Risk & Compliance

Ex-Chesapeake CEO Dies a Day After Indictment

Aubrey McClendon was facing charges that he conspired with another company to not bid against each other for oil and natural gas leases.
Matthew HellerMarch 2, 2016

Former Chesapeake Energy CEO Aubrey McClendon died in a high-speed car wreck Wednesday, a day after he was charged in an antitrust case alleging he conspired to rig bids for oil and natural gas leases.

Police said McClendon, 56, slammed into an embankment in Oklahoma City while traveling well over the posted speed limit. “He pretty much drove straight into the wall,” Capt. Paco Balderrama of the Oklahoma City Police Department told a news conference.

A day earlier, McClendon, a pioneer of the U.S. shale boom, was indicted for allegedly orchestrating a conspiracy between two large oil and gas companies to not bid against each other for the purchase of oil and natural gas leases in northwest Oklahoma. He faced up to 10 years in prison if convicted.

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“While serving as CEO of a major oil and gas company, the defendant formed and led a conspiracy to suppress prices paid to leaseholders in northwest Oklahoma,” Assistant Attorney General Bill Baer said in a news release. “His actions put company profits ahead of the interests of leaseholders entitled to competitive bids for oil and gas rights on their land.”

The two companies would decide ahead of time who would win the leases and the winning bidder would then allocate an interest in the leases to the other company, prosecutors said.

McClendon co-founded Chesapeake, the second-largest U.S. natural gas producer, in 1989 and stepped down as CEO in April 2013. In a statement Tuesday, he said the allegations against him were “wrong and unprecedented.”

“I have been singled out as the only person in the oil and gas industry in over 110 years since the Sherman Act became law to have been accused of this crime in relation to joint bidding on leasehold,” he said. “Anyone who knows me, my business record and the industry in which I have worked for 35 years, knows that I could not be guilty of violating any antitrust laws.”

Balderrama said McClendon drove through a grassy area before colliding into the embankment. “There was plenty of opportunity for him to correct and get back on the roadway and that didn’t occur,” he said.

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