Aubrey McClendon Faces 10 Years in Prison for Rigging Bids

The Angelo Mozillo of the natural gas sector, the guy who revolutionized fracking and laid waste to CHK by over leveraging it, has been indicted for being a malefactor and also fixing bids.

I am not suprised in the least.

McClendon is accused of orchestrating a scheme between two “large oil and gas companies” to not bid against each other for leases in northwest Oklahoma from December 2007 to March 2012, the Justice Department said Tuesday in a statement. The charge is “wrong and unprecedented,” McClendon said in a separate statement.

The conspirators allegedly decided ahead of time who would win the leases and the winning bidder would then allocate an interest in the leases to the other company, the government said. The companies, which aren’t defendants in the case, are identified in the indictment as Company A and Company B. Mark Abueg, a spokesman for the Justice Department, declined to comment on their identities.

“The Justice Department has taken business practices well-known in the Oklahoma and American energy industries that were intended to, and did in fact, enhance competition and lower energy costs and twisted these business practices to allege an antitrust violation that did not occur,” McLendon’s lead lawyers, Abbe Lowell of Chadbourne & Parke LLP and Williams & Connolly LLP’s Emmet Flood, said in a statement. “We will show that this prosecutorial overreach was completely unjustified.”

According to the indictment, McClendon was the chief executive officer, president and a director of Company A until at least March 2012. Company B was a corporation with its principal place of business in Oklahoma City, according to the charging document. The Justice Department provided a copy of the filing, which couldn’t immediately be confirmed in court records.

Prosecutors said McClendon contacted an unnamed co-conspirator at Company B in 2007 and proposed they stop competing on bids to purchase leases.

The antitrust law McClendon is accused of violating, the Sherman Act, carries a maximum prison sentence of 10 years and a $1 million fine for individuals, according to the Justice Department statement.

“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,” McClendon said in a statement. “I will fight to prove my innocence and to clear my name.”

This has no bearing on CHK, whatsoever. It’s amazing to me that this man was entrusted with $10 billion in financing after being ousted from Chesapeake.