Drilling Down

McClendon Accused of Conspiring to Rig Bids

OKLAHOMA CITY – Aubrey McClendon, the former CEO of Chesapeake Energy Corp. was charged Tuesday with conspiring to rig bids to buy oil and gas leases in Oklahoma.

The indictment was handed down by a federal grand jury here.

McClendon, forced out of Chesapeake three years ago, is accused of conspiring with an unnamed company not to bid against each other for oil and gas leases in Oklahoma.

States the indictment: “Beginning at least as early as December 2007 and continuing until at least as late as March 2012 … McClendon and his co-conspirators knowingly entered into and engaged in a combination and conspiracy to suppress and eliminate competition by rigging bids for certain leasehold interests and producing properties. The combination and conspiracy engaged in by [McClendon] and his co-conspirators was in unreasonable restraint of interstate commerce in violation of Section 1 of the Sherman Act.

McClendon responded to the indictment by calling the charges “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 in a statement.

McClendon’s attorneys accused the Justice Department of “prosecutorial overreach” in their prepared statement:

“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. In response to criticism of their past charging practices and in the name of a new policy to be tough on individuals, the prosecutors have wrongfully singled out Aubrey McClendon and have wrongly charged an innocent man.  A charge is one thing. Proving the case is another. Starting today, Aubrey gets his day in court where we will show that this prosecutorial overreach was completely unjustified.”

MORE:
Former Chesapeake CEO McClendon charged with bid-rigging of land leases

Published by The Business Journal, Youngstown, Ohio.