This is the "Master Fracker". I truly believe he is getting his resume 'in order' to run Glencore.

Thank You
Earl




Exclusive: Chesapeake CEO took out $1.1 billion in unreported loans

finance.yahoo.com/news/exclusive-chesape...659198--finance.html


HOUSTON (Reuters) - Aubrey McClendon, the CEO of Chesapeake Energy Corp, has borrowed as much as $1.1 billion over the last three years against his stake in thousands of company wells - a move that analysts, academics and attorneys who reviewed loan documents say raises the potential for conflicts of interest.

The loans, which haven't been previously detailed to shareholders, are used to fund McClendon's operating costs for an unusual corporate perk that offers him a chance to invest in a 2.5 percent interest in every well the company drills. McClendon in turn is using the 2.5 percent stakes as collateral on those same loans, documents filed in five states show.

The size and nature of the loans raise questions about whether McClendon's personal financial deals could compromise his fiduciary duty to Chesapeake investors, experts who reviewed the documents told Reuters.

Both McClendon and Chesapeake said the loans don't pose any conflict of interest. And they are private transactions that the company has no responsibility to disclose or to vet, Chesapeake said. "There are no covenants or obligations in my loan documents or mortgages that bind Chesapeake in any way," McClendon wrote in an email to Reuters.

The revelation comes as McClendon is scrambling to help Chesapeake weather a multi-billion-dollar cash shortfall amid a plunge in natural gas prices.

McClendon's biggest personal lender, EIG Global Energy Partners, has also been a big financier for Chesapeake. EIG and other investors have helped Chesapeake raise more than $2 billion through the sale of preferred shares that provide very favorable terms to the buyers. (Editing by Blake Morrison)

(Reporting By Anna Driver and Brian Grow)

Great post Earl!

This PERFECTLY illustrates what I've been saying about how "conflict of interest" is a concept which (unique among ALL of the people of the world) the U.S. population generally seems not to have the SLIGHTEST understanding.

Here we have the CEO of a large, publicly-traded corporation who is LEVERAGING HIS PERSONAL HOLDINGS to the max, based (at least in part) upon a STILL experimental and HIGHLY controversial form of oil/gas extraction.

Yet based upon his own RECKLESS GAMBLING we can expect him to commit this corporation (and its shareholders) 100% to this experimental/controversial side of the business - no matter what happens in the future. Because if Chesapeaked DOESN'T continue aggressively expanding its fracking the CEO is guaranteed to go bankrupt.

So no matter how much PUBLIC OPPOSITION arises to "fracking", and no matter how much new science emerges CRITICIZING the environmental harm (and legal liability), this CEO can be counted upon to (literally) GAMBLE the company's future on fracking.

Thus when we have this media DRONE meekly suggesting that this "might" be perceived as a conflict of interest I can only laugh.

Then the fact that this reckless borrowing was UNREPORTED transforms this from an ORDINARY conflict of interest to a POTENTIALLY CRIMINAL breach of fiduciary duty.

P.S. Here's Rolling Stone's take on your "Master Fracker".


"Rolling Stone Responds to Chesapeake Energy on 'The Fracking Bubble'"

www.rollingstone.com/politics/blogs/nati...king-bubble-20120306

Aubrey McClendon, the CEO of Chesapeake Energy, has a reputation for being a tough street-fighter, so his company’s response to my article in Rolling Stone is no surprise. (You can view the entire response here.) What is surprising is how weak it is. The company entirely dodges the article’s central point: that Chesapeake is highly-leveraged firm operated by a corporate gambler who engaged in complex scheme to profit off the illusion that America has a virtually unlimited supply of cheap natural gas...

Jeff,

I went to the original article "The Fracking Bubble", March 15, 2012.

This is a very well written piece, I wanted to post a few items from the article
to hopefully spark interest.

The phrase "for US energy independence", has in the last thirty years (at least), been the way to sell the public on just about anything. When will the public realize there's nothing noble or patriotic about these individuals, politicians and corporations ???

A few things in bold are to highlight the personal greed, the corporate "loopholes" and the penalties, topics we discuss daily. Just items that I noticed.

PS- To read the experience of the land owners who signed leases is eye opening (to say the least).



McClendon dominates America's supply of natural gas the same way the Tea Party-financing Koch brothers control the nation's pipelines and refineries. Like them, McClendon is an influential right-wing power broker – he helped fund the Swift Boat attacks against John Kerry in 2004, donated $250,000 to the presidential campaign of Rick Perry, and contributed more than $500,000 to stop gay marriage. But unlike his fellow energy czars, McClendon knows how to tone down his politics and present a friendlier, less ideological face to the public. He secretly gave $26 million to the Sierra Club to fight Big Coal, and built a Google-like campus for Chesapeake's 4,600 employees in Oklahoma City, complete with a 63,000-square-foot day care center, a luxurious gym and four cafes manned by cook-to-order chefs. He even voted for Barack Obama because he thought the country needed "an inspirational figure."

Read more: www.rollingstone.com/politics/news/the-b...120301#ixzz1sWN9w5qX


. McClendon's personal fortune is now estimated at $1.2 billion, including a major stake in the NBA's Oklahoma City Thunder and a $20 million retreat in Bermuda.

Read more: www.rollingstone.com/politics/news/the-b...120301#ixzz1sWNrVphM


In 2010, it pocketed $2.2 billion by selling land it bought in Texas for $2,000 an acre to one of China's largest oil companies for $11,000 an acre. "That's a five-to-one return on investment," says Jeff Mobley, Chesapeake's senior vice president for investor relations.

Read more: www.rollingstone.com/politics/news/the-b...120301#ixzz1sWOJrtaU


During the financial meltdown in 2008, McClendon was forced to sell off 94 percent of his stock in Chesapeake – some 33 million shares – for $550 million to meet a margin call on his personal investments. (Only a few months earlier, the stock had been worth $2 billion.) Despite the dramatic setback, Chesapeake's board boosted McClendon's annual salary to $112 million, making him the highest paid CEO at any S&P 500 company at the time. The pay hike, which sparked a shareholder lawsuit, was scorned by Wall Street analysts. "McClendon clearly thinks of Chesapeake as his own personal piggy bank," says one. In the end, that piggy bank may prove to be empty: In February, Chesapeake announced that, because of low gas prices, its revenues will fall $3.5 billion short of its expenses this year.

Read more: www.rollingstone.com/politics/news/the-b...120301#ixzz1sWOwAmEy



Last April, a Chesapeake well in Bradford County suffered a massive blowout. It was the onshore, natural gas version of what happened to BP in the Gulf two years ago: A wellhead flange failed, and toxic water gushed uncontrollably from the well for several days before workers were able to bring it under control. Seven families were evacuated from their homes as 10,000 gallons of fracking fluid spilled into surrounding pastures and streams. Pennsylvania fined the company $250,000 – the highest penalty allowed under state law.

Read more: www.rollingstone.com/politics/news/the-b...120301#ixzz1sWPUlFZo



It's also impossible to know what chemicals are flowing out of the wells, or how toxic they are, because companies like Chesapeake are not required to disclose the compounds they use in fracking operations. Providers of fracking fluids, such as Halliburton, claim that the composition of such fluids can't be revealed without disclosing trade secrets. In 2005, the industry lobbied hard for what's known as "the Halliburton loophole," which exempts it from federal disclosure requirements. In recent months, Colorado, Texas and Pennsylvania have moved to tighten state regulations and require mandatory disclosure of what's in the fracking fluids, but loopholes still remain. "We don't know the chemicals that are involved," Vikas Kapil, chief medical officer at the National Center for Environmental Health, admitted at a recent conference. "We don't have a great handle on the toxicology of fracking chemicals."

Read more: www.rollingstone.com/politics/news/the-b...120301#ixzz1sWPjnBM5



McClendon also hopes to increase demand and boost gas prices by promoting cars and power plants that run on natural gas, and by cutting deals to export gas to Europe and Asia, where prices are five times higher than in the U.S.

Read more: www.rollingstone.com/politics/news/the-b...120301#ixzz1sWQkePED

Stuff like this tends to get me "over-stimulated" Earl, since there is so much to be outraged about.

First of all, no CEO is worth a $100 million per year. No CEO is worth 10% of that. Throughout the first CENTURY or so after the Industrial Revolution, the average pay ratio between the senior management and the average employee averaged between 3:1 and 10:1.

Just like the Oligarchs have erased the TRUE gold/silver ratio from the history books (and now PRETEND that 50:1 or more has ALWAYS been the ratio), they have ALSO erased the wage ratio from our history books.

NOW the propagandists see nothing wrong with these THIEVES paying themselves from 500 to 1,000 times the average (or more) literally a HUNDRED times more than they are worth.

When any of these Thieves claims they have "earned" these obscene windfalls because of the "profits" they have generated for their companies, we already have an answer for that: Wall Street.

Does it take any BRAINS to bet $1 million (or a BILLION) on a spin of the roulette wheel again and again and again - and every time you LOSE you steal the losses from taxpayers, but when you WIN you call yourself a "genius"?

Being a reckless gambler is NEVER justification for a high salary for a PUBLICLY-TRADED corporation even if successful. As we got into originally in this thread, ALL these senior executives have a FIDUCIARY DUTY to run these corporations in a prudent and cautious manner. But the Boards are totally corrupt and shareholders are COMPLETE IDIOTS - who deserve to get robbed by allowing this to go on.

None of these massive Oligarchies EVER make money for their shareholders any more over the longer term. Subtract inflation and what senior management STEAL every year, and ALL these corporations are are just another vehicle for stealing.

First these oligopolies steal from consumers to generate their "profits" - then senior management steals all the profits of the corporation...