Chesapeake Energy Ex-CEO McClendon Indicted

Aubrey McClendon, the former chief executive of Chesapeake Energy Corp., has been indicted for conspiring to rig bids to buy oil and natural gas leases in northwest Oklahoma.

The Department of Justice said Tuesday the indictment alleges that the conspiracy ran from December 2007 to March 2012.

The department said that McClendon allegedly orchestrated the scheme between two large energy companies. They would decide ahead of time who would win bids, with the winner then allocating an interest in the leases to the other company.

Leasehold interests usually include the right to develop the land and to extract oil and natural gas for a period of time, typically three to five years.

The indictment was filed in U.S. District Court for the Western District of Oklahoma.

Chesapeake spokesperson Gordon Pennoyer released the following statement about the indictment:

“Chesapeake has been actively cooperating for some time with a criminal antitrust investigation by the Department of Justice regarding past land leasing practices and has received conditional leniency under the Antitrust Division’s Leniency Program. Chesapeake does not expect to face criminal prosecution or fines relating to this matter. Chesapeake has taken significant steps to address legacy issues and enhance legal and regulatory compliance throughout the organization.”

McClendon responded to today’s filing of a single charge of an antitrust conspiracy with the following statement:

"The charge that has been filed against me today is 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.  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.  All my life I have worked to create jobs in Oklahoma, grow its economy, and to provide abundant and affordable energy to all Americans. I am proud of my track record in this industry, and I will fight to prove my innocence and to clear my name."

McClendon’s lead lawyers Abbe Lowell of Chadbourne & Parke and Emmet Flood of Williams & Connolly responded to today’s news with the following 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."