OKLAHOMA CITY (AP) — Aubrey McClendon, a natural gas industry titan, was killed when police say he drove his sport utility vehicle “straight into a wall” in Oklahoma City on Wednesday, a day after he was indicted on a charge of conspiring to rig bids to buy oil and natural gas leases in northwest Oklahoma.
Police Capt. Paco Balderrama said McClendon, also a part-owner of the NBA’s Oklahoma City Thunder, was the only occupant in the vehicle when it slammed into a concrete bridge embankment shortly after 9 a.m.
“He pretty much drove straight into the wall,” Balderrama said. “The information out there at the scene is that he went left of center, went through a grassy area right 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.”
McClendon’s death follows an announcement Tuesday that he had been indicted by a federal grand jury.
Balderrama says it’s too early to say if the collision was intentional.
The Department of Justice said in a statement Tuesday that McClendon, 56, was suspected of orchestrating a scheme between two large energy companies, which are not named in the indictment, from December 2007 to March 2012. The companies would decide ahead of time who would win bids, with the winner then allocating an interest in the leases to the other company, according to the statement.
In a statement released Tuesday after his indictment, McClendon denied violating antitrust laws.
“The charge that has been filed against me today is wrong and unprecedented,” McClendon 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. 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.”
Department of Justice spokesman Mark Abueg declined to comment on the impact McClendon’s death would have on the case.
McClendon could frequently be spotted in his courtside seats near the Thunder bench in the arena named after the company he founded in 1989 with his friend, Tom Ward, with an initial $50,000 investment. They eventually grew the company into one of the largest independent producers of natural gas in the United States. He left the company in January 2013 amid philosophical differences with a new board of directors, and founded American Energy Partners, where he was chairman and CEO.
“Aubrey’s tremendous leadership, vision, and passion for the energy industry had an impact on the community, the country, and the world,” AEP said in a statement. “We are tremendously proud of his legacy and will continue to work hard to live up to the unmatched standards he set for excellence and integrity.”
McClendon was renowned for his aggression and skill in acquiring oil and gas drilling rights. As drillers learned to unlock natural gas from shale formations over the last decade, McClendon pushed the company to acquire enormous tracks of land in several states. The strategy landed the company promising assets, boosted the company’s own production and helped fuel the national boom in natural gas production. But it saddled Chesapeake with enormous debt.
Chesapeake eventually became victim of its own success. Natural gas prices plummeted along with all the new drilling by Chesapeake and its peers, reducing revenues for the company and making the debt harder to repay.
Chesapeake’s 20-acre campus sprawls through an exclusive area of Oklahoma City, its Georgian-style brick buildings surrounded by manicured lawns and sycamore and elm trees.
McClendon’s death is the second fatal crash this year connected to the Thunder organization. Assistant coach Monty Williams’ wife, Ingrid, died Feb. 10 after she was involved in a head-on crash in Oklahoma City.
From Bloomberg: Authors: David McLaughlin, Joe Carroll
Aubrey McClendon was killed in a car crash in Oklahoma City Wednesday, police said. His death comes a day after he was charged with rigging bids for oil and natural gas leases.
Three years after being forced out of Chesapeake Energy Corp., the natural gas company he co-founded, the 56-year-old was facing allegations he worked with an unidentified competitor to keep the price of leasing drilling rights artificially low.
McClendon was 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 Tuesday in a separate statement.
The grand jury indictment came after the hydraulic fracturing process McClendon championed for accessing trapped oil and gas has caused prices to crater. Chesapeake has sunk 39 percent this year, including losing a third of its value in a single day last month after a report, which the Oklahoma City-based company denied, that it had hired lawyers for potential bankruptcy.
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 and Williams & Connolly’s Emmet Flood, said in a statement Tuesday. “We will show that this prosecutorial overreach was completely unjustified.”
During his almost quarter-century at the helm of Chesapeake, McClendon embraced drilling and fracking innovations that unleashed the shale revolution ignored by the world’s biggest energy producers, building the company into what was for a time the largest U.S. source of gas.
McClendon, who co-founded Chesapeake in 1989, oversaw a jump in its market value from its 1993 debut as a public company to a peak of more than $35 billion in 2008, according to data compiled by Bloomberg.
McClendon was in the vanguard of the shale revolution that upended U.S. gas markets and paved the way for the renaissance in American crude oil production. At Chesapeake, he amassed a shale empire that rivaled Exxon Mobil Corp.’s before he was dismissed in 2013 amid conflict-of-interest probes and a shareholder revolt led by billionaire Carl Icahn.
After his ouster from Chesapeake, McClendon formed American Energy Partners and raised more than $10 billion for acquisitions. With financial backing from private-equity heavyweights including First Reserve Corp. and Energy & Minerals Group, controlled by John Raymond, McClendon’s new vehicle amassed drilling rights and exploratory stakes from the Appalachian mountains to Australia and Argentina before commodity prices cut the company’s growth and restricted its access to credit.
Elizabeth Prewitt, a former Justice Department prosecutor, said the indictment represents a major case for the U.S. following a new policy announced last year intended to emphasize the prosecution of individuals in corporate-fraud investigations. McClendon’s lawyer said he had been singled out in the name of the new policy, which came after years of criticism that the department had failed to hold individuals accountable.
“McClendon was at the head of the table in the C-suite when he supposedly orchestrated the bid-rigging scheme, and so this charge lines up with the DOJ’s recent focus on prosecuting individuals,” said Prewitt, now at Hughes Hubbard & Reed in New York.
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 was accused of violating, the Sherman Act, carried 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.”
Chesapeake spokesman Gordon Pennoyer said the company has been cooperating with prosecutors and received immunity under a Justice Department leniency program that shields companies from criminal prosecution if they are the first to report an antitrust violation.
“Chesapeake does not expect to face criminal prosecution or fines relating to this matter,” Pennoyer said in a statement. “Chesapeake has taken significant steps to address legacy issues and enhance legal and regulatory compliance throughout the organization.”
The Justice Department’s investigation is ongoing.
Chesapeake paid a $25 million penalty to the U.S. state of Michigan last year to settle allegations it conspired with Canadian gas driller Encana Corp. to rig auctions for drilling rights. In addition to the civil settlement, Chesapeake pleaded “no contest” to two misdemeanor criminal antitrust violations in state court, the Michigan attorney general’s office said in an April 24, 2015, statement. The Justice Department opened a grand jury inquiry into the Michigan bid rigging allegations, though it never brought charges.
Kartikay Mehrotra and Dan Murtaugh contributed.
Update from Associated Press:
Condolences are pouring in from Oklahoma leaders following the death of energy executive Aubrey McClendon in a single-car crash in Oklahoma City.
Oklahoma City Mayor Mick Cornett remembered McClendon for his civic pride and his support of local charities, arts and local organizations.
Energy tycoon T. Boone Pickens described McClendon as “charismatic and a true American entrepreneur.”
Oklahoma State University President Burns Hargis described him as “one of the most visionary and brilliant people I’ve ever met.”
Members of the Oklahoma House paused their floor session on Wednesday to deliver a prayer for McClendon’s family.