The Oklahoma City police said the car McClendon was driving hit the wall at high speed. He had been scheduled to appear in court later in the day.
HOUSTON — Aubrey McClendon, energy-industry innovator and a former minority owner of the Sonics who was part of the group that moved the team to Oklahoma City, died in a car crash Wednesday, a day after he was indicted on federal bid-rigging charges of conspiring to suppress prices paid for oil and natural-gas leases. He was 56.
The Oklahoma City police said the car McClendon was driving hit the wall of a bridge at high speed in a remote part of the city. He had been scheduled to appear in court later in the day.
“He pretty much drove straight into the wall,” Capt. Paco Balderrama of the Oklahoma City Police Department said. Balderrama added that the crash occurred while McClendon was driving a 2013 Chevy Tahoe about 9 a.m. The vehicle was found engulfed in flames.
Balderrama said it’s too early to say whether the crash was intentional. He said McClendon, the sole occupant, was not wearing a seat belt and was driving faster than the 50 mph speed limit.
Most Read Stories
- Prosecutor reviewing sex-abuse allegations against ‘Deadliest Catch’ star Sig Hansen
- The results are in: Here's where the new Dick's Drive-In will be
- Knife-wielding man in custody after downtown standoff VIEW
- Amazon tries to bag a big chunk of grocery market with Seattle pickup locations WATCH
- Career advice: End affair with boss, then apply for promotion | Dear Carolyn
The indictment served by the Justice Department late Tuesday accused McClendon, who pioneered the nation’s shale-gas and shale-oil revolution, of orchestrating a conspiracy in which two unnamed companies colluded not to bid against each other for several oil and gas leases in northwest Oklahoma between late 2007 and early 2012.
Even in a business known for bigger-than-life executives, McClendon was a mythical character. He took a tiny oil company, Chesapeake Energy, which he co-founded in 1989, and made it into the second-biggest gas producer in the United States. Only Exxon Mobil produces more.
Under his leadership, Chesapeake was a darling of Wall Street as he acquired leases across the country and liberally employed hydraulic fracturing to unlock vast amounts of natural gas in Texas, Oklahoma, Ohio and Pennsylvania.
But Chesapeake and a handful of other companies released so much gas that they glutted the market. Natural-gas prices collapsed, pulling down the value of Chesapeake’s shares in the past five years.
The company’s problems were compounded by revelations that McClendon had taken a personal stake in Chesapeake wells, then used those investments as collateral for up to $1.1 billion in loans, used mostly to pay for his share of the cost of drilling those wells.
Those revelations ignited a revolt by Chesapeake’s board, and he was forced to leave the company three years ago. But Wednesday, the oil and gas world was in a state of shock.
“He was charismatic and a true American entrepreneur,” said T. Boone Pickens, a legendary oilman himself, who had known McClendon for 25 years. “No individual is without flaws, but his impact on American energy will be long-lasting.”
As a businessman, McClendon had a reputation for pushing the envelope, and he is perhaps best-known for that in Seattle.
He was a minority owner in the Sonics after Starbucks CEO Howard Schultz sold the NBA team in 2006. At the time, majority owner Clay Bennett promised 12 months of good-faith negotiations with the city and state to build a new arena to keep the team in Seattle.
But in 2007, McClendon was fined $250,000 by the NBA for comments to an Oklahoma City newspaper in which he bragged that he and his partners “didn’t buy the team to keep it in Seattle.”
In 2008, emails were uncovered between McClendon and Bennett. They seemed to indicate members of the ownership group — during that good-faith period — were already seeking to move the team. The Sonics moved to Oklahoma City for the 2008-09 season. The team was renamed the Oklahoma City Thunder and plays in Chesapeake Energy Arena.
When McClendon began quietly acquiring leases around 2005, most energy analysts thought the United States faced a future of gas shortages. Billions of dollars were invested in import terminals that would receive liquefied natural gas from Qatar and other gas-producing countries. But McClendon’s explorations were so successful there was no longer any need for imports, and the terminals quickly became virtually unusable.
Now, in a once-unthinkable turnabout, some are being converted to export liquefied natural gas.
McClendon’s corporate pursuits also reflected his eclectic interests. As the company grew, he developed a corporate campus that looked more like an Ivy League school than a piece of the oil patch, with a cafeteria that served international fare and a spalike gym.
He dabbled in politics and appeared in television commercials promoting the benefits of natural gas, trying to replace coal burning for power. He unsuccessfully pushed for cars fueled by natural gas.
McClendon had interests that ranged far and wide, including part ownership of a winery in France. He bragged about his $12 million antique-map collection.
Classmates at Duke University remembered McClendon, who studied history, for his expansive appetite for reading and for having copies of Businessweek magazine strewn around his room.
It was in college that he met his future financier, Ralph Eads, a Jefferies investment banker. He married his college girlfriend, Kathleen Upton Byrns. In addition to his wife, he is survived by two sons, Will and Jack, and a daughter, Callie.
While the indictment did not identify the two companies, most energy experts believe they are Chesapeake and SandRidge Energy, also based in Oklahoma City and formerly led by a onetime McClendon partner.
The two companies had previously disclosed in regulatory documents that they were being investigated by the Justice Department’s antitrust division.
SandRidge has yet to comment on the indictment, while Chesapeake said it was cooperating with the investigation and did not expect to face criminal penalties.
According to the antitrust division, the companies secretly decided who would win leases, and the winning bidder allotted an interest in the leases to the other company. The indictment said McClendon instructed subordinates to conspire with others from the second company to allocate leases among themselves.
“His actions put company profits ahead of the interests of leaseholders entitled to competitive bids for oil and gas rights on their land,” said Assistant Attorney General Bill Baer. “Executives who abuse their positions as leaders of major corporations to organize criminal activity must be held accountable for their actions.”
The indictment was filed Tuesday in the U.S. District Court for the Western District of Oklahoma.
The Justice Department said this was the first case resulting from a federal antitrust investigation into price-fixing, bid-rigging and other anti-competitive conduct in the oil and natural-gas industry.
At first McClendon and his lawyers expressed indignant disagreement with the indictment, although McClendon did not expressly deny there were discussions with a competitor.
“The charge that has been filed against me today is wrong and unprecedented,” McClendon said in a statement Tuesday. “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.”
Under the federal Sherman antitrust statute, violations carry a maximum penalty of 10 years in prison and a $1 million fine.
The indictment came after a four-year federal investigation that began when Reuters news service revealed in 2012 that Chesapeake had discussed with EnCana, a rival Canadian energy giant, how to suppress land-lease prices in Michigan. Last year, Chesapeake settled by agreeing to pay $25 million as compensation to landowners with leases.
After his ouster from Chesapeake in 2013, McClendon turned his attention to his next venture, co-founding American Energy Partners, a private oil company. His goal was to take the fracking revolution worldwide.
“He was always looking for worlds to conquer,” said Melvin Moran, an Oklahoma oil executive who knew McClendon for years. “And he did that.”