Former Chesapeake Energy Corp. CEO Aubrey McClendon was indicted Tuesday by a federal grand jury on charges of rigging bids for the purchase of oil and natural gas leases in Oklahoma.
According to the Justice Department, McClendon formed a conspiracy between two large oil and gas companies to not work against each other during the bidding process. The conspiracy, which ran from December 2007 to March 2012, would make sure the company that won the lease was decided ahead of time.
McClendon told his employees to implement the conspiracy by withdrawing bids for certain leases and agreeing to allocate interests in the leases between the two companies, the Justice Department said.
“While serving as CEO of a major oil and gas company, the defendant formed and led a conspiracy to suppress prices paid to leaseholders in northwest Oklahoma,” said Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division.
“His actions put company profits ahead of the interests of leaseholders entitled to competitive bids for oil and gas rights on their land. Executives who abuse their positions as leaders of major corporations to organize criminal activity must be held accountable for their actions.”
McClendon resigned from the company, a major player in the U.S. energy boom, in 2013.
The indictment was filed Tuesday in the U.S. District Court for the Western District of Oklahoma. McClendon is accused of violating the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million fine.
It is the first indictment handed down in a federal antitrust investigation into price fixing, bid rigging and anticompetitive behavior in the oil and natural gas industry.
The FBI’s Oklahoma City office and the Justice Department’s Antitrust Division in Chicago are leading the investigation.
