Teach Your Children Well: The Aubrey McClendon Morality Tale
(This entry was initially posted Monday, October 13. It was reposted with its current time stamp after the Okie Funk site experienced some technical difficulties.)
You, who are on the road
Must have a code
That you can live by.
And so, become yourself
Because the past
Is just a goodbye.—“Teach Your Children,” Crosby, Stills, Nash and Young.
Surely it is easy for folks to read the recent financial demise of Aubrey McClendon and Chesapeake Energy Corporation as a good old-fashioned morality tale they could teach their children.
The morality tale could go something like this:
Sailing high the last few years, McClendon, the chief executive of Chesapeake, became the moral equivalent of a nineteenth-century railroad baron, pushing his political agenda and corporate ideology while reportedly amassing a huge fortune.
Meanwhile, caught up in his own greed and hubris, he bet his money on a gambling scheme related to the stock market. His hubris blinded him to risk and reality. He had plenty of money by any measurement, but he needed more and more. He believed he was right, not the lessons of history, not those who pushed for more government regulations of Wall Street.
Now, according to news reports, McClendon has sold “substantially all” of his stocks and his company is facing operating cuts because of a decline in natural gas prices and the financial crisis on Wall Street.
Another GOP ideologue, another unabashed champion of the ultra-rich, has fallen because greed and hubris still have consequences.
So, kids, be conservative with your money and be nice to those who don’t have as much as you.
Well, that’s one way to put it.
But I think the seemingly overnight financial demise of McClendon and the free fall of Chesapeake Energy, a major natural gas company in Oklahoma, can be attributed primarily to irrational and illogical business decisions across the spectrum of American big business these days. These decisions can be directly related to the Orwellian era in which we live, an era defined by President George Bush’s and the GOP’s support of an unregulated free market.
It also tells us powerfully on a local level: Don’t listen to McClendon or others in what I half-jokingly call the Okie Oligarchy—Clayton Bennett, Tom Ward, Christy Gaylord Everest, etc.—about important business or political issues. They have been self-absorbed and dreadfully wrong about important issues for a long time now.
On a national level, McClendon’s financial demise and Chesapeake’s current challenges are a fitting symbol of the destructive business practices waged against this country by the market fundamentalists, led by their cheerleader Bush and now supported by one of his surrogates, U.S. Sen. John McCain.
This is what happened in simple terms: As natural gas prices increased, McClendon bought shares in the company he co-founded on margin, which means he borrowed the money. As long as Chesapeake stock remained high, McClendon was fine. But when stocks plummeted recently because of the financial crisis and when natural gas prices decreased because of the ensuing lack of demand, he was forced to raise money to cover his daring bets. In the end, he had to sell “substantially all” of his 33.4 million in stocks to meet the margin call, according to news reports. This, say the reports, represented much of his estimated $2.1 to $3 billion personal stash.
But before anyone sheds any tears for poor Aubrey, keep in mind his Chesapeake compensation was valued at $25.5 million last year. He’s still apparently drawing a paycheck that most of us cannot even begin to fathom. Let me put it in a more understandable way: He can still easily afford to go see the doctor, unlike a growing number of Oklahomans, even those with health insurance.
Even as he played his daring shell game, McClendon tried to shove his narrow, soulless ideology down our throats. In 2004, he and his former business partner, Tom Ward, donated $250,000 to a political action committee to help elect Republican U.S. Sen. Tom Coburn, another GOP ideologue. Both McClendon and Ward donated $1.1 million to Gary Bauer’s Americans United To Preserve Marriage, a group that agitates against gay marriages. Records show McClendon donated $250,000 to Swift Vets and POWs for Truth, a group that disseminated outrageous lies about presidential candidate John Kerry during the 2004 elections.
In addition, both former Oklahoma Gov. Frank Keating and former U.S. Sen. Don Nickles, two ultra-conservative politicians, currently serve on the Chesapeake Board of Directors. Keating, mimicking McClendon’s style of dirty politics, recently attacked presidential contender Barack Obama with comments some say were racist and ugly. Burns Hargis, a former Republican candidate for governor and the president of Oklahoma State University, serves on the board as well. When is he going to go ballistic against Obama?
Recently, McClendon was one of 16 prominent Oklahoma executives who urged Congress to pass Bush’s financial bailout plan, which has failed so far to provide any relief to the rich fat cats who supported it. Obviously, McClendon had to be thinking on some level about his own investments, his own company. What about the others? The list included Larry Nichols, the CEO of Devon Energy Corporation, and, of course, Bennett, who is the chairman of the Oklahoma City Thunder basketball team.
McClendon was wrong about his business. He was wrong about the incompetent Bush. He was wrong about politics in general. He was wrong about the stock market. He was wrong about taxes. As others, including myself, spoke out repeatedly beginning years ago against the reckless tax policies and business ideology of the Bush administration, McClendon ignored the obvious and gambled his fortune away. Fine. It’s his money, right?
But has McClendon made poor business decisions that parallel his personal financial decisions? Has he hurt his employees, many of whom are hardworking, decent Oklahomans, by risking their financial security, too? How will McClendon’s business actions ultimately impact the economy in Oklahoma?
Will those legislators who recently voted to cut the taxes of Oklahoma’s richest citizens like McClendon finally see that, no, revenues are not going to grow under the archaic “trickle-down” theory the local corporate moguls used as a scam to increase their wealth?
Is Oklahoma about ready to face another energy company bust like it did in the early 1980s that brought about the failure of Penn Square Bank?
These are important questions that important people need to be asking. But don’t count on the corporate media here for anything more than a cursory discussion about these questions.