Monday, May 28, 2012

Aubrey McClendon, One Of America's Most Dangerous-- And Richest-- Sociopaths


Aubrey McClendon has given hundreds of thousands of dollars to politicians running for Congress. Although most of them are Republican, not all of them are. There's something else they all have in common. All of them, regardless of political party, are willing-- eager in most cases-- to carry water for the energy oligarchy that McClendon represents. He's lavished thousands and thousands of dollars on the political hacks who work assiduously to make sure taxpayer dollars get funneled directly into the pockets of the energy barons like McClendon himself. Technically these "contributions" are bribes of course-- and McCelndon and the politicians he owns should all be imprisoned-- but in McClendon's world the payoffs are "investments." He's helped finance the political careers of homestate lackeys Tom Cole (R-OK), John Sullivan (R-OK), Mary Fallin (R-OK), Jim Inhofe (R-OK), and Dan Boren (Blue Dog-OK) but by no means does he stop giving at his state's boundaries. McClendon is a major donor to Big Oil whores from one end of the country to the other-- from Scott Brown (R-MA), John Boehner (R-OH), Nick Rahall (D-WV), Fred Upton (R-MI), George Allen (R-VA), David McKinley (R-WV), Joe Manchin (D-WV) to George W. Bush, John McCain and, of course, Mitt Romney.

And he also helps fund the Chesaapeake Energy PAC, which give more hundreds of thousands of dollars to more Big Energy shills in Congress who will always vote for the Big Oil and Big Coal agendas. So far this year-- and they're only getting started, they've goven over $150,000 to candidates, almost all of them Republicans... almost. Tucked in there among the usual suspects and energy industry shills like Tom Cole (R-OK), Eric Cantor (R-VA), Joe Barton (R-TX), Kevin McCarthy (R-CA), were the payoffs to the "Democrats" who always cross the aisle to vote against the 99% and with the Big Energy barons:
Jason Altmire (Blue Dog-PA)
Dan Boren (Blue Dog-OK)
Henry Cuellar (Blue Dog-TX)
Charlie Gonzalez (D-TX)
Gene Green (D-TX)
Jim Matheson (Blue Dog-UT)
Ed Perlmutter (New Dem-CO)
Nick Rahall (D-WV)
Mike Ross (Blue Dog-AR)

In the 2010 cycle the PAC spent $367,210 on congressional races, mostly helping Republicans beat Democrats, but also helping corrupt conservative Democrats beat progressive challengers-- or just rewarding them for a job well done. Funny that they gave the Democratic House leaders hefty payoffs-- $3,500 for Clyburn, $5,000 for Hoyer and $10,000 for Pelosi. In Mark Ames' great new report on McClendon in the Daily Banter, he labels McClendon "one of America's biggest oligarchs" and compares him to the Russian criminals and sociopaths who have taken over that country's natural resources with the collapse of the Soviet Union and the wholesale looting of that country by a few well-connected and ruthless local John Galt types.
Of all the disastrous results of that experiment, what troubled many Western free-market true-believers most wasn’t so much the mass poverty and population collapse, but rather, the way things turned out so badly in Russia’s newly-privatized companies and industries. That was the one thing that was supposed to go right. According to the operative theory-- developed by the founding fathers of libertarianism/neoliberalism, Friedrich von Hayek, Ludwig von Mises, Milton Friedman and the rest-- a privately-owned company will always outperform a state-run company because private ownership and the profit-motive incentivize the owners to make their companies stronger, more efficient, more competitive, and so on. The theory promises that everyone benefits except for the bad old state and the lazy.

That was the dominant libertarian theory framing the whole “shock doctrine” privatization experiment in Russia and elsewhere. In reality, as everyone was forced to admit by 1999, Russia’s privatized companies were stripped and plundered as fast as their new private owners could loot them, leaving millions of workers without salaries, and most of Russia’s industry in far worse shape than the Communists left it.

Most of the free-market proselytizers-- ranging from Clinton neoliberal Michael McFaul (currently Obama’s ambassador to Moscow) to libertarian Pinochet fanboy Andrei Illarionov (currently with the Cato Institute)-- blamed everything but free-market experiments for Russia’s collapse.

...[Milton] Friedman’s rationalization... that without this “rule of law” to protect their private property, the new private owners of Russia’s industries were incentivized to plunder their companies as quickly as possible for fear that the state would steal their companies back. Of course, all this rationalizing was undermined by fact that Russia’s oligarchs stole their companies in the first place, and thieves do tend to steal what they’ve stolen. But never mind-- the libertarian ideology was salvaged, as Russia’s privatization experiment was declared “not a real free-market” without Friedrich Hayek’s “rule of law” in place.

The reason I’m bringing this up now is because over the past month, one of America’s most rapacious oligarchs, Aubrey McClendon, was exposed by Reuters for plundering Chesapeake Energy, the second-largest natural gas producer in the country after Exxon-Mobil. McClendon, co-founder, CEO and until a few weeks ago Chairman of Chesapeake, was discovered running a hedge fund inside of Chesapeake, personally profiting on the side from large trading positions that his public company Chesapeake took in the gas and oil markets.

Reuters also discovered that McClendon took small personal stakes in natural gas wells bought by Chesapeake, then borrowed against the wells’ reserves from the same banks that Chesapeake borrowed from—basically, the banks kicked back sweet lending deals to McClendon on the side as McClendon arranged less-than-sweet loans to his publicly-owned company, Chesapeake, kicking profits from Chesapeake’s shareholders and employees’ pockets into the banks and into Aubrey’s accounts.

The loser in all this, as always: Employees, retirees, and shareholders. As Reuters reported, Chespeake is one of a small handful of companies whose employee 401k retirement packages consist mostly of Chesapeake stock, and the company requires employees to hold on to their stock for the maximum amount of time allowed by law:
Thousands of Chesapeake workers have retirement portfolios that are heavily invested in Chesapeake stock, which has declined sharply following revelations about Chief Executive Aubrey K. McClendon’s business dealings.

But while retail and institutional investors have sold the stock, employees don’t always have that option.

It’s not the first time McClendon has been caught plundering Chesapeake at the expense of shareholders, pension fund investors and employees: In 2008, McClendon bet and lost about $2 billion worth of Chesapeake Energy stock he owned-- 94% of Aubrey’s personal stake in Chesapeake-- on a margin call when natural gas prices collapsed. Aubrey bet that natural gas prices would continue soaring, you see.

But like his peers in the oligarchy class, Aubrey’s loss became everyone but Aubrey’s loss: He was awarded a “CEO bailout” by his board of directors, who honored Aubrey with a $75 million “bonus” to bring his total pay in 2008 to $112 million, making Aubrey McClendon the highest-paid CEO in Corporate America that year. Even though Chesapeake’s earnings dropped in half, and its stock fell 60%, wiping out up to $33 billion in shareholder wealth.

Now, we’re learning, Aubrey was profiting in other ways off of Chesapeake that same year.

There is so much more to hate about Aubrey McClendon than this-- the millions McClendon poured into Gary Bauer’s gay-bashing outfit “Americans United To Preserve Marriage” and the Swift Boat Veterans for Truth, the role McClendon and his Whirlpool heiress wife played in stealing waterfront land from Benton Harbor, an African-American slum and the poorest city in Michigan, in order to expand an exclusive golf course country club for residents of St. Josephs, where McClendon owns several plots of land. McClendon’s wife, Katie, is from St. Joseph’s; so is Katie’s cousin, Fred Upton, the Republican Congressman from St. Joseph’s. Aubrey and his wife are what pass for royalty (sans noblesse oblige) these days: Katie from the Whirpool fortune, Aubrey an heir to the Kerr-McGee fortune. (If you’ve seen the movie Silkwood, you might remember Kerr-McGee as the company that iced the labor union activist played by Meryl Streep.)

This is just one of many stories about how publicly-traded companies have been and can be transformed into elaborate schemes to loot and steal from the public and enrich a tiny handful of oligarchs. We saw this in the 1980s when Reagan deregulated the Savings & Loans, which were quickly transformed into a means of looting, fraud and plunder; we saw it in the 2000s, after the de-regulation of the financial sector.

The problem goes much deeper than Milton Friedman’s “rule of law” fetish. “Rule of law” is just another red herring diversion to provide cover for continued oligarchy plunder, failure and barbarism. The problem is systemic, and more importantly, ideological. We still operate under the same neoliberal/libertarian major premises we inherited from the Hayek-Mises-Friedman era, an ideology that considers notions like “the public good” to be quaint delusions at best-- as opposed to today’s still-dominant, still-standing foundational ideology, which says that freedom equals the ruthless pursuit of individual self-interest, the unlimited acquisition of private property and wealth, framed within a cold, dystopian “rule of law.”

That is where the problem starts. That is why, every week, I could tell another story about another Aubrey McClendon or Dick Parsons, and it will never end until the ideology that enables them is buried.

So, never. Guillotines won't work, not with the weapons these bastards have. We are so fucked-- and we're a coin toss away from electing one of them to the presidency!

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At 6:17 AM, Anonymous Anonymous said...

Prescient article. And now McClendon is dead, but Trump is poised to take the (R) nomination for president. And all his stupid followers think he's going to fight for them.....


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