Aubrey McClendon, the controversial former CEO of Chesapeake Energy Corp., died Wednesday in a car crash in Oklahoma City, just one day after he was indicted for allegedly working with a competing company to keep drilling rights artificially low amid the nationwide boom in natural gas production.
Oklahoma City Police Department officials confirmed the death, which they said occurred in a one-vehicle crash at about 9 a.m. local time. Oklahoma City news reports cited police statements that the vehicle McClendon was driving hit a wall under a bridge at a speed of more than 40 miles per hour.
American Energy Partners, McClendon's new company, issued a statement that confirmed his death.
"Aubrey's tremendous leadership, vision, and passion for the energy industry had an impact on the community, the country, and the world. 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," the statement said. "We will deeply mourn his loss and please join us in expressing our condolences to his family."
On Tuesday, a federal grand jury had indicted the 56-year-old McClendon, accusing him 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 U.S. Justice Department said Tuesday in a statement.
"His actions put company profits ahead of the interests of leaseholders entitled to competitive bids for oil and gas rights on their land," Assistant Attorney General Bill Baer, of the Justice Department's Antitrust Division, said. "Executives who abuse their positions as leaders of major corporations to organize criminal activity must be held accountable for their actions."
If convicted of violating the Sherman Antitrust Act, McClendon would have faced up to 10 years in prison and a $1 million fine.
The charge is "wrong and unprecedented," McClendon had said in a statement.
The grand jury indictment came after the hydraulic fracturing process McClendon championed for accessing trapped oil and gas had 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.
West Virginia was among the states where Chesapeake's operations greatly expanded, helping to fuel a boom in gas drilling and production in the state's Northern counties. Chesapeake sold most of its West Virginia assets in late 2014 to Southwestern Energy.
In 2008, Chesapeake dropped plans for a new regional corporate headquarters in Charleston after the West Virginia Supreme Court declined to review a $400 million verdict in favor of landowners who had alleged that they were cheated by the company. The next year, Chesapeake again cited that court ruling when it eliminated more than 200 jobs in Charleston.
Also in West Virginia, Chesapeake pleaded guilty to three criminal Clean Water Act violations related to the illegal filling of waterways with drilling waste.
In the new criminal case against McClendon, the alleged conspirators reportedly 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, would not 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," McClendon's lead lawyers, Abbe Lowell, of Chadbourne & Parke, and Williams & Connolly's Emmet Flood, said in a statement. "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, until 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, until commodity prices cut the company's growth and restricted its access to credit.
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 be confirmed Wednesday through court records.
Prosecutors said McClendon contacted an unnamed co-conspirator at Company B in 2007 and proposed that they stop competing on bids to purchase leases.
The antitrust law McClendon is accused of violating, the Sherman Act, carries 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 had 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 continuing.
Chesapeake paid a $25 million penalty to Michigan last year to settle allegations that 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, but it never brought charges.
In its most recent annual report to shareholders, Chesapeake said the investigations into possible antitrust violations involved the company's activities "in various states," but did not identify which states.