Here we go again with more fat cat corporate greed. And another fat cat, Chris Christie hints he's interested in running with Romney. How appropriate, a fat cat ticket. But this story is going to sink the GOP.
The Conservative Menace: Chesapeake Energy Corp
Once again we get reminded of what a Republican/Libertarian America would look like as the next and newest type of Enron emerges.
Chesapeake Energy Corp is being investigated for the actions of it's CEO and the poo is just starting to hit the fan.
A greedy CEO, a board of yes men, including former Republican Governor Frank Keating, a complex spider web of deals and questionable actions, and it's looking pretty much like another prime example for why we need regulations and controls on business.
And as usual, it's the going to be the tax payer and the middle class stockholders who will get to eat the losses. Not everyone has the option to not invest in Chesapeake if they have mutual funds, pension plans, etc...so when Chesapeake implodes those are the people who
lose everything. if Chesapeake falls apart, it's the social programs that get to pick up the pieces when people lose their jobs.
Privatize the profits but socialize the losses.
But that won't stop the day dreamers like Libertarians and Ayn Randtards. They're still going to praise the purity of unrestricted unregulated business because fantasy is much easier to deal with when reality is so cruel.
"Reuters reported on April 18 that McClendon, who founded the company, had borrowed as much as $1.1 billion in the last three years against his ownership stakes in wells that he received under the company's 'Founder Well Participation Program.'"
"Chesapeake also confirmed in an amendment to its annual report filed with the SEC that Mr. McClendon has mortgaged his well stakes with lenders, some of whom have business relationships with Chesapeake. The Wall Street Journal reported that Mr. McClendon has received loans from private-equity firm EIG Global Energy Partners in addition to Wells Fargo & Co., Bank of America Corp. and
Goldman Sachs Group Inc. None of the companies have commented on the
relationship, and a Chesapeake spokesman on Monday declined to discuss the IRS review."
"The loans had been previously undisclosed to shareholders, analysts and academics said, raising concerns that McClendon's personal financial deals could compromise his fiduciary duty to Chesapeake."
"Investors should also be wary of the company’s monstrous complexity. It has convoluted off-balance sheet liabilities thanks to convoluted partnerships; hedging gains have dwarfed profit since 2006; and cash flow is consistently negative."
"With no cash flow and its byzantine structure, Chesapeake is a trust-me story. The CEO’s personal transactions raise questions about the basis for such faith. All the more reason for investors to steer clear unless and until McClendon and his colleagues can explain exactly what’s in the corporate black box they have constructed."
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Originally Posted by Conley
