SUNY Shale Institute Funder Fracked by SEC Probe
by Buck Quigley
Last week Aubrey McClendon was removed from his position as chairman of the board of Chesapeake Energy, the company he founded. He remains CEO while the company confirms that the Securities and Exchange Commission continues an “informal” investigation launched on April 26. It is suspected that the SEC’s curiosity surrounds how McClendon borrowed over $1 billion over the last three years using minority shares in Chesapeake wells—a corporate perk he enjoyed called the “Founders Well Participation Program.” The SEC has requested certain documents not be destroyed until they can investigate.
On April 30, Chesapeake confirmed that the Internal Revenue Service is conducting its own investigation into the situation. On May 1, the company announced it will be ending the controversial perk.
In addition, an investigation by Reuters found McClendon to be running a $200 million hedge-fund from 2004-2008 from inside corporate headquarters—trading in commodities Chesapeake produces. For his part, McClendon said he was “‘deeply sorry’ for the turmoil he’s caused.” The company’s stock has dropped over 15 percent.
Chesapeake Energy is one of the sponsors of the SUNY Fredonia Shale Resources Institute. Gary Lash—a SUNY Fredonia geosciences professor—formed the institute. Lash and Penn State colleague Terry Engelder were named among the top 100 global thinkers by Foreign Policy magazine in 2011 for their work in estimating the amount of natural gas trapped in Marcellus shale deposits. (Penn State runs a similar institute at the Pennsylvania state school called the Penn State Marcellus Center for Outreach and Research.) Lash and Engelder are also partners in a fracking consulting firm called Appalachian Fracture Systems, Inc. Among other things, their firm produced a “science briefing” for former Pennsylvania Congressman John Peterson—an unabashed pro-fracking advocate. Other researchers have sharply questioned the estimates.
Artvoice drew attention to the Fredonia institute (and its big brother, the UB Shale Resources and Society Institute) in an April 5 blog post—before UB’s institute had even been rolled out to the public. Since then, the Fredonia institute’s website has been taken down. UB’s institute still doesn’t have a website up yet.
SUNY Fredonia spokesperson Michael Barone told us he had no idea why the Fredonia website was down, and stressed that he did not direct that it be taken down. He also confirmed that since the institute’s funding is filtered through the Fredonia College Foundation, all information pertaining to corporate funders like Chesapeake is beyond the reach of the Freedom of Information Law.
We can only presume the new institute at UB will be funded the same way as Fredonia’s was—through support from gas industry companies like Chief Oil and Gas, Seneca Resources, EQT, Thermoscientific, Shell, and Chesapeake Energy—but UB spokesperson John DellaContrada is tight-lipped about it. On April 30, we sent him an email asking if he could share the list of sponsors/donors/funders of the new UB institute, along with the dollar amount of their support. We also asked if donations to UB’s institute would be filtered through one of UB’s foundations, and if so, which one?
The next day we received a one-sentence reply: “Philanthropic support is pending from a variety of potential funders.”
Apparently, anonymity is highly prized by corporate donors that are under investigation for securities fraud.
Meanwhile NYS Senate Bill 5797—which would make the foundations of SUNY schools subject to FOIL—continues to move through the Education Committee.
At the University at Buffalo, foundations have been used to hide a variety of activities beyond their mission statements. If S5797 were to become law, it might help the reputations of SUNY foundations—as well as the reputation of the State University of New York as a whole.blog comments powered by Disqus
Issue Navigation> Issue Index > v11n19 (Best of Buffalo Issue, week of Thursday, May 10) > Week in Review > SUNY Shale Institute Funder Fracked by SEC Probe
This Week's Issue • Artvoice Daily • Artvoice TV • Events Calendar • Classifieds