News yesterday of the death of former Chesapeake Energy CEO Aubrey McClendon in a fiery car crash one day after being indicted on federal charges for bid-rigging is raising a lot of eyebrows. We’ll have to wait for the results of an investigation (early reports say he wasn’t wearing a seat belt and crashed at a high rate of speed), but details in the Wall Street Journal story suggest McClendon was in deep personal financial trouble as well as being doubly bankrupt on an epic scale in his last two business ventures.
McClendon has always taken huge risks and borrowed money on a scale that would make Donald Trump blush, but he also did one very strange thing a few years back that made me wonder about him and also decide that I’d never invest in the stock of any company he was running: he secretly gave $25 million to the Sierra Club for the Sierra Club’s “Beyond Coal” campaign, for the obvious reason that it would benefit his natural gas company if coal were squeezed by new regulation. It’s a perfect instance of the “Bootleggers and Baptist” phenomenon. (See the four-minute video below with the great Bruce Yandle if you’re not familiar with this.)
But as the Sierra Club and other environmental groups have made clear, once they’re done killing coal they’re going after natural gas next. Did McClendon think they’d spare him? He was a perfect example of Churchill’s description of an appeaser as someone who feeds the crocodile hoping he’ll be eaten last. I lost all respect for McClendon when this news leaked out, and it was a great embarrassment to the Sierra Club as well. He was rent-seeking bootlegger. A lot of them died in high-speed crashes back during Prohibition, usually being chased by the law.
Bootleggers and Baptists: