Reuters had already gotten results for its outstanding investigation into Chesapeake Energy and the conflicts of its swashbuckling CEO Aubrey McClendon.
In May, less than two weeks after the first piece in the Reuters series, which showed that McClendon had borrowed more than a billion dollars against well interests from a company doing business with Chesapeake, the board stripped him of his chairmanship. Weeks after Reuters exposed a cozy drilling-rights alliance between Chesapeake and a competitor in June, the Justice Department opened an antitrust investigation into the matter.
And now it’s had the biggest impact yet: McClendon is being run out of the company he founded, having resigned yesterday “due to certain philosophical differences that exist between the Board and me,” according to an email to employees posted by The Lost Ogle.
The Pittsburgh Post-Gazette deserves a round of applause here, since it was first to report that McClendon was borrowing against his well interests.
But make no mistake: This is Reuters’s scalp, and it’s a big one. While Chesapeake’s market capitalization is now just $12 billion, that’s down two thirds from 2008, largely because Chesapeake was a victim of its own success. The natural gas fracking techniques it helped pioneer and its aggressive—some would say reckless—drilling across the country flooded natural gas onto the North American market, sending prices into a tailspin.
That’s had enormous economic and environmental consequences that we’re only beginning to understand. Forbes’s Chris Helman yesterday called McClendon “the greatest wildcatter of his generation.”
That Chesapeake’s board was, as recently as last summer, dominated by McClendon cronies, makes this all the more remarkable. Although this statement has the look of a lawyer-negotiated whitewash:
The Board expects to release the results of its previously announced review of the financing arrangements, and other matters, between Mr. McClendon (and the entities through which he participates in the Founder Well Participation Program) and any third party that has had or may have a relationship with the company in any capacity, in its earnings announcement scheduled for release before market open on February 21, 2013. The Board’s extensive review to date has not revealed improper conduct by Mr. McClendon. The Board and Mr. McClendon’s decision to commence a search for a new leader is not related to the Board’s pending review of his financing arrangements and other matters.
We’ll see about that.
In the meantime, let’s see how other outlets covered Reuters’s role in McClendon’s demise, which you really can’t ignore if you’re giving readers the context they deserve. Beat reporters tend and their bosses not to like to give credit to competitors who have scooped them repeatedly.
The Wall Street Journal doesn’t deign to mention Reuters at all in its Marketplace cover piece, which is a big hole in its story. Bloomberg is chintzy, crediting “media reports” rather than its top competitor. That’s pathetic, but at least it mentioned the press’s role, unlike the Journal.
Shareholders including Carl Icahn, the activist investor, forced a shake-up of the board last year after the revelation by Reuters of Mr McClendon’s previously undisclosed borrowings intensified concerns about corporate governance.
It might be cynical to note that Reuters is more of a competitor to the WSJ (Dow Jones) and Bloomberg than it is to the FT and the NYT, but there it is. By ignoring or downplaying a competitor’s scoop, particularly one that sent a company’s shares down 10 percent at one point, you’re not telling the whole story.