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Enron with drilling rigs
Last week, Reuters broke some unsettling news about Chesapeake Energy CEO and self-proclaimed "world's biggest fracker" Aubrey McClendon. Over the last three years, Aubrey has taken out over a billion dollars in loans to finance Chesapeake's drilling operations. For collateral, he's used his stake in the very same wells he's taken out loans to finance. Because of a highly unorthodox job perk, Aubrey stands to receive 2.5 percent of the earnings from the wells he's financing, while the risk that the wells don't turn a profit is passed on to state pension funds and other large investors.
When the news broke, Chesapeake's stock immediately lost ten percent of its value and became one of the most traded stocks on Wall Street. The news adds additional credibility to accusations that Chesapeake Energy, which is already struggling to cope with a $10 billion dollar revenue shortfall, is a gas-fueled Ponzi scheme destined to go the way of Enron, WorldCom and Lehman Brothers
Details about this story are still emerging, but one thing is clear: whether or not Chesapeake Enrons its way into the history books, it's already destroyed the American Dream for thousands of families all across the country by poisoning their water, air and bodies.
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