Lack of Ethics at Chesapeake Energy

Lack of Ethics at Chesapeake Energy

George T. Gadberry

SCM 302

4 December 2012

Many things happen in business that can be deemed unethical. I would suggest that while that maybe there are some that once dissected prove to show the lack of an ethical code throughout.

The story that I found discussed the Chief Executive Officer (CEO) of the Chesapeake Energy Corporation. CEO Aubrey Mclendon was under investigation for loans that he received from an investment firm that was a partner of his company (Chesapeake Energy Corp) (Lynch & Viswanatha, 2012). Even further, the article detailed that these loans enabled Mr. Mclendon to take part in a special perk that allowed him to gain 2.5% interest in every well that was dug for Chesapeake Energy (Lynch & Viswanatha, 2012). The list does not stop there as Mr. McClendon also is under investigation for running a hedge fund that dealt with the same commodities in which Chesapeake worked with (Shiffman, Driver & Grow, 2012).

A later article by Reuters looked further into actions of Mr. Mclendon. These reporters uncovered that in 2010 over 15,000 man hours and $3 million in funds was used to support personal projects and an additional $3.2 Million in 2011 all for Mr. McClendon(Shiffman, Driver & Grow, 2012). It is also stated that six full time workers were employed in the unofficial Aubrey K. McClendon (AKM) operations that was located on the corporate campus(Shiffman, Driver & Grow, 2012). Mr. McClendon was also tracked to have spent over $2.25 Million worth of business flights, in which family members usually accompanied him(Shiffman, Driver & Grow, 2012). The use of air transport did not stop there as $1 million of personal flights were taken. One these personal flights were logged to Bermuda with nine friends of the Mrs. McClendon but no McClendon’s were on board(Shiffman, Driver & Grow, 2012).

Now after reading the information above it would be easy to say that Mr. McClendon...