Bad News for Oklahoma's High-Flying Chesapeake Energy

In case you missed it, it hasn't been a good week for Oklahoma City's Chesapeake Energy. More accurately, it hasn't been a good year for the company.

The company's stock has fallen 45 percent since the beginning of 2011, according to press reports, and the company's CEO, Aubrey McClendon, has racked up "more than $846 million in debt from companies and banks also doing business with Chesapeake…."

This was from Bloomberg News, which knows a little bit about high finance. And this was headline on the Bloomberg story in the Tulsa World Tuesday: "Chesapeake's directors enjoyed cozy deals."

And who are these directors? None other than former Oklahoma Gov. Frank Keating and current OSU President Burns Hargis, among others. According to one critic quoted by Bloomberg, the company's directors "repeatedly failed to exercise independent oversight."

What's more, the directors were well paid, taking home more than directors at similarly sized energy companies. Then there's the cozy deal allegations, which involve the employment of directors' relatives (Keating's son and daughter-in-law) and numerous gifts to a university run by a director (OSU).

We don't claim any expertise in financial matters of this sort, but this can't be good publicity for Oklahoma or its energy industry.

Indeed, it looks a like what some wags call crony capitalism. It's not a good thing.