Kelly Schmidt

Wed, 2014-06-11 13:09Steve Horn
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Revealed: Emails Show ND Ethics Law Potentially Broken on Petraeus Fracking Trip

DeSmogBlog has obtained emails via North Dakota's Open Records Statute revealing facts that could be interpreted as indicating that North Dakota Treasurer Kelly Schmidt broke State Investment Board ethics laws.

The potential legal breach occurred during a late-April fracking field trip made to the state by former CIA Director Gen. David Petraeus.

In a radio interview responding to DeSmogBlog's original investigation about the trip, Schmidt said rolling out the red carpet for Petraeus — who now works at Manhattan-based private equity giant Kohlberg Kravis Roberts (KKR), which holds over $1 billion in oil and gas industry assets and calls itself a “mini oil and gas company“ — was “not unusual.”

KKR initially told DeSmogBlog it followed all state and federal laws during the Petraeus visit. 

But new emails obtained by DeSmogBlog from both the North Dakota State Investment Board and the Office of the North Dakota State Treasurer call that and much more into question. 

Rewinding back to where it all began, for the final stops of the two-day Petraeus visit to North Dakota, he and his KKR colleagues Ari Barkan and Vance Serchuk met with representatives from the North State Investment Board and the North Dakota Department of Land Trusts.

Banal convenings at face-value, what preceded and followed the meetings tells a bigger story: first a crucial plane flight and then a follow-up invitation to come to New York City to talk business.

Looked at on the whole, the plane flight and what came after it raises fundamental legal and ethical questions about the burgeoning — and much-touted in some circles — North Dakota oil and gas Legacy Fund.  

Thu, 2014-05-29 17:00Steve Horn
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ND Treasurer: Red Carpet Rollout for Gen. Petraeus Fracking Field Trip "Not Unusual"

North Dakota Treasurer Kelly Schmidt has responded to DeSmogBlog's investigation of the Bakken Shale basin fracking field trip her office facilitated for former CIA Director Gen. David Petraeus, who now works at the Manhattan-based private equity firm Kohlberg Kravis Roberts (KKR)

Schmidt expanded on the initial comments she provided to DeSmogBlog in response to our findings obtained via North Dakota Open Records Statute. Among other things, she described the blurred lines existing between the North Dakota government, the oil industry and private equity firms like KKR as “not unusual.” 

Schmidt's comments came on May 23 on WDAY's Jay Thomas Show, guest hosted that day by Rob Port, just over three weeks after her office hosted Petraeus.

DeSmogBlog's May 22 investigative piece revealed that KKR — which has ties to North Dakota's hydraulic fracturing (“fracking”) boom via Samson Resources and The Ridge housing complex and considers itself a “mini oil and gas company” — wrote the press release for the Office of North Dakota State Treasurer announcing Petraeus' visit, closely counseled Schmidt's office on media strategy and hosted Schmidt on a company chartered private jet.

Thu, 2014-05-22 14:13Steve Horn
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Documents: Petraeus Fracking Field Trip Reveals ND Government, Oil, Private Equity Nexus

DeSmogBlog has obtained hundreds of documents portraying the blurred lines between North Dakota's government, the oil and gas industry and the private equity world. They also offer one of the first looks inside the professional life of former CIA Director Gen. David Petraeus after he resigned from the agency in 2012.

The documents reveal Kohlberg Kravis Roberts (KKR) — a private equity firm where Petraeus now works at the KKR Global Institute — wrote a press release for North Dakota's State Treasurer announcing the Petraeus visit, meticulously counseled the state treasurer's office on media strategy and hosted the state treasurer on its company plane.

A large part of Petraeus' visit centered around a tour of the state's Bakken Shale basin, where upwards of 1 million barrels of oil are extracted each day via hydraulic fracturing (“fracking”). The Bakken pumped out its billionth barrel of oil during his stay.

KKR, with $87 billion in assets, owns two major Bakken entities: The Ridge in Williston, ND, and Samson Resources.

The Ridge is a KKR-owned housing complex for Bakken oil and gas workers, while Samson Resources is a major company fracking for oil and gas throughout the U.S., including in the Bakken.  

With over $4 billion sitting in an energy investment fund as of June 2012, KKR also owns over $950 million in oil and gas industry assets. Marc Lipschultz, head of energy and infrastructure for KKR, called the firm a “mini oil and gas company“ in an April 2013 interview with Privcap.

“We have our own technical abilities attached to the firm we have our own back office [and] we can manage the daily flows of oil and gas in drilling wells and managing our own hedges,” said Lipschultz. 

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