Fraud

New Fraud Allegations Emerge at Troubled 'Clean Coal' Project As Southern Co. Records Multi-Billion Loss

Southern Company CEO Tom Fanning

Southern Co. is accused of fraudulently misrepresenting the prospects for its troubled “clean coal” project in Kemper County, Mississippi in several legal filings this summer.

Southern announced in late July that it was shuttering the troubled “clean coal” part of Kemper after construction ran years behind schedule and the company spent $7.5 billion on the 582 megawatt power plant — over $5 billion more than it first projected.

In a lawsuit filed today, Brett Wingo, a former Southern Company engineer, alleges he warned the company's top executives that it would not be possible to meet key construction deadlines. Management responded by retaliating against him, the complaint asserts, and Southern continued to assure investors and the public that Kemper's schedule and budget targets would be met, then blamed unpredictable factors like the weather when those goals were missed.

Koch-Funded Groups Slapped With Fines By Federal Election Commission

Charles and David Koch, the nefarious Koch Brothers, have vowed to spend as much as $889 million on the 2016 elections in the United States. This money will be funneled through a massive network of faux grassroots organizations, lobbyists, and direct candidate donations. This $889 million is the single largest sum ever committed by individuals, meaning that Charles and David will have more financial sway over the 2016 elections than any other individual, or group, in the history of American politics.

Of course, the Koch brothers have spent hundreds of millions, if not billions, on political activities in recent years, and their seemingly unlimited spending finally drew the ire of the Federal Election Commission (FEC). This week it was announced that three Koch-linked groups are being fined a combined total of $233,000 for violating campaign finance laws by concealing the sources of their funds. The three groups are the American Future Fund, 60 Plus Association and Americans for Job Security.

SEC Charges "Frack Master" Chris Faulkner, Shale CEO and Industry Advocate, with $80 Million Fraud

At the start of June, Chris Faulkner, Chief Executive Officer of Breitling Energy, was a high-flying shale company executive and media darling, often interviewed on CNN, Fox Business News and even the BBC. During his most recent appearance on CNN on June 2nd, he weighed in on the financial prospects for drillers who survive low oil prices despite the spate of bankruptcies sweeping the shale industry.

It was hardly the first time the Texas oilman aired his views on the national stage. “The era of coal is coming to an end,” Mr. Faulkner told The New York Times in June 2014. “We are entering the era of natural gas.”

“Instead of rejecting promising new energy-extraction techniques, citizens should work with responsible energy companies to preserve the benefits of fracking, while stamping out current abuses,” he said in the Wall Street Journal in August of the same year.

High-Level EPA Adviser Accused of Scientific Fraud in Methane Leak Research

It's one of the highest-stakes debates in the battle over climate change policy action: how much methane is spewing from oil and gas sites nationwide, and what do we do as a result? If enough of the odorless, colorless methane gas leaks or is vented into the air, scientists say, then burning natural gas — marketed as a green fuel that can help wean the U.S. off of high-carbon fuels — will actually be worse for the climate than coal, long seen as the fuel that contributes the most to global warming.

Recently, over 100 community and environmental groups sent a letter urging the Environmental Protection Agency's internal watchdog to investigate claims that a top methane researcher had committed scientific fraud and charging that he had made false and misleading statements to the press in response to those claims.

Earlier this month, NC WARN, an environmental group, presented the EPA Inspector General with evidence it said showed that key research on methane leaks was tainted, and that one of the EPA's top scientific advisors fraudulently concealed evidence that a commonly-used tool for collecting data from oil and gas wells gives artificially low methane measurements.

Following Sudden Death of Indicted Former Chesapeake Energy CEO, Justice Department Investigation into Collusion Continues

Last Tuesday, the Justice Department announced criminal charges against former Chesapeake Energy CEO Aubrey McClendon, stemming from an alleged lease bid-rigging conspiracy between McClendon and another unidentified oil and gas company. The felony count against McClendon carried up to a decade in prison and $1 million in fines.

Shortly after 9 AM the next day, McClendon crashed his SUV at over 50 mph into a concrete highway overpass and died instantly of blunt force trauma. Police are continuing to investigate McClendon's cause of death, awaiting toxicology results and other data, and have not ruled out the possibility that the car wreck may have been a suicide.

“He pretty much drove straight into the wall,” Oklahoma City Police Department Capt. Paco Balderrama told a local NBC affiliate. “There was plenty of opportunity for him to correct and get back on the roadway and that didn’t occur.”

The dramatic exit of one of the most flamboyant wildcatters in the shale rush stunned many observers — and his abrupt death may serve to pull attention away from the underlying crimes that McClendon was so recently accused of committing. The acts McClendon, age 56, stood accused of occurred at the height of the shale land rush and were committed in his role as then-CEO of Chesapeake Energy, the nation's second largest natural gas producer.

Before McClendon died, Forbes writer Chris Helman noticed something very interesting in the former CEO's response to his indictment: McClendon didn't deny the acts underlying the charges, he simply argued that others in oil and gas industry also engaged in the same conduct.

"Bait and Switch": Pennsylvania Sues Driller and Pipeline Company Over Deceptive Deals

Pennsylvania's beleaguered top prosecutor has filed a civil action against two of the nation's largest oil and gas companies, Chesapeake Energy and pipeline company Williams Partners LP, alleging that the companies defrauded over 4,000 property owners out of the royalties owed for shale oil and gas produced from their land.

“This alleged conduct amounts to a 'bait-and-switch,'” Attorney General Kathleen Kane said in a statement. “Pennsylvania landowners were deceived in thousands of transactions by a company accused of similar conduct in several other states,” she added, referring to Chesapeake Energy, which has faced class actions in Texas, Louisiana and Ohio over its royalty payments.

When the Shale Runs Dry: A Look at the Future of Fracking

If you want to see the future of the shale industry — what today's drilling rush will leave behind — come to Bradford, Pennsylvania.

A small city, it was home to one of America's first energy booms, producing over three quarters of the world's oil in 1877. A wooden oil rig towering over a local museum commemorates those heady days, marking the first “billion dollar oil field” in the world.

But times have changed dramatically in Bradford. Most of the oil has been pumped out, leaving residents atop an aging oil field that requires complicated upkeep and mounting costs. Since its height in the 1940's, Bradford's population has steadily declined, leaving the city now home to only 8,600 people, down from over 17,000. 

The story of Bradford these days is a story of thousands of oil and gas wells: abandoned, uncapped, and often leaking.

To drive through McKean County, home to Bradford and much of the Allegheny National Forest, is to witness an array of creative ways people have found to hide the remnants of this bygone boom. Rusted metal pipes — the old steel casings from long abandoned wells — jut from lawns and roadsides. Mailboxes are strapped to some of the taller pipes. In autumn, abandoned wells are tucked behind Halloween props and hay bales in front yards.

The aging steel pipes aren't just on land. They line creek beds, water flowing around one rusted pipe then another.

Hundreds are even submerged in the Allegheny Reservoir, small bubbles of methane gas the only visible sign of their existence. But in many cases, these rusted top hats from now deceased wells simply protrude from locals' lawns.

They are visual reminders that, for local communities where mining or drilling happens, fossil fuel wealth burns hot and short. Where there's a boom, there's bound to be a bust.

BP Attempts To Misdirect Public With Claims Of Fraud

Oil giant BP is again attempting to convince the public that the oil spill settlement process for their destruction of the Gulf of Mexico resulting from the 2010 Deepwater Horizon oil rig explosion and leak, is completely riddled with fraud.

The company filed a fraud lawsuit earlier this week to stop payments on the claim process while investigators look into the fraud allegations. According to BP, one of the law firms representing oil spill victims has been submitting and receiving payment for claimants who don’t actually exist. 

The specific payments that BP is hoping to stop come from the Seafood Compensation Fund, a fund that was set up to pay fishermen and others who rely on the seafood industry as their source of income. The company says that Louisiana attorney Mikal Watts has filed 648 claims on behalf of seafood industry workers, and that 8 of those have been verified as accurate with 17 more still pending approval. 

Watts’ attorney has fired back at BP, saying that Watts did nothing illegal during the spill process, and submitted the appropriate documentation for every spill claim that he has filed. BP insists that at least half of Watts’ clients don’t exist.

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