Monday, June 4, 2012

The Pegulas: You Can't Tell the Players Without a Scorecard!

Connecting the Dots
The Marcellus Natural Gas Play Players - Part 1
You Can't Tell the Players Without a Scorecard!

The Beginning
One Sunday afternoon in the summer of 2009 there was a knock at our door.  It was a landman from Encana.  He wanted us to sign a gas drilling lease; we agreed to look it over.

We didn’t know much about gas drilling and what it would mean to our area.  Although we only have 3/4 of an acre this was our little piece of heaven, from the woods behind our home to the view of the Endless Mountains.  

I began searching the internet to learn about the Marcellus Shale Formation and gas leases.  Much of what I found was industry talking points promising a lot of money for leases in the form of a signing bonuses and royalties.   The money would be nice, but what was the real cost?  The industry talking points didn’t say.

A local group, Gas Drilling Awareness Coalition of Luzerne County began holding informational meetings and we went to learn the other side of the issue, the risks, and the potential hazards.
I am naturally skeptical of what I am told by any group, or corporation.  My rule of thumb is to disregard half, and verify the rest – so back to Google I went and did my own digging.   This resulted in my becoming more involved with GDAC and going back to Google to check out the various Gas Corporations operating in Marcellus Shale.

As I researched Gas Corporations, I found certain names appearing in conjunction with other Gas Corporations.   I soon realized that jotting down names was not the way to go, and the Marcellus Gas Play Players spreadsheet was born. 

Connect the Dots
The Marcellus Gas Play Players spreadsheet is very much a work in progress.  To date, it contains over 3,800 names of gas corporations, their leadership, and boards of directors, lobbyists, astro-turf groups, industry organizations and politicians.   One dot leads to another and creates a very interesting picture of how gas drilling and politics mix.

If anyone tells me that corporate money does not influence politics – please let me know where you live, because it sure isn’t in America.  The amount of money pouring into Pennsylvania from the gas corporations is outrageous.  Pennsylvania does not have campaign donation limits for state offices – it’s unlimited and its power is enormous.

The natural gas industry gave $7,175,234 to Pennsylvania candidates and Political Action Committees (PACs) from 2000 through the end of 2010, according to a Common Cause/Pennsylvania (CCPA) analysis released today.  $3,442,212 was donated to elected officials currently in office.  

The top recipient remains Governor Tom Corbett, with a total $1,634,096 in contributions from the natural gas industry. Corbett raised $1,083,315 of that total in 2009-2010 from 216 donations.  He is followed by Senate President Pro Tempore Joseph Scarnati, with $293,333.  

Giving by the industry doubled from the 2008 election cycle ($1,004,757) to the 2010 election cycle ($2,608,187).

Let’s take a look at one of the donors and the recipient.

In February 2011, Bloomsburg reports Billionaire Terry Pegula bought the National Hockey League’s Buffalo Sabres.  What does hockey have to do with gas drilling?  Maybe nothing, and maybe in the case of Terry Pegula – a lot.

On February 23, 2011 the Buffalo News reported:

Pegula drew violations as gas driller
In the course of making his fortune, the Florida billionaire, negotiating to buy the Buffalo Sabres, contributed heavily to politicians in a position to advance his business interests and established a less-than-stellar track record in the environmentally dicey business of drilling for natural gas, The Buffalo News has found.

A news review of compliance records found East Resources, the company Terrence M. Pegula sold last summer for $4.7 billion, had a middling record of complying with environmental regulations in Pennsylvania, his base of operations. The company last year paid the largest regulatory fine in its history and was involved in a spill of toxic wastewater that resulted in the first quarantine of cattle in the history of natural gas drilling in the state. 

(See: A Fracking First in Pennsylvania: Cattle Quarantine - by Nicholas Kusnetz - ProPublica, July 2, 2010)

On Sept. 17, Pegula announced his donation of $88 million — the largest philanthropic act in university history — to help fund a state-of-the-art ice arena, as well as the addition of men’s and women’s NCAA Division I hockey programs to his alma mater (Penn State).Buying a Hockey Team, big donation to Penn State .

Where did the money come from?
By Tom Taulli Posted 10:57AM 05/28/10 Energy, Company News                            

About a year ago, private-equity firm KKR struck a $350 million deal to invest in East Resources, a natural gas exploration and development company focused on an area called the Marcellus Shale, which stretches from Ohio and Virginia to New York. At the time, the transaction got little fanfare.
Well, now it's getting lots of attention. On Friday, Royal Dutch Shell (RDS) announced it had agreed $4.7 billion in cash for most of the assets of East Resources.

In Pennsylvania the subject of gas drilling was beginning to heat up, and it was also mid-term elections.  The future of gas drilling would depend heavily on who would be Governor.
There is no campaign donation limit in Pennsylvania.  Anyone can give any amount to any candidate. Corporate wallets and Political Campaign are wide open.
Approximately on September 2010:

Pegula: Marcellus Shale Development Good for Us                                                                                                                     

  “If you could tell students here at Penn State one thing, what would it be?”
He (Pegula) paused for just a millisecond before saying,

" I would tell students that this contribution could be just the tip of the iceberg, the first of many such gifts, if the development of the Marcellus Shale is allowed to proceed."

Penn State wasn’t the only beneficiary of the Pegula’s fortunes.
Kim Pegula (Terry’s wife) donated $180,000 to Tom Corbett’s campaign for Governor. 
Terry Pegula donated $100,000 to Tom Corbett’s Campaign for Governor

Kim and Terry both list their employer as Royal Dutch Shell:
Total Given to Date: $180,500 (4 records)
Contributor Type: Individual
Occupations Listed: HOMEMAKER, EXECUTIVE
Parent Organization: ROYAL DUTCH SHELL
Total Given to Date: $100,500 (2 records)
Contributor Type: Individual
Employers Listed: EAST RESOURCES, SELF
Occupations Listed: PRESIDENT & CEO, RETIRED
Parent Organization: ROYAL DUTCH SHELL
Per Source Watch : Pegula and his wife, Kim's, donations to lobbying groups and candidates accounted for 15 percent of all donations by the fracking industry.

Political Donations by Company Execs
Senior management has donated large amounts of money to politicians, front group PACs and the Republican National Committee.

Pegula and his wife, Kim, were frequent funders of pro-drilling politicians. Kim Pegula donated the most money in 2010 to a single candidate: $360,000 to Tom Corbett. Pegula and his wife are also major contributors at the federal level, with donations of $106,350 since 2006 to the National Republican Senatorial Committee and national and state Republican committees.

Pegula has also donated to his alma mater. In September 2010, he gave $88 million to build a Division I arena for Penn State's hockey team. Penn State is also the home of The Penn State Marcellus Center for Outreach and Research.  The center funds research for the advancement of methane drilling technology and procedures in the Marcellus Shale area. They are currently conducting a study on the safety of tap water in the homes surrounding the wells and fracking sites owned by East Resources and Shell.

Politicians who received contributions: Governor Tom Corbett (R-Pa.), Gubernatorial Candidate Lynn Swann (R-Pa.), Senator Don White (R-Pa.), Senator Joseph Scarnati (R-Pa.), Congressman Glenn Thompson (R-Pa.) and Senator Patrick Toomey (R-Pa.).

Below is a list of East Resources employee contributions between 2002-2010:
    Terrence and Kim Pegula - CEO and President - $630,000
    Robert Long - Executive Vice President - $50,000
    William Fustos - Chief Operating Officer - $7,000
    Jack Showers - Director of Community Relations and Regional Affairs  
                              for East and Shell - $1,500
    Paul Dudenas - Engineer - $1,000

According to Common Cause's "Deep Drilling, Deep Pockets", Pegula and his wife, Kim's, donations to lobbying groups and candidates accounted for 15 percent of all donations by the fracking industry.
In November 2010 Tom Corbett became Governor Tom Corbett.   The gas drilling issue is a priority for the new governor, so he decides to form a committee to make recommendations.

One of the newly appointed committee members is none other than Terry Pegula.

 I’m so surprised.  NOT.

November 2011 – The Penn State Sandusky Scandal breaks
November 9, 2011, 11:49 PM
What does Western New York's most prominent Penn State alum and booster think of the sex-abuse scandal allegedly involving former defensive coordinator Jerry Sandusky that has rocked the university? So far, he's silent.

Buffalo Sabres owner Terry Pegula has declined to make any comment on the chaotic situation at his alma mater that resulted in Wednesday night's firings of football coach Joe Paterno and president Graham Spanier.

Business First by James Fink, Buffalo Business First Reporter
Friday, November 11, 2011, 12:20am EST
Cliff Benson, Pegula’s close friend who helped broker the deal to buy the Sabres and is now a team executive, is listed as a board member of the The Second Mile, an agency founded by Sandusky in 1997, that aids at-risk youth in Pennsylvania.

Published: Friday, November 18, 2011, 3:42 PM     Updated: Friday, November 18, 2011, 10:27 PM
Terry Pegula, the Penn State alumnus whose $88 million gift funded two Division I ice hockey programs, said this week he's "standing behind the university" in the wake of a child sex abuse scandal, but also had candid words for university officials in an interview with Canadian sports network TSN.

Pegula also told TSN he intends to be more active in university affairs in the wake of the scandal to make sure "the right things are done."

Is Terry pushing for the big chair as President of Penn State, or a seat at the Trustee’s table?  And will Marcellus Gas Drilling take even more control over Penn State and other institutions of higher education?

Recent Updates
June 2012:  Gov. Corbett is in the process of  wooing Royal Dutch Shell and its ethane cracker includes the top-secret promise of a $67 million annual tax credit, starting in 2017, for 25 years.  This amounts to $1.7 billion dollars.  How will Corbett pay for this?  Probably by cutting needed state services, education and other things which benefit Pennesylvania residents - the people who actually live in Pennsylvania, not the frack and run carpet baggers.

Although 2012 isn't an election year for PA Governor, Corbett is already filling his campaign coffers for 2014.   He currently has $2,758,326.

Kim Pegula has already tossed him $50,000.

Oil & Gas contributions, as a sector, comes in at 2nd place.   Expect that number to increase significantly the closer we get to 2014 elections

1 comment:

  1. big, drill-mud mess involving politicos and universities...