Saturday, February 4, 2012

Chesapeake (CHK), Sierra Club in Donation Scandal

Chesapeake Energy (NYSE: CHK) donated over $26 million to the Sierra Club over a four-year period which ended in 2010, prompting angry responses from their competitors in the coal industry.

The scandalous conflict of interest came about from the reception by the controversial Sierra Club of the millions via its "Beyond Coal" campaign.

National Mining Association spokesman Luke Popovich blasted the alliance, saying rightly of the Sierra Club, "The Club demonstrates both its hypocrisy and its incompetence. It takes dictation and money from the very industry its members condemn for threatening ground water.

"And its support for gas as the bridge fuel has ironically dampened investment in renewable energy which the Club claims to support. With friends like the Sierra Club, the renewable energy industry doesn't need any enemies."

Cecil Roberts, president of the United Mine Workers of America, just as adamantly responded, saying, "The Sierra Club used secret gas industry funding to actively work to suppress the building of hundreds of next-generation coal-fired power plants across the country."

Chesapeake Energy spokesman Jim Gipson stated the sweetheart deal was agreed to be mutually ended in 2010 by them and the Sierra Club.

Chesapeake has been scaling back on production as natural gas prices continue to be under pressure from the huge supply.

Credit Suisse initiated coverage on Chesapeake, starting them off with a "Neutral" rating and price target of $23.00.

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