(Reuters) - In an annex at the headquarters of Chesapeake Energy Corp, a unit informally known as AKM Operations manages a top company priority: the personal business of its namesake, Chief Executive Aubrey K. McClendon.
According to internal documents reviewed by Reuters, the unit's accountants, engineers and supervisors handled about $3 million of personal work for McClendon in 2010 alone. Among other tasks, the unit's controller once helped coordinate the repair of a McClendon house that was damaged by hailstones.
Fourteen miles south, at Will Rogers World Airport, Chesapeake leases a fleet of planes that shuttle executives to oil and gas fields -- and the McClendon family to holiday destinations. On one trip, the clan took flights to Amsterdam and Paris that cost $108,000; McClendon counted the trip as a business expense. In another case, Chesapeake logs show, nine female friends of McClendon's wife flew to Bermuda in 2010 without any McClendons aboard. The cost: $23,000.
Closer to home, McClendon pursues another of his passions: the Oklahoma City Thunder, the NBA franchise in which he owns a 19 percent stake. As with other assets, McClendon has melded his Thunder interest with Chesapeake business. The energy company signed a $36 million sponsorship deal, and it pays up to $4 million annually to brand the stadium Chesapeake Energy Arena.
What hasn't been previously disclosed is that McClendon mortgaged his future proceeds from the team to secure two bank loans.
The AKM unit, the jet flights and the Thunder relationship are part of the lavish but leveraged lifestyle that McClendon has built through Chesapeake, America's second-largest natural gas producer.
From the 111-acre corporate campus that he shaped with a meticulous eye for detail, McClendon has intertwined his personal financial interests with those of the publicly traded corporation he runs to a far greater degree than shareholders may realize, according to interviews, public records and hundreds of pages of internal Chesapeake documents reviewed by Reuters.
McClendon, 52, has put longtime friends on the Chesapeake board and showered them with compensation. Restaurants he has co-owned occupy buildings owned by the energy company. A Chesapeake executive has handled the CEO's personal land and oil- and gas-well transactions.
Few outsiders are privy to the sophisticated universe of services that Chesapeake provides McClendon. The existence and scope of AKM Operations, for instance, hasn't been previously reported.
"I have to be wary when I see this type of pattern of disregarding shareholders' best interests," said David Dreman, chairman of Dreman Value Management LLP, which owns about 1 million Chesapeake shares. "I think McClendon should go."