Statements of Economic Interest (SEI) recently released by Congressman Paul Ryan (R-Janesville), when compared to previous years’ SEI show a clear pattern – the more influence he has on the Congressional Budget process, the more stake he (through his wife Janna (nee Little)) has gained in Oklahoma mining interests. This family interest is led by Ryan’s father-in-law, Dan Little; and is currently making millions leasing rights to energy giants engaging in extensive natural gas shale fracking.
The financial conflicts at work here are direct. Ryan’s budget gives $43 Billion in tax breaks to the companies and processes the Little family (and Ryan) profit from. The policy conflict is the expansion of fracking, which the American Legislative Exchange Council (ALEC) is promoting through powerful Legislators like Ryan.
Ryan’s 2011 SEI shows his most significant interests are in four companies, all owned by his father-in-law, Dan Little (according to Oklahoma Secretary of State corporate registration). Little is a prominent oil industry attorney (who refused comment to Badger Democracy). The total value of these interests are $350K – $800K, with annual profit of $40K – $130K:
Ava O Limited Mining Co (8% interest) – valued at $100K – $250K; paying out $15K – $50K in profit.
Blondie & Brownie, LLC (10% interest) – valued at $100K – $250K; paying out $5K – $15K in profit.
Little Land Co., LLC – valued at $50K – $100K; paying out $5K – $15K in profit.
Red River Pine Timber (7% interest) – valued at $50K – $100K; no reported profit or interest.
Also owned by Ryan are Mineral Rights in Oklahoma valued at $50K – $100K; and returning $15K – 50K in profit last year.
Ava O Limited – in 2000, had no reported value; 2007 value of $100K – $250K
Blondie & Brownie, LLC – no listing
Land Oil Co. (now Little Land Co.) – 2000 had no reported value; 2007 reported $50K – $100K in value
Red River Pine Timber – 2000 had reported value of $15K – $50K; 2007 reported value of $15K – $50K
“Various Mineral Rights” in 2000 had reported value of $1K – $15K total; none reported in 2007.
Since 2000, the value has grown 15 – 20X; since 2007, the value has doubled – not a bad return for Ryan.
In addition, Ryan’s “minor” stock investments in gas, oil, and energy companies have increased significantly since 2007. The entire history of Ryan’s SEI can be viewed at Open Secrets.org.
The Little family, and Ryan by direct business association, stand to make additional millions based on the Ryan budget incentives for those very companies. The Oklahoma mining and land companies Ryan is invested in have lease contracts (according to the Oklahoma Secretary of State) with three of the most extensive “frackers” in the world. The gas and oil giants are leasing land and mineral rights from these companies in pursuit of natural gas trapped in the enormous shale deposits in the region. Expanded fracking and tax incentives would net Ryan, the Littles, and the Gas Companies millions more in profits.
The first company, Chesapeake Energy, are self-proclaimed as the “biggest frackers in the world” by CEO Aubrey McClendon. Chesapeake and McClendon are under numerous investigations for conflicts of interest by the SEC.
Reuters reported that from 2004 through 2008, McClendon ran a $200 million hedge fund that traded in the very same commodities that Chesapeake produces. McClendon’s hedge fund traded oil and gas contracts at the same time he was privy to potentially market-moving information in his role as Chesapeake CEO.
The second company is XTO Energy, which was a 2010 acquisition by Exxon (a significant ALEC supporter) to the tune of $30 Billion. Ryan has received $3,000 in campaign contributions from the Exxon PAC in 2008 and 2010; in addition to profits from lease payments on his mining land investments. An article in Fortune highlights the value of these lease payments in the Oklahoma shale region (Woodford):
XTO has contracted it (the land rights) for three years at a cost of $24,000 per day. It’s one of 12 rigs the company has running full-time in the Woodford right now. The company has 65 wells in the area, but it’s now drilling at a pace to finish about 130 wells per year. “We’re stepping things up here,” says Guy Haykus, XTO’s regional production supervisor. “Right now this is a limelight area.”
The third company, Devon Energy, is the largest employer in Oklahoma. Devon is currently undertaking extensive fracking operations in Michigan, Oklahoma, and Canada. The Executive Vice President for Energy of Devon, Dr. William Ehitsett, recently testified before Congress on the “safety” of fracking. The linked video of the March 2012 testimony is twelve minutes long – and worth watching.
Ryan is getting away with clear financial conflicts of interest. The worse crime is complete rejection of potential social, safety and environmental impact to pursue profit at any cost. Ryan is using his powerful position to forward a fiscal and regulatory agenda from which he personally has, and will continue to reap enormous profit. In 1998, none of this interest was reported by Ryan – now, the value is nearly $1 Million and growing…thanks to Ryan’s inside operations.
For the record, Ryan’s office sent the following response via email to inquiries about this subject:
Our office doesn’t comment on the financial disclosures any further than what is available publicly. Appreciate your reaching out.
If we are to restore democracy, the new Robber Barons, like Paul Ryan, must be held into account.