Administration-approved takeover by Chinese oil company provides Obama backers windfall
The government watchdog group Judicial Watch is suing the Treasury Department for records pertaining to the department’s decision to grant a Chinese government-backed company access to oil deposits in the Gulf of Mexico, a move that will benefit Obama donors.
The Chinese National Offshore Oil Corporation (CNOOC) reached a “definitive agreement” with Nexen, Inc., a Canadian energy company, announced on July 23, 2012, to buy all of the company’s outstanding public shares. Nexen has holdings in the Gulf of Mexico and Canada, giving the Chinese government access to millions of barrels of Keystone XL and Gulf reserve oil.
Nexen’s holdings in the Gulf, coupled with the Chinese government’s ownership of CNOOC, meant the Treasury Department’s Committee on Foreign Investment in the United States had to approve the takeover, which it did on Feb. 12.
The secretaries of several major executive departments—including treasury, state, defense, and homeland security—sit on the committee.
Judicial Watch filed a Freedom of Information Act request for information on the deal in November, but the Treasury Department did not reply within the mandatory 20 days. Judicial Watch then filed suit on Feb. 14 to get access to the documents.
Judicial Watch noted that several prominent fundraisers and donors to President Barack Obama’s 2012 campaign stood to make a windfall profit from the Chinese corporation’s expansion in their press release announcing the suit.
David Shaw founded D.E. Shaw and Co., which massively increased its shares in Nexen in the third quarter of 2012, according to its SEC reports. Nexen’s stock rose almost 50 percent the week of the announcement, which was early in the third quarter.
Shaw bundled between $200,000 and $500,000 for the Obama campaign in 2012. He also sits on a presidential advisory council, Judicial Watch noted. D.E. Shaw and Company did not return a request for comment.
Frank Brosens is another prominent Democratic supporter who stood to gain significantly from the merger. His firm Taconic Capital bought at least 6 million shares in Nexen in the third quarter of 2012 but sold all of them by the end of the year. Taconic did not return a request for comment on their investment strategy.