The Obama administration decided to allow China to take over strategic drilling interests in the Gulf of Mexico in a move that will bring riches to several of the president’s financial supporters, according to claims made in a lawsuit over the issue.
The allegations are made as part of a pending Freedom of Information Act lawsuit filed by Judicial Watch against the U.S. Department of the Treasury.
“Obama influence peddlers are evidently at it again,” the organization explained in a report on its work. “This time, a very curious and potentially threatening decision to approve a deal that puts China in control of drilling interests in the Gulf of Mexico [also] puts cash in the pockets of Obama campaign donors and bundlers.”
The issue involves the acquisition by the government-owned Chinese National Offshore Oil Corp. of the Canada-based Nexen Inc., which holds rights to drilling in northern Canada as well as the Gulf of Mexico.
Because of Nexen’s holdings in the Gulf of Mexico, the takeover required approval from the federal Committee on Foreign Investment in the U.S., which includes the Treasury, Department of Homeland Security, Commerce, Defense, State, and Energy secretaries as well as the attorney general and U.S. trade representatives – all Obama patrons.
That approval was given, producing a secondary effect because the Chinese company, “owned by the Chinese government and managed by Communist Party officials,” paid a 60 percent premium over the trading value of Nexen.
But, Judicial Watch explained, that raised questions “as to whether the Chinese government’s interests were more strategic than economic.”
“It certainly appears that the Obama administration’s interests were strategic. The acquisition will apparently provide a windfall return to Obama-connected investors who profited heavily from Treasury’s approval of the takeover and Chinese expansion,” Judicial Watch reported.
Judicial Watch cited several specifics:
- Frank Brosens, a bundler who raised more than $1 million for Obama, is founder and manager director of Taconic Capital. It reported it had acquired six million shares of Nexen before Sept. 30, 2012.
- Farallon Capital founder Thomas Steyer is a long-time Democratic fundraiser who spoke at the Democratic National Convention. His company bought 8.7 million shares of Nexen before Sept. 30, 2012.
- Eric Mindick is a bundler who raised more than $71,000 for Obama, and has given $500,000 to Democrat candidates since 1990. His company, Eton Park Capital Management, bought 6.7 million shares of Nexen.
- David E. Shaw is an Obama bundler in the $200,000 to $500,000 range, and is on the President’s Council of Advisers on Science and Technology. His company, D.E. Shaw & Co., increased its position by 5.8 milllion shares of Nexen.
“With one ill-chosen action, the Obama administration has managed to undermine our strategic interests and reward its corporate cronies,” said Tom Fitton, Judicial Watch president.
“It’s little wonder that the Treasury Department is defying open records law to stonewall accountability. And Americans may want to compare and contrast the quick approval of this Chinese strategic initiative – which benefits the Communist Chinese – with the Obama administration’s scandalous delay of the related Keystone XL oil pipeline project, which would bring energy independence, jobs and resources to America.”
The organization’s FOIA request to the Obama administration was submitted Nov. 13, 2012, and has never generated a response even though that was required by law.
Judicial Watch’s lawsuit over access to the information about the deal-cutting with the Chinese communists was filed in the U.S. District Court for the District of Columbia on Feb. 14, 2013.