With one ill-chosen action, the Obama administration has managed to undermine our strategic interests and reward its corporate cronies,”

Judicial Watch Press Room

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.(which includes 1.6 billion barrels in Keystone XL oil reserves) and in the Gulf of Mexico (which includes 100 exploration projects and access to 116 million barrels in reserves

As a state enterprise, CNOOC is owned by the Chinese government and is managed by Communist Party officials. CNOOC offered Nexen a 60% premium over the stock’s trading value at the time of the takeover, prompting analysts to describe the terms as “a fantastic deal for Nexen.” It also raised questions as to whether the Chinese government’s interests were more strategic than economic.

The acquisition will reportedly provide a windfall return to Obama-connected investors, who profited heavily from Treasury’s approval of the takeover and Chinese expansion into the hemisphere, including:

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    Taconic did not return a request for comment on their investment strategy. **Brosens, like Shaw, has close ties to the current administration. He was reportedly Treasury Secretary Tim Geithner’s first choice to run the bailout program in 2009, and was a major donor to the Democratic National Committee in the 2012 cycle. He also bundled between $200,000 and $500,000 for Obama’s campaign in 2012.

Judicial Watch also pointed out several other organizations with close ties to the administration stood to gain from the merger.

Farallon Capital Management LLC, which bought 8.7 million shares of Nexen (1.65 percent of the company) between July 1 and September 30, 2012. The founder of Fallon Capital isThomas Steyer, is a long-time Democratic fundraiser who ridiculed Romney’s energy plans at the 2012 Democratic National Convention.

Eton Park Capital Management  which bought 6,737,000 shares (1.28 percent) of Nexen. Eton Park was founded and is directed by** Eric Mindich, a bundler who raised more than $71,000 for Obama this cycle and has given more than $500,000 to Democratic candidates since 1990.

Covington & Burling LLP, in which **Eric Holder was formerly a partner, was hired by Nexen to lobby on behalf of the acquisition’s approval.

With one ill-chosen action, the Obama administration has managed to undermine our strategic interests and reward its corporate cronies said Tom Fitton, President of Judicial Watch. “It’s little wonder that the Treasury Department is defying the open records law to stonewall accountability.

Americans may want to compare and contrast the quick approval of this Chinese strategic initiative with the Obama administration’s scandalous delay of the related Keystone XL oil pipeline project.”

The lawsuit comes as the president’s campaign-apparatus-turned-dark-money-advocacy group has come under scrutiny for providing donors access to the president.

With one ill-chosen action, the Obama administration has managed to undermine our strategic interests and reward its corporate cronies,” said Tom Fitton, president of Judicial Watch, in the released statement.

The Treasury Department did not return a request for comment.

This entry was posted in China, Obama Administration and tagged China, Chinese National Offshore Oil Corporation, David Shaw, Frank Brosens, Keystone Pipeline, Nexen

remember this ? 2011

*Obama develops Brazilian offshore oil to help the Brazilian economy create jobs for Brazilian workers while Americans are left unemployed in the face of skyrocketing energy prices by an administration that despises fossil fuels as a threat to the environment and wants to increase our dependency on foreign oil. And one hundred thousand American Jobs Gone !!!!!!

demagogue

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