Harken Energy
Encyclopedia
HKN, Inc., formerly known as Harken Energy Corporation, is a small American
oil
and gas production company, with ownership interests in other production companies. The company is headquartered in Southlake, Texas
, near Fort Worth. There is a second office near Dallas, in the town of Paris. The total number of employees varies. It is at approximately 20 in 2009. Shares with the stock symbol HKN trade publicly on the American Stock Exchange
.
s for investors seeking tax write-off
s.
In 1986, Spectrum 7
was bought by Harken for $2.2 million. After the sale of his company, as part of the deal, George W. Bush
would serve on Harken's board of directors. George W. Bush remained on the board through 1993 and was also paid fees as a consultant.
In 1987, Talat M. Othman
joined the board of the company and served as the chair of the Audit Committee.
Aloha Petroleum
was sold in a controversial deal in which Harken's equity stake
in Aloha was turned into a loan, thereby disguising financial loses. This questionable accounting technique, which can serve to inflate profits, was also used by Enron
. It helped result in the infamous 2001 Enron scandal
, when the fifth largest corporation in America at the time suddenly collapsed into bankruptcy.
. While a member of the company's board of directors, Bush sold stock in Harken on the 22nd of June, 1990, shortly before the company announced substantial losses. This transaction resulted in a U.S. Securities and Exchange Commission investigation of probable insider trading
.
A Harken transaction associated with the endowment fund of Harvard University
has also been questioned; see Harken Energy scandal
and the Harken board member from Harvard, Michael R. Eisenson
.
The controversy is discussed in the 2004 film Fahrenheit 9/11
. In another documentary, Orwell Rolls in His Grave
, one of the responders, Charles Lewis of the Center for Public Integrity
said that his organisation brought this controversy on April 4, 2000, 7 months before the 2000 U.S. presidential election, but the mainstream media "chose not to report the story".
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
oil
Petroleum
Petroleum or crude oil is a naturally occurring, flammable liquid consisting of a complex mixture of hydrocarbons of various molecular weights and other liquid organic compounds, that are found in geologic formations beneath the Earth's surface. Petroleum is recovered mostly through oil drilling...
and gas production company, with ownership interests in other production companies. The company is headquartered in Southlake, Texas
Southlake, Texas
Southlake is a city in northeast Tarrant and southeast Denton counties, Texas. As of the 2010 census it had a population of 26,575. A suburb of Fort Worth and Dallas, Southlake is known for exemplary public schools, Southlake Town Square, and Carroll High School's 7-time state champion football...
, near Fort Worth. There is a second office near Dallas, in the town of Paris. The total number of employees varies. It is at approximately 20 in 2009. Shares with the stock symbol HKN trade publicly on the American Stock Exchange
American Stock Exchange
NYSE Amex Equities, formerly known as the American Stock Exchange is an American stock exchange situated in New York. AMEX was a mutual organization, owned by its members. Until 1953, it was known as the New York Curb Exchange. On January 17, 2008, NYSE Euronext announced it would acquire the...
.
History
The company began as an unprofitable collection of Texas oil wellOil well
An oil well is a general term for any boring through the earth's surface that is designed to find and acquire petroleum oil hydrocarbons. Usually some natural gas is produced along with the oil. A well that is designed to produce mainly or only gas may be termed a gas well.-History:The earliest...
s for investors seeking tax write-off
Write-off
The term write-off describes a reduction in recognized value. In accounting terminology, it refers to recognition of the reduced or zero value of an asset. In income tax statements, it refers to a reduction of taxable income as recognition of certain expenses required to produce the income...
s.
In 1986, Spectrum 7
Spectrum 7
Spectrum 7 was an oil company started by William DeWitt and Mercer Reynolds.In 1984, Spectrum 7 merged with George W. Bush's Arbusto Energy. After the merger, Bush became the Chairman and CEO of Spectrum 7....
was bought by Harken for $2.2 million. After the sale of his company, as part of the deal, George W. Bush
George W. Bush
George Walker Bush is an American politician who served as the 43rd President of the United States, from 2001 to 2009. Before that, he was the 46th Governor of Texas, having served from 1995 to 2000....
would serve on Harken's board of directors. George W. Bush remained on the board through 1993 and was also paid fees as a consultant.
In 1987, Talat M. Othman
Talat M. Othman
Talat M. Othman is a Palestinian-American businessman, investor, and Republican fundraiser. On July 31, 2000, he opened the Republican National Convention session with a dua'a, or Muslim benediction, marking the first time a Muslim had addressed a major US political gathering. Governor Jim Edgar...
joined the board of the company and served as the chair of the Audit Committee.
Aloha Petroleum
Aloha Petroleum
Aloha Petroleum, Ltd. is a company that owns numerous convenience stores and gas stations in Hawaii, many of which are operated by independent convenience store owners such as 7-Eleven....
was sold in a controversial deal in which Harken's equity stake
Ownership equity
In accounting and finance, equity is the residual claim or interest of the most junior class of investors in assets, after all liabilities are paid. If liability exceeds assets, negative equity exists...
in Aloha was turned into a loan, thereby disguising financial loses. This questionable accounting technique, which can serve to inflate profits, was also used by Enron
Enron
Enron Corporation was an American energy, commodities, and services company based in Houston, Texas. Before its bankruptcy on December 2, 2001, Enron employed approximately 22,000 staff and was one of the world's leading electricity, natural gas, communications, and pulp and paper companies, with...
. It helped result in the infamous 2001 Enron scandal
Enron scandal
The Enron scandal, revealed in October 2001, eventually led to the bankruptcy of the Enron Corporation, an American energy company based in Houston, Texas, and the dissolution of Arthur Andersen, which was one of the five largest audit and accountancy partnerships in the world...
, when the fifth largest corporation in America at the time suddenly collapsed into bankruptcy.
Insider trading allegations
Harken has attracted attention because of the role played in its affairs during the 1980s by George W. Bush, later the President of the United StatesPresident of the United States
The President of the United States of America is the head of state and head of government of the United States. The president leads the executive branch of the federal government and is the commander-in-chief of the United States Armed Forces....
. While a member of the company's board of directors, Bush sold stock in Harken on the 22nd of June, 1990, shortly before the company announced substantial losses. This transaction resulted in a U.S. Securities and Exchange Commission investigation of probable insider trading
Insider trading
Insider trading is the trading of a corporation's stock or other securities by individuals with potential access to non-public information about the company...
.
A Harken transaction associated with the endowment fund of Harvard University
Harvard University
Harvard University is a private Ivy League university located in Cambridge, Massachusetts, United States, established in 1636 by the Massachusetts legislature. Harvard is the oldest institution of higher learning in the United States and the first corporation chartered in the country...
has also been questioned; see Harken Energy scandal
Harken Energy Scandal
The Harken Energy scandal refers to a series of transactions entered into during 1990 involving Harken Energy. These transactions are alleged to involve either issues relating to insider trading, or influence peddling. No wrongdoings were found by any investigating authorities although the matter...
and the Harken board member from Harvard, Michael R. Eisenson
Michael R. Eisenson
Michael R. Eisenson is co-founder, managing director and chief executive officer of Charlesbank Capital Partners, LLC, a private equity investment firm based in Boston and New York....
.
The controversy is discussed in the 2004 film Fahrenheit 9/11
Fahrenheit 9/11
Fahrenheit 9/11 is a 2004 documentary film by American filmmaker and political commentator Michael Moore. The film takes a critical look at the presidency of George W. Bush, the War on Terror, and its coverage in the news media...
. In another documentary, Orwell Rolls in His Grave
Orwell Rolls in His Grave
Orwell Rolls in His Grave is a 2003 documentary film written and directed by Robert Kane Pappas. Covered topics include the Telecommunications Act of 1996, concentration of media ownership, political corruption, Federal Communications Commission , the controversy over the US presidential election...
, one of the responders, Charles Lewis of the Center for Public Integrity
Center for Public Integrity
The Center for Public Integrity is a nonprofit organization dedicated to producing original, responsible investigative journalism on issues of public concern. The Center is non-partisan and non-advocacy and committed to transparent and comprehensive reporting both in the United States and around...
said that his organisation brought this controversy on April 4, 2000, 7 months before the 2000 U.S. presidential election, but the mainstream media "chose not to report the story".
Further reading
- Harken Energy - George W.'s perfect storm
- Mike Allen and George Lardner Jr., "Papers Offer Details on Bush Knowledge Motive for Stock Sale In '90 Remains Unclear", Washington Post Sunday, July 14, 2002; Page A01