Contact
Subscribe
Ads attacking Pearce aren’t entirely true or false
Steve Pearce (Photo by Heath Haussamen)
Controversy has swirled around two TV ads from Defenders of Wildlife Action Fund attacking Republican congressional candidate Steve Pearce, with Pearce and others calling the ads false and misleading and Defenders standing by the accuracy of its ads.
I’ve been looking into the situation and found that the truth is somewhere in between. The ads aren’t entirely true, but they’re also not entirely false. You can view the ads here and here.
The central claim that’s been disputed centers around Pearce twice being named by the left-leaning group Citizens for Responsibility and Ethics in Washington (CREW) as one of the most corrupt members of Congress. Regardless of whether the group’s subjective characterization of Pearce as corrupt is fair, it’s accurate to say the group calls him corrupt. But the House committee charged with ruling on ethical issues has rejected the claim at the heart of CREW’s attack on Pearce.
In 2007, Pearce made the group’s list of the most corrupt members of Congress primarily because of “his failure to properly report a transaction on his financial disclosure report.”
The CREW complaint states that Pearce was president of Lea Fishing Tools, Inc. in the fall of 2003, and sold the company’s assets to Key Energy Services for more than 540,000 shares of stock. Pearce failed to report that in his 2003 financial disclosure report, the complaint states.
“After selling Lea Fishing Tools’ assets to Key Energy, Rep. Pearce was required to report the sale on his financial disclosure form as a transaction, but he failed to do so,” the group’s complaint stated. “By failing to list the sale, Rep. Pearce appears to have violated the Ethics in Government Act.”
In 2008, Pearce ended up on CREW’s list again based on the same allegations. Pearce was quick to release publicly, for the first time, a letter from the House Committee on Standards and Official Conduct stating that he was not required to report the sale of Lea Fishing Tools.
CREW admitted that it did not and should have known about the letter – but it also rejected the committee’s conclusion, standing by its allegation that Pearce was required to report the company sale and its inclusion of Pearce on its list of the most corrupt members of Congress.
So the group twice listed Pearce as among the most corrupt members of Congress. It’s a subjective list compiled by a subjective group – nothing more. Putting Pearce on that list the second time was something I questioned because of the committee’s letter. It’s accurate to say that the committee has officially rejected CREW’s allegation against Pearce.
But it’s also accurate to say – as Defenders does – that the group twice ranked Pearce as among the most corrupt members of Congress.
On to other claims in the ads…
‘Over $1 million in campaign cash’
The first ad from Defenders claims that Pearce “took over $1 million in campaign cash from big oil giants like BP and voted to give them billions in tax breaks.”
At the time the ad starting running a few weeks ago, OpenSecrets.org said Pearce had taken $998,178 in donations from the oil and gas industry – indicating that the claim that he had taken “over” $1 million not quite true.
However, since then, the site has been amended, and it now states that Pearce has taken $1,015,178 from the oil and gas industry. I’m not sure why it was changed, but we’re almost splitting hairs on this point.
Did Pearce vote to give such companies billions in tax breaks? Though I don’t agree with parts of FactCheck.org’s analysis of the first Defenders ad, the Web site is right on when it comes to this point. The ads’ claim is based on Pearce’s vote in favor of the Energy Policy Act of 2005.
From FactCheck:
“While the bill did provide $14.5 billion in subsidies to energy companies, most of that went to electric utilities, nuclear power, energy-efficient cars and buildings, and renewable fuels research — not to oil and gas companies. In fact, tax increases imposed by the bill on the oil and gas industry exceeded the tax breaks, according to a Congressional Research Service report released in 2007.”
“… So while it’s true that Pearce accepted roughly $1 million in donations from oil and gas companies over 19 years, his vote on the 2005 energy bill on balance did not give oil companies ‘billions in tax breaks.’”
Selling his business to a company ‘that was lobbying his committee’
The ad also states about the Lea Fishing Tools sale that Pearce “got rich selling his own company for twice its stated value to an oil company that was lobbying his committee.”
If there’s an implication there that Pearce took action to benefit that company, Key Energy, it’s not true. Roll Call reported in 2008 that it “found no evidence that Pearce has taken any legislative action to specifically benefit Key Energy Services.”
However, it’s true that a company official testified before a task force on which Pearce sat (he was appointed by then-House Speaker Dennis Hastert). Defenders provided a document proving that.
Is testifying before a task force on affordable natural gas formed by the House speaker the same as lobbying the House Natural Resources Subcommittee on Energy and Mineral Resources? Mostly.
‘Producers of the toxic chemical MTBE’
The new claim in Defenders’ second ad is that Pearce “took thousands from the producers of the toxic chemical MTBE and then voted to protect them from liability for protecting New Mexico’s drinking water.”
Asked for a response to the new ad, the Pearce campaign didn’t refute the MTBE claim. According to the fact sheet Defenders provided to back up the ad, Pearce voted in 2003 and 2005 in favor of bills that would have protected companies from lawsuits related to MTBE contamination.
And, according to Defenders, Pearce has taken tens of thousands of dollars in contributions from the corporations producing the chemical – which, incidentally, includes Valero Energy Corp., a company whose board included Bill Richardson before he became New Mexico’s governor.
|
Share
Tweet
|
Advertisements
|
22 comments so far. Scroll down to submit your own comment.
Leave a response
You must be logged in to post a comment.
Thinker,
Oh Jeebus….just like how ‘all oil companies are amoral though I offer no evidence”…kinda like that
Oh, Thomas Kenneth Gailbraith and, what a shock, John Maynard Keynes…..two economic minds who have been disproven again and again. It’s amazing how y’all don’t see that government spending doesn’t create real jobs, private sector jobs. Amazing.
The old truthes remain the same….Reagan showed it in the early 80′s, even JFK knew that lowering taxes helped create capital that was used to create jobs. Bush’s tax cuts helped save our economy after the 9-11 attacks. Facts are facts.
Oh Jeebus. The terms “Marxist/Socialist/Leftist College Professors/Saul Alinsky” MUST to be added as corollaries to Godwin’s Law.
What exact ‘greater economic mind’? Thomas Kenneth Gailbraith, John Maynard Keynes have always been highly regarded for their support of controlled free-market and capitalism as part of greater access to freedom for all citizens. They just saw that as the world changes, so must our definitions and responses to those concepts. But then, since we are at an era where up is down and good is bad, I will assume that they are now labeled as a radical Marxists by those who fail to understand their theories.
Thinker,
Do YOU even know what amoral means? It has an obvious negative tone to it regardless of you copying and pasting from websters online. Your very use of the word amoral means a negative label on an entire industry.
Did I ever say that BP was NOT amoral for dumping the benzene gas? Go back and read my reply and not anywhere in my reply did I say that I put them off the hook. In fact, BP IS in the wrong for that and should be punished in accordance with the law. BUT, as I have asked you repeatedly, and you continue to ignore, is how one bad apple ruins the entire tree? You attempt to attack and injure an entire industry for one or two bad apples. How is that good common sense or good policy?
What exact ‘greater economic mind’? Leftist professors who teach economics while secretly longing to buy more copies of the works of Karl Marx.
Large and big businesses are a success story to American capitalism. What right do you have to limit the size of a businesses success in the name of what YOU believe is best for the ‘community’.
If anybody needs to stop drinking the kool-aid it is YOU. You desire to embrace an make believe dream of this idea that businesses were only intended to be small and community oriented is the true make believe.
“The biggest threat to our freedom is a rigid adherence to ideology.” And YOU are the walking example of this very quote you tried to use against me.
Sorry, but the success and need for small and large business is a testiment to economic fact and economic history for that is where I get my facts.
YOU still refuse to explain why an entire industry is amoral because of one or two bad apples.
YOU still refuse to show any evidence or fact to why Steve Pearce is ‘corrupt’ even though all evidence has been shown he is NOT.
YOU still refuse to show any evidence that there is massive corruption and graft among the entire energy industry as far as its dealings with Congress or etc.
So, who is letting their ideology guide them here? YOU obviously. Your own partisan hatred of Pearce, and business for that matter, is so hot and so large that you can’t see anything past your own ideology.
You may want to take up smoking cigars…it would relax you and help you clear your head of the smoke of your own blinding partisan anger
Oh, and as for cigars, I don’t smoke so it matters not that I didn’t win one.
reagangoldwater: First of all, do you even know what the word “amoral” means? It is NOT synonymous with “immoral”, just additive:
amor·al
adj \(ˌ)ā-ˈmȯr-əl, (ˌ)a-, -ˈmär-\
Definition of AMORAL
1
a : being neither moral nor immoral; specifically : lying outside the sphere to which moral judgments apply b : lacking moral sensibility
2
: being outside or beyond the moral order or a particular code of morals
— amor·al·ism\-ə-ˌli-zəm\ noun
— amo·ral·i·ty\ˌā-mə-ˈra-lə-tē, ˌa-, -(ˌ)mȯ-\ noun
— amor·al·ly\ˌā-ˈmȯr-ə-lē, (ˌ)a-, -ˈmär-\ adverb
Examples of AMORAL
1. He is an amoral, selfish person pursuing his own goals.
2. a cynical and amoral way of competing for business
How could a business that dumps benzene gas (a carcinogen) into the lungs of innocent people and lie about it for weeks just to avoid financial losses NOT be called amoral? I guess you’d be ok with it if it was in your back yard, your kids soaking up the benzene, right? I would expect you to be consistent and be one of the first people to take a stand in support of this company, because that’s what capitalism is all about, right? PROFIT.
Well, greater economic minds than yours or mine have found a way to argue that capitalism unfettered by moral decision-making and good government oversight will harm the greater good. Many would argue that totally free market capitalism was never intended to be applied to large corporations that lack personal accountability, and instead only works in smaller community-connected environments. Big businesses become so powerful they can choose to avoid the natural and logical consequences of their bad behavior.
Enough with the apologism for all things designated Republican, RG. You don’t have to just gulp down the Party Kool Aid on the issues. Think for yourself, for God’s sake. It never ceases to amaze me how right wing loyalty to “the word” forces you folks to argue yourself into an absurd corner in which you lose your ability to see reality.
The biggest threat to our freedom is a rigid adherence to ideology.
Thinker,
Once again, how does ONE company make the entire industry evil or amoral? This whole concept of the entire oil industry being amoral is ridiculous. There are both good and bad in all industries, government and etc. To label an industry amoral because of your own blind, partisan ideology goes against reason and common sense.
No cigar….again.
Hey reagangoldwater, if you’re out there and are still wondering where on earth someone could get the idea that Big Oil Companies are AMORAL…Here’s a fine example of your kind of capitalism: profits before anything else, courtesy of British Petroleum:
Thinker,
You may have not used the exact word ‘evil’ but you and Hemingway sure do like to imply that all energy industries are evil. How is ‘Big Oil’ ‘amoral’? Seriously, AND ONCE AGAIN, I ask for evidence and facts as to why an entire industry is evil or amoral.
“Having no other value than making a profit’…..REALLY? You do know that that IS capitalism. You do know that our local grocery stores do not exist solely to ‘feed the community’ right? You do know that all businesses, both large and small, exist solely to provide a product to make PROFIT. There is nothing bad or wrong about that.
“He NEVER voted in any way, shape or form that wasn’t exactly dictated by the industry’s lobbyists. They handed him a sheet of paper and he did what it said to do.” ONCE AGAIN, where is the evidence? Where is this ‘fact sheet’ and the PROOF that he voted as he ‘was told’? Naturally, you don’t have any proof because all you have is your own conspiracy theories guided by partisan fires.
So, according to your logic we should stop offshore drilling in the Gulf because of ONE incident? Even though hundreds of platforms have drilled safely for decades? WOW. I am sure our economy and those hundreds of thousands who depend upon the energy industry in the Gulf appreciate your economic fantasy thinking.
“As for “where’s the evidence”, well, all one has to do is pay attention to the documentation provided us by vrious journalists who still conduct investigative reporting and has been available to the public for quite awhile. Ok….WHO? Seriously, WHO? Give me evidence. You just like to say that ‘it’s out there, like I’m watching an episode of the X-Files, but you never give me any evidence. What exact articles from the AP? I have seen nothing about oil companies giving money to congressmen to vote off a ‘checklist’.
“But if the current state of things in this country is any gauge, the Democrats are obviously NOT providing quid-pro-quo results in return for any of these organizations financial support.” WHOA! What? The Democrats are NOT providing quid-pro-quo to their leftist interest groups? I am sorry but wasn’t Obamacare, new pro-union regulations, stimulus bills, state bailouts, FDA power to regulate everything, Cap & Trade (House vote so far) and new EPA rules part of their agenda that has been passed or on the way passage? Of course, I don’t call that quid-pro-quo….they are liberals and won a majority so they are now pushing their agenda…it’s natural.
Once again, no evidence, no facts, just same conspiracy theories.
Sorry Thinker but no cigar
.
Once again we hear sour apples from Hemingway. Seems he can only write doom and despair about the conservative candidates. Must be the sour world he lives in.
“reagangoldwater”:
Never once did I use the term “evil” to describe Pearce, Big Oil, or anything else. At most, Big Oil is “amoral”, having no other value than making a profit. Again, supporting the industry is not the problem, passing oneself off as a a neutral party is. He NEVER voted in any way, shape or form that wasn’t exactly dictated by the industry’s lobbyists. They handed him a sheet of paper and he did what it said to do.
As for the Gulf Spill, yes, we had “one platform” blow —-and it created a national tragedy that will destroy the environment and economy of the region for DECADES. AND the rules the Mineral Management Service created in the past to protect these oil companies while drilling in the Gulf mean we are only one more “oopsy!” away from another outright catastrophe, because NONE of them are prepared any better than BP was for this one.
As for “where’s the evidence”, well, all one has to do is pay attention to the documentation provided us by vrious journalists who still conduct investigative reporting and has been available to the public for quite awhile. No, not Glenn and Rush and Sean—pay attention–READING materials released by legitimate news and journalism outlets, like McClatchy, the AP, etc.
And “Dr. J”: these organizations are doing exceptional, on-site, legal and public policy education work in conservation and natural resource protection. Sorry, but the Republican Pacs that exist to bundle donations don’t hold a moral candle to these folks. And yes, in addition, these organizations attempt to get the voice of environmentally conscientious across to our elected officials. But if the current state of things in this country is any gauge, the Democrats are obviously NOT providing quid-pro-quo results in return for any of these organizations financial support.
Hemingway,
Really? That’s all you got to come back with…the difference between beef and bologna.
Once again, how is Steve being successful in life, from a LEGAL and ETHICAL sell, being evil or wrong? Of course, none of y’all can effectively answer that because there is NOTHING illegal or ethical about what Pearce did and that drives y’all nuts. It’s only illegal and unethical in y’alls own minds because your giant dislike of Pearce is so great. Too bad y’all have no facts to back it up with.
Mr. Reagangoldwater – I am confused by your comment about bologna and beef. Bologna is actually made from either beef, pork or a combination of both meats. Some more sophisticated bologna products may contain more exotic meats such as veal, goat or even moose. I am sure Mr. Pearce partakes of the upper grade of bologna with a touch of garlic. He should after making millions from the strong smelling Key Energy stock deal.
Thinker,
How is Pearce’s support of industry not make him an ‘upstanding, patriotic, Christian man’? How exactly is Steve in the pockets of the oil industry? I haven’t seen any evidence showing how oil executives use him like a puppet. I haven’t seen any federal investigation into anyone taking bribes from oil companies and etc. Once again, it is unethical and cynical ONLY TO YOU.
How does helping the oil industry hurt the country? If anything, opening more areas for oil exploration benefits our domestic energy supply and gets us one step away from dependence on foreign oil. You do know that the energy industry, and those industries that support them, employ millions of Americans? You do know this right.
I want one of you leftists to finally tell me exactly how an oil company is evil? SERIOUSLY, I want to know. How exactly, citing examples, evidence and etc that the ENTIRE AMERICAN OIL AND GAS INDUSTRY is evil. I want the proof besides y’alls own bias.
How did the spill in the Gulf open ‘our’ eyes to the ‘evil’ of Big Oil? You had ONE off shore platform with ONE company that decided to not follow the set regulations. Attacking the entire industry as ‘evil’ for BP’s oil spill is like attacking all doctors as ‘evil’ because ONE doctor was drinking before ONE surgery and caused an injury or death. We have hundreds of offshore platforms who have worked in the Gulf for decades and now with ONE spill you want to kill an entire industry in the Gulf and almost 100,000 jobs that it affects? WOW.
It’s laughable your ‘We, the little people, had nothing to say about that, for the decisions were made in smoke filled rooms by financially juiced-up shadow interests who got the Steve Pearces of the world elected”. ONCE AGAIN, where is the evidence? Y’all like to talk big but never seem to have any evidence for your shadowy world conspiracies.
Once again Thinker, where’s the beef? All you have given so far is bologna.
Great point stever! You wonder why these special interests don’t run ads supporting their candidate rather than attacking the opponent unfairly and falsely. The only answer is that they enjoy the politics of personal destruction far more than the politics of supporting your candidate. It speaks volumes of these organizations and their motives.
I guess if its only partially true, or mostly true, its ok? So if I say person A has lived an exemplary life (true) but for the one 15 minute period when they killed someone (not true) that makes what I said OK?
These type of ads are never supposed to be about getting facts out, they are designed to harm the reputation of whomever they are directed against. I suppose in this case they could run an ad talking about how many good things Harry Teague has and would do for their cause.
Thinker says that Defenders of Wildlife are NOT an organization ” who exist ONLY to bundle cash and donate gobs of it to the campaigns of those they perceive will be the kind of toady’s that do their bidding once elected” . You think? I’m sorry, if you think rich special interests like them, the Sierra Club, NRDC, Greenspeace, WWF, etc. don’t expect a quid pro quo from Democratic Party candidates for their millions of $$ dumped into ads attacking opponents, you are serious irrational or naive. And they spend a huge % of their “donations” for political attacks, just check the records at opensecrets.org.
reagangoldwater: You are correct: It’s not illegal to take donations from oil companies. It’s just cynical and unethical to pretend to the naive grandma in Alamogordo that you are an upstanding, patriotic Christian man who is NOT in the pocket of the oil industry when it comes time to vote on legislation regarding environmental regulation, taxes or other laws that would benefit the majority of people–not just Big Oil– in this country.
The spill in the Gulf has pretty much opened our eyes to the complete and total capitulation to the demands Big Oil made by the previous administration and Republicans in Congress. We, the little people, had nothing to say about that, for the decisions were made in smoke filled rooms by financially juiced-up shadow interests who got the Steve Pearces of the world elected. Why is it so terrible that legitimate questions are raised and true facts disseminated about who the folks back home are REALLY voting for?
I would think THAT would be a Tea Partier’s Dream: transparency in government. ‘Cause the Tea Party is really not just last year’s Republicans dressed up in powdered wigs waving “Don’t Tread on Me” flags made in Indonesia, right?
Hemingway,
What part of the House Ethics Committee, which is evenly split between Democrat and Republican, ruling that Pearce did NOTHING unethical or illegal do you just not accept?
In fact, I ask why this entire story is even up on this blog. So, just because CREW, a left leaning organization who has many former Democratic congressional aides, staffers and etc as its employees ‘doesn’t agree’ with the fact that their allegations were shot done as bunk makes Pearce open to the ethics question? Really? Really?
Also, when did it become illegal or unethical to take LEGAL campaign contributions from oil companies. Plus, when did it become unethical or illegal to vote in favor of legislation to give the energy industry tax breaks? So, with this reasoning I could say that Harry Teague is corrupt because Defenders of Wildlife lobbied for Cap & Trade and other bills that gave tax breaks to green technology companies and industries.
This whole article is bunk. Steve Pearce did NOTHING illegal. The ad by Defenders of Wildlife is bunk. The House Ethics Committee ruled that Pearce did nothing unethical or illegal. There is NOTHING WRONG OR ILLEGAL OR UNETHICAL about taking legal campaign contributions or voting to help American industries by removing unnecessary regulations and giving tax breaks. IF YOU ATTACK PEARCE OVER THIS NON-EXISTANT CORRUPTION ALLEGATION THEN YOU HAVE TO ACCUSE HARRY TEAGUE OF CORRUPTION DUE TO HIS TAKING HUNDREDS OF THOUSANDS OF DOLLARS FROM LABOR UNIONS AND THEN HELPING PASS PRO-UNION LEGISLATION. OF COURSE, THIS, LIKE PEARCE SUPPORTING INDUSTRY, IS NEITHER ILLEGAL OR UNETHICAL.
Hemingway, what part of this do you just refuse to accept? It’s easy, you dislike Pearce so much that you don’t really care what the evidence says. Also, when did it become wrong to be the oil industry? Is the oil industry illegal now? Have they been banned? Are there no good people who work in the oil patch?
The ads by Defenders of Wildlife are bunk. What they falsely accuse Pearce of has been refuted and CREW, who is ran by leftists, likes to target Republicans as well as weak Democrats as a way to give them the false image of ‘bipartisan respectability’.
If Defenders of Wildlife attack Steve Pearce for something he was found innocent then they need to have the moral testicular fortitude to find a new attack. Because I myself could easily do a TV ad attacking Harry Teague for being corrupt by voting for Cap & Trade when Defenders of Wildlife helped his election and are now helping his re-election.
The ads by Defenders of Wildlife are bunk pure and simple. Their ad shouldn’t even be given the consideration of being ‘accurate’.
So, what you’re saying is, the ads are…pretty much TRUE! And illuminate for voters who care about our environment VERY important things they need to know about Steve Pearce: that he is dishonest, and desires to hold office so he can steer government policy towards businesses in which he has a financial stake. Oh, and that he is 100% anti-environmental protection, and that he will pretty much vote anyway his donors tell him to on legislation. What’s the problem here?
By the way, as a donor to Defender’s of Wildlife, I researched them carefully to see what my money gets used for: junk or actual good works. Guess what I found out?
Unlike the majority of political action committees (“Freedom’s Watch”, “American Crossroads”, “Swiftboat Vets…”) that donate money to Republicans, Defenders of Wildlife is an organization that actually DOES something besides collect money and funnel it to candidates. They use the majority of their income to conduct legal and issue advocacy activities for wildlife conservation, environmental and natural resource science causes, only participating in election issues as a part of the bigger picture of saving what is left of our planet for future generations. You may think it’s perfectly terrific to gas endangered wolf pups in Idaho or dump toxins into our NM water table, but some of us don’t, and we’d like to see politicians who DO, not win elections.
And no, “Dr.J”, Defenders of Wildlife is NOT one of those “wealthy special interest groups” or “rich, untrustworthy, and biased partisan interests seek[ing] to twist facts and truth for political gain”–Those would be the Machiavelli/Rovianesque groups and their ilk mentioned above, whose “principles” vary according to the wind, and who exist ONLY to bundle cash and donate gobs of it to the campaigns of those they perceive will be the kind of toady’s that do their bidding once elected.
Here are the reports on the Stevan and Cynthia Pearce Charitable Foundation from 2002 to 2009. Note that Mr. Pearce put Key Energy stock in his Foundation on 12/12/03. The value of the stock was only $60,483. Next year it looks like he sold all his 542,477 shares of common stock of Key Energy. The question is when he sold all the stock. Did he sell his stock just before Key Energy’s following events:
“On March 15, 2004, Key Energy announced it would delay filing
its 2003 Form 10-K so that it could review the classification of
fixed assets during 2003. Later, on March 29, 2004, Key Energy
announced it would be taking write-downs of $83 million to
reflect good will impairment and would restate its prior year’s
financial statements. Then on June 7, 2004, before the market
opened, Key Energy announced it was withdrawing earnings
guidance for 2004.” The stock price collapsed.
The question is when did he sell the stock. Mr. Pearce should explain this matter. We need more transparency in government.
Stevan and Cynthia Pearce Charitable Foundation from 2002 to 2009 reports are as follows:
http://nccsdataweb.urban.org/PubApps/showVals.php?ft=bmf&ein=010576324
Once again, wealthy special interest groups are running attack ads for the Democrats and Teague. These rich, untrustworthy, and biased partisan interests seek to twist facts and truth for political gain. If a corporate group were to run these type of ads there would cries of foul play from the progressives, yet they are silent on this influence peddling and intrusion of big money into campaigns. They only object when groups who disagree with them pour money into these kind of false ads, then they point to all this money having too much influence on elections. Where are these defenders of keeping big money out of politics now? Hypocrites.
It would be nice to have the full story on this stock deal. It has never been adequately described! This is my question for Mr. Pearce – let us have details!!!!!!
There is a lot of questions that Congressman Pearce should explain about the Lea Fishing. “Rep. Pearce was the president of Lea Fishing Tools from which, in 2002, he drew a salary of $277,352 and held stock worth between $1 and $5 million. In the fall of 2003, Rep. Pearce sold the company’s assets to Key Energy, in exchange for 542,477 shares of common stock. The value of the stock at the time was $5.2 million. During an October 29, 2003 conference call, however, the president of Key Energy said Lea Fishing Tools was purchased for $12 million. Rep. Pearce failed to report the transaction on his 2003 financial disclosure report, and the $6.8 million discrepancy remains unresolved. In the 2003 report, Rep. Pearce indicated only that he was the president of Trinity Industries, Inc. “F/K/A Lea Fishing Tools, Inc.” and that he held between $5 and $25 million of stock in the company. Given that all of Lea Fishing Tools’ assets were transferred to Key Energy, it appears that Trinity Industries may be a holding company for the Key Energy stock, but this is unclear.” There is $6.8 million discrepancy.
There was a class action after the acquisition of Lea Fishing by Key Energy. It was not just a matter of Key Energy not filing an annual report for accounting reasons
The complaint charged Key Energy and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. Key Energy is the world’s largest rig-based, onshore well
service company. The Company provides diversified energy
operations, including well servicing, contract drilling,
pressure pumping, fishing and rental tool services and other
oilfield services.
Here is the class action suit:
http://www.thefreelibrary.com/Lerach+Coughlin+Stoia+%26+Robbins+LLP+Files+Class+Action+Suit+against…-a0118813214
“The complaint alleges that during the Class Period, defendants
misrepresented the strength of Key Energy’s financial results.
Throughout the Class Period, defendants repeatedly stated that
Key Energy’s financials were strong and improving and that it
had strengthened its competitive position to benefit once market
conditions improved. In fact, the Company’s financial statements
were materially misstated and not nearly as favorable as
reported. As a result of defendants’ misstatements, Key Energy’s
securities traded at artificially inflated levels. Defendants
were thus able to complete a $150 million note offering in May
2003 and to exchange 542,477 shares of Key Energy stock in the
acquisition of Lea Fishing Tools, Inc. in September 2003.
On March 15, 2004, Key Energy announced it would delay filing
its 2003 Form 10-K so that it could review the classification of
fixed assets during 2003. Later, on March 29, 2004, Key Energy
announced it would be taking write-downs of $83 million to
reflect good will impairment and would restate its prior year’s
financial statements. Then on June 7, 2004, before the market
opened, Key Energy announced it was withdrawing earnings
guidance for 2004. The Company also disclosed that if it failed
to obtain a waiver for its default on its senior notes, it would
be in default. On this news, the Company’s stock collapsed to as
low as $7.00 per share before closing at $8.67 on volume of 13.9
million shares. This was a 37% drop from the Class Period high
of $13.96.”
It appears that Congressman Pearce had prior knowledge of the Key Energy situation. What happened to the Key Energy stock Pearce had in his possession after the Lea Fishing deal? At the time of the stock deal Mr. Pearce was Chairman of Subcommittee on Energy and Mineral Resources that had hearings with testimony from Key Energy! Mr. Pearce didn’t state he had a conflict of interest at all. This was all very DUBIOUS!