Larry Nichols

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John Larry Nichols (J. Larry Nichols or Larry Nichols) is the co-founder and executive chair of Devon Energy, where he had been CEO from 1980-2010.[1] Nichols also serves on the executive committee of the board of directors of the National Association of Manufacturers and the America's Natural Gas Alliance, as well as on the boards of the Business Industry Political Action Committee (BIPAC) and the American Petroleum Institute (of which he formerly served as chair),[2] and has attended at least one donor summit of the Koch brothers' network.[3]

Nichols has been a major donor to Republican candidates and causes, including contributing to Wisconsin Governor Scott Walker's campaign during the 2011-2012 Wisconsin recall elections. In 2014 Devon Energy was revealed to have made a previously unknown contribution of $50,000 during the recall to Wisconsin Club for Growth (WiCFG) shortly after Walker was advised to ask Nichols for a contribution.[4] WiCFG is a target of a long-running investigation into potentially illegal campaign coordination with Walker's electoral campaign.

Nichols holds a bachelor's degree in geology from Princeton University and a law degree from the University of Michigan and served as a law clerk for Chief Justice Earl Warren and Justice Tom Clark. He also served as a special assistant to William Rehnquist when Rehnquist was Assistant Attorney General at the U.S. Department of Justice.[2]

Nichols was 39th on the Forbes 400 list of CEO Compensation in 2010, with total compensation of $18.42 million.[5] Bloomberg estimates his compensation as executive chair in 2014 was $975,529.[6]

Biography and Ties to Devon Energy

Prior to entering the energy industry in 1970, Larry Nichols had earned a law degree from the University of Michigan and served as a law clerk for Chief Justice Earl Warren and Justice Tom Clark. He also served as a special assistant to William Rehnquist when Rehnquist was Assistant Attorney General at the U.S. Department of Justice.[2]

Together with his father, John Whiteman Nichols, Larry Nichols co-founded Devon Energy in 1970. The elder Nichols had previously discovered a way to structure the funding of a drilling enterprise that allowed "intangible drilling costs" to be used as a tax deduction[7] (which ended with the tax reform act of 1986),[8] then co-founded a regional oil company with F.G. Blackwood in the 1950s. According to Larry Nichols, by the late 1960s, his father was acquainted with a wide network of European bankers and investors who "wanted to invest in the oil business because they thought there would be an appreciation in the price of oil, but they did not want to take the risk of drilling oil and gas wells. So he [John Whiteman Nichols] had the idea of starting a new company that would raise money in Europe that would be focused on buying and producing oil and gas properties in the U.S."[7] John Nichols invited his son, Larry Nichols, to join him.

According to Larry Nichols, Devon Energy's business strategy has relied on making acquisitions more quickly than larger companies and using newer extraction technologies to continue drilling for oil and gas.

"...unlike what most people [in the 1980s] thought, that all of the oil and gas had been discovered of any size of consequence in the United States–we realized that new technology was teaching us how to get oil and gas out of old fields in old areas, and that there was a real opportunity there."[7]

Nichols Denies Problems and Risks Associated with Fracking

Nichols credits Devon with being the first company to combine horizontal drilling and hydraulic fracturing (fracking) technologies.[7] In response to an interview question about the increased public scrutiny of fracking, Nichols said in 2011:

"It is the most amazing thing to me. It shows the level to which the environmentalists will stoop. No one has ever been able to find a single well anywhere where hydraulic fracturing has caused a problem. Not one. The technology actually for both horizontal drilling and fracturing has been used for more than 60 years. There is not a single well in the world where there is any documentation that hydraulic fracturing caused any problem to water and yet they are constantly raising that problem. I’ve testified before Congress a couple of years ago and others have done the same thing. The EPA has been challenged by testimony to show us a well where it’s caused a problem. No one can show the well. The newspapers can give us anecdotal evidence, but whenever anyone investigates it, it’s always caused by something else.[7]

In the same interview, Nichols claimed that the EPA does not have authority to issue regulations related to drilling and denies that fracking has ever been shown to cause environmental problems:

Nichols: "The EPA really doesn’t have any authority. It’s interesting to see how that has evolved. They first tried to pass legislation to control hydraulic fracturing itself. The federal government has no authority to do that. All of the states, both Republican and Democrat have challenged their authority to do that. So the EPA gave up on that technique and has then shifted over to the disposal of water and air emissions as a way that they can control wells. [...] But since they don’t have that power in Washington, if the EPA can find a way to control drilling then they will have a lever to do what some of the environmentalists in this administration want to do, which is stop oil and gas drilling."
Interviewer: "We are talking about the Obama Administration, for the sake of history. Under the Republican George W. Bush, was there a whole different attitude?"
Nichols: "Well, there wasn’t a problem. Again, show me the well where hydraulic fracturing has caused a problem. The problem is manmade by raising the concerns about hydraulic fracturing to give the EPA a lever to try and have control at the federal level that they don’t have now."
Interviewer: "Is there more of a risk with fracking for natural gas and oil than the vertical drill?"
Nichols : No."[7]

The U.S. Geological Survey issued a report in 2015 linking increased seismic activity to the locations of fracking wastewater injection sites in several states,[9] and numerous studies have found evidence of drinking water contaminated by fracking chemicals.[10][11]

New York Times: State AG Letters Critical of EPA Rules Were Drafted by Devon Energy

Nichols made a $5,000 contribution to Oklahoma Attorney General candidate Scott Pruitt in 2010.[12] Pruitt was one of several state Attorneys General who sent letters to the EPA critical of air pollution rules that had in fact been drafted by Devon Energy, as an investigation by The New York Times revealed in 2014. The Times characterized the relationship between state officials and Devon an an "unprecedented, secretive alliance that Pruitt and other Republican attorneys general have formed with some of the nation’s top energy producers to push back against the Obama regulatory agenda."[13]

Ties to the Koch Brothers

Nichols was listed as a presenter at the June 2010 Koch network donor summit in Aspen, Colorado.[3]

Koch Wiki

The Koch brothers -- David and Charles -- are the right-wing billionaire co-owners of Koch Industries. As two of the richest people in the world, they are key funders of the right-wing infrastructure, including the American Legislative Exchange Council (ALEC) and the State Policy Network (SPN). In SourceWatch, key articles on the Kochs include: Koch Brothers, Koch Industries, Americans for Prosperity, American Encore, and Freedom Partners.

Support for the American Legislative Exchange Council

Nichols' company, Devon Energy, was a "Director" level sponsor of the 2014 ALEC Annual Conference,[14] was a sponsor of the 2013 Task Force Summit in 2013,[15] and gave $1,000 to the ALEC "scholarship" fund in 2007 and an additional $1,000 in 2008.[16] Devon lobbyists also accompanied a group of nine U.S. lawmakers on an industry-sponsored trip to the Alberta tar sands in 2012 that was publicly described as an "ALEC academy." The lawmakers were taken on a tour of a Devon Energy facility as part of the trip.[15]

Shareholder Resolution Demands Disclosure: A group of Devon Energy shareholders in 2014 proposed that the Board of Directors "require comprehensive disclosure related to its direct, indirect, and grassroots lobbying," specifically noting in their proposal that Devon did not disclose membership in or contributions to ALEC. The Board of Directors, then chaired by Nichols, opposed requiring such disclosure.[17]

About ALEC
ALEC is a corporate bill mill. It is not just a lobby or a front group; it is much more powerful than that. Through ALEC, corporations hand state legislators their wishlists to benefit their bottom line. Corporations fund almost all of ALEC's operations. They pay for a seat on ALEC task forces where corporate lobbyists and special interest reps vote with elected officials to approve “model” bills. Learn more at the Center for Media and Democracy's ALECexposed.org, and check out breaking news on our PRWatch.org site.


Political Influence and Contributions

Nichols spends heavily on political campaigns and organizations across the U.S., reporting $350,100 in political contributions in the 2014 cycle.[18] He has also engaged directly with lawmakers, reportedly "meet[ing] individually with congressional leaders and their staff" during the recession following the 2008 crisis, according to the Financial Times, which reported in 2009 that Nichols "spends a lot of time in Washington DC, trying to educate lawmakers and the new administration. “A good number of people in the new administration are eager to learn,” he says. Then adds: “There are some lost causes.”[19] Nichols was also registered as a federal lobbyist for Devon Energy in 2000.[20]

Nichols is also an influential figure in his home state of Oklahoma. For example, Nichols was named co-chair of the transition team of Oklahoma governor Mary Fallin when she was elected in 2010.[21] (Fallin was named "legislator of the year" by the American Legislative Exchange Council (ALEC) in 1993, while Nichols' co-chair on Fallin's transition team, State Sen. Glenn Coffee, was ALEC's "legislator of the year" in 2010.)[22]

Ties to Scott Walker and Dark Money Groups

Summary of supporting exhibits from case documents filed August 22, 2014.

In addition to a $5,000 disclosed contribution Nichols made to Walker's recall campaign,[23] Devon Energy made an undisclosed contribution of $50,000 in March 2012 to Wisconsin Club for Growth (WiCFG), a Wisconsin-based organization that spent at least $9.1 million during the Wisconsin recall elections in 2011-2012, and funneled at least $10 million more to other politically-active groups like Wisconsin Manufacturers and Commerce, while reporting that it spent $0 on politics to the IRS.[24] The contribution only became public in August 2014, when documents related to a "John Doe" investigation into potentially illegal campaign coordination between Scott Walker's campaign, WiCFG, WMC, and possibly other groups were briefly unsealed.

According to the Milwaukee Journal Sentinel, the documents suggest that Walker was advised to personally solicit funds from Nichols and others for WiCFG:

"The records include example after example of Walker or his aides encouraging donors to give money to the Wisconsin Club for Growth.
"In September 2011, Doner sent an email to Walker and others with brainstorming ideas for raising money for the Wisconsin Club for Growth. Among them: "Take Koch's money," "Get on a plane to Vegas and sit down with Sheldon Adelson," and "Go heavy after (corporations) to give."
"The documents also show the club received large checks from donors soon after Walker was advised to solicit funds from them for the group. Those included $250,000 from hedge fund CEO Paul Singer, $100,000 from manufacturer Maclean-Fogg Co., $50,000 donation from Atlanticus Holdings CEO David Hanna's trust, $50,000 from hedge fund chairman Bruce Kovner, $50,000 from natural gas and oil producer Devon Energy, $15,000 from Home Depot co-founder Ken Langone and $15,000 from Trump" (emphasis added).[4]

Case documents filed by the prosecutors include the following supporting exhibits related to Nichols:

[Id. at ¶ 64; Exhibits 58, 59] An April 17, 2012 email to Walker advising him to ask Larry Nichols, Chairman of Devon Energy, to contribute "$250k in support of your recall" (emphasis in the original). WiCFG bank records reflect a $50,000 contribution from Devon Energy on May 3, 2012.

Devon Energy would not have been able to contribute directly to Walker's campaign committee because direct corporate contributions to candidates are banned in Wisconsin.[25]

For more information, see the pages Scott Walker, Wisconsin Club for Growth, Scott Walker John Doe Documents, and The Campaign to Legalize Coordination in Wisconsin and Nationwide.

Devon Energy and Wisconsin

In 2013, Devon Energy was a Co-Host sponsor of the National Governors Association annual meeting, which was held in Milwaukee that year.[26] Three Devon Energy employees, including Nichols and all based in Oklahoma, have reported a total of $6,350.00 contributions in Wisconsin electoral campaigns, all to Scott Walker between 2012 and 2014.[27]

Disclosed Federal Contributions

2014

Nichols reported the following contributions to federal candidates and political committees in the 2014 election cycle, according to data compiled by the Center for Responsive Politics:[18]

  • Targeted State Victory committee: $136,200. The Targeted State Victory committee was a Republican joint fundraising committee that planned to split the funds it raised (at least $2.3 million by October 15, 2014) "between at least 14 different state Republican party committees." Prior to the Supreme Court's FEC v. McCutcheon decision in April 2014, that contribution would have violated laws that limited total individual contributions to candidates to no more than $123,200 in a two-year cycle.[28]
  • National Republican Senatorial Committee: $58,600
  • Republican National Committee: $32,400
  • Republican Party of North Carolina: $10,000
  • Republican Party of Georgia: $10,000
  • Republican Party of Michigan: $10,000
  • Colorado Republican Committee: $10,000
  • Republican Party of West Virginia: $10,000
  • Republican Party of South Dakota: $10,000
  • New Hampshire Republican State Committee: $10,000
  • Republican Party of Kentucky: $2,500
  • Independent Petroleum Association of America: $5,000
  • American Petroleum Institute: $1,000
  • Business Industry PAC: $2,000
  • COLE PAC: $5,000 (affiliated with Tom Cole, R-OK)
  • Devon Energy: $10,000, -$5,000
  • Frank D. Lucas: $5,200
  • Patrice Douglas: $5,200
  • Kevin Cramer: $2,600
  • James Lankford: $5,200
  • Tom Cole: $4,000
  • Tom Cotton: $5,200

Disclosed State Contributions

Nichols has reported $921,101 in political contributions in state-level elections between 1999 and 2014, according to data compiled by the National Institute for Money in State Politics.[12] (This amount includes some contributions that were also listed in federal contributions.)

Recipients of $10,000 or more in recent election cycles (2010-2014) include:[12]

  • Arkansas Republican Party: $10,000 (2014)
  • Cole for Congress: $12,400 (2010-2013)
    • Also to COLE PAC: $5,000 (2014)
  • Colorado Republican Party: $10,000 (2014)
  • Devon Energy: $30,000 (2010-2014)
  • Iowa Republican Party: $10,000 (2014)
  • Louisiana Republican Party: $10,000 (2014)
  • Lucas for Congress: $10,200 (2011-2013)
  • Michigan Republican Party: $10,000 (2014)
  • Minnesota Republican Party: $10,000 (2014)
  • Montana Republican Party: $10,000 (2014)
  • New Hampshire Republican Party: $10,000 (2014)
  • North Carolina Republican Party: $10,000 (2014)
  • Oklahoma Republican Party: $10,000 (2013-2014)
  • Republican Governors Association: $11,395.56 (2010)
  • Republican National Committee: $63,200 (2012-2014)
  • Romney Victory Inc: $47,500 (2012)
    • Also to Romney for President: $5,000 (2012)
  • South Dakota Republican Party: $10,000 (2014)
  • Targeted State Victory Fund: $136,200 (2014)
  • West Virginia Republican Party: $10,000 (2014)

Also noteworthy are Nichols' $5,000 contribution to the recall campaign of Wisconsin Governor Scott Walker in 2012, and $5,000 contribution to Oklahoma Attorney General candidate Scott Pruitt in 2010.[12]

Affiliations

As of May 2015:[2]

References

  1. Jay F. Marks, "Co-founder Larry Nichols to retire from Devon Energy in Oklahoma City," The Oklahoman, December 12, 2012.
  2. 2.0 2.1 2.2 2.3 Devon Energy, "Board of Directors," organizational profile, accessed May 2015.
  3. 3.0 3.1 ClimateProgress, "MEMO: Health insurance, banking, oil industries met with Koch, Chamber, Glenn Beck to plot 2010 election," ThinkProgress, October 20, 2010.
  4. 4.0 4.1 Patrick Marley, Daniel Bice, and Lee Bergquist, "Walker wanted funds funneled to Wisconsin Club for Growth," Milwaukee Journal Sentinel, August 22, 2014.
  5. "J. Larry Nichols," compensation profile, Forbes, April 28, 2010.
  6. "J. Larry Nichols," executive profile, Bloomberg Business, accessed May 2015.
  7. 7.0 7.1 7.2 7.3 7.4 7.5 John Ehrling and Larry Nichols, "Voices of Oklahoma, Larry Nichols," interview transcript, October 26, 2011.
  8. Joint Committee on Taxation, U.S. Congress, "General Explanation of the Tax Reform Act of 1986," staff report, May 4, 1987.
  9. U.S. Geological Survey, "[http://earthquake.usgs.gov/research/induced/ Induced Earthquakes]," government research project report, site accessed May 2015.
  10. Nicholas St. Fleur, "Fracking Chemicals Detected in Pennsylvania Drinking Water," The New York Times, May 4, 2015.
  11. Mike Gaworecki, "Confirmed: California Aquifers Contaminated With Billions Of Gallons of Fracking Wastewater," DeSmogBlog, October 7, 2014.
  12. 12.0 12.1 12.2 12.3 National Institute for Money in State Politics, "J. Larry Nichols (overview)," Follow the Money database, accessed May 2015.
  13. Eric Lipton, "Energy Firms in Secretive Alliance With Attorneys General," The New York Times, December 7, 2014.
  14. Nick Surgey, "Coal and Oil Polluters Dominate ALEC Conference," Center for Media and Democracy, PR Watch, July 31, 2014.
  15. 15.0 15.1 Nick Surgey, "Keystone Academy: Where Legislators Learn the Etiquette of Serving Special Interests," Center for Media and Democracy, PR Watch, July 31, 2013.
  16. Center for Media and Democracy, Common Cause, and D.B.A. Press, "Buying Influence: How the American Legislative Exchange Council Uses "Scholarships" to Send Lawmakers on Trips with Corporate Lobbyists," report, updated July 2013.
  17. Devon Energy, "2014 Proxy Statement," SEC filing, April 21, 2014.
  18. 18.0 18.1 Center for Responsive Politics, "Larry Nichols (2014)," donor lookup, Open Secrets database, accessed May 2015.
  19. Sheila McNulty, "Larry Nichols, Devon Energy: Independent boss is happy with his lot," Financial Times, October 2, 2009.
  20. Center for Responsive Politics, "J. Larry Nichols," lobbyist profile, Open Secrets database, accessed May 2015.
  21. "Fallin names Coffee, Nichols to co-chair transition," Capitol Beat OK, November 9, 2010.
  22. "Senate Pro Tem Glenn Coffee named Legislator of the Year," Capitol Beat OK, August 17, 2010.
  23. Wisconsin Democracy Campaign, "Walker Contributions Over $1,000," campaign finance report, May 31, 2012.
  24. Brendan Fischer, GOP Prosecutor Defends Scott Walker Criminal Probe, Says "Let's Get the Truth Out", PR Watch, May 1, 2015.
  25. National Conference of State Legislatures, "State Limits on Contributions to Candidates," summary report, January 20, 2010.
  26. Bill Glauber, Jason Stein, and Patrick Marley, "Cost of sponsoring governors meeting kept under wraps," Milwaukee Journal-Sentinel, August 1, 2013.
  27. Wisconsin Democracy Campaign, "http://www.wisdc.org/index.php?from=--&to=--&filter=+Search+&employer=Devon+Energy&module=wisdc.websiteforms&cmd=searchadvanced Devon Energy, employer]," campaign finance database search, May 2015.
  28. Russ Choma, "Super JFC Donors Emerge in Third Quarter," Center for Responsive Politics, Open Secrets blog, October 15, 2014.