Harken Energy

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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.

Contents

History

The company began as an unprofitable collection of Texas oil wells for investors seeking tax write-offs.[1]

In 1986, Spectrum 7 was bought by Harken for $2.2 million[citation needed]. After the sale of his company, as part of the deal, George W. Bush would serve on Harken's board of directors. Having a board member whose father was the Vice-President of the United States (at that time) should benefit any company. George W. Bush remained on the board through 1993 and was also paid fees as a consultant.[2]

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.[citation needed] This questionable accounting technique, which can serve to inflate profits, was also used by Enron. It helped result in the infamous 2003 Enron scandal, 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 States. 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.[3] 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.

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