Elections 2022EnergyBeto O’Rourke Sued for Defamation by Natural Gas Company CEO Over Claims of Bribery

O'Rourke has repeatedly accused Abbott of taking bribes from energy companies after the 2021 winter storm.
March 8, 2022
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The Democratic nominee for governor has been sued by billionaire CEO of Energy Transfer Partners (ETP), Kelcy Warren, who is alleging defamation for continuous statements the candidate has made on the campaign trail.

“Like millions of Americans around the country, Warren exercises his right to make political contributions to the campaigns of candidates whose policies he supports, including incumbent Texas Governor Greg Abbott, to whose campaigns for Governor and Attorney General, Warren has donated in every year since 2010, except 2016,” Warren’s suit reads, which is filed in his personal capacity.

At root of the conflict is Warren’s $1 million contribution to Gov. Greg Abbott in June of 2021.

“Defendant O’Rourke intentionally, repeatedly, and widely disseminated his deliberate and defamatory falsehoods,” the suit adds, “through publicly released messages on Twitter, Facebook, and other social media sites and during speaking engagements and interviews.”

Beto O’Rourke has accused Abbott of taking bribes from titans in the energy industry, one of those being Warren, to avoid “fix[ing] the grid” with his preferred policies. What O’Rourke is alleging here is a second-degree felony punishable by up to 20 years in prison.

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For instance, on January 20, 2022, O’Rourke tweeted, “Gas company Energy Transfer Partners says: ‘give us $22 [million] or we cut the power for Texans.’ That’s extortion. Abbott isn’t stopping them because their CEO bought him off with a $1 [million] check. That’s corrupt. I will fix the grid [and] hold extortionists and corrupt officials to account.”

O’Rourke also has accused the legislature of sticking Texans with the bill caused by the 2021 blackouts.

During those blackouts, the scarcity pricing of electricity caused wholesale market prices to jump to their $9,000 per megawatt-hour (MWh) cap where it remained for much of the week even after emergency conditions lightened.

This led to $3.2 billion in estimated “overcharges” on the wholesale market. The legislature decided to approve legislation, called “securitization,” granting companies that lost money premium-priced loans so their debts may be defrayed over a long period of time rather than force more companies into bankruptcy.

Retail Electric Providers that absorbed massive debts because they had to purchase that supremely pricey electricity have begun charging their ratepayers monthly fees to begin making headway on the debts.

O’Rourke has dubbed this the “Abbott tax.” But he’s also criticized the governor for the opposite fact — that some companies, ETP included, made money during the blackouts. Because Texas’ electricity market is largely free — supply and price are not negotiated upfront like in a capacity market — there are two sides of every transaction, the one paying for a product and the other being paid for its supply.

The same scenario exists on the natural gas market, which is used to generate more than half of Texas’ power grid electricity.

ETP made money because they were on the supply side of the transaction when prices soared, while generators had to pay the exorbitant prices to fulfill their electricity supply obligations if they didn’t hedge — a strategy used to protect against exactly the kind of market volatility exhibited a year ago.

One of those entities that didn’t hedge was Brazos Electric Power Cooperative, the state’s largest electricity co-op, which is currently mired in a bankruptcy proceeding.

“All I have done over the course of the campaign is share these facts,” O’Rourke told reporters on Monday. “We are not backing down. He’s now trying to shut us down in the courts through a frivolous lawsuit.”

A spokesman for Abbott’s campaign said they are in no way involved with the lawsuit.

“Beto O’Rourke clearly hasn’t read or doesn’t understand the lawsuit filed personally by Kelcy Warren,” a statement from ETP reads, adding that Warren’s aim isn’t to prevent O’Rourke from discussing the blackouts. “What Mr. Warren is interested in stopping are the irresponsible, defamatory, and highly offensive statements by Mr. O’Rourke related to his donation to Governor Abbott’s campaign.”

“[The] statements are flat-out false, and they appear to have been made for political gain in a desperate attempt to overcome what appears to be a weakening campaign.”

The timing of the $1 million donation has been criticized, being only a few months after the blackouts and just after the legislature’s response was finalized.

In the suit, Warren says the catalyst for his donation was not the blackouts or the corresponding legislation, but former state Sen. Don Huffines’ primary challenge against Abbott which became official in May 2021. Warren also cites the speculation, which would prove to be true, that Allen West would also join the primary against Abbott.

The O’Rourke filing then turns combative, stating, “Badly behind in the polls after he announced his candidacy and with winter approaching, and seeking to capitalize off the unprecedented storm in Texas the prior winter, Defendant O’Rourke blamed Governor Abbott for the power plant failures during that storm and predicted further similar failures based on the malicious and false (not to mention absurd) statement that Governor Abbott decided not to protect Texas’s energy grid because Warren paid him not to do so.”

O’Rourke was one of many across the state warning frantically about another grid collapse as a winter storm hit a month ago, a warning that fell flat when put to the test.

The evidence of O’Rourke’s corruption allegations is sundry as the suit compiles many different examples of such statements.

But in Texas, there exists the Texas Citizens Participation Act, an anti-Strategic Lawsuit Against Public Participation (SLAPP) law, that protects citizens from lawsuits aimed at silencing speech.

O’Rourke has clearly accused Warren, and Abbott, of multiple crimes but that is not generally abnormal for a heated campaign.

Warren is demanding that O’Rourke retract his claims about the CEO and asking for over $1 million in damages. The suit was filed in the San Saba County district court.

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Brad Johnson

Brad Johnson is an Ohio native who graduated from the University of Cincinnati in 2017. He is an avid sports fan who most enjoys watching his favorite teams continue their title drought throughout his cognizant lifetime. In his free time, you may find Brad quoting Monty Python productions and trying to calculate the airspeed velocity of an unladen swallow.