By Terry Hood and Dan Bewley, The News On 6
TULSA, OK -- A 267-page report into the fall of SemGroup puts most of the blame on co-founder Tom Kivisto.
The independent investigation accuses company leaders of mismanagement and misconduct.
The investigation, led by former FBI director Louis Freeh, says SemGroup's top brass misled investors and paved the way for the fall of a Tulsa energy giant.
SemGroup was once a shining light in the oil business and proud member of the Tulsa community. But last July its star dimmed as the energy company filed bankruptcy, owing more than $2 billion on the oil market.
Since then hundreds of employees have been let go as the company tries to reorganize.
An investigation into the trail that led to SemGroup's fall chronicles misdeeds and questionable business decisions.
Freeh says as SemGroup grew in the last decade its three founders, Kivisto, Kevin Foxx and Gregory Wallace, maintained a business that lacked any managerial controls.
The report cited a human resources manager who was surprised the company had no job descriptions, few performance reviews and little coordination among its various units.
The man who faces most of the blame, according to the report, is Kivisto.
"I trust, however, as the facts and the truths surrounding this chain of events are revealed, the SemGroup employees will regain their trust in what they initially believed," Kivisto said in July.
The report says SemGroup's management did not know or understand that Kivisto's trading strategy was putting the company at risk.
It also brings to light that Kivisto was operating his own trading company using SemGroup money, a company Freeh called Kivisto's "alter ego."
Freeh also accuses Kivisto of hiring two top trading assistants who had no experience trading commodities.
One of those assistants, Melina Oven, received a bonus last year for $1.5 million, and the report says e-mails exchanged between Kivisto and Oven in 2001 and 2002 show the pair had an intimate relationship while Oven was still working as a consultant.
The report also shows Kivisto had a personal relationship with the woman who started the D'Novo restaurant in south Tulsa.
Anna Hollinger began contracting with SemGroup to provide healthy meals for its employees. The investigation shows that Kivisto used SemGroup money and resources to help Hollinger launch her business and, at one point, paid for a limousine to pick her up at an airport in Cancun.
That trip took place seven months before SemGroup filed for bankruptcy.
Several organizations associated with the report, including the Bank of Oklahoma, SemGroup and John Catsimatidis, the New York businessman trying to take over the company, declined to comment.
Messages left with Kivisto's attorney were not returned.