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Pearce Made Millions on Sale

While Pearce’s forms provide no details about those businesses or their holdings, his Senate campaign paid Gree $15,000 in the first three months of 2008 for “contract airfare.” According to Federal Aviation Administration records, Gree owns two small airplanes. New Mexico business records list Pearce and his wife as the “organizers” of Gree, and the Congressman as the registered agent for the firm.

None of the companies Pearce lists on his disclosure forms has a telephone number listed in New Mexico directories. Several of the companies are registered at an address that used to belong to Lea Fishing Tools. The phone number affiliated with that listing now reaches an answering machine for Pearce’s Senate campaign. The physical location is now occupied by a Key Energy subsidiary, but Pearce’s campaign is not operating there.

Key Energy bought Lea Fishing at the tail end of a frenetic growth period that was fueled partly by mismanagement and poor accounting. In March 2004, Key announced that it had discovered widespread financial irregularities and could not produce an annual report for 2003. The company ultimately removed its senior managers and restated its earnings for 2000-2003, declaring about $200 million in write-downs for accounting errors.

Key Energy stock was removed from the New York Stock Exchange for about two years in the wake of the scandal, but it has since been reinstated and is now trading at about $15 per share. When Pearce sold his company, the stock was trading at about $9.50 per share, and the sale included 542,000 shares of Key stock.

Since the sale, Pearce and his wife have become quite wealthy. The assets listed on his personal financial disclosure form for calendar year 2002 totaled $1.6 million to $6.4 million, not including Individual Retirement Accounts and loans he made to his Congressional campaigns. By last May, Pearce was reporting assets ranging from $7.3 million to $32.6 million, not including IRAs. That total also does not include an additional $1.2 million the Pearces contributed in late 2003 to the Stevan and Cynthia Pearce Charitable Foundation, consisting of $800,000 from the couple, $340,000 from Trinity Industries and $60,000 in Key Energy Services stock donated by Trinity Industries.

Pearce has long been an advocate of expanded access to federal lands for oil and gas drilling. In September 2003, just before Hastert released the final report of the natural gas task force, Pearce sponsored an energy bill amendment to speed the processing of natural gas drilling permits, and warned an industry group of the dangers of gas price volatility.

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