SW Jack Drilling

SW Jack Drilling was an Indiana, Pennsylvania-based oil and gas company. It was involved in the controversial practice of fracking for methane gas in the Northeastern U.S. in the Marcellus Shale region. SW Jack was the largest privately held land-based drilling company in the United States. In 2005, it was the nineteenth largest contract drilling company in terms of total footage drilled. Though lauded as an environmentally-friendly alternative to coal, fracking for gas has been linked to depleting drinking water resources of local communities and polluting the wells of the people living around drill sites. According to a 2010 article in Vanity Fair, "as use of the technique (fracking) has spread, it has been followed by incidents of water contamination and environmental degradation, and even devastating health problems." And according to data released to the EPA, Halliburton, a major supplier of fracking fluid, admitted using 807,000 gallons of diesel-based chemicals in its fluids, in violation of an agreement drillers had with the EPA.

Executive Summary

SW Jack Drilling was one of the biggest fracking companies in the Marcellus Shale region of the U.S. since it began drilling there in the early 2000s. In August 2010, CEO Christine Toretti decided to completely liquidate her family's company. A statement on the company's now defunct Web site says "the S.W. Jack Company supports oil and gas exploration in West Virginia, Pennsylvania, Kentucky, Virginia and New York." Though financial records are no longer available, it has been reported that annual revenues were between $20 million and $50 million during the past 5 years. Its CEO gave the largest political contribution during the 2009-2010 election season in Pennsylvania and is a National Committeewoman of Pennsylvania to the Republican National Committee. SW Jack Drilling has been involved with health and safety incidents in the Marcellus Shale region. Its executives have also been very active in making partisan political donations, predominantly in favor of Republicans. This company, headquartered in Indiana, Pennsylvania, has invested significant funds in elections in Pennsylvania, a state with large shale deposits, and its CEO was the biggest spender in the election of the new governor of Pennsylvania, Tom Corbett.

Liquidation of all operational assets

SW Jack Drilling's 16 drilling rigs and related equipment, including dozens of trucks, trailers and dozers, was auctioned by Kruse Energy & Equipment in August 2010 in Pittsburgh, Pennsylvania. In a statement posted on the company's website, Christine Toretti, S.W. Jack's chairman and CEO, said the company will invest the liquidation proceeds "in endeavors within the energy industry and other innovative realms."

Toretti is now co-chairing Pennsylvania Governor Tom Corbett's transitional team.

SW Jack Drilling

Type	Methane gas drilling and oil
Founded	1918
Headquarters	Indiana, Pennsylvania
Number of locations	Buckhannon, WV; Elkview, WV
Revenue	between $20 and $50 million at time of liquidation in 2010

Partisan Political Activity

Toretti has deep ties to the Republican Party, including having served as the Pennsylvania State System of Higher Education in 1995. She was also elected RNC National Committeewoman for Pennsylvania in August 1997 and she served on the George W. Bush Presidential Campaign Committee. She was one of the first Pennsylvania Republicans to endorse the then-Texas Governor and was put on the Energy Advisory Committee for the Bush/Cheney Transition Team. Toretti is also the director of the National Federation of Republican Women. "In 2010, Politics Magazine named her one of the most influential Republicans in Pennsylvania."

Common Cause's 2010 report "Deep Drilling, Deep Pockets" found SW Jack Drilling was the top donor in the Pennsylvania 2010 state election, giving over $1 million in Republican campaign contributions. Toretti gave about $15,000 in air fare and hotels for Governor-elect Corbett's campaign. As a token of appreciation, Toretti was appointed to serve on the transition team of Governor Corbett.

Corporate Political Action Committee

SW Jack never had a PAC, but was the biggest contributor to candidates and other PACs who support methane drilling and the lenient laws surrounding it. "The biggest single donor by far was S.W. Jack Drilling with $1 million in contributions—an amount that comprises more than a third of the industry total of $2.85 million over the last ten years. Of S.W. Jack Drilling’s total, $990,000 came from CEO Christine Toretti."

Political Donations by Company Execs

State Public Records show that Christine Torreti (also using the name Christine Olson) gave money to over 15 state Republican committees, most notably Arizona's (where her ex-husband is the former head coach for the University of Arizona men's basketball team) and Pennsylvania. She gave $990,000 to Pennsylvania Republicans and was also a big supporter of Governor Lynn Swann, who appointed her chair of his campaign. She has given an additional $120,579 in West Virginia and Virginia since 1999.

President of SW Jack and Toretti's business partner for over 30 years Jim McElwain, was also a big contributor to politicians and PACs as well. Public records show he has donated over $15,000 to Republican candidates since 2000.

Lobbying

There is no information found on lobbying efforts of SW Jack Drilling on Open Secrets. CEO Christine Toretti and President James McElwain both gave generously to Republican candidates and committees, as well as the Independent Oil and Gas Association of Pennsylvania.

Front Groups

As of 2010, SW Jack Drilling has dissolved. As a result, there is little information on past front group involvement. It is assumed the company was involved with several special interest groups that push for expanded drilling rights and limited or no regulation of fracking.

President and COO James (Jim) McElwain is one of the founders of the Independent Oil and Gas Association of Pennsylvania. He also served as the Association's first President.

Claimed Violations of Safety Rules or Other Laws

Health and Safety Violations Alleged

A Search on the Pennsylvania DEP Web site showed no violations by SW Jack Drilling from 2008-2011, as it did contract drilling in Marcellus.

2005: While not issued any violations, on November 2, 2005, Andrew John Murphy, 19, was working at S.W. Drilling Company site in West Virginia and was told to beat down foam on a mud pit. While performing this task, he noticed a liner holding contaminants had fallen into the pit, and he attempted to pull the liner out. While trying to pull the liner out, Mr. Murphy fell into the mud pit and died."

2008: "State and federal officials investigated a drilling rig collapse that killed two men in Upshur County, Texas. According to a State Police news release, the accident occurred in Rock Cave. A four-man crew was drilling a well for S.W. Jack Drilling Company, which had been contracted to do the work by methane gas provider Keyspan Energy." No additional information was found about the investigation.

Lawsuits

2009: A 2006 decision in the case of Andrew John Murphy's estate suing S.W. Jack Drilling was overturned in June. "West Virginia workers' compensation law prohibits a wrongful death suit against an employer unless the estate proves deliberate intention on the employer's part. Although deliberate intention sounds as if an employer meant to kill a worker, it means an employer's unreasonable disregard for safety created a foreseeable risk. S.W. Jack Drilling moved for a quick summary judgment and in 2007, a judge granted it, but Murphy's mother, Evelyn "Peach" Murphy, appealed as administrator." Justice Margaret Workman applied wrongful death law to SW Jack Drilling three years after the initial ruling.

Revenue and Profits

Since the company's complete liquidation in 2010, financial records have been deleted on Forbes, Bloomberg BusinessWeek and MarketWatch.

Here are some incomplete numbers that were found:

• $5 million in annual revenue in 1990

Executives and Annual Compensation

No information was found on Christine Toretti's or James McElwain's annual compensations.

Senior Executives

• Christine Olson Toretti: CEO and Owner - The daughter of Sam Jack, Jr., "she took over management of the Jack Company's pension and profit-sharing portfolio during college. Her tenure at S.W. Jack Drilling began in 1984, after a career as a venture capital investor specializing in semi-conductor technologies." In 1990, Toretti was named president. "Christine Toretti serves as National Committeewoman of Pennsylvania to the Republican National Committee. She is also a Partner of C&N Company-Gas Drillers and Producers and served as Co-Chairman of The Andy Warhol Museum and as a Director of S&T Bancorp Inc. since 1984. Toretti served on the George W. Bush Presidential Campaign Committee and on the Energy Advisory Committee for the Bush/Cheney Transition Team. She is the director of the National Federation of Republican Women and also created P.O.W.E.R. Pennsylvania, an organization for women in the G.O.P. She also served as the chair of the campaign for 2006 Republican gubernatorial nominee Lynn Swann and Mark Schweiker appointed her as his representative on the Interstate Oil and Gas Compact Commission.

• James McElwain: President, COO and Business Partner - "McElwain was appointed by Toretti as the company's Chief Operating Officer. He was Executive Vice President of S.W. Jack and J&J Enterprises in the 1970s. He is also one of the founders of the Independent Oil and Gas Association of Pennsylvania, the state's first methane gas trade association, and served as its first president."

Contact Information

Company Headquarters

S.W. Jack Drilling Company
P.O. Box 697
57 South Ninth Street
Indiana, PA 15701
Phone: 724-349-6800

West Virginia Offices

S.W. Jack Drilling Company
RR 33 Box W
Buckhannon, WV 26201
Phone: 304-472-9403

S.W. Jack Drilling Company
2454 Little Sandy Road
Elkview, WV 25071
Phone: 304-965-6718

Official Web site http://swjackdrilling.com (As of February 2011, the SW Jack Drilling Web site is unavailable)

Articles & Sources

External Resources

• Open Secrets
• Campaign Money.com
• Marcellus Shale.us
• Common Cause
• Propublica
• West Virginia State Donor Lookup
• Pennsylvania State Donor Lookup

Related SourceWatch Articles

• Samuel W. Bodman - Former CEO
• John M. Majoras

Source Watch has a special clearinghouse on fracking, Fracking for Gas