Get Connected
  • facebook
  • twitter
Print

Taking Big Coal to task is difficult

CHARLESTON, W.Va. -- On Jan. 14, 2009, officials from Aracoma Coal Co. pleaded guilty to 10 mine safety crimes. Prosecutors uncovered the violations during their investigation of a January 2006 fire at Aracoma's Alma No. 1 Mine in Logan County.

Delorice Bragg and Freda Hatfield were in court that day, too. Their husbands, Don and Elvis, died in the fire. The widows came to speak out against the government's promise not to bring any future charges against Aracoma's parent company, Massey Energy.

It wasn't the first time government officials went after Massey but settled for a deal with one of the Richmond, Va.-based coal giant's subsidiaries or a low-level company staffer.

Despite years of environmental problems and dozens of mining deaths, Massey and its corporate officials -- including now-retired CEO Don Blankenship -- have mostly escaped any serious, direct punishment.

At Aracoma, prosecutors said they just didn't have a case against Massey or any of its officers, executives or agents. Bragg and Hatfield weren't so sure.

"If Massey executives have done nothing wrong and bear no criminal responsibility for the fire that killed Don and Elvis, why do they need this deal?" Bragg said at the time. "If they're innocent, they don't."

U.S. District Judge John T. Copenhaver heard the widows out. The deal sounded a little unusual, the judge said, but he didn't want to second-guess prosecutors.

Aracoma Coal Co. paid a $2.5 million criminal fine and $1.7 million in civil penalties, the largest combined payment ever in a coal-mining death case. Five of the subsidiary's mid- and low-level foreman later pleaded guilty to misdemeanor charges. No one went to jail.

Massey Energy says its corporate policy puts safety first. Blankenship repeatedly said his company never put profits or coal production ahead of people.

However, long before 29 miners died in an explosion a year ago Tuesday at Raleigh County's Upper Big Branch Mine, Massey had its share of run-ins with the law. Inspectors doled out thousands of citations, and agencies levied millions in fines. Widows and injured miners sued. Citizens filed pollution complaints. In the past decade alone, at least four Massey subsidiaries have pleaded guilty to workplace safety or environmental crimes.

Still, regulators have almost always cited one of Massey's maze of operating subsidiaries or independent contractors. Prosecutors squeezed section foremen or fire bosses into guilty pleas. Even personal injury lawyers who represented the families of miners killed at Massey operations generally ended up in court against a subsidiary several layers from Massey, or against one of the firm's insurance carriers.

"Enforcement doesn't reach into the boardroom," said Davitt McAteer, a longtime mine safety advocate who ran the U.S. Mine Safety and Health Administration during the Clinton administration and is conducting an independent investigation of the Upper Big Branch disaster.

As Massey grew over the past two decades into the region's biggest and most powerful coal producer, government officials had plenty of chances to rein in the company. Between 2000 and 2009, no other coal company was responsible for more mining deaths than Massey, according to an analysis by the Investigative Reporting Workshop at American University.

However, even the largest-ever penalties in mine safety and environmental cases involving coal operators were not enough to stop unsafe work practices and allegations of illegal pollution.

In January 2008, Massey agreed to pay a $20 million fine to resolve water pollution violations. It was the biggest deal ever between a coal company and the U.S. Environmental Protection Agency. EPA officials said the settlement tied Massey to new pollution-control plans and improved internal audits that would change the way the company did business.

Two years later, the Sierra Club and other environmental groups filed suit against Massey, alleging the company's water pollution violations actually had gotten worse since the EPA settlement.

When the government settled its case over the Aracoma fire, then-MSHA chief Richard Stickler said the outcome "should be a reminder to all mine operators of their legal duty to provide their workers with safe and healthful working environments."

A year later, the Upper Big Branch Mine blew up.

"Corporate executives and board members have the power to make compliance with the law a company priority," said Pat McGinley, a West Virginia University law professor who is part of McAteer's team. "If rogue corporate officials were forced to spend even a few weeks in jail for condoning serious continued violations of safety or environmental laws, compliance would become a personal priority."

'. . . You're going to have a problem'

Just beyond a sharp bend in the Big Coal River, in the town of Sylvester, Massey Energy in 1980 built one of the key parts of its growing Southern West Virginia empire: a huge coal processing and shipping facility run by Massey's Elk Run Coal Co. subsidiary. Residents worried from the start that the sprawling industrial site would be nothing but trouble.

"Common sense will tell you that, if you put a preparation plant as close to a town as Elk Run put theirs to Sylvester, you're going to have a problem," said Ralph Anderson, a former mayor who worked for years at coal preparation plants.

Still, the people of Sylvester lived with Massey until the late 1990s, when the company expanded the operation. Massey removed a finger ridge that had extended from south to north across the valley, between the mining complex and the town. The company used the material it excavated to create a large, flat area for coal stockpiling and loading.

That's when, according to residents, dust from Elk Run literally took over their town. State inspectors repeatedly cited Elk Run, and demanded various plans for fixing the problems, but the dust continued.

In February 2001, 150 residents sued Massey. When they got their day in court, then-Boone Circuit Judge E. Lee Schlaegel wouldn't let the jury hear about the dozens of violations and thousands in fines state inspectors had issued to the company. Jurors came back with a verdict against Massey. The company should clean up the dust, jurors said, but without the long record of violations to show Massey put off fixing the problem, jurors declined to punish the company with any punitive damages.

'The agencies let it happen'

On Oct. 11, 2000, Coldwater Fork and Wolf Creek in Martin County, Ky., flowed black.

The floor collapsed from under the Big Branch impoundment, operated by Massey subsidiary Martin County Coal. More than 300 million gallons of slurry poured out of the impoundment, into the adjacent underground mine and then out into nearby creeks, the Tug Fork of the Big Sandy, along the West Virginia-Kentucky border, and eventually, to the Ohio River.

Near the spill site, lawns were buried in up to 7 feet of sludge. Downstream, more than 75 miles of creeks and rivers were damaged. Prior to last year's BP oil blowout in the Gulf of Mexico, it was considered the largest environmental disaster ever in the Southeast United States.

MSHA investigator Jack Spadaro found that the Massey impoundment had problems before the break, and that MSHA had not followed its own expert's advice about repairs the company needed to make.

When the Bush administration took office in 2001, Spadaro says, it moved to stop any review of those issues. Spadaro resigned from the investigation team and, eventually, left the agency.

"Massey simply ignored the hazard to the public," Spadaro recalled last month. "The company did that, and the agencies let it happen."

Later, lawsuits were settled. A criminal inquiry ended with no charges being filed. Most of the cleanup costs were covered by Massey's insurance policies. The company told stockholders the slurry disaster didn't have a "material effect" on Massey's finances.

In the wake of Martin County, the administration of West Virginia Gov. Bob Wise in August 2001 launched a crackdown on Massey, following a long series of blackwater spills along the Coal River in Boone and Raleigh counties. The state Department of Environmental Protection dug out a tool it seldom used: the ability to suspend or revoke mining permits, and block companies with repeated violations from obtaining new permits to mine coal anywhere in the country.

Leading the charge were DEP Secretary Mike Callaghan, a former federal prosecutor, and Callaghan's mining office director, a former U.S. Department of Justice lawyer named Matt Crum. Massey challenged Crum's authority to preside over enforcement hearings, though, and the cases quickly ground to a halt.

While the state cases languished, federal prosecutors went after two Massey subsidiaries for some of the same violations. Independence Coal and Omar Mining pleaded guilty to criminal violations of the federal Clean Water Act and agreed to pay the maximum fines of $200,000. Violations by both companies continued.

State officials, meanwhile, never permit blocked Massey. Instead, the DEP agreed in January 2006 to settle the cases -- along with hundreds of Massey violations dating back years -- for $1.4 million. By then, a new DEP secretary, Stephanie Timmermeyer, had forced Crum out of the agency's mining office.

Pat Parenteau, who teaches environmental law at Vermont Law School, said Massey's history is a symptom of larger problems with the way the nation's pollution laws are written.

First, big corporations create dozens of subsidiary companies to help shield the parent from liability. Also, Parenteau said, "Although environmental laws impose strict liability, significant penalties and stiff criminal sanctions, they are only as good as the agencies that are charged with enforcing them.

"As we've seen with MSHA, and to a lesser degree with [the] EPA, the problem of 'agency capture' by the regulated industry is a deeply engrained cultural phenomenon in the U.S.," Parenteau said. "And when the agency does flex its muscles -- as [the] EPA has been doing with mountaintop mining and coal-ash regulation -- the members of the Congress who owe their seats to industry move quickly to punish the agency by starving it through the budget process and bullying the administrator in oversight hearings."

'Where they had been was not a good place' 

Davitt McAteer's phone rang shortly after 4:30 p.m. on April 5, 2010. A reporter was on the line, asking if he'd heard reports about a terrible accident at Upper Big Branch.

"They were asking for as many ambulances as possible," McAteer recalled. Initial numbers of those who were dead or missing shocked McAteer, but he says now that the name of the company involved was no surprise.

"If you look to understand where someone has been, it sometimes tells you where they might be headed," McAteer said last month, "and with Massey, where they had been was not a good place."

McAteer had faced off with Massey before, when he was assistant secretary of labor in charge of MSHA for President Clinton in the 1990s.

After leaving that job, McAteer studied West Virginia mine safety problems for then-Gov. Wise.

In a major report issued in 2001, McAteer singled out the safety records of independent-contract companies Massey hired to do work at its operations. McAteer alleged that Massey used contractors to make its corporate safety record look better. Five years later, Gov. Joe Manchin brought McAteer in to perform an independent investigation of the Aracoma fire.

For years, McAteer watched criminal prosecutions in mine safety cases work out about like the one in 2007 at Massey's White Buck Coal Co. subsidiary.

Federal agents spent nearly five years investigating White Buck's Grassy Creek No. 1 Mine in Nicholas County. They found that mine officials were not conducting pre-shift safety examinations, but were filling out paperwork as if they had done so.

During one hearing in federal court, White Buck foreman William Edwin Wine testified that company managers told him to falsify the pre-shift examination records.

"I was told to do it this way by my supervisors, by my bosses," Wine said.

Massey disputed Wine's story, and the federal charges stopped at Wine, another low-level foreman and the White Buck subsidiary.

McAteer said the nation's mine safety laws put the responsibility for compliance -- and potential criminal liability -- mostly on mid- and low-level mine foremen. When the laws were written, he said, those foremen had a much greater say over how coal mines operate. Today, he said, decisions about spending time and money on safety comes from higher up in parent corporations.

"The structure has changed, and we haven't changed the law," McAteer said. "It's terribly important for management to be made part of the enforcement process."

Shortly after the Upper Big Branch Mine blew up, McAteer recommended a series of changes to West Virginia law to help hold corporate officials more accountable. Manchin, now the junior U.S. senator from West Virginia, declined to push the proposals before leaving the Governor's Mansion for Congress. His acting successor, state Senate President Earl Ray Tomblin, has shown no interest in McAteer's recommendations.

In Congress, Rep. George Miller, D-Calif., has pushed to amend federal mine safety law to make it easer for prosecutors to target corporate officials who knowingly allow criminal safety violations. The House, in early December, voted down Miller's efforts to advance the legislation.

Among those who spoke against the bill was Rep. Shelley Moore Capito, R-W.Va.

"It imposes vague new standards for criminal liability, potentially criminalizing most infractions and subjecting officials to sanctions over which they have no direct control," Capito said.

'Stay tuned'

On Dec. 3, 2010, just after the close of business, Massey Energy announced that Blankenship was retiring as the company's CEO. Under his deal with Massey, Blankenship is expected to receive $12 million in cash by July.

The next evening, Charles R. Qualls, 32, was driving his coal truck down a steep haul road at Massey's Republic Energy Surface Mine along the Kanawha-Fayette County line. Qualls lost control of the truck, the truck overturned, and Qualls was killed. Investigators found the brakes on the truck weren't working properly.

The day of Qualls' wake, Blankenship's attorney submitted a letter to state investigators, invoking his Fifth Amendment right to not answer questions in the Upper Big Branch investigation.

Seven weeks later, Alpha Natural Resources announced that it was buying Massey Energy. The deal is expected to close by midyear.

So far, federal prosecutors have charged two people in the Upper Big Branch inquiry. They allege that one of Massey's security directors lied to investigators and tried to destroy documents regarding the warning of miners that inspectors were on the way. They charged a former Upper Big Branch miner -- who left the operation eight months before the explosion -- with lying about whether he had a foreman's license.

Asked after a court hearing in the security director's case if more charges would be coming, U.S. Attorney Booth Goodwin told reporters to "stay tuned."

Reach Ken Ward Jr. at kward@wvgazette.com or 304-348-1702.


Print

User Comments