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Aracoma assessed record fine

CHARLESTON, W.Va. - A Massey Energy subsidiary has admitted to criminal safety violations that caused the deaths of two Logan County coal miners in a January 2006 fire, federal prosecutors revealed Tuesday. Read the MSHA report Read the plea agreement Read the settlement with MSHA

Massey's Aracoma Coal Co. has agreed to plead guilty to 10 criminal charges, including one felony, and pay $2.5 million in criminal fines, according to documents filed in U.S. District Court in Charleston.

Aracoma agreed to plead guilty to not providing a proper escape tunnel out of the underground mine, to not conducting required evacuation drills, and to faking a record book so it appeared the drills had been done.

The company has also agreed to pay $1.7 million in civil fines to settle safety violations related to the fire that claimed the lives of miners Don Bragg and Ellery Hatfield.

In a sweeping deal with prosecutors and the U.S. Mine Safety and Health Administration, the Massey operation will also resolve more than 1,300 safety violations at Aracoma and Massey's nearby Hernshaw Mine since the Jan. 19, 2006, fire.

At a news conference on Tuesday, U.S. Attorney Charles T. Miller said he hopes the prosecution will send a message to other coal companies that "willful violation of health and safety regulations will be prosecuted in the Southern District of West Virginia to the fullest extent of the law."

While Tuesday's announcement signals the resolution of the criminal case against the company, there are still open investigations against individuals, he said.

"Coal mining is an inherently dangerous business, but when companies ignore safety standards, it becomes more than inherently dangerous, it becomes eminently disastrous," Miller said.

Bragg and Hatfield's widows attended the announcement but did not speak to reporters. On their behalf, attorney Bruce Stanley made the following statement: "Perhaps these penalties will help to convince all operators that money will never be more important than miners' lives. No one's life should be put at risk just because they showed up for work. May the deaths of Don and Elvis stand at least for that much. And may the rule of law, not man's love of money, control."

Richmond, Va.-based Massey Energy issued a statement quoting Aracoma Coal Co. President John Jones. "While we will never forget the loss of our two members, resolving these issues with the U.S. Attorney and MSHA will help all of us at Aracoma Coal Company move forward from this tragic accident.

"Since the fire, all of us at Aracoma have pulled together in a united effort to improve safety," Jones said in the statement. "I am very proud of the members of Aracoma and their focus on safety."

Combined, the $4.2 million in criminal and civil fines appear to amount to the largest government penalty ever in a coal-mining death case, according to MSHA records. A federal judge must still approve the criminal plea before it can be finalized.

Prosecutors agreed that they would not bring additional charges against Massey Energy or any of the parent company's officers. Documents indicate that more charges are likely to come against mine managers at the Aracoma operation.

Massey had already agreed last month to pay an undisclosed amount of money to the Bragg and Hatfield families to resolve a wrongful-death lawsuit filed by the families in Logan Circuit Court.

Safety violations cited

MSHA had sought $1.5 million in civil fines for 25 violations it said contributed to the deaths, and federal prosecutors have been working the case for nearly three years.

On Jan. 19, 2006, a fire broke out in the belt take-up storage unit for the Aracoma mine's longwall conveyor belt. A crew of workers, including Bragg and Hatfield, ran into thick, black smoke in their escape tunnel and had to find another way out. Ten men from the crew escaped. Bragg and Hatfield somehow became separated from the group, got lost and eventually succumbed to the smoke.

MSHA investigators had cited a variety of major safety violations that led to the fire, including "prolonged operation" of a misaligned conveyor belt and allowing large spills of combustible coal dust and grease to build up on the belt.

Aracoma agreed to plead guilty to a series of criminal violations that hampered miners trying to evacuate the mine after the fire had started.

The central misdemeanor charge alleged that Aracoma failed to provide a required primary escapeway that was clearly marked, and isolated from fire sources such as conveyor belts. That charge stemmed from Aracoma's removal of at least two ventilation walls, called stoppings, creating holes that allowed smoke into the tunnel meant to be the miners' main evacuation tunnel.

In a joint "stipulation of facts," Aracoma agreed with prosecutors that one stopping was removed on Oct. 26, 2005, to "allow the installation of a dual switch house, a piece of electrical equipment known as a splitter box." The other was removed on Nov. 28, 2005, "to improve ventilation in a crosscut in which electrical equipment had been overheating."

Aracoma also agreed with prosecutors that the company "recklessly failed to replace the stoppings or to provide additional ventilation controls" to protect the primary escape tunnel.

In their charging documents, prosecutors stated that this violation "resulted in the deaths" of Bragg and Hatfield. Aracoma also agreed to plead guilty to not promptly evacuating the mine once the fire broke out, and to not training a mine dispatcher charged with organizing the evacuation.

The deal also includes guilty pleas to six counts of not conducting two different kinds of mine evacuation drills during the three months prior to the fire.

The one felony count included in the plea deal was a charge of falsifying a Jan. 7 entry in the mine's record books to make it appear that two different escape drills had taken place. Under federal mine safety law, the only felony criminal charges are for falsifying safety records that operators are required to keep.

The largest criminal fine in U.S. history was the $3 million that Pyro Mining Co. agreed to pay after 10 miners died in a September 1989 explosion in Union County, Ky. That case involved a civil penalty of only $711,000, making its total $3.7 million, or less than the $4.2 million in the Aracoma settlement.

In West Virginia, the previous record criminal fine in a mine safety case was $400,000, paid by Fire Creek Inc. in the January 1991 deaths of two miners in a McDowell County explosion.

Massey violations

Aracoma is at least the fourth subsidiary of Massey to plead guilty in the last five years to criminal violations of federal environmental or safety laws.

In 2003, Independence Coal Co. and Omar Mining Co. each paid $200,000 in fines after pleading guilty to criminal Clean Water Act violations related to illegal spills of mining waste into Boone County streams. And in July 2007, White Buck Coal Co. agreed to a $50,000 fine after pleading guilty to one misdemeanor count of not making sure a mine was safe before workers went underground.

Also, in January 2008, Massey agreed to a record $20 million civil fine to settle a U.S. Environmental Protection Agency lawsuit that accused the company of thousands of water pollution violations across the Southern West Virginia and Eastern Kentucky coalfields.

In the plea agreement, prosecutors pledged not to pursue charges against parent company Massey or any of its officers or employees. The joint statement added that the government "does not have evidence suggesting that Massey knew, approved or acquiesced in, Aracoma's failure to maintain true and accurate records of escapeway drills."

In the plea deal, prosecutors preserved their ability to bring more charges against "any individual who was an employee (whether salaried, or hourly or contract employee) or officer of Aracoma" between January 2005 and January 2006.

State mine safety director Ronald Wooten has sought to suspend or revoke mining licenses of at least seven Aracoma foremen or safety examiners, and issued individual citations against two other Aracoma officials. Several of those officials have said publicly that they are targets or subjects of the criminal investigation of the fire.

In the civil settlement, MSHA agreed to accept payment of $1.7 million in fines to resolve more than 1,300 violations at Aracoma and Hernshaw that originally drew proposed fines of $2.8 million, a reduction of about 40 percent. Most of the citations came after and were not directly related to the fire, but came at a time when MSHA inspectors were giving the mine intense scrutiny because of the deaths.

The civil settlement also gives Massey a chance to improve the safety performance at Aracoma and Hernshaw before MSHA officials institute a "pattern of violations" enforcement proceeding against the mines.

"I am pleased to see a resolution of the criminal and civil cases prompted by the fire at Aracoma Mine nearly three years ago," said acting MSHA chief Richard Stickler. "It reflects the seriousness of the misconduct committed by the mine operator that resulted in two lives lost, and serves both the ends of justice and of mine safety. This outcome should be a reminder to all mine operators of their legal duty to provide their workers with safe and healthful working environments."

On Tuesday, Robert J. Lesnick, chief administrative law sudge of the federal Mine Safety and Health Review Commission, approved the settlement, but said that he did so "reluctantly."

"Here, the parties have agreed that Aracoma will pay a Mine Act penalty of $1.7 million, which is approximately 61 percent of the penalty originally proposed by the Secretary," Lesnick's order states. "In contrast, the Chairman, Chief Executive Officer, and President of Massey Energy Company, Aracoma's parent company, received in 2007 a compensation package that probably exceeded $23 million."

Lesnick noted that according to a newspaper article, Massey CEO Don Blankenship's pay increased more than 35 percent in 2007.

"I question whether a penalty of $1.7 million is adequate in light of Aracoma's enormous size as indicated by the compensation of its leader," he wrote. But when factoring in the federal criminal sanctions and fines included in the agreement, the judge concluded that the settlement was "appropriate."

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

aclevenger@wvgazette.com

or 304-348-1723.


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