Massey lawyers insisted on language to protect Massey from such action when subsidiary White Buck Coal Co. pleaded guilty to a criminal charge of not making sure a mine was safe before miners went to work.
Prosecutors and company lawyers signed an "agreed statement of facts" that said "there is no evidence" to suggest that Massey "knew or had reason to know of, approved or acquiesced" in a foreman's failure to conduct a pre-shift examination at White Buck's Grassey Creek No. 1 Mine near Leivasy, Nicholas County.
During a Feb. 21 plea hearing, Massey lawyer Robert Luskin told U.S. District Judge John T. Copenhaver that the paragraph was "intended to distinguish Massey, the parent corporation, from White Buck, the subsidiary, which is admitting to a knowing violation of the statute."
"Massey Energy, among its other businesses, includes contracting with the federal government," Luskin told Copenhaver, according to a hearing transcript.
"There are various rules regarding contractors and contractors with affiliated companies that are not convicted of a criminal offense, and the question of whether or not the parent corporation knew or had reason to know of the criminal conduct would be relevant to determinations of suitability for a company that does business with the federal government," Luskin said.
Under the federal Clean Water Act, specific facilities that are convicted of criminal pollution violations are automatically barred from receiving government contracts. Under the law, EPA has discretion to broaden the contract ban if it believes a corporate parent was involved in the criminal violations.
In August 2002, federal prosecutors charged Omar and Independence with criminal violations related to blackwater spills into Boone County streams. The charges stemmed from leaks from Massey operations into Robinson Creek during June and August 2001. Both companies paid the maximum $200,000 in fines.
Federal records show that Massey officials approached EPA "in anticipation of guilty pleas" in the Omar and Independence cases.
Massey wanted to "inform [EPA] about corrective measures instituted and planned by Massey and to seek a determination that the conditions giving rise to the anticipated convictions of Omar and Independence have been corrected," according to the EPA settlement.
Under the settlement, Massey agreed to a number of steps to improve environmental performance. The company created a new compliance program that included regular audits, additional staff, better training, and a hot line for employees to report environmental problems.
The agreement said EPA officials were convinced the Omar and Independence violations "were one-time occurrences which have been corrected."
EPA, the agreement said, "believes that education of employees corrects the proximate cause of the convictions and the compliance programs required by the plea agreements and this compliance agreement provide the institutional commitment to environmental compliance necessary for [EPA] to make the determination that the conditions giving rise to the anticipated [Clean Water Act] convictions have been corrected."
In its new lawsuit, the EPA recited a long list of Massey violations and settlements with various regulatory agencies.
"Despite this history of Clean Water Act violations and enforcement efforts by federal, state and local authorities, Massey Energy and its subsidiaries continue to violate the CWA, and remain in substantial noncompliance with the law," EPA said.