By Paul J. Nyden
Some of last year's biggest political donors were coal operators whose contractors owe tens of millions of dollars to the Workers' Compensation Fund.
Coal operators gave more than $250,000 to Gov. Cecil Underwood, nearly 12 percent of $2.1 million he raised. Coal companies gave another $253,850 to finance Underwood's inaugural ceremonies and parties in January.
During the final month of Gov. Gaston Caperton's administration, Workers' Compensation Fund lawyers filed three lawsuits to collect more than $12 million from Bluestone Coal Corp., Island Creek Coal Co., National Mines Corp. and their contractors.
In February, William Vieweg, a former Island Creek Coal Co. executive, became Underwood's new Employment Programs Commissioner. Vieweg called a halt to other planned lawsuits against coal company debtors.
Steve White, West Virginia Democratic Party co-chairman, said Tuesday, "West Virginians expect a workers' compensation system that requires all employers to pay their fair share. Anything less creates a climate of resentment and suspicion, casting a cloud over the entire workers' compensation program.
"If there weren't any special breaks being given to companies, the issue of political contributions would be of little interest," said White, a lawyer with Goodwin & Goodwin.
Bill Raney, president of the West Virginia Coal Association, does not believe there is a direct connection between political donations and political favors.
"You can draw all kinds of conclusions," Raney said. "But you generally pick those candidates who are already closely aligned with your own thoughts.
"Generally, donors find candidates they believe will take the state where they think it should be going," he said.
Coal company owners also gave at least $185,000 to winning state Senate and House of Delegates candidates in 1996, about 7 percent of $2.6 million contributed to those legislative races, according to a computer database compiled by the Peoples Election Reform Committee.
Some of the biggest coal contributions came from companies whose contractors ran up debts to state agencies, mine suppliers and their own employees.
Typically, a larger coal company would hire contractors to operate small mines. The larger company owned the coal in the ground and sold it after it was mined. The small contractor hired the miners.
Political contributors whose coal contractors owe millions to the Workers' Compensation Fund include James "Buck" Harless of Gilbert, James C. Justice II of Beckley, James O. Bunn and Omer Bunn of Grundy, Va., and A.T. Massey Coal Co. executives.
Harless owns several coal and lumber companies, including Hampden Coal Co. and Jumacris Mining Inc. Six Hampden and Jumacris contractors owe at least $2.6 million to the Workers' Compensation Fund, according to records released in May.
Gary White, president of Harless-owned International Industries Inc. and former president of the West Virginia Coal Association, said at that time, "Those were not our employees. Those were arms-length contracts." White said Harless has no intention of paying the $2.6 million.
Vieweg has not authorized a lawsuit to be filed against Harless and his contractors.
Lockridge Development Inc., one Harless contractor, is owned by Beckley coal operator Kennie Compton, who owes Workers' Compensation more than $21 million from 39 different coal companies.
Harless was a major Underwood supporter in his 1996 gubernatorial race. White, on loan from Harless, chaired Underwood's transition committee a year ago.
Harless family members contributed $5,000 to Underwood's election committee in 1996. White gave $2,000. International Industries gave $10,000 to Underwood's inaugural.
C.F. Shewey, a retired executive for Harless, and his wife Christine each gave $1,000 to Underwood.
Harless also made nearly $17,000 in legislative donations to 19 candidates including Tomblin and House Speaker Robert Kiss, D-Raleigh.
Harless donations also went to Sens. Martha Walker, D-Kanawha, and Vic Sprouse, R-Kanawha, as well as Delegate Mark Hunt, D-Kanawha. White made nine legislative contributions totaling $4,100.
The lawsuit Workers' Comp filed against Bluestone Coal Corp. in December 1996 alleged 13 company contractors who mined coal near Keystone in McDowell County owe more than $5 million in compensation premiums and interest.
Despite the lawsuit, at least one Bluestone contractor continued to run up new workers' comp debts. Blue Swan Energy Inc. went into default on Aug. 1, owing more than $37,000.
James C. Justice II, Cathy L. Justice and Byrd White III, officers of Bluestone Coal Corp., gave Underwood's campaign $3,000.
James O. Bunn and Omer Bunn of Grundy, Va., own several coal companies, including Northland Resources, Eaglehawk Carbon Inc. and Mate Creek Energy. Three Bunn coal contractors owe $1.4 million to the compensation fund, according to a list of debtors the agency released earlier this month.
The Bunns gave Underwood's campaign $2,600. Northland Resources contributed $5,000 to the inaugural. James Bunn also gave $500 each to Tomblin and Delegates Eustace Frederick, D-Mercer, and K. Steven Kominar, D-Mingo.
Executives from A.T. Massey and Fluor Corp., its Irvine, Calif.-based parent corporation, were the largest coal contributors to Underwood.
By early October 1996, Massey executives raised $100,000 for Underwood. A major part came from guests at an Aug. 24 fund-raiser at the Mingo County home of Massey President Don Blankenship.
In late October, 17 Fluor Corp. executives gave Underwood $16,570, which did not have to be reported until after Election Day. All 17 live in South Carolina, Texas or California.
Massey Coal Services and Elk Run Coal, Massey's Boone County subsidiary, each gave another $10,000 to Underwood's inaugural festivities.
During the past 20 years, Massey hired more than 475 contractors in central Appalachia. Most went bankrupt or simply disappeared. About 100 of those contractors mined coal in West Virginia and owe the Workers' Compensation Fund about $30 million, according to Workers' Comp and other state agency records.
Massey officials believe their contractors have a much smaller debt, perhaps $4.5 million. Company officials deny Massey has any responsibility to pay that.
Vieweg has not authorized suits against either the Bunns nor against Massey.
Coal companies and health-care providers were the two largest groups of contributors to gubernatorial and legislative races in 1996.
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