Coal Miners Get the Shaft Again—Postscript 1

The post to which this is a postscript is available at: https://academeblog.org/2013/07/10/coal-miners-get-the-shaft-again/

Lest anyone think that what Peabody Energy and Arch Coal are doing through Patriot Coal is an anomaly in the Appalachian coal fields, let me draw your attention to the career of Don Blankenship.

From 1992 to 2010, Blankenship headed Massey Energy in a mode that seemed to many observers to be all too reminiscent of the mine owners who relentlessly and ruthlessly fought the unionization of the coal fields. At the previous turn of the century, those owners had sought to solidify their absolute authority over their employees by paying them in company script usable only at company stores, where the company-controlled pricing insured that every miner would soon be hopelessly in debt to his employer. Indeed, the coal companies asserted that a miner’s debt was by extension his family’s debt and that, until it was paid, his sons were, in effect, indentured to the company. The companies insured that such arrangements would go largely unchallenged by buying off judges and politicians. But, much more immediately for the isolated mining communities populated largely by impoverished immigrant miners, they exerted their power with brutish clarity by employing thugs who were called “private detectives” or “company police” but who acted more like secret police than law enforcement. Anyone who challenged the companies’ authority or who even talked about unionization would be put openly under surveillance and intimidated. If that sort of tactic proved insufficient, the company thugs routinely resorted to beatings and worse.

I will not claim that Don Blankenship deserves to be grouped with the worst of the worst of those mine owners. But he himself seemed almost to encourage such comparisons. In 2004, Blankenship inserted himself very publicly into the election for a seat on the West Virginia Supreme Court, contributing $3 million to a PAC supporting a Far-Right, openly pro-business challenger to the incumbent judge, who had a reputation for upholding workers’ rights. The PAC was disingenuously, if awkwardly, named the “And for the Sake of the Kids PAC,” and it framed every questionable decision made by the incumbent in the most defamatory way possible, reducing what had been previously been perceived as a distinguished judicial career to a record too scurrilous to be believed. The buying of this election was so blatant that it attracted national media attention, and USA Today would describe the attacks on the incumbent as “venomously misleading.” All of the attention that Blankenship invited did, however, lead to his subsequently being photographed walking on a beach on the French Riviera with another member of the West Virginia Supreme Court, making it very clear that the candidate whom he had backed was very likely not the only judge on the state’s Supreme Court with whom he might have inordinate influence. When the judge in that photo came up for re-election, he lost. Indeed, in between those two judicial elections, Blankenship contributed another $3 million to about four-dozen races for legislative seats, but at least in part because his attempt to buy the legislature was so blatantly a repeat of his buying the judicial election, only one of the candidates whom he backed actually won.

Blankenship posed as the true friend of his miners, speaking out against environmentalists who threatened the coal industry and claiming to have established the Massey Energy Spousal Groups, which, according to the corporate website, provided “financial support . . . as they [assisted] children, the elderly, fire departments and many other deserving individuals and programs.” Specific projects that these Groups supported were said to have included “town and stream cleanups, school book fairs, local park improvement, senior citizen appreciation dinners, and the annual Christmas Extravaganzas.” But, according to Michael Shayerson, who profiled Blankenship in his book Coal River (2008), Blankenship made more of a practice of referencing such foundations than of actually funding them.

Much less ambiguous are the fines that Massey Energy has paid for its willful disregard of environmental and occupational regulations. In 2000, containment pond owned by a Massey subsidiary failed, spilling 200 million gallons of coal slurry into two streams. Because of the massive kill off of fish and wildlife and the number of people whose sources of drinking water were permanently contaminated, this incident was briefly described as the worst environmental disaster in the history of the southeastern United States, until the BP Oil Spill in the Gulf of Mexico superseded it. But, the environmental clean-up in a much more concentrated affected area did cost more than $50 million. And it was the only environmental incident that cost the company large sums of money. In 2003, Massey was forced to pay the residents of Sylvester, West Virginia, almost a half-million dollars because it failure to properly contain coal dust. In 2004, Massey was forced to pay more than $1.5 million to residents of Mingo County whose water wells it had undermined. In 2008, the residents of Prenter, West Virginia reached an undisclosed settlement with Massey after coal slurry contaminated their wells. In 2008, the company agreed to pay $20 million to settle all outstanding environmental claims against it. Although the amount remains the largest fine paid by a company for violations of the Clean Water Act, it represented only a very small fraction of the $2.4 billion in fines that the company might have ultimately paid if each violation had been litigated.

In the most notable of the suits brought against Massey by its own employees, in 2009, more than 200 miners received a judgment of almost $9 million after being improperly terminated by Massey.

But the climactic event in this company’s disregard for both environmental and occupational regulations occurred in 2010 when 29 miners were killed in a coal-dust explosion in Massey’s Upper Big Branch Mine. The company was assessed a record $10.8 million in fines for safety violations, and Alpha Natural Resources, the Indian corporation that has subsequently bought Massey, has paid $209 million to settle Massey’s criminal liabilities stemming from the disaster. In the three years preceding the disaster, the company had been cited for 1,100 safety violations, including 50 for improper ventilation in the month preceding the explosion. In the year preceding the disaster, 60 violations had been serious enough for the mine to be ordered temporarily closed until the violations were addressed.

The settlement protected Massey employees from individual criminal prosecution for how they may have contributed to the disaster in the course of performing their normal duties. Still, although this disaster cost Don Blankenship his leadership of Massey, he can hardly be said to have suffered for it. In 2009, the year before the disaster, he had received $17.8 million in salary and another $27.2 million in deferred compensation.

In 2011, however, a former Massey manager pleaded guilty in criminal court to fraud charges involving his very deliberate attempts to conceal hazardous conditions at the Upper Big Branch Mine from safety inspectors. Reportedly, Blankenship has been the subject of broader Department of Justice investigations into company efforts to flout health and safety regulations in the company’s mines.

It would be close to unprecedented for someone at Blankenship’s level to be held accountable for corporate wrongdoing. So don’t hold your breath that he will ever be indicted.

But what should now be very clear is that although Blankenship portrayed himself as a champion of West Virginia’s interests and as a protector of his employees’ interests, it is hard to argue that, in the end, any of those interests motivated him more than his own self-interest.

It is not coincidental that Blankenship was consistently supported and repeatedly honored by the Chambers of Commerce. And it is very telling that while he very publicly contributed hundred s of thousands of dollars to initiatives to improve health care in the terribly under-served mining communities dominated by his company, he also contributed millions of dollars to the efforts to prevent the passage and then the enactment of the Affordable Care Act.

In this respect, the most notable suit brought against Massey may have been one that that the company won. In 2005, residents of Raleigh County, West Virginia filed a suit against the company hoping to block the construction of a second coal silo near an elementary school. The existing silo seemed already to be creating more breathing problems than usual among the young children attending the school. But, the company led by the man who had contributed millions supposedly “for the Sake of the Kids” took the case to the state Supreme Court and then to the federal Supreme Court to override the concerns of those parents and to force the construction of the second silo on that site.

Finally, I would be remiss if I failed to mention that during his second go-round as president of Ohio State University, Gordon Gee served on the Board of Directors of Massey Energy. For years, he resisted calls for his resignation from that board, arguing that he could do more to make the company adhere to environmental and occupational regulations as an insider than as an outside critic. But, in 2009, not far ahead of the disaster at the Upper Big Branch Mine, Gee decided to accede, ostensibly, to the pressure being brought by student groups and resigned from the Massey board. One cannot help but wonder, of course, whether it was more the case that his inside knowledge of the company made him anticipate that some public-relations disaster was looming.

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