Coal Trial

Coal CEO faces rare criminal prosecution

Wednesday, September 30th, 2015 

CHARLESTON, W. Va. — Just three weeks after the Upper Big Branch Mine blew up in early April 2010, the rumors of a criminal investigation of the blast were everywhere. So was the skepticism that this time would be any different.

Twenty-nine miners died at Massey Energy's Upper Big Branch mine. But in previous mining death and disaster cases, never had any high-ranking officials been charged. Plea deals went no further up than mid-level foremen or corporate subsidiaries, even after a major investigation of a January 2006 mine fire that killed two workers at another Massey operation.

It turned out, though, that the Upper Big Branch case was different. A new U.S. attorney, Booth Goodwin, and a top assistant, Steve Ruby, along with FBI Agent Jim Lafferty, did what no one had succeeded in doing — or really even tried to do — before.

The Investigative Reporting Workshop found that no U.S. coal company had a worse fatality record than Massey Energy Co., even before an explosion at its Upper Big Branch mine in West Virginia killed 29 on April 5, 2010.

For the 10 largest mines, we documented deaths and significant fines at the time.

The long-awaited prosecution of Massey's former CEO, Don Blankenship, begins Oct. 1 with jury selection. He is charged with conspiracy to violate mine safety standards and mislead government inspectors before the explosion, and with lying to securities regulators about Massey's safety practices and policies after the disaster.

Ken Ward Jr., who has reported on the coal industry for more than 20 years for the Charleston Gazette-Mail, gives us an overview of the work of federal prosecutors over the last five years.

For updates on the trial, see the Gazette-Mail's site.

Banner photo of Don Blankenship by Mannie Garcia

UPDATE: Don Blankenship surrendered in May to federal authorities to begin serving a one-year sentence for conspiring to violate mine safety and health standards at Massey Energy’s Upper Big Branch Mine.

Reporter Ken Ward writes:

A federal jury convicted Blankenship on Dec. 3 of conspiracy to violate federal mine safety and health standards at the Upper Big Branch Mine, where 29 workers died in an April 2010 explosion. Under federal mine safety law, willful violation of mine safety standards is a misdemeanor, so conspiracy to commit such violations is also a misdemeanor.

The jury acquitted him of two felony counts that alleged a false statement and securities fraud. Jurors also found that the conspiracy he was guilty of involved the goal of violating mine safety standards, not of thwarting government inspectors, which would have been a felony.

On Oct. 1, jury selection will begin for a federal trial in which former Massey CEO Don Blankenship will face three felony charges that carry a maximum statutory sentence of 30 years in prison. Blankenship was charged in November 2014 with conspiracy to violate federal mine safety standards and to hide hazardous mine conditions from government inspectors. He is also charged with lying to investors and securities regulators about Massey’s safety practices to try to stabilize stock prices that were plummeting in the wake of the explosion. Experts say Blankenship is the highest ranking coal company official to ever face criminal charges following a mining disaster.

“We’ve never seen anybody charged of any consequence,” said former federal mine safety chief Davitt McAteer, who led an independent investigation of Upper Big Branch. “That alone is just a very dramatic shift.”

While the grand jury did not specifically charge Blankenship with blowing up the mine or causing the 29 miner deaths, the 41-page indictment does recount hundreds of violations of key safety standards, including proper mine ventilation, control of the buildup of explosive dust and maintenance of equipment to prevent sparks that could set up a blast. Four government and independent investigations concluded that such violations set the stage for the April 5, 2010, disaster.

“Blankenship possessed full authority to respond to UBB’s hundreds of annual, preventable safety-law violations,” prosecutors said in the indictment,  “and to reduce the mine’s requirements for coal production and profit so that miners would have more time to work on following the safety laws.”

Blankenship joined Massey in 1982 and worked his way up to become CEO in 1992, helping to build the company into one of Appalachia’s largest coal producers. Along the way, he amassed a personal fortune and became a major political force in the region. He took on unions, governors, legislators, judges and anyone in the media who dared to challenge him. And he usually won.

Now, though, Blankenship’s well-known management style — a hands-on approach that had him monitoring hourly production reports and gruffly demanding more coal at lower costs — has been turned against him in a landmark white-collar criminal prosecution.

One recently filed court document depicts Blankenship at home on a Friday night, going through production reports and threatening to fire a mine manager whose operations were falling behind on their production quota. Another prosecution filing touts a widely distributed memo in which Blankenship advised his mine managers that they better “run coal” instead of spending time on safety practices that protect miners from cave-ins and explosions, because “coal pays the bills.”

“That’s what the government is going to focus on,” said Jane Barrett, a University of Maryland law professor who has written about Upper Big Branch. “You can’t manage every minute detail and then claim you didn’t know what was going on.”

In the aftermath of Upper Big Branch, out-of-town media outlets breathlessly reported that FBI agents had fanned out across the coalfields. President Barack Obama ordered federal mine inspectors to work with the Justice Department to use “every tool” in the probe. Prosecutors promised they would follow the evidence wherever it led, even if that meant going all the way up the corporate ladder at Massey Energy.

But despite the deaths of 29 miners in what was the worst U.S. coal-mining disaster in a generation, coal country residents and mining industry experts weren’t really buying all that talk of accountability for what happened. They had been there before. Massey Energy subsidiaries had been prosecuted twice before for mine-safety crimes and twice before for Clean Water Act violations. And never in those cases had any high-ranking Massey officials been charged.

Though it represents some of the most aggressive tactics the government has used in mine safety oversight, the work of Goodwin and his team hasn’t always been well-received. After they made an agreement not to prosecute Alpha Natural Resources — which purchased Massey in June 2011 — a former top DOJ official, David Uhlmann, harshly criticized them for the move. In a later law review article, though, Uhlmann noted the key to fighting corporate crime is to make top executives afraid they’ll end up in jail.

“There is no better deterrent to corporate crime than the realization that criminal activity could result in incarceration,” Uhlmann, now a law professor at the University of Michigan, wrote. Even after Blankenship was indicted, Uhlmann argued that officials still should have brought charges against the company as well. “It is not an either-or proposition,” he said.

Coal industry experts and safety advocates say that putting Blankenship on trial — and perhaps convicting him — is a long-overdue step toward creating that kind of fear among those who run Appalachia’s coal industry.

“Of course, one indictment will change nothing unless criminal charges are regularly brought against corporate managers every time evidence exists that they have placed miners lives at serious risk or miners are killed or maimed,” said Pat McGinley, a West Virginia University law professor who served on McAteer’s independent investigation team. “Whether Don Blankenship is convicted or acquitted, if mine managers know that if they put profits and production above safety they will face indictment and jail time, a new day will dawn in the Appalachian coalfields because miner deaths and injuries will surely decline.”

To get this far, prosecutors have had to move slowly and methodically to gather evidence and amass a list of witnesses who are expected to testify against Blankenship.

So far, four men have gone to jail in Upper Big Branch-related cases: A low-level miner who faked safety examinations; a security chief who tried to destroy evidence and obstruct the probe; one of Upper Big Branch’s mine superintendents; and a longtime Massey mine manager. Investigators have examined millions of pages of documents, and court records indicate they’ve given immunity to nearly two dozen individuals in exchange for testimony against Blankenship.

Blankenship has pleaded not guilty, and has repeatedly said the Upper Big Branch explosion was a natural disaster, and that he worked hard to improve Massey’s safety performance. His defense has provided a glimpse of why high-level executives are so rarely prosecuted. His lawyers have filed dozens of pre-trial motions to have the case thrown out, get key evidence ruled inadmissible, or have every single judge in West Virginia disqualified from presiding. The lawyers have so far lost those motions, but court records in a separate case — where Blankenship sought to force Alpha to pay his legal bills — showed the defense had cost $5.8 million through April 1.

His tenure with the company was marked by bitter disputes with the United Mine Workers union, a series of workplace and environmental disasters, and controversial political involvement — he spent millions of dollars to unseat a pro-labor West Virginia Supreme Court justice — that increasingly drew negative national attention for Massey. He retired less than a year after the Upper Big Branch Mine Disaster, as Massey was working out the details of Alpha’s buyout.

If convicted of all three charges, Blankenship, who turned 65 in March, faces a statutory maximum of 30 years in prison.

"We are tired of waiting for justice, but we firmly believe that it will eventually come," said Dr. Judy Jones Peterson, whose brother, Dean Jones, died in the explosion.


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Ken Ward Jr.