Time to turn the page on Massey Energy?

June 1, 2011 by Ken Ward Jr.

The American flag and the Massey Energy Co. flags are seen at half staff, Friday, April 9, 2010, in Rock Creek, W.Va.  (AP Photo/The Register-Herald, Rick Barbero)

UPDATED: Shareholders from Alpha and Massey have approved the merger, according to this news release issued by Alpha. You can also read this Gazette news story on the merger.

As I write this, shareholder meetings are beginning for the final vote, likely to approve the $8.5 billion buyout of Massey Energy by Alpha Natural Resources. By early afternoon, officials from the combined companies — joined by Senate President Earl Ray Tomblin, acting as governor — will celebrate with a “sign unveiling” event at the Massey regional headquarters at Julian, in Boone County, W.Va.

The media advisory for that event touted the merger this way:

Following the acquisition, Alpha will hold the second largest coal reserve in America with approximately five billion tons of reserves and will become one of the top suppliers of metallurgical coal in the world. Alpha will operate approximately 150 coal mines and 40 preparation plants, more than any other coal company in America. Once the acquisition is complete, Alpha and its affiliates will employ 14,000 people, including approximately 7,000 in W.Va., making it one of the largest private-sector employers in the state.

Tomblin and other elected officials will likely give brief speeches praising the merger as a great thing for West Virginia. Coal industry officials and company executives will mug for the television cameras, touting the transaction as a huge step forward for the state and the coal business.

Everyone is eager to turn the page on Massey Energy, to take down the Massey logos and stop talking about Don Blankenship, the Upper Big Branch Mine Disaster, and the Massey culture that has led to so much workplace death and environmental damage.

Let’s face it:  Having Massey and Blankenship front and center has always troubled some coal industry lobbyists and spokesman, and especially executives at other companies. They would whisper about Massey’s safety practices, aggressive political campaigns and the company’s latest environmental mess — always careful to make sure such comments stay off the record, to avoid a run-in with Blankenship.

While he didn’t grant an injunction to block the Alpha-Massey deal, Delaware Judge Leo Strine Jr. had some interesting discussion in this 79-page decision about Massey. For example:

Convinced that it knew better than the public authorities charged with enforcing laws designed to make mining a safer and cleaner business, Massey management, with board knowledge, fostered an adversarial relationship with the company’s regulators and accepted as ordinary the idea that the company would regularly be accused of violating important safety regulations.

Of course, when a company has strong opinions about knowing better than the regulators, it is optimal to match that with a record of worker safety and environmental protection that is substantively spotless. But in the case of Massey, no such match existed, at least insofar as one credits actual judgments and other regulation-related losses suffered by the company under Blankenship’s tenure as CEO.

The judge also expresses the conventional wisdom — or at least the hopes — of coal industry promoters and industry backers among West Virginia’s political leaders, when he described Alpha as:

… A  mining company with a good reputation and track record for miner safety and regulatory compliance.

Certainly, an analysis by the Investigative Reporting Workshop at American University gave Alpha far better marks than Massey, in terms of miners killed on the job and safety fines issued by the U.S. Mine Safety and Health Administration.

But a closer look shows some troubling things in the more recent history at Alpha: The January 2007 roof fall that killed two McDowell County miners, a near-disaster in May 2009 at a flooded mine in Mingo County, a guilty plea by an Alpha miner who got away with faking foreman’s credentials for two years at a mine in Webster County, and an Alpha contract training officer who pleaded guilty to lying to federal investigators in a case just last month.

Do these sorts of things constitute what Alpha management considers to be “Running Right“?

In their report on Upper Big Branch, independent investigator Davitt McAteer’s team questioned Alpha’s plan to keep some top Massey officials, especially Massey vice president for operations Chris Adkins. United Mine Workers officials have likewise criticized Alpha’s decisions on this matter, and so have some Massey shareholder groups, who allege Alpha CEO Kevin Crutchfield agreed to a secret pact to protect Adkins and Massey general counsel Shane Harvey.

Along with these things, the most interesting disclosure in the newly unsealed documents filed with the West Virginia Supreme Court is that of all of the many mine-level management officials at Massey, board chairman Bobby Inman sought to ensure that Alpha would provide jobs for Chris Blanchard and Jason Whitehead, the two top men in charge of the mine that blew up and killed 29 workers.

Yesterday, two members of Congress questioned Alpha’s plan for keeping top Massey officials in place running the combined company.  Both were from California. You don’t hear elected officials here in West Virginia daring to say much about any of the questions surrounding the Alpha-Massey deal.  The closest anyone gets is this, from Rep. Nick Rahall:

… I look positively upon the buyout of Massey by Alpha Natural Resources – a company with a well-regarded safety program. It is my fervent hope that Alpha will move swiftly to institute the necessary safety changes once it takes control in the coming weeks.

And despite all of their talk about protecting coal miners, and learning whatever can be learned from Upper Big Branch, you don’t hear West Virginia political leaders demanding that records on the Alpha-Massey merger case — documents that may provide much information about who was responsible for the disaster — be made open for public scrutiny. That fight is left up to the Gazette and the good folks over at NPR.

While the legal motions in the suits brought by Massey shareholder groups were an effort to at least temporarily halt the merger, isn’t the issue for folks who want a responsible coal industry to get to the bottom of questions about the mine disaster and to ensure Alpha really does turn around the culture at Massey?

The great historian John Alexander Williams writes about how the history of coal in West Virginia often seems to be an endless stream of disasters … perhaps one reason that’s so is that we try so desperately to quickly move on after a disaster, before we figure out for sure what happened, punish those responsible, and take steps to make sure it doesn’t happen again.

Before we turn the page on Massey Energy and the Upper Big Branch Disaster, wouldn’t it be worthwhile to find out the rest of the story?

3 Responses to “Time to turn the page on Massey Energy?”

  1. Jim says:

    I am getting a very sick feeling in my stomach that once again a great tragedy is being swept under the rug. Does anyone feel the US Attorney is going to bring charges against the Massey executives who caused this tragedy? Over a year has passed and we see nothing but a token prosecution of two “expendable” Massey employees.

  2. Elle says:

    Criminal charges on a federal level can only be brought against executives if they lied. For instance, in the case of Hughie Stover, Performance Coal’s head of Security, he is being charged with lying and destruction of evidence. Cases are for lying or falsifying records. If they executives have not lied (they aren’t talking) and if they have not falisified records, then I think the charges are misdemeanor. Responsibility is placed on front-line supervisors. At an Eastern Mineral Law Foundation mining conference a while back (maybe 10 years at this point), during a Q&A session, an attorney for the solicitor’s office was told by a mining supervisor that if he shut down production he would be fired. The response from the Solicitor’s Office: “Better that you are fired then some miner gets killed. If you are fired, then you have a discrimination claim.” So, that says it all in a nutshell. However, that’s not to say that the state could not try to bring charges.

  3. Jim says:

    The State of WV bring charges? That will be the day. Did we not just see Tomblin and other elected state officials fawning all over the ALPHA takeover ceremony at the former Massey headquarters?

    If the US Attorney cannot bring criminal charges then why do we have a grand jury investigating the UBB tragedy?

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