(AP Photo/Evan Agostini for The Greenbrier Resort, File)
There’s been a flurry of response from both Jim Justice and his supporters to the blockbuster story by NPR (along with West Virginia Public Broadcasting and Ohio Valley ReSource) about Justice’s $15 million in unpaid taxes and fines. Some supporters, like the United Mine Workers, are rushing to defend Justice, and others — like the state Democratic Party — are trying to deflect attention with one of those “I know you are, but what am I” stories the career campaign consultants want our elections to be all about.
Justice himself stooped to a silly attack on respected NPR reporter Howard Berkes, saying that Berkes was “twisting things” and trying to make Justice out to be a bad guy.
Having watched the national media kick our butts on this story, pulling together all of the pieces in a way that they hadn’t been before, it seemed like the least we could do was to do a little bit of fact-checking on the response to the NPR story. So here is a little question-and-answer session I did via email with Howard Berkes:
Coal Tattoo: In a statement issued yesterday, the United Mine Workers of America defended Jim Justice, saying that Mr. Justice’s “fines are, in fact, being paid right now.” What can you say from your reporting about that? To what extent are the MSHA fines “being paid right now”?
Berkes: It is true that Justice’s mining companies are making $75,000 a month in payments as stipulated in a payment plan with the Mine Safety and Health Administration (MSHA). That payment plan was signed on December 30,2015, and covers $1,546,363.04 in delinquent mine safety penalties that are under MSHA’s jurisdiction (payment plan documents [posted here]) in the form provided by MSHA in response to a FOIA request). Another $1,751,107 in delinquent mine safety penalties (including interest and fees) is at the Treasury Department for collection and is not covered by a payment plan, according to a detailed list of delinquencies as of 7/31/2016 and provided to NPR in response to a FOIA request. Some of the delinquent penalties at the Treasury Department have been referred to the Department of Justice for possible litigation and others are pending referral to DOJ.
Coal Tattoo: Exactly how far overdue are these penalties, generally speaking? Are any of them penalties that are still being contested, or appealed, by the Justice companies involved?
Berkes: All of the penalties in our analysis are officially final. They have been through any challenges and appeals. None are contested. We eliminated from our analysis any delinquent penalties listed by MSHA as “On Hold” because they were recalled for further review. The oldest penalties go back to August, 2009, and as we reported, there were $1,381,408 in newly delinquent penalties since January of 2014, when we first engaged with Justice and his mining companies, who said the delinquent penalties would be paid.
Coal Tattoo: What can you tell use from your reporting about the extent to which the total overdue debts you reported on — some $15 million — were for taxes or other things that are not MSHA fines and therefore not part of any payment plans with the federal government?
Berkes: Only $1,546,363.04 in mine safety penalties is covered by a payment plan with the federal government. There are county payment plans for $4,555,297.29 in delinquent county taxes in Kentucky. Some of those plans were in default until the last few weeks. But as of last week, the Justice companies are making payment on all payment plans in Kentucky. We documented one county payment plan in Virginia in Tazewell County. That payment plan began after the county sheriff seized mining equipment. We also documented one county payment plan in Alabama.
We found no evidence of payment plans, and the Justice companies did not assert the existence of payment plans, for $3,107,854.95 in federal tax liens in Kentucky, Virginia and West Virginia, and $3,941,541.59 in state tax liens in South Carolina, Tennessee, Virginia and West Virginia. Our spreadsheet summarizing Justice company debts by states and counties [is posted here].
Coal Tattoo: Are you aware of any movement since the publication of your story toward paying these other overdue debts? And have Justice, his companies or his campaign questioned the accuracy of anything you reported?
Berkes: We have been in contact with the Justice companies and campaigns about our findings since early August, sharing our data and offering an opportunity to dispute the data and comment. In our first contact, Justice mining executives noted that some of the delinquent penalties listed by MSHA as unpaid in the data provided to us were listed as paid in MSHA’s Mine Data Retrieval System (MDRS). We then reviewed every delinquent penalty and also confirmed with MSHA the status of penalties listed in the MDRS. We then removed from our analysis and findings the penalties listed as paid in the MDRS. Justice COO Tom Lusk has provided updates on payment plans. We documented the revival of dormant payment plans, some of which occurred after county attorneys threatened lawsuits and after we contacted Lusk. Some counties confirmed that they were discussing payment plans before we contacted Lusk. There’s no question that Lusk was pursuing some of these payment plans, and some existed, before we contacted the Justice companies. We’re not aware of any payments since our story was published last week.
Coal Tattoo: Justice indicated in Tuesday night’s debate that he doesn’t believe that not paying fines or taxes on time is part of any buiness plan or practice or pattern of his. But didn’t your reporting describe a pattern in which such debts weren’t paid, until attention was brought — either by the press or a lawsuit — over one particular set of bills, and those bills would then be paid, while perhaps others not brought to public attention continued to go unpaid or even got larger?
Berkes: We found coincidental timing of some payments and payment plans. When the Gazette-Mail reported nearly $4 million in delinquent county taxes in West Virginia in April, most were completely paid-off in two weeks. When the county sheriff in Tazewell County, Virginia, seized mining equipment at a Justice mine in March, a payment plan began. When the county attorney in Harlan County, Kentucky, filed suit in October, a payment plan followed. When the county attorney in Knott County, Kentucky, sued and filed two motions for summary judgement in August and September, a payment plan followed. When NPR reported delinquent mine safety penalties in 2014, a payment plan followed (though two years later). In Pike County, Kentucky, we were told, a Justice mining company was not responsive until after NPR told Justice representatives that we were going to report delinquent taxes.
We also found that some Kentucky county payment plans defaulted in this same time frame. Payments suddenly stopped, county officials told us, in January, April and May, and recently resumed.
Coal Tattoo: The UMWA’s response in defending Justice also focused on the issue of paying the MSHA fines, and union President Cecil Roberts has said that Justice is “one of the good coal operators.” What does your reporting show about the safety record at the Justice mines that you examined, aside from their unpaid fines?
Berkes: We reviewed and analyzed raw injury and violations data gathered by MSHA for the delinquent Justice mines during the years they were delinquent. We found that delinquent underground Justice mines had a rate of NonFatal Days Lost injuries (6.17) nearly twice the national rate (3.36) and a surface mine rate (2.66) that was more than double the national rate. We found that the violations rate (Violations Per Inspection Day) for the delinquent Justice mines was four times the national average.
We also analyzed the types of violations while these mines were delinquent. Of the 3,657 violations:
1,176 were Significant and Substantial
699 were identified by MSHA as the kind common in mine deaths, fatal accidents and/or mine disasters. The rate of these kinds of violations were as much as eight times the national average.
309 triggered Special Assessments and were classified as flagrant, serious, repeat, unwarrantable, negligent and/or imminent.
The delinquent Justice mines also were subjected to 19 Mine Impact Inspections while they were delinquent. These special surprise blitz inspections target mines with habitual safety problems.
We found dozens of violations for excessive coal dust, combustible materials, unsupported roof or walls, unsafe machinery, unabated citations, unwarrantable failures and imminent danger, among others.
Coal Tattoo: There were questions during last night’s debate about West Virginia’s financial condition, and about coal severance taxes specifically. What did your reporting show regarding Justice companies and their payment of these taxes?
Berkes: State tax liens show that the Justice companies failed to pay $3,011,487.34 in West Virginia coal severance taxes for 2013 and 2014. According to the State Tax Department, state coal severance tax delinquencies for all West Virginia companies combined was $7 million for the same period. That means that the Justice companies are responsible for 43% of the shortfall in coal severance taxes for 2013-2014.
Coal Tattoo: One of the responses we’ve seen from Republican gubernatorial candidate and West Virginia Senate President Bill Cole is to point to the mine safety bill that Sen. Joe Manchin has sponsored in Washington. Sen. Manchin, of course, is a key supporter of Jim Justice’s and some believe he recruited Justice to run for governor. Cole’s campaign says two things: First, they wonder if Manchin believes that mines like the ones Justice operates should be closed down until they pay their overdue fines, given that that’s the language in the bill; and Second, they question part of the Manchin bill that appears to give mine operators with currently overdue fines a pass on that mine closure language. What can you tell us from your reporting about what the Manchin bill would do in situations like Justice’s?
Berkes: The proposed mine safety bills in Congress would give MSHA the authority to shut down delinquent mines six months after their penalties became final and delinquent. That’s after all appeals and challenges are resolved. Mine closure could be avoided if the mine operators engage in payment plans.
As of July 31, only 2 of the 398 delinquent penalties at Treasury ($1.75 million) had not yet hit that proposed six-month trigger for mine closure. There is no payment plan for these delinquent penalties.
As of April 1, 27 of the 143 delinquent assessments at MSHA ($1.55 million) had not yet hit that proposed six-month trigger for mine closure. The Justice companies had a payment plan for these delinquent penalties as of December 30, 2015, but no payment plan existed before that.
Coal Tattoo: As our Andrew Brown reported, Jim Justice last evening alleged that you were “twisting things” in a way that made him look like a bad guy. Would you care to respond to that?
Berkes: We straightforwardly reported facts and data based on federal state and county documents, data and records. We reported what Justice mining company executives had to say about the mine safety penalties and delinquent county taxes. We reported what his campaign had to say about $30 million in unfulfilled pledges to the Cleveland Clinic and the Boy Scouts’ Summit Bechtel Reserve. Our reporting is detailed at http://www.npr.org/2016/10/07/496696292/billionaire-gubernatorial-candidate-owes-15-million-in-taxes-and-fines where we have also posted spreadsheets and documents. Justice would not speak with us, according to his campaign.
Coal Tattoo: You’ve obviously covered other stories in West Virginia, most notably the Upper Big Branch Mine Disaster, and from that you have an understanding of our state’s ties to the coal industry, culturally, economically and politically. Without trying to drag you too far into the political side of this, what made the continued investigation of Jim Justice’s fines and taxes into a story that you felt had importance on the national stage, and do you have any thoughts on the way it’s played out — both the reaction from Justice and the discussion of the story in the context of the gubernatorial race?
Berkes: This story started out as an effort to revisit our 2014 reporting on the federal mine safety penalty system and the failure to collect millions in penalties while miners continued to be put at risk. Justice was one of the mine owners featured. Our investigation prompted an audit of the mine safety penalty system and MSHA’s management of that system. That audit by the Department of Labor Office of Inspector General continues.
I decided to take another look at delinquent penalties two years after our 2014 reports. The MSHA data showed that Jim Justice turned out to be the top delinquent even though his mining executives promised to pay those penalties. We conducted another injury and violations analysis. And as we dug deeper, we discovered far more in unpaid county taxes and federal and state tax liens than had been previously reported. We also found that he hadn’t kept his promises to charities. As a candidate for Governor, Justice is a public figure promoting his business acumen, his coal mining experience and his philanthropy. As journalists, we cannot ignore facts and data that hold Justice and other public figures accountable. It would have been journalistic malpractice not to report what we found.