Charges for Coal CEO: 6 Years for Worker Deaths, Up to 25 for Deceiving Investors

Eric Fink

Former Massey Energy CEO Don Blankenship is accused of sacrificing worker safety for coal profits, helping lead to the deaths of 29 miners in 2010. (Rainforest Action Network / Flickr)

A federal grand jury last week indicted former Massey Energy CEO Donald Blankenship on charges stemming from the April 2010 explosion at Massey’s Upper Big Branch (“UBB”) mine, which killed 29 miners. Blankenship faces two counts of conspiracy based on his role in a pattern of widespread mine safety and health violations at UBB and two counts of securities fraud based on public statements by the company following the explosion.

If convicted, Blankenship could face up to 31 years in prison.

The indictment recounts the dismal safety record at UBB. MSHA inspectors issued 835 citations in the 27 months leading up to the explosion. Fifty-nine of these citations resulted in orders to shut down the mine, an extreme remedy imposed in cases of immediate and severe hazard.

The most common violations involved accumulations of coal dust, inadequate ventilation to disperse methane gas and deficient water sprays — conditions that substantially increased the risk of explosion and fire. The indictment also explains how UBB personnel sought to avoid detection of unsafe conditions. When MSHA personnel would arrive at the mine for unannounced inspections, company guards would send warnings to mine supervisors, who in turn would direct miners to quickly cover up violations.”

Blankenship closely monitored operations at UBB, receiving daily reports on MSHA violations and estimated fines, and production updates every thirty minutes for the mine’s longwall section and every two hours for other sections. He repeatedly ordered subordinates to cut back on construction and maintenance of ventilations and other safety features in order to focus on increasing coal production.

Blankenship’s single-minded focus on meeting aggressive production quotas and his refusal to devote adequate personnel and time to safety compliance, created the conditions that resulted in the deadly explosion.

The securities fraud charges are based on a shareholder statement and press release that Massey issued in an effort to stem a nearly 17 percent drop in the company’s share price immediately following the explosion. Blankenship — whose own holdings of Massey stock took a nearly $3 million hit, according to the indictment — personally reviewed and approved both the shareholder statement and press release.

Denying that non-compliance with safety standards led to the disaster, the company insisted, We do not condone any violation of MSHA regulations, and we strive to be in compliance with all regulations at all times.” Citing Blankenship’s knowledge of and complicity in the widespread and persistent MSHA violations at UBB and other Massey mines, the indictment contends that these assurances were knowingly false and misleading and were made for the purpose of deceiving investors in Massey stock.

The securities charges are significant because they carry much stiffer penalties — up to 25 years imprisonment and up to $5 million in fines — than the MSHA violations, for which the maximum sentence is six years. Clearly, the law places a much lesser value on workers’ lives than investment capital.

In response to the indictment, an attorney for Blankenship suggested that his vociferous criticism of mine safety and environmental regulators is the real motivation for the prosecution. Just a few hours before the indictment was released, Blankenship tweeted a jab at Assistant Secretary of Labor Joe Main.

The coal industry knows Main is not qualified to head MSHA. Lardieri takes Main to task. See MAIN at http://t.co/0MUSoZ2t3D

 — Don Blankenship (@DonBlankenship) November 132014

This case will be an important test of MSHA’s competence — and of Blankenship’s bravado.

Eric Fink is a law professor at Elon University and a former union lawyer.
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