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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