Coal kingpin faces possible prison sentence after mine explosion
Former Massey Energy CEO Don Blankenship, infamous for his flouting of safety regulations, won’t be spending 30 years behind bars, but he didn’t escape his federal criminal trial unscathed.
Blankenship’s trial was the outcome of investigations into a fatal 2010 Massey coal mine explosion that killed 29 miners in West Virginia. After more than 40 hours of deliberation, a jury of eight women and four men convicted Blankenship on Thursday of conspiring to willfully violate mine safety standards, while finding him not guilty of securities fraud and making false statements to investors and regulators. He faces a maximum of one year in prison out of a potential 30 years because — despite evidence that his direction created dangerous conditions that led to theUpper Big Branch mine explosion — the majority of the potential prison sentence was tied to the question of whether he’d lied to investors and the feds in a statement following the disaster.
Blankenship’s career exploits made him a symbol of capitalism’s vicious side, a villain to environmentalists, unions, and anyone that got between him and a profit. He broke labor strikes, gobbled up weaker competitors, bought elections, built up West Virginia Republicans, and pioneered the “war on coal” rhetoric that’s become a national GOP talking point. The Massey mine explosion was the worst coal mining disaster in 40 years, and the following investigation shone a bright light on Blankenship’s careless approach to managing the mine. That led to the indictment and Blankenship’s landmark trial.
“[T]he overwhelming evidence was that Don Blankenship, his board of directors, and managers oversaw operations that regularly violated mine safety and health law and put miners lives at risk, [and] that, ultimately, the mine blew up and 29 miners were killed,” said Patrick McGinley, a law professor at West Virginia University who contributed to an independent investigation after the 2010 explosion and followed the trial closely. “There was just overwhelming evidence about how UBB mine was run with disregard for the rules and regulations and the basic components of keeping miners safe.”
McGinley said that the trial “does send a message that, unlike the last century, when literally tens of thousands of coal miners lost their lives in America’s coal mines, there is a chance in the future that if coal mine managers engage in criminal conduct in managing their mines that impacts the safety of coal miners, they run the risk of being prosecuted.”
Blankenship’s indictment in November 2014 charged him with lying to investors and to the SEC about how he managed Massey’s mines in the months before the disaster, as well as how the company responded afterward. It marked a new formulation of the conspiracy charge which has been applied by prosecutors to a broad variety of crimes.
None of the three felony charges directly accused Blankenship of causing the disaster at Upper Big Branch mine, which happened when a spark from a longwall shearer ignited a fireball that hit accumulated coal dust, triggering a massive explosion.
Yet, the explosion overshadowed and informed every bit of the trial. Most of the evidence dealt with working conditions at Upper Big Branch, which received 836 citations from the U.S. Mine Safety and Health Administration, including many for problems that directly played into the 2010 explosion, according to numerous investigations.
Prosecutors charged Blankenship with conspiring to violate safety laws in Massey’s mines, then covering up those violations by encouraging the practice of calling ahead to warn miners underground when federal Mine Safety and Health Administration (MSHA) inspectors arrived on site. He was also charged with filing a shareholder statement after the explosion that included false statements about Massey’s commitment to mine safety, effectively misleading investors and the SEC in order to prop up the stock price. Blankenship’s multimillion-dollar compensation was tied to the performance of Massey shares.
“He had all the power in the world to put a stop to it, to put a stop to the vast majority of the law breaking there and start following the laws that exist to keep coal miners safe at their jobs — and instead of hitting the brakes, he pushed his foot as far down on the gas as it would go,” said Assistant U.S. Attorney Steve Ruby in the prosecution’s closing argument to jurors.
“And the reason that he did it was money — millions and millions of dollars for him, hundreds of millions of dollars for Massey, millions for the ‘yes’ men that he surrounded himself with,” Ruby said. “And when tragedy happened and he found the eyes of the world on him and his safety practices, he lied about it to cover it up and to keep the money machine going a little longer.”
Evidence and testimony
The prosecution’s evidence revealed Blankenship as an inveterate micro-manager, demanding reports on production every half hour, handwriting bullying memos to managers and executives scolding them for spending too much time on safety issues instead of focusing on producing coal, and even recording hundreds of hours of phone conversations.
Those patterns left a massive paper trail: Prosecutors put hundreds of documents and other exhibits into evidence. They also brought 27 witnesses to testify before the jury, including former Massey employees — underground miners, managers, and high-level executives.
At the heart of the case was an internal memo to Blankenship from Massey lawyer Stephanie Ojeda. In it, she described a meeting with Bill Ross, a former MSHA official who became a mine ventilation and safety expert for Massey, in which Ross expressed concerns about the company’s dysfunctional culture, unwillingness to pay for adequate staffing, and high number of safety violations.
“We need to change how we do business,” Ross was quoted in the memo, which was labeled “confidential” on each page. Later, he said, “The attitude at Massey operations is, ‘if you can get the footage [of coal production], we can pay the fines.’ … Foremen are continually forced to operate with skeleton crews. … If they need nine men, they’re given five and they’re still expected to produce big footage.”
In the memo, Ross quoted miners saying, “We are told to run, run, run until we get caught; when we get caught, then we will fix it.”
About a dozen miners testified as part of the prosecution’s case, describing perilous working conditions at Upper Big Branch and the feeling that they couldn’t improve matters without losing their jobs. Stanley “Goose” Stewart, who worked on the longwall machine at Upper Big Branch, testified that he and other miners fixed ventilation issues and cleaned up coal dust after being notified that federal inspectors were on the way: “We would dress things up. Make it pretty.” Stewart said his experience at Upper Big Branch showed him that Massey’s attitude toward safety rules was that they didn’t apply: “They not only condoned breaking them, they encouraged breaking them, and they demanded that they be broke.”
Another miner who had suffered an injury testified about how he wore an instrument to measure coal dust while standing well away from active mining so that its readings were artificially low. Another described flooded tunnels, occasional roof collapses, and instances when dust pumps were covered up or hung away from active work areas to provide cleaner air-quality samples.
Establishing the Massey way of life underground was just the first step. The jury heard recordings of Blankenship’s phone conversations, in which he fretted about his stock options and their impact on his compensation. It heard lengthy, detailed descriptions of Upper Big Branch’s unorthodox ventilation system, coal dust accumulation, staffing levels, and nozzles on the longwall machine.
Prosecutors then needed managers and executives to make the connection to Blankenship. Unfortunately, witnesses brought with them character flaws that weakened their testimony.
David Hughart, president of Massey’s Green Valley unit for 15 years, was previously sentenced to 42 months in prison after pleading guilty to conspiring to hide safety violations from inspectors. He testified that Blankenship constantly pressured him to produce more coal in his mines despite short staffing. But Hughart damaged his credibility during cross-examination, when he admitted he’d left Massey amid allegations that he had taken company money through a kickback deal with contractors, as well as lying to federal agents about the scheme.
Chris Blanchard, the former president of Performance Coal, a Massey subsidiary that managed Upper Big Branch, proved even more problematic. Blanchard, offered an immunity deal in exchange for his testimony before a grand jury and in the trial itself, was essentially — perhaps willingly — hijacked by the defense. Over nearly five days of cross-examination, the defense used Blanchard to introduce more than 180 documents into evidence.
Blanchard testified that he’d agreed to talk only after prosecutors offered him an immunity agreement, forcing him to choose between testifying against his old boss or being indicted himself. Four other Massey officials, including Hughart, have been convicted on charges relating to the Upper Big Branch explosion, mostly related to thwarting inspectors or lying to investigators afterward.
On the other hand, Blanchard’s testimony painted a picture of a corporate culture where his boss, Blankenship, demanded to be informed and sign off on nearly everything that went on at Upper Big Branch, from staffing changes to production numbers. Blankenship also turned down requests for a new $1.8 million ventilation shaft and for $75,000 in equipment to clean up coal dust — the lack of which resulted in numerous MSHA violations as well as contributed to the explosion, according to investigations.
Ruby had Blanchard read off the number of violations at Upper Big Branch and his compensation for 2009 (456 violations, $450,000 salary) and 2010 (120 violations up to the April 5 explosion, $600,000 salary). Then Ruby drove the point home while asking about Massey’s respective profits in 2008, 2009, and 2010: $56 million, $104 million, and $150 million.
“Did that amount of profit provide any reason to commit preventable violations of safety laws?” Ruby asked Blanchard. “No, sir,” answered Blanchard, as one of the dead miners’ family members broke into tears in the courtroom.
Safety expert Bill Ross, who wrote the memo featured in the prosecution’s case, also wept during the trial. He recalled on the stand how happy he had been at the thought his recommendations would result in positive change at Massey — only to be crushed as the company failed to implement his recommendations in the months before the Upper Big Branch disaster.
The prosecution rested its case after five and a half weeks of testimony. Five minutes later, the defense rested its own case — without calling any witnesses but having introduced a slew of evidence during its cross-examinations of Blanchard and Ross.
In his closing, defense attorney William Taylor highlighted excerpts from those cross-examinations, and conceded that Blankenship had more than 30 miners die while he led Massey. But, he argued, that wasn’t the question at hand. He mocked the huge volume of documents introduced by prosecutors — “The paper is what the government has brought you to prove that Don Blankenship is guilty of conspiracy” — and several times repeated the mantra, “There’s no proof.”
In his rebuttal, Ruby asked the jury to imagine itself in the Massey miner’s place, mining day in and day out “while you are literally choking on the coal dust in the air around you. Picture having your boss tell you to go reroute the air in the mine because safety inspectors are coming and you’ve got to trick them into thinking there’s enough fresh air in the part of the mine where your friends are working. And then picture being told to go take your friends’ fresh air away as soon as the inspector leaves so they can go back to sweating and choking and being afraid that the methane gas is going to come back again.”
Outcome of the conviction
The jury’s “not guilty” verdicts on the two counts of lying in the wake of the mine explosion means that Blankenship will serve a year at most, as opposed to a potential 30-year sentence. Jurors struggled over the question of exactly what “strive” and “condone” meant, as used in two sentences — “We do not condone any violation of MSHA regulations” and “We strive to be in compliance with all regulations at all times” — which appeared in the shareholder statement that Massey filed. Perhaps their “not guilty” verdicts reflect conventional wisdom that companies lie as a day-to-day matter of business.
Brandon L. Garrett, the Justice Thurgood Marshall Distinguished Professor of Law at the University of Virginia School of Law, said he’s not surprised the case boiled down to the mine safety charge, as opposed to the securities charges. “I always thought the heart of a case was a culture of ignoring mine safety,” Garrett said. “I think that’s why the public was interested in this case: Can the guy at the top be held accountable for ignoring mine safety rules? The conspiracy charge got at the heart of that. It was only a misdemeanor, but it sent a message that the guy at the top can be held accountable.”
Garrett thinks the fact that misdemeanor charges don’t require proof of intent may result in increased use by prosecutors going after executives in criminal cases. “No CEO wants to be convicted of anything, not even a misdemeanor,” Garrett said. “No CEO wants to spend any time in prison. Misdemeanors don’t have to have intent, and so misdemeanors may increasingly be a weapon of choice for prosecutors who want to hold higher-ups accountable, simply because it is hard to show higher-ups were accountable.”
Bill Price, West Virginia-based senior organizing representative for the Sierra Club’s Beyond Coal program, said the result was a “mixed bag” but agreed that the trial represented a landmark case nevertheless. “It’s important to keep in mind the conviction of Don Blankenship on conspiracy is the first time I can remember where a major coal executive has been found guilty of conspiracy in regards to the way they run their coal mines. That’s in itself a victory.”
Even a partial conviction was a source of some relief for at least one family member of a victim of the disaster. Judy Jones Peterson, who lost her brother Dean Jones at Upper Big Branch, told the press outside the courthouse, “This says to all the CEOs, owners, and operators: You’re on notice.”
Blankenship’s legacy extends well beyond the federal courtroom. His political donations over the last 15 years built up the West Virginia Republican Party, eventually building a party apparatus of staff and election professionals, said Scott Crichlow, associate professor of political science at West Virginia University. That paid off over the last three election cycles, when — fueled by “war on coal” rhetoric and anti-Obama sentiment — Republicans seized all three congressional seats, one of the two U.S. Senate seats, and majorities in both houses of the West Virginia legislature.
State political observers have speculated that Booth Goodwin — who as U.S. attorney for the southern district of West Virginia spearheaded the case against Blankenship — may be interested in running for the Democratic nomination for governor next year. If so, he’s kept it quiet of late, which makes sense given the enormity of this case.
If Goodwin does decide to run, however, he likely would face opposition from another state coal baron who’s actively running for the nomination, but he might also wind up squaring off against operatives or an opposition candidate whose rise was fueled by Blankenship’s money. That would bring a version of the fight we saw in the courtroom over the past eight weeks, between the people and King Coal, to the political battlefield.