Posts Tagged ‘Don Blankenship’

Blankenship on trial: Potentially precedent setting case re CEO criminal responsibility

Wednesday, October 7th, 2015

A day that many in West Virginia have waited for has come to pass: Don Blankenship, former CEO of Massey Mining, is on trial. Proceedings began on October 1 in Charleston Federal Court and are in the jury selection phase.

Get your popcorn ready for what promises to be a very interesting and potentially precedent setting case. Holding a CEO criminally responsible for charges related to work safety violations is extremely rare. Observers are interested particularly in light of the Justice Department’s new emphasis and directive on prioritizing accountability and prosecution of individuals rather than just corporations. And no one is watching the proceedings with more interest than the families of the 29 miners who lost their lives.

The Charleston Gazette is following the trial closely with Don Blankenship on Trial, a special reporting section that includes day-by-day trial coverage updates and stories, timelines, a list of legal documents, historical articles, videos, maps and more. It also includes photos and profiles of the deceased.

Coverage also includes links to podcasts by West Virginia Public Broadcasting. WVPB has also been reporting on the case, offering an extensive background and podcasts of the trial events. You can find the latest podcast on the link above, or find a roster of the daily podcasts here or at the WVPB site’s dedicated Blankenship Trial page, where other reportage is also available.

The 16 minute Episode One is well worth a listen. WVPB’s Ashton Marra interviews
Howard Birkus, investigative reporter for NPR on coal mining and work safety, and Mike Hissam, Partner of Bailey & Glasser law firm. They set the stage for the trial and talk about its precedent-setting nature. Birkus says that it is “”extraordinarily rare to hold a CEO responsible for criminal or civil violations at their companies” noting that prosecutors need a paper trail, electronic trail or inside people who will testify. Hissom talk about how this case is on the leading edge of the Obama Justice Department’s new guidelines on criminally prosecuting individuals rather than just fining a corporation. They discuss how CEOs are often insulated from decision-making, but that Blankenship is unique and legendary in his micro-managing practices.

For background on the Justice Department’s new focus on criminal prosecutions, see the New York Times: Justice Department Sets Sights on Wall Street Executives. Matt Apuzzo and Ben Protess report on new rules, issued in a memo to federal prosecutors nationwide:

“Though limited in reach, the memo could erase some barriers to prosecuting corporate employees and inject new life into these high-profile investigations. The Justice Department often targets companies themselves and turns its eyes toward individuals only after negotiating a corporate settlement. In many cases, that means the offending employees go unpunished.

The memo, a copy of which was provided to The New York Times, tells civil and criminal investigators to focus on individual employees from the beginning. In settlement negotiations, companies will not be able to obtain credit for cooperating with the government unless they identify employees and turn over evidence against them, “regardless of their position, status or seniority.” Credit for cooperation can save companies billions of dollars in fines and mean the difference between a civil settlement and a criminal charge.”

For background on the case, How we got here offers a history of the case.

The reporting traces Blankenship’s rise to power in the coal mining industry and his influence in the state’s politics on through to the April 2010 Upper Big Branch Mine explosion that claimed the lives of 29 miners. Several investigations revealed ” … a pattern of violations by Massey of key safety standards, including proper mine ventilation, control of the buildup of explosive dust, and maintenance of equipment to prevent sparks that could set off a blast.” To date, four criminal convictions have occurred. Then in November of last year:

“… a federal grand jury meeting in Charleston indicted Blankenship, charging him with four criminal counts. A superseding indictment was later filed that combined two of the counts. Blankenship faces charges that he conspired to violate federal mine safety standards and to hide those violations from government inspectors and that he lied to federal securities regulators about Massey’s safety practices to try to stop the company’s stock prices from plummeting after the disaster.”

More resopurces
See our prior stories on Don Blankenship here

Follow Ken Ward on Twitter

Follow other reporting and commentary on twitter at #Blankenship

Massey Energy: The Don of an Era

Thursday, May 19th, 2011

Last year 29 coal miners died in an explosion at Massey Energy’s Upper Big Branch Mine in West Virginia. Don Blankenship, Massey CEO, blamed the explosion on federal interference and a gigantic methane bubble that percolated up from below the mine shafts. The bubble has burst, but not in the way Blankenship would have you believe.
An independent team appointed by the former West Virginia governor, Joe Manchin, and led by the former federal mine safety chief Davitt McAteer, has issued its findings, which are both unambiguous and scathing. There was no methane bubble. There was, instead, a pattern of negligence by management that led directly to the deaths of the miners.
As summarized in the New York Times, the report is a searing indictment of Massey’s management style:

“The story of Upper Big Branch is a cautionary tale of hubris,” the report concluded. “A company that was a towering presence in the Appalachian coalfields operated its mines in a profoundly reckless manner, and 29 coal miners paid with their lives for the corporate risk-taking.”

The report goes on to say that a “perfect storm” was brewing inside the mine, combining poor ventilation, equipment whose safety mechanisms were not functioning and coal dust, which, contrary to industry rules, had been allowed to accumulate, “behaving like a line of gunpowder carrying the blast forward in multiple directions.”

Given the uncompromising language of the report, Massey management may not enjoy the “exclusive remedy” protections of the workers comp statute. They are now vulnerable to charges of criminal negligence. I suspect that attorneys for the widows and children of the miners will look rather closely at the assets of Massey’s (now former) CEO.
Farewell, My Ugly
Don Blankenship resigned from his CEO post in December of last year. Don’t bother putting up a collection to buy this ethically-challenged titan of business a gold watch. In 2009 he earned $17.8 million, which does not include deferred compensation of an additional $27.2 million. There is no question that Blankenship’s leadership created profits for the company. Unfortunately, these profits came at the expense of the environment and of the men who extracted the coal from the West Virginia mountains.
The anecdote that tells you a lot about Blankenship involves his personal water supply. When Massey Energy activity poisoned the water reaching his own home, Blankenship ran a private pipeline to the next town, where clean water was readily available. His neighbors, lacking Blankenship’s resources, have to make do with the local, polluted water.
It will be interesting to see what happens next. In a just world, Blankenship would be held accountable for his actions as Massey’s CEO. But we do not live in a world where justice prevails very often. Blankenship will likely continue to enjoy his retirement years, drinking clean mountain waters, railing about government interference, buying a few politicians and generally living the good life. We can only hope that each and every night his dreams are haunted by visions of the 29 miners and their struggling families. That would be one form of justice indeed.