CHARLESTON, W.Va. — The 43-page four-count federal indictment of former Massey Energy president and CEO Don Blankenship portrays an operator obsessive about upping production at the cheapest cost. Federal prosecutors allege it was an attitude that led to the deadly explosion at the Upper Big Branch mine in Raleigh County that killed 29 miners.
The indictment, announced Thursday by U.S. Attorney Booth Goodwin, alleges Blankenship knew about UBB’s safety problems and the practice of alerting supervisors underground when federal mine inspectors arrived at UBB for inspections. It’s also alleged he lied to the U.S. Securities Exchange Commission about mine safety in the days after the April 5, 2010 explosion in an attempt to help Massey’s stock price.
Blankenship was charged with conspiracy to violate mandatory federal mine safety and health standards, conspiracy to impede federal mine safety officials, making false statements to the United States Securities and Exchange Commission and securities fraud.
The mix of metallurgical coal that came from the UBB centered group of mines made millions for Blankenship from Jan. 1, 2008, to April 10, 2010, according to the indictment. In 2009, the group of mines generated $331 million, making up 14 percent percent of Massey’s $2.3 billion in revenue that year. The UBB mines were projected to bring in $432 million in 2010, 16 percent of all Massey revenue. The longwall section at UBB, where the explosion occurred, could produce $600,000 a day.
The indictment alleges Blankenship was driven by the numbers and in doing so ignored dozens of safety violations at UBB and covered up others. Federal prosecutors said from April 3, 2009, to April 5, 2010, Blankenship received 249 daily safety violation reports from the UBB mines but did very little to correct the problems.
Instead, according to the indictment, Blankenship continued to push the a UBB executive for more production. In a March 19, 2009 memo Blankenship wrote “UBB’s miner sections are a mitigated [sic] disaster.” That same month the executive heard from an angry Blankenship who told him, “You have a kid to feed. Do your job.”
The indictment alleges Blankenship knew UBB had coal dust and ventilation problems, two things federal investigators said enhanced the UBB explosion, but he ignored them. According to the indictment:
“Blankenship’s imposition and aggressive enforcement of coal-production quotas that deprived UBB’s coal miners of the time they needed to construct and maintain ventilation control structures, and that forced them to operate even where air quantities were below legal minimums; Blankenship’s direction, addressed below, not to construct certain ventilation controls that would produce more reliable airflow because constructing them diverted time from coal production; and Blankenship’s denial, also addressed below, of a request to construct an airshaft at UBB that would have increased airflow to areas of the mine where it was often below the legal minimum.”
Blankenship, according to prosecutors, would at times receive hourly reports on UBB’s production and in some cases was even faxed the hourly reports at home during the weekends.
The indictment also details the conspiracy of how underground supervisors at UBB were alerted that a federal mine inspector was on site for a ‘surprise’ inspection. The word would first come from the front gate, passed to the mine entrance and then by telephone to underground supervisors who would instruct workers to cover up safety violations. In some cases, because of the size of UBB, it would take investigators two hours to reach certain sections of the mine.
In the days after the UBB explosion, while Massey’s stock price was plummeting, prosecutors allege Blankenship worked with a public relations firm on a statement to give to the SEC stating the company did “not condone any violation of MSHA regulations” and “we [Massey] strive to be in compliance with all regulations at all times.” Prosecutors allege Blankenship knew the statement was false and fraudulent, committing securities fraud.
If convicted on all four counts, Blankenship could receive a maximum of 31 years in prison. He is scheduled to have an initial appearance before a U.S. Magistrate Judge in Beckley Federal Court in the near future.
The investigation in the aftermath of the UBB tragedy has already led to four convictions form the office of U.S. Attorney Goodwin.
“We’re going to take this investigation wherever it leads to whomever it leads,” Goodwin said following the Sept. 2013 sentencing of former Massey executive David Hughart. He was sentenced to three and a half years in prison for impeding MSHA and taking part in the conspiracy to alert workers of the pending inspections.
Massey Energy was purchased by Alpha Natural Resources months after the UBB tragedy. Alpha settled with the federal government for $209 million and agreed to establish a mine safety academy. The academy opened last year in Boone County.