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Invited to explain IRS liens, Governor Justice instead calls coverage unfair

Gov. Jim Justice, when asked to provide an explanation for IRS liens on several of his business properties, provided none.

Instead the governor said coverage of his family’s companies should be more positive.

“I’m super respectful and I try to answer any question,” Justice said during a briefing Tuesday. “I’ve told everyone that if you’ll tend to the business of the state of West Virginia as I’m tending to the business of the state and you’ll just stay out of my family’s personal stuff you’ll find the final outcomes will be exactly what I’ve told you they’ll be. They’ll be worked out.”

The IRS has filed several liens in recent months on Justice entities, including one of at least $1.07 million against the Greenbrier Hotel Corp.

Another lien against the Greenbrier Hotel Corporation was filed last month, June 22, in Greenbrier County. That one amounts to more than $395,000.

The Greenbrier Hotel Corp., representing the corporate entity that runs the historic resort in White Sulphur Springs, lists members of Governor Justice’s family as its top officers. The governor’s daughter, Jill, is the president. Jay Justice, the governor’s son, is a director. The secretary is Stephen Ball, an in-house attorney for the Justice companies.

Those liens refer to employment taxes dating back to the 2018 filing period. The IRS may also go after additional penalties, interest and costs.

A lien relating to $80,000 in employment taxes was filed on The Greenbrier Clinic on March 8, the same day the million-dollar lien against Greenbrier Hotel Corp. was filed.

The IRS filed a lien amounting to more than $8 million on March 26 on property owned by Jill Justice. The bulk of the taxes owed were from 2009, the year the Russian company Mechel bought the Justice family’s coal operations, Bluestone Coal Corp., for $436 million in cash and 83.3 million Mechel preferred shares.

The IRS specifies that its process includes earlier notice and demands for payment before a lien is filed. The documents filed by the IRS notes that it represents the federal government’s ability to collect on property and rights to property.

In cases where an employer willfully fails to pay employment taxes, the Justice Department may become involved with criminal penalties. “Usually, the IRS only prosecutes high-profile cases.”

U.S. Code 7202 covers “willful failure to collect or pay over tax.” The felony penalties include fines of no more than $10,000 or imprisonment of no more than five years.

Justice today objected to reporting on the financial troubles.

“From the standpoint of legality and everything else, you can continue to run down ratholes and try to come up with stuff here and there, but at the end of the day I hope and pray, at least, that you’ll report the final outcomes,” he said.

Justice’s businesses and public persona have been intertwined for many years.

To much acclaim, Justice’s family purchased the iconic Greenbrier out of bankruptcy in 2009. “I knew I just couldn’t mess this up,” Jim Justice told The Washington Post in a story that ran two years after the purchase. “I mean, the employees know where I live.”

Justice successfully ran for governor in 2016 by characterizing himself as a successful businessman who could translate that experience.  Forbes had named him as the state’s only billionaire, a title that was retracted this year over the financial troubles with the international financial services company Greensill.

A month into his first term, Justice  issued a letter to state employees saying he was pursuing a blind trust for his many businesses, but described his holdings his as too complicated to move quickly.

“Being Governor is a full-time responsibility,” Justice wrote. “I want to put all of my assets in a blind trust, however, the process has been slowed down by the multitude of financial institutions that work with my family’s companies.”

So, instead, the governor has produced an annual financial disclosure form that includes more than 90 businesses.

Now, the liens are the latest revelations indicating wide-ranging and significant financial turmoil with the Justice business holdings.

The Justice companies and their longtime lender, Carter Bank & Trust, are in a dispute over millions of dollars. The Justice companies are suing Carter Bank in federal court for millions of dollars, saying the bank became unfairly restrictive over the years. Carter Bank has filed claim on $58 million in defaults, personally guaranteed by Jim and Cathy Justice.

Another financial company, Greensill, which supplied more than $700 million in loans to the Justice companies, filed bankruptcy March 8. The Justice companies have another federal suit against Greensill.

“We’re in this situation because primarily a bank that turned around and went bankrupt – and from all that they were a very, very bad actor — of which we had no knowledge in any way you can possibly have. There’s been other things that happened along the way that will get worked out just like they have in the past,” Justice said.

The Justice companies took out hundreds of millions of dollars in loans from Greensill Capital in 2018.  Greensill packaged such loans and sold them to investment funds managed by Credit Suisse.

Credit Suisse is now pressing to recover lost investments and has has named Justice’s Bluestone Resources as one of three major borrowers from the Greensill funds.

Bluestone Resources, the coal company owned by the Justices, last week put out a statement signaling progress in talks with Credit Suisse over the millions of dollars in debt.

Justice objected to a lack of coverage of the talks with Credit Suisse.

A story about the talks, headlined “Justice’s business says it’s making progress in debt talks with international banker” was the lead story on the MetroNews website from midday this past Friday until Sunday morning.

“We’ve managed to not report much at all about the fact that there were meetings between us and the Credit Suisse people,” Justice said today. “And the outcome of those meetings was extremely, extremely good. From Bluestone’s standpoint, the outcome was fantastic. We should have celebrated that.

“What we should have reported is ‘Hallelujah, Bluestone is continuing on, employees are continuing on, everybody’s in great shape, everybody’s happy, everybody’s moving forward.’ But what we do is continue to dig around for something in the negative, and that’s not what I think we should be doing.”

Despite the liens on the Greenbrier Hotel Corp., Justice characterized the resort as thriving.

“From the standpoint of The Greenbrier and the folks at The Greenbrier, you know we’ve got nearly 2,000 employees there. Those folks are doing great. And the amount of business that’s going on there, I’ve been reported that it’s doing well. There’s no point in me elaborating whatsoever.”

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