Tag: Coal

Coal Executives Take Millions Before Bankruptcies

Amid the news of Alpha Coal’s bankruptcy, attention is rightly given to the communities and miners affected. The bankruptcy will be used to take away promised benefits from miners who earned them. But there are some people who won’t be harmed at all by what happened, and it’s important to know who they are.

Kevin S. Crutchfield, “Chairman and Chief Executive Officer” of Alpha, just picked up a $2,000,000.00 bonus this spring, as he led the company into bankruptcy. While Alpha’s stock has plunged over the last several years, he picked up over $6,000,000.00 in cash payouts in 2011 and 2012.

“President” Paul Vining walked away with almost $8,000,000.00 for just two years of work as these executives marched Alpha off a cliff. Vining then got away while the getting was good. As “Former President,” he still gets $4,500,000.00!

Peabody Energy, another company on the verge of bankruptcy, thought its corporate leadership so effective it awarded top suit Gregory Boyce well over $10,000,000.00 in 2014. The “President and Chief Operating Officer” got about $5,500,000.00.

Arch Coal was doing so well it rewarded the boss with a $7,300,000.00 payday inhttp://bloximages.newyork1.vip.townnews.com/stltoday.com/content/tncms/assets/v3/editorial/d/f7/df73955e-6183-11e1-8bc1-001a4bcf6878/4f4bebaed534f.preview-620.jpg 2014. He got paid this stupendous sum while the company lost almost half a billion dollars — “Arch reported a loss of $558.4 million in 2014. In 2014, Arch common stock fell almost 62% and was recently trading at about $1.24 per share” — Imagine what he’d have got if it made money!

Of course, that’s just chump change compared to the tens of millions executives paid themselves just a few years ago. Coal executives, including, yes, Don Blankenship, have extracted hundreds of millions to pad their wallets even as miners have lost their jobs and communities have been devastated.

Don’t forget Consol, which hands over at least $8,300,000.00 annually to Rich DiIuliis. Remember that number as these guys go to the public talking about the “tough times” for coal. Tough for some, pretty clean sailing for others. Follow those links and you’ll find out that Consol calls the eight million plus a “savings” because they paid the last guy over $15,000,000.00 per year. What for? So the company can go down, down, down . . .http://www.post-gazette.com/image/2013/11/27/The-Cultural-Trust-at-18.jpg

Lesser-known Cloud Peak Coal pays a raft of executives million dollar salaries, but the top two rake in over $4,000,000.00 per year and for the big man at the head of the table, there is somehow $10,000,000.00 available to “invest” in his services. All of this while miners for CPC get laid off and left out of the financial bonanza reaped by the corporate big-wigs.

All of this occurred despite the key factors in coal’s decline being business factors and things people could see coming miles and miles away. If it doesn’t make sense for these savvy businessmen to have borrowed so much and spent so much in what everyone knew was a tough environment for coal, you’re not thinking about it right. The point was never to save the companies — it was to jack up their paychecks and make sure they cleared a bundle before the inevitable crash.

Same story, different day: the risks of capitalism are only for the workers and their families and communities. It’s win-win for the corporate leadership that always gets paid in advance. Oh, and even though the companies are “bankrupt,” they’ve got plenty of money left over to influence politics.

The Right-Wing Coal Con

UPDATE: The coal billionaire demanding a tax cut while schools literally crumble in Fayette County, and while West Virginia has a 300-400 million dollar deficit responds — and he sounds pretty mad. Let it not be said I won’t give him equal time. His response is here, original article below.

Mitch McConnell finally gave away the game. After years of pretending to be a friend of coal miners, he got caught red-handed and made national news. The right-wing coal con has begun to unravel.

Tens of thousands of retired coal miners depend for their health care benefits and retirement money on the United Mine Worker pension. That is to say, they depend on it for their very lives. Given the chance to protect it, as the Washington Post reported, McConnell’s decision was clear: helping the miners “was a no-go issue.”

The reason? Saving those miners lives offers no political benefit to him (the UMW didn’t support him last election), and there’s no benefit to the owners he relies on for campaign funds either. To McConnell and his ilk, coal miners are just props — wedged there beside them to keep the roof from caving in on their massive decade-long con job.

We’ve seen this pattern over and over again. As coal ownership and senior management line one set of pockets with multi-million dollar bonuses, they turn another set inside out, and cry poverty when it is time to pay miners and retirees. Accomplices like McConnell are only too happy to help — he knows his campaigns are financed by the owners and the corporate leadership, and he takes good care of them.

That’s what it means for him to be a “friend of coal.” Mitch McConnell is friends with coal money, not coal miners.

We’ve got an aspiring McConnell on our hands here in West Virginia. Patrick Morrisey, who lost a  New Jersey Congressional race in 2000, packed up his game, headed out west, and picked up a West Virginia law license just in time to run for Attorney General in 2012. He saw something here he didn’t  see back in Jersey. What was it?

Well, next thing you know, though, he’s posing in hard hats, touring mines, and collecting major campaign cash at a coal company headquarters in Illinois. He starts telling everyone that his mission in life is to fight the President and his war on coal. A real road-to-Damascus story.

But Morrisey didn’t see a blinding light on his road, he saw a political path. And he didn’t hear the booming voice of the Lord, he heard the President’s poll numbers. “They are LOW,” the voice said, “so when you get to Charleston, you will know what you must do.”

And so Morrisey’s coal con began. A person with no previous interest in West Virginia became a self-styled zealot for coal. He spent over a million dollars of his own money on his campaign, and an investment like that isn’t made if it’s not expected to pay off. His move has delivered a lot of political juice for Morrisey, but just as with McConnell, there’s been nothing actually in it for coal miners.

Lawsuit after lawsuit has turned the Attorney General lawsuit into a publicity factory. All the lawsuits have been ballyhooed at the filing time, trumped up with press releases at every procedural stage, and ultimately lost, or abandoned, with no tangible results for miners. The latest and loudest — a stay of the Clean Power Plan —  fits the pattern.

The CPP rules are slated to go into effect between 2020 and 2022. This tells us at least two things: 1) a stay for six to nine months has a lot more to do with election-year politics than altering the future of the coal industry, much less the lives of miners; and 2) The CPP, still far in the future no matter what happens in court, is not what ails the coal industry today. Nationally, Republicans don’t even bother talking about the “war on coal” anymore. It’s played out everywhere but here.

Utility companies have made it clear that the price of other fuels and worldwide markets are driving their moves away from coal. Billionaire Bob Murray brazenly demanded a 60% tax cut for himself in West Virginia while plotting a strategy to reap billions from the “death of coal.” Dealing from the bottom of the deck doesn’t begin to describe how dishonest the right-wing coal con has become. But McConnell “caught a hanger” with the pension move, and we can all be grateful to see the con exposed once and for all.

We might have known. McConnell’s been getting away with it for years — claiming to be a friend of coal miners and then stabbing them in the back, as the Post revealed. When Morrisey actually put a campaign manager on the public payroll, you couldn’t really be surprised at that either: his whole office is a perpetual political campaign and the “job” he worries about in his office is his own.

The investments that could improve lives in coalfield communities always seem to get held up. Actually working on the problem doesn’t suit the political con, so solutions are deliberately undermined by McConnell and the snow job continues. Continuing pain in coal country supports the scam, so they can’t let it end.

Now, the most important part of a con job is to get out while the getting is good. That why Murray is quietly getting into gas. And after Bill Cole cleared Morrisey out of the governor’s race, Morrisey can have only one thing in mind — the 2018 Senate race and a chance to get out of West Virginia and back to Washington, D.C., where he started his political career working as a committee staffer.

So coal miners who deserve better get used: first to deliver owners their billions and executives their millions; and now to protect Morrisey’s political ambitions, which point back the way he came and have nothing to do with West Virginia. Meanwhile, McConnell and Morrisey play Catch-Me-If-You-Can to become political bosses, using coal miners as props. The sooner the miners walk away from these guys, the sooner the roof comes down over the whole sickening enterprise, and the sooner West Virginia can go back to work for itself, instead of right-wing coal grifters.

Blankenship Case Exhibits the Need to Change the System

UPDATE 2/17/16: Regular as clockwork, another CEO, Gary Southern, has swung himself a 30 day jail sentence despite poisoning the water supply for Charleston West Virginia. There continues to be one system for the rich in this country and one for everybody else. That has got to change.

Don Blankenship will escape his criminal trial without receiving the long prison sentence he deserves. A possible one year in jail, and a fine, are punishments that do not fit his crimes. But rather than rail against the injustice, we need to understand it, and address it, by fixing the laws and the system that made it happen.

Don’t imagine the lawyers, or the judge, or the jury rigged it. All of those folks performed their roles properly and honestly in this case. Everyone involved did their lawful duty in the epic Charleston trial of the former coal baron. But the resulting sentence points to a larger and more important truth below the surface.

For a powerful few in this country, nothing is left to chance. Blankenship didn’t have to try to influence the judge or jury unduly, because people like him set the system up well in advance, and make sure that the law itself is looking after them. When the chips fall their way, there is no surprise because everything has been arranged ahead of time.

CEOs like Blankenship have rigged our system in a deep and systematic way. The reason the sentence will be such a letdown was perfectly expressed by Vann Newkirk’s observation that our “system cannot avenge those it was not designed to protect.” Exactly so.

Our justice system has been built up over hundreds of years — all of them dominated, to one extent or another, by the power of organized money. A person can receive a long prison term for possessing marijuana, but not for conspiring to violate mine safety regulations. The reason is that those who would conspire to violate mine safety regulations organize their money and demand special protections from the legal system — and they get them.

West Virginians overwhelmingly believe that Don Blankenship bears responsibility for the deaths at Upper Big Branch. A clearer case of “industrial homicide” has rarely been seen. Yet again, and again, Blankenship’s team expressed frank incredulity and indignity at the idea that he would even be tried, let alone convicted, of anything.

Booth Goodwin’s historic prosecution of Blankenship was a tour de force, all the more so given the limited tools we give our prosecutors to work with against CEOs. But the light sentence — destined to be heavier in money than jail time — clearly shows us where ordinary miners stand in our legal system compared to the big bosses. Blankenship faced thirty times as many years behind bars for crimes against banking than he did for crimes against human beings.

Mine safety regulations are a matter of life and death. But conspiracy to violate them carries a misdemeanor-grade sentence. The system we have cannot avenge those it was not designed to protect. So we must change the system, and bring it into balance with what truly matters — bringing workers home at the end of the day to be reunited with their families — instead of tilting it towards “profit at any cost.”

All aspects of the system have this problem. Pensions and health benefits for workers are no safer than the workers themselves. In bankruptcy court, there is always money, and more money, to pay executives their salaries, bankers their fees, and bonuses on top of that. But there is never money for the workers’ pensions. Modest, monthly checks earned over thirty-plus-years of service at hard labor are suddenly “bloated” or “excessive,” while multi-million-dollar bonanzas for single executives are “necessary expenditures” for “key employees.”

More often than not, the most-highly compensated personnel have the most responsibility for the financial disasters, just as they have the most responsibility for the the human catastrophes. But they have financed a system that makes sure the price for their mistakes is paid by others. And they are getting their way.

Year after year, just as families are broken and bereft of their loved ones who do not survive Blankenship’s vision of how to “run coal,” so are those who survive bereft of the money once thought to have been earned underground. Organized money operates a system much like the house in a casino; in the end, they get it all.

Financial criminals brought this nation to its knees in 2007, and few if any of them have been prosecuted and none received a significant jail sentence despite costing the nation hundreds of billions of dollars and millions of jobs. Meanwhile, thousands of Americans are jailed for failing to have money enough to pay fines for petty violations of the law and regulations. Privatization of our prisons and courts is another means for organized money to extract profit from ordinary working people, and it’s a growth industry in 2016.

We need to redesign our system. We need to give prosecutors the tools they need to reach the top — where the decisions really get made. Mine safety is as good a place as any to start. At the federal level, the Byrd Act remains ready to go — every member of West Virginia’s Congressional delegation should support it as a top priority. If West Virginia’s leaders won’t stand up for miners and their families, who will? At the state level, conspiracies like Blankenship’s to violate mine safety rules should be deemed a felony, and carry a stiff sentence.

Some say that West Virginia prosecutors wouldn’t have the moxie to take on CEOs like Blankenship. But our U.S. Attorney has set an example for others to follow by boldly placing the responsibility where it belongs: on the wealthy men making the decisions that sent honest, hardworking, decent people into needless peril and death. Others must follow his work. The least leaders can do is deliver to our prosecuting attorneys the legal tools they need to make their convictions count at sentencing time.

Working people don’t have the advantage of unlimited bank accounts. They have to educate, organize, and vote to beat the Blankenships at their own game. When organized people demand it, we will have a system that protects them from organized money. Let’s get started.

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