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Outrageous! A CEO’s attempted hostile takeover of WV

NPR this morning had a very important report about truly extraordinary thing is happening in one of the U.S.’s smallest and poorest states:

Don Blankenship, The CEO of Massey Energy, the WV coal giant, and all around corporate bad actor, is essentially attempting a Hostile takeover of the WV Legislature. Apparently the Democratically controlled state legislature hasn’t been sufficiently solicitous of his corporation’s interests so Blankenship has decided to replace the democratic majority (which has been in power since 1932) with his own hand-picked group of Republicans on whose campaigns he’s already spent over $2 million dollars and promises to spend millions more.

In market as small as WV, where an average Statehouse campaign costs barely more than $10,000-$20,000; This money is an incredible advantage for his candidates. Worse yet, there is no limit on what he can spend on the effort, because Blankenship has found a loophole in WV campaign finance laws passed specifically to thwart him:

You see this is not the first time Massey Energy’s CEO has bought an election in WV:

Back in ’04, when his company had several huge regulatory appeals pending with the State Supreme Court ; Blankenship Bought himself a WV supreme Court justice by pouring contributions into a phony “child advocacy” 527 who’s real aim was to replace a too-consumer friendly Democratic Justice with a puppet Republican with no judicial experience:

The sharpest ads, many of which ran in the Washington market, came from [a 527 called] “And For the Sake of the Kids,” a group formed to “discuss” the perceived shortcomings of McGraw, according to its Web site. …
The group raised $2.5 million, including $1.7 million from one donor: Don Blankenship, chief executive of Massey Energy Co. The coal company is one of the largest employers in the state, and it is expected to have several cases on appeal before the state Supreme Court. Blankenship,…, also privately financed mechanized calls to homes across the state in the last week of the campaign.

“It proves that West Virginia Supreme Court seats were for sale,” said Beth White, a coordinator with West Virginia Consumers for Justice,

In response to his blatant purchase of a statewide office, after the 04 elections the WV Legislature cracked down hard on 527’s, passing a law that limited individual contributions to them to no more than $1,000 per person. Apparently primarily in the hopes of shutting down Blankenship and his false fronts. Thus with both contributions to individual campaigns and shadowy 527’s now severely limited. The legislators probably thought Blankenship’s government-buying days were over.

Unfortunately for them, Blankenship discovered a novel ,and completely unprecedented, way around the laws. Rather than contribute to any particular legislator’s campaign per se, Blankenship has now effectively created a “shadow campaign” of his own for each candidate. Thus, without any coordination (wink, wink) from the candidate he runs his own “issue oriented” TV and Radio ads, prints his own bumper stickers and yard signs and buys his own billboards.

Since he’s spending his own money, he has no legal limits. Thus he’s been able to spend millions for his chosen candidates and neither he or they have any worries about violating
campaign finance rules. Even better his “shadow spending” allows Republicans to self- righteously claim to have taken a mere $1,000 from Blankenship and attack their Democratic opponents over THEIR contributors

Neat huh?

Whether he’ll succeed in making the WV legislature a wholly owned subsidiary of Massey Energy seems to be anybody’s guess right now. It goes without saying that the people and environment of West Virginian have dark days ahead if he succeeds. But to me far more important than the question of whether we can stop him is, how the hell did we reach this point in the first place?

Well, it actually appears that Massey started big and is now working their way down the food chain. They started in 2000 with a De Facto purchase of the Mine Safety and Health Administration from the

That purchase seems to have be necessitated by the fact that shortly before the 2000 election Massey’s gross negligence causedthe
worst environmental disaster ever in the continental US in 2000

in October of 2000, when 300 million gallons of coal slurry – thick pudding-like waste from mining operations – flooded land, polluted rivers and destroyed property in Eastern Kentucky and West Virginia. The slurry contained hazardous chemicals, including arsenic and mercury.

“It polluted 100 miles of stream, killed everything in the streams, all the way to the Ohio River,” says Spadaro, who was second in command of the team investigating the accident.

The slurry had been contained in an enormous reservoir, called an impoundment, which is owned by the Massey Energy Company. One night, the heavy liquid broke through the bottom of the reservoir, flooded the abandoned coalmines below it and roared out into the streams.

… investigators discovered the spill was more than an accident – it was an accident waiting to happen.

During the investigation .. it came out that there had been a previous spill in 1994 …an engineer working for the company said the problem had not been fixed, and that both he and the company knew another spill was virtually inevitable.

Luckily for Massey though, a new ,easily purchasable, administration had just taken over in Washington, one that already had many Millions of reasons to be grateful to Massey energy and the coal industry in general:

coal executives, threatened by Vice President Al Gore’s green background …raised a record $3.8 million dollars for the 2000 federal election, 88 percent went to the GOP. At the annual meeting of the West Virginia Coal Association a few months after Bush’s inauguration, the group’s director told 150 industry executives, “You did everything you could to elect a Republican president. [Now] you are already seeing in his actions the payback.”

Massey Energy, Martin County Coal’s parent company, gained a front-row seat to the new Bush administration when it invited James H. “Buck” Harless to join its board in 2001. Harless, a West Virginia coal and timber baron, had raised $275,000 for Bush’s 2000 campaign, given $5,000 for the Florida recount, and contributed $100,000 to the
president’s inaugural fund. Bush nicknamed Harless “Big Buck” and invited him to join the administration’s transition task force on energy. “We were looking for friends, and we found one in George W. Bush,” Harless told The Wall Street Journal.

And what are friends for if not to De-rail major criminal and regulatory investigations agains their pals?

two days before President Bush’s inauguration, [the investigation team] was abruptly assigned a new boss to lead the investigation. Immediately after taking charge, Thompson told the team that they had one week to conclude the investigation. ….[they]…had counted on having four or five more months to complete their work.

The new head of MSHA, a Bush appointee named Dave Lauriski, was a former mining industry mining executive ,..Spadaro [the lead investigator’] says Lauriski came into his office one day, and insisted he sign a watered down version of the report — a version that
virtually let the coal company and MSHA off the hook.

“He said , `I’m in a hard spot here and I need you to sign this report,” recalls Spadaro. “I said…I’m never going to sign that report.'”
… in the end, Massey Energy was only cited for two violations, and had to pay approximately $110,000 in fines

So it appears now that Blankenship has been emboldened by his success at having successfully turned the federal watchdogs into lapdogs. So in order to “complete the set” and give himself an his company nigh- lassie faire levels of governmental
oversight, he’s taken aim at the only public institutions left that can force this energy giant to play nice: the State legislature and courts. Whether he succeeds or not nobody will know for another few weeks; but to me the outrage comes from the fact that they are even in a position to try. It’s easy to dismiss this as an isolated incident in a small isolated state, but there are a LOT of small states, particularly in the West that have few people and a lot of exploitable resources. So, if Massey suceeds here, it is a virtual certainty that they or some other large coporation will employ this model elsewhere..

Update [2006-10-11 14:26:22 by Magorn]: For your further edification, Commentor Fiddling Nero has graciously provided A link to an incredible Vanity Fair Article that explains just whoDon Blankenship is and how devastating his company has been for Mine workers nationwide, and the destruction Massey has wrought on WV’s people and environment. A very good read.




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