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Accused Coal Mining Boss Fires Back At "Politically-Motivated" Prosecutors

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With the unsealing of a federal criminal case against a former coal mining boss, the public is getting its first glimpse at the defense team’s legal strategy. And according to one legal expert, parts of their pleading could resonate with judges.

This week, the 4th US Circuit of Appeals ruled on a media request to lift a gag order in the case of the people versus Don Blankenship, who is the ex-chief executive of Massey Energy. A cornerstone of his argument is that prosecutors failed to let him address a pending indictment that was handed down last November -- one that accused him of violating mine safety laws and a securities code.

The defense maintains that those practices are customary in the legal world and they give such “targets” a chance to present exculpatory evidence, or things that might prove their innocence. Federal prosecutors, however, responded that any pre-notification would have jeopardized their case -- that the now-defendant could have fled or that he could have sought to destroy critical evidence.

“Mr. Blankenship’s best argument is that the government did not advise him of the grand jury proceedings and give him an opportunity to present exculpatory evidence,” says Jim Lees, a former prosecutor and now a criminal defense attorney, in Charleston, WV. “I cannot believe that happened but if it did, that is troubling.”

The former coal baron has denied the charges against him, which include three criminal counts involving violations of mine safety laws and one count dealing with securities fraud. The allegations are tied to a 2010 coal mining explosion in Beckley, WV that killed 29 miners, which to date, has resulted in the successful prosecution of four former Massey managers.

The case was filed in the US District Court for Southern West Virginia and it alleges that Blankenship ignored federal mining safety laws so that the “Upper Big Branch” mine owned by Massey could increase production. That "UBB" division had been one of the company’s most profitable, accounting for between $300 million and $400 million of the parent's $2.3 billion in revenues in 2009 and 2010. Massey is now owned by Alpha Natural Resources .

Interestingly, the mine safety allegations carry a prison sentence of between one and five years each, if convicted. The securities fraud charge, if proven, earns a 20-year term. Altogether, Blankenship could receive 31 years if found guilty. The indictment is signed by U.S. Attorney Booth Goodwin and Assistant U.S. Attorney Steven Ruby, which has also become central to Blankenship’s defense.

“Blankenship knew that UBB was committing hundreds of safety-law violations every year and that he had the ability to prevent most of the violations . . . . Yet he fostered and participated in an understanding that perpetuated UBB’s practice of routine safety violations, ... to produce more coal, avoid the costs of following safety laws, and make more money,” the indictment reads.

Specifically, between Jan. 1, 2008 and April 9, 2010, the UBB branch was cited 835 times for mine safety violations. Massey had been assessed about $900,000 in fines but had only paid $168,000 of that. A chief criticism of the mine operator is that it would drag its feet and contest everything, hoping to wear down regulators and continue business as usual.

The accused, however, is saying that the case against him is brought for political purposes, implying that the US attorney has grander aspirations and that the judge hearing the case won’t toss it because it would upset the prosecutor’s father, US District Court Judge Joseph Goodwin. The entire case should be dropped for those reasons, his defense team says, or at a minimum, moved out of West Virginia’s southern judicial district so that Blankenship can get a fair trial.

To this end, Blankenship maintains that the Goodwin family members are prominent Democrats -- part of an “establishment” that “hates” him. The coal boss has long railed against federal environmental and workplace guidelines that he feels are too onerous and that have crippled his enterprises and the coal sector, generally. For those reasons, his supporters call him “tough-minded” while his opponents label him as “heartless” and “greedy.”

“The deep-seated resentment of Mr. Blankenship has been years in the making,” says the defendant’s motion to dismiss the case against him. “The prosecutors acted with actual animus.”

The motion maintains that the allegations over securities fraud are particularly ludicrous -- ones that assert Blankenship falsely claimed to be dedicated to mine safety so as to keep his company’s stock price propped up. Coal companies across the country that include Consol Energy Inc., Arch Coal Inc. and Peabody Energy Co. all make similar heartfelt statements, even though they too have been issued mine safety citations. Yet, no company or no executive has ever been indicted for securities fraud of this nature, the pleading says.

The securities charge is the weakest allegation, in the eyes of some experts, who argue that it has been filed because the prison term would be the stiffest. The less-severe mine safety allegations, meantime, won’t be easy to prove either.

To win their case, prosecutors will have to accurately reconstruct the decision-making process that led to the safety violations. In a coal business with $2.3 billion in revenues, that could be quite difficult, says WV defense attorney Lees, who made no reference to the securities charge.

With that, Lees goes on to tell this reporter that prosecutors have the upper hand in this case, given that they have been working it for nearly five years. The matter is scheduled for trial in April, although the defense team has asked for more time and a delay until January 2016.

"Mr. Blankenship is making pre-trial arguments that he is being prosecuted not because he committed crimes but because of politics and punishment for criticizing the government,” says Lees. “Such motions are routinely filed in major cases and have virtually no chance of succeeding.

“However, if in the future US Attorney Booth Goodwin were to run for political office in part based upon his prosecutorial record against individuals like Don Blankenship, an appellate court in reviewing a conviction may take these motions much more serious.”

It’s the highest-profile corporate prosecution that has been pursued by that specific US attorney, although there have been others in which the office has extended its investigations beyond the rank-and-file and into the boardroom. Regardless of the outcome here, those actions may result in greater overall transparency and more emphasis on safety and the environment.