West Virginia Governor’s Coal Empire Sued by the Federal Government — Again
The lawsuit, filed by the Justice Department, seeks millions in unpaid environmental fines as Gov. Jim Justice begins his campaign for the U.S. Senate.
Written by Ken Ward Jr., Mountain State Spotlight
Co-published with Mountain State Spotlight ... Series:Big Jim ... West Virginia’s Conflicted Governor
June 1st 2023 at 2 p.m. EDT
https://www.propublica.org/article/jim-justice-coal-empire-sued-by-federal-government-again
This article was produced for ProPublica’s Local Reporting Network in partnership with Mountain State Spotlight. Sign up for Dispatches to get stories like this one as soon as they are published.
Federal authorities sued West Virginia Gov. Jim Justice’s business empire on Wednesday, seeking $7.6 million in unpaid environmental fines and overdue fees. The move adds to Justice’s growing legal and debt problems and comes just a month into his campaign for the U.S. Senate.
Justice Department lawyers filed the suit to collect fines assessed by the Interior Department against 13 companies for strip mining violations that “pose health and safety risks or threaten environmental harm” to neighboring communities.
For years, Justice has been dogged by allegations that his family businesses haven’t paid their business and regulatory debts. In 2020, an investigation by ProPublica and Mountain State Spotlight found that the total judgments and settlements owed by Justice family businesses had reached $140 million. The review found hundreds of lawsuits that dated back more than 30 years, with many filed by workers, vendors, business partners and government agencies, alleging they hadn’t been paid.
This week’s lawsuit is the third time in the last two months that either federal agencies have pursued legal action against the Justice companies or a court has ruled against them over fines for environmental and worker safety violations. In April, a federal appeals court ruled that Justice companies must pay $2.5 million in fines assessed by the Environmental Protection Agency. In mid-May, the Labor Department sought a judge’s help in collecting millions of dollars in fines, alleging Justice companies are habitually late making payments related to violations that could have endangered the health and safety of coal miners.
The new suit cites more than 130 violations and more than 40 more serious enforcement orders issued between 2018 and 2022. The Justice companies previously argued that the government had reneged on a deal to resolve some of these violations for a $250,000 fine. But a federal judge threw out their case.
In response to this week’s suit, Justice sought to divert attention from the substance of the case by implying that the White House was using regulatory agencies for political purposes. “Joe Biden, Chuck Schumer, and the Democrats have seen the polling that show me winning this U.S. Senate race. Now the Biden Administration has started their political games to beat me,” the governor said in a tweet.
Justice, a hugely popular Republican, is seeking the GOP nomination to challenge Sen. Joe Manchin, a Democrat who is often the swing vote on key legislation.
Government lawyers said the underlying violations included the failure to maintain and ensure the stability of a dam, violating pollution limits and not controlling erosion or sediment from mine sites.
Christopher R. Kavanaugh, the U.S. Attorney for the Western District of Virginia, said in a statement that the companies “failed to remedy those violations and were ordered over 50 times to cease mining activities until their violations were abated.”
Kavanaugh continued, “The filing of this complaint continues the process of holding defendants accountable for jeopardizing the health and safety of the public and our environment.”
In addition to unpaid environmental penalties, the case also seeks nearly $200,000 in unpaid Abandoned Mine Land fees, which fund the federal cleanup of coal mines abandoned prior to 1977. West Virginia has more than 175,000 acres of abandoned mine sites awaiting cleanup, the second-highest total in the country. According to one estimate, the Interior Department program for cleanups is projected to have a shortfall of more than $25 billion nationwide by 2050.
As the mining industry continues a downward economic spiral, reclamation of abandoned mines is an increasing concern in coalfield communities, especially in the wake of corporate bankruptcies that threaten to shift the costs to taxpayers.
The total amount sought by the government also includes interest and administrative expenses.
Justice has said that he and his family’s companies always pay their debts. The governor was not named as a defendant in the Interior Department suit, but 12 of the 13 companies involved were listed among his business holdings on his most recent financial disclosure filed with the West Virginia Ethics Commission.
The new lawsuit does name the governor’s son, James C. “Jay” Justice III, as a defendant. The suit states that Jay Justice is a “controller” of 12 of the companies named in the complaint and that he was previously assessed fines as a corporate owner, as allowed by the federal strip mine law.
Representatives for Jim Justice’s businesses and for Jay Justice did not respond to requests for comment on the lawsuit.
Four years ago, Jay Justice issued a news release after the family’s coal firms sued the Interior Department over what was then $4.2 million in unpaid strip mining penalties and fees. The companies alleged that they had a verbal deal to resolve the matter for $250,000. But, they said, the agency backed out. Fearing a government collection action like this one, the Justices sued to try to enforce that verbal deal.
“We don’t want to have to go to court to get the government to do the right thing and live up to its end of the bargain,” Jay Justice said at the time, “but we can’t sit back and let the government take advantage of our good faith efforts to resolve this matter.”
Five months after that case was filed, a federal judge in Virginia dismissed it.
West Virginia Gov. Jim Justice Runs for Senate Amid Stacks of Unpaid Bills
https://www.propublica.org/article/west-virginia-governor-jim-justice-runs-for-senate-amid-debts
Politics
West Virginia Gov. Jim Justice Runs for Senate Amid Stacks of Unpaid Bills
As Big Jim hopes to take on Sen. Joe Manchin, Justice’s family businesses face allegations of unpaid debts, overdue environmental fines and conflicts of interest.
West Virginia Gov. Jim Justice announced his U.S. Senate campaign in White Sulphur Springs, West Virginia, on April 27. Credit:Chris Jackson/AP
by Ken Ward Jr., Mountain State Spotlight
This article was produced for ProPublica’s Local Reporting Network in partnership with Mountain State Spotlight. Sign up for Dispatches to get stories like this one as soon as they are published.
For years, West Virginia Gov. Jim Justice has been dogged by allegations that his family businesses haven’t paid their debts, including fines for environmental violations at their coal plants. One bank is even seeking to garnish his salary as governor to cover an unpaid personal guarantee of a business loan, court documents show.
But these disputes are likely to resurface in what will be one of the most hotly contested races for control of the U.S. Senate in 2024. Last week, Justice, a Republican who is immensely popular in the state, announced that he will challenge U.S. Sen. Joe Manchin, a Democrat who is often the swing vote on key legislation.
A review by ProPublica in 2020 found that, over three decades, Justice’s constellation of mining, farming and hospitality companies were involved in over 600 lawsuits in more than two dozen states. Many were filed by workers, vendors, business partners and government agencies, alleging they weren’t paid. Often, similar cases were filed in multiple jurisdictions, as lawyers for plaintiffs tried to chase down a Justice company’s assets to settle debts.
By late 2020, the total in judgments and settlements for Justice family businesses had reached $140 million, ProPublica and Mountain State Spotlight found.
Since then, his family business empire has faced more turmoil. Lenders are trying to hold him personally responsible for hundreds of millions in debt. Courts are ordering payment of long-standing environmental penalties.
Neither representatives for Justice nor the family’s businesses responded to a request for comment. In the past, Justice has said that he and his family companies always pay what they owe. The governor has said that his businesses don’t create any conflicts of interest and that he didn’t run for office to get anything for himself.
Justice inherited a coal fortune from his father and expanded it to an empire of agricultural companies and resort hotels, including The Greenbrier, a posh, historic resort located in a valley where southern West Virginia’s mountains meet western Virginia’s rolling hills.
Last week, Justice used The Greenbrier as the backdrop for his announcement that he would seek the Republican nomination, facing U.S. Rep. Alex Mooney in the GOP primary. (Manchin has not announced a reelection bid yet, but in response to questions about Justice he said, “Make no mistake, I will win any race I enter.”)
As we documented, the resort has been at the heart of various conflicts of interest, as major trade associations that lobby state government for their industries have held meetings and conferences there.
And just two days before Justice’s Senate announcement, another of his resorts, Glade Springs, was the subject of state Supreme Court arguments in a case in which the resort homeowners’ association is seeking $6.6 million in property upkeep fees from one of Justice’s companies, which owns lots at the resort.
When he became governor in 2017, Justice said he was turning control of his family businesses over to his adult children. But our investigation found that, while governor, he continued to steer the empire.
In his political campaigns, Justice frequently touted his experience as a businessman and said that his long career in coal and other industries made him suited for the role of West Virginia’s chief executive.
Justice’s coal operations have also been repeatedly pressed to settle allegations of significant pollution problems in deals with regulators, yet the environmental violations have continued. Last month, a federal appeals court ruled that Justice companies must pay $2.5 million in environmental fines. Lawyers for the companies had argued the fines were the result of a misreading of an earlier settlement.
In December, an industrial plant owned by Justice’s family agreed to pay nearly $1 million in fines after releasing excessive air pollution into Black neighborhoods in Birmingham, Alabama. An attorney who works with the Justice family said the consent order would “provide the certainty that the company needs to complete its evaluation of the plant’s future.”
For years, Justice had been considered West Virginia’s richest man and listed by Forbes as a billionaire. But in 2021, Forbes removed that listing. The magazine cited a dispute over $850 million in debt to the now-defunct firm Greensill Capital.
The Justice companies settled that dispute with a payment plan. But last week a longtime banking partner of Justice’s, Carter Bank & Trust, filed documents seeking to collect on a separate $300 million debt. Justice’s son, Jay Justice, said in a statement that the bank had refused a reasonable repayment plan.
Read More
This Billionaire Governor’s Coal Companies Owe Millions More in Environmental Fines
https://www.propublica.org/article/this-billionaire-governors-coal-companies-owe-millions-more-in-environmental-fines
West Virginia Gov. Jim Justice in his office in the state Capitol in Charleston in March 2020. Credit:Kenny Kemp/Charleston Gazette-Mail via AP
Environment
This Billionaire Governor’s Coal Companies Owe Millions More in Environmental Fines
The richest person in West Virginia, who is also the state’s governor, owns coal companies that routinely violate environmental laws. Latest filings say the companies owe over $3 million for not complying with a major water pollution settlement.
by Ken Ward Jr., Mountain State Spotlight
March 12, 2021, 4:30 p.m. EST
https://www.propublica.org/article/this-billionaire-governors-coal-companies-owe-millions-more-in-environmental-fines
Co-published with Mountain State Spotlight
Series: Big Jim ... West Virginia’s Conflicted Governor
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This story was co-published with Mountain State Spotlight, a new nonprofit newsroom covering West Virginia.
The federal government is seeking to collect nearly $3.2 million in fines from coal companies owned by West Virginia Gov. Jim Justice after the firms violated the terms of a major water pollution settlement, according to documents filed Thursday in federal court.
U.S. Department of Justice attorneys said in their filing that Southern Coal Corp. and two related companies failed to renew required water pollution permits, leading to unauthorized discharges at three mining sites in Tennessee and one in Alabama. Those permits are required so regulators can limit the runoff of everything from mud to toxic metals from coal operations.
The companies’ actions triggered fines under the terms of a 2016 settlement with the Environmental Protection Agency. As part of the deal, the governor’s companies had agreed to resolve more than 23,000 water pollution violations by paying a $900,000 fine, spending millions of dollars on new pollution controls, and covering automatic penalty amounts — known as “stipulated penalties” — for any future violations.
The DOJ’s new court filing indicated Justice’s companies have so far paid nearly $2.9 million in stipulated penalties, but the firms have repeatedly failed to honor the other terms of the settlement, either delivering late or not at all on site improvements and fines, continuing what federal attorneys called a “long history” of environmental violations.
A DOJ spokesperson declined to comment beyond the Thursday court filing.
Representatives for Justice’s companies and the governor’s office did not respond to requests for comment.
The new court filing, in U.S. District Court in Roanoke, comes three months after another one of Justice’s companies reached a separate pollution settlement with environmental groups, which sued over excess discharges of selenium, a mining byproduct that can be toxic to fish, at a strip mine in southern West Virginia.
In that deal, Bluestone Coal Corp. paid a federal fine of $30,000 and contributed $270,000 to a conservation group, settling a case brought by the Sierra Club and other citizen groups. The maximum federal penalty for Bluestone Coal could have been nearly $170 million.
Justice, a billionaire listed by Forbes as the richest person in the state, owns a vast empire of businesses, including coal mines, resort hotels and agricultural interests, many of them regulated by the state agencies that report to him. While Justice’s adult children have day-to-day control over the family’s business operations, the governor has continued to guide the empire.
Last year, an investigation by ProPublica found that, over the last three decades, the governor’s companies have accumulated more than $140 million in judgments and settlements in cases brought by vendors and other businesses and government entities over unpaid bills. (The governor and his representatives say that his companies always eventually pay their bills.) Many of the cases involve Justice’s mining companies.
Last spring, about two dozen of those mining companies reached a deal with the DOJ to pay more than $5 million in delinquent mine safety penalties, some of them dating back more than five years.
The 2016 water pollution settlement at issue in this week’s filing was announced just weeks before that year’s general election, in which Justice, then a Democrat, won the governor’s race. Last year, Justice, now a Republican, was reelected to another four-year term.
On Thursday, the federal government asked U.S. District Judge Glen Conrad to order Justice’s companies to stop the unpermitted discharges and to pay the outstanding fines. Attorneys said they have been seeking compliance since September 2020.
As part of the 2016 settlement, the federal government took the unusual step of requiring Justice’s companies to put up $4.5 million, in the form of a bank line of credit, that the DOJ could access so it could pay to have mine cleanup work done if the governor’s companies failed to complete it. In December 2020, with promised work at mine sites in Tennessee unfinished, the U.S. withdrew $1.5 million from that account.
A lawyer for the companies objected to the amount of the government’s withdrawal and asked that the matter be taken up through a dispute resolution process spelled out in the settlement.
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