Massey panel saw need to improve 'tone and message'
CHARLESTON, W.Va. -- A committee of the Massey Energy board of directors concluded late last year that the coal giant needed to change its "tone and message," but not because of any weaknesses in its existing safety practices, according to an internal report made public as a result of a legal action by the Gazette and National Public Radio.
The advisory committee was considering appointment of a "blue ribbon" panel of outside experts or hiring a major consulting firm, but not because board members on the committee believed Massey's "S-1" safety program wasn't working.
In a Dec. 20, 2010, report stamped "HIGHLY CONFIDENTIAL," the committee recommended that Massey drop its highly publicized battle with federal regulators and "visibly strengthen its commitment to safety" if it hoped to emerge from a downward spiral following the Upper Big Branch Mine Disaster.
"Massey should move past an 'always on the attack' approach to regulators which ... has infected working relationships at the inspector-local mine level in a way that is not helpful to the company," the 12-page report said. "In addition to whatever effects the combative approach may have had on the safety culture at the company, the current constantly attacking approach also seems to have caused, among other things, excessive focus by regulators and the media on Massey as opposed to its competitors."
In late November 2010, the advisory committee had recommended that longtime and controversial CEO Don Blankenship not be reappointed to Massey's board and that "a change in top leadership was required to rebuild the company's reputation, regain the confidence of shareholders, regulators and public officials, and be in a position to enhance the company's safety and compliance performance."
The committee report made public Thursday was dated several weeks after Blankenship retired.
Committee members recommended, among other things, that a stronger public commitment to safety was needed, especially in the wake of Blankenship's departure and longtime Massey official Baxter Phillips' appointment as CEO.
But, the report added, "In making this recommendation, the advisory committee is not making any finding that Massey's S-1 program, or any other of the company's existing safety policies or programs, are inadequate or deficient.
"However," the report said, "there have been a number of highly visible incidents in which the effectiveness of the company's safety policy and practices has been called into question by regulators, shareholders and the media."
The report listed the Upper Big Branch Disaster, the Aracoma Alma No. 1 Mine fire, the criminal prosecution of Massey's White Buck Coal Co., major violations issued after the disaster at a different Massey operation, the Seng Creek Powellton Mine, and the Obama administration's legal effort to shut down the Freedom Mine in Kentucky over serious safety breaches.
"Thus, however appropriate Massey's safety program may be, the company should not be satisfied with these results," the committee report said.
The advisory committee report was among hundreds of thousands of pages of documents filed in a Kanawha County lawsuit that some Massey shareholders filed against the company's board members and top executives. While Massey's buyout by Alpha Natural Resources was finalized Wednesday, lawyers for the shareholder groups are continuing to try to hold Massey management responsible for perhaps $1 billion in losses from the April 5, 2010, disaster.
Alpha has tried to distance itself from Massey's safety record, but shareholder groups allege Alpha CEO Kevin Crutchfield agreed to provide jobs to several Massey officials who were running Upper Big Branch at the time of the explosion.
Lawyers for the shareholder groups and Massey sought to have records in the case concealed from the public, but Kanawha Circuit Judge Charles King unsealed them at the request of the Gazette and NPR.
Previously, limited documents made public in the West Virginia case and a similar action in Delaware have revealed serious concerns by Alpha officials about Massey's safety practices and corporate culture, questions about the merger, and warnings issued directly to Massey's board members about safety problems at Upper Big Branch prior to the disaster.
Records unsealed by King outline a series of actions by Massey's board, despite a legal settlement and court order that mandated board members take a larger role in ensuring Massey complied with safety regulations.
For example, the June 2008 court order mandated that Massey hire a "vice president for safety practices" who would report not to then-CEO Don Blankenship, but to a separate Safety, Environmental Public Policy Committee.
Massey lured Elizabeth Chamberlin from CONSOL Energy to fill the vice president's role, but then Blankenship set up a system through which she would report directly to him, not to the special committee.
The court order also required Massey to set up a new safety reporting system that would encourage miners and other employees to report problems without fear of being punished or fired. Citing sworn statements by various Massey officials, the court records show the board's safety committee didn't inquire about whether this system was up and running until after the Upper Big Branch Mine blew up.
The documents also cite testimony by Massey officials who admitted the board was aware of increasing numbers of violations at numerous Massey mines -- including Upper Big Branch -- but took no concrete actions to try to remedy the problems.
Reach Ken Ward Jr. at email@example.com or 304-348-1702.