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Like Trump, Jim Justice’s financial holdings make conflicts possible

F. BRIAN FERGUSON | Gazette-Mail file photo
Jim Justice declares victory in the governor’s race during an Election Day gathering at The Greenbrier.

Governor-elect Jim Justice has suggested he can’t be influenced by special interests because he self-funded his campaign. He promised not to take a salary if he was elected.

But, as Justice gets set to take office, the billionaire’s ownership of dozens of companies and a long list of publicly traded stocks could create problems when it comes to the businessman-turned-politician trying to avoid conflicts of interest.

Justice, one of the state’s largest coal mine operators and the owner of The Greenbrier resort, is in the process of setting up his incoming administration. But as his transition team recruits key staff members, Justice is also trying to figure out what to do with millions of dollars in assets that could cause people to call his future executive actions into question.

“The governor-elect is meeting with a team of experts that will inform him on what he needs to do to operate in the most ethical way possible when he gets sworn in,” said Grant Herring, Justice’s campaign spokesman.

Justice, through Herring, declined interview requests for this story.

The specifics of Justice’s vast stock holdings and private companies are not completely clear, as the incoming governor refused a request by the Gazette-Mail to release his personal tax returns during his campaign against Republican Bill Cole.

But a financial disclosure statement filed with the West Virginia Ethics Commission does shed some light onto Justice’s sprawling business connections.

That document lists nearly 100 coal, tourism and agricultural operations he privately owns, many of which are in West Virginia. It also names another 50 publicly traded companies he maintains stock in, including corporations with business interests in the Mountain State.

He owns shares in Procter & Gamble Co., which got state assistance in its effort to build a manufacturing facility near Martinsburg, and Merck & Co., the pharmaceutical giant that received $4.7 million through the state’s Medicaid program last year.

He also has an ownership stake in Wal-Mart, one of the state’s largest private employers; DuPont and the spin-off company Chemours, which own chemical manufacturing plants near Belle and Parkersburg; and Axiall Corp., which operates a chemical plant in Natrium that had a significant chlorine gas leak in August.

Attorneys and law professors who work with and study governmental ethics and transparency believe Justice’s corporate stocks can be dealt with relatively easily by transferring those assets into a blind trust, which would be controlled by an independent third party.

The managers of that trust would have the ability to sell off and reinvest any of Justice’s financial holdings, and Justice wouldn’t be allowed to know anything about those transactions.

But when it comes to Justice’s privately held businesses — especially the ones regulated by the state or that benefit from state spending — efforts to remove personal conflicts could be more vexing.

Justice’s businesses in West Virginia would be impacted by decisions on state tax policy. His coal companies will continue to be regulated by the state Department of Environmental Protection.

The Greenbrier resort and some of his other businesses would benefit from enhancements in state tourism advertising, and his casino at The Greenbrier will continue to be subject to the state’s gaming laws.

Justice’s financial disclosure statement also shows that The Greenbrier and Justice’s Glade Springs resort near Beckley have been frequented in the past by state agencies that held conferences, meetings and retreats at the tourism destinations.

Like President-elect Donald Trump, Justice has said he will cede control of his companies to his children. The Greenbrier will be run by Justice’s daughter. His son and son-in-law will take over his coal and agricultural businesses, he said.

Kathleen Clark, a law professor at Washington University in St. Louis who studies governmental ethics and transparency, said politicians handing the reins of a business over to their children does nothing to eliminate a public official’s financial conflicts.

“Kudos to him on putting his full attention on West Virginia, but that doesn’t address the issue of conflicts of interest at all,” said Clark, who previously drafted an ethics manual for the District of Columbia. “Turning over a business or assets to one’s children does not constitute a blind trust.”

Lawrence Noble, the general counsel for the national Campaign Legal Center, said the only way for Justice to fully avoid any appearance of conflict with some of his privately held businesses — especially the coal operations — would be to sell them.

Appointing someone other than his family to run the businesses wouldn’t be a perfect fix either, Noble said, because Justice would still know he’s profiting from those companies.

“People realize when you are asked to vote against your financial interests or the financial interests of your family, it is very hard to do,” Noble said.

Noble, who previously worked as general counsel for the Federal Elections Commission and the Center for Responsive Politics, understands divesting from a privately owned business is something politicians like Justice and Trump don’t want to do, but he said they should consider those personal conflicts before running for office.

“I’m sympathetic at some level of the problems that they face,” Noble said. “But you are not drafted to run for these offices.”

Justice was reportedly recruited by the state’s Democratic leadership last year, and he ran a conservative campaign promising to revive the Southern West Virginia coal industry, of which his companies are a part.

Nick Casey, who operated as Justice’s campaign treasurer, is currently in the process of analyzing Justice’s finances and figuring out the best way to insulate the governor-elect from ethical concerns — something he calls the “due diligence” process.

Casey, a former state Democratic Party chairman, pointed out this isn’t the first time West Virginians have voted a wealthy individual into the state’s highest office, though he admitted most people don’t “have as many chips on the table” as Justice does.

Former governor and later U.S. Sen. Jay Rockefeller had to deal with his personal wealth before he entered office by setting up a blind trust, and he only recently removed his assets from that trust. Former Gov. Gaston Caperton did the same after he was questioned about his business ties to the state public employee’s insurance program.

And Casey personally helped Sen. Joe Manchin set up his blind trust when he was entering the governor’s mansion in 2005.

“I wouldn’t say this is a new dawn or a new day,” Casey said. “It may be on a different scale than a Rockefeller or Caperton, but it’s not like we opened up a door into the unknown.”

Casey said he is still reviewing all of the relevant laws to limit Justice’s exposure to conflicts during his four-year term as governor.

“It’s not new ground, but it definitely hasn’t been plowed by me in a while,” Casey said.

Clark, who has led ethics workshops around the world, says politicians who open themselves up to even the appearance of a conflict only serve to make the public more cynical.

“We need the public to actually believe that government officials are acting in the public’s best interest,” Clark said. “We really undermine democracy when we undermine the public faith.”

Reach Andrew Brown at

andrew.brown@wvgazettemail.com,

304-348-4814 or follow

@Andy_Ed_Brown on Twitter.

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