Billionaire Spent Millions In Charity, But Avoided Mine Fines Jim Justice, a West Virginia philanthropist and mine owner, gave away and invested more than $200 million while his mines failed to pay $2 million in delinquent mine safety penalties.
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Billionaire Spent Millions In Charity, But Avoided Mine Fines

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Billionaire Spent Millions In Charity, But Avoided Mine Fines

Billionaire Spent Millions In Charity, But Avoided Mine Fines

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ARUN RATH, HOST:

This week, we've been reporting the findings of an investigation that looks into the mining industry. Federal regulators issue citations and fines to mining companies to discourage unsafe practices. NPR has documented a failure in the regulation, which permits mining companies to ignore the fines and continue operating. One of the biggest delinquencies is a company owned by West Virginia's richest man. As Howard Berkes reports, he's a billionaire and philanthropist who gives away many more millions than his company owes.

HOWARD BERKES, BYLINE: Forbes says he's worth $1.6 billion. As of April, his coal mines owed $2 million in fines for safety violations, some going back seven years, according to federal delinquency records. But Jim Justice is best known for his most prized possession - the 200-year-old, 10,000-acre Greenbrier Resort in White Sulphur Springs, West Virginia.

(SOUNDBITE OF BOWLING)

BERKES: Even the bowling alley is elegant with darkened wood and plush green walls. The indoor pool is lined with pillars like a Roman bath. And the sprawling white antebellum hotel boasts 700 luxury rooms. But it's the 70 Jim Justice coal mines with 1,200 workers in five states that interests Celeste Monforton, a former federal mine safety official now at George Washington University.

CELESTE MONFORTON: This is a business person who paints himself as a responsible citizen, who donates to charities. But there's a whole other side of that business.

BERKES: The Justice mines failed to pay more than 500 mine safety penalties, four times as many as anyone else. And while they didn't pay, these delinquent mines were cited again and again, more than 4,000 times according to our analysis of federal records - 1,300 violations were so serious, federal inspectors said they would likely cause injury or illness if left uncorrected. Our findings troubled California Congressman George Miller, the ranking Democrat on the House Labor Committee.

GEORGE MILLER: He's personally worth a great deal of money. He's a major figure within the community. And yet he just simply chooses to ignore this. And he's certainly exhibit A of the kind of operator that should not be allowed to continue with reckless disregard of the law.

(SOUNDBITE OF BASKETBALL GAME)

BERKES: Justice didn't respond to weeks of phone calls and emails about his delinquent fines. So we showed up one night at Greenbrier East High School in Lewisburg, West Virginia, where Justice volunteers as the basketball coach.

(SOUNDBITE OF BASKETBALL GAME)

BERKES: Tall and bulky with a round face and bright white hair, Justice coached the Lady Spartans from the sidelines. We didn't want to interrupt, but he came over to tell us he wouldn't answer our questions.

JIM JUSTICE: One of the guys that is my chief operating officer, he knows everything about what you want to talk about. And I know it, but he knows it better than I.

BERKES: You're the owner. You're the boss. That's why we want to talk to you.

JUSTICE: But he has to talk to you.

BERKES: We'll talk to both of you.

JUSTICE: I can get him to be able to talk to you tomorrow, but I cannot talk to you at all. I just can't.

BERKES: Why?

We eventually sat down with Tom Lusk, the chief operating officer of Justice's Southern Coal corporation. Lusk says the company and the industry have had a tough time in the last six years.

TOM LUSK: An operator's going to maintain a safe operation is faced with the dilemma of what gets paid and doesn't. And the unpaid fines and citations with Southern Coal have simply been not having the available cash to settle those.

BERKES: Federal records show that Justice's delinquent coal mines produced more than 9 million tons in the years they didn't pay their fines. That's $500 million worth, according to average prices in the same areas reported by the Energy Department. Lusk says operating costs cut deep.

LUSK: There's been no windfall in Appalachia today. All of the operations, I think, in Appalachia are struggling as far as profit margins compared to input cost. It's not there.

BERKES: Still, the vast majority of mining companies, including those in Appalachia, do manage to pay their fines according to federal delinquency data. Justice himself has plenty of money. In 2009, he promised $150 million to buy and upgrade the Greenbrier Resort. Two years later, he pledged $10 million to the Cleveland Clinic, plus $25 million for a National Boy Scout reserve in West Virginia, where he was introduced to thousands of scouts last year.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED MAN: I want to give a special thanks to the man in the white hat standing there. That's Jim Justice. You're sitting in the home of the Jim Justice National Boy Scouts Scout Camp. Let's welcome Jim.

(APPLAUSE)

BERKES: Then it was $5 million for Marshall University. And this year, back at the Greenbrier, Justice paid for three football fields and a training center for the New Orleans Saints. The team celebrated in a promotional video.

(SOUNDBITE OF NEW ORLEANS SAINTS PROMOTIONAL VIDEO)

UNIDENTIFIED WOMAN: Total price tag? About $25 million. Justice says they're rolling out the red carpet for the Saints in every way possible.

JUSTICE: It is a fabulous opportunity for West Virginia.

BERKES: That's more than $200 million in philanthropy and investments while his coal mines had unpaid safety fines reaching $2 million. Tom Lusk says his boss treats each of his businesses as independent operations.

LUSK: He owns, probably, 80-plus companies. And one of the things he requires in those companies is that they stand on their own. They live and die by their own cash flow. And the real issue, where we begin this conversation, is does it compromise safety? And I can absolutely say no.

BERKES: We wanted to test that claim by visiting Justice's underground coal mines with troubling safety records. Lusk refused, saying he'd been burned before by taking reporters underground. Instead, he sent us to a surface coal mine, the company's Tams mountaintop removal mine in Raleigh County, West Virginia, with safety chief Pat Graham.

PAT GRAHAM: And every time we direct one of these employees to do his job, it's always safety first. If it's not safe, it's not going to end up productive.

BERKES: Miners we spoke with, who were told in advance we were coming, had the same safety message. We stopped to watch a massive front-end loader scoop up piles of crushed coal and pour them into a dump truck.

This surface mine has a relatively good safety record. And overall, the Justice mines had injury rates last year below the national average, according to NPR's analysis of federal injury data. But the numbers for the delinquent Justice mines aren't so good. Their injury rate for the last 5 years is more than twice the average rate. Jay Mattos supervises enforcement at the Mine Safety and Health Administration.

JAY MATTOS: We can definitely say that the Justice operations meet the criteria that we review and they are on our radar. They obviously would be. They made it onto yours and believe me, they are on ours.

BERKES: Seven of the Justice delinquent mines have been hit with surprise blitz inspections that target mines with poor safety records. But the agency hasn't sought federal court orders for payment, according to court and agency records. Joe Main is assistant secretary of labor for Mine Safety and Health.

JOE MAIN: It isn't an automatic let's-take-them-to-court approach to life. It is looking at the different circumstances we have with the different mine operators and trying to figure out what is the best approach here.

BERKES: Whatever the approach, the mine safety agency hasn't been able to force the Justice mines to pay, even though he's a billionaire. The agency also doesn't have the authority to shut down his or any other mines until fines are paid. Justice executive Tom Lusk complains that Southern Coal had paid half a million dollars years ago, but didn't get credit until recently. He says Justice will eventually pay the rest.

LUSK: He is an individual that does not run from his obligations. And that's the case here. He's made it abundantly clear that there's no way we're going to not fully meet and satisfy these obligations.

BERKES: And after we made it clear what we were going to report, Lusk told NPR that he was instructed to pay off the delinquent fines at the rate of $100,000 a month. Howard Berkes, NPR News.

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