Sep 06, 2023

West Virginia Governor’s Coal Empire Sued by the Federal Government — Again — ProPublica

West Virginia's Conflicted Governor

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.

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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.

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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.

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