Key witness testifies against ex-coal CEO boss

AP News
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Posted: Oct 22, 2015 7:09 PM

CHARLESTON, W.Va. (AP) — A key government witness testified Thursday that his former coal boss, ex-Massey Energy CEO Don Blankenship, was a micromanager who considered it less expensive to break the law and pay fines than to implement appropriate safety measures prior to a deadly mine explosion in 2010.

During Blankenship's criminal trial in Charleston, former Massey subsidiary president Christopher Blanchard said violations could have been prevented if more miners were hired or more time was spent focusing on safety, and he said Blankenship had the power to make those changes.

It was acceptable to incur a certain amount of safety violations, even if they could have been avoided, Blanchard said.

"There was an understanding that a certain number of safety violations would be written that could have been prevented," said Blanchard, whose group of mines at Performance Coal included Upper Big Branch Mine in West Virginia.

Blankenship is charged with conspiring to break mine safety laws at Upper Big Branch and lying to financial regulators about safety practices. The mine exploded in 2010 and killed 29 men. It was the worst U.S. mine disaster in four decades.

Blanchard rose to president of a different Massey coal subsidiary by about age 27, and was making $400,000 a year as head of Performance Coal. Under his watch, his group of mines centering around Upper Big Branch at times generated as much as $600,000 a day. The group was projected to bring in $432 million in revenue in 2010, or 15 percent of all Massey mines, according to Blanchard and government exhibits.

Blanchard said that during one phone call with Blankenship, the two discussed how Upper Big Branch dispatchers would tip off workers underground when federal inspectors were coming. The practice let them cover up some deficiencies before regulators arrived. Blanchard said he knew what they were doing was illegal.

During the call, Blanchard told Blankenship he was heading underground in Upper Big Branch to accompany inspectors, Blanchard testified. Blankenship asked if "the crews knew they were coming," and Blanchard replied, "Yes."

In another instance, Blanchard said Blankenship wanted him to start mining coal again in a flooded area. Blanchard said he told Blankenship that it would be illegal, and laid out a plan to fix the drainage problem. Blankenship responded that Blanchard was letting the U.S. Mine Safety and Health Administration run his mines, Blanchard testified.

Blanchard said the company did hire more miners for safety when Upper Big Branch was close to being put on a federal list of the worst offender mines, which would have been a huge financial risk. After violations dropped in 2008 and regulators rescinded the warning, those positions were turned into production jobs or removed and violations went up again in 2009, Blanchard said.

Blanchard also painted his former boss as a heavy-handed, highly critical manager.

He needed Blankenship's permission to hire contractors or new workers, give raises or buy equipment with a lifespan longer than a year. Blankenship demanded production reports every 30 minutes from the most valuable section of Upper Big Branch. He wrote "Nonsense. Giving money away" on one request to pay $750 on a freeze-proofing system.

Blankenship spent one production report questioning Blanchard about mining minutiae, and Blankenship chastised him for not calling him enough.

"Did you call me today? TODAY?" Blankenship wrote.

Blankenship's attorneys have contended that he was a divisive figure and a pushy boss who cared about money, but they said he still ordered that safety come first.

Prosecutors will continue questioning Blanchard on Friday, and have said they expect to rest their case early next week. The trial began Oct. 1.