Kentucky is No. 1 in delinquent fines for mine-safety violations – Coal operators owe $29.2 million to feds
Reporter James R. Carroll
9:42 PM, May. 26, 2012
WASHINGTON — Kentucky coal-mining operators owe the federal government $29.2 million in delinquent fines — more than any state in the nation, an analysis by The Courier-Journal shows.
Those fines make up 40 percent of the nearly $73.6 million that coal companies owe the federal government.
D & C Mining Corp. of Harlan County alone owes more than $2.1 million in unpaid fines, while Murriel-Don Coal Co. Inc. of Knott and Floyd counties racked up $970,526 in fines.
Many of the unpaid penalties nationwide and in Kentucky are years old and some date to 1993, records with the federal Mine Safety and Health Administration show. The Courier-Journal examined data through the end of March.
The fines, for violations of federal safety laws, have been levied against underground and surface coal mines, metal and non-metal mines, sand pits, quarries, trucking companies and related operations.
While millions of dollars in penalties have been referred to the Department of the Treasury for collection, millions more may never be collected, despite the serious safety violations that prompted the penalties.
That’s in part because some companies have declared bankruptcy, while others have closed and abandoned mines, records show.
Critics say the uncollected fines reflect the stark reality that the federal agency whose mission it is to enforce safety in the nation’s mines doesn’t have the power to make chronic scofflaws suffer any consequences.
And that, they say, is a safety issue.
“Mine operators have less incentive to keep miners safe when fines go uncollected,” Rep. George Miller, D-Calif., said in a statement. “If operators can ignore fines with impunity, enforcement efforts will have no deterrent effect.”
Miller is sponsoring mine-safety legislation that includes a provision giving MSHA the power to close mines that are delinquent paying their fines.
“These delinquencies undermine MSHA’s efforts to protect miners,” the congressman said. “MSHA needs better tools to swiftly shut down an operation when the operator refuses to pay overdue fines.”
But his bill has been languishing in the Republican-controlled House.
“There’s no deterrent at all for companies that don’t play by the rules,” echoed Wes Addington, deputy director of the Appalachian Citizens Law Center, a nonprofit law firm in Whitesburg, Ky., that represents coal miners and their families on mine-safety and black-lung issues.
“If you don’t pay a single cent, nothing will happen,” Addington said. “It’s about as weak a collection process as you could see in American life. If the IRS collected overdue (tax) penalties the way we do from mining violations, the country would go bankrupt.”
MSHA chief Joseph Main countered in a statement that his agency has “a very high collection rate — 85-90 percent.”
Last year, MSHA collected $104 million in penalties from companies cited for safety violations, which represents 84 percent of the fines the agency assessed. That is down from a high of 90 percent in 2006 and 2007, according to MSHA figures.
Main added in his statement that “We are taking a hard look at mine operators that do not pay their penalties and will continue working with other agencies that have an obligation to collect delinquent debt.”
Delinquent fine leaders
Kentucky, which is honeycombed with small coal mines, particularly in the eastern part of the commonwealth, leads the nation in delinquent fines at $29,259,605. West Virginia is second, with $14.7 million in outstanding penalties.
Pennsylvania ranks third, with $3.2 million in overdue fines. Virginia accounts for $2.9 million in delinquent penalties, followed by Tennessee at almost $2.7 million, Alabama at $2.4 million, and Texas at nearly $1.9 million.
Indiana ranks 11th among the states in uncollected fines, with $732,852.
Of Kentucky’s $29 million in delinquent penalties, about $9.8 million is owed by active mines or intermittently operating mines; $6.3 million is owed by non-producing active mines; and $3.6 million is owed by mines listed by MSHA as temporarily idle, the data shows.
An additional $9.5 million is owed to MSHA by mines that have been abandoned.
Nationwide, MSHA calculates that about half of the unpaid fines became delinquent in the past 2½ years, while it generally can take three to four years to finally collect the money.
The Courier-Journal reported last month that nearly six years after an explosion killed five miners at Kentucky Darby Mine No. 1 in Harlan County, the operators have not paid nearly $700,000 in civil fines and interest fees for safety violations connected to the accident.
Kentucky Darby is closed and the company is not in business, although its operators are mining under the names of other companies, The Courier-Journal reported.
That case is hardly isolated, federal data reveals.
A Kentucky company called D & C Mining Corp., which operates an active underground mine in Harlan County, owes the government more than $2.1 million, the largest sum of any overdue penalties in the state, according to MSHA’s data.
A miner, Wilson “Rome” Meade, was crushed to death at the D & C mine in June 2009.
MSHA filed a civil suit against D & C in March in the U.S. District Court for the Eastern District of Kentucky, seeking $1.6 million of the penalties the company owes.
Under federal law, the agency has six months to serve D & C a summons for the case, MSHA spokeswoman Amy Louviere said. “Thus far, our attempts at service by mail have been unsuccessful. Our next step is to personally serve the summons on the operator,” she said.
The phone number listed for D & C has been disconnected.
Murriel-Don Coal Co., which operated three mines in Knott and Floyd counties, owes MSHA nearly $1 million. The mines are now listed by MSHA as abandoned, and the company could not be reached.
‘You are devaluing miners’ lives’
After MSHA imposes penalties, companies may appeal. Once final judgments are rendered, the clock starts ticking. After 180 days without payment in a final fine, MSHA refers that delinquent debt to the Department of the Treasury for collection. In some cases, Treasury may refer uncollected debt to the Department of Justice.
MSHA is processing about $8 million in penalties at any given time, spokeswoman Amy Louviere said, and some of that could include delinquencies.
According to agency figures, $26.3 million of the $73.6 million in delinquencies are penalties levied against mines that have been abandoned, while an additional $15.2 million are fines incurred by operators who no longer run the mines where the violations were found.
However, operators frequently close mines and open new ones and change company names without ever leaving coal mining.
Tony Oppegard, a former state and federal mine safety official who is an attorney in Lexington, Ky., said federal law needs to be changed to give MSHA more regulatory power.
“Presumably unsafe conditions still are being abated (when MSHA safety citations are issued), but it does make a mockery of the inspection process to a certain extent” when companies don’t pay fines, Oppegard said.
“If you can continue mining and making money, you are devaluing miners’ lives,” he said.
Bill Bissett, president of the Kentucky Coal Association, said the coal industry has a constitutional right to challenge government fines through appeals.
But, he added, “if a final order has been rendered, and at that point you’ve exhausted any kind of legal recourse, payment should be made.”