The year of Blankenship comes to an end

The ousting of Don Blankenship from his position as CEO of Massey Coal at first glance appears like the toppling of an icon of "old-coal." But there may be cooler calculations at play, according to Jeff Goodell, author of the recent profile of Massey in Rolling Stone, Goodell's scathing portrayal of the embattled, highly divisive West Virginia coal executive, The Dark Lord of Coal Country, was published one week prior to his surprise resignation on December 3 after pressure from the company's board of directors.

In his article, Goodell, a consulting reporter on the documentary Dirty Business, chronicles the myriad misdeeds committed during Blankenship's nearly two-decade reign as West Virginia's "undisputed king of coal." Blankenship directed Massey with brutal efficiency, Goodell writes, developing a reputation for crushing rivals, busting unions, and lavish spending to purchase political influence. His many critics maintain that Blankenship leaves a legacy of environmental degradation, particularly from the practice of mountaintop removal, resulting in obliterated ridgelines, contaminated watersheds, and a slew of resulting major public health problems in nearby communities.

Yet, as Goodell notes in his story, Blankenship's caustic tenure resulted, for the most part, in only minor penalties and major financial gains. In his 18 years at the helm, Massey staff doubled and its annual revenues tripled, ending last year with $2.7 billion last year, even as the surrounding region sunk further into poverty. For his part, Blankenship was taking in $18 million a year, making him the highest paid CEO in the coal industry. And he's certainly not leaving his post empty-handed – Massey has offered him a $12 million payout, CNBC reports.

"From a strictly business point of view, it's hard to argue with Blankenship's success," writes Goodell. "He has taken a sleepy old coal company and built it into the most powerful economic and political machine in Appalachia."

Massey's safety violations had long been mounting, but it was The Upper Big Branch Mine explosion in April in West Virginia's Raleigh County, leaving 29 miners dead, that seemed to finally challenge Blankenship's impervious command. In addition to losing some of its major investors, Massey also faced serious fines and lawsuits, increasingly strict regulations, and an FBI criminal investigation. Last month, the company reported significant third quarter losses.

Coal mining communities in Appalachia will forgive a lot of things, Goodell notes. But, he adds, "one thing you don't do is kill coal miners, expose them to unsafe conditions. It's a politically really dangerous thing in that state, one of the only things that will turn the industry against a coal [boss] like Blankenship."

"I don't know what role [the article] played. I'm sure it helped nudge him out the door a little bit," he adds. "One of the sweet rewards of journalism."

Goodell says that it had become increasingly clear to Massey's board – which of late has expressed an interest in selling the company, possibly to a firm in India - that Blankenship was attracting escalating levels of negative press and regulatory scrutiny, dimming the prospects of a good deal.

"Blankenship's exit may be part of a larger strategy to keep himself out of jail and avoid financial liability for the suffering he has caused during his decades as Appalachia's most powerful coal baron," Goodell writes in an addendum to his article. "But it's good news for Massey stockholders."

Blankenship's ouster also does not in any way shield him from the ongoing federal-state criminal investigation or the pending shareholder liability lawsuits. Scheduled to testify in a Charleston courtroom this Tuesday as part of the ongoing Mine Safety and Health Administration's Investigation, Blankenship invoked the Fifth Amendment and declined to appear. According to a news release from the AFL-CIO, Blankenship claimed to have a "totally clear conscience" about the disaster.

Goodell also doubts that the regime change signals any major transformation in the business of coal mining. "Some stuff may be toned down a bit. But it won't fundamentally change the dynamics of the industry." Blankenship, he notes, was the last of the old guard. The new industry executives are more polished, more able to appear conciliatory to environmental and safety concerns, even if the resulting changes are marginal at best.

Blankenship leaves at the end of the year and will be succeeded by Massey's current president, Baxter Phillips Jr., as chief executive, and by retired Adm. Bobby Inman, a former senior CIA official, as nonexecutive chairman, the New York Times reports.

"For environmentalists, having Blankenship around was a certain kind of godsend," says Goodell. "He is such a monster, the id of the industry." The new brand of coal executive, he adds, is a lot harder to demonize.

Dirty Business producer Peter Bull conducted a contentious interview with Blankenship, which offers some sense of his combative personality in defending his company and the coal industry from criticism. Here's the exclusive interview, excerpted from the film:

 

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