This Billionaire Governor’s Coal Companies Owe Millions More in Environmental Fines

Series: Big Jim

West Virginia’s Conflicted Governor

The federal government is seeking to collect nearly $3.2 million in fines from coal companies owned by West Virginia Gov. Jim Justice after the firms violated the terms of a major water pollution settlement, according to documents filed Thursday in federal court.

U.S. Department of Justice attorneys said in their filing that Southern Coal Corp. and two related companies failed to renew required water pollution permits, leading to unauthorized discharges at three mining sites in Tennessee and one in Alabama. Those permits are required so regulators can limit the runoff of everything from mud to toxic metals from coal operations.

The companies’ actions triggered fines under the terms of a 2016 settlement with the Environmental Protection Agency. As part of the deal, the governor’s companies had agreed to resolve more than 23,000 water pollution violations by paying a $900,000 fine, spending millions of dollars on new pollution controls, and covering automatic penalty amounts — known as “stipulated penalties” — for any future violations.

The DOJ’s new court filing indicated Justice’s companies have so far paid nearly $2.9 million in stipulated penalties, but the firms have repeatedly failed to honor the other terms of the settlement, either delivering late or not at all on site improvements and fines, continuing what federal attorneys called a “long history” of environmental violations.

A DOJ spokesperson declined to comment beyond the Thursday court filing.

Representatives for Justice’s companies and the governor’s office did not respond to requests for comment.

The new court filing, in U.S. District Court in Roanoke, comes three months after another one of Justice’s companies reached a separate pollution settlement with environmental groups, which sued over excess discharges of selenium, a mining byproduct that can be toxic to fish, at a strip mine in southern West Virginia.

In that deal, Bluestone Coal Corp. paid a federal fine of $30,000 and contributed $270,000 to a conservation group, settling a case brought by the Sierra Club and other citizen groups. The maximum federal penalty for Bluestone Coal could have been nearly $170 million.

Justice, a billionaire listed by Forbes as the richest person in the state, owns a vast empire of businesses, including coal mines, resort hotels and agricultural interests, many of them regulated by the state agencies that report to him. While Justice’s adult children have day-to-day control over the family’s business operations, the governor has continued to guide the empire.

Last year, an investigation by ProPublica found that, over the last three decades, the governor’s companies have accumulated more than $140 million in judgments and settlements in cases brought by vendors and other businesses and government entities over unpaid bills. (The governor and his representatives say that his companies always eventually pay their bills.) Many of the cases involve Justice’s mining companies.

Last spring, about two dozen of those mining companies reached a deal with the DOJ to pay more than $5 million in delinquent mine safety penalties, some of them dating back more than five years.

The 2016 water pollution settlement at issue in this week’s filing was announced just weeks before that year’s general election, in which Justice, then a Democrat, won the governor’s race. Last year, Justice, now a Republican, was reelected to another four-year term.

On Thursday, the federal government asked U.S. District Judge Glen Conrad to order Justice’s companies to stop the unpermitted discharges and to pay the outstanding fines. Attorneys said they have been seeking compliance since September 2020.

As part of the 2016 settlement, the federal government took the unusual step of requiring Justice’s companies to put up $4.5 million, in the form of a bank line of credit, that the DOJ could access so it could pay to have mine cleanup work done if the governor’s companies failed to complete it. In December 2020, with promised work at mine sites in Tennessee unfinished, the U.S. withdrew $1.5 million from that account.

A lawyer for the companies objected to the amount of the government’s withdrawal and asked that the matter be taken up through a dispute resolution process spelled out in the settlement.