October 21, 2004

Massey CEO's political donations questioned

By Paul J. Nyden
Staff writer

The man whose company won a $50 million lawsuit in 2002 against Massey Energy is worried about the huge amount of money Massey’s CEO has put into the state Supreme Court race.

Hugh Caperton said he was “deeply disturbed” to read that Don Blankenship, Massey’s CEO, chairman and president, had personally funded $1.7 million to an organization called And for the Sake of the Kids.

That group is working to defeat incumbent Supreme Court Justice Warren McGraw, who is running against Republican Brent Benjamin.

“It isn’t for the sake of the children of our state that Mr. Blankenship is spending that much money,” Caperton said during an interview in Charleston on Wednesday.

“A question we all have to ask is whether we, as West Virginians, want one person such as Don Blankenship to dictate who our next Supreme Court justice is going to be,” he said.

In August 2002, a Boone County jury found Massey guilty of fraud because it forced Caperton’s company, Harman Mining, out of business and awarded Harman and Caperton $50 million. With interest, that verdict is now worth more than $61 million.

Massey will probably appeal the decision to the state Supreme Court. If so, the winner of the election between McGraw and Benjamin could be the deciding vote as to whether the Supreme Court upholds the verdict against Massey.

Rob Capehart, who manages Benjamin’s campaign, said on Wednesday that he could not comment on what Benjamin might do if he wins the election and the Harman case is appealed to the Supreme Court.

Capehart also said he could not comment on whether Benjamin might recuse himself from sitting on the case if it does come before the Supreme Court.

“As a businessman, I have firsthand knowledge of how Mr. Blankenship operates,” Caperton said Wednesday. “I was the owner and operator of Harman Mining Co., an independent mining company that Massey, under his direction, deliberately put out of business.

“During their destruction of my company, Mr. Blankenship personally threatened me not to sue Massey. He told me they had spent $1 million a month on attorneys and he would tie me up in court for years. He has succeeded.”

Caperton and Harman have been in court for seven years.

“During the [Boone County] trial, Massey did their best to attack me personally and destroy my reputation much like Mr. Blankenship is doing through the guise of the organization And for the Sake of the Kids to Justice McGraw during this campaign.”

Harman Mining produced high-quality metallurgical coal from mines near Grundy, Va., until Massey forced it out of business and into bankruptcy by late 1997.

Blankenship broke a 10-year coal supply contract Harman had with Wellmore Coal, shortly after Massey bought Wellmore, and its parent company United Coal, on July 31, 1997.

Blankenship switched that contract from Harman to his company’s mines in Boone County, which are all nonunion. When Harman Mining was forced to close and file bankruptcy, 150 miners lost their jobs.

Harman sued Massey in Virginia state courts and won a $6 million verdict in May 2001 for “bad faith and breach of contract.” After the Virginia Supreme Court refused to hear Massey’s appeal, Massey paid Harman $7.2 million, including $1.2 million in interest, in November 2002.

The Boone County verdict for $50 million came in a lawsuit charging that Massey and its subsidiaries “tortiously interfered with Harman’s contract with Wellmore and, as a result, caused Harman to go out of business.”

And for the Sake of the Kids raised about $2.5 million in just 40 days between Aug. 20, when the group was formed, and Sept. 30, the end of the first reporting period required by the Internal Revenue Service. Of that, Blankenship contributed $1.7 million.

Blankenship has also sent three different letters to physicians, businessmen and coal industry executives urging them to contribute directly to Benjamin’s campaign committee.

Last week, Ron Stollings, a Boone County physician from Madison, sent letters to registered nurses around the state, urging them to help elect Benjamin. In the letter, Stollings wrote, “Don Blankenship has been kind enough to pay for this mailing.”

To contact staff writer Paul J. Nyden, use e-mail or call 348-5164.