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Jury Convicts Former Massey CEO Don Blankenship of Conspiracy

Former executive found not guilty of securities-related charges after deadly West Virginia mining accident

ENLARGE

Don Blankenship, left, and attorney William Taylor on Thursday. 
PHOTO: CHRIS TILLEY/REUTERS

By 
KRIS MAHER

Updated Dec. 3, 20

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CHARLESTON, W.Va.—A jury on Thursday convicted former Massey Energy Chief Executive Don Blankenship of conspiracy to violate federal mine-safety laws but acquitted him of more onerous counts of lying to regulators and investors in connection with a 2010 

coal mine explosion that killed 29 miners

.

The case, which riveted the coal-centric state for nearly two months, sets a precedent for prosecutors to use safety laws to target high-ranking corporate executives.

Mr. Blankenship, 65 years old, is believed to be the first chief executive of a major U.S. corporation to be convicted of workplace-safety-related charges brought after a deadly industrial accident. The explosion at Massey’s Upper Big Branch mine was the worst U.S. mining accident in four decades.

PREVIOUSLY

·

Opening Statements Heard in West Virginia Mine Blast Case

 (Oct. 7, 2015)

·

Views on Mining to Play Key Role in Finding Jurors for Massey Trial

 (Oct. 1, 2015)

·

Ex-Coal CEO Heads to Trial for Alleged Worker-Safety Breaches

 (Sept. 30, 2015)

·

Blankenship Pleads Not Guilty in West Virginia Mine Blast Case 

(Nov. 20, 2014)

·

Ex-CEO of Massey Energy Indicted in Case of 2010 Mine Blast 

(Nov. 13, 2014)

William Taylor, Mr. Blankenship’s attorney, who previously argued that prosecutors had tried to elevate allegations of corporate mismanagement to a crime, told reporters outside the federal courthouse that he would appeal.

“This case should never have been brought,” he said. “This is a record which will be very full of errors on appeal.”

While the verdict was a partial defeat for prosecutors, U.S. Attorney Booth Goodwin said it should send a signal to other executives.

“The CEO and chairman of one of America’s largest coal companies now stands convicted,” Mr. Goodwin said. “To go from boardroom to prospective incarceration sends a powerful message to executives who would ignore the safety of their workers.”

Prosecutors charged that Mr. Blankenship was the driving force behind an often unspoken conspiracy to violate safety laws to keep the coal and profits flowing at the company. They alleged that company officials broke the law by tipping off miners about inspections and falsifying coal dust samples.

The conspiracy charge upon which Mr. Blankenship was convicted is a misdemeanor with a maximum prison sentence of one year.

U.S. District Judge Irene Berger set a tentative date of March 23 for a sentencing hearing.

The majority of the potential 30-year sentence Mr. Blankenship had faced was linked to securities-related charges on which the jury found him not guilty.

After the 2010 blast caused Massey’s stock to tank, prosecutors alleged in two additional felony counts that Mr. Blankenship lied to the U.S. Securities and Exchange Commission and to investors in a company news release that stated Massey didn’t condone safety violations.

Prosecutors said he wanted to shore up Massey’s stock and his own holdings, which had taken a $3 million hit.

The verdict closes another chapter in a five-year federal investigation set in motion when a blast shook the Upper Big Branch mine on April 5, 2010.

The accident attracted national attention when teams combed the soot-blackened mine for days searching for survivors. President Barack Obama called the accident a failure of management and traveled to West Virginia to eulogize the miners.

On Thursday, Labor Secretary Thomas Perez praised the verdict, saying it sent a message that “there must be accountability when people lose their lives because of the neglect of their employer.”

Federal and state investigations found that Massey’s safety failings, such as not fixing water sprays on a cutting machine and letting coal dust accumulate, enabled a spark to set off a massive coal-dust explosion that swept through 2 miles of tunnels, killing miners in its path.

Since the accident, Mr. Blankenship has attracted criticism, and often derision, from the state’s highest elected officials.

In April of 2014, Sen. Joe Manchin, a Democrat, said the former executive had “blood on his hands.” Mr. Blankenship was indicted several months later, in November of last year.

Two other former Massey managers pleaded guilty to conspiring to violate safety laws, while a former security chief at the mine was convicted of lying to investigators and trying to destroy safety-related documents.

All three served prison terms.

Mr. Blankenship, who became CEO of Massey in 2000, has been one of West Virginia’s most powerful and polarizing figures. He helped Massey grow into the nation’s fourth-largest coal company by revenue, but under his guidance it acquired a reputation for placing profits before people.

The six-week trial featured testimony from former Massey executives and coal miners and the inclusion of more than 400 trial exhibits, including phone conversations secretly taped by Mr. Blankenship.

ENLARGE

Rescue efforts were under way in April 2010 at Massey Energy’s Upper Big Branch mine in Montcoal, W.Va. 
PHOTO: AGENCE FRANCE-PRESSE/GETTY IMAGES

In one recording, Mr. Blankenship describes an internal memo from June 2009 detailing Massey’s safety failings and says he wanted to keep it confidential, because it could prove damaging in the event of an accident. “If that was a fatal today or if we have one it would be a terrible document to be in discovery,” he said.

Prosecutors never said Mr. Blankenship’s actions caused the Upper Big Branch mine explosion. But the disaster, while often unmentioned, was ever-present during the trial, and family members of miners who had been killed said they felt vindicated by the verdict.

“Though you’re not convicted on all counts, you are convicted,” said Judy Jones Petersen, whose brother Dean Jones was killed. “This sends a message to all CEOs, owners and operators.”

Mr. Blankenship has maintained his innocence. A Republican who has clashed with Democrats and regulators, he said he believed he was targeted for political reasons.

On Thursday, Mr. Blankenship didn’t react when the verdict was read in a crowded courtroom, and he later declined to comment as he made his way through a pack of reporters.

Legal experts said the case highlights the relative weakness of the nation’s workplace-safety laws, in which a conspiracy to violate the law is a misdemeanor.

Assistant U.S. Attorney Steve Ruby, who led the prosecution, however, called the verdict a just result because it ultimately held a CEO accountable for safety at a company. “You can’t always measure justice by the length of a prison sentence,” he said.

Write to Kris Maher at 

kris.maher@wsj.com

TOPICS: Unethical behavior

SUMMARY: A jury convicted former Massey Energy CEO Don Blankenship of conspiracy to violate federal mine safety laws but acquitted him of more onerous counts of lying to regulators and investors in connection with a 2010 coal mine explosion that killed 29 miners.
Organizational culture is largely driven the actions and behavior of the senior leadership of the organization. Culture impacts employees including satisfaction, productivity and safety. This article discusses the culture that Don Blankenship created at Massey Energy that ignored the safety of employees.

QUESTIONS: 
1. Why was former Massey Energy CEO Don Blankenship convicted for conspiracy to violate federal mine safety laws?
2. What is the implication of Mr. Blankenship’s conviction for other business leaders? Offer two ideas from the article.
3. How did Mr. Blankenship drive the culture at Massey Energy? What was the impact of the culture he created?

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