Louisville Courier-Journal front page story on flawed and inadequate collection of fines for mine safety violations
Kentucky coal mine’s unpaid fines show MSHA’s penalty process still broken, critics say
by James R. Carroll
WASHINGTON — Nearly a year after it was fined more than $800,000 for safety violations, K and D Mining Inc. — run by two operators of the Kentucky Darby Mine where five miners died in 2006 — has essentially disappeared and none of the fines have been paid, federal records show.
It’s the latest example of how the federal Mine Safety and Health Administration’s penalty process is too slow and cumbersome to stop operators from putting miners in danger and fails to deter companies that ignore fines, mine safety advocates say.
“The process of collecting fines from scofflaw operators — rogue operators — is still broken,” said Wes Addington, deputy director of the Appalachian Citizens’ Law Center, a nonprofit firm in Whitesburg, Ky., that represents miners and their families on mine safety and environmental issues. “It really is disappointing.”
But MSHA chief Joseph Main insists K and D will not elude the agency’s grasp. He was not specific about what other tools his agency might use.
“We’re looking at that (mine-safety law) to figure out all the tools in there and using them to the maximum,” Main said in an interview with The Courier-Journal. “We’re trying to move the ball forward in dealing with mine operators like this.”
Getting mine operators to pay their fines has been a longtime problem.
Last year, a Courier-Journal analysis found that coal companies owed the federal government $73.6 million in delinquent fines as of the end of March, including $29.2 million owed by Kentucky operators, the most of any state in the nation.
Many of the unpaid penalties were years old and some dated to 1993, MSHA records showed.
The dangers at K and D’s Mine No. 17 in Highsplint, Ky., were uncovered in an unannounced safety check by MSHA inspectors on May 16 and 17, 2012. MSHA completed assessing the penalties for the Eastern Kentucky mine in December.
The mine was cited for 43 violations, carrying total penalties of $816,413. Those violations included accumulating coal dust, which in certain concentrations and conditions can explode; damaged coal conveyor belts; ventilation problems; dangerous electrical conditions; and roof control violations, among other hazards. At the time, inspectors repeatedly noted the mine’s “reckless disregard” for safety.
One inspector wrote that the mine operator “has engaged in aggravated conduct constituting more than ordinary negligence.”
Although the fines are intended to discourage mine operators from committing future safety violations, the case underscores the limited powers the federal government has to force mines to pay up, critics say.
They point out that K and D’s operators were allowed to continue mining coal even as they racked up delinquent penalty payments year after year without any worry that their business could be interrupted, much less closed.
Overall, K and D owes $1.6 million in unpaid civil penalties, according to MSHA records. All but nine of those penalties are listed as “delinquent.” The company also owes almost $104,000 in unpaid fines and fees for another mine it abandoned in 2010, the agency said.
“If you are an operator and get citations for unsafe conditions and you know you’re not going to pay the fines and nothing’s going to happen to you for not paying the fines, then there is no incentive to operate a safe mine,” said Tony Oppegard, a Lexington, Ky., attorney and former state and federal mine safety official. “The people who suffer because of that are the miners.”
K and D’s operators — Jack H. Ealy, Ralph Napier and John D. North — were well-known to MSHA.
Ealy had hundreds of thousands of dollars in delinquent penalties dating to 2007. And Napier and North formerly ran Kentucky Darby Mine No. 1 in Harlan County, where on May 20, 2006, an explosion killed five miners.
MSHA found Kentucky Darby improperly sealed a section of the mine, failed to follow proper methods for repairing the seal and failed to train miners in using escape ways and breathing equipment.
The Courier-Journal reported in April 2012 that Napier and North had not paid nearly $700,000 in civil fines and interest fees for safety violations at Kentucky Darby, which closed.
That did not prevent them from opening and operating the new mine under the K and D name.
But now K and D has essentially disappeared.
Although the fines are intended to discourage mine operators from committing future safety violations, the case underscores the limited powers the federal government has to force mines to pay up, critics say.
They point out that K and D’s operators were allowed to continue mining coal even as they racked up delinquent penalty payments year after year without any worry that their business could be interrupted, much less closed.
Overall, K and D owes $1.6 million in unpaid civil penalties, according to MSHA records. All but nine of those penalties are listed as “delinquent.” The company also owes almost $104,000 in unpaid fines and fees for another mine it abandoned in 2010, the agency said.
“If you are an operator and get citations for unsafe conditions and you know you’re not going to pay the fines and nothing’s going to happen to you for not paying the fines, then there is no incentive to operate a safe mine,” said Tony Oppegard, a Lexington, Ky., attorney and former state and federal mine safety official. “The people who suffer because of that are the miners.”
K and D’s operators — Jack H. Ealy, Ralph Napier and John D. North — were well-known to MSHA.
Ealy had hundreds of thousands of dollars in delinquent penalties dating to 2007. And Napier and North formerly ran Kentucky Darby Mine No. 1 in Harlan County, where on May 20, 2006, an explosion killed five miners.
MSHA found Kentucky Darby improperly sealed a section of the mine, failed to follow proper methods for repairing the seal and failed to train miners in using escape ways and breathing equipment.
The Courier-Journal reported in April 2012 that Napier and North had not paid nearly $700,000 in civil fines and interest fees for safety violations at Kentucky Darby, which closed.
That did not prevent them from opening and operating the new mine under the K and D name.
But now K and D has essentially disappeared.
The mine changed hands during the summer of 2012, and the company phone number in Middlesboro, Ky., has been disconnected. K and D last filed an annual report with the Kentucky secretary of state’s office on June 5, 2012, according to the agency’s website.
There are no records of bankruptcy proceedings involving the company or its operators in the U.S. Bankruptcy Court for Kentucky. The Kentucky Office of Mine Safety and Licensing did not issue a 2013 mining license to K and D, nor to any operation under the names of Napier, North or Ealy.
Rep. George Miller, D-Calif., has proposed legislation that includes giving MSHA the power to issue closure orders, known as withdrawal orders, against mines that have a history of not paying fines.
“The tactics used by K and D show the lengths some operators will go to avoid accountability for operating an unsafe mine and the weak enforcement tools federal officials have to collect those penalties,” Miller said in a statement to The Courier-Journal. “Mines that won’t pay what they owe should be shut down until they pay up, as the bill I have introduced in Congress does.”
Addington agreed, saying “withdrawal orders would go a long way towards putting these rogue operators on notice.”
But Miller’s bill has languished in the GOP-controlled House.
Main stopped short of endorsing Miller’s bill but said “we could always use more tools … to deal with mine operators like the ones we’re talking about.”
Oppegard said a better way to stop scofflaw operators is to deny them mining permits if they have a poor safety record or many outstanding fines. “The problem there is that licensing of mines is a state function,” he said.
Addington said scofflaw mines have been a problem for years, especially in Eastern Kentucky.
“Once the mining is finished, they’ll often pull up, and that company will no longer have any assets — no money to pay the penalties,” he said. “And then they will open a mine under a different corporate name and do the same thing all over again.”
There are no records of bankruptcy proceedings involving the company or its operators in the U.S. Bankruptcy Court for Kentucky. The Kentucky Office of Mine Safety and Licensing did not issue a 2013 mining license to K and D, nor to any operation under the names of Napier, North or Ealy.
Rep. George Miller, D-Calif., has proposed legislation that includes giving MSHA the power to issue closure orders, known as withdrawal orders, against mines that have a history of not paying fines.
“The tactics used by K and D show the lengths some operators will go to avoid accountability for operating an unsafe mine and the weak enforcement tools federal officials have to collect those penalties,” Miller said in a statement to The Courier-Journal. “Mines that won’t pay what they owe should be shut down until they pay up, as the bill I have introduced in Congress does.”
Addington agreed, saying “withdrawal orders would go a long way towards putting these rogue operators on notice.”
But Miller’s bill has languished in the GOP-controlled House.
Main stopped short of endorsing Miller’s bill but said “we could always use more tools … to deal with mine operators like the ones we’re talking about.”
Oppegard said a better way to stop scofflaw operators is to deny them mining permits if they have a poor safety record or many outstanding fines. “The problem there is that licensing of mines is a state function,” he said.
Addington said scofflaw mines have been a problem for years, especially in Eastern Kentucky.
“Once the mining is finished, they’ll often pull up, and that company will no longer have any assets — no money to pay the penalties,” he said. “And then they will open a mine under a different corporate name and do the same thing all over again.”
Main did not say his agency needed more people, even though its Special Assessments Office — which decides whether mines should pay special penalties for safety violations — has three employees, according to the agency.
Main said another person may be deployed there but insisted his agency’s collection system “works to a great deal.”
“Our average is somewhere around 90 percent collection on the fines that are assessed,” he said. “… Yet we still we have more work to do when dealing with some of these folks.”
Addington disputed Main’s claim.
“If other state and federal agencies collected fees and penalties due to them the way MSHA does, the government would shut down,” he said.
MSHA in 2012 oversaw 1,865 coal mines and 12,193 metal and non-metal mines.
In fiscal 2012, the agency’s assessment office reviewed 3,820 citations recommended for special penalties — those for major violations. Of those, 2,434 special assessments, totaling almost $50.4 million, were proposed — a 28 percent increase over 2011 and the most ever recorded, MSHA said.
Main said such penalties take time to process because the agency anticipates that many will be appealed or challenged in legal proceedings.
“We want to make sure we have our facts together,” he said.
Main said another person may be deployed there but insisted his agency’s collection system “works to a great deal.”
“Our average is somewhere around 90 percent collection on the fines that are assessed,” he said. “… Yet we still we have more work to do when dealing with some of these folks.”
Addington disputed Main’s claim.
“If other state and federal agencies collected fees and penalties due to them the way MSHA does, the government would shut down,” he said.
MSHA in 2012 oversaw 1,865 coal mines and 12,193 metal and non-metal mines.
In fiscal 2012, the agency’s assessment office reviewed 3,820 citations recommended for special penalties — those for major violations. Of those, 2,434 special assessments, totaling almost $50.4 million, were proposed — a 28 percent increase over 2011 and the most ever recorded, MSHA said.
Main said such penalties take time to process because the agency anticipates that many will be appealed or challenged in legal proceedings.
“We want to make sure we have our facts together,” he said.
Recent Comments