Can Rolling Stone claim another scalp? Six months after ending the career of Stanley McChrystal, Rolling Stone published Jeff Goodell’s blistering, 7,600-word profile of Don Blankenship, the CEO of Massey Energy. Entitled “The Dark Lord of Coal Country,” it’s powerful stuff:
Unless you live in West Virginia, you’ve probably never heard of Don Blankenship. You might not know that he grew up in the coal fields of West Virginia, received an accounting degree from a local college, and, through a combination of luck, hard work and coldblooded ruthlessness, transformed himself into the embodiment of everything that’s wrong with the business and politics of energy in America today — a man who pursues naked self-interest and calls it patriotism, who buys judges like cheap hookers, treats workers like dogs, blasts mountains to get at a few inches of coal and uses his money and influence to ensure that America remains enslaved to the 19th-century idea that burning coal equals progress…
29 men died violent deaths in large part because Don Blankenship ran what amounted to an outlaw coal mine, racking up more than 500 safety violations and nearly $1 million in fines last year alone.
And while the lethal explosion at Big Branch got the headlines, that’s not all the human misery that Blankenship has caused: Goodell goes into detail about the way in which his decision to divert 1.4 billion gallons of toxic coal slurry into old coal mines poisoned the drinking water of hundreds of people with heavy metals such as arsenic and lead.
According to the lawsuit, Massey knew that the ground around the injection sites was cracked, which would allow the toxic waste to leach into nearby drinking water. But injecting the slurry underground saved Massey millions of dollars a year. “The BP oil spill was an accident,” says Thompson. “This was an intentional environmental catastrophe.” Massey denies any wrongdoing in the case. But after Blankenship started pumping the slurry underground, he took steps to make sure that he and his family did not suffer. Around the time that his neighbors were starting to get sick, Massey paid to build a waterline to bring clean, treated water directly to Blankenship’s house from Matewan, a few miles away. Yet he never offered to provide the water to his neighbors, some of whom can see his house from their windows.
Goodell’s story was prescient, perhaps even self-fulfillingly so:
Blankenship still holds an iron grip on Massey’s board of directors. “He’s the embodiment of an imperial CEO,” says one expert on corporate governance. But the board may soon find itself forced to choose between Blankenship and the company’s survival… big shareholders are beginning to turn against the company. “The mine disaster was an eye-opening event for us,” says Brian Bartow, general counsel for the California State Teachers’ Retirement System, a large pension fund that is a major holder in Massey stock. “We re-examined the risks that the company was running in the way it does business. In our view, it has a lot in common with the subprime mortgage crisis — there are a lot of risks here that Massey is not acknowledging.”
I ask Bartow if he believes Blankenship should resign. “He should,” he says. “He clearly doesn’t get it.”
Blankenship announced that he was retiring—to unanimous astonishment—on Friday, a week after Goodell’s story appeared. Massey Energy itself will probably not last long in its present form: although it’s reportedly looking for companies to buy, more likely is that it will end up being swallowed by a larger player. And Blankenship himself is still the target of various lawsuits. But Goodell’s conclusion still, sadly, stands.
“I don’t care what people think,” he once said during a talk to a gathering of Republican Party leaders in West Virginia. “At the end of the day, Don Blankenship is going to die with more money than he needs.”Felix Salmon is an Audit contributor. He's also the finance blogger for Reuters; this post can also be found at Reuters.com. Tags: Accountability, Rolling Stone