Investors call for Massey ˜safety directors to resign

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"Investors call for Massey ˜safety directors to resign"

I don’t think it’s a big coincidence that we’re seeing all of these fossil fuel accidents after 8 years of lax oversight by Bush-Cheney (see The deadly toll of the ‘safe’ and ‘clean’ coal and oil industries).  The fox was guarding the henhouse.  And in this case, the henhouse itself was not actually run by the hens.

An investment group with ties to labor pension funds called for the resignation of Massey Energy directors who are “ultimately responsible for Massey’s alarming safety compliance record.”  Brad Johnson has the story in this Wonk Room repost.

The Change to Win Investment Group “presented today an in-depth analysis to shareholders of Massey Energy Company, making the case to vote against the three directors up for election at the mining company’s May 18 annual meeting, the first meeting of shareholders since the tragic April 5 explosion at Massey’s Upper Big Branch mine in West Virginia, in which 29 miners lost their lives.” In a letter to investors, CtW called for the removal of directors responsible for the “preventable mine explosion” that “killed 29 miners and destroyed $1.1 billion in shareholder value“:

We urge you to vote “Withhold” on directors Richard M. Gabrys, Dan R. Moore and Baxter F. Phillips, Jr. at the Massey Energy Company annual meeting on May 18. As members of the Safety, Environmental and Public Policy Committee (SEPPC), these directors are ultimately responsible for serious and systematic non-compliance with mine safety laws over an extended period, a risk oversight failure that likely led to the catastrophic and preventable mine explosion on April 5 that killed 29 miners and destroyed $1.1 billion in shareholder value.

The investment group “believes Massey Chair and CEO Donald Blankenship’s ‘production first’ emphasis fostered a management culture that tolerated unacceptable safety and compliance failures.” By supporting Blankenship’s drive for profits over rules, the members of the Safety, Environmental and Public Policy Committee hold ultimate responsibility for the deaths of Massey’s miners.

Don Blankenship’s ‘Safety’ Overseers:

Richard Gabrys
On Massey’s board since 2007, Gabrys is “the retired vice chairman of Deloitte.” He also serves on the board of the Michigan-based companies La-Z-Boy Inc., coal-dependent utility CMS Energy, and engineering firm TriMas Corporation. Gabrys has given $6000 to Republicans, including $1000 to George W. Bush, and $500 to Rep. John Dingell (D-MI).

Dan R. Moore
On Massey’s board since 2002, Moore is “the Chairman of Moore Group, Inc., which owns multiple automobile dealerships in West Virginia and Kentucky.” He previously ran West Virginia’s Matewan Bank. Moore also serves on the board of the West Virginia University Foundation, the Branch Bank and Trust Company, and the West Virginia Housing Fund. Moore has contributed $8100 to Republicans since 2000.

Baxter F. Phillips
Massey’s president since 2008 and a top executive since 2000, Phillips joined Massey in 1981. Phillips has contributed $8900 to Republicans and $5950 to the Massey PAC.

On April 19, Massey director Lady Barbara Thomas Judge resigned amid shareholder unrest.

“During times like these, a change in senior management is not appropriate or in the best interest of our members and shareholders,” said Admiral Bobby R. Inman, Massey Energy’s lead independent director on April 22. “Therefore, we want to emphasize that Don Blankenship has the full support and confidence of the Massey Energy Board of Directors.”

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7 Responses to Investors call for Massey ˜safety directors to resign

  1. homunq says:

    What % of shares do they hold? What % are held by the directors and CEO?

    How big is the board of directors? Ie, If these three directors were outed and replaced with anti-Blankenship directors, how many more directors would it take to change CEOs?

    I know it’s very unlikely to see Blankenship out on his ear any time soon. But I’d really like to know how unlikely.

  2. Harv Consiglio says:

    It looks like safety incidents under Obama when he has installed his own new czars and cabinet tell us where the hope and change breakdown is. Has the fox guarding the henhouse since the first of last year fallen asleep?
    It will be interesting who will cast judgement after the investigation and who does the same before gathering information.

    [JR: Takes a long time to undo 8 years of cronyism, especially with GOP blocking Obama nominees.]

  3. mike roddy says:

    Massey needs to be disbanded, and its parts sold off at auction. Even if they fire these three directors plus Blankenship, the company will remain rotten from within, due to its corporate culture. This as, after all, a firm that is basically opposed to any kind of regulation or safety oversight, and defeats these efforts with teams of attorneys who delay compliance and enforcement.

    It will be interesting to see if anyone in power proposes the death penalty here. The main people standing in the way will be the shareholders, who include very wealthy individuals and investors. They are arrogant enough to believe that they don’t deserve to take a hit for investing in this obviously criminal company. We’re going to find out soon how much juice they have.

  4. Anne says:

    There is some, but not much, justice in knowing that Massey’s stock price is taking a nose dive, see here http://finance.yahoo.com/q/bc?s=MEE+Basic+Chart&t=5d Though, that is just the last five days. Over the past year, the stock has been steadily climbing and is still more than twice the value of its annual low, see here: http://finance.yahoo.com/q/bc?s=MEE&t=1y&l=on&z=m&q=l&c= Unless there is SERIOUS INTERVENTION, they will reconfigure a bit and go on with biz-as-usual.

    NPR has broken the story (unusual for them to do, I know) that the FBI is investigating Massey for possible bribery charges; do ya think Blankenship was paying off the feds (you know, those tough-as-nails-take-no-shit regulators at the Mine Safety and Health Administration) to keep this off his back? Nawwwwhhhhh… he wouldn’t do that, would he????

    http://www.npr.org/blogs/thetwo-way/2010/04/fbi_probing_fed_officials_and.html

    Or would he? Oh, that would be just so sweeeet..

  5. Anne says:

    Another comment — has anyone checked out Massey’s nauseating ads on their website?

    Anyone interested in environment safety and health is a crazy treehugger and opposed to jobs:
    http://www.masseyenergyco.com/uploads/1/Protect_Edit_01.wmv

    Coal replaces OIL to protect Americans from crazy terrorists. (HUH?)

    http://www.masseyenergyco.com/uploads/1/Security_Edit_01.wmv

    And this one is the kicker. Massey supports local health care by bringing in doctors. This only works, however, for pre-explosion health conditions. Maybe Massey also contributes to the local morgue?

    http://www.masseyenergyco.com/uploads/1/Healthcare_Edit_03.wmv

    Like, um, like, uh, shouldn’t there be at least a thread of truth in advertising????

  6. PeterW says:

    “An investment group with ties to labor pension funds”

    Where was this group years ago? It’s not like Massey didn’t have a horrible record before this accident. And why are they giving Blankenship a free pass? Weren’t the directors only following his leadership?

  7. Chris Dudley says:

    Joe in #2,

    If the Obama administration has been tolerating corruption at the MSHA for more than a year, as Anne’s (#4) post suggests, then the blame can’t be shifted to the prior administration. That sort of cleanup should have been completed in the first six weeks, three months at the outside. Otherwise you are saddled with a corrupt administration for the duration.