Jim Justice complying on Ky mine violations

FRANKFORT, Ky. – Despite a fitful start, billionaire coal operator and West Virginia gubernatorial candidate Jim Justice is making progress in addressing a record number of environmental violations at his Kentucky strip mines, state regulators say.

"They've made some diligent progress in some areas, and in some areas they've struggled," Kentucky Natural Resources Commissioner Steve Hohmann said of Justice's companies' compliance with an agreed order to resolve scores of violations in eight counties. "Their effort at this time seems to be sufficient to meet terms of the agreed order."

There are still 79 environmental violations pending against Justice companies in Kentucky, according to a database maintained by the federal Office of Surface Mining Reclamation and Enforcement. But that's down from 129 last July.

Hohmann said Justice's companies got off to a slow start and that on five occasions his department found them in violation of the agreed order, announced last August, for issues like failing to reclaim land on time and not deploying sufficient equipment to reclaim particular sites.

But Hohmann said Justice has retained a Virginia conservation organization to help comply with the order and mobilized sufficient manpower and equipment to do the job. He also said Justice is making timely payments on a $1.5 million fine imposed by the order and has posted $12 million in additional bonding required by the state to assure the reclamation work gets done.

And many more months of progress will be needed to assure all terms of the order are met. "It's one of the most significant agreed orders encompassing the most sites and most violations we've ever dealt with in Kentucky," Hohmann said.

For his part, Justice said in a phone interview, "Naturally you're going to have some bumps in the road, but everybody seems to be working together. … I think we've made tremendous progress."

Gabby Gillespie, a Sierra Club organizer in southwest Virginia, said while the Sierra Club is pleased with some recent steps, much work remains in repairing environmental damage and settling financial obligations in Appalachia.

"Our experience with Justice's operations is to 'distrust but verify,' " Gillespie said.

Justice, whose net worth is estimated at nearly $1.7 billion by Forbes, is owner of The Greenbrier resort in White Sulphur Springs, W. Va. For years he has been a major political contributor to candidates of both political parties. Since 2011 he and immediate family members have given more than $400,000 to political causes of Gov. Steve Beshear, a Democrat. Last September, he and his family gave $100,000 to a super PAC working for the re-election of U.S. Sen Mitch McConnell, a Republican.

He announced that he would seek the Democratic nomination for governor in West Virginia on May 11.

Last July, The Courier-Journal reported on the violations by Justice companies, which state Energy and Environment Cabinet Secretary Len Peters called "the most serious set of violations" he had seen in his seven years in the post.

The newspaper also reported that Hohmann informed Justice officials in a June 26 letter that problems — including one "highwall" more than a mile long in Harlan County, and a second nearly half a mile long in Letcher County — needed immediate correction or Justice mining permits would be revoked. A highwall is what's left after rock and coal have been blasted from the side of a mountain.

"For the past two and one half years, your company has allowed these problems to continue, languish and multiply," Hohmann wrote.

But a shutdown of Justice operations was delayed as the state and Justice entered negotiations that produced the agreed order in early August. The deal required Justice to post additional bonds and put up his personal assets to guarantee the vast land reclamation required at his companies' mine sites in Breathitt, Floyd, Harlan, Knott, Leslie, Letcher, Magoffin and Pike counties.

The agreement required payment of $1.5 million in penalties — which represented a reduction from a total of $4.5 million in fines Justice had accrued in Kentucky.

The agreement set deadlines for Justice to bring the highwall sites in Letcher and Harlan counties back to their approximate original contour, and it required Justice to put three reclamation crews to work on sites no longer producing coal and complete work there within 12 months.

Hohmann said Justice initially struggled to comply — failing to deploy reclamation equipment on a Pike County site and failing to post a bond on time. Those situations were quickly resolved, he said.

"They've also struggled in meeting some of the reclamation deadlines," Hohmann said. "That seems to be a problem area, but overall they are out there making the effort to meet those deadlines."

The state found a Justice company in breach of the agreed order for falling behind in its effort to reclaim the Letcher County highwall. But Hohmann said inspections of the site later resulted in the state extending the deadline for completion of that work until September.

One step Justice has taken to comply with the Kentucky order is to accept the help of the Virginia Conservation Legacy Fund, which had been highly critical of his mining practices.

Tom Clarke, chief executive of the Virginia fund, said Justice companies are paying the fund for employee hours and other actual costs to monitor water quality and reclamation efforts at the Kentucky sites.

"They've deployed massive amounts of equipment all over Kentucky and remain committed to doing whatever it takes," Clarke said. "Are we going to meet all of our deadlines? No. There's an extensive amount of work that has to be done. … But I can tell you that as much as can humanly be accomplished is being accomplished right now."

Justice said he contracted with the fund "because we wanted to get things right. It's a matter of trying to do what needed to be done to get everything corrected. I told you we'd do that."

Reporter Tom Loftus can be reached at (502) 875-5136. follow him on Twitter at @TomLoftus_CJ.