Secretly Recorded Calls Subject of Blankenship Trial Tuesday

Oct 13, 2015

“We can’t outrun this bear.” “Without MSHA we would blow ourselves up.” “I have to get one thousand people off the payroll.” These are all statements jurors in Charleston listened to Don Blankenship make during phone conversations he recorded in his Belfry, Kentucky, office in the few years before the Upper Big Branch mine disaster.

Former Massey CEO Don Blankenship leaving the federal courthouse in Charleston Tuesday.
Credit Ashton Marra / West Virginia Public Broadcasting

The ex-Massey Energy CEO is charged with conspiring to violate federal mine safety standards and lying to investors about the company’s safety record after the 2010 explosion that killed 29 men. Those secret recordings are now being used by federal prosecutors to make a case against him. 

The audio clips were presented during a lengthy testimony from Blankenship’s former executive assistant.

“Yea, I just, I need to get a thousand people off the payroll,” Blankenship said in a September 2009 phone conversation with Baxter Phillips, the president of Massey Energy. It was just one of many jurors listened to in a federal courtroom in Charleston Tuesday.

“Sometimes I’m torn with what I see because…if it weren’t for MSHA, we’d blow ourselves up,” Blankenship said on a second call. “I don’t know, but I know MSHA is bad, but I tell you what, we do some dumb things. I don’t know what we’d do if we didn’t have them.”

MSHA is the federal Mine Safety and Health Administration, the regulatory agency responsible for inspecting mines.

The 2009 conversations came at a time when the defense said Massey was working to significantly decrease the number of safety violations throughout the Massey mine network, including the Upper Big Branch mine near Mont Coal, the coal mine at the heart of this case.

Defense attorneys presented evidence Tuesday and in their opening arguments to show that Blankenship was concerned about safety, creating a Hazard Elimination Program to reduce violations and accidents and their efforts were working.

But that argument was countered with another July 2009 recording presented by the prosecution during which Blankenship is again speaking with Massey President Baxter Philips about a company release.

“I think down there under the permitting I wrote on the one you don’t have Baxter, Hazard Elimination Initiative, which probably has a better name, but I don’t know how far we want to go, but that could lead us into the fact that we’re having a record year on safety and that the company believes it is there position to comply with the law and anyone else in central App, or whatever, and give us a chance to do some propaganda there.”

The prosecution will attempt to prove that the Hazard Elimination Initiative was all for show. They’ve already started to do so through a witness last week, Bobbie Pauley. A former underground miner, Pauley testified safety was the last priority at Massey, production came first.

Jurors heard the first set of audio recordings Friday during the testimony of Blankenship’s former long-time secretary Sandra Davis. Those recordings focused mostly on Blankenship’s concerns with his salary and stock options, both of which he was disgruntled with.

Tuesday’s recordings included more phone calls about compensation—including one in which Blankenship states the company needs to make some kind of announcement in order to shift attention away from executives who were selling off their stock options, but they also included many about safety.

A few recordings focused on a memo written by Massey attorney Stephanie Ojeda after a meeting with Bill Ross. Ross was a former mine regulator who worked as a ventilation specialist for Massey.

After an interview with Ross, Ojeda sent a memo to Blankenship and other top Massey officials depicting the poor relationship between the company and regulators and what Ross saw as substandard operations in underground mines.

“I had them interview Bill Ross to get his view of all these MSHA violations. Have you been made aware of that?” Blankenship told Mike Snelling, another Massey executive.

“No sir. I knew you were going to do it, you mentioned it in a call,” Snelling said.

“It’s highly confidential because I don’t know, I really don’t know what to do with it cause I meant to keep it privileged and confidential,” Blankenship said in the recording, “but Bill, his interview on our performance regarding MSHA safety is worse than a Charleston Gazette article.”

In another call, Blankenship said should a Massey mine have a fatal accident, the Ross memo would “be a terrible document to be in discovery.”

Testimony from Blankenship’s former secretary Sandra Davis will continue Wednesday morning. She is expected to be followed on the stand by David Hughart.

Hughart is a former Massey executive who was sentenced to 42 months in prison in 2013 for conspiring to hide safety violations from federal regulators. Hughart has been cooperating with the U.S. Attorney’s Office during the investigation into Don Blankenship, but Blankenship claims Hughart is disgruntled because he was fired from Massey for stealing from the company and abusing drugs.