Successful and reviled Massey CEO retires in weeks

[December 04, 2010]  MORGANTOWN, W.Va. (AP) -- Massey Energy Co. Chief Executive Don Blankenship, the modern-day coal baron who made millions for investors while turning countless neighbors into bitter enemies over environmental destruction, will wrap up his reign as the king of central Appalachia's coalfields at year's end.

Virginia-based Massey announced late Friday that Blankenship -- respected and reviled in equal measure -- will retire as chairman and CEO Dec. 31. That will end a 30-year career highlighted by huge profits, violent labor battles, feuds with federal regulators and a 2010 mine explosion that ranks as the nation's worst coal mining disaster since 1970.

A 60-year-old millionaire who rose from obscure beginnings, Blankenship oversaw an ongoing plan to expand the production of Appalachian coal for growing Asian markets, but leaves behind a company badly shaken by the April 5 blast that killed 29 men at the Upper Big Branch mine.

Current president Baxter F. Phillips Jr. is Massey's new CEO. Retired Adm. Bobby Inman, a board director, was named nonexecutive chairman.

"After almost three decades at Massey it is time for me to move on," Blankenship said in a prepared statement. "Baxter and I have worked together for 28 years, and he will provide the company great executive leadership."

Blankenship did not immediately respond to a message seeking comment Friday night.

His abrupt retirement sent ripples throughout Appalachia, stunning even those who might have seen it coming.

"I don't think it's any of my business whether it's good or bad," said Bill Raney, president of the West Virginia Coal Association. "I've just observed that Don's been quite a leader over the years."

He called Blankenship one of the industry's "most aggressive, intelligent and certainly one of the most outspoken leaders."

But environmental activist Larry Gibson, who has long battled Massey and the practice of mountaintop removal coal mining, said there was one thing Blankenship did best -- to his own disadvantage: "He was very successful in bringing the worst publicity to the industry."

"And any industry worth its salt doesn't want somebody like that around."

Blankenship, who has been chairman and CEO since 2000, leaves at a time when Massey's safety practices are under scrutiny by state and federal regulators. Its practices are also the subject of a criminal investigation.

His departure also comes as Massey's board is reviewing its strategic options: In recent weeks there have been reports that Massey is a possible takeover target for rivals such as Alpha Natural Resources and global steel conglomerate ArcelorMittal SA.

Massey is the nation's fourth-largest coal producer by revenue. It operates 19 mining complexes in Virginia, West Virginia and Kentucky.

Massey said it lost money in the third quarter of this year because of tougher federal regulations after the Upper Big Branch mine explosion.

Though he had long blamed a sudden surge of methane for the blast, Blankenship last month suggested an inundation of natural gas might be to blame. He also blames the federal Mine Health and Safety Administration for making things worse, complaining it wrongly forced Massey to change a ventilation plan for the mine.

MSHA investigators have said a buildup of methane and coal dust most likely caused the blast.

Blankenship grew up in a tiny town in the Tug Fork River valley along the Kentucky-West Virginia border, raised by a single mother who owned a gas station and grocery store. He was an accountant before joining Massey in 1982.

Blankenship's rise was helped by his handling of a labor dispute involving the United Mine Workers of America. Massey has been strongly anti-union under Blankenship. He keeps a television set in his Kentucky office that was hit by a stray bullet during a labor dispute.

As he rose through the company, his personal fortune also increased. According to Associated Press calculations, Blankenship earned $17.3 million in total compensation last year, including salary, perks and performance-related bonuses. That was down from $19.7 million in 2008. The bulk of Blankenship's 2009 compensation came in a performance award of $11.5 million. He kept tight control of the business, staying intimately involved in minute details of company activity.

But UMW President Cecil Roberts said Blankenship's reign was a long, difficult chapter for the industry, too often marked by tragedy.

One page in that chapter came in 2006, when two Massey employees died in conveyor belt fire at Aracoma Coal's Alma No. 1 mine in West Virginia. Testimony in a wrongful death trial later revealed Blankenship held strict control over the operation.

In a memo three months before the fire, he appeared to order superintendents to ignore safety concerns.

"If any of you have been asked by your group presidents, your supervisors, engineers or anyone else to do anything other than run coal ... you need to ignore them and run coal," Blankenship wrote.

The victims' widows ultimately settled for undisclosed terms in 2008.

Over the years, Blankenship's reach has gone far beyond the coalfields: He also used his wealth to influence West Virginia politics and public policy.

In 2006, he spent more than $1.8 million to promote 41 hand-picked Republican candidates through contributions and his personal political action committee.

He also spent $3.4 million to help elect the first Republican to the state Supreme Court in 2004. The U.S. Supreme Court would later cite that campaign as a conflict of interest in a ruling involving Massey and the state Supreme Court.

But Pittsburgh attorney Bruce Stanley, who has sued Massey at least five times and represented the families of the Aracoma victims, said Blankenship has left a larger legacy of pain by polluting the coalfields surrounding his mountaintop mansion.

"He poisoned his own back yard," said Stanley, one of the lawyers behind a case involving some 700 people who blame their polluted wells and wrecked health on toxic coal slurry that Massey pumped into worked-out underground mines.

Miner's widow Lorelei Scarbro has fought for years to stop Massey's planned mountaintop removal operation on the Coal River Mountain, where residents say their health, property values and quality of life have already been hurt by dust, vibrations and pollution.

"I know coal companies are in business to make money, but we must no longer be asked to pay such a high price for cheap energy," she said. "Under the reign of Don Blankenship, the bodies continue to pile up -- from the people drinking poisoned water to the men who have gone into the earth to never see the light of day again."

But will life change when he's gone?

Probably not, says Andrew Munn, an organizer for an environmental movement called Climate Ground Zero. The group has waged a nearly two-year campaign of nonviolent protest against Massey, incurring more than 100 arrests as members try to disrupt production.

While Blankenship's ouster is "certainly a victory in public opinion," Munn said, "until slurry injection stops and mountaintop removal stops, it's a superficial change."

[Associated Press; By VICKI SMITH]

Associated Press writer Michael Felberbaum contributed from Richmond, Va.

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