Connect with us

Politics

Companies Sue West Virginia Governor’s Family Companies Over Debts But Find Empty Bank Accounts

Published

on

West Virginia Gov. Jim Justice. Photo: Jesse Wright/West Virginia Public Broadcasting

The Justice family companies’ difficulties paying taxes over the years are well documented. But tax collectors haven’t been the only ones trying to recover debts from companies once operated by West Virginia Gov. Jim Justice and now in control of his family.

A review of court documents by the Ohio Valley ReSource found at least five cases in which judges ruled that Justice family companies failed to pay suppliers for goods or services. When compelled by courts to pay, the companies either refused or failed to meet agreed upon payments.

These cases, dating back to 2013, include a failure to pay for a range of common coal industry needs, such as parts for mining equipment, coal barge services, insurance, and the royalties due to mineral property owners. The debts the Justice family companies owed in these cases ranged from just under $150,000 to a little more than $3 million.

In all five cases the courts authorized U.S. Marshals to seize assets from the Justice family companies’ bank accounts in order to recover the debts. However, in some cases officials discovered the bank accounts were empty or closed.

National Union Insurance

One recent case involves a contract dispute between an insurance company and Southern Coal Corp., one of the Justice family companies. Southern Coal operates 33 mines and has a coal mining capacity of 7.2 million tons, according to Bloomberg.

Based in New York, National Union Fire Insurance Company provided workers compensation, general liability, and auto insurance policies for Southern Coal from 2009 to 2014.

According to court documents, after coverage ended, National Union audited Southern Coal’s books and found the company owed roughly $2.7 million. In March 2014, Stephen W. Ball, vice president of operations for Southern Coal, issued a promissory note to National Union. The document spelled out how much the company would pay and set up a payment plan.

The note also said if Southern Coal defaulted, the unpaid principal and interest would become due and National Union could collect attorney fees.

Court records show the company made several payments, but then stopped, defaulting on almost $560,000. This July, a judge in the U.S. District Court for the Southern District of West Virginia issued a writ of execution, a legal method by which judgment may be enforced and collected.

A court document shows the judge authorized U.S. Marshals to recover debts owed by Southern Coal.

Rick Shearer is a Kansas City-based attorney who represents National Union. In an email exchange, Shearer said the U.S. Marshal’s office checked out each of the bank accounts listed.

“Those entities responded that any accounts of Southern Coal were closed or now have a zero balance, or they were no longer holding any Southern Coal assets,” he said.

Shearer said he has even reached out to other lawyers who have litigated similar cases against Justice family companies seeking advice on how best to recover debts.

Turns out, National Union is not the first company to run into this problem.

A timeline drawn from court documents shows key events in National Union’s lawsuit against Southern Coal. Credit: Alexandra Kanik/Ohio Valley ReSource

Empty Accounts

The Ohio Valley ReSource found five examples of ongoing or closed lawsuits where a judge issued a writ of execution to collect judgments against Justice family companies.

This summer, Georgia-based paper company WestRock got a writ of execution and writ of summons to recover about $1 million owed by two Justice family companies, Southern Coal and Kentucky Fuel Corp. The companies have been battling for years over a coal contract for a paper mill in Florida. The parties settled, but after making three payments, Southern Coal defaulted.

As in the National Union case, court records filed last month show the U.S. Marshal for the Southern District found nothing in the three accounts listed for the Justice family companies.

Another example dates back to 2013. In March of that year Thomas Lampert agreed to sell his interest in the Three Marie Mine located in the Slab Fork District of Raleigh County, West Virginia, to Tams Management Inc., a Justice family company owned by Southern Coal.

James C. Justice III, left, watches his father’s inauguration as governor. He has assumed control of some Justice family companies. Photo: West Virginia Governor’s Office

The agreement included a $2 million royalty payment, which Tams failed to pay. Lampert sued for breach of contract and a judge in the U.S. District Court for the Southern District of West Virginia sided with him. After the company refused to pay, presiding judge Irene Berger ordered Tams in July, 2016, to post an appeal bond for $2.6 million. Every day the company was late, the court ordered they pay a $1,000 fine. It took a month for the company to post the bond.

After Tams and Southern Coal lost an appeal to the 4th U.S. Circuit Court, Lampert was able to collect on the bond.

Other cases include disputes over coal barging services and a case involving roughly $150,000 in mining equipment, service and parts. In that 2013 case, the Virginia-based James River Equipment company sued Justice Energy Company Inc. Two years after being ordered to pay the debt, and after repeatedly failing to show up for court hearings, Judge Berger held Justice Energy in contempt of court to a tune of $30,000 per day.

Justice Energy lost an appeal of the $1.23 million in civil contempt fines in 4th U.S. Circuit Court of Appeals last month 

In that case, Justice Energy had also agreed to a payment plan, but stopped making payments after just two. In all cases, the court issued a writ of execution tapping into the bank accounts of the Justice family companies.

Not Bankrupt

John Prescott, professor of business administration and director of the Organization and Entrepreneurship Area at the University of Pittsburgh’s business school, said that it is not uncommon for companies experiencing financial difficulties, especially smaller companies, to sometimes find themselves in court over contract breaches with suppliers.

He said there are many reasons this might happen, including cash flow problems or poor management. If there is no dominant supplier of a service or good, he said, the company may have many other options to consider, and it may decide that whatever hit the company reputation might take from failing to pay would be minimal.

Lawyers who have represented suppliers in the lawsuits against the Justice family companies say those companies repeatedly engage in this type of behavior despite sometimes severe reprimands from the court.

Over the course of the coal industry’s history, boom and bust cycles have sent many coal companies into bankruptcy and others have struggled to pay their bills. The industry’s recent downturn triggered a wave of mining company bankruptcies.

In a November 2015 interview with the Charleston Gazette-Mail, Gov. Justice said he could have declared bankruptcy, but chose not to.

“Just bankrupt those companies and life’s good and you just move on,” he said. “Wouldn’t that have been an easy fix? That isn’t what we did. That’s what a lot of people are doing.”

Patrick McGinley is an environmental lawyer and faculty member at West Virginia University’s College of Law who has studied and written about the coal industry for 40 years. McGinley said the pattern of behavior laid out in these court cases may indicate the companies should be in bankruptcy.

“The Justice companies haven’t gone bankrupt, but they’re not paying their bills,” he said. “It’s not clear what’s going on except the impact of not paying taxes, not paying suppliers, not reclaiming land — that’s serious and that impacts people through the region.”

Unpaid Taxes

In 2016 the Ohio Valley ReSource, its partner stations, and NPR reported on millions of dollars in overdue taxes owed by the companies that Gov. Justice operated before he was elected. The Justice family companies, many now operated by the governor’s son, have since repaid some of those taxes owed in West Virginia but still owe taxes in other states, including Kentucky, Tennessee, and Virginia.

In an August news conference, Justice said back taxes owed in West Virginia by his family’s coal companies had been paid, but did not specify how much was owed or paid or if any of it had been part of a settlement. Rural counties in several other states are still owed taxes and fines that total in the millions, and county officials say they have been forced to take extraordinary measures to collect.

Zach Weignberg looks at the tally of property taxes that Jim Justice owes to Knott County, Kentucky. Photo: Benny Becker

For example, in Tazewell County, Virginia, County Treasurer David Larimer worked with the county sheriff to seize equipment at a Justice family mine this spring. The sale of two massive Caterpillar trucks raised enough money to cover all but about $150,000 of the more than $800,000 debt, he said.

Justice family coal companies also have a history of mine safety violations. The October, 2016, report by NPR showed Justice companies also owed more than $2 million in overdue mine safety violation fines.

McGinley added that in a contracted industry, Justice family companies are significant players, which means when they don’t pay debts the impact on other contracting companies is also significant.

“It’s especially important at a time when the industry is on a decline and there are fewer jobs and the profit margin for suppliers is much smaller,” he said. “For the remaining companies in the business, failure to pay your bills can be devastating.”

The Ohio Valley ReSource repeatedly reached out to the Justice Family Corporation and lawyer Billy Shelton who has represented their business interests. Shelton said he had no comment and the companies did not respond to several phone calls and emails.

From Businessman To Governor

Before he was governor, Justice was president and CEO of more than 100 companies, according to his official state biography. Upon his election, Justice, who is a billionaire, transferred control of many of those companies to his family members, including his son and daughter.

A review of business filings with the West Virginia Secretary of State’s office show, for example, his son, James C. Justice III, is listed as the director and president of Southern Coal and his daughter, Jillean Justice, is listed as an officer.

When asked at an event in Parkersburg, West Virginia, shortly after the writ of execution was issued in the WestRock paper mill case Gov. Justice said he was unaware of the action.

“I don’t know a thing in the world about it,” he said. “I really don’t.”

Gov. Justice takes the oath of office as his son James C. Justice III (center) looks on. Photo: West Virginia Governor’s Office

However, the governor’s most recent financial disclosure form filed in January with the West Virginia Office of Ethics raises some questions about what connections Justice maintains to the family companies. The form lists more than 100 companies in the section for “business and/or property interests.”

Scott Amey, general counsel for the Project on Government Oversight, a nonpartisan government watchdog, reviewed Justice’s financial disclosure form. Amey said it appears Justice has an active interest in those companies. Southern Coal, Kentucky Fuel, and Justice Energy Company are among those listed.

As of when he filed this form and signed it, he was saying that, yeah, he still had a business interest in all these companies and that that interest had a fair market value of $10,000 or more,” Amey said.

But he cautioned that from the form alone it’s impossible to characterize that interest.

“That could be the price of real estate, that could be a business license. I don’t know,” he said. “Maybe they’re not up and running anymore and he just owns the companies, owns the name, and he thinks they have $10,000 worth of value cause of the naming rights or something.”

The Ohio Valley ReSource asked Butch Antolini, the governor’s head of communications, for more information about Justice’s relationship with the businesses listed. He referred those questions to the Justice Family Corporation. Five calls to the number Antolini provided went unanswered and two email addresses that were provided bounced back.

This story was originally published by the Ohio Valley Resource

Politics

When W.Va. Delegate Compared LGBT to KKK, He Highlighted the History of Religious Right Prejudice

Published

on

Newly elected Del. Eric Porterfield was sworn in to the West Virginia House before the start of the 2019 session. Photo: Perry Bennett/West Virginia Legislative Photography

When West Virginia House of Delegates member Eric Porterfield, R-Mercer, called the LGBT community “the modern-day version of the Ku Klux Klan” in an interview with a Charleston Gazette-Mail reporter last week, it drew condemnation not just in the state, but nationwide. But Porterfield, in fact, joined a long legacy of right-wing evangelicals who have conflated legal protections for lesbians, gay men, bisexuals and transgender people with white supremacy and domestic terrorism.

The Southern Baptist Convention in 2012 resolved that “homosexual rights activists” had “misappropriated the rhetoric of the Civil Rights Movement” in advocating for marriage equality and other legal protections.

Bryan Fischer, former director of issues analysis for the American Family Association, has compared LGBT people to Nazis numerous times, arguing in a 2010 column that “homosexuality gave us Adolph [sic] Hitler.”

And Tony Perkins, president of the Christian conservative lobbying group the Family Research Council, argued in a 2018 column on the organization’s website that marriage equality was really “about obliterating every moral and cultural boundary humans have ever known.”

“The LGBTQ is suppressing the freedom of people that disagree with them and forcing their ideology,” Porterfield told Rachel Anderson, a reporter and weekend anchor with the Bluefield, West Virginia, TV station WVVA, in a separate interview.  

“If they do not get their way, they cause chaos, apply pressure, intimidate, internet stalk,” he added. “They’re the most evil-spreading and hate-filled group in this country.”

Porterfield’s comments came after a controversial rant in a legislative committee meeting, during which lawmakers were debating a bill to add protections to the state’s housing and employment nondiscrimination law for sexual orientation and gender identity.

His broader claim that “the LGBTQ” are harming America by lobbying for equal protections under the law is not new either. It’s right out of the right-wing evangelical playbook, according to Randall Balmer, an Episcopal priest and historian whose work studying the religious right has been recognized with numerous accolades, including an Emmy nomination for script-writing and hosting the PBS documentary based on his book, “Mine Eyes Have Seen the Glory.

Balmer said that right-wing evangelical leaders often rely on a “rhetoric of victimization” to make themselves seem persecuted in the face of changing social norms.

“That, by the way, is one of the reasons that they embrace Trump…he’s very good at this rhetoric of victimization,” Balmer said. “What this guy in West Virginia is saying is just a variant on this. ‘We’re the ones who are under siege, we’re the ones who have some sort of grievance that needs to be redressed.’”

But even given this context, Porterfield’s comparison of LGBT people with the KKK is a strange one, given the religious right’s origins. Although many believe abortion had a central role in pushing evangelical leaders toward politics, pro-life rhetoric did not become important in those circles until well past the 1970s.

In a Politico Magazine piece, Balmer traces the beginnings of the evangelical right’s political efforts to a court case in the late 1960s, when a group of Black parents in Holmes, Mississippi, filed a lawsuit against the U.S. Treasury Department in hopes of preventing segregated private K-12 schools from receiving full tax-exempt status. As the Internal Revenue Status targeted the tax exempt status of private, segregated primary and secondary schools, leaders like the late Jerry Falwell became involved in the fight. “In some states it’s easier to open a massage parlor than to open a Christian school,” Falwell is quoted as saying at the time in an article in The Nation exploring the preacher’s racist roots.

The racism exhibited by leaders of the evangelical right at the time was not limited to their efforts to preserve whites-only Christian academies. Tony Perkins, the aforementioned president of the Family Research Council, had no problem associating with the KKK when he served in Louisiana’s House of Representatives. He even spent time with David Duke, a former grand wizard for the white supremacist hate group.

“The religious right has its roots in racism, I’m sorry to say,” Balmer said. “So for this guy to kind of call on that trope is both ironic, but also fully compatible with the history of this movement.”

Heather Warren, a University of Virginia religion professor who studies American religious history, agreed with Balmer, adding that racism and Christianity were intertwined not just in evangelical movements, but in “hardcore KKK ideology.” Warren, who is also an Episcopal priest, said that in the 1950s and ‘60s, leaders in the religious right were fighting not to make America great again, but “to keep America Christian.”

“And Christian and white and democracy all went together,” she said. “They were all interchangeable. There was this way that it all added up to a white supremacy.”

So laws and ordinances banning discrimination based on sexual orientation and gender identity are a direct affront to democracy, Warren said, and an attack on democracy is synonymous with an attack on white Christianity and America, under this belief system.

“When Falwell was alive and writing, usually in his catalogue of phenomena and types of people who were eroding America and eroding American democracy, he’d often start off with homosexuals at the top of his list,” Warren said. “Feminists were close behind.”

It’s a convenient leap to make if you want to demonize the continued push for increased LGBT rights, which Porterfield seems to think are somehow wholly separate from the gay community. He clarified in his interview with Anderson that his original statement was an “anti-LGBTQ sentiment,” not an “anti-gay sentiment.”

Even before taking office, Porterfield made his positions on issues that directly impact the LGBT community clear. In a December interview, Porter condemned efforts to outlaw conversion therapy in West Virginia, a practice opposed by every major credible psychology or psychiatry organization. Porterfield called efforts to ban the practice “bigoted and discriminatory” and that the counseling practice should be protected as free speech.

Historically, conversion therapy methods have relied on tactics like castration, induced vomiting and electroshock therapy to “cure” LGBT people. While the unscientific and unethical therapeutic method has been banned or condemned in a number of states, including California and Washington State, New York is the only Appalachian state so far to outlaw it.

Porterfield’s comments, both before taking office and since, make it clear that he believes being criticized for bigotry is on par with a legacy of racist, sexist, homophobic and transphobic violence rooted in white supremacy and white Christianity. By making this comparison, he’s dismissing that Black and LGBT Americans have faced far worse than a few mean comments online.

The KKK was infamous for carrying out lynchings against Black Americans, a hate crime that often involves hanging but often also can include being burned alive or shot multiple times. The 1998 murder of Matthew Shepard’s, a gay college student from Wyoming who was beaten and left to die tied to a fencepost,is sometimes considered a lynching, and the history of lynching was painfully brought up for many Black LGBT Americans recently when Jussie Smollett, a Black gay actor, was assaulted by two men in Chicago who put a noose around his neck.

There’s hope, however, for Balmer in the form of younger white evangelicals who might not share Porterfield’s extreme beliefs.

“Not that his views are unique, and not that his vitriol is unique,” Balmer said. “But I think it’s changing, and much of it is generational.”

Balmer says young evangelicals are already showing they’re more concerned about issues like ending widespread hunger and poverty than whether someone is trans or attracted to a person of the same gender. Hopefully, he says, one day these young people will refuse to back other politicians like Porterfield and focus their efforts on finding solutions for struggling communities.

Tiffany Stevens (@tiffanymstevens) is an independent journalist living in Southwest Virginia. Their work focuses on the media, the LGBT community and Appalachia.

Continue Reading

Politics

West Virginia Lawmaker Faces Calls To Resign After Likening LGBTQ People To KKK, ‘Terrorist Group’

Published

on

West Virginia House of Delegates member Eric Porterfield during a recent floor session. Photo: Perry Bennett/West Virginia Legislative Photography

This story was originally published by the Huffington Post and is used here  with permission.

West Virginia lawmaker Eric Porterfield is facing calls to resign after a string of homophobic remarks, such as likening the LGBTQ community to the Ku Klux Klan and saying he would “see if [his kids] can swim” if they came out as gay.

Porterfield (R-Mercer), who is a born-again Baptist missionary and is blind, was elected to the state’s House of Delegates in November. He has continued to stand by his bigoted views, accusing the LGBTQ community of being a “terrorist group” that has “no care for diversity of thought.”

“The LGBTQ is a modern-day version of the Ku Klux Klan, without wearing hoods with their antics of hate,” Porterfield told a reporter with the Charleston Gazette-Mail on Friday. 

West Virginia House of Delegates member Eric Porterfield during a recent floor session. Photo: Perry Bennett/West Virginia Legislative Photography

He reportedly used the slur “faggot” in a committee meeting on Wednesday amid discussions over a proposed amendment that would restrict anti-discrimination protections for LGBTQ people. That amendment failed to pass, the Gazette-Mail reported.

Porterfield, responding to backlash against his comments on Saturday, repeated his views to Bluefield station WVVA, adding that if his young son or daughter came out to him as gay, he would “see if she can swim … then I’d see if he can swim.”

The West Virginia Democratic Party on Friday called for Porterfield’s resignation.

“West Virginia has no room for someone who expresses such hate. Let alone room for him to hold a public office where he is supposed to represent the people of West Virginia,” WVDP Chairwoman Belinda Biafore said in a statement.

“His hate-filled remarks and actions speak volumes and so does the Republican Party’s silence. The Republican majority’s leadership needs to condemn these actions. Their silence is complicit and the people of West Virginia deserve better,” she added.

Among the Republicans publicly condemning Porterfield’s words was Mercer County Commissioner Greg Puckett, who characterized the homophobic comments as contrary to what the Bible teaches.

“As a Commissioner within Mercer County, I do not condone, nor accept this behavior of anyone, let alone an elected official. Likewise, this form of antics in representation of my county is not inclusive to the people within,” Puckett said in a Facebook post.

Delegate John Shott (R-Mercer) also distanced himself from Porterfield’s views, calling them “much too extreme.” 

“I don’t accept his categorization of that group nor do I think it’s productive to call anyone names when you are trying to advance the goals of the party. It’s not a productive approach to solving problems,” he told the Bluefield Daily Telegraph. He added that Porterfield should learn to be “[discreet] with his words.”

Porterfield did not immediately respond to a request for comment on Monday.

This story was originally published by the Huffington Post and is used here  with permission.



Continue Reading

Politics

Fact-check: Has Unemployment in W.Va. Fallen Under GOP Governor?

Published

on

West Virginia Gov. Jim Justice holds a service dog onstage after announcing Monday, Jan. 7, 2019, in White Sulphur Springs, W.Va., that he will seek re-election in 2020. Photo: John Raby, AP Photo.

Unemployment has fallen across the country in recent years. But the West Virginia Democratic Party said in a recent tweet that it hasn’t fallen on Republican Gov. Jim Justice’s watch.

In a Jan. 9 tweet, the state party wrote, “FACT: Unemployment rate has not decreased since @WVGovernor took office. #wvpol #WVSOTS19″

Is that correct? We decided to check it out. (We reached out to a party representative but did not receive a response.)

Justice, elected as a Democrat in 2016, took office on Jan. 16, 2017. That month, the unemployment rate in West Virginia was 5.3 percent.

Justice became a Republican on Aug. 3, 2017. That month, the state unemployment rate stood at 5.2 percent.

And today? In the most recent month available, December 2018, the unemployment rate in West Virginia was 5.1 percent.

Is that a dramatic drop? No. But unlike what the tweet says, it is a decline.

It’s worth noting a limitation in the data, said Brian Lego, a research assistant professor at West Virginia University. Because West Virginia’s population is small, he said, the margin of error for the survey used to track the unemployment rate is big enough to produce uncertainty about small changes in the data, like those seen during Justice’s tenure.

“The change is statistically insignificant,” Lego said.

He added that regular revisions by the Bureau of Labor Statistics, which collects the data, could produce small changes that affect the comparison.Our ruling

The West Virginia Democratic Party tweeted, “FACT: Unemployment rate has not decreased since @WVGovernor took office.”

The state unemployment rate did, in fact, decline from 5.3 percent to 5.1 percent on Justice’s watch. That said, it was an exceedingly narrow decline — in fact, economists say that the margin of error for the survey in question leaves in doubt how big the decline was.

We rate the statement Mostly False.

This article was originally published by PolitiFact.

Continue Reading

Trending

100 Days

FREE
VIEW