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Kentucky Aluminum Plant Investor Is Russian Company Formerly Under US Sanctions

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Craig Bouchard speaks at a Braidy Industries launch event as KY Gov. Matt Bevin (right) looks on.

This article was originally published by the Ohio Valley ReSource.

Russian aluminum company Rusal announced Monday it plans to invest in a new Kentucky aluminum mill to be built near Ashland in eastern Kentucky. The $200 million investment in Braidy Industries is Rusal’s first U.S. project since the Trump administration lifted U.S. sanctions placed against the company.

Rusal had been sanctioned by the U.S. government because its major controller, Russian oligarch Oleg Deripaska, who has close ties to Russian President Vladimir Putin, faces accusations of “a range of malign activity around the globe” by Russia, according to the U.S. Treasury Department. Those actions include interference in the 2016 U.S. presidential election and meddling in neighboring Ukraine.

Deripaska also has close business ties to former Trump campaign chair Paul Manafort, who has been convicted of tax evasion and money laundering. Deripaska is suing the U.S. to have sanctions against him removed.

The Trump administration released Rusal from sanctions in January after the company reduced the ownership stake held by Deripaska. Congressional Democrats attempted to block the White House decision and passed legislation in the House that would keep sanctions in place. However, the bill fell short in the Republican-controlled Senate, where Majority Leader Mitch McConnell of Kentucky accused Democrats of trying to “politicize” the sanctions.

Braidy Bunch

According to a press release, RUSAL will earn a 40 percent share in the factory’s profits, and Braidy will keep the remaining 60 percent. The plant has also received $15 million in direct investment from the state of Kentucky. Gov. Matt Bevin cut a deal to attract Braidy to the state with that public money and additional tax incentives totaling more than $10 million.

As part of his reelection bid, Bevin has pointed to the Braidy development as evidence of job creation in an economically struggling part of the state.

“This is a seed that has been in the ground, the germination so often seems invisible to people,” Bevin said at an event over the weekend in Martin County, Kentucky. “But good things have been happening.”

The project is expected to cost more than $1 billion and employ over 500 people.

The Ashland project will produce rolled aluminum for the American auto and aircraft markets, and is the type of project President Donald Trump hoped to support with his tariffs on aluminum imports.

Braidy Industries CEO Craig T. Bouchard discussed the partnership at the New York Stock Exchange Monday morning.

“We’re really lucky and honored to have them as our partner in Kentucky,” Bouchard said of Rusal, adding that his company had chosen to partner with Rusal for its record of environmentalism.

We are going to lead the world in highest quality, lowest cost, and the least use of carbon from start to finish in the manufacturing process, and we’re changing the world,” he said.

The Ashland aluminum mill would be the first such plant to be built in the U.S. in 37 years, according to industry sources. Final agreements among the partners are expected to be signed later this year.

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A High-Speed Internet Boondoggle is Now a Campaign Issue in Kentucky

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Gov. Matt Bevin is pictured in 2015. Photo: Jacob Ryan

Candidates for governor of both parties are using Kentucky’s long-delayed and over-budget statewide internet project to bash Gov. Matt Bevin, following a jointly published report by the Courier Journal and ProPublica.

KentuckyWired — a bipartisan plan pushed by former Democratic Gov. Steve Beshear and Republican Rep. Hal Rogers — promised to bring improved broadband internet connectivity to the state’s farthest corners. But it is years behind schedule and more than $100 million over budget.

Bevin’s Democratic opponents in the governor’s race laid blame with the current administration.

“The governor has damaged the project with his lack of commitment to keep it on schedule,” House Minority Leader Rocky Adkins, D-Sandy Hook, said in an emailed statement. “In fact, it will cost the state more to get out of the contract than if we continue. In order to go the last mile and complete this project, we need to look at successful models in other states and bring new partners to the table.”

Representatives for Bevin and his technology chief, Chuck Grindle, did not respond to multiple requests for comment on the report, which highlighted dissent in the Republican administration’s approach to salvaging the troubled KentuckyWired project.

Democratic candidate and former state Auditor Adam Edelen, who has made improved broadband connectivity part of his platform in the governor’s race, said in an emailed statement that Bevin “doesn’t care” enough to fix the project.

“As governor, I will prioritize building a real system to provide broadband to the hundreds of thousands of Kentuckians who still lack access, whether in the hills of eastern Kentucky or Southern and Western Jefferson County,” Edelen said. “It must be done through partnership between the public and private sector, but that doesn’t mean pushing a half-baked plan that leaves taxpayers holding the bag.”

The campaign manager for Attorney General Andy Beshear, the son of the former governor, called for “working together across party lines.”

“As governor, Andy’s first step will be evaluating the KentuckyWired program in a nonpartisan way focused on both its costs and potential benefits for our families,” campaign manager Eric Hyers said in an emailed statement. “From there, he can keep what’s working and change what isn’t.”

A spokeswoman for Rogers, however, issued an emailed statement last week defending Bevin’s stewardship.

“With any public-private project of this magnitude, delays and challenges are to be expected,” the statement said. “Since Gov. Bevin inherited this project, he has worked diligently to comb through the unexpected problems and carefully balanced rising expenses with future benefits.”

Wednesday’s Courier Journal-ProPublica report underscored warnings that Beshear administration officials received about likely roadblocks.

Despite these, KentuckyWired moved ahead with what experts have said is an unrealistic three-year construction schedule for the project that saw the state accept most of the risk for the public-private partnership.

In his statement, Rogers described KentuckyWired as the “only path” to affordable, high-speed internet for his constituents in eastern Kentucky.

But state Rep. Robert Goforth, R-East Bernstadt, a challenger to Bevin for the Republican Party’s nomination for governor, disagreed.

In an interview with the Courier Journal, Goforth said Bevin should have killed the project years ago. He said Bevin has much to learn from a broadband project in Jackson County, which Goforth represents.

The Kentucky-based nonprofit Peoples Rural Telephone Cooperative used federal stimulus money to bring high-speed fiber-optic lines within reach of every home and business in Jackson and Owsley counties, the Courier Journal and ProPublica reported.

“If Jackson County can do it, the rest of Kentucky should be able to follow their example and be able to duplicate what they have done to be able to provide the fastest internet service to one of the most rural communities in Kentucky,” Goforth said. “We can do this.”

State Rep. Lynn Bechler, R-Marion, described as “marvelous” the job Peoples Rural and other similar cooperatives and rural providers have done.

He said he wished the Peoples Rural model could be followed in his area of western Kentucky, where residents such as Christy Hardison say they pay upward of $120 a month for unreliable satellite internet service, the only available option.

Bechler, co-chairman of the Program Review and Investigations Committee, which is investigating KentuckyWired, reiterated his call for a halt to the project.

To solve the problem of poor rural broadband access, Bechler proposed the creation of a state incentive program to encourage more projects like the one in Jackson County.

Keith Gabbard, head of Peoples Rural, told the Courier Journal that a state-level program, similar to Tennessee’s new Broadband Accessibility Grants, would encourage rural providers like his to expand service.

“The state doesn’t have to build their own network that way,” Gabbard said. “People that have already been doing that work can do a little more of it and would have an incentive to expand into areas that, it appears, the bigger companies are not going to build fiber to.”

Meanwhile, a longtime KentuckyWired skeptic, state Sen. Chris McDaniel, R-Taylor Mill, said he’s still waiting for the first section of the state-owned network to operate.

The project’s overseers said in December that the first loop, an area that includes Frankfort, Lexington, Louisville and northern Kentucky, was nearly ready to be turned on.

Phillip Brown, then head of the state authority in charge of KentuckyWired, promised “very good news” in the first quarter of 2019.

“I’m still waiting to see the press release on that happening,” McDaniel told the Courier Journal. “This thing is a mess and it’s going to continue to be a mess. I don’t know where it ends.”

This article was produced in partnership with the Louisville Courier Journal, which is a member of the ProPublica Local Reporting Network. It was originally published by ProPublica.

This story is part of an ongoing investigation into what went wrong with KentuckyWired. Sign up for the Miswired newsletter to receive updates in this series as soon as they publish.

Reach reporter Alfred Miller at amiller@gannett.com or 502-582-7142. Follow him on Twitter. Support strong local journalism by subscribing today: courier-journal.com/subscribe.

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DOJ Files Suit Against W.Va. Governor’s Family Companies Over Mine Violation Debts

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West Virginia Governor Jim Justice at a bill signing ceremony in 2019. Photo: Jesse Wright/West Virginia Public Broadcasting

This article was originally published by the Ohio Valley ReSource.

The U.S. Department of Justice has filed a civil lawsuit against 23 coal companies owned by the family of West Virginia Gov. Jim Justice, seeking more than $4.7 million in unpaid fines and fees for mine safety and health violations.

The delinquent fines were brought to light by investigations by NPR and the Ohio Valley ReSource as the Justice companies’ overdue debts ballooned from just under $2 million in 2014 to more than $4 million in 2018.

The lawsuit was announced Tuesday by U.S. Attorney Thomas Cullen of the Western District of Virginia and David Zatezalo, the head of the Mine Safety and Health Administration, or MSHA.

In a news release, the DOJ said the 23 companies named in the lawsuit incurred nearly 2,300 mine safety and health violations over the last five years. According to a 2019 financial disclosure filed with the West Virginia Ethics Commission, all 23 companies are owned by the Justice family.

The civil complaint says the companies failed to pay nearly $4 million in penalties associated with those violations.

The DOJ said the Justice-owned companies ignored multiple demands by MSHA, the Department of Treasury, and the U.S. Attorney’s Office to pay the delinquent debts.

“As alleged in the complaint, the defendants racked up over 2,000 safety violations over a five-year period and have, to date, refused to comply with their legal obligations to pay the resulting financial penalties,” Cullen stated in the news release. “This is unacceptable, and, as indicated by this suit, we will hold them accountable.”  

“MSHA stands with the Department of Justice in seeking to hold mine operators responsible for the penalties they owe,” Zatezalo said in the same release. “Failure to pay penalties is unfair to miners who deserve safe workplaces, and to mine operators who play by the rules.”

Representatives for the Justice companies and the governor’s office did not immediately respond to a request for comment.

ReSource Investigation

Last month, an Ohio Valley ReSource analysis of federal mine safety data found that the Justice family companies owed $4.3 million in delinquent debt for mine safety violations. That meant the Justice companies had by far the highest delinquent mine safety debt in the U.S. mining industry. And it was also far more than the companies owed when Justice ran for governor in 2016, when he pledged to make good on such debts.

In 2016, an investigation by NPR, the ReSource and partner station West Virginia Public Broadcasting found that Justice’s mines owed $2.6 million in overdue mines safety fines, as well as millions more in unpaid tax debt.

Then-candidate Justice said those debts would be paid.

“When it all really boils right down to it we’re taking care of them,” Justice said at a rally announcing his gubernatorial bid. “We’ll absolutely y’know, take, make sure that every one of them is taken care of.”

This story was updated on May 8 at 4:30 p.m. to include additional information.

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Kentucky’s Secretary of State Turns Up Heat in Fight With Elections Board

Kentucky Secretary of State Alison Lundergan Grimes Photo: Win McNamee/Getty Images

Alison Lundergan Grimes removed the State Board of Elections’ executive director, a longtime critic of her actions, from a national committee on improving the country’s voting systems.

Kentucky Secretary of State Alison Lundergan Grimes escalated her fight with the State Board of Elections last week when she removed its executive director from a national committee devoted to improving the country’s voting systems and better protecting them from cyberattacks.

Grimes took the action against the executive director, Jared Dearing, just days before he was expected to travel to Memphis, Tennessee, to participate in a meeting dealing with upgrading the voting machines and technology used by states across the country. The meeting is being held by the federal Election Assistance Commission’s Standards Board, and is widely considered to be the most significant meeting of the EAC in years.

Dearing has been a longtime critic of actions taken by Grimes, by law the state’s top elections official, and last year he filed a nine-page complaint with the Executive Branch Ethics Commission accusing Grimes of creating a hostile work environment and overstepping her authority. Dearing’s complaint helped prompt a number of investigations into Grimes’ performance and played a role in the state legislature’s decision last month to strip Grimes of some of her authority over state elections.

Grimes has steadfastly denied the claims against her, calling them politically motivated. Grimes is a Democrat, as is Dearing. In a statement, Grimes’ spokeswoman, Lillie Ruschell, said appointments to the Standards Board remain at the secretary’s discretion, and she made new appointments using “the same routine practice as previous appointments over the past eight years.”

Ruschell said the decision to remove Dearing was based on his “absence from the 2018 EAC meeting.” In a statement, Dearing said he skipped last year’s meeting at the direction of Grimes.

“I was unable to attend the 2018 meeting because the secretary did not give me approval to travel, and at that time the secretary approved all travel requests,” he said. “The Standards Board meetings are an important function of securing the commonwealth’s election systems. The State Board of Elections will continue to do everything in our power to secure our systems whether or not we are in attendance.”

This will be the first time in the history of the EAC’s Standards Board that Kentucky will not be represented by an SBE director. Trey Grayson, a former secretary of state in Kentucky, said “It’s puzzling to see this deviation from Kentucky’s long-standing practice of appointing a staff member from the SBE to this board. And the timing of Dearing’s removal, given his outspoken criticism of her, is curious.”

Dearing was widely expected to be an active participant in the Memphis meeting, and he had been consulting with elections officials across the state and country in preparation. He is being replaced by Assistant Secretary of State Erica Galyon, who has been largely absent from national conversations on voting machines.

Grimes also removed Madison County Clerk Kenny Barger from the Standards Board and appointed Johnny Collier, the clerk from Jessamine County. Barger has also been an outspoken critic of Grimes. Ruschell said Barger was removed because of his lack of “communication” about the meeting. He did not respond to a request for comment.

Collier also did not respond to a request for comment, but his office indicated he would not attend the meeting in Memphis family issues. This has left Grimes’ office scrambling to find another elections official only one day before the meeting begins.

Neither Barger nor Dearing’s term on the Standards Board officially ends until the end of the month, making it unclear to Kentucky’s elections officials why Grimes chose to make appointments only days ahead of a crucial meeting.

“This meeting is huge,” said Gabrielle Summe, the clerk in Kenton County, who is also the president of Kentucky’s statewide clerks association. “It decides the machines Kentucky will be able to buy.”

Summe said Grimes’ replacement of Barger may have been improper. She said national regulations required that “local election officials” select one of their own for the Standards Board. Summe said the Kentucky County Clerks Association was neither told that Grimes intended to dismiss Barger nor consulted about his replacement. The association is taking steps to prevent Barger’s removal. said the KCCA had never before complained about the appointment process.

“There’s no vacancy,” Summe said. “There’s no reason to replace him and he’s got at least a little more experience with the process.”

According to federal and state officials, last September Dearing was in the process of being approved for a security clearance when Grimes abruptly asked the Department of Homeland Security to halt the process. The move came only weeks after Dearing first issued his public grievances with Grimes.

In her statement, Ruschell did not explain why Grimes halted the process but said security clearances were at the secretary’s discretion.

In pushing back against the legislation that reduced her powers over state election matters this year, Grimes had argued that she alone had the security clearance necessary to respond to real or potential threats to election security in the state. In doing so, she failed to mention she had played a role in making sure members of the SBE lacked such clearances.

“At a time when election security is a top concern for our nation, our Republican majority wants to remove the only member of the State Board of Elections with a National Security Clearance from having a voice in protecting Kentucky, placing the process solely in the hands of unelected bureaucrats appointed by the Governor,” Grimes said in a statement last month.

After the 2016 election, DHS allowed the “chief elections official” in each state to apply for a security clearance and to sponsor the applications of two appointees in order to streamline communication between the federal government and the states.

The clearance allows DHS to quickly communicate threats to Kentucky’s elections infrastructure. Without the clearance, Dearing would likely not be among the first to know about imminent risks. The SBE is largely responsible for the day to day management of elections.

Officials indicated the SBE has expressed its intention to ask for additional clearances to be given to its members now that legislation has given the board clearer authority. It is likely this process will move forward.

EAC spokeswoman Brenda Soder said the general counsel is reviewing Grimes’ new appointments to the Standards Board “to determine the right course of action for all involved” and that a decision on how to move forward will be guided by relevant federal law.

“This will have a huge impact on the way our state is run,” Summe said. “We need to keep the people there who should be there.”

Update, April 11, 2019: The Election Assistance Commission rejected Kentucky Secretary of State Alison Lundergan Grimes’ attempt to replace one of Kentucky’s representatives on the commission’s Standards Board. The commission said Grimes lacked the authority to replace Kenny Barger, the local elections representative serving on the Standards Board. Grimes had tried to replace Barger in the days leading up to a major conference on voting machine reform.

This article was originally published by ProPublica.

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