11:34pm

Thu June 2, 2011
The Two-Way

Internal Review Scorned Massey Image and CEO

As we have thoroughly documented here in the last year, the company that owned the Upper Big Branch (UBB) coal mine in West Virginia has been thoroughly criticized by federal regulators, members of Congress, mine disaster investigators and mine safety experts.

But documents just unsealed by a West Virginia court show that an internal review at Massey Energy last year found serious problems with the company's leadership and image in the wake of the deadly explosion at the mine.

"The ability of the company to move past the tragedy of UBB, improve its safety and regulatory performance and establish positive relationships with constituencies required a new 'tone at the top,'" the review concluded, as it recommended in November the departure of then-CEO Don Blankenship.

That came 10 days before Blankenship suddenly announced his retirement. And it sharply contrasts with the public stance of the company and its board, which considered the UBB explosion a natural disaster and depicted Massey as a victim of overzealous regulators, crusading members of Congress, anti-coal activists and labor unions.

The review was conducted by a two-person "Advisory Committee" from the Massey Board of Directors, which is the target of lawsuits filed by several large institutional shareholders.

Sealed documents in the case were released publicly Thursday in response to a joint legal challenge brought by NPR and the Charleston Gazette. The review was generally described but not included in documents released last week.

The 12-page review is marked "HIGHLY CONFIDENTIAL" and lists a litany of problems the committee was assigned to investigate, including:

1. "Any failure by senior management or the Board," which contributed to the UBB explosion.

2. Retaliation against whistleblowers; an alleged corporate culture that put profits over safety; an "allegedly combative attitude toward Government regulators"; advance alerts of federal inspections; manipulation of injury reporting data; the rate of safety violations; and the pattern of appeals of safety citations.

3. Any failure by senior management or the Board to improve the safety culture at Massey after the 2006 fire at its Aracoma mine, in which two workers were killed and the company was criminally charged.

That's some assignment and it directly addressed the criticisms leveled at the company since the UBB disaster.

But in a summary of its activities dated December 20, 2010, the committee said it needed three more months at least to complete its investigation.

Still, the committee concluded, "the Company should visibly strengthen its commitment to safety," as it noted a litany of disasters, criminal prosecutions, safety failures and regulatory crackdowns. "The Company should not be satisfied with these results," the review says.

Remarkably, it also says it found nothing "inadequate or deficient" with Massey's safety programs.

The Committee then focuses on ways "to de-escalate the constant combat" with state and federal regulators. It casts attention to safety as a way to improve the company's image.

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