A West Virginia Newspaper is in Bankruptcy. The Powerful Coal Industry Celebrates.

 

 

By Steve Mufson

February 16, 2018 - One day after the Charleston Gazette-Mail declared bankruptcy, coal industry attorney Robert McLusky made light of the newspaper’s plight.

Speaking at a West Virginia mining symposium Jan. 31, McLusky told the hundreds of executives there that he was sorry that the Gazette-Mail’s hard-hitting coal correspondent Ken Ward wasn’t there. Playing off the possibility that reporters would get “pink slips,” McLusky held up a pink sheet of paper on which he had printed Ward’s name and a notice of potential layoffs at the newspaper.

The crowd laughed.

McLusky later called Ward to apologize. “I took a shot in front of a pro-coal audience that I regret, that I shouldn’t have taken,” he said in an interview.

Yet McLusky’s comments betrayed the ill will between the coal industry, which has dominated the economy and politics of West Virginia for the better part of a century, and the state’s premier newspaper, the feisty Gazette-Mail, which has played an important role in checking the industry’s power.

The Gazette-Mail hasn’t won many friends in coal country, where executives worry more about mining jobs than they do about the 210 jobs in danger at the Charleston newspaper. McLusky said: “I think it’s safe to say that the coal industry as a whole does not view the Gazette as giving them balanced coverage.”

Others see it differently. “It has been the voice of reason in our state,” said Davitt McAteer, a former head of the Mine Safety and Health Administration who led an independent investigation of the Upper Big Branch Mine disaster. “When you have a one-horse economy as West Virginia is and has been, the fact that there’s one paper willing to not be a lap dog for that industry” is important, he said.

The incident at the mining conference — which was reported by industry news publication S&P Global correspondent Taylor Kuykendall — lasted just a moment. But over the past century, newspapers and coal mining companies have grown rich and now poor together, both victims of new technologies and broader changes in the economy. And both are hoping for survival, if not revival.

The Gazette-Mail will probably be bought by Ogden Newspapers for $11 million. The bankruptcy court will decide how to divide that among creditors, who are owed more than $31 million. Nearly half that amount, $15 million, is owed to United Bank, and $12 million is owed to the federal Pension Benefit Guaranty Corporation.

The Ogden group owns more than 40 newspapers from New York to Hawaii.

The Appalachian coal industry, whose biggest companies recently emerged from their own bankruptcies, is counting on help from President Trump. The president campaigned on the slogan “bring back coal”; a sign at one campaign stop read: “Trump digs coal.” In office, he has vowed to bring regulatory relief and to handicap rivals in the natural gas and renewable energy industries.

If the future of the Charleston Gazette-Mail is cloudy, so is that of the state’s coal miners. Despite Trump’s promises of a turnaround for Appalachian coal miners, the amount of coal burned by power plants dropped 2.8 percent in 2017. Metallurgical coal is doing better, but overall coal output is stagnant and appears headed for further declines.

To understand the change in fortune in the West Virginia coal fields, just look to Don Blankenship, the former Massey Energy chief executive who went to prison for conspiring to violate federal safety regulations after the Upper Big Branch accident killed 29 miners in April 2010. Blankenship finished his one-year sentence last year, and he is now running for the U.S. Senate.

Blankenship faces two tough opponents. He must defeat state Attorney General Patrick Morrisey in the GOP primary and then take on Sen. Joe Manchin III (D).

There was little love lost between Blankenship and Ward, especially after the Upper Big Branch Mine disaster. In the trial after the accident, prosecutors presented a damning summary of concerns from a safety expert at Massey. The memo, Blankenship said, was “worse than a Charleston Gazette article.”

Yet the celebration of Ward’s demise might be premature. Ward — who in December wrote about the Trump administration’s efforts to reconsider a rule meant to reduce miners’ exposure to coal dust that causes black lung disease — occasionally posts items on his “Coal Tattoo” blog. And he has a one-year deal with the independent ProPublica news organization, which is reimbursing the Gazette for Ward’s salary while Ward reports on the decline of coal and rise of natural gas in the state.

“No matter who ultimately takes control, we look forward to working with Ken Ward on what we think is a very important story,” Stephen Engelberg, ProPublica’s editor in chief, said in an email.

The new owners might also choose to keep Ward, who has worked for the Gazette since 1991. “It is the only place I’ve worked and the only place I’ve wanted to work,” he said.

Ward is something of an institution at a time when institutions are in peril. A native of West Virginia’s Mineral County, he started off as an intern covering a strike at Pittston Coal and has covered the industry almost continuously since. He even has kind words for McLusky, calling him “a very talented lawyer” who in the past “helped me understand his clients’ point of view.”

“No coal industry lawyer or anyone else will make decisions for us in the hiring of newsroom staff,” said Robert Nutting, chief executive of Ogden Newspapers. Nutting, great-grandson of the founder of the Wheeling News, said that if the court lets him move ahead with the purchase, he would take “fresh looks” at the paper, but he added that the “tremendously talented newsroom team” was “part of the appeal to us.”

From its building and printing presses in downtown Charleston, the Gazette has been a fixture in state politics for more than a century. Founded in 1873, the paper was bought by the Chilton family in 1912. After a term in the Senate, businessman-politician W.E. Chilton became publisher.

His grandson, W.E. “Ned” Chilton III, who ran the paper from 1961 until his death in 1987, made the paper a force for reform and coined the phrase “sustained outrage” to describe the paper’s spirit. Under him, the paper became a voice for strip-mining reform.

One of the paper’s star reporters, Paul Nyden, took on the industry over mountaintop removal, safety violations and tax scams. Nyden, who died in January, revealed through his reporting how the coal industry had built a maze of shell companies to escape liabilities for pensions, health benefits and environmental cleanup.

Chilton also did battle with Gov. Arch A. Moore Jr., who in 1990 was convicted on federal corruption charges of taking more than $500,000 from state coal interests.

“The paper long before me has tried not just to be a champion of a powerful local industry but to be a watchdog over” it, Ward said. “It is easy to champion local institutions that provide jobs and do all the things local institutions do to make communities viable and livable. But it is also important for newspapers to play a role in ferreting out things that are not in the public interest.”

“It’s heartbreaking for me to lose something that’s been such a part of my family for so long,” Susan Chilton Shumate, Ned’s daughter and current publisher of the Gazette-Mail, said. She used to go with her father to the building on weekends. She said she is proud of the paper’s record of reporting on environmental issues, schools and safe work environments.

“We know that the coal industry is a vital part of West Virginia,” she added. “They employ a lot of people.” Indeed the decline of the coal industry hurt the paper’s help-wanted ad section.

However, she said, “there are issues you have to cover. Sometimes they don’t like us, sometimes they don’t mind us.”

The wave of optimism about a possible coal rebound after Trump’s election has already faded. According to a poll conducted by Orion Strategies and released in January, Trump, who won 68.5 percent of the vote in West Virginia, holds just a 51 percent approval rating there now. The live-interview telephone survey of 365 respondents was conducted among likely voters.

When asked whether they believe that the president is bringing coal jobs to the levels he promised during his campaign, 49 percent of respondents said no.

In 2017, the job total for mining and logging in the state inched up to 21,300, according to preliminary data. That equals 2.9 percent of the jobs in the state.

More cuts may be coming. A new report by the consulting firm BDO says that by 2020, robots will replace more than half of coal miners — and cut mining accidents by 75 percent.

Yet at the recent industry conference in Charleston, McLusky wasn’t the only one celebrating its prospects.

“The good news is I’m with the federal government, and I’m here to help,” Douglas A. Matheney, special adviser to Energy Secretary Rick Perry, said at the conference. Matheney earlier worked for the coal industry, the National Mining Association and the Koch-backed Americans for Prosperity before joining the Trump campaign in Ohio in 2016.

 

“I went to Washington, D.C., for one purpose, and that was to help create coal jobs in the United States,” he said, according to a report by S&P Global. “That’s my total purpose for being there. I’m not a researcher. I’m not a scientist. I’m an advocate for the coal industry.” 

 

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