The Times West Virginian

West Virginia

July 6, 2012

Feds: Ex-Massey investors could benefit from delay

By Vicki Smith Associated Press

MORGANTOWN — To protect the ongoing criminal probe of the Upper Big Branch mine disaster, federal prosecutors want to withhold until January evidence that they say could eventually help former shareholders suing Massey Energy.

U.S. District Judge Irene Berger hadn’t ruled on the request by midday Friday.

In a joint filing with the plaintiffs and defendants earlier this week, however, Assistant U.S. Attorney Steve Ruby said he doesn’t want to divert his investigators’ time away from the criminal investigation to compile evidence for a civil case.

Allowing the Department of Justice to withhold evidence until January won’t harm the investors’ case, Ruby said. “On the contrary, there is a good chance it will improve, perhaps substantially.”

Investors led by the Massachusetts Pension Reserves Investment contend that Massey repeatedly lied about its safety record, artificially inflating stock prices between 2008 and 2010. They say shareholders had no idea of the company’s abysmal record and history of violations until after the southern West Virginia mine exploded, killing 29 men in April 2010.

Ruby also acknowledges in the court document that prosecutors may be looking at the top of the corporate ladder: The filing says some individual defendants in the civil case “may be or may become” targets of the criminal probe.

Among those individual defendants are former chief executive officer Don Blankenship, his successor, Baxter Phillips, and former chief operating officer Chris Adkins.

Massey was bought last year by Virginia-based Alpha Natural Resources.

Last month, Berger delayed the sentencing of former Upper Big Branch superintendent Gary May until October, to give prosecutors more time to develop his cooperation. May pleaded guilty earlier this year to conspiracy to defraud the federal government and is the highest-ranking mine official charged so far in the blast.

Ex-security chief Hughie Elbert Stover, meanwhile, is appealing his conviction and a three-year sentence for lying to investigators. His case will be argued in September.

Ruby argues that sharing evidence his team has gathered so far would tip prosecutors’ hand, revealing strategy and letting the defendants “shape the record extensively for their own ends.” That, in turn, might make the investigation and possible prosecutions more difficult.

The evidence of concern, he said, includes “certain non-business records” and depositions of potential witnesses who may be cooperating with the government’s investigation.

The investors indicated they would prefer not to delay their case. Massey’s lawyers, meanwhile, offered no objection.

 

Text Only
West Virginia
Featured Ads
House Ads