Donald Trump won the presidency in part by mobilizing white working-class voters, including coal miners. But his choice to run the agency that oversees mine safety has quietly taken a series of steps — one of them possibly illegal — that could gut the most powerful tool regulators have to protect miners from companies that expose them to deadly working conditions.
And the company benefiting from one unprecedented recent move is part of the business empire of a Ukrainian oligarch who hired former Trump campaign manager Paul Manafort, now a convicted felon.
The head of the agency pushing these changes is former coal company executive David Zatezalo, who was appointed late last year to run the federal Mine Safety and Health Administration. Previously, he chaired a coal industry group and ran a coal company that was repeatedly cited for safety violations.
Under his leadership, the agency has taken steps that undercut enforcement of the so-called “pattern of violations” rule, which enables regulators to mete out strict penalties to unsafe operators.
In his most recent move, Zatezalo released Pocahontas Coal Company from pattern of violations status in a settlement agreement that one commissioner of an independent federal agency called an “illegal act” based on “the administration’s corrupted reading of the law.” The ultimate owner of the West Virginia mining company is Ukrainian billionaire Rinat Akhmetov, who has backed that nation’s pro-Russia political party.
The mine safety agency refused to answer questions about who participated in settlement negotiations or whether Akhmetov’s ownership played any role.
Pocahontas Coal’s Affinity mine in West Virginia was placed on pattern of violations status in 2013, a few months after two miners died there in less than two weeks.
Meanwhile, the trade association Zatezalo chaired until 2014 is suing the agency he now runs in an attempt to invalidate the pattern of violations rule entirely. Under the Obama administration, the agency defended the rule in court, but, under the Trump administration, it has reversed course and is negotiating a settlement with the industry groups. Zatezalo has declined to recuse himself from participating in those talks.
The settlement with Pocahontas Coal was filed under seal but became public after commissioners at the Federal Mine Safety and Health Review Commission asked why secrecy was necessary. Rather than provide an explanation, the agency and the company lifted the seal on the documents.
The commission ultimately allowed the settlement, but Commissioner Robert Cohen dissented, calling the deal an "unlawful agreement" that could substantially undermine “the most powerful tool for protecting the lives of the nation’s miners."
A Mine Safety and Health Administration spokesperson said the agency “entered into this settlement at the direction of Assistant Secretary David Zatezalo, and upon the advice of the career associate solicitor.” In a statement to BuzzFeed News, Zatezalo said, “In litigating this matter, I believe this was the strongest enforcement action that would withstand judicial scrutiny.” The spokesperson refused to address Cohen’s conclusion that the agency had no legal authority to lift a pattern of violations designation in a settlement.
Former Solicitor of Labor Patricia Smith called the move “shocking” and “illegal.” The head of the Mine Safety and Health Administration under Obama, Joe Main, said the dubious settlement could undercut “the biggest disaster-prevention action taken” during the last 40 years.
Agency officials have credited the pattern of violations authority with helping to reduce injuries and prevent catastrophes. Zatezalo himself, under questioning from members of Congress earlier this year, said it “has been effective” and “has been able to reduce repeat violators.”
Previously, Zatezalo was nearly on the receiving end of the pattern of violations sanction. While he was chief executive of Rhino Resources, the company twice received warnings from regulators that one mine’s poor safety record could lead to the issuance of a pattern of violations notice.
Representatives for the company controlled by Akhmetov, Metinvest, and for its subsidiary that owns Pocahontas, United Coal Company, did not respond to requests for comment. In a recent press release about the settlement, United Coal said it had made improvements that significantly reduced violations. “This is a first class mine that operates with high standards and true professionalism,” CEO John Schroder said.
The agency's pattern of violations authority dates back to 1977. Congress intended it as a powerful deterrent: Once a mine was put on notice, every time an inspector found a serious safety violation, the company was required to stop production and pull workers out of that area of the mine until the hazard was corrected, potentially causing costly shutdowns.
A 2010 report by the Labor Department’s Office of Inspector General, however, found that the agency never once had successfully used this authority. The sharply critical report pointed to loopholes in the agency’s rule that allowed companies to avoid sanctions, and it recommended regulatory changes. Because of agency errors, one mine that should have gotten a warning letter in 2009 never did, the inspector general found. Less than a year later, that mine — Massey Energy Company’s Upper Big Branch mine — exploded, killing 29 miners in the worst coal mine disaster in 40 years.
In response to the report, the agency issued a new rule in 2013 that closed gaps in the previous version. The following year, the agency issued a press release that credited the rule with helping to significantly reduce violations and injuries at mines. The head of the agency at the time, Main, called the rule “a game changer in mine safety and health culture,” and said that the reforms “have sent a message that chronic violator behavior will no longer be tolerated and elevated the safety culture in the nation's mines.”
One of the first pattern of violations notices the agency sent, in October 2013, went to Pocahontas Coal. Earlier that year, the company’s Affinity mine had experienced two fatal accidents separated by less than two weeks. In one, a 44-year-old miner died after being hit by machinery. In the other, a 43-year-old miner was crushed because a piece of equipment had been tampered with, disabling a safety switch. This allowed miners to work faster but increased the risk of a deadly accident, a section foreman who worked at the mine until a few months before the accident told BuzzFeed News. The miner, who spoke on the condition of anonymity because he feared retaliation, said he saw equipment — including the machine that caused the fatal accident and others — that had been jury-rigged to bypass safety controls during his time at the mine.
When inspectors began issuing citations that required temporary shutdowns, Pocahontas challenged them before the Federal Mine Safety and Health Review Commission and argued that regulators had unfairly and wrongly imposed the pattern of violations designation on the company in the first place. In a 2015 decision, an administrative law judge rejected Pocahontas’ arguments and found the designation valid.
The company appealed, and the case appeared to be heading toward a decision by the appellate body of commissioners. This July, however, both Pocahontas and the Labor Department filed motions notifying the commission that they had reached a settlement agreement.
In the settlement, the Mine Safety and Health Administration agreed to “immediately terminate” the pattern of violations notice. The company’s filing described the settlement as a negotiated “compromise,” but, aside from agreeing to drop its appeal, it is unclear what, if anything, Pocahontas conceded in return for the agency’s lifting of its most powerful penalty.
The larger problem with the settlement agreement, however, is that the law doesn’t allow regulators to lift the pattern of violations designation in a settlement at all, Cohen wrote in his dissent. In a motion, the Labor Department asserted that it could remove mines from pattern of violations status as it deemed fit. Cohen called this a clear violation of a 40-year-old law.
One reason for the designation’s deterrent effect is a stricture imposed by Congress in the 1977 law: To have it lifted, a mine had to undergo a complete inspection without receiving any violations deemed “significant and substantial,” meaning the violation was reasonably likely to cause a serious injury or illness.
There is no evidence that Pocahontas’ Affinity mine had ever achieved that, Cohen wrote, so signing off on the settlement “only provides cover for an unlawful agreement by the current administration.”
In fact, the mine has continued to receive citations for significant and substantial violations throughout this year, including one issued less than a week before the settlement became final. The mine received two more of these serious violations in the two weeks after the agreement went through. In both, inspectors cited problems that could lead to rock falls and similar accidents — the same hazard that inspectors had repeatedly cited in the past, triggering the pattern of violations designation.
The settlement also could have broader implications. It “sends the dangerous message that an operator who has chronically disregarded safety, thus gaining an unfair advantage over safer competitors in the process, may nevertheless obtain reprieve from the Mine Act’s heaviest sanctions by the grace of a friendly administration no longer committed to enforcing those sanctions,” wrote Cohen, who was appointed to the commission by Obama and whose term ended shortly after he wrote the dissent in late August.
Mine safety advocates also have concerns about Zatezalo’s role as head of the agency that is negotiating the potential settlement of the industry lawsuit challenging the 2013 regulatory reforms.
They point to his time as chief executive of Rhino Resources — during which the company received two letters from regulators warning that one of its mines was at risk of being placed on pattern of violations status — as well as his connections to some of the industry groups pursuing the lawsuit.
Zatezalo previously served as chair of the Ohio Coal Association and the Kentucky Coal Association, both of which are plaintiffs in the case. The ongoing suit is the second attempt by these organizations to invalidate the rule. Their first try began in 2013 and played out while Zatezalo chaired the Kentucky Coal Association.
A court dismissed that case for lack of jurisdiction, and, in December 2014, the trade groups filed much the same lawsuit in a different court. It is that legal challenge that Zatezalo’s agency now is seeking to settle.
In response to questions from lawmakers earlier this year, Zatezalo said he had resigned as chairman of the Kentucky Coal Association on November 14, 2014 — one month before the organization filed the ongoing lawsuit.
Zatezalo told lawmakers that the Labor Department’s ethics counsel had informed him that appointees were not allowed to participate in actions involving organizations where they had worked during the previous two years. Because he retired in 2014, Zatezalo said, “I am not required to recuse myself from matters involving” the Kentucky Coal Association.
An agency spokesperson declined to say what role Zatezalo was playing in the ongoing the settlement talks.
Smith, who reviewed potential conflicts as the top Labor Department lawyer during the Obama administration, said she would have recommended that Zatezalo recuse himself. “If it was strictly legal but it looked shady, we didn’t want to do it,” she said.