Gov't Seeks $16M in Mine Safety Fines

Kentucky mine operator Stanley Osborne has accumulated more than $200,000 in safety fines since the 1980s, but the federal government has not been able to collect the money.

In a new approach, the Mine Safety and Health Administration filed suit against Osborne this month. "We just can't be chasing people around for these collection cases when they should be paying their civil penalties," said Thomas Mascolino, deputy associate solicitor at the Labor Department.

MSHA, part of the Labor Department, was owed more than $16 million in delinquent fines at the end of last year, said agency spokesman Dirk Fillpot. More than $11 million was for violations at coal mines.

The problem isn't new, but it has gained attention following mining accidents that have left 21 miners dead so far this year.

West Virginia lawmakers have asked the Government Accountability Office, the investigative arm of Congress, to look into how the mine agency assesses and collects fines.

"It is critically important that penalties for serious violations be painful," the lawmakers said in a letter to the GAO.

But critics wonder how safety fines can be painful when they can go uncollected.

"The payment of fines assessed by MSHA is essentially voluntary," said Wes Addington, a lawyer at the Appalachian Citizens Law Center, which is based in Prestonsburg, Ky., and represents miners in discrimination cases.

Addington recently analyzed fines levied against companies in Kentucky — the nation's third-largest coal producer — and found there were one or more years during the past decade in which one-third of the state's underground mines paid little or none of their fines.

Fillpot said MSHA has collected 80 percent of the fines it has assessed in the past decade.

He said the agency first tries to collect the fines and after 180 days asks the Treasury Department to get involved. Treasury can ask collection agencies to go after the fines.

If an operator cannot be found, goes out of business or doesn't have the money, MSHA can write the debt off. The Internal Revenue Service can consider the money part of the operator's earned income, meaning it is taxable.

"The process needs to change," said Stephen Webber, who headed the mine agency's assessments office at the end of the Clinton administration and for a few years under the Bush administration.

"If mine operators are not paying their civil penalty assessments, they're not going to have the right attitude toward health and safety," Webber said. "They'll just get another assessment and not pay it."

Webber said he suggested to Labor Department lawyers that they shut down mines that had delinquent fines: "That would have an effect." But the idea was rejected, he said.

If a coal operator isn't fixing the problem for which he is cited, MSHA can shut down the part of the mine in question, said Mascolino. But he said the agency can't take that action just because fines haven't been paid.

"Our power to shut a portion of a mine is always directed to the finding of a current existing health and safety violation," he said.

Another option Webber supports is creation of a system by which mine operators would have to pay outstanding fines to renew permits. West Virginia has such a law, ensuring the state is paid, he said.

There is no similar federal permit system, Mascolino said.

"They don't have it, but they need it," said Webber, who thinks Congress ought to mandate the change.

In the case of Osborne, who has operated several mines in eastern Kentucky, the agency didn't go after old fines but asked the court to make Osborne post a bond for payment of future fines.

Mascolino said the goal is to make other operators think twice about ignoring fines.

"That's what this case is about," he said, adding that the legal strategy has been developing since last year, before the recent spate of mine accidents.

Osborne couldn't be reached for comment on the new suit. But he offered an explanation on the unpaid fines during a worker discrimination case last year, saying, "I don't have the money."

Miner representatives are skeptical, noting coal prices are up.

"Those operators that do not pay their fines in a timely manner, they should not be able to operate," said Dennis O'Dell, top safety expert at United Mine Workers of America. "They're making all kinds of money."