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OSM still reviewing financial disclosure from WV DEP’s Caperton

The Charleston Gazette-Mail

CHARLESTON, W.Va — More than two months after he took the job, West Virginia Department of Environmental Protection Secretary Austin Caperton’s disclosures about his personal finances are still under review by the U.S. Interior Department under the conflict-of-interest provisions of the federal strip mining law, according to records obtained under the Freedom of Information Act.

Caperton, a lawyer and a mining engineer, filed two separate financial disclosures with Interior’s Office of Surface Mining Reclamation and Enforcement, each listing different financial interests or business holdings. Copies of the forms, obtained from the OSM after the DEP refused to release them, indicate no one from the federal agency has yet signed off as having completed a review of Caperton’s filings.

“The review is ongoing,” confirmed Christopher Holmes, a press spokesman for OSM.

The 1977 Surface Mining Control and Reclamation Act prohibits any OSM employees and any personnel at state agency programs that enforce coal industry environmental rules from having “a direct or indirect financial interest in any underground or surface coal-mining operation.”

OSM rules and DEP procedures require all employees at the DEP to file a financial disclosure form so officials can be sure there are no prohibited interests in mining operations. Forms must be filed annually and include information for the previous year. The head of each state agency must review the forms for all of the state’s employees to ensure any conflicts are resolved. The same sort of review is done by the national director of the OSM for heads of state agencies like Caperton, under OSM regulations. So far, President Donald Trump has not named an OSM director. Longtime OSM employee Glenda Owens is serving as acting director.

Caperton, a former coal executive and energy industry consultant, filed his first financial disclosure with the OSM on Jan. 20, a week after he was appointed to the DEP post by Gov. Jim Justice and four days after Justice was inaugurated.

That form, called an OSM 23, listed one business entity in which Caperton indicated he had business interest: Dominion Aquaculture LLC, a Richlands, Virginia-based company that raises tilapia. Caperton marked that he was a consultant to the company and received a retainer. Caperton also marked on the form that none of the financial interests he listed “represents an interest in an underground or surface coal mining operation.”

The Jan. 13 press release announcing Justice had appointed Caperton to the DEP said tat Caperton was “currently serving as president of Caperton Inc., a strategic business consulting company.”

In a personal biography posted on his company’s website, Caperton said consulting clients were “primarily in the coal, energy and related fields.” Caperton was an executive at A.T. Massey Coal and at his family’s Slab Fork Coal. The website promoting his consultant business is still live, and it notes he has taken the DEP post and provides his new contact information, calling the move “a great honor at a very difficult time in the history of our state.”

On Jan. 23, the Gazette-Mail began inquiring the DEP about Caperton’s financial disclosure. On Jan. 31, DEP public information officer Jake Glance denied a request made under the state Freedom of Information Act. Glance said the financial disclosure form was covered by an exemption for “information of a personal nature such as that kept in a personal, medical, or similar file, if the public disclosure would constitute an unreasonable invasion of privacy.”

Then, on Feb. 6, Caperton filed a second OSM 23 form with the federal agency.

That form listed Caperton Energy Company as a business entity in which Caperton had an interest. The OSM blacked out the part of the form that described his interest in the company, but a separate blank on the form listed the nature of his employment or financial interest as “salary.” Caperton again marked that none of the financial interests he listed “represents an interest in an underground or surface coal mining operation.”

The OSM said the information withheld about Caperton’s interest in Caperton Energy was exempt from disclosure as “trade secrets and commercial or financial information.”

It was not entirely clear why Caperton did not include Caperton Energy Company on his initial OSM financial disclosure form. The instructions on the form state business entities and relationships that must be listed include “an interest as an employee, officer, owner, director, trustee, partner or consultant.”

Also to be included is any “continuing financial interest through a pension or retirement plan, individual retirement account, shared income, or other arrangement as a result of any current or prior employment” and “any financial interest through the ownership of stock, bonds, securities, or other arrangements, including trusts.”

Neither Caperton nor Glance responded to a request for comment on the situation.

Holmes, the OSM spokesman, said “in some cases” forms submitted to the federal agency aren’t always complete. Holmes said the OSM’s ethics officer “determined more information was required.”

Holmes did not respond to requests for a more detailed explanation. The OSM’s deputy ethics counselor Nicola Sanchez said she was not authorized to discuss the matter with a newspaper reporter.

The OSM provided copies of the two Caperton financial disclosures in response to a formal Freedom of Information Act request, after the agency’s press office had said the documents were confidential and would not be released or discussed publicly.

The Gazette-Mail asked for not just any OSM 23 forms Caperton submitted, but it also asked for copies of any documents representing the OSM’s review of those forms and any correspondence between the DEP and the OSM about the matter. The OSM said the only documents it had were the two financial disclosure forms.

Two days after filing his second financial disclosure with the OSM — and more than a week after the state’s legal deadline — Caperton filed a required financial disclosure Feb. 8 with West Virginia’s state Ethics Commission. Caperton filed that document after calling the commission for instructions on filing the form electronically following a query by the Gazette-Mail about why he hadn’t filed the required disclosure form.

Under the state Ethics Act, signed into law in 1989 by the DEP secretary’s cousin, then-Gov. Gaston Caperton, the Justice administration’s new cabinet secretaries were required to file their state financial disclosures by Feb. 1, a deadline emphasized by Ethics Commission Executive Director Rebecca Stepto in an email to those secretaries sent Jan. 24.

On his Ethics Commission form, Caperton reported at least 20 percent of his income last year came from the mining equipment sector. Caperton listed the mining equipment manufacturing firm A.L. Lee, which makes rock-dusting machines and other mining equipment, as a company where he was an officer or director.

Records from the state secretary of state’s office, though, do not list him as currently being an officer or director, and no records could immediately be located that list him as previously holding such a position.

In December, A.L. Lee’s mining equipment business was acquired by another firm, Strata Worldwide, according to a press release from Strata. Officials from Strata did not respond to a request for information about Caperton’s connection with Strata, A.L. Lee or any involvement he had in the acquisition.

The state DEP’s water pollution rules contain their own conflict-of-interest language.

Those rules state, “The secretary or his or her authorized representative who has or shares authority to approve all or portions of permits, either in the first instance or as modified and reissued, shall not be a person who receives or has during the previous two years received a significant portion of income directly or indirectly from permit holders or applicants for a permit.”

The rules defined “significant portion of income” as $5,000 or 10 percent or more of gross income for a calendar year, whichever is less. If the person is older than 60 and is receiving the money from a retirement, pension or other similar arrangement, then “significant portion of income” means 50 percent or more of gross personal income, under the rules.

DEP records indicate A.L. Lee has a water pollution permit issued by the state agency. The company received the individual water discharge permit for its facility in Lester in 2007, and in 2009 the facility switched to a general water pollution permit, according to DEP records obtained under the Freedom of Information Act.

Reach Ken Ward Jr. at

[email protected],

304-348-1702 or follow

@kenwardjr on Twitter.

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