By KEN WARD JR.
CHARLESTON, W.Va. — Regular financial disclosures to investors about the performance of publicly traded corporations would not include details about mining company safety violations or worker deaths, under a bill that is sponsored by Rep. Alex Mooney, R-W.Va., and that advanced this week out of the House Financial Services Committee.
Committee members, on a party-line vote, approved the legislation that would repeal the disclosure requirement that was added to federal securities law after the deaths of 29 miners at Massey Energy’s Upper Big Branch Mine and amid questions about whether Massey investors were misled about the company’s safety practices.
In a prepared statement, Mooney depicted the legislation as “one part of our ongoing efforts to revitalize the coal industry and bring jobs back to West Virginia.” During a committee meeting Wednesday, Mooney thanked the U.S. Chamber of Commerce and the National Mining Association for sending letters in support of the legislation.
“This is a small, but significant way to get rid of duplicative paperwork and allow people to be employed in these mines and feed their families,” Mooney said.
The United Mine Workers union opposes the bill, saying that it “takes us back to the days where companies like Massey could once again hide health and safety issues from their investors and the general public.”
“Failing to disclose adverse safety or health conditions could have a significant impact on investors, especially if there is a halt in production because a company failed in its obligation to protect its workers,” UMW President Cecil Roberts said. “Another tragic disaster, or even the shutdown of a mine by an inspecting agency for failure to follow the law, will cost shareholders significantly.”
The requirement at issue, part of the Dodd-Frank financial reform bill passed after the 2007-08 financial crisis, forced mining companies to include in their periodic financial reports to shareholders and the U.S. Securities and Exchange Commission information about the numbers of serious safety violations, mine closure orders and other enforcement actions, and about miner deaths.
The language was added by then-Sen. Jay Rockefeller, D-W.Va., and was among the last legislative actions taken by the late Sen. Robert C. Byrd, also D-W.Va.
Mooney and other supporters of repealing the requirement tried to depict the SEC reporting requirement as duplicating information that mining companies already report to the federal Mine Safety and Health Administration. But while information about citations, enforcement orders and miner deaths is available from MSHA — largely because MSHA issues the citations and orders and investigates the deaths — the data is not compiled for parent companies by MSHA in the same way as required in the SEC disclosures.
And, contrary to what supporters of repeal said this week, the Dodd-Frank language did not make the SEC an enforcer of safety regulations, only of the law that requires safety data to be included in financial reports.
Following the Upper Big Branch Mine disaster, the criminal charges against former Massey CEO Don Blankenship included allegations that Blankenship misled investors about Massey’s safety practices. Blankenship was acquitted of those particular criminal charges, but Alpha Natural Resources — which bought Massey after the mine disaster — paid $265 million to settle a shareholder lawsuit alleging that investors were misled about Massey’s safety practices.
“Shareholders have a direct and material interest in the safety performance of a company they invest in,” said Rep. Maxine Waters, D-Calif., the ranking member of the Financial Services Committee. “Safety has as much of an impact on a company’s long-term financial health as production.”
Waters noted that Mooney voted earlier this year with West Virginia’s other two House members, fellow Republicans Evan Jenkins and David McKinley, to cut the budget for MSHA to enforce coal-mine safety and health rules.
See more from the Charleston Gazette-Mail