Don Childers: A self-made man in the spotlight for environmental spills

Don Childers' company being blamed for polluting Whitesburg's water source

dhjalmarson@herald-leader.comApril 5, 2009 

WHITESBURG — For a man who provides hundreds of jobs and shies away from publicity, Don Childers has made a lot of people mad recently.

Being blamed for polluting a town's water source — twice in four months — will do that.

The Whitesburg company that Childers, the son of a barber, built into one of the largest employers in the region is facing environmental sanctions, a criminal investigation and lawsuits for polluting the water.

The founder of Childers Oil is both admired and resented in Letcher County for his success. The company operates a wholesale petroleum-supply business, a chain of 45 convenience stores and a popular restaurant.

Residents are divided over where the blame lies for the petroleum leaks from his property.

Some accept that the leaks — oil sludge in November and diesel fuel in February — were accidents. Each time, state regulators said, contaminants leaked from Childers' property into the North Fork of the Kentucky River upstream from Whitesburg, forcing the city water plant to shut down and leave thousands of residents without clean water for days. Some businesses had to shut down temporarily. The state citations for those spills are pending.

Others in Letcher County wonder whether there are other incidents they don't know about.

"What else is happening that we're not aware of?" said Josephine Richardson, co-owner of the popular Courthouse Café in Whitesburg and a plaintiff in one of the lawsuits against Childers over polluted water.

"I think there's a real health concern in the community."

State inspectors recognized those questions in affidavits filed with a state lawsuit after the February spill: "There is concern that he is not abiding by best management practices and that there may be additional sites not yet known by the commonwealth," inspectors wrote.

Childers' daughter, Missy Matthews, a vice president of Childers Oil, said the lawsuits and criticism don't paint a true picture of the man or the business.

Childers wouldn't deliberately do anything to hurt his neighbors, Matthews said.

"We love this community," she said.

"We live here," added her husband, Charles "Junior" Matthews, chief financial officer for the company. "We use the water, too. I bathe my kid in it and brush my teeth with it, too."

Don Childers, 77, still the president of Childers Oil, declined to speak with the Herald-Leader. However, his daughter and son-in-law recently sat down at the family-owned restaurant, the Pine Mountain Grill, for a rare interview. They declined to have photos taken.

The Matthewses seemed upset about what they see as an attack on their family and company. On the advice of their lawyers, they won't discuss the current investigations.

"We certainly don't think it was our fault," was about all Missy Matthews would say.

The couple doesn't sit in the office all day. Missy Matthews said she drives hundreds of miles each week to visit stores, fills in as a stocker or cashier if she's needed, and keep tabs on family interests and employees.

"We take pride in providing a community with something they don't have," she said, namely clean stores, safe parking lots, ATMs and the ability to get money orders in places like Virgie, where customers otherwise would have to drive a long way to find those things.

A family-run company

Don Childers was raised in Hellier, in Pike County. His dad was a barber who walked to work every day until the day he died, Missy Matthews said.

After graduating from Pikeville College and the University of Kentucky and spending time in the Army, Don Childers went to work as a teacher and basketball coach in Hellier. Then he took a job selling petroleum products for Gulf Oil.

Eventually, Childers bought the Whitesburg distributorship from Gulf, and Childers Oil was born.

In 1974, to tide his family over through the winter dip in coal production, Childers opened the company's first retail station — a self-serve pump and coin-operated vending machines at Jenkins in Letcher County.

Childers had the first self-service station in the county, and perhaps the region, said J. Follace Fields, who has known Childers since the 1950s and owns a company that delivers fuel products for Childers Oil.

"He was pretty brave to jump out there and do that," Fields said.

From the start, the company has been a family business.

Childers' wife, Peggy, who is from Elkhorn City, designed their first 24-hour convenience store, drawing up plans for the Whitesburg Pine Mountain Market at the family's kitchen table.

Peggy Childers designed and operated all the company's new retail stores, including the Sugar Shack, which opened in 1982 and later became the Pine Mountain Grill. Missy Matthews says they still use her mother's recipes .

Childers' children — Missy, Donna and William — grew up in the stores, stocking shelves, waiting tables, making doughnuts and learning the business.

William Childers had health problems and died more than a decade ago.

Donna Childers, of Nicholasville, now runs the Double Kwik truck stop at London. Missy has run the retail end of the business since her mom retired in 1992.

The family built the company one store at a time until 2002, when its size doubled with the purchase of the bankrupt Coleman Oil, which had stores in Pike County.

Since then, Junior Matthews says, Childers Oil has become unwieldy.

"It's tough to apply a family-owned philosophy to a territory that big," he said.

Frugal and conservative

Junior Matthews said Childers is a natural salesman who likes people. He focuses on the wholesale side of the business, selling to large customers such as mining and trucking companies.

"He's still the smartest guy at the table most times," Matthews said.

Childers built his company by being frugal — recycling used materials in building projects, for instance — and that financially conservative outlook extends to his personal life.

He still works 6:30 a.m. to 5 p.m. most days, seldom takes vacations and wasn't too happy when the shirts he bought at an outlet went from $12 to $15, Missy Matthews said.

His methodical acquisition of gas stations has led to a near monopoly on gas in Letcher County.

"Now there's no other gas in Letcher County," except for the Food City grocery store, said former Letcher Judge-Executive Carroll Smith.

Childers' efforts helped defeat Smith's re-election bid in 2006.

"He owns everything in town," said Kathleen Brown, a Whitco woman who signed on to a civil suit alleging negligence, fraud and nuisance by Childers Oil over the two recent spills.

"First time they did it, we didn't say nothing," Brown said. "The next time, that was just too much."

Businesses in Whitesburg, too, had trouble when the county health department barred them from using the water for days at a time.

Kathy Kincer, owner of Hobo's Diner, said her business hasn't been the same since November.

"We were doing really well, and it just bottomed out," Kincer said. "And it had just started to pick back up when it happened again."

She said she has no problem with Childers personally, but she thinks he should be responsible for his company's actions.

A political fighter

Childers has fought publicly against government measures that he saw as harming business in Letcher County, including a 1999 effort to set a county minimum wage of $7.50 an hour, when the national figure was $5.15. Childers and many other businesspeople opposed the measure, saying it would mean higher prices and job losses.

Missy Matthews said despite Childers' opposition to the measure, he pays a starting wage of $7.

In partnership with U.S. Rep. Hal Rogers, R-Somerset, Childers has worked to bring a federal prison to Letcher County to provide more jobs.

Childers thinks Rogers has brought good things to Eastern Kentucky, Missy Matthews said.

Since the mid-1990s, the Childers family has given more than $18,000 to various federal candidates and committees, including to Rogers and other Republican interests. They also gave to some Democrats.

In state elections, the family has given nearly $31,000 in the same time period, but nearly evenly to Republicans and Democrats.

Behind the times?

Smith, the former judge-executive, said Childers' mindset is from a different time, when environmental rules weren't as stringent. He described how people in rural areas used to spread used motor oil on gravel roads to keep down dust.

"Don Childers is still living in that time when you put oil in the road," Smith said.

But Missy and Junior Matthews said the company is not behind the times in complying with environmental standards and doesn't cut corners.

"We don't make a practice of disposing of something in the wrong way," Missy Matthews said.

However, the lawsuit brought by the Energy and Environment Cabinet over the November spill said Childers acted illegally, ignoring state law and regulations, "endangering not only the environment but also public welfare."

More than 7,500 people, a hospital, four schools and a nursing home are served by Whitesburg's water plant.

As part of the state's action against Childers, the court was asked to issue an injunction barring the companies from allowing more leaks. That could mean a contempt of court charge against the company if there are more spills.

Missy Matthews said the injunction was not necessary — the company was already doing everything the state asked of it, and it maintains that it is not at fault.

In the months since the November spill, Missy and Junior Matthews said, they have considered "checking out" of the business because of the animosity toward their family. But they love their community and their customers, they said.

"We love what we do," Missy Matthews said.

The water contamination and the public's reaction have made the family take stock. "We are more conscious of things now, more aware of things now," she said.

"We live here," Junior Matthews said. "This has always been our home, and we hope it always will be."

Dori Hjalmarson covers Eastern Kentucky for the Herald-Leader. Reach her at (859) 312-8967.

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