Coal execs hope to spend big to defeat Conway and Chandler

Companies seek to pool funds to defeat chandler, Conway, and delay disclosure

jcheves@herald-leader.comJuly 28, 2010 

Several major coal companies hope to use newly loosened campaign-finance laws to pool their money and defeat Democratic congressional candidates they consider "anti-coal," including U.S. Senate nominee Jack Conway and U.S. Rep. Ben Chandler in Kentucky.

The companies hope to create a politically active nonprofit under Section 527 of the Internal Revenue Code, so they won't have to publicly disclose their activities — such as advertising — until they file a tax return next year, long after the Nov. 2 election.

The U.S. Supreme Court ruled last winter that corporations and labor unions may pour unlimited funds into such efforts to influence elections.

"With the recent Supreme Court ruling, we are in a position to be able to take corporate positions that were not previously available in allowing our voices to be heard," wrote Roger Nicholson, senior vice president and general counsel at International Coal Group of Scott Depot, W.Va., in an undated letter he sent to other coal companies.

Nicholson declined to comment on his letter Tuesday, after the Herald-Leader obtained it.

"A number of coal industry representatives recently have been considering developing a 527 entity with the purpose of attempting to defeat anti-coal incumbents in select races, as well as elect pro-coal candidates running for certain open seats," Nicholson wrote. "We're requesting your consideration as to whether your company would be willing to meet to discuss a significant commitment to such an effort."

Nicholson listed three races "of interest": Conway against Republican Rand Paul for Kentucky's open Senate seat; Chandler against Republican Garland "Andy" Barr in Kentucky's 6th House District; and Democratic U.S. Rep. Nick Rahall against Republican Elliott "Spike" Maynard in West Virginia's 3rd House District.

The coal industry already has supported Barr and Maynard through individuals' relatively small and legally limited donations. But working together as a 527, the companies potentially could spend millions of dollars on political activity, as long as it isn't coordinated with the Republicans' campaigns.

"I think this is certainly troubling, and it's going to put an entirely different face on American politics now that companies can do this," said Tony Oppegard, a Lexington lawyer and mine safety advocate. "People are going to have to expect the rhetoric to get heated."

In his letter, Nicholson said his company and three others — Massey Energy, Alliance Resource Partners and Natural Resource Partners — "have already had some theoretical discussions about such an effort and would like to proceed in developing an action plan."

Several of those companies have been involved in recent mine disasters that led to congressional scrutiny of their safety problems. International Coal Group owns the Sago mine in West Virginia where 12 miners died in 2006. Massey owns the Upper Big Branch mine, also in West Virginia, where 29 miners died in April. Two miners died in April in a Western Kentucky mine owned by an Alliance Resource subsidiary.

"Between them, ICG and Massey have had 41 miners killed in just two disasters," Oppegard said. "It's disturbing to see companies that don't have strong safety records try to defeat politicians, like Ben Chandler, who have fought for stronger mine safety."

In his letter, Nicholson wrote that a meeting of the West Virginia Coal Association on Aug. 5-7 would "present an ideal opportunity to have an initial meeting."

The letter does not say how the three Democrats displeased the coal industry.

Chandler has co-sponsored mine-safety legislation and voted last year in favor of a "cap-and-trade" plan to reduce greenhouse gas emissions from coal and other fossil fuels. The plan, which the House passed, recently was removed by the Senate from the pending energy bill.

A Chandler spokesman on Tuesday said the congressman would not comment.

Conway's position on coal has been less clear. In a newspaper article last year, Conway did not oppose the general concept of cap-and-trade if it included adequate protection for Kentucky consumers and businesses, but he did not endorse the proposal before Congress, saying it didn't meet his test.

Conway spokeswoman Allison Haley declined to comment.

In the West Virginia congressional race, Maynard, the Republican, is a former state Supreme Court chief justice who gained national attention because of his friendship with Massey Energy chief executive Don Blankenship.

Maynard and Blankenship were photographed vacationing together on the French Riviera in 2006. Months later, Maynard cast the court's deciding vote to overturn a $50 million jury verdict against Massey.

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