Beshear aide allegedly gave coal industry early word of regulator's firing

Mine industry tipped to regulator's firing

jcheves@herald-leader.comJuly 30, 2011 

Kentucky Governor

Gov. Steve Beshear smiles as he gets ready for a gubernatorial forum at the Kentucky Farm Bureau in Louisville, Ky., Wednesday, July 20, 2011. Beshear and Republican challenger David Williams reached out to Kentucky farm leaders Wednesday in their first joint appearance of the general election campaign, promising their full attention to agricultural matters if elected on Nov. 8. (AP Photo/Ed Reinke)


FRANKFORT — An employee of Alliance Coal said an aide to Gov. Steve Beshear called him in 2009 to tell him that a state regulator unpopular with the coal industry was about to get fired, according to court records filed Friday.

The revelation solves a 19-month-old mystery about how key members of the coal industry learned about the firing of Ron Mills, the state's mine permits director, around the same time Mills was informed of his dismissal.

Mills was unpopular with the industry for blocking a controversial policy called "the 331⁄3 rule," which allows coal companies to mine without showing they hold the legal right to enter all of the land in their mining plans. The Beshear administration overturned Mills and reinstated the policy following industry lobbying.

Mills is suing the state for wrongful termination in Franklin Circuit Court, arguing that he lost his job because he opposed illegal mining practices that benefited Alliance Coal and other politically influential companies. Energy and Environment Secretary Len Peters has said he ordered Mills fired because of poor job performance. A trial is set for October.

Raymond "Rusty" Ashcraft, Alliance Coal's manager of environmental affairs and mine permitting, said in a June 6 deposition that he often communicates with the governor and his top aides about state policy. Employees of Alliance Coal, based in Tulsa, Okla., have given more than $109,000 in political donations since 2000 to Democratic and Republican candidates for state and local offices, including $7,750 to Beshear's campaign in 2007.

Beshear appointees fired Mills near the start of the workday on Nov. 13, 2009, and replaced him with his deputy. Around the same time, Ashcraft sent an e-mail to others in the coal industry advising them of the power shift at the Division of Mine Permits, which must approve their plans to remove coal.

"Ron Mills will be asked to resign this morning and will be replaced by Allen Luttrell on an acting basis," Ashcraft wrote in his email, which the Herald-Leader obtained last year from environmentalist Thomas FitzGerald, director of the Kentucky Resources Council.

Ashcraft said in his deposition that he got a heads up about Mills' 2009 firing from one of two aides to the governor, both of whom are frequent contacts for him, but he could not remember which aide.

"I was notified by an individual in the governor's office. I don't recall which — you know, who that individual was," Ashcraft said in the deposition. "It was either Geoff Dunn or Jeff Belcher."

In their own depositions, Belcher denied calling Ashcraft about Mills' firing while Dunn said he cannot remember if he called Ashcraft.

"I do not know that — if I called him on Nov. 13," Dunn said.

Reached by telephone on Friday, Ashcraft declined to comment.

Kerri Richardson, a spokeswoman for the governor, said it would be inappropriate to comment on ongoing litigation.

"However, as we have stated repeatedly in the past, this administration does not make any personnel decisions based on outside interests or pressure," Richardson said.

In his deposition, Ashcraft said he is not registered as an executive branch lobbyist because he doesn't think it's legally necessary. But he said he communicates the coal industry's views on a variety of issues to the governor's office and the Energy and Environment Cabinet.

Ashcraft said in his deposition that he successfully lobbied Gov. Ernie Fletcher's administration in 2007 to enact the 331⁄3 rule, which Alliance Coal uses in Western Kentucky surface mines. Ashcraft said he successfully lobbied the Beshear administration in 2008 to reinstate the rule over Mills' objections.

Alliance Coal hired the governor's former law firm, Stites & Harbison of Lexington, to prepare a legal defense of the rule.

Also, emails in the court file show that on Oct. 12, 2009, Ashcraft wrote Adam Edelen, then Beshear's chief of staff, to provide the names of three men whom Alliance Coal wanted the governor to nominate to a federal panel to study "the ecological impacts associated with" mountaintop removal mining. The panel was organized by the U.S. Environmental Protection Agency to help it craft new regulations.

"Thanks. Will follow up in short order," Edelen replied to Ashcraft.

Beshear went on to nominate two of the three men, who were backed by the coal industry, Ashcraft said.

During the June deposition, Mills' attorney, Bernard Pafunda, quizzed Ashcraft about his interest in the EPA panel.

"Is Alliance Coal engaged in mountaintop mining?" Pafunda asked.

"No, sir," Ashcraft said.

"So why stick your nose into mountaintop mining?" Pafunda asked.

"Good question," Ashcraft said. "These names were suggested by other members of industry and sent to me."

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