PIKEVILLE — W. Keith Hall, then a powerful state lawmaker who owned coal mines in Pike County, secretly paid tens of thousands of dollars to a state mine inspector in 2009 and 2010 "so he could have that inspector in his back pocket if he needed it," a federal prosecutor told a jury Monday.
The jury had just been seated in U.S. District Court to hear the government's bribery case against Hall, 55, who served 14 years as a Democratic state representative from Phelps until his defeat in last year's primary. The trial is expected to continue through Friday. Hall could face up to 10 years in prison if convicted.
The mine inspector, Kelly Shortridge, who was assigned to Hall's surface mines from the Pikeville office of the Division of Mine Reclamation and Enforcement, has pleaded guilty to soliciting a bribe. He awaits sentencing this summer, after he testifies against Hall.
In his opening statement Monday, one of Hall's attorneys acknowledged that Hall sometimes paid money to Shortridge. But those payments were for legitimate business deals on which the men cooperated, lawyer Bryce Caldwell told jurors. In one instance, Caldwell said, Hall wanted Shortridge to find a buyer for some of his coal properties.
"There is no disputing payments were made to Mr. Shortridge," Caldwell said. "But they were not for an unlawful purpose. ... He never asked Kelly Shortridge to not do his job. He never asked him to not enforce the reclamation and enforcement laws."
Hall will take the witness stand during the trial to defend himself, Caldwell said.
Until voters turned Hall out last year, he helped regulate the state's coal industry as chairman of the House Tourism Development and Energy Committee and vice chairman of the House Natural Resources Committee.
As described by federal prosecutors, Shortridge, a mine inspector for 24 years, habitually missed or ignored violations on his assignments; accepted bribes from Hall; and wrongfully solicited "tens of thousands of dollars" from people as donations for a youth basketball team with which he wasn't affiliated, actually keeping the money for himself.
However, the state Energy and Environment Cabinet, for which Shortridge worked until he resigned last year, confirmed Monday that it has not taken a look at his other mine reports to determine whether there were possible problems apart from Hall's properties.
"The cabinet and the Department for Natural Resources have not received any other information that would lead us to ask the (Office of the Inspector General) to open another investigation into further allegations of bribes being sought by Short ridge," cabinet spokesman Dick Brown said.
The Herald-Leader first reported in June 2013 on a history of unresolved safety and environmental violations at Hall's mines and on his close relationship with Short ridge, which later turned antagonistic.
Hall complained in 2012 to Billy Ratliff, the state's director of mine reclamation and enforcement, that he had paid Shortridge an undisclosed sum, but Shortridge was demanding more.
"Hall informed Ratliff that he had given a 'small fortune' to Shortridge for the Millard Little League basketball team even though Shortridge doesn't have any children in the league. Hall conveyed that Shortridge 'liked the Benjamins' but would not elaborate," according to a subsequent report filed in 2013 by the Office of the Inspector General at the Energy and Environment Cabinet.
Cabinet leaders chose not to pursue the matter further or forward their report to state ethics agencies or law-enforcement officials. But the FBI read about the report in the Herald-Leader and opened an investigation, one that came with the subpoena power necessary to examine Hall and Shortridge's bank records, Assistant U.S. Attorney Ken Taylor told the jury Monday.
Bank records show Hall paying Shortridge in several ways, Taylor said. Hall co-signed on a car loan for Shortridge, made monthly payments on it and paid off some other loans for him, Taylor said. Hall also arranged for $43,000 to be paid to DKJ Consulting — a firm established in the name of Shortridge's wife — through five checks from Hall's business accounts, Taylor said.
Shortridge issued "very few citations" to Hall's mines while the money was flowing, Taylor said.
"He only wrote up Hall's mines when he had no other choice," the prosecutor said, such as when rocks blasted from the site crashed into a nearby home, or supervisors were following closely behind Shortridge to check his work.