The Latest on Blankenship: Jurors Return to Deliberate for 5th Day | us news

The Latest on Blankenship: Jurors Return to Deliberate for 5th Day

25 Nov 2015 | Author: | No comments yet »

4 days of deliberations and no decision in Blankenship trial.

CHARLESTON, W.Va. (AP) — Jurors left court Monday after a fourth full day of deliberating without reaching a verdict in the federal trial of ex-Massey Energy CEO Don Blankenship.

First, OSHA is in the process of implementing changes to its penalty calculation system, which includes increasing penalty amounts as much as 82%, and extending the time period for consideration of repeat violators and penalty reductions based on history from three to five years. The following day, the jury requested more information about the wording of a statement included in the second and third counts of a three-count indictment. The trial, held in Charleston, was to determine whether Blankenship is guilty of conspiring to break safety laws, defrauding mine regulators and lying to both investors and regulators about mine safety. Two former managers of a Georgia peanut plant linked to a deadly salmonella outbreak were jailed due to their involvement in the safety violations, and, on September 21, 2015, the company’s owner was sentenced to 28 years in prison. Berger received no notes from the jury Monday, giving no indication about what’s being debated behind closed doors, or a timeline for a possible verdict.

As of Friday, the jury has begun its fifth day of deliberations, after the judge ordered members to keep trying to reach a verdict and denied the defences motion for a mistrial. We cannot agree.” Berger ordered them to continue, saying the amount of time they had deliberated at that point was not adequate given the length of the trial and the number of witnesses called to testify. On Thursday, the judge received a note from jurors asking how long they should deliberate, saying: “We cannot agree.” The prosecutors seem to have laid out a damning pattern of facts. Friday afternoon, jurors asked for more specific definitions of the words “strive” and “condone” in reference to a Massey letter to shareholders sent three days after the mine disaster. The phrase in question from the letter reads, “We do not condone any violation of MSHA regulations, and we strive to be in compliance with all regulations at all times.” Prosecutors argued that statement in the letter, sent to investors and filed with the Securities and Exchange Commission, contained false statements and omissions.

He was a micromanager, with a staff of individuals whom prosecutors derided as “yes men”, who seems – based on some documents and tape recordings he himself made of his own phone calls – to have been concerned about the costs of safety regulations and their impact on production levels. One of those “yes men”, Christopher Blanchard, who ran the Massey company in charge of the Upper Big Branch mine, testified that he thought Blankenship believed paying fines would prove less costly than paying for safety measures.

Had the mine hired more miners or spent more time on safety – both of which would have cost money directly or indirectly – this could have prevented most of the violations. If your industry warrants (such as those where severe injury or death are more likely to occur, such as mining, construction or factory work), hire a Chief Safety Officer. But determining where the buck stops seems to be as difficult for this jury as it is for regulators and law enforcement personnel trying to nail CEOs for corporate misdeeds.

Consider, for a moment, the varying fates of Bradley Birkenfeld, a former UBS private banker in Switzerland, and his erstwhile boss, Raoul Weil, who headed the Swiss bank’s entire private banking operation. Hire only the safest employees by engaging in the following: conduct background checks as permitted under other applicable laws, include questions about safety during the interview process and have hiring determinations include a factor rating the applicant’s commitment to safety.

The result was a massive “win” for US law enforcement and tax authorities, not only in connection with UBS but with other Swiss institutions, enabling them to recoup billions of dollars in unpaid taxes. He also received a 40-month jail sentence for withholding some details relating to some of his clients in his initial contacts with Department of Justice officials. Indeed, it’s pretty rare for a CEO or the guy running a business, and setting the rules by which the rest of the team must play, to end up in the dock, charged with ultimate responsibility for its misdeeds. Exxon ended up paying $507.5m in punitive damages (reduced from an original award of $5bn) in the wake of the Exxon Valdez oil spill of 1989, one of the worst environmental disasters caused by human beings.

As in the UBS case, when junior bankers shouldered the blame, lesser executives involved with Massey are already paying the price for their role in the Big Branch catastrophe. The government, and juries, once showed an appetite for sending corporate fraudsters to jail – look at Enron’s Jeff Skilling and Kenneth Lay or Tyco’s Dennis Kozlowski. Former Federal Reserve chairman Ben Bernanke, in his memoir of the crisis, The Courage to Act, says that had it been within his power, he would have preferred to see more corporate executives head to jail, instead of just signing off on massive fines to the SEC and other agencies to settle allegations of wrongdoing. “Obviously everything (that) went wrong or was illegal was done by some individual, not by an abstract firm,” he said. With the statute of limitations set to expire in the United States on financial crisis-related issues, the prospect of never getting their man (or woman) may finally be injecting some vigor into federal prosecutors. An earlier decision not to hold those individuals – including HBOS’s chairman, Lord Stevenson, and two chief executives – personally responsible was described as being “materially flawed”, and as many as ten executives could face lifetime bans from serving as corporate officers or directors.

Still, if it’s looking as if it might be tougher than expected even to convict Massey’s Blankenship of criminal charges, it’s worth remembering just how much more difficult it will be to convict Wall Street’s top guys. That is going to be tougher to prove at the topmost levels of corporate life than you might think, especially since we’re now looking at it with the benefit of hindsight.

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