By Ian Shapira
Washington Post Staff Writer
Monday, April 19, 2010; B01
BRISTOL, VA. -- The scrappy reporter just a few years out of college got a tip from a reader: Thousands of property owners who controlled the rights to the natural gas beneath their land were being stiffed out of millions of dollars in royalties.
For months, Daniel Gilbert, a staff writer at the Bristol Herald Courier, dug into an injustice, guided by sources such as Jamie Hale, a laid-off power plant worker who owns 40 acres of woods and figured he was owed $200,000 in royalties.
Last week, Gilbert's investigation won the nation's highest journalism honor, the Pulitzer Prize for Public Service, and Virginia -- impelled by Gilbert's reporting -- has passed a law that's designed to make it easier to get royalties to the landowners.
In a rural area where jobs are scarce and the use of food stamps has shot up by nearly a third in the past three years, Gilbert's story about gas royalties created a rare burst of optimism. But in this time of economic distress, even good news can be fleeting: A Pulitzer gold medal was once a near-guarantee of a vastly better job, but Gilbert is talking about leaving the industry, having recently considered law school or joining the Foreign Service.
And Hale, saddled with $20,000 in debt, is skeptical that he will ever see a dollar from the gas under the land where his ancestors are buried. "It's hard to be positive until you see something -- some money," Hale said.
After the initial tip, Gilbert, 28, who grew up in Prince William County, scoured Virginia's bureaucracy and banged up against government stonewalling as he sought to find out why the payments remained trapped in a state escrow account.
Gilbert profiled Hale as part of an eight-part Herald Courier series in December, an extraordinary commitment of time and resources for a struggling newspaper that, like so many across the country, has seen its circulation plummet in the face of swift technological change.
Hale would eventually bring the complicated story to life for Gilbert, but at first, the property owner was wary. "I didn't know if Daniel was on the companies' side or the people's side," Hale said. "I didn't want him to portray us as a bunch of hicks who didn't know what was going on -- because we do know what's going on."
To Gilbert, Hale symbolized the region's ironic plight: "There was a certain drama of people from humble means living on top of tremendous resources of natural wealth."
From his small newsroom cubicle in Bristol, Gilbert ventured into the surrounding coalfield counties -- Dickenson, Russell, Tazewell, Wise and Buchanan -- where the economy since the late 1800s has been tied to coal's fluctuating fortunes. The recession brought rampant joblessness, and household incomes have continued to fall behind the national average.
"Historically, our culture has been jaded," said Frank Kilgore, a longtime Wise County lawyer. "Everybody expects the bottom to drop out. Despite the Bristol paper's Pulitzer, you can take all that money in the state escrow account and give it to landowners today, and it wouldn't make that much of a difference in the coalfield economy."
At the outset of his investigation, Gilbert, fresh from two years as a reporter for the Potomac News in Prince William, knew only the outlines: Thousands of people were owed at least $24.5 million in royalty payments. He started attending Virginia Gas and Oil Board meetings. His questions to state officials about the royalties were often met with a "no comment."
Gilbert discovered that landowners couldn't get their money out of the account unless they filed lawsuits proving that they owned the gas rights. The reporter filed Freedom of Information Act requests that yielded e-mails and financial statements indicating that the state account that held the royalties was losing money and that some officials had opposed a thorough audit of the account.
But the essence of the story was the readership in the area, for whom the gas royalties could make a powerful economic difference. Hale, 38, relies on weekly unemployment checks of $255 that will run out in June. Laid off in January from a power-plant job where he hauled coal ash, he's trying to support his wife, a teacher's aide, and their 14-year-old daughter.
The 40 acres of wooded land he and his relatives inherited from his great-great grandfather are rich in natural gas. He estimates his royalties add up to $213,854.18, of which he has seen not a penny. (Hale learned Sunday that his old employer can take him back -- at least for now. He heads back Monday.)
Hale said he shouldn't have to pay for a lawyer to prove he owns the gas rights. "They've been pumping off my property for years, and I haven't gotten one monthly statement that they've been putting money into the escrow," he said. "When you have a deed for something in America, it should stand for something."
Hale led Gilbert along curving byways embroidered with purple redbuds, past dilapidated homes and diabetes-awareness billboards, to his rocky tract and a gas meter and gas pipe near the boundary of his land. "This is hard, knowing my family could benefit from this," Hale said, listening to the hiss of gas being sucked out of his piece of earth.
The two picked their way down a steep slope laced with brambles, arriving at a level patch dotted with gray stone markers. This, Hale said, is his family cemetery, a testament to short, hard lives: Mary Hale and son, 1874 to 1905; Lula Hale, 1899-1932; Bury Hale, Sept. 9-11, 1948.
J. Todd Foster, managing editor of the Herald Courier, supported Gilbert's investigation as a way to demonstrate the value of aggressive journalism to a suffering community at a time when the paper, although profitable, was trimming its rural delivery routes to save on fuel costs and cutting its budget as circulation dropped from 40,000 in 2006 to 30,000.
"I get calls from residents all the time, saying, 'Please come back and deliver here,' " Foster said.
The paper is husbanding its resources to keep up its ambitious work. Its most recent big project, a 24-page special section devoted to health care, was published Sunday. "The coalfields are historically depressed," Foster said. "There's a reason we have remote-area medical clinics and that abuse of Oxycontin reached epidemic proportions here. We are one of the most unhealthy parts of the country."
Complex investigations sometimes get results and win prizes, but they don't tend to attract huge audiences. Foster said the gas royalties stories netted "less than half the Web traffic of a story about three local Hooters waitresses" being chosen for their chain's 2010 calendar.
Since winning his Pulitzer, Gilbert hasn't received any job offers from big newspaper recruiters. "There's a lot of buzz at the moment, but none of that means I'm a better journalist," he said. "I wouldn't say this catapults me to stardom."
Driving back to the newsroom from Hale's property, Gilbert contemplated his future in a troubled business. "I'm wondering if I'm okay with being a journalist for my career," he said. "This is the time to consider other careers. I got into journalism because I wanted to be a foreign correspondent, but I don't see that as a viable career path -- not even after [last] Monday's news."
That night, Gilbert got back to the newsroom and soon was on deadline again.
After the royalties series was published, Richmond lawmakers introduced legislation that could release the royalties to their rightful owners. Gov. Robert F. McDonnell (R) has signed the measure into law.
Gilbert dialed up two state lawmakers for their reaction but wasn't getting callbacks. As he typed quickly, the police scanner squawked something about a Country Boy market clerk calling 911 because a customer threw a phone in her face.
His story filed, Gilbert stood in the newsroom's hallway, miffed about not getting calls returned. "I'm a Pulitzer Prize winner," he said, chuckling. "Why didn't they call me back?"