Two groups of low-income Appalachian families have marshaled a powerful attack on the Interior Department office that polices strip mining in coal fields around their houses, charging that the Reagan administration has weakened the regulatory agency much as it did the Environmental Protection Agency.
Drawing on government enforcement files, court records and personal observations, they have documented a serious breakdown in enforcement of the 1977 federal law enacted to protect land and people in coal fields from the dangers of unregulated strip mining. They charge that:
* Since the law took effect, hundreds of coal mining companies have refused with impunity to obey more than 1,000 federal orders to cease illegal strip-mining practices, such as exposing citizens to dynamite blasts, dumping acid wastes into rivers and streams and defacing hillsides.
* The Interior Department's Office of Surface Mining, the agency created to enforce the 1977 law, has failed to collect more than $40 million in fines against these companies and has not forced them to correct environmental damage, despite a federal regulation requiring the department to do so.
* Owners of many such companies have since been granted permits to open new mines under different corporate names, allowing continuation of "scrape-and-run" practices that created public clamor for the federal law.
* Many of the violators have ties to influential politicians and businessmen in coal states. These include Kentucky state Rep. Jimmy White, a member of a House committee that oversees strip mining, and Kentucky businessman Todd Hollenbach, candidate for lieutenant governor in next month's state Democratic primary.
The two groups, Save Our Cumberland Mountains and the Council of Southern Mountains, went to court months before the controversy over the EPA drew national attention to the administration's environmental policies.
In a ruling that generated few headlines, U.S. District Court Judge Barrington D. Parker ruled here that Interior Secretary James G. Watt was "flouting" the strip-mining control law by not forcing coal companies to correct abuses unabated for years and by not collecting fines. He ordered the agency to collect an estimated $44 million in fines and begin enforcement efforts by filing civil and criminal court actions and revoking mining permits at each site to force repairs.
The two groups recently took documents to NBC News, The Courier-Journal in Louisville, The Washington Post and congressional advocates of the strip-mining law.
This effort to exert pressure on the OSM comes after two years in which Watt dramatically changed the agency's direction, shrinking enforcement ranks, rewriting dozens of environmental regulations that he termed "burdensome and counterproductive" for the coal industry and returning control of coal fields to state regulators.
To meet the court ruling, the OSM is setting up teams of attorneys, clerical workers and inspectors to force industry to comply with long-ignored cleanup orders. Sources said the agency is drafting a supplemental budget request to restore some of the positions eliminated in the last two years.
OSM Director James R. Harris recently threatened to take control from Tennessee and other states soft on the coal industry, and he has instructed state regulators to deny mining permits to companies with financial ties to firms that have not abated violations.
"I haven't seen this much activity in the agency since the early days in 1978 when we all were gearing up to enforce the hell out of the law," said an OSM official who joined the program in its first months.
Harris and his deputy, Steven Griles, have said the new enforcement offensive was not prompted by Parker's order. They emphasized that they have been attempting to collect overdue fines for more than a year.
Several officials said privately that the offensive is largely a result of the court order and of fears among top OSM officials that their program could become "the next EPA," a potential target of congressional and media investigations.
"Everybody here was watching the EPA mess and watching that lawsuit saying we had flouted the law, and figuring we're next on the list, we've got to do something to keep this from happening to us. We're nobody's dummy," an OSM official said.
"The agency wasn't doing this work as a matter of first priority for two years," said a senior Interior Department official who asked to remain anonymous. "It has become a first priority now because you've got a federal judge saying you have to do it."
The enforcement breakdown outlined in the lawsuit began before Watt took office. Federal inspectors began enforcing the new regulations in 1978, asking companies to reclaim mined hillsides, protect rivers, streams and wildlife and adopt far more controls. Many complied, but many others, accustomed to little or no government regulation in the past, did not, leaving bared hills and piles of coal waste sliding down mountainsides.
Carter administration officials issued thousands of citations and, if violations continued, inspectors levied $750-a-day fines. Court records say coal companies defied 1,099 such orders--almost 30 percent of those that were issued under Carter--and some fines climbed into the millions. An estimated 400 more orders have gone ignored under the Reagan administration, officials said.
Fines grew so large that government and industry officials thought they could not be collected. In October, 1980, the Carter administration struck an agreement with industry and environmentalists to cap the so-called "megabucks" fines at $22,500 per violation and, in exchange for forgoing the rest, take action to make violators clean up environmental damage.
Even so, uncollected fines totaled $44 million, almost six times the amount of all civil penalties collected under the act.
One year into the Reagan administration, virtually all of the fines remained uncollected and the environmental damage unabated, according to the lawsuit.
"What the megabucks cases reflect," said Tom Galloway, attorney for the two groups, "is a pattern of behavior by a sizable segment of the coal industry in Appalachia. Throughout history, this segment has shown an absolute minimal compliance with environmental regulations . . . . Behind all the figures . . . are ravaged landscapes and people in the coal fields who have to bear the brunt of the damage caused by the industry."
Leonard and Ethel Gabbard see it that way from their home on a ridge in Laurel County, Ky. In 1978, Black and White Land Developers began mining just below the ridge and within months had destroyed the only road leading to the Gabbards' home, dumped acid coal wastes into the nearby Rockcastle River and created several mud slides, according to federal inspection reports. The company abandoned the site, leaving a scarred hillside without restoring its natural contour.
The 1977 law was intended to stop such practices, and OSM inspectors issued five violation notices against company owner Aubrey Watkins. Federal records and the Gabbards say the violations were never corrected, and unpaid fines total $67,000. Watkins did not return phone calls, and his wife said his company is now out of business.
Meanwhile, the Gabbards, in their seventies, were forced until recently to walk more than a mile through the woods to reach a road.
Also cited in the group's files are:
* Carnes Coal Co., listed in 1979 for a mine in Harlan, Ky. Federal inspection reports said the firm allowed coal spoil and dirt to slide down the hillside, covering "the entire roadbed" and clogging a nearby stream. Records show that the OSM issued eight violation notices, none of which was obeyed, and that unpaid fines total $157,000.
OSM inspection records list Kentucky state Rep. Jimmy White of Barbourville as Carnes' owner but White, reached by telephone, denied that, saying he performed only contract work for the company, which he said is in bankruptcy proceedings. White acknowledged receiving the violation notices. The man White identified as the owner, Jimmy Carnes of Flatlick, could not be reached.
White is a member of the state House's Agriculture and Natural Resources Committee and an outspoken advocate of lessening regulations on small strip miners.
* Lexon Corp. of Louisville, listed in 1980 and 1981 for 10 violations of federal strip-mining regulations outside London, Ky. Inspectors cited the firm for mining within 100 feet of a cemetery and for failing to revegetate mined areas, to monitor environmental damage to streams and underground water supplies and to restore the hillside after stripping.
Kentucky records show that businessman Todd Hollenbach, Democratic candidate for lieutenant governor, is a Lexon shareholder. His campaign aides confirmed Friday that he owned part of the corporation, which is no longer in business. They said Hollenbach was not aware of the violations because his firm contracted work to another company.
Another Lexon official said that the contractor, S.P.G. Coal Co., promised to correct the violations and that the government planned to cancel the fines once the damage was undone.
A recent federal inspection report concludes that the environmental damage has not been corrected. Uncollected fines total $180,000, according to government records.
One of the most influential coal industry leaders in Kentucky is James L. Rose, president of five coal companies that are wholly owned subsidiaries of Kaneb Services Inc. of Houston.
Several of Rose's companies were listed as violators on a 1982 "megabucks" list. OSM officials said Rose presented evidence last July that his firm had corrected violations cited in 37 notices and orders after the agency threatened to sue for $145,570. He settled for $73,685, federal records show.
"No matter how good a company is in this business, it's going to get some violations because we deal with a lot of dirt. But there are still those companies, most of them undercapitalized, that abuse the environment and they abuse the law and there's no way around that. It hurts all of us," Rose said.