Donald Trump isn’t the only rich businessman and political neophyte telling West Virginia voters he can create jobs if he is elected.
Jim Justice — a colorful 65-year-old coal-mining baron and owner of the famed 710-room Greenbrier hotel — solidly defeated two rivals this month to win the Democratic primary for governor, putting him on a path to likely victory in November, according to polls. Justice, who has never held office, spent lavishly on his campaign, including an election-night party at the Greenbrier featuring ham biscuits and shrimp cocktails. In a state that has lost almost half its 42,600 mining jobs over the past year, Justice has vowed to create jobs and bring mining back.
But the massive, 6-foot-7, white-haired Justice, a former Republican whose wealth Forbes magazine puts at $1.6 billion, has another distinction: He has left a trail of millions of dollars of unpaid fines to federal coal regulators, unpaid bills to suppliers and unpaid taxes to state and local governments throughout Appalachia. In some cases, he has agreed to installment plans that drag out far beyond their original deadlines or he has bargained for discounts in the amounts he owes.
“Most of their bills aren’t paid,” said Donna Hoskins, the clerk for Harlan County in Kentucky. “Their tax bills are delinquent.” She said that Sequoia Energy, a coal company owned by Justice, owes the county $653,169 for back taxes for the past three years.
The Justice companies — Justice says he is chief executive of 83 companies in different states, making it hard to track all of his activities — declined to comment to The Washington Post about the backlog of payments, deferring to a campaign spokesman.
“He has always, and will always, meet every obligation,” said Grant Herring, a spokesman for the Justice campaign.
Since buying the Greenbrier in 2009, Justice has been a prominent figure in West Virginia, a folksy businessman whose success has been inspirational in the nation’s second-poorest state. But as coal jobs dry up and tax coffers run low, Justice’s record is more complicated than his promises of jobs and prosperity.
As of January, companies owned by Justice piled up $3 million for federal fines that were imposed for safety violations in his coal-mining operations by the Mine Safety and Health Administration, according to records analyzed by Ellen Smith, owner of Mine Safety and Health News, an independent publication targeted at businesses and government agencies. Nearly all of that amount was past due for more than 90 days, Smith said.
The fines were not just a question of money. On Jan. 29, MSHA harshly penalized a surface mine in Kentucky where the Justice-owned company had not fixed dangerous conditions cited previously by the agency. Justice also has won and lost court fights over the contamination of rivers from his mining operations.
It isn’t clear why Justice has so many outstanding bills. After college, he expanded a family farming business that grew to 50,000 acres in four states. When his father died in 1993, he inherited a coal-mining and farming business worth about $25 million. He built that by buying and selling a variety of enterprises, including small coal mines, timberland, cornfields, Christmas tree farms and John Deere dealerships.
In 2011, he told a Post reporter that he was worth “somewhat more than a billion,” before adding that “that would be a very conservative number.” Yet he still lives in a relatively modest one-story ranch house he bought in 2001 in Lewisburg, W.Va., for $205,000. (In it, an Andy Warhol poster hung on the wall — a copy, not the real thing).
One of his main pastimes is coaching basketball at Greenbrier East High School; he gave $300,000 for a new parquet floor in the gym where he coached his daughter’s team.
As a teenager, he was taken by his father to play golf at the Greenbrier and became captain of the golf team at Marshall University in Huntington, W.Va. So he jumped at the chance to buy the resort when it teetered on the brink of bankruptcy in 2009. Then he paid celebrity athletes and actors to attend the grand opening of the newly licensed Casino Club and persuaded the Professional Golfers’ Association to move a tournament there.
“West Virginians, most of whom couldn’t afford to stay there, saw it as something that stood out and was positive,” said Patrick C. McGinley, a law professor at West Virginia University’s law school.
Even then, some bills weren’t paid. Aspen Corp., which builds golf courses, sued the Greenbrier for $1.275 million for work done before the PGA Greenbrier Classic tournament, according to the West Virginia Record. The case was settled in April 2012 for undisclosed terms.
Since 2011, the price of central Appalachian coal has dropped in half, and the lower prices are hurting the cash flow of all coal-mining firms. And Justice’s disputes continue.
A Washington Post search of court records in Virginia and West Virginia found more than a hundred civil suits filed against 10 of his coal companies; most of the suits were filed since early 2015.
In January, the Virginia Supreme Court ordered a company owned by Justice to pay $1.3 million to Lambert Coal. Justice had agreed to acquire a strip mine and two coal leases from Lambert in 2010 but paid only half of the agreed-upon sum. The Justice companies said there wasn’t as much coal as expected. The court said the sale agreement never included a warranty about the amount of minable coal.
Local suppliers of coal-mining equipment, such as rockdust and crushing equipment, have also gone to court seeking payment, according to court records.
Politically, however, coal remains an asset for Justice. He stands a good chance of becoming governor of a state where politics and coal are intertwined. Justice, who directly employs 2,719 people in West Virginia alone, according to his campaign, says he knows how to create jobs, including new coal jobs. How? “Promote new uses for coal,” he says on his campaign website. “Find chemical and mineral advantages for central Appalachian coal. Then market that strength.”
A campaign ad shows him in a hard hat telling a group of miners: “I believe in coal, guys. I really believe in coal.” The ad ends with an off-screen voice saying, “We need a coal man running this state.”
In recent years, however, the use of coal has dropped in the face of cheap natural gas and government regulations designed to slow climate change.
In June of last year, Justice made a splash in West Virginia by saying he would hire about 200 miners at two sites in West Virginia. But around the same time, Justice closed two other sites in Virginia’s Tazewell County.
“Like Donald Trump, he’s promised to bring coal-mining jobs back to West Virginia,” said McGinley, the law professor. And while that was unlikely, he said “people would like to believe those jobs are coming back, so they’re willing to place their faith in somebody who makes a promise of that kind.”
Justice’s optimism about coal could be awkward for Democratic presidential hopeful Hillary Clinton. She has backed climate policies that she concedes will put “a lot of coal miners and coal companies out of business,” but she has also proposed training and infrastructure spending because “we don’t want to forget those people.”
“The most important thing is that Jim Justice continues to keep West Virginia families working,” said Herring, his campaign spokesman. “Jim is a respected businessman who has created nearly 3,000 jobs in the state.”
Many Democrats allege that reports of these unpaid bills and fines are being spread by politically motivated Republicans.
Herring also pointed to the support Justice has from traditional Democratic groups, including Sen. Joe Manchin III (D-W.Va.), the teachers’ federation and United Mine Workers of America. Phil Smith, spokesman for the UMWA, said that Justice has bargained fairly with unions, rehired union workers fired by previous owners of the Greenbrier and said that as governor, he would not sign a right-to-work law.
“To our members, that demonstrates that he’s not the anti-union person that his Republican opponent certainly is,” Smith said.
Justice’s Republican opponent, Bill Cole, spoke early this year at a Palm Springs retreat organized by Charles and David Koch. In March, Freedom Partners Action Fund, a political action committee affiliated with the conservative Koch brothers, donated $100,000 to Accelerate West Virginia, a super PAC supporting Cole, according to Federal Election Commission records.
Justice’s tardiness in paying his bills contrasts with his reputation for generosity. He has given millions of dollars to charities, including the Boy Scouts of America. At Christmas, he has worn a Santa suit, made specially to accommodate his large frame and slumping shoulders, and taken his helicopter to a low-income area of West Virginia so he could give presents to children there.
He has spent lavishly to spruce up the Greenbrier. And in 2015, his family paid $5 million to buy back coal-producing properties it had sold to Russia’s OAO Mechel in 2009 for $568 million, Bloomberg News reported.
Yet the list of agencies and companies that say they have not been paid by Justice remains long.
Phelps Dunbar, one of the largest law firms in the South, filed suit in a Louisiana federal court in December seeking $410,000 in fees for legal work dating to 2011. (The firm had represented Justice in a maritime dispute that also involved an unpaid bill.) The law firm said that Justice has not paid a bill since June 2013. The Justice companies answered in a court document that Phelps Dunbar had engaged in “excessive billing.” A trial is to start Aug. 22.
Sometimes, Justice negotiates a better deal. The Kentucky Energy and Environment Cabinet, a regulatory agency, agreed to slash the outstanding penalties for his mining companies in the state from $4.9 million as of August 2014 to just $1.5 million, spokesman John Mura said. The Justice companies paid a chunk at the time of the agreement and have been paying the rest on an installment plan of $50,000 a month. The agency also reinstated permits that had been suspended.
Meanwhile, however, his companies have been accumulating more unpaid penalties, Mura said.
Some agencies take a tougher stance. In March, the Tazewell County treasurer asked the sheriff to seize machinery, tools and other equipment at a Black River Coal mine owned by Justice in Bandy, Va. The treasurer feared that the company would move the equipment to a different state without paying delinquent taxes. After the seizure, the Justice companies agreed to a payment plan. After delivering the second installment on Monday, Justice still owes Tazewell $520,634.
The unpaid money could come in handy, Tazewell Treasurer David T. Larimer II said. This month, the county laid off many teachers, including those with less than five years of experience or in such areas as art and music.
Larimer said one other coal company operating in the county has failed to pay its taxes, and that was Alpha Natural Resources, a large public company that recently filed for bankruptcy. Otherwise, he said, “in the short time I’ve been here, all the [other] coal-mining companies have been paying on time and in full.”
Alice Crites and Neely Tucker contributed to this report.