Gov. Justice gets personal on campaign road trip
BLUEFIELD — Gov. Jim Justice wrapped up two town hall meetings in southern West Virginia Thursday, taking questions from the public about education reform, economic development and the growing divide between he and Senate Republicans.
The town halls were also notable for what people didn’t ask about.
Attendees did not ask whether Justice should live in Charleston as required by the state Constitution. They also didn’t ask about the myriad of federal civil cases pending regarding Justice’s family businesses, his companies’ tax issues or even the possible criminal investigation by the Department of Justice.
Despite not being asked any questions about these subjects, Justice willingly talked about the issues that have caused him and his companies to end up in court.
“I want everyone to know you don’t have to worry about my stuff,” Justice said after the event in Bluefield. “Everything is going good on my end, and every single last thing will get paid. It always has.”
The first event Thursday morning in Beckley was a friendly crowd of teachers and business leaders at the Black Knight Country Club, formerly owned by Justice and a place where he first learned to play golf.
The second event Thursday afternoon was at Bluefield State College at the bottom of the state. The crowd, made up of Mercer County teachers and local leaders, filled all the seats in the first half of the room, with more people sitting or standing in the back.
THE TAX MAN COMETH
Last week, Justice’s companies paid millions of dollars in overdue property taxes in West Virginia, Virginia and Kentucky.
According to the Kentucky Department of Revenue, Justice’s companies cut checks for more than $1.2 million in settlements with four counties. However, according to the Kentucky Herald-Leader, Floyd County plans to sue Justice’s Kentucky Fuel Corp. for $670,000 in delinquent property taxes. The Daily Progress in Charlottesville, Va., reported that James C. Justice Cos. paid more than $404,000 in delinquent taxes on 55 parcels of property in Albemarle County.
In West Virginia, Justice Holdings in Raleigh County still owe the county more than $2,000 in delinquent property taxes according to the Raleigh County Sheriff’s Department. That’s after paying more than $167,000 in delinquent property taxes on more than 400 parcels.
Justice’s companies paid their delinquent property taxes in Greenbrier County, home to the Greenbrier Resort — operated by daughter Jill — and other properties. According to the Greenbrier County Sheriff’s Office, the taxes were paid as of June 10. The taxes were due April 1. The taxes on just one parcel were more than $700,000.
“Take the Greenbrier for instance,” Justice said in Beckley. “The Greenbrier was a few days late on their property taxes, but they paid every single dime. All the stuff in Kentucky is paid. Everything is paid in Virginia. Everything is paid. So why would you worry about it? Why would you occupy your time with it? It’s a waste of time.”
According to Justice’s January 2019 financial disclosure with the West Virginia Ethics Commission, the governor lists 123 companies he owns. Only two of those entities — companies associated with the Glade Springs Resort in Raleigh County and the Wintergreen Resort near Charlottesville, Va. — are in blind trusts to protect Justice from conflicts of interest. The remaining businesses are managed by Jay and Jill Justice.
“I’m involved this much in my family’s businesses,” Justice said in Beckley, putting his index finger a half an inch from his thumb to denote how little he is involved.
However, Justice did admit Thursday that he gave son Jay advice in the purchase of a coal-cleaning preparation plant in his native Wyoming County. Justice said the Green Ridge facility could be back up and running in 60 days, with negotiations ongoing with the United Mine Workers of America.
He estimated the facility and the mines that could restart nearby could bring 500 jobs back to southern West Virginia.
“Not only am I your governor, but if I can help just a little bit, especially in an area where I grew up and we can bring back 500 more jobs in West Virginia, I want to do that,” Justice said.
CATCH ME IF YOU CAN
Justice’s actions as a businessman have garnered the governor’s companies greater scrutiny by the federal government.
Just last week, representatives of the Justice-owned Southern Coal Corp. were ordered to attend a hearing on July 31 at the Robert C. Byrd Federal Courthouse in Charleston. A federal magistrate will be appointed as a special commissioner while attorneys for National Union Fire Insurance will be on the other side of the table.
According to the order, Southern Coal representatives will have to “to testify under oath and furnish information to aid in enforcement of the money judgment or to answer concerning property or debt.”
The order came after the U.S District Court for the Southern District of West Virginia issued a subpoena June 10 for all documents used for preparation of tax returns by Southern Coal, which owed more than $2.7 million to the insurer at one point. A federal court in New York granted judgment in 2017, ordering Southern Coal to pay National Union more than $800,000.
In 2018, the U.S. District Court in Southern West Virginia ordered Southern Coal to pay $559,286 remaining in the $800,000 judgment, plus $196,645 in prejudgment interest and $87,473 in attorneys’ fees and expenses. U.S. Marshals were ordered to search Southern Coal’s bank accounts, but found them empty.
The U.S. Attorney’s Office in Charleston found a similar situation when determining whether Justice Energy had the assets to pay a $1.23 million civil contempt penalty for non-payment of a debt to James River Equipment. Justice Energy owed the coal mining parts and supply company $148,000 during its brief ownership by Russian energy company Mechel OAO in 2013.
Justice sold the company to Mechel in 2009 for $578 million and bought it back in 2015 for $5 million, but Justice Energy refused to pay the debt after being taken to federal court, resulting in the civil contempt penalty.
Federal investigators found no money in Justice Energy’s accounts, but found a spider web of Justice-owned companies handling various aspects of Justice Energy’s operations. U.S. Attorney Mike Stuart called Justice Energy a shell company and had recommended piercing the corporate veil to go after the governor and his son directly for the contempt penalty.
At the last minute, U.S. District Judge Irene Berger agreed to let Justice-owned Bluestone Resources pay Justice Energy’s penalty in three payments of $410,000 by the end of the year. Justice said he was not happy with agreeing to pay to clean up Mechel’s mess.
“Every single solitary thing is paid, plus a whole lot more is paid — a lot of stuff I shouldn’t have paid,” Justice said. “Russian taxes and things like that. I shouldn’t have paid them, but I did.”
In another case, U.S. Marshals were ordered last month to seek payment from Justice’s Bluestone Coal Corp. for more than $662,000 in a case brought in 2016 by coal miners who were laid off without warning, a violation of federal law.
“When you’ve had all the tentacles that I’ve had in the past, you’re going to have issues,” Justice said, referring to the multiple federal civil cases. “When you make decisions to not take bankruptcy and pay your way out of it, you may get late in paying something.”
That’s not Justice’s only run-in with federal investigators. The U.S. Attorney’s Office for the Western District of Virginia and the U.S. Mine Safety and Health Administration filed a civil action against 23 Justice-owned coal companies for $4.8 million in unpaid penalties accumulated between 2014 and 2019. In March, the Public Integrity Unit of the Department of Justice subpoenaed the state Department of Commerce looking for records pertaining to the Greenbrier Classic golf tournament and the charity Justice started to run the tournament.
HOME, SWEET, HOME
Talking to both groups in Beckley and Bluefield Thursday, Justice openly talked about the issue that has united several Republican and Democratic lawmakers: his residency.
The first hearing in the third case brought against Justice to ask the courts to order the governor to abide by the state Constitution and live in Charleston took place June 5. Kanawha County Circuit Judge Charles King is considering a motion to dismiss by Justice’s attorneys.
Delegate Isaac Sponaugle, D-Pendleton, brought the case against Justice in December after the first two attempts were unsuccessful. Despite arguing that the governor wasn’t fulfilling the requirements of his office as prescribed in the Constitution, King appeared reluctant for the court to tell the governor when and how often he should be at the mansion.
Several governors in other states have elected to live in their own homes rather than live in the mansions set aside for them. According to Governing magazine, Texas did away with a similar constitutional provision requiring its executive branch elected officials to live in the capital (the governor of Texas still has to live in Austin). In California, another large state, the state’s top elected officials are not required to live in Sacramento.
Justice believes he is doing the work of governor, even though he is not consistently in Charleston. He points to record-breaking tax revenue collections as a sign of an improving economy. According to revenue officials, West Virginia had a general revenue growth rate of 11.5 percent for the first 10 months of fiscal 2019, which ends June 30.
“I believe the people could give a hoot where I live,” Justice said. “I think at the end of the day is they want to see results, and they’re seeing that. All we want to do in Charleston is to come up with drama. I’m all about results and I don’t care about the drama…I want to do is get stuff done.”
The governor compares that growth rate to fiscal years 2007 and 2017 — under former governors Joe Manchin and Earl Ray Tomblin — when the growth rate for the decade was .08 percent. Justice said his experience running 123 businesses has helped him pull the state out of a nearly $500 million hole he inherited when he took office in 2017 to constant budget surpluses.
“You’ve never had a business guy that had a lot of stuff as your governor,” Justice said. “The guy with all the business ideas that’s your governor today that owns all these businesses and has all this experience is able to lead us out of this mess we’re in. We’re accomplishing that.”