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The for-profit corporate structure of Hardworking
Ohioans, Inc. and other groups precludes transparency on how
companies use money to in fluence energy policy.
By Kathiann Kowalski This article provided by Eye on Ohio, the
nonprofit, nonpartisan Ohio Center for Journalism, in partnership
with the nonprofit Energy News Network. Help us provide more public
service reporting by joining our free mailing list or the mailing
list for the Energy News Network.
While an Ohio-based coal company has contributed $100,000 to an
organization that may have been involved in an alleged bribery
operation to pass a power plant bailout law last year, company
officials said in a bankruptcy filing that they don’t know how the
money was spent.
A bankruptcy court ruled last week that Murray Energy can move ahead
to seek approval of its reorganization plan, subject to a
representation that its officers and directors have no knowledge
about how money it gave to a dark money organization might have been
used to promote the Ohio coal and nuclear bailout law at the heart
of a federal conspiracy case.
The ruling is a partial victory for environmental and citizen
groups, who had objected to a more limited disclosure statement
proposed by Murray Energy and its related debtors on Aug. 6. But
creditors or others can’t independently verify that statement or dig
into other questions about the extent to which the company may have
spent funds to influence Ohio energy policy.
“If we do not have the ability to verify, we should not trust,” said
Catherine Turcer, executive director of Common Cause Ohio,
paraphrasing a Russian proverb.
Murray Energy has been identified as “Company B” in the federal
government’s July 21 complaint, which alleges that $100,000 was
wired from a company to “Dark Money Group 1” on Oct. 26, 2018.
Murray Energy’s bankruptcy filings show a $100,000 cash contribution
that day to Hardworking Ohioans, Inc. That organization, which is
registered as a for-profit corporation, allegedly spent $1.5 million
on political ads supporting Republican candidates in 2018.
Murray Energy did not respond to a request for comments for this
article.
The Environmental Law & Policy Center, Ohio Environmental Council,
and Ohio Citizen Action had asked Bankruptcy Judge John Hoffman,
Jr., to require disclosures about Murray Energy’s possible
involvement in the federal case. Murray Energy’s Aug. 6 filing
stated that the case had been filed, that so far it was unaware of
contacts with the authorities that had filed the complaint, and that
it had previously disclosed all gifts and charitable contributions.
Criminal charges against the company generally would not be wiped
out by bankruptcy, so they might impair the financial viability of
the reorganized company. That information could be important to
creditors, the environmental and citizen groups stressed.
Moreover, if the government should bring criminal charges, Murray
Energy might be unable to complete its mine closure obligations, the
groups argued. If that happened, the state fund set up as a backstop
lacks sufficient money to cover the estimated costs of more than
$200 million for that work.
It’s unclear whether those liabilities will be discharged in
bankruptcy — and thus limited to the reorganized company’s assets
going forward.
“The question is still before the court, and we will object to the
plan on the grounds that it is not feasible and does not comply with
federal law,” said attorney Margrethe Kearney at the Environmental
Law & Policy Center. Ohio’s current bond pool has never been
approved under the Surface Mining Control & Reclamation Act, she
explained.
What’s disclosed — and what’s not
The revised statement required by Judge Hoffman’s Aug. 7 order
specifically notes the payment to Hardworking Ohioans, Inc. It also
says that, to date, Murray Energy and its affiliated debtors and
their officers and directors “have no further knowledge regarding
how Hardworking Ohioans Inc. spent the contribution.”
That representation raises the question of why the company paid
$100,000 to the organization. Because Hardworking Ohioans is set up
as a for-profit corporation, there’s no way to find out who its
directors and officers were, unless that company voluntarily
discloses the information.
J. Anthony Kington, the attorney who signed for Taft Service
Solutions Corp. as the Hardworking Ohioans’ incorporator and agent
for service, has not responded to a request for comment.
The bankruptcy court’s required disclosure statement also calls only
for Murray Energy to indicate whether it had communications from
authorities about the federal criminal case. It does not require any
statements about communications the coal company, its officers or
directors may have had with the defendants named in that case,
including Ohio Rep. Larry Householder, a Republican from Glenford.
There have at least been some contacts over the years, although
topics of any discussions are unknown. For example, an attendee list
from an executive roundtable at a 2015 conference for Republican
governors shows both defendant Jeff Longstreth and attorney Eric
Lycan as guests of Murray Energy. Jamie Corey, a senior researcher
at the watchdog group Documented, uncovered the material from a
public records request. Lycan has been treasurer of both Generation
Now and the Growth and Opportunity PAC, which are alleged to have
funneled money in the federal court case.
“Federal authorities have made clear that their investigation into
the events surrounding the passage of House Bill 6, which benefited
Murray Energy, is ongoing and they will follow the evidence where it
leads,” said Dave Anderson, policy and communications manager for
the Energy & Policy Institute.
The lack of information is compounded by a $15.7 million settlement
of claims an unsecured creditors’ group had made this spring. At
that time, the creditors’ group alleged that company officers had
been “grossly overcompensated” and that members of the Murray family
had used the company as their personal “piggy bank.” The company had
denied the allegations, stating that its claims were “baseless and
concocted.”
A July 29 filing in the case includes stipulations that the
settlement would be in the best interests of Murray Energy and its
creditors. However, the settlement also means there won’t be more
public inquiry into the issues it resolves.
“Investigations within Murray Energy's bankruptcy case have
identified a larger pot of contributions made between 2016 and 2019
that has not been fully disclosed publicly,” Anderson said. “The
bankruptcy court could simply request that the results of these
investigations be made public, rather than suppressed as part of a
settlement agreement.”
“Ultimately the Murray Energy bankruptcy has broad implications for
things like mine clean up funds that are a matter of public concern,
and the public deserves to know how this private company spent
itself into bankruptcy,” Anderson added.
The bigger question beyond the bankruptcy case is the way companies
and others use different organizations to engage in political
activity without being upfront with the public about what they’re
doing, Turcer said. And that applies, in her view, whether the
spending is done through a for-profit limited liability corporation,
a tax-exempt group known as a 501(c)(4) corporation, or another type
of entity.
“It’s completely infuriating that these entities that are claiming
they need to go bankrupt are willing to make investments in
political advertisements — and that they expect to operate in
secret, so that their debtors wouldn’t even have information about
what they’re up to,” Turcer said. |
