A federal judge has fined a Jim Justice-owned coal company $1.23 million for being in contempt of court after the company was sued for not paying a debt.
U.S. District Judge Irene Berger issued the fine to Justice Energy Company after the company failed to respond for 41 days to her order holding the company in contempt.
The $1.23 million fine represents a fine of $30,000 per day that the company was in contempt. Berger found Justice Energy in contempt of court from Jan. 5, the day she issued her order, until Feb. 14.
The original debt, owed to a Virginia-based construction equipment company, dates back to 2013, a time when Justice, now a Democratic candidate for governor, did not own the company.
Justice Energy, owned at the time by Mechel OAO, a Russian energy company, owed James River Equipment about $150,000 for mining equipment.
After the debt went unpaid, James River sued in November 2013. After Justice Energy missed several court appearances, the companies eventually worked out a payment plan, which required Justice Energy to pay a total of $180,000, in spread out over six monthly payments.
Justice Energy made payments in November and December of last year, but failed to make its payments, due on the first of the month, in January and February of this year.
The company eventually made those back payments on Feb. 15, the same day the Gazette-Mail inquired and wrote about the unpaid debt and contempt of court finding.
"This is another step by the Justice company to clean up the mess left over from the irresponsible and bankrupt Russian operation; while we still put coal miners back to work," Tom Lusk, a company spokesman, said in a prepared statement.
Justice, the state's richest man and owner of The Greenbrier resort, has a lengthy history of unpaid debts and fines.
Many of the recent debts relate to the buyback of many of his mining interests from Mechel.
He initially sold many of his mining interests to the Russian company in 2009 for $568 million in cash and stock.
He bought the businesses back in February 2015 for just $5 million, a tiny fraction of the original price and a signal of the precipitous decline of the coal industry. But as part of the buyback he agreed to take on $130 million in debts and millions more in legal liability.
Justice has argued that if not for his buyback, those mines would be bankrupt and out of business and the debts would have gone completely unpaid.
"At the time of occurrence of all or most of the events which led to the [debts], Justice Energy was a wholly owned subsidiary of a Russian entity with all decision-making coming out of Moscow, Russia," Justice's lawyers wrote to Berger. "Since that time, the defendant's ownership and management has changed."
Justice notes that when he bought back the mining companies he re-opened mines in Wyoming and McDowell counties.
"I knew before I ran for governor, that when I took on these troubled projects, I would take a hit from the press and politicians," Justice said in a prepared statement. "But I know when I lay my head down I am putting West Virginians back to work to support their families. In my heart, I know I am doing the right thing."
Scott Crichlow, chairman of the political science department at West Virginia University, said the fines and debts could be a relevant campaign issue, with Justice currently leading in polls of the governor's race.
"To the extent some voters will see this as a pattern, not just a one-time event, that could raise concerns on a highly relatable issue. A lot of voters are in debt and think 'I have to pay my bills - why isn't a billionaire paying his?'" Crichlow said. "Elections are often, at their core, about trust. Who do you trust to have the judgment to safely run the state? Some voters would likely have less faith in Mr. Justice if they believed he skirted or broke the rules to make his fortune."
Reach David Gutman at david.gutman@wvgazettemail.com, 304-348-5119 or follow @davidlgutman on Twitter.