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January 6, 2006

The Cost of Cronyism

By: Rowan Wolf

Merriam Webster cronyism: partiality to cronies especially as evidenced in the appointment of political hangers-on to office without regard to their qualifications

MoneyGlossary
cronyism: Favoritism to a friend.

What are the costs of cronyism? Well, death and disaster are heading the list. Thirteen people lost their lives in the Sago Mine explosion in Tallmansville, West Virginia. Immediately, questions turned to the safety of the mine owned and operated by International Coal Group. One didn't haven to look far to find that SAGO had 276 safety violations for which they paid $23,986. But this story is more complicated and reaches higher that safety violations, and slaps on the wrist by the Mine Safety and Health Administration (MSHA) of the Department of Labor.

The Bush administration came into power in 2001 and set out to create a corporate friendly environment, by rewriting environmental and worker safety protections. The approach in this regard has been to focus on "voluntary compliance" by corporations to laws and regulations that once held them more accountable for their actions. This voluntary compliance approach is clearly at play with the Sago mine. A former investigator for MSHA Jack Sparado, stated in an interview on DemocracyNow!:

JUAN GONZALEZ "...Could you talk a little bit about what has happened with mine health and safety regulation in monitoring at the federal government level under the administration, the current administration?"

JACK SPADARO "... It's the top officials in the agency who have, over the past five years, interfered with the field operations and tried to prevent inspectors from doing their jobs. Lauriski instituted a program called “compliance assistance,” where he encouraged the inspectors to, instead of writing violations, to try to convince the operators to comply with the law. But the law is mandatory. If an inspector finds a violation, the inspector is supposed to write a citation and make sure that it gets corrected. That's one of the reasons the agency was effective up until 2001 and had reduced over the 30-year period the numbers of fatalities and serious injuries at mines.

But now, I've talked in recent years with many inspectors and, in fact, two weeks ago talked with someone in the agency who's quite knowledgeable about what was happening with the agency, and that person said, “Jack, I'm afraid that there's going to be another mine disaster very soon, because of how poorly the agency's being managed and because the inspectors aren't being allowed to go forward with the kind of enforcement action they think is necessary."

"Mismanagement." Does that sound familiar to anyone? How about FEMA? And who is Lauriski? David Luarisiki is the Assistant Secretary of Labor for Mine Safety & Health. According to the White House posting, "Dave Lauriski was most recently the President of Lauriski and Associates, LLC, a consulting firm in Price, Utah. He served as General Manager of Energy West Mining Company from 1995 to 1999 and as the Director of Health, Safety, Environmental and Government Affairs for Interwest Mining Company from 1993 to 1995." Lauriski left MSHA and David Dye has been Acting Assistant Secretary, whose job resume looks like that of the semi-well placed political flunky. This follows the pattern of appointments that Bush makes. Does anyone remember "Brownie" (Michael Brown) of FEMA who made a disaster of disaster relief?

But let's go back to ICG for a moment. ICG was formed in 2004 by WL Ross & Co. to suck up mines that were going bankrupt. Sago was one of those acquisitions. It was part of the Anker acquisition in March of 2005. However, ICG never completed - or even filed for - the transfer permit for Sago. Without the permit, the mine should not even have been in operation. I'm sure this is another "voluntary compliance" issue. One wonders whether MHSA was aware of the fact that the mine was in operation without a permit, and if so, told them "Hey folks, you really ought to see about this at some point." Maybe that is exactly what the West Virginia inspector from the Department of Environmental Protection told the mine operators on December 1, 2005, when not even a citation was issued for failure to have a permit.

According to Science Daily article:

"Federal inspectors found 20 dangerous roof-falls, 14 power wire insulation problems and three cases of inadequate ventilation plans, among the 96 major violations, The Christian Science Monitor reported Thursday.

Sago's "serious and substantial" violations, which rose four-fold in 2005, form a pattern that worries safety experts, the newspaper said. During the last quarter of 2005, federal inspectors at Sago cited or ordered the company to fix 50 safety violations -- 19 of them serious and substantial."

In the same article, Joe McGowan (a friend of one of the miners- Junior Hammer) had spoken with Hammer a couple of weeks ago. Hammer had characterized the mine as a "walking time bomb" and "They're going to kill us all."

So we have a mine that had numerous serious safety violations operating without a permit, under a "mine friendly" government agency. What does "friends in high places" mean for people and workers? It means that you come last - if at all - in the calculations of what are priorities.

The explosion and deaths at the Sago mine are just the latest example of the costs to us of the cronyism of the Bush administration. Like the deaths of those who perished from lack of action in New Orleans, some folks just don't count. Who cares about the poor of the Gulf states? Who cares about some miners in Appalachia? Who cares about U.S. troops in a far away land (or those who return and need help)? Who cares about those who are freezing this winter because they can't pay for heat? Well it is not Bush. His top agenda, from the "war on terrorism" to opening the government to corporate cronyism, is focused towards profits and cronyism - which brings him more profits.

My guess is that most of the corporate press will look no further that Sago mine as the problem. The story will ultimately be that it was an "act of God" (lightning) that caused the explosion in the mine and resulted in the deaths of that crew of miners. Like hurricane Katrina was an "act of God," an no one can be responsible for that either. What is missed is that while "acts of God" are not preventable, our ability to prepare for them and to respond to them is in our hands. In both of these "natural disasters," it was not "God" who killed these people, it was George Bush's policies and priorities.

Posted by Rowan at January 6, 2006 10:09 AM Category: Environmental Justice