If Peabody’s Bankrupt, Who’s Got the Money?

by Chris Regan

bank of america

Peabody Coal has declared bankruptcy. It’s the latest, and largest, of the extraordinary string of corporate frauds on workers, investors, and whole US states. Once again, taxpayers will be victimized, while ownership, management, and Wall Street walk away with fat paydays. We all know Peabody has made billions – who’s got the money?

In 2014, Peabody Energy was paying its CEO over ten million dollars a year. Another fourteen-to-fifteen million per year went to the next four ranking executives. Over the past seven years, the CEO led Peabody into total financial disaster, while he and his second-in-command raked in cash. While these corporate “leaders” feathered their beds and gold-plated their bathrooms, they declined to fund the pension and health care funds of the men and women who actually brought the coal up from underground.

This isn’t bankruptcy. It’s robbery.

Time and time again, we see the same coal con-game. The executives cook the books, bonus the bosses, raid the retirees, and when the music stops, there’s money for everyone except those who actually did the work. Alpha’s suits ran the company into the ground and walked away with tens of millions for themselves.

These extraordinary hauls of cold, hard cash beg the question – what would they have gotten if the company had done well? We know that too. Don Blankenship and his crew, just to pick one example, reaped almost two hundred million dollars in transactions made when coal prices were high in 2011. So Don will have plenty of money to count if he ever actually goes to prison.

Were these savvy, risk-taking entrepreneurs simply blindsided by factors they couldn’t have anticipated? Was the whole thing beyond their control? Not a chance. Making huge, risky buys at the top of the market five years ago, going deeply into debt, and ignoring the rise of natural gas sealed the fate of these coal giants. But why shouldn’t the corporate boards have bet big – after all, they were gambling with other people’s money.

The course of the Peabody bankruptcy is utterly predictable. First and foremost, the executives are “key leaders” who can’t be replaced – they must continue to make millions. But the employees will have to “make sacrifices,” and take cuts in what will surely be described as “bloated” health care plans and retirement funds.

It’s Patriot Coal, all over again.

While these coal executives and owners are jettisoning the pension obligations and leaving miners without health care benefits that they earned, you can rest assured the bosses will find money to put into politics. Just last week, Ted Cruz came to Wheeling for a big-money dinner hosted by Bob Murray. Murray has been a major financial force behind the Republican takeover of West Virginia and has even been sued by a former employee who credibly claimed to have been fired for not giving money to GOP candidates.

No matter their rhetoric, these political leaders will be looking out for who pays them – coal owners – and not for the miners. Just last month, Mitch McConnell – a “war on coal” guy all the way – specifically blocked relief for miners who had their healthcare and pension money robbed from them by corporate bosses. Money talks, while hard work walks.

This whole bankruptcy scam has been so successful, that it’s been expanded to our state government. Just eighteen months after taking over in 2014, Republicans began to declare that West Virginia had run out of money. So who do they say should suffer?

You guessed it: working people. Our teachers, police, and firefighters now face premium hikes and benefit cuts in the PEIA program. A member of Republican Bill Cole’s Senate Majority said “our wages are too high because of prevailing wage” and that blue-collar construction therefore needed a pay cut. Thereafter, he explained that union members in West Virginia were “free riders” and insulted their work ethic. I guess when you become a billionaire, you learn to spot overpaid people from a mile away.

Make no mistake: the corporate bosses got everything they wanted from the new “business-minded” Republican leadership in Charleston. They got wages lowered, unions weakened, and people’s legal rights taken away. But somehow it’s not enough, and they need more. More and more has to be taken off the tables of ordinary people to fill the bellies of millionaires and billionaires who can never eat enough.

It’s gone so far, so fast, that Republicans have begun openly discussing the repeal of the minimum wage. So ten million a year won’t do it for the corporate chieftains of bankrupt Peabody. But ten dollars an hour is too much for people who actually work.

The values in our country have gotten fundamentally out of whack. A privileged few and their accomplices can’t lose, no matter how little they work. They take more and more, but are never satisfied. Meanwhile, the vast majority of people can’t get ahead no matter how hard they work. Even what they’ve already earned is subject to being taken away to feed the greed of the billionaire class.

Peabody is bankrupt, so who’s got the money? “Mr. Peabody’s coal train has hauled it away.”

It’s time to change the system.

[N.B.: The iconic photo above is from this historic expose on Wall Street abuse by Matt Taibbi]