November 2, 2004

Kerry calls for federal probe of MSHA contracts

By Ken Ward Jr.
Staff writer

Democratic presidential candidate John Kerry has called for a U.S. Department of Justice probe of sole-source contracts that the federal Mine Safety and Health Administration awarded to companies with close ties to top MSHA officials.

Kerry said that more investigation is needed of the contracts, which the Department of Labor Inspector General said Friday violated government purchasing rules.

Slurry spill probe urged

In a prepared statement, Kerry also said that the Justice Department should examine MSHA’s investigation of an October 2000 slurry spill at a Massey Energy coal-waste impoundment in Eastern Kentucky.

The MSHA contracts and the Massey spill were the subject of separate inspector general probes after longtime federal mine inspector Jack Spadaro complained about the agency’s actions.

Kerry noted that, in the case of the slurry spill, the IG continues to refuse to publicly disclose half of its 25-page report.

“Given the fact that MSHA’s director, David D. Lauriski, is widely known to have had close business ties and personal relations with executives responsible for both the sole-source procurement violations cited by the Inspector General and the deadly impoundment spill in Martin County, the Justice Department should make a full investigation of both cases,” Kerry said in his statement.

“Quality of life”

“The lives and quality of life in our coal mines and mining communities are far too precious to be left to the devices of public officials who may value their relations with the industries they have served more than their sworn duty to protect the public’s health and safety,” Kerry said.

“As with the dangers posed by the letting of non-bid contracts to Halliburton in Iraq, the practice of sole-source procurement in the mining industry here at home must not be tolerated,” he said. “Too many lives are at stake.”

In an 88-page report released Friday, the Labor Department IG said that MSHA should not have given sole-source awards for contracts totaling more than $500,000 to Performance Associates International Inc. and Ben W. Sheppard & Associates. Both companies were hired to work on MSHA’s safety training programs.

Lauriski has close ties to both companies, but the IG said that it could “not substantiate” allegations by Spadaro that MSHA officials specifically directed the contracts to the firms.

“Lack of commitment”

Instead, Inspector General Elliott P. Lewis said the probe found “a long-term MSHA-wide history of career and non-career management that accepted and fostered a lack of commitment to procurement principles.”

The IG report said that the situation was so bad that the Labor Department should strip MSHA of its authority to handle its own procurement.

IG auditors examined and found problems with MSHA contracts for the period from June 2000 through December 2002, a time frame that included the last six months of the Clinton administration.

Overall, auditors found problems — mostly the failure to follow bidding requirements — with $17.8 million in contracts with eight different vendors.

For the top three vendors, accounting for $16.5 million in contracts, purchases that violated bidding requirements began in mid- to late-2000, but continued well into 2002.

President Bush took office in January 2001, and Lauriski became MSHA chief in May 2001.

Suzy Bohnert, an MSHA spokeswoman, said that no one from the mine safety agency was available Monday to discuss the IG report.

Lauriski was in his office, Bohnert said, but was in meetings.

In a prepared statement read by Bohnert, Deputy Labor Secretary Steven J. Law credited Lauriski with “flagging procurement problems at MSHA soon after he arrived.”

Bohnert said that, “unlike his predecessors, [Lauriski] has made several reforms that have substantially improved the situation.”

Bohnert said she could not elaborate on how or when Lauriski pointed out procurement problems or what steps he took to fix them.

The IG’s report does note that a new procurement officer hired in 2001 pointed out that some MSHA employees who did not have authority to do so were committing to government purchases.

The report also says, however, that such activities continued, even after the procurement officer warned they were against the rules.

To contact staff writer Ken Ward Jr., use e-mail or call 348-1702.