Truth IS Stranger than Fiction - Coal Mine Wants Charity Tax Break

by Scott Finn, Charleston Gazette, Dec. 18, 2006

A Milton-based company is asking the IRS for up to $21 million a year in charitable tax deductions for a mountaintop-removal mine in Mingo County, according to a state labor leader.

Trinity Coal Partners LLC is promising to build the roadbed for 12 miles of the King Coal Highway if  it gets permission to write it off as a charitable donation, said Steve White, executive director of the Affiliated Construction Trades Foundation, a labor umbrella organization.

In fact, the company has already built one mile of the roadbed "in anticipation of receiving the charitable contribution designation from the IRS," according to one letter obtained by White’s group.

"It borders on outrageous," White said. "Maybe it’s a really innovative concept. I suspect it may be a coal operator trying to scam the system."

According to White, the plan would go something like this: First, the company would mine the coal. Instead of having to restore the mountain to its approximate original contour, the company would use the overburden to build the roadbed.

For the life of the job, the company would get to write off up to $21 million a year as a charitable donation. At the end of the job, the state would get the right-of-way to 12 miles of four-lane roadbed. Finally, the state would have to hire construction workers to actually build the road.

One last wrinkle: The state would have to move the proposed route of the highway to the ridge tops where Trinity Coal wants to mine, White said …

(Mike Whitt of ) the Mingo County Redevelopment Authority tried to convince the state’s congressional delegation to get behind the deal, White said.

The ACT Foundation is suing the state Division of Highways in federal court over a similar deal.

In that deal, the DOH agreed to pay Nicewonder Coal (now Alpha Natural Resources) up to $15 million a year from the state to prepare a roadbed on another part of the King Coal Highway.

The coal company also was allowed to keep the coal and avoid restoring the mountain involved to its original contour, White said. The deal circumvented state and federal laws about open bidding and prevailing wage, he said.

"Bidding things out, making sure people pay a fair wage – that’s how you keep it honest when you’re spending the public’s money," White said.