Campbell County Commissioners have fielded many questions about the Blackjewel LLC bankruptcy, and one that keeps coming up is if the county will pursue criminal charges against Jeff Hoops Sr., the company’s former CEO and president.
At the Commission’s monthly meeting with elected officials Monday, Commissioner Mark Christensen told County Attorney Ron Wirthwein to look into how the county could prosecute Hoops criminally.
“There’s got to be tons of statutes that apply. There’s easily fraud,” Christensen said.
Nearly 600 of Blackjewel’s 1,700 employees in four states were locked out of their jobs at the Eagle Butte and Belle Ayr mines in Campbell County on July 1 hours after the company filed for Chapter 11 bankruptcy.
Most are still owed for time worked between their last paycheck and the mines shutting down while nearly $1.5 million representing multiple employee contributions to their own 401(k) and health savings accounts were not made.
Sheriff Scott Matheny said someone needs to file a complaint for there to be an investigation. So far, no complaints have been filed.
“Then it has to be, what jurisdiction did that crime occur in? In this instance, it might be more appropriate for a federal charge,” said Deputy County Attorney Carol Seeger. “(Right) now, none of us have any hard facts to know what, if anything, might have happened.”
Commission Chairman Rusty Bell said Seeger told him that if any illegal activity has been committed, it will be still illegal a month from now.
“Sometimes you have to be a little bit patient,” he said. “Let this bankruptcy part get hashed out, let’s get people back to work.”
He suggested checking to see if there has been any legal action taken against Hoops in the East, where Blackjewel also had coal mines. At those mines, about 1,100 employees also had their final regular paychecks bounce and their deposits clawed back by their banks, leaving many with negative account balances.
If that’s the case, Bell suggested Campbell County join the lawsuit.
“I’d rather partner with the attorney general and drag (Hoops) out here,” Christensen said.
What’s the state doing?
Bell said state legislators also are keeping a close eye on the Blackjewel and Cloud Peak Energy bankruptcies.
“It’s going to be interesting,” he said. “We’ve got two ends of the spectrum on this. The Cloud Peak one has been drug out forever and the Blackjewel one has been rammed through in record time.”
Legislators have been asking counties for numbers that highlight how they’ve been affected by the bankruptcies and the downturn in the energy industry, Bell said.
Bell believes the Legislature will do something to address the millions of dollars in unpaid taxes — something commissioners have asked legislators to address for several years, even before the industry was beset with bankruptcies.
“I’d be surprised if they don’t try to deal with that faster than they normally would,” he said, adding that they’ve talked about everything from fixing the lien priority to going to a monthly payment schedule.
He’s even heard that some legislators want to make it a felony to pay executives bonuses if a company hasn’t paid its taxes.
“There’s all kinds of things floating around,” he said.
“It’s going to go somewhere this time,” Christensen said of the monthly payment issue.
“It’s not going to be easy for anybody to oppose that, in light of everything that’s happened in the bankruptcies,” Bell said, but he thinks there will be some opposition from the energy industry.
“Whether they can justify the fact that they’re operating on money that should have been escrowed or paid in taxes, I think that’s something for them to defend. It’s a tougher position to defend now than ever before,” he said.
Companies now pay county taxes on mineral production up to 18 months after the mineral has been taken out of the ground.
The state now has motivation to fix the issue, Bell said, because 73% of the money Campbell County collects goes to the state to redistribute to school districts. If Campbell County is unable to collect those taxes, the state will have to find that money somewhere else, so “it’s a double hit.”
“This is all self-inflicted,” Christensen said of the state’s predicament. “We took (the lien issue) to the Legislature at least six years ago. We kept telling them this exact thing would happen and nobody wanted to do it. Now, everybody wants to be the hero.”