The Root of Sago Mine Disaster: Corporate Crime Pays

By Jeff Milchen 
Published January 14, 2006

In the aftermath of the Sago mine disaster, the Bush Administration issued familiar and predictable promises to conduct a full investigation and take “necessary steps to ensure that this never happens again.”

Administration officials could learn a lot about improving mine safety by talking with any miner for just a few minutes. But the most crucial step to prevent tragedies like Sago has little to do with the specifics of mining — it involves changing the cost-benefit analysis made by corporate executives in workplace safety decisions.

Consider the decisions by managers of the Sago mine, which received more than 200 citations last year from the Mine Safety and Health Administration (MSHA), the federal agency charged with enforcing safety compliance. These were not just minor infractions; in the last quarter of 2005, inspectors cited 18 “serious and substantial” violations capable of causing major injuries or deaths. Not surprisingly, Sago’s accident rate tripled the national average and more than a dozen serious roof falls — in which huge slabs of the mine roof simply collapsed — were recorded last year. Many citations were for violating ventilation standards that exist specifically to prevent explosions like that which doomed Sago’s victims.

“This mine [Sago] should have been closed… the record is very clear,” says Jack Spadaro, former director of the National Mine Safety and Health Academy.

Instead, MSHA continued issuing fines and the managers at then-owner Anker Mining Co. simply wrote them off as a cost of doing business on the cheap. It made perfect sense for the corporation’s bottom line; the fines for those 205 violations total about $25,000. This was a pittance to Anker, never mind International Coal Group (ICG), which bought the Sago mine last November. ICG’s most recent quarterly earnings were $158 million, meaning the average fine levied in 2005 — about $150 — equals a few seconds of income. Such “enforcement” has a deterrent effect akin to punishing drunk driving with fines of a few nickels.

Like drunk or reckless drivers, most corporate executives would never break the law deliberately if they knew action X would cause the deaths of persons one through 12. But that’s never the case. The structure of corporations tends to separate decision-making power from accountability for those decisions, and executives are expected to weigh only economic costs against benefits, not the human impact of their decisions.

At Sago, it seems management performed the same calculations their counterparts at FordFirestone, and other corporations employed with deadly results. When money saved by ignoring the law far outweighs the cost of minuscule fines and the occasional lawsuit, corporations often will endanger workers, customers or all of us.

The Bush administration reflexively blames “bad apples” rather than addresses a broken system and its own role in perpetuating it, but Rep. Major Owens, D-NY, was on target when he noted last year, “the federal government is itself guilty of gross negligence in efforts to deter corporate manslaughter.”

Rather than solving that problem, Bush and Congress continue to exacerbate it. Since Bush took office, 17 proposed MSHA standards to protect miners’ safety and health were discarded, and the number of mines referred by MSHA to the Justice Department for criminal prosecution has dropped from 38 in 2000 to 12 last year.

Compromising the agency’s mission already driven away dedicated staff. Celeste Monforton, former special assistant at the MSHA for 6 years under the Clinton administration, told me she left a year after Bush took office because she “didn’t want to be a disgruntled employee.” Monforton believed Bush appointees were focused on “trying to be a friend and partner to industry instead of protecting workers.”

Bush appointees also have squelched the flow of information from MSHA, denying or heavily redacting information requests. Ironically, the agency was exceptionally transparent during his father’s presidency, according to Ellen Smith, editor of Mine Health and Safety News.

Preventing the Next Tragedy

When Rep. Owens introduced the Wrongful Death Accountability Act last year, to make corporate manslaughter a felony offense and double the maximum punishment for lying to federal safety inspectors, Republicans quickly killed the bill on a party-line vote.

In sharp contrast, government responded swiftly (if inadequately) when the corporate media and wealthy interests sounded alarms over the financial harm caused by fraud and accounting crimes at Enron. Forcing federal officials to change their political calculations and treat corporate crimes that kill as seriously as those harming investors will require a level of public outcry that dwarfs the response to the Enron and Arthur Andersen scandals.

Perhaps the outrage over Sago will prove the impetus to save the lives of other Americans. It’s not just to protect those toiling in mines. More U.S. workers are killed in workplace accidents in an average day than died in the Sago mine — most of them in equally preventable events.

Though the timing was unpredictable, let’s recognize the Sago tragedy is not rightfully called an “accident.” Corporate executives’ decisions will change when endangering workers’ lives carries the likelihood of painful fines or imprisonment. Only then will crimes like those at Sago, and the subsequent tragedy, cease to be regular events.

An earlier version of this story was first published by

Addendum: On Jan. 10, less than one week after the Sago miners were found dead, a roof collapse at a mine owned by Maverick Mining Co. in Pikeville, KY killed employee Cornelius Yates. The mine had been cited five times in two years for failure to protect against roof falls. The average fine was less than $70.

© 2006 

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