Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: WEDNESDAY, April 26, 1995                   TAG: 9504260107
SECTION: VIRGINIA                    PAGE: A1   EDITION: METRO 
SOURCE: JAN VERTEFEUILLE STAFF WRITER
DATELINE:                                 LENGTH: Medium

$2 MILLION SETTLEMENT OFFERED

Southmountain Coal Co.'s parent company, Apple Coal, has agreed to recapitalize its now-defunct subsidiary with $2 million. If a judge approves the settlement, $1.2 million will be paid in fines, and $800,000 will go into an educational trust for the miners' dependents.

"The children can use the money a lot more than the federal government," said Tony Oppegard, an attorney with the Mine Safety Project in Kentucky. "The fact that a trust account was set up is a very positive aspect of the settlement."

The explosion was caused when methane gas, allowed to build up in violation of mining laws, was ignited by a cigarette lighter carried into the mine by one of the blast's victims.

Southmountain admitted that its mine foreman did not conduct required weekly searches of employees for smoking materials before the December 1992 explosion. The company also failed to follow federal ventilation guidelines, which the government said was the primary cause of the explosion.

Southmountain is now defunct, so the government planned to go after its parent company, Apple. The government had asked the court to impose a $3.6 million fine, but because the company's willful violation of mining laws amounted to involuntary manslaughter, the judge is not bound by sentencing guidelines and could award more.

In addition to the settlement in U.S. District Court in Abingdon, an Apple employee pleaded guilty to two felony counts of making false statements to investigators. William Ridley Elkins, a manager for Apple Coal in Coeburn, admitted running Southmountain despite being prohibited from doing so by a history of mining violations. He later lied to federal and state mining investigators about whether he was operating Southmountain.

The government had asked the court to impose a $3.6 million fine at a February hearing, and Judge Samuel Wilson still could choose to impose a higher fine. But the $2 million payment ensures that the parent company will be held responsible for paying the fine for Southmountain, which likely could not have paid a fine.

"I am ecstatic," Assistant U.S. Attorney Tom Bondurant said. "I don't think it could have worked out any better."

Southmountain attorney Warren Upton said Tuesday evening that he was unaware of the settlement. An Apple attorney could not be reached for comment.

Southmountain nearly lost its surface-mining permits in 1991 because of Elkins' ties to companies with a history of uncorrected environmental violations. The company was able to keep the permits when it successfully argued that Elkins was not in charge at the mine but was only a consultant to W. Jack Davis, the company's president.

Elkins will be sentenced July 12, along with three Southmountain employees.

Last summer, Southmountain pleaded guilty to five felony counts and eight misdemeanor charges that it didn't perform required safety checks and then falsified records to say it did.

Apple Coal was indicted in December, along with Elkins.

"The kind of conditions that existed at Southmountain are not at all unusual for small mines in the Appalachian coalfields," Oppegard said. "The conditions were egregious, but they weren't unusual."

Oppegard's Mine Safety Project represented three of the killed workers' families in some proceedings after the mine explosion.

The indictment against Apple was the first time a coal corporation has been charged for violations occurring at a subsidiary.