By Carolyn Johnson, Staff Director, Citizens Coal Council

AEI, (Addington), the fourth largest coal producer in the country, announced that it will file for bankruptcy. For over a year, citizens across the country have been very concerned that the US Office of Surface Mining and regulators in several states are allowing the company to continue operating without adequate reclamation bonds.

Based in Kentucky, the privately held company headed by Larry Addington operates 29 strip mines (including mountaintop removal strip mines) and 15 underground mines in Colorado, Illinois, Indiana, Kentucky, Tennessee and West Virginia. Frontier Insurance, a company that guaranteed the AEI's bonds, went bankrupt and was taken over by the state of New York last year. The cost of the reclamation at these 44 mines is estimated to be close to $400 million.

In September 2001, Save Our Cumberland Mountains (SOCM) in Tennessee and the Citizens Coal Council ( CCC ) asked the US Office of Surface Mining (OSM) to take enforcement action and immediately require AEI to post new and adequate bonds as required by law. OSM refused. In December, Steve Griles, Deputy Secretary of the Interior, gave AEI more time to come up with the bond money. Griles was a lobbyist for the National Mining Association before President Bush appointed him to be the second in command of the Interior Department.

Connect the dots from AEI's campaign donations . . . to Griles’ special favor for AEI. The federal coal law requires all coal mine operators to have adequate bonds, no exceptions. In Feb. 2001, the Louisville Courier-Journal reported that Larry Addington and his family members gave President Bush and the Republicans over $800,000 in campaign donations between 1998 and 2000.

Is there a bankruptcy plague in the coal/energy industry? CCC has received reports that Larry Addington was a special guest, along with Enron officials, at the announcement of the Bush-Cheney energy policy last May. Maybe they caught a bug. Coal prices are at their highest in two decades but some other coal companies look financially shaky – Massey Energy’s stock dropped over 20% in two days last month.

We hope to have more news about actions on AEI in the next few weeks.