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McConnell Said No to Money for Miners, Yes to Russian-Backed Plant

Sep 10, 2019
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Photo Illustration by Elizabeth Brockway/The Daily Beast/Getty

Senate Majority Leader Mitch McConnell last month blocked a measure that would have used Treasury Department funds marked for Appalachian development to help pay for coal miners’ health care and pensions in his home state of Kentucky. 

But just a few months earlier, McConnell successfully steered near-identical Treasury funds for Appalachia to bankroll a Kentucky aluminum plant connected to an ally of Russian President Vladimir Putin. 

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Democrats on Capitol Hill have raised concerns for months about McConnell’s connection to the aluminum plant. It’s one of several reasons why McConnell’s political opponents have tried to stick him with the nickname “Moscow Mitch.” But what’s gone largely unnoticed as the sobriquet has become a social media trending topic is how McConnell worked to keep money out of coal miners’ hands—even as he maneuvered to steer federal funds to the Russian-linked plant.” data-reactid=”18″>Democrats on Capitol Hill have raised concerns for months about McConnell’s connection to the aluminum plant. It’s one of several reasons why McConnell’s political opponents have tried to stick him with the nickname “Moscow Mitch.” But what’s gone largely unnoticed as the sobriquet has become a social media trending topic is how McConnell worked to keep money out of coal miners’ hands—even as he maneuvered to steer federal funds to the Russian-linked plant.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The scrutiny started in January, when McConnell voted to lift sanctions on Rusal, a Russian aluminum company formerly headed by Putin ally Oleg Deripaska, despite several of his Republican colleagues defecting and voting no. Rusal’s de-listing caused an uproar among Democrats on Capitol Hill who viewed the deal the Treasury Department put together with Rusal as too lenient.&nbsp;” data-reactid=”19″>The scrutiny started in January, when McConnell voted to lift sanctions on Rusal, a Russian aluminum company formerly headed by Putin ally Oleg Deripaska, despite several of his Republican colleagues defecting and voting no. Rusal’s de-listing caused an uproar among Democrats on Capitol Hill who viewed the deal the Treasury Department put together with Rusal as too lenient. 

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Dems Move to Block Trump From Lifting Sanctions on Russian Oligarch Oleg Deripaska” data-reactid=”20″>Dems Move to Block Trump From Lifting Sanctions on Russian Oligarch Oleg Deripaska

Then, in April, the focus turned to McConnell. Just days after the Treasury Department announced the official de-listing of Rusal, the company announced a $200 million investment in the Braidy Industries aluminum plant in the northeastern part of Kentucky. Democrats raised questions about how much McConnell knew about Rusal’s investment plan before he voted for sanctions relief. Rusal is the only outside investor in the plant. 

In a statement to The Daily Beast, a Braidy Industries spokesperson said the company has never lobbied members of Congress on sanctions issues and began working with law firm Akin Gump in May 2019 for “general government relations representation.” The spokesperson also said no employee or director of the company has ever spoken to McConnell about Rusal.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="But McConnell’s connection to the Rusal-Braidy aluminum plant is deeper than previously understood. At the same time Rusal was lobbying the Trump administration to get off the U.S. sanctions list, McConnell was advocating for federal funds to be diverted to help with construction of the Braidy plant in Kentucky.&nbsp;” data-reactid=”23″>But McConnell’s connection to the Rusal-Braidy aluminum plant is deeper than previously understood. At the same time Rusal was lobbying the Trump administration to get off the U.S. sanctions list, McConnell was advocating for federal funds to be diverted to help with construction of the Braidy plant in Kentucky. 

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Since 2016 the federal government has given states in Appalachia millions of dollars from the Treasury Department to help clean up and reform abandoned coal mining land, and to assist in economic and community development in those areas. McConnell and other Kentucky lawmakers, including Rep. Harold Rogers (R-KY), have advocated that the state continue to receive that federal funding given the impact of coal companies’ bankruptcies. Two companies, EastPark Industrial and Ashland Alliance, applied for $7 million from the pot of federal money from the Kentucky state government in November 2017 for general sewer and road repair on 204 acres of land.” data-reactid=”24″>Since 2016 the federal government has given states in Appalachia millions of dollars from the Treasury Department to help clean up and reform abandoned coal mining land, and to assist in economic and community development in those areas. McConnell and other Kentucky lawmakers, including Rep. Harold Rogers (R-KY), have advocated that the state continue to receive that federal funding given the impact of coal companies’ bankruptcies. Two companies, EastPark Industrial and Ashland Alliance, applied for $7 million from the pot of federal money from the Kentucky state government in November 2017 for general sewer and road repair on 204 acres of land.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="In October 2018, McConnell, Rogers, and Kentucky officials announced that EastPark and Ashland would get $4 million. Then, in March 2019, the applicants confirmed that the $4 million would not go to funding general repairs but would instead go prepping for construction on the aluminum plant.” data-reactid=”25″>In October 2018, McConnell, Rogers, and Kentucky officials announced that EastPark and Ashland would get $4 million. Then, in March 2019, the applicants confirmed that the $4 million would not go to funding general repairs but would instead go prepping for construction on the aluminum plant.

“Ashland Alliance and EastPark will only be applying the $4 million to the Braidy Site preparation,” wrote Ashland Alliance president Tim Gibbs in an email from March 2019 reviewed by The Daily Beast. “The $4 million in AML funds will enable Braidy to complete the $14 million total investment to stabilize the site for high precision manufacturing.”

It is not clear when talks between Braidy Industries and Rusal began, but two sources with direct knowledge of the $4 million payout said McConnell went to bat for the applicants during the internal review process and was instrumental in helping them secure the federal funding.

As site cleanup for the aluminum plant began, McConnell blocked a bill sponsored by Sen. Joe Manchin (D-WV) that would have doled out federal money to help fund miners’ pensions. 

Every year the Treasury Department collects fees from coal companies based on how much coal they produce in their plants. Those fees are then doled out to the Department of the Interior in part for the purpose of cleaning up land that houses abandoned mines and for economic development and restoration of coal communities suffering from energy company bankruptcies. Manchin wanted to take the excess money from that fund and use it to secure coal miner pensions and health care plans. McConnell blocked the measure, claiming he wanted a more permanent fix to multiemployer pensions. 

“There are amendments that benefit Americans and West Virginians that are being blocked by one person: Mitch McConnell,” Manchin said in a statement at the time. “He is the sole person that is blocking a vote on my amendment to… secure coal miners’ health care and pensions, even though it has bipartisan support and would better the lives of every West Virginian, Kentuckian and American.”

Making matters even more contentious was the fact that the majority leader helped steer $4 million in very similar federal funding for the Braidy aluminum plant construction. The $4 million came out of a $90 million allocation from the Treasury Department to the Department of the Interior to help three Appalachian states cope with the impact of a declining coal industry. The Department of the Interior did not respond to a request for comment.

In a statement, McConnell’s office defended his decisions.

“Leader McConnell has long been and will continue to be a strong supporter of Kentucky coal miners and their families. He has met with numerous Kentucky miners about important issues including the challenges facing their pension plan,” a spokesperson said. “Sen. McConnell is concerned about the challenges facing a number of multiemployer pension plans, including UMWA’s pension, and he believes it is best addressed through a broader bipartisan and bicameral pension reform effort.” 

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="But some coal miners in Kentucky are threatening to throw their support behind McConnell’s main 2020 opponent, Amy McGrath, if the majority leader fails to pass legislation that would help secure their pensions. Thousands of miners in Kentucky rely on the monthly $600 check to pay the bills and to buy groceries for their families.&nbsp;” data-reactid=”36″>But some coal miners in Kentucky are threatening to throw their support behind McConnell’s main 2020 opponent, Amy McGrath, if the majority leader fails to pass legislation that would help secure their pensions. Thousands of miners in Kentucky rely on the monthly $600 check to pay the bills and to buy groceries for their families. 

“We’re not ever going to quit until they give us what we’ve earned. We’re not going to quit until we get it,” said Dwayne Thompson, a 72-year-old former Peabody Energy coal miner from Kentucky. “I hope Senator McConnell gets that. If he supports us, we will support him.”

The United Mine Workers of America (UMWA), the national mining union, has for years called on McConnell and other lawmakers to pass legislation that would help mitigate the fallout of the increasing number of energy company bankruptcies and the closure of hundreds of mines. In 1974, Congress passed a law that established minimum standards for pension plans in private industry. That same year UMWA negotiated its pension plan with coal mining companies. But with the demise of the coal industry, the fund is running out of money. It’s expected to be insolvent by 2022.

Behind closed doors, two sources with direct knowledge say, McConnell has privately promised miners a more permanent fix to the pension issue, but even national coal mining leaders are skeptical that the Senate majority leader and his colleagues in Congress will help in the short term.

“Coal miners understand something—when people tell us ‘we’re going to pass legislation’… we don’t believe it,” said Cecil Roberts, president of the UWMA, at a recent speech in Washington. “Anyone who understands how Congress works knows that that’s a fight.”

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Several miners who spoke to The Daily Beast said they felt McConnell had blocked the funding for pensions because some of the union members had decided to support his 2014 election opponent, Alison Lundergan Grimes. Others, though, were wary of going too far in their condemnation of the majority leader, saying that at the end of the day, McConnell was their best shot at ensuring they could continue providing for their families. (In 2017 McConnell helped push forward a bipartisan spending bill that included a permanent extension of health care benefits to thousands of coal miners.) On Friday two miners featured in an attack add by McGrath said they were not told their images would be used for a political campaign and demanded that McGrath stop airing them.” data-reactid=”41″>Several miners who spoke to The Daily Beast said they felt McConnell had blocked the funding for pensions because some of the union members had decided to support his 2014 election opponent, Alison Lundergan Grimes. Others, though, were wary of going too far in their condemnation of the majority leader, saying that at the end of the day, McConnell was their best shot at ensuring they could continue providing for their families. (In 2017 McConnell helped push forward a bipartisan spending bill that included a permanent extension of health care benefits to thousands of coal miners.) On Friday two miners featured in an attack add by McGrath said they were not told their images would be used for a political campaign and demanded that McGrath stop airing them.

“We thank Mr. McConnell for what he did to help on our health care, but now he needs to finish the job and do something about our pensions,” said Bob Cox, a 73-year-old former miner who serves as the president of a local UMWA chapter. “It’s a day to day concern for a lot of the older people I live with. They’re not well and they don’t need the extra worry that it brings on. If anything goes wrong, we won’t last as long as we thought we would.”

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