Signal Peak coal mine opponents seek federal investigation alleging disregard for the law

The groups cite the federal government’s own data about criminal activity at the mine, as well as a leaked U.S. State Department cable about stakeholder Gunvor Group’s alleged ties with Russia. An Ohio bribery scandal involving the mine’s other major stakeholder, First Energy, was also referenced. The point of the letters, opponents argued, is that when making enforcement decisions, federal officials must consider what they know about the operator and its owners.

The meat of the argument centers on the federal government’s successful prosecution of Signal Peak for environmental and safety violations in 2021. That prosecution resulted in an admission of guilt by the company, which was placed on probation for five years and fined $1 million. The violations included pumping mine waste into abandoned sections of the mine without preapproval from federal regulators.

The U.S. attorney has an obligation to investigate, said Anne Hedges, Montana Environmental Information Center co-director. The office of Surface Mining Reclamation and Enforcement also “has an obligation to investigate. Nobody’s done it and it’s just mind boggling that this mine has gotten away with what it’s gotten away with for as long as it has," she said. “Everyone, I think, is hoping somebody else will take care of the problem.”

MEIC, Billings-based Northern Plains Resource Council, Sierra Club, WildEarth Guardians, Western Environmental Law Center and Earthjustice are the groups asking OSMRE and the U.S. attorney to act. Specifically, the groups ask OSMRE to perform a federal inspection within days of receiving the complaint, which is backstopped by the enforcement requirements of the Surface Mining Control and Reclamation Act.

Contacted for this article, Signal Peak chose not to comment, as the company is involved in ongoing litigation with the petitioning groups over the expansion of the underground mine, located roughly 26 miles north of Billings.

In April, a three-judge panel of the U.S. 9th Circuit Court of Appeals ruled that the Department of Interior under President Donald Trump greenlighted the expansion without effectively considering the greenhouse gasses released when the coal was eventually burned. The ruling, in which the justices were divided, remanded the case to U.S. District Court. In late June, the Department of Interior, Signal Peak, and 15 state attorneys general, Montana’s included, asked the 9th Circuit Court as a whole to reconsider the panel’s decision.

Attempts to reach OSMRE’s regional office for this article were unsuccessful. The U.S. Attorney’s office for the District of Montana said it had received the letter, but declined further comment at this time.

The requests for closer scrutiny by the U.S attorney, are sorted into three categories of previous investigations and suggests that federal investigators have shown the mine and its owners have a disregard and disrespect for the law.

The first category, concerns the environmental and safety violations at the mine, as well as the criminal activity of previous mine managers, namely Larry Wayne Price, former vice president of surface operations and former Signal Peak President Brad Hanson. Price was convicted in 2020 of stealing roughly $40 million from Signal Peak and private investors. In the process, he aided Hanson with a scheme of overbilling and fake equipment sales at the mine. At his sentencing, Price told the court he had told Signal Peak founder Wayne Boich, Jr. about Hanson defrauding the mine, but that the comment was ignored. The Gazette's reporting of the sentencing is cited in the letter to U.S. Attorney Jesse Laslovich.

Price’s case made headlines, first because the Tazewell, Virginia, man attempted to fake his own kidnapping, hiding with a waitress from a restaurant he owned before eventually surrendering to law enforcement. He alleged a motorcycle gang was behind the abduction. Later, it was revealed that an $11 million stone castle built by Price in Billings was an asset caught up the scam and was seized by creditors.

Price was sentenced to five years in federal prison. Hanson, 59, died at his home in Nokomis, Florida, and was never charged.

After Price was convicted in 2020, Signal Peak officials distanced the mine from the years of illegal activity under Hanson and Price, saying that with new management the activity had ended.

The second category concerns global commodity trading company Gunvor Group, which became a Signal Peak owner though a subsidiary in 2011. One of Gunvor’s founding owners, Russian Gennady Timchenko, was identified in March 2014 by the U.S. Treasury as providing material support to Russian President Vladimir Putin during the period in which Russia took Crimea from Ukraine. Treasury identified Putin as having investments in Gunvor and possibly access to Gunvor funds.

It worth noting that the same month as the Treasury announcement, Gunvor announced that Timchenko had sold his interest in the company in anticipation of sanctions, which never impacted Gunvor.

The petitioners also referenced a more recent instance in which Gunvor’s name surfaced in the federal prosecution of Raymond Kohut, convicted in July 2021 of a bribery scheme to secure petroleum contracts in Ecuador. In Kohut’s case, Gunvor told the Associated Press it was cooperating in the investigation and described Kohut as a former agent. The company hasn’t been charged in connection to Kohut’s crimes.

The third category raised involves FirstEnergy Corp. a Signal Peak corporate founder. In a 2019 bribery scheme concerning the Ohio Legislature, FirstEnergy admitted, in a deferred prosecution agreement, to funneling tens of millions of dollars to then Ohio House speaker, Republican Larry Householder, and a chairman of the state utility commission, who in return advanced a law creating a customer-funded bailout of aging nuclear, and coal-fired power plants. Two other energy companies were involved in the scheme. The case against Householder is ongoing.