"Something bad is going to happen," Gary Quarles, a worker inside Massey Energy's Upper Big Branch Mine in West Virginia, told at least three people on Easter weekend last year. Large parts of the mine had filled with water, impeding the flow of air that would normally remove dangerous accumulations of methane. And there wasn't enough crew and functioning equipment to tamp down clouds of explosive coal dust. As workers returned to the mine on April 5th, some of them commented that it was stuffy and miserably hot inside. At around 3 p.m. that afternoon, a massive explosion ripped through the shaft and killed 29 men—the worst mining accident in 40 years.
The recollections of Quarles and other surviving miners feature prominently in a damning report [ http://nttc.edu/programs&projects/minesafety/disasterinvestigations/upperbigbranch/introduction.asp ] on the UBB disaster released today. Put together by an independent team of investigators appointed by West Virginia Governor Joe Manchin, it reads less like a government tome at times than a nonfiction novella. Quarles, who is described as a big man and "a good guy" preoccupied by a divorce and the welfare of his two children, is the narrative's Cassandra. "When I get up in the mornings, I don't want to put my shoes on," he tells a friend. "I'm just scared to death to go to work."
The investigation firmly pins blame for the accident on Massey. "The story of Upper Big Branch is a cautionary tale of hubris," it concludes. "A company that was a towering presence in the Appalachian coalfields operated its mines in a profoundly reckless manner, and 29 coal miners paid with their lives for the corporate risk-taking."
The report's blunt tone reflects the clearer picture that has emerged since investigators began probing the causes of the accident [ http://motherjones.com/environment/2011/01/mine-safety-massey-msha ] more than a year ago. But it also underscores Massey's faded political clout. In January, Massey was acquired by Virginia-based Alpha Natural Resources in a deal that made Alpha the nation's second-largest coal company while retiring Massey's tarnished name.
Josef Ackermann last month at the Deutsche Bank shareholders' meeting, where he received much applause — and a few boos.
By JACK EWING and LIZ ALDERMAN June 11, 2011
FRANKFURT
LATE one night in September 2008, as the financial world trembled, Josef Ackermann received an urgent call from Berlin.
On the line was Angela Merkel, the German chancellor. She needed his help — now.
A big German bank was about to collapse, much the way Lehman Brothers had only days before. It was 12:45 a.m. and shaky financial markets were about to open across Asia. Fear was in the air.
Mrs. Merkel asked whether Mr. Ackermann, the head of Deutsche Bank, could help rescue the failing lender.
He could, and he did. Within minutes, he persuaded German bankers to pledge 8.5 billion euros for a bailout.
Mr. Ackermann, 63, emerged from the panic of 2008 as the most powerful banker in Europe and, depending on whom you ask, possibly the most dangerous one, too. As the chief executive of Europe’s largest bank and a symbol of German financial might, he is at the center of more concentric circles of power than any other banker on the Continent.
From this seat at the nexus of money and politics, Mr. Ackermann, for better or worse, is helping to shape Europe’s economic and financial future. He regularly advises politicians and policy makers on the most pressing economic issues of the day: the smoldering debt crises in Greece; the widening gulf between the economically strong nations of Europe, like Germany, and weaker ones like Ireland and Portugal; and the future of Europe’s economic and monetary union and that grand venture’s most manifest expression, the euro.
But it is no secret where Mr. Ackermann’s financial allegiances lie: with the banks. For instance, he has insisted that providing some sort of debt relief for Greece would be a huge mistake. Such a move — a restructuring, in banking parlance — would involve writing down Greece’s debt, which is now more than 140 percent of its gross domestic product, deferring payments and cutting interest rates.
What would be so bad about that? European banks, including German ones like Deutsche Bank, hold many billions of euros in Greek government bonds, and the banks would lose big if those debts were restructured. For the moment, Europe’s solution for Greece is, essentially, Mr. Ackermann’s: more bailout money and more austerity — an approach that some economists say only buys time without offering any hope of recovery.
Mr. Ackermann, like many of his counterparts in the United States, has also argued against tighter regulation of the post-crisis financial industry. His visibility as an industry advocate stems in part from his chairmanship of the Institute of International Finance, an association of the world’s biggest banks, including American ones like Goldman Sachs, Morgan Stanley and Citigroup. The group has released studies contending, among other things, that compelling banks to reduce their use of leverage — a move that would almost certainly reduce banks’ profits — would cause a credit crunch. That’s ridiculous, some economists counter.
“Most of the arguments made by the bankers and the I.I.F. in particular are just fallacious,” says Martin Hellwig, an economist and a director of the Bonn branch of the Max Planck Institute.
Even some of Mr. Ackermann’s peers in banking are uncomfortable with his positions. One senior European banking executive said he thought Mr. Ackermann’s zealous defense of banking interests failed to take public opinion into account. Like many ordinary Americans, many Europeans say they are paying the price for the excesses of bankers.
“As an industry, we have a reputational problem and we need to be aware of it and manage it properly,” says this banker, who did not want to be quoted by name for fear of damaging his relationship with Mr. Ackermann.
THE twin towers of Deutsche Bank punctuate the skyline in this city of bankers. They stand as a monument to a bank that was founded in Berlin in 1870 to ease trade with overseas markets, and it is now among the largest banks in the world. Deutsche Bank operates in more than 70 countries and in virtually every corner of finance.
The man who runs this giant has neither the star quality of Jamie Dimon, the head of JPMorgan Chase, nor the polarizing power of Lloyd C. Blankfein, the head of Goldman Sachs. But in Germany, Josef Ackermann is a household name. And although admired by many, he has also become a lightning rod for public hostility toward banks. His name springs to mind for protesters when they look for a banker to demonize.
So it might come as a surprise that in person, Mr. Ackermann comes across as soft-spoken and almost a bit shy. That’s all the more startling because he rose to the top of Deutsche Bank in 2002 after overseeing its investment bank, which isn’t known for shrinking violets.
In an interview late last month high in Deutsche Bank’s headquarters, surrounded by a few examples of the bank’s collection of modern art, Mr. Ackermann portrayed himself as a man who enjoys the simple pleasures. During his rare moments of leisure time, he likes to hike in the Alps in Switzerland, his native country, or browse in bookstores on Fifth Avenue in Manhattan. His bank has a large operation on Wall Street — indeed, it helped inflate the American mortgage bubble — and he keeps an apartment near Central Park.
Mr. Ackermann plays down his relationship with Mrs. Merkel, who has recently taken pains not to appear too close to him. Her office did not respond to requests for comment.
“We have a cordial and professional relationship,” Mr. Ackermann says. “But since the financial crisis, the relationship between banks and governments became more challenging.”
The relationship may not be as warm as it once was, but Mrs. Merkel, a pivotal player in European politics and economics, still calls on Mr. Ackermann. Since the European debt crisis unfolded in spring 2010, the two have been in direct contact numerous times, he says.
“He is a political animal,” Roland Berger, founder of the management consulting firm that bears his name, and a longtime adviser to Mr. Ackermann, says of him. “I’m not sure Germany without him would have mastered these critical situations as well as it did.” . . .
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