San José, Costa Rica, since 1956

Murder of union leaders in Colombia among problems facing Alabama coal tycoon Drummond

BOGOTÁ, Colombia – Gustavo Soler knew he was in trouble. In 2001, Soler was union president at a Colombian coal mine owned by Drummond Co., controlled by the wealthiest family in the U.S. state of Alabama.

Soler’s predecessor, and his deputy, had been killed seven months earlier. Now Soler was getting threats, Nubia Soler said. He told his family to pack, that they would leave as soon as he got home from the union office in Valledupar, a city in Colombia’s coal belt.

He never made it. Armed men stopped his bus, asked for him by name and abducted him. He was found under a pile of banana leaves with two bullet holes in his head, Bloomberg Markets magazine reports.

Afterward, Nubia Soler said, Drummond Chief Executive Officer Garry Neil Drummond sent a taxi to bring her to company offices near the coastal town of Santa Marta. He promised to put her children, then 14 and 9, through school.

“He never paid for a pencil,” Soler said.

Garry Neil, as he’s known, declined to comment and did not answer questions sent to spokesman Steve Bradley of Stephen Bradley & Associates.

Drummond faces many challenges related to the mining operations he began in 1995 in Colombia. That first mine came under attack from the Revolutionary Armed Forces of Colombia (FARC), a group at war with the government since the 1960s.

Currently, workers at Drummond, Colombia’s second-biggest thermal coal producer, may strike as early as Saturday after rejecting the company’s latest pay offer.

And labor lawyer Terry Collingsworth has filed four civil suits against Drummond Co., two demanding compensation for the families of union leaders killed in Colombia while representing workers at its mines.

In 2007, Drummond won one case brought by Collingsworth after a U.S. District Court jury in Birmingham, Ala., concluded the company didn’t aid or abet the killers. Another suit was dismissed in 2012.

In the current case, filed in 2009, Collingsworth charges that Drummond Co. paid right-wing paramilitaries to terrorize the population along the 120-mile rail line from Drummond’s two mines to its port on the Caribbean, torturing and killing innocent people to keep them from giving haven to the FARC. Collingsworth sued Garry Neil personally for the same allegations in February.

Collingsworth, now a partner at Conrad & Scherer in Fort Lauderdale, Florida, made his claims in part under the 1789 Alien Tort Statute, which gives federal courts jurisdiction to hear complaints from non-U.S. citizens for violations of international law. He said he is suing in the U.S. instead of Colombia partly out of concern for the safety of the plaintiffs.

In numerous filings in the case, Drummond Co. and its CEO have denied any links to murders in Colombia. Its lawyer in the Colombian matters, William Jeffress of Houston-based Baker Botts, declined to comment.

Vaulting into international markets

The Colombian mines are crucial to Drummond Co., which had 2012 revenue of $3 billion, based on the volume of its coal shipments. On its website, the company estimates its coal reserves at 2.2 billion tons, 2 billion of which are in Colombia.

In 2011, when coal prices were higher, Drummond Co. sold a 20 percent stake in the Colombian operations to Tokyo-based Itochu Corp. for $1.5 billion. Based on that sale, the Colombian mines were worth $7.5 billion. Two years later, the fall in the coal price makes them worth less than $3 billion, according to data compiled by Bloomberg comparing Drummond with publicly listed coal companies.

Garry Neil, 75, is one of two surviving heirs of Heman Drummond, who founded the company in 1935 and died in 1956. Today, Garry Neil owns 100 percent of the capital stock in Drummond Co., according to an April report by Dun & Bradstreet, meaning that he is a billionaire. Spokesman Bradley declined to comment on the company’s ownership.

It was Garry Neil who vaulted the regional miner into international markets. He earned a civil engineering degree from the University of Alabama in 1961, and in 1969 negotiated a five-year, $100 million export deal with Japanese trading company Ataka & Co., now part of Itochu, Drummond’s partner in Colombia. He became CEO four years later, leapfrogging his older brothers. Drummond Co. now sells its coal in more than 30 countries.

In 1976, Drummond signed a 15-year contract with Alabama Power, a unit of Southern Co., to deliver 2 million tons of coal a year to the utility, according to Drummond’s website. It filled it by stripping coal from the Alabama hills.

Nubia Soler

“It’s 12 years without justice,” says Nubia Soler, the widow of Gustavo Soler, union president at a Colombian coal mine owned by Drummond Co. After his murder, CEO Garry Neil Drummond promised to pay for her children’s schooling but “never paid for a pencil,” Soler says. David Nicolas/Bloomberg Markets

With power and money came scrutiny. In 1979, a federal grand jury indicted Garry Neil, two other Drummond executives and three Alabama lawmakers in an alleged scheme to influence the legislators by, among other things, providing them with prostitutes. Judge Frank McFadden dismissed the case without letting it go to the jury. McFadden declined to comment and suggested looking up his rulings in the docket. But the entire record of the case has been sealed, according to the U.S. District Court in Birmingham.

In election years, the Drummond family donates tens of thousands of dollars. In the 2012 cycle, Garry Neil alone gave $67,800 to candidates and political action committees, according to the Center for Responsive Politics in Washington. The company is the third-biggest donor to Sen. Richard Shelby, R-Ala., behind power generator Southern Co., a big Drummond customer, and JPMorgan Chase & Co.

War and death as business

In the 1980s, Garry Neil started prospecting in Colombia, during a civil war. Soon after Drummond opened his first mine, the FARC started bombing the railway that carries coal to Drummond’s Caribbean port. In 1999, according to Collingsworth’s complaint, Drummond began paying the paramilitary group Autodefensas Unidas de Colombia (United Self-Defense Forces of Colombia) for protection, a charge Drummond Co. denies in court papers.

Other companies have acknowledged paying the AUC, designated by the U.S. as a terrorist organization in 2001. Chiquita Brands International pleaded guilty in 2007 to U.S. charges that it paid the AUC more than $1.7 million to protect its banana plantations from 1997 to 2004 and agreed to a $25 million fine.

AUC gunmen first arrived in the town of Becerril, about 15 miles from one of Drummond’s mines, in 1997 or 1998, according to Victoria Sánchez, 32. She fled in 2003 after a death squad murdered her father, a butcher with no connection to the Drummond union.

Yameris Herrera, 45, ran in 2002 after the murder of her father, a farmer, and her uncle. Herrera’s mother discovered their tortured bodies after returning to the family farm from a trip to town. Her husband had been cut to pieces. Her brother’s head was severed.

“They thought all the farmers were guerrillas,” Herrera said in an interview.

Sánchez and Herrera are among 600 plaintiffs in Collingsworth’s lawsuit, all people who lost family members to the AUC’s reign of terror in towns along the rail line, a campaign that the complaint said was heavily funded by Drummond. Collingsworth says he hopes to win his latest fight by using the testimony of the AUC members who have given depositions under Colombia’s 2005 Justice and Peace Law, which rewards those who confess to their crimes with reduced sentences.

Alcides Manuel Mattos Tabares is one who talked. In a March 2012 deposition, he said Drummond Co. paid his AUC unit to provide security along the rail line.

“We used lethal force,” Mattos said. “We would just kill anyone who was said to be a guerrilla around those parts.”

In January, Jaime Blanco Maya, who had run a food concession at Drummond Co.’s mines, was convicted in Colombia of arranging for the AUC to kill Drummond union leaders Valmore Locarno, Soler’s predecessor, and Locarno’s deputy, Victor Orcasita. He was sentenced to 38 years in prison.

In a 2009 motion to dismiss Collingsworth’s complaint, Drummond Co. denied any link to any of the killings anywhere in Colombia. The company never hired the AUC to do anything, its lawyers said. In a June 2012 deposition, Garry Neil said, “I was never in charge of anything in Colombia.”

There have been no convictions in Gustavo Soler’s murder, said his widow, who supports herself by giving manicures and pedicures. After Garry Neil reneged on his promise to pay for her children’s education, Nubia Soler said, she paid for it herself by selling cattle and jewelry.

“It’s 12 years without justice,” she says.

With assistance from Margaret Newkirk in Atlanta, Andrew Willis in Bogotá and Mario Parker in Chicago. Adapted from Bloomberg Markets magazine.

© 2013, Bloomberg News

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