CHARLESTON – Governor Jim Justice had no answers this week about why only seven of his 112 companies were in blind trust companies and about the million dollar loans he personally guaranteed to at least two financial institutions.
Justice was asked during his COVID-19 briefing Tuesday whether the types of credit for the businesses he owns – run by his son Jay and daughter Jill – make it difficult to put those business interests in blind trust companies.
“My financiers could answer this question much better than I can.” he said.
Justice personally guaranteed $ 368 million in loans from the Carter Bank and Trust of Virginia over a period of 15 years, followed by $ 700 million in personal loan guarantees to Greensill Capital, London. The loans were for Bluestone Resources Inc. and the Greenbrier Resort.
Bluestone and Greenbrier are two of approximately 112 companies Justice owns, according to its 2021 financial report with the West Virginia Ethics Commission. Only seven of these companies were placed in blind trusts on April 30, 2017, shortly after Justice took office as governor. Blind trusts are used by elected officials to put their business interests in the hands of third parties, while they serve to avoid potential conflicts of interest.
In a letter to government officials after taking office in January 2017, Justice announced that he would hand over control of his private businesses to son Jay, who runs the coal and farming businesses, and daughter Jill, who runs the Greenbrier Resort. But Justice has long been accused of still being involved in the day-to-day running of his companies.
“It would be no different than if your son went out and bought a house and the bank told me to personally guarantee it.” Justice said. “I would say sure. From the standpoint of my involvement in the household and everything that goes on, I have no involvement. From the point of view of my business and everything, of course I speak to my children from time to time. “
Greensill filed for bankruptcy in March – Justice filed a lawsuit against the company soon after – after the company lost coverage from credit insurers designed to provide the company with liability protection from the risky supply chain finance firm, a type of corporate payday loan . One of Greensill’s creditors, Credit Suisse Group, is demanding that Bluestone Resources begin repaying the loan.
According to the Wall Street Journal report, Justice and his wife Cathy Justice gave Bluestones unlimited loans to Greensill, while Bluestone CEO Jay Justice gave several limited loan guarantees while Justice is acting as governor. The funding extended over a period of three years from 2018.
Justice, his wife, Cathy Justice, and several of the Justice family companies filed civil lawsuits in the U.S. District Court for the Southern District of West Virginia earlier this month against executives at Carter Bank and Trust, a community bank based in Bassett, Virginia.
The judiciary is demanding $ 421 million in damages from the bank, accusing the governor of anti-competitive behavior, breach of contract and breach of his duties of loyalty. The lawsuit alleges that several companies were tricked by Justice into missing out on loan payments, defaulting those loans, and forcing companies to revise loan terms. The lawsuit was filed the day before the full repayment of two loans from Justice.
Justice also claims Carter Bank is fighting Justice’s efforts to refinance the loans through a new financial institution so as not to get reduced interest rates. According to the lawsuit, Justice’s relationship with the bank went awry after the bank’s founder, Worth Carter, died in 2017.
In a report to the US Securities and Exchange Commission last week, the bank began reducing its credit exposure due to the Justice loans five years ago.
“The allegations in the lawsuit regarding negotiations between the parties are false and misleading” it says in the report. “Banks have a duty to their shareholders and the financial system to collect all amounts due and due to them in full. Carter Bank is no different from any other bank in this regard. As with all of its clients, Carter Bank expects all amounts due and owed to be repaid by the judicial authorities in a timely and full manner as agreed in the various loan documents existing between the parties. “