Justice dismissive of reports of $700 million loan guarantee
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Photo Courtesy of the West Virginia Governor's Office
Gov. Jim Justice fields questions about his $700 million personal guarantee on a loan for his business.
CHARLESTON -- Gov. Jim Justice said Tuesday that he had not read reports claiming he personally guaranteed nearly $700 million for a loan to his company during the second year of his first term as Governor, saying he would "not pay one bit of attention to it."
The Wall Street Journal reported Monday that Justice made the $700 million loan guarantee for loans taken out for Bluestone Resources Inc. in 2018 to Greensill Capital.
Speaking during his Tuesday coronavirus briefing at the state Capitol, Justice said he had not read the article but had been made aware of its existence and contents.
"Yes, I did personally guarantee the loans, the loans have always been personally guaranteed" Justice said. "We're not going to let Greensill get by with doing bad stuff."
Greensill, which went under last year, had sold the Bluestone loans and other loans to Credit Suisse Group's investment funds. Packaged as "supply-chain finance funds," Greensill and Credit Suisse funded $10 billion in these kinds of loans.
In March, Credit Suisse froze all the funds and is working with Bluestone and other borrowers to return the borrowed money. According to the Wall Street Journal, Bluestone was one of three of Greensill's largest borrowers. In court documents filed in March against Greensill, Bluestone's attorneys stated the company was not expected to start making payments on the loans until 2023.
"If you knew all the details … you'd know that evidently Greensill is a bad, bad actor," Justice said. "Almost in partnership with that, you've got the Credit Suisse people who were tied to the hip with Greensill and we didn't know anything whatsoever about."
Greensill filed for bankruptcy in March after losing coverage by credit insurers meant to provide the company liability protection from the risky supply-chain finance venture, a kind of payday loan meant for companies. According to the Wall Street Journal report, Justice and his wife Cathy Justice guaranteed Bluestone's loans to Greensill in unlimited amounts while Jay Justice, Bluestone's CEO while Justice serves as governor, made several limited loan guarantees. The financing, starting in 2018, covered a three-year period.
"From the standpoint of what Greensill has done and what they're doing, how in the world could we have known anything whatsoever? It's very unfortunate to our companies and we'll have to get through it," Justice said.
Bluestone includes Justice's coal and agricultural holdings. The company primarily produces metallurgical coal used for making steel. Justice said the loans were needed to help pay off liabilities and obligations when Bluestone bought back several mines and processing facilities from Russian coal producer OAO Mechel in 2015.
"We absolutely took back over and have been rebuilding Bluestone back, and Greensill was doing the lending," Justice said. "It is absolutely a mess, for sure, and a burden on our family beyond belief."
Bluestone is one of about 112 companies owned by Justice according to his 2021 financial disclosure report with the West Virginia Ethics Commission. Only seven of those companies were placed in blind trusts as of April 30, 2017, shortly after Justice took office. Blind trusts are used by elected officials to place their business holdings in the hands of third parties while they serve to avoid possible conflicts of interest.
Justice turned over the control of his private businesses to Jay, who runs the coal and agricultural businesses, and daughter Jill, who runs the Greenbrier Resort. But Justice has been long accused of still being active in day-to-day management of his companies.
"I know some people will probably rejoice in the agony of what our companies will have to go through and everything to get through all of this, but our companies are good, and they did the right stuff," Justice said. "It's very unfortunate and truly it's a pain. That's all there is to it."
Justice has been party to numerous lawsuits over the years by vendors seeking payment or breached contracts. The federal government has also gone after Justice for non-payment of fines and penalties, resulting in settlement agreements. Once the state's only billionaire, Forbes magazine now lists Justice's net worth at $450 million, downgraded after the Greensill bankruptcy.
A request for comment from Justice's attorneys in the Greensill case was not returned.