Even though readers and members of the public often express their outrage as to what banks have gotten away with, there’s a good case to be made that PG&E has them beat. How many real companies have been the lead bad guys in a movie? And PG&E has decades of misconduct after the case highlighted in Erin Brockovich, where the chemical discharge from a PG&E plant got into the water table of a neighboring community, and one of the compounds was highly carcinogenic. PG&E lied to the residents, telling them the chemical was beneficial to their health!
For starters, the mere threat of an indictment is a death sentence for a financial firm; that’s why the conservative press was so outraged when Eliot Spitzer used the threat of filing a criminal case against AIG as the leverage to force the ouster of CEO Hank Greenberg. Many customers are prohibited from doing business with a company that had been found guilty of criminal conduct; a high proportion would flee when an indictment was filed, both to minimize controversy and to avoid being caught in a rush for the exits if a case were to be loss or the alleged perp pleaded guilty in a settlement. That’s why in the rare cases when the US has charged a large financial firm, it’s been against a subsidiary.
But PG&E is even more too big to fail than big banks. The giant utility can’t be put out of business because so many communities depend on it.
Nevertheless, the murder charges are a new angle. If AG Beccera isn’t simply trying to convince the public that he takes PG&E’s misdeeds seriously, perhaps he (and this would presumably also mean key power factions in California) have decided that PG&E needs a whole-scale shakeup, which included replacing the CEO and other key executives and much of the board, and the suits are they way to make sure that gets done. One influential CalPERS stakeholder had taken to regularly e-mailing me about PG&E horrors. In sending a November 2018 San Francisco Chronicle article, California regulator lays groundwork for PG&E bailout, he noted:
I’m reminded of Sheldon Wollin’s concept of Inverted Totalitarianism; FDR understood fascism first of all as corporatism — before mass-murder muddied the waters about the brand (Arbeit macht Frei slave-labor was the original Public-Private Partnership). PG&E CEO Geisha Williams is a Marcie Frost clone. Williams was a mediocre 2007 diversity-hire from Florida responsible for electric infrastructure before becoming CEO. She should be wearing denim at the Women’s Prison at Chowchilla; instead she’ll probably get another $8 Million dollar payday…
But even so, how long would it take to turn around such a badly mismanaged company? And how would the new leadership stare down demands to maintain profits, which amount to insisting that the current dangerous skimping on maintenance continues? Here again, court orders may be key to forcing behavior changes.
By Paola Rosa-Aquino, Grist’s justice fellow. Originally published at Grist
It’s been nearly two months since the massive Camp Fire laid waste to the town of Paradise in northern California. It destroyed nearly 14,000 homes and claimed at least 86 lives, making it the deadliest fire in the state’s history. And now the state’s largest public utility provider, Pacific Gas & Electric Co. could face murder or manslaughter charges related to the blazes.
PG&E is already under investigation for criminal wrongdoing related to California’s deadly wildfires. Though investigators have not determined what officially sparked the fire, PG&E reported “an outage”on a transmission line in the area where the blaze began around the time the blazes started.
If district prosecutors find that “reckless operation” of its power equipment caused any of the state’s deadly wildfires in the past two years, the company could be held responsible for not just the resulting property damages but the loss of life as well.
“PG&E’s most important responsibility is public and workforce safety,” the utility, which provides electricity to about 16 million Californians, said in a statement. “Our focus continues to be on assessing our infrastructure to further enhance safety and helping our customers continue to recover and rebuild.”
On Friday, California’s Attorney General Xavier Becerra submitted a legal brief to a federal judge who is considering how the wildfires could affect PG&E’s probation from a criminal case born out a 2010 explosion at a natural gas pipeline operated by PG&E. The judge will have to gauge PG&E’s “mental state” — meaning, its employees’ degree of negligence and recklessness — before determining which charges to bring, if any.
Potential charges range from minor misdemeanors related to poor maintenance of trees along power lines to involuntary manslaughter or murder if the company is found to be the cause of the wildfires.
In addition to possible criminal charges, PG&E could be found liable for billions of dollars in civil damages. But it’s not just the company that will bear the burden of any resulting settlements. In September 2018, California Governor Jerry Brown signed a bill which permitted PG&E to pass on some of the costs related to utility’s role in the 2017 wildfires on to their customers.