Federal criminal indictment of PG&E doesn't go far enough

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How can PG&E executives pocket money intended to prevent the deadly gas explosion in San Bruno and not face punishment? Amazing
Examiner file photo

  A federal grand jury in San Francisco yesterday issued a criminal indictment against Pacific Gas & Electric for negligence in the 2010 gas pipeline explosion in San Bruno that killed eight people and destroyed an entire neighborhood. That’s significant and serious, but it also falls far short of what this rapacious company and its conniving executives -- none of whom face personal criminal charges -- should be facing.

The indictment and media reports on it omit key details of what happened leading up this tragic and entirely preventable explosion, buying into the fiction that there is a meaningful difference between PG&E Co., the regulated utility, and PG&E Corp., the wealthy and powerful Wall Street corporation. This is a stark example of how corporations are given all the rights of individuals, but accept few of the responsibilities, with the complicity of the political and economic systems.

The 12-count indictment focused on violation of the Pipeline Safety Act, which requires companies to maintain their potentially dangerous pipelines, including keeping detailed records and doing safety inspections that would detect flaws like the faulty weld that caused the San Bruno explosion on Sept. 9, 2010 – work the company negligently failed to perform.

But PG&E’s wanton disregard for public safety, combined with the greed and shameless self-interest of then-CEO Peter Darbee and other executives, goes far deeper than that. A report by the California Public Utilities Commission released in January 2012 found that $100 million in ratepayer funds that had been earmarked for pipeline maintenance and replacement, including this section in San Bruno, was instead diverted to executive bonuses and shareholder profits.

“PG&E chose to use the surplus revenues for general corporate purposes,” the audit said, noting that the company was flush with cash at the time and there was no good reason to neglect this required maintenance.

And in 2010, those questionable corporate purposes included spending more than $45 million to write and promote Prop. 16, a June 2010 ballot measure that would have required approval by two-thirds of voters whenever cities wanted to start community choice aggregation programs such as San Francisco’s proposed CleanPowerSF. California voters rejected that outrageous ruse by more than a 2-1 margin – so Mayor Ed Lee and his appointees were forced to kill CleanPowerSF on their own last year.

PG&E maintains the explosion was just an accident.

"San Bruno was a tragic accident. We've taken accountability and are deeply sorry. We have worked hard to do the right thing for victims, their families and the community, and we will continue to do so,” PG&E CEO Tony Early, who was hired after the explosion, said in a prepared statement. "We want all of our customers and their families to know that nothing will distract us from our mission of transforming this 100-plus-year-old system into the safest and most reliable natural gas system in the country."

But this “tragic accident” was foreseeable and preventable, particularly if PG&E was spending our ratepayer money on the system maintenance it was allocated for, instead of trying to fool us with a deceptive and myopic political campaign. Those were decisions made by real people, including Darbee and others, decisions that killed innocent people – and they should be held accountable. Neither this indictment nor a previous civil settlement go far enough.

PG&E’s employee union, IBEW Local 1245, continues to act as an apologist for the company executives, issuing a statement that in part says, “The federal indictment filed April 1st against the company says that PG&E willfully failed to identify and evaluate threats to its transmission pipelines. We know of nothing that would rise to the level of willful. It is possible there are things we don’t know. But based on what we do know, the company failures that led to the San Bruno explosion were not willful.”

Meanwhile, even some PG&E shareholders are siding with the company’s federal prosecution while bringing a shareholder lawsuit seeking to recover some of the diverted funds. Their high-powered attorney, Joe Cotchett, issued a statement today that said, “We welcome yesterday’s indictment by the federal grand jury of PG&E on criminal charges that it violated federal pipeline regulations. It is clear the federal government agrees with us that PG&E chose profits over safety. The indictment comes as no surprise, as it closely mirrors the detailed complaint we filed months ago against PG&E’s officers and directors, after our own extensive investigation.  The indictment states that PG&E ignored and failed to properly identify potential threats to gas pipelines, failed to gather relevant data, maintained flawed records, and as a result, was unable to accurately assess the dangers related to its lines that could have prevented the explosion. On behalf of the shareholders of PG&E, we intend to amend our complaint to add some additional facts stated in the indictment.”

“Our complaint alleges that PG&E’s executives dropped the ball and failed to implement safety measures despite numerous red flags raised by Company insiders with risk management responsibilities. We allege PG&E has already incurred charges of about $1.83 billion related to the San Bruno accident and natural gas matters. In its annual report, PG&E admitted that this criminal investigation could expose the Company to even greater losses. Our complaint also alleges that PG&E’s Board sponsored reviews of its risk management practices revealing that PG&E was in ‘crisis’ mode prior to the accident, and that, in 2007, PG&E’s newly-hired Senior Vice President of Engineering and Operations determined that the Company’s Enterprise Risk Management program ‘seems unactionable because almost everything is broken.’”

This is the company that Mayor Lee praises as a "great company that gets it," supporting its continued monopoly control of San Francisco’s energy system and subverting a city proposal to provide renewable energy to city residents, even as the threats posed by global warming increase, as this week’s report by the United Nations Intergovernmental Panel on Climate Change warns.

This is a sick system, and something needs to change.

Comments

Posted by Guest on Apr. 07, 2014 @ 12:23 pm

am not happy with PG&E at all

PG&E is a deadly joke

i simply asked you for proof that municipal gas would be worse and you have continued to change the subject rather than answer

but i want to thank you for helping me keep this report prominent on the Guardian page by continuing your endless pathetic responses

if you think about it long and hard enough with that tiny mind of yours, you'll realize that this is the only reason i'm still replying to you... ;)

Posted by anonymous on Apr. 07, 2014 @ 12:51 pm

The voters have always abcked PG&E

Posted by Guest on Apr. 07, 2014 @ 1:06 pm

they have just continued to go with the crap service they know because they are erroneously afraid to try something new (kind of like Comcast cable)

most people are like that, very risk averse

Posted by anonymous on Apr. 07, 2014 @ 1:24 pm

You mean all seven of them?

And that would concern me why, exactly?

Thanks for the laugh.

Posted by Guest on Apr. 06, 2014 @ 4:20 pm

if you believe that the Guardian only has 7 readers, why do you post here?

Posted by anonymous on Apr. 07, 2014 @ 3:04 am

So I need to drive out some of them with logic and truth

Posted by Guest on Apr. 07, 2014 @ 6:58 am

show us some truth

again

since, after all this time bickering about nonsense, you have still been unable to display any evidence municipally delivered gas would be more dangerous than PG&E's you are clearly wrong

Posted by anonymous on Apr. 07, 2014 @ 10:10 am

You are the one who needs evidence and proof to change our minds. So far you've given us none, so we wills tick with what we've got.

Posted by Guest on Apr. 07, 2014 @ 10:32 am

PG&E criminally blowing people up.

you said (unfathomably) that you would still prefer that PG&E deliver your gas

we said, prove that municipal gas would be more dangerous

you responded by changing the subject and distracting people with other topics so that you wouldn't have to answer that challenge

and notably you have still not responded to prove your incredibly dubious concept that PG&E would somehow be safer

Posted by anonymous on Apr. 07, 2014 @ 11:33 am

You don't live in SF do you?

Posted by Guest on Apr. 06, 2014 @ 4:22 pm

of the public power proposals for San Francisco have proposed taking over gas delivery - all have left that to PG&E

(perhaps after San Bruno we should actually rethink that exclusion however)

Posted by anonymous on Apr. 07, 2014 @ 3:03 am

You'd have known that if you lived in SF.

Posted by Guest on Apr. 07, 2014 @ 6:57 am

i do in fact live in San Francisco but even if i didn't it is not relevant to the subject at hand in this part of the thread

you were called out to show some proof that public gas would be more dangerous than PG&E gas and you have simply failed to do so

if there was proof, you definitely would have posted it by now, so you are clearly wrong

Posted by anonymous on Apr. 07, 2014 @ 10:00 am

and every day that the city doesn't fix the potholes in the street.

And yes, it matters that you don't live here because you are clearly clueless about the city and how we vote.

Posted by Guest on Apr. 07, 2014 @ 10:09 am

are not natural gas

i defy you to show evidence that municipal gas delivery anywhere in the u.s. has proven to be more dangerous than PG&E's clearly incredibly dangerous system

this is easily the fourth of fifth time you've been prompted to prove your case

are you going to do so?

or instead continue to crawl around with your tail between your legs wiping your butt on the carpet, wimping out every time you are challenged, and proving nothing to anyone but your own pathetic inability to simply use the internet to find evidence that supports your claim

Posted by anonymous on Apr. 07, 2014 @ 11:39 am

we are the majority and we are happy with the status quo.

Posted by Guest on Apr. 07, 2014 @ 12:23 pm

Looks like you are just arguing for the sake of it.

Posted by anon on Apr. 07, 2014 @ 12:27 pm

but that's fine

the more he responds with his endless circular troll arguments, the longer this story stays high on the Guardian page because of the high number of comments on the story

and that's all i really want (there would be no reason to respond to this idiot otherwise)

hardly anyone reads this ridiculous, troll ridden comment section anymore

it is just a device that is used to create web hits for the paper

(bogus web hits which advertisers still stupidly pay for apparently)

Posted by anonymous on Apr. 07, 2014 @ 12:59 pm

Didn't do him much good either

Posted by Guest on Apr. 07, 2014 @ 1:07 pm

report links high on the Guardian politics blog

then it worked quite well

Posted by anonymous on Apr. 07, 2014 @ 1:35 pm

helping your cause.

Try some facts and ideas next time - you'll get a better response

Posted by Guest on Apr. 07, 2014 @ 1:54 pm

to debate such an incredible "ass whooper" as yourself (who uses such masterful and powerful arguments as "i don't need to prove it - YOU prove it" and "LOL"

i think i'll take my chances on the tiny handful of readers who are actually suffering through this absurd conversation to think for themselves and come to sensible conclusions

and as i said

every time you respond you help keep this report prominent on the Guardian blog so that as many people as possible will notice and read the main story

so by all means please continue

Posted by anonymous on Apr. 07, 2014 @ 3:41 pm

gainsaying regulars and endlessly using that old internet debate gambit "prove it". nothing ever gets "proved" here, and nobody ever changes their mind. We just exchange ideas and, so far, you haven't given us any - you just criticize the quorum here.

Here's a clue, go away, take a breath, try and learn some things, and then come back when you have something affirmative to say.

Posted by anon on Apr. 07, 2014 @ 4:03 pm

challenging a troll to prove his bullshit

lot's of people respond to requests to proof on this blog with, well..

proof

and that does indeed enhance the debate

it is in fact key to effective debate to call for proof

Posted by anonymous on Apr. 07, 2014 @ 4:27 pm
Posted by Guest on Apr. 07, 2014 @ 4:51 pm

can you explain what it was i 'lost'?

Posted by anonymous on Apr. 07, 2014 @ 9:36 pm

QED. Like it wasn't obvious that you were that loser troll anyway.

Posted by Guest on Apr. 08, 2014 @ 7:19 am

no one cares who i am, and no one is reading this idiotic conversation except you

to repeat, the only reason i am replying to your is that it keeps the story high on the links on the Guardian blog page

Posted by anonymous on Apr. 08, 2014 @ 11:42 am

rationalization for endlessly posting while contributing nothing.

If all you want to do is rack up posts, you don't need anyone else to play to do that, so knock yourself out, Lilli.

Posted by Guest on Apr. 08, 2014 @ 11:58 am

does your comment at last mean that you are going to shut up and go away now?

Posted by anonymous on Apr. 08, 2014 @ 7:43 pm

No... His comment means that if all that you really wanted to do was to keep this conversation at the top of the comments list, you don't need to continually respond to him. All you have to do is keep putting up posts (kind of like your idiotic troll barrier shit). But seeing as you keep responding to him shows you have another agenda in mind.

Posted by Guest on Apr. 08, 2014 @ 7:58 pm

that stupid?

if i were posting all by myself without creating a continuing dialogue that invites you brainless fools to keep responding, then I would have to do all of the work myself, and my posts would quickly be flagged as spam

so every time i can get one of you dipshits to respond to me, it saves me work

notice that this report is now number two on the list

thanks very much for helping me to get it there

Posted by anonymous on Apr. 08, 2014 @ 8:37 pm

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