Pacific Gas and Electric Co. tried to avoid the stain of a criminal conviction over its geriatric power line that sparked California’s deadliest and most destructive wildfire.
Last year, attorneys for the company attempted to resolve the matter on lesser charges, according to the top prosecutor in Butte County, where century-old PG&E equipment caused the horrific 2018 Camp Fire that nearly destroyed the town of Paradise.
The civil settlement sought by PG&E would have come with a far larger price tag than the $4 million the company will pay in connection to the felonious guilty plea agreement it revealed on Monday. But PG&E’s proposal would have also allowed the company to avoid criminal liability from its role in the disaster that killed 85 people and incinerated nearly 19,000 buildings in the Sierra Nevada foothills east of Chico.
Butte County District Attorney Mike Ramsey was uncomfortable with the company’s idea. PG&E needed to be held responsible to the fullest extent allowed under the law, Ramsey told The Chronicle in a recent interview.
Now, after being indicted by a grand jury, PG&E has accepted guilt for 84 felony counts of involuntary manslaughter and one count of unlawfully causing a fire, a charge that Ramsey said is akin to “reckless arson.” The company is scheduled to be arraigned next month.
“I felt it was very important to get the label upon PG&E … to make sure that they were shown to be absolutely responsible for these deaths,” he said of the total felony counts.
As part of its plea agreement, PG&E will be fined about $3.5 million — the maximum allowed by statute. The company will also pay $500,000 to reimburse costs incurred by the district attorney’s office.
The pleading marks a historic turn of events for PG&E, which is already a convicted felon because of crimes stemming from a 2010 gas pipeline explosion in San Bruno that killed eight people and destroyed 38 homes. And it’s not the end of the company’s long-running legal challenges: PG&E is likely to face further judicial scrutiny because of the Camp Fire felonies, since one of the terms of its probation from the San Bruno case is that the company not commit any more crimes.
PG&E spokeswoman Lynsey Paulo said in an email that the company’s guilty plea for the Camp Fire “is an important step in taking responsibility for the past and working to create a better future for all concerned.”
“We want to do right by the victims and the communities,” she said in the email.
Still, some of PG&E’s toughest critics are so far unsatisfied by the outcome of the Camp Fire criminal case.
“What shocks people is nobody went to jail and the fine is so tiny in comparison to the magnitude of the crime,” said Mark Toney, the executive director of The Utility Reform Network watchdog group. “There’s a mismatch. When people read the headline, they’re like, holy cow, really? They got away scot-free?”
Most relatives of deceased Camp Fire victims whom Ramsey spoke with were grateful to get “a modicum of justice” from the criminal case, he said. But Ramsey, a 71-year-old Butte County native, understands the complaints. He’s heard them before from families of victims in vehicular manslaughter cases — only those often involve prison time for the offender.
“This is my community. I grew up in this community. I’m sworn to protect this community, and we had an out-of-control company that killed 84 of my innocent citizens. So absolutely, we felt that the fact of a criminal conviction would be paramount,” Ramsey said. “The fact that the punishment does not fit the crime, unfortunately, is out of my hands.”
The Camp Fire case is not the first time that Ramsey, who has been Butte County’s district attorney for more than 30 years, has tangled with PG&E. Ramsey was ready to prosecute PG&E on misdemeanor charges for its role in a small 2017 wildfire, but he and the company agreed to a $1.5 million civil settlement instead of maximum $1,000 criminal fine.
U.S. District Judge William Alsup later found PG&E in violation of its probation because it did not properly report the settlement with Ramsey’s office. In response, Alsup forced PG&E executives and board members to tour the burned remains of Paradise and witness the devastation firsthand.
Now Alsup has the power to impose new restrictions because of the Camp Fire case.
“If I were PG&E, I would not want to be standing in front of Alsup the next time that I have to go into his courtroom,” said Frank Pitre, an attorney who represents many victims of PG&E-caused fires.
At the same time, the company and its parent PG&E Corp. are working feverishly to conclude their bankruptcy case in the coming months, even as some fire victims have voiced strong objections to how PG&E wants to compensate them for their losses. Last week, two members of the fire victims’ committee involved in the bankruptcy case resigned from their roles, saying they did not believe people who lost homes, businesses and loved ones were getting a good deal.
The company intends to pay victims from a $13.5 billion trust provided by its bankruptcy exit plan. But that same trust would be used to pay a potential $200 million cash fine from the California Public Utilities Commission and the $4 million connected to the Camp Fire criminal case — a fact that has drawn strong criticism from fire victims.
PG&E is challenging the proposed $200 million cash regulatory fine over the 2017 and 2018 fires, hoping to stick with an earlier deal the company struck that would not detract from the victims’ fund. On Friday, one of the utility commissioners moved to reconsider the fine, which was included in an administrative law judge’s decision that would impose a record $2.14 billion penalty against the company (most of that amount would be paid by PG&E shareholders).
In terms of paying for the Butte County felony counts, PG&E’s court-approved settlement agreements currently require that fire-related fines and penalties come from the $13.5 billion victims’ trust, and the company can’t pay its criminal costs in another way “without the necessary consents,” said Paulo, the PG&E spokeswoman.
“If the company were to do that, it risks investors walking away from their commitments to provide the funding essential to the company’s ability to make payments to victims,” she said in the email.
PG&E’s overall wildfire claim commitments total $25.5 billion, due to the $13.5 billion victims’ trust, an $11 billion settlement with insurance companies and $1 billion for a group of local governments. According to a PG&E Corp. filing with the Securities and Exchange Commission, investors who have agreed to help finance those payouts could walk away if the amount exceeds $25.5 billion.
Ramsey, the Butte County district attorney, said he is sensitive to the funds PG&E secured to pay fire victims through its bankruptcy case. The amount of money prosecutors would have wanted to extract from PG&E through a civil settlement could have upended the “delicate financing” the company arranged, which would have been bad for victims and Ramsey’s office too, he said.
“Just like a person, if (the company is) dead, you have no one left to prosecute,” Ramsey said.
No one currently or formerly employed by PG&E was indicted, though Ramsey said the role of some individuals at the company was examined by the grand jury.
Prosecutors would have had to show that a specific PG&E official “made a conscious choice” to let the Caribou-Palermo line deteriorate and allow the failure of the worn hook that led to the Camp Fire, Ramsey said.
Asked whether he thought the outcome of the criminal case would make PG&E operate more safely, Ramsey said “it has to, or they should die,” referring to the company.
“It’s my expectation that now, being tagged a killer company, that they have no wiggle room,” he said. “Their ability to say, ‘Well, this is just kind of simple negligence’ or ‘It is what it is’ or anything that they were using in the past is gone. … They are mandated now to make their delivery of power safe.”
More details are expected to emerge when PG&E appears in Butte County Superior Court on April 24.