“Do you believe the tragic 2010 San Bruno gas explosion was caused by a criminal PG&E? I doubt it, but this recent LA Times Editorial Board article has no doubt (after a federal jury found PG&E guilty on six felony counts) and in fact, they believe that PG&E and its officers, directors, employees, and shareholders got off way too easy. Given my hard experiences with false government allegations,…
…I read and think about an issue like this differently than most people. How can a corporation be put on trial and found guilty of a crime? The corporation is just a legal entity (a piece of paper) and assets and liabilities, etc. Only human beings, who own or work for the corporation, can commit crimes and as the article below points out, not a single PG&E employee, officer, or director was charged with, let alone found guilty of a crime. Why? I think it’s very simple. Do you believe that any people at PG&E acted with criminal intent to cause the San Bruno tragedy? I don’t and I bet the tens of thousands of employees and their families who work for PG&E don’t either. At its core, the government accused PG&E of not following regulations regarding the timing/frequency of gas pipeline safety inspections. PG&E engineers had classified the San Bruno pipelines as low risk, and with the benefit of hindsight (of a tragic accident/explosion), the government said they were deliberately mis-classified to save money and higher risk and should have been inspected more frequently. First, PG&E is a monopoly, regulated utility, so almost every cost is recovered from its ratepayers. So, where is the motive to intentionally mis-classify? Maybe PG&E engineers made a mistake in classification or were lazy at their job? Maybe they didn’t make a mistake, maybe the government prosecutors are re-defining, with the benefit hindsight and for political reasons (the need of some to punish for an accident that cost lives and injured many) PG&E’s pipeline inspection policies? Clearly, managing gas pipelines is a risky business and tragic accidents can happen in spite of strong safety procedures, given the massive area and millions of customers PG&E serves. Let me repeat it again, how can a corporation commit a crime when no one at the corporation was even charged with a crime, let alone convicted? I think these types of government prosecutions are political in nature and unfairly damage the reputation of America’s free enterprise system and hurt entrepreneurial risk-taking. mp p.s. Do you remember Arthur Anderson, the huge international CPA firm? They were convicted by a U.S. federal jury of criminal activity (with regard to Enron and WorldCom) and collapsed, destroying the careers and finances of tens of thousands of innocent employees and their families. On appeal, years later, their conviction was reversed, yet it was too late for those thousands of innocent victims of a politicized U.S. federal prosecutor. PG&E has the benefit in its appeal of hard assets and a monopoly business, so it’s not going to collapse either way.”, Mike Perry, former Chairman and CEO, IndyMac Bank
“Nobody at PG&E is a criminal,” Steven Bauer, the utility’s attorney, said during the trial.
“The government failed to meet its burden to prove its case beyond a reasonable doubt,” PG&E said in its court filing (appealing the criminal verdict), reports the East Bay Times. “The government urged the jury to convict on novel legal theories [as part of an] unprecedented prosecution.”
Conviction, but no real punishment, in San Bruno explosion case
The Times Editorial Board
The conviction of Pacific Gas & Electric Co. in federal court on Tuesday puts to rest the question of whether the state’s largest investor-owned utility broke the law before a natural gas explosion that killed eight people, badly injured 58 others and destroyed 38 homes in the Bay Area community of San Bruno in 2010. It did. Thanks to a strong case brought by federal prosecutors, a jury found PG&E guilty on five felony counts of violating pipeline safety laws and one felony count of obstructing the investigation into the explosion. But while the conviction is important because it helps make clear that the company was to blame in this terrible tragedy, it may not be as satisfying a resolution for those who lost homes, friends or loved ones as they had hoped. Or, for that matter, for people who want the utilities in their communities put on notice that if they violate gas pipeline safety rules, they could face real punishment. That’s because there are no real consequences for any actual people in this case. No one will go to jail or be put on probation. In fact, not one PG&E executive was charged. Former PG&E chief executive and president Peter Darbee, who retired in 2011 with a $35-million payout, did not take the stand at the trial to explain what happened, and neither did other top executives. It was just the corporation itself on trial. And you can’t very well send a company to jail or sentence it to picking up litter on the side of the freeway. “Nobody at PG&E is a criminal,” Steven Bauer, the utility’s attorney, said during the trial. Technically true, but in reality we all know that corporations can’t act on their own. It’s the people in the corporation who made the decisions that led to the criminality. The judge in this case can impose a fine on PG&E of up to $3 million. And he should go for the maximum, even if it is little more than pocket change to the multi-billion-dollar corporation. Originally prosecutors had sought $562 million in fines, half of what they figured the utility saved by misclassifying high-risk pipelines so it could avoid paying for appropriate testing. But four days into jury deliberations, prosecutors dropped that demand and settled instead on $500,000 per conviction, which is the standard fine. For PG&E, it represents just a small cost of doing business. The California Public Utilities Commission’s record $1.6 billion fine for pipeline violations probably hurt PG&E a little more. But even that did not serve a s much of a warning to the company’s executives — because they don’t have to pay it themselves. This is not to say the case wasn’t worth pursuing. Many people have long believed that PG&E was not properly maintaining its pipelines and now that’s been proven in court. But it’s frustrating as well to see, once again, how difficult it is to hold people accountable for misdeeds when they can hide behind the corporate seal.