Pacific Graft & Extortion

According to recent news reports, PG&E may seek bankruptcy protection to avoid liability for its negligence in causing the Camp Fire. To understand how nauseating this is, and what should be done about it, a little history and background is in order.

In 1997, PG&E was convicted of 739 misdemeanors for causing the Trauner fire in Nevada County that burned twelve homes and a schoolhouse. That number—739–isn’t a typo. The fire was caused by a tree limb brushing against a power line. PG&E is supposed keep trees trimmed near its lines—but instead, it diverted $77 million over seven years from its tree maintenance program in order to prop up profits for investors. So it was convicted of 739 crimes.

Did PG&E learn? Nah. In 2010, a PG&E gas pipeline in San Bruno exploded, killing eight people and injuring many more. Thirty five houses were destroyed; three more had to be torn down because of extensive damage. The cause of the explosion was determined to be a combination of excessive pressure in the pipeline, faulty welds, and poor maintenance practices. The State of California determined that PG&E had illegally diverted $100 million from a fund dedicated to safety operations, and had instead used the money for executive compensation and bonuses. As a result, PG&E was convicted of six felonies, paid a fine of $3 million, and was put on five years probation. The Public Utilities Commission fined the utility $1.6 billion.

But they learned that time, right? Nope. In 2015–just as their probation was ending—a wildfire swept through Amador and Calaveras Counties, burning 70,00 acres, killing two people, and destroying over 900 structures. Cal Fire determined that the cause of the fire was poor tree maintenance by PG&E that led to a tree falling on a power line near Jackson. PG&E paid an $8.3 million dollar fine, and estimated that its total losses for that fire, including payments to individual homeowners, exceeded $750 million.

That must be the end of it, right? You would think. But you would be wrong. Cal Fire, the state’s fire management agency, has so far reported that PG&E’s electric equipment started 12 fires in October 2017. The fires ultimately killed 18 people. The agency’s research indicated that the utility violated state law governing vegetation management in eight of those wildfires.

Now PG&E may have to declare bankruptcy to avoid its liability for the Camp Fire.

It’s pretty clear that PG&E doesn’t care whether you die because of its negligence. How can they get away with it again and again? Well, guess who’s paying PG&E’s fines and settlements? Ratepayers. You and me. They blow up our families and burn down our homes, and we pay the tab.

Executives aren’t hurt. The San Jose Mercury News reports, “In 2017, Geisha Williams, PG&E’s chief executive officer, was awarded $8.6 million in total direct compensation, according to a PG&E filing with the Securities and Exchange Commission. Her 2017 pay package was 106 percent higher than the $4.2 million in total pay she received in 2016.” Got that? She got a 106% raise for presiding over a year of negligence that killed 18 people. Why should she care?

Also according to the Mercury News, Anthony Earley, PG&E’s former CEO and Williams’ predecessor, saw a gain of $15 million from the sale of stock according to the same SEC filing. Earley officially retired at the end of 2017. So he made $15 million for guiding his company into negligent homicide and possible bankruptcy.

These disasters keep happening because there are no consequences. When PG&E is fined or sued, ratepayers pay the bill. When the utility is convicted criminally, no one goes to prison. Executives are given bonuses that reflect complete indifference to their negligent homicides.

There are many smart people who believe that public utilities should never be public corporations precisely because it encourages companies to put shareholders and executives before ratepayers. I haven’t researched the issue in sufficient depth to know what the alternatives are, or whether they would be any better. But you don’t have to be a business or utility expert to know that people are predictable creatures. They react to carrots and sticks in predictable ways. Reward them for negligence, and they will be negligent. Insulate them from the consequences of their actions, and they will be indifferent to those consequences.

When utilities display a pattern and practice of negligence, as PG&E has, they need to be held accountable. They should not be allowed to raise rates to pay the costs of their negligence. Executives should not be rewarded with bonuses or stock options, or able to realize profits on the sale of options, when those executives have presided over catastrophic negligence—regardless of whether the company has been otherwise profitable. And if PG&E is allowed to discharge its obligations to the Camp Fire victims in bankruptcy court—and remember, “discharge” is legalese for “skip out on”—then all parties must understand that justice must still be done. Top executives, including Geisha Williams, need to go to prison.

If this sounds harsh, it shouldn’t. Under California law, involuntary (negligent) manslaughter is a felony carrying a prison term of two, three, or four years in state prison. If you think PG&E executives should be able to skip out on their obligation to compensate their victims and avoid prison for their deadly acts and omissions, tell me: Is that because the law shouldn’t apply to wealthy, successful people, or because the victims of the Camp Fire are unworthy of justice?

On Forest Fires

In 1991, Clyde the Wonder Cat and I lived in a small in-law apartment in the basement of a house in the Oakland Hills. Single and just a few years into my career, I was beginning to acquire a cool stash of consumer goods—television, skis, Yamaha tenor sax—that constituted indicia of a comfortable, enjoyable life to come.

On the morning of October 21, my girlfriend and I drove to San Francisco to attend a birthday brunch for a friend. On the way back, we noticed a column of smoke in the East Bay. “Must be something on fire in the port,” I guessed. As we turned onto the Bay Bridge, we saw that the smoke was coming from the hills, not the port. “How close is that to our neighborhood?” Linda asked. (She owned a house a couple of miles from my apartment.) The closer we got, the more apparent it was that the smoke was indeed coming from our neighborhood.

We got to within two blocks of my apartment before being turned away by emergency personnel. Retreating to Linda’s house, we watched the news reports of what came to be known as the Oakland Hills fire. Eventually, we had to evacuate her house and flee with a carful of her possessions to her parents’ home in the Berkeley hills.

I won’t bore you with all the details. Linda’s house survived. My apartment did not. (Clyde the Wonder Cat lived through a feat of derring-do worthy of another writing.) Over 2,000 homes burned.

I lost everything. The fire was so intense that there was nothing left of the apartment but the foundation of the house above it. There was no sign that my large metal desk or big brass instrument had ever existed; they melted and trickled down the street. I had no clothing, no kitchen gear—not even a toothbrush. I was one of the lucky ones; I had a girlfriend who let me crash at her house. (Admittedly, that worked out well in the long run.) Worse, my mother had sold the family house several years before, and, lacking room in her new apartment to store memorabilia, had distributed almost every memento of my childhood to me and my brothers. Family pictures, Cub Scout and Little League paraphernalia, academic diplomas, and more—all of it was gone.

I learned some lessons from that fire. Not all of them were the right lessons. To my own surprise, I was not devastated by the loss of my apartment or possessions. It was all just stuff. Even the pictures and items of sentimental value were just stuff; I had my memories, and that was enough. The fire didn’t teach me to not get too attached to stuff; it simply showed me that I was already that way. Honestly, by the time of the fire I was already starting to miss the time, just a few years before, when I could move my apartment in a small number of produce boxes in the back of my hatchback. Possessions are nice, but they do not define me. I found Clyde a few days after the fire, and together we sponged off of Linda and her cat, Sporty, while we got back on our feet.

(Another lesson: if your girlfriend is really crazy about you and wants you to move in with her, do it before she burns down half the city just to make it happen. I can’t prove Linda was responsible, but I still have my suspicions.)

In the days following the fire, I watched news reporters thrust microphones and cameras at fire victims to record their tears at having lost their homes and possessions. I was judgmental. Fools, I thought. Everyone in your family is alive. The house was insured. The rest is just stuff. It isn’t worth crying about.

I still think that way, to a certain extent. I do think people are too invested in material possessions, and if my house burned down tomorrow, I’d be okay. Sure I’d be upset—come on, another melted saxophone?—but it’s still just stuff. Nevertheless, in the fullness of late middle age, my perspective has changed. I understand now how lucky I was when the worst happened to me. No one I knew died (although people did perish in the Oakland Hills fire); even my cat survived. I was single; I didn’t have to worry about how much school my kids were missing because school didn’t exist anymore. I was young and healthy; I didn’t have mobility or medication issues that made me dependent on outside resources that suddenly weren’t there. My girlfriend had a house; I wasn’t out on the street, scrambling to find shelter, or dependent on government largesse. Most important, the vast majority of my working life—and thus, my earning power—was still in front of me. Sentimental value aside, everything I lost could be replaced, eventually. It’s a lot easier to lose everything you have when you still have your future.

The median age in Paradise, California, is 50.2 years. A quarter of the population is 65 or older. Many of these folks are undoubtedly on fixed incomes. Many won’t ever be able to replace what they’ve lost. Some likely are facing a reduced standard of living for the rest of their lives. Some may be forced out of the area forever. And, of course, the death toll is still rising. As I write this sentence, a headline is flashing across my tablet that 631 people are missing, and 63 are dead.

I like to think that I could pack up and move tomorrow if I had to, and find the adventure in it. But even I recognize that there comes a point in life when it’s too damned hard to start over. I suppose we’d all like to think that our efforts to build a decent life earn us a certain amount of credit with Fate—that we’re safe, at some point, from the possibility of having the rug yanked out from under us and finding ourselves back at our beginnings. Recent events remind us that it isn’t so. We can lose it all, even our lives, at any time to a random exothermic chemical process of combustion. The only possession we ever get to keep is the one we give away; that is, the imprint we make on the lives of others. Go make one tomorrow.