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Deadliest Corporate Crime in U.S. Will End With 84 Guilty Pleas

June 15, 2020, 12:00 PM

On Tuesday, PG&E Corp. will plead guilty 84 separate times to involuntary manslaughter -- the deadliest corporate crime in U.S. history.

That admission in a California courtroom will mark the end of one portion of the power company’s legal travails after its equipment sparked the largest wildfire in state history, consuming the town of Paradise. Many who lost loved ones or homes to the 2018 conflagration may not find much comfort in the utility paying a $4 million fine.

But for some, a small measure of justice will come from witnessing PG&E’s comeuppance in court.

“It doesn’t bring my daughter back -- that’s the bottom line,” said Tom LeBlanc, whose stepdaughter, Kimberly Wehr, 53 years old and disabled, was killed at her home in the Camp Fire on Nov. 8, 2018. At the same time, Leblanc said in an interview, PG&E’s plea “means something because they’re admitting the guilt.”

The plea is unparalleled for a publicly traded company. Over a period of about 40 years that prosecutors in the U.S. have tried to charge companies for killing people -- mostly without success -- the closest comparison is BP Plc’s manslaughter plea after 11 workers were killed in the 2010 Deepwater Horizon explosion.

“This was extraordinarily difficult for PG&E to swallow,” Butte County District Attorney Mike Ramsey, who investigated the fire and negotiated the plea, said in an interview. For the company it amounts to conceding that “the evidence will show beyond a reasonable doubt that we killed 84 people and burned down a town by a criminally reckless fire,” he said.

The utility already has agreed to settle claims from insurers, individual fire victims and local government agencies for more than $25 billion. It also received a $1.9 billion penalty from the California Public Utilities Commission. The criminal case is the company’s last unfinished business as it races to exit from bankruptcy in the wake of a series of wildfires in recent years.

PG&E calls the plea agreement “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,” the company said in a statement.

And yet, as fire season returns, trepidation runs as far and wide as PG&E’s 125,000 miles (200,000 kilometers) of electrical grid about whether it has been sufficiently punished, and reformed, to prevent it from causing another deadly blaze. The plea agreement has been roundly criticized on social media and by a former victim representative in the company’s bankruptcy case, Karen Gowins, as barely a slap on the wrist.

Gowins, who lost her home in the Camp Fire, said she felt “disgusted” that PG&E was paying only a $4 million fine.

“Why is it that PG&E continues to get away with murder and destruction while ignoring all the legal warnings, probations, government demands, CPUC oversight and the court’s penalties?” she asked.

Ramsey heard the frustration voiced by victims, along with questions about why no PG&E executives will be sent to jail and why the fine is so small.

Even more, the plea deal doesn’t call for PG&E to be placed on probation. By contrast, the utility was ordered in 2017 to spend five years under the supervision of a federal judge after it was convicted of safety violations over a gas pipeline blast that killed eight people.

Butte County District Attorney Mike Ramsey
Photographer: Jason Halley/The Chico Enterprise-Record/AP

Ramsey says his hands are tied. Under California law, corporations are treated like people when they are convicted of crimes, and PG&E is paying the same fine a person would face for an unintentional killing through negligence: $10,000 for each count of involuntary manslaughter. The utility is also pleading guilty to an 85th count -- unlawfully causing a fire -- and paying the maximum $50,000 fine for that, along with court fees and remimbursement to Ramsey’s office for its investigation.

An individual found guilty of a single count of involuntary manslaughter might be locked up for as long as four years -- but of course that’s not an option for companies. And placing a company under court supervision as an alternative to incarceration is difficult because the law -- written for people -- gives defendants the option of declining probation in favor of spending more time behind bars.

In PG&E’s case, the solution is for a court-appointed monitor overseeing the company’s safety performance in the federal criminal case to also report to Ramsey until January 2022.

As for the executives, they couldn’t be found criminally liable unless the evidence proved they participated in causing the Camp Fire, according to Ramsey. The utility’s layered corporate structure made pinning wrongdoing on an individual impossible, particularly because the essence of the crime was years of failing to do maintenance, he said.

“That wasn’t just one day or one year,” he said. “This was over decades.”

At the hearing, Ramsey intends for the utility to acknowledge its culpability aloud for every victim by name. Surviving victims are expected to address Superior Court Judge Michael Deems Wednesday and possibly into Thursday and Friday before he imposes a sentence on the company.

LeBlanc said he looks forward to speaking directly to PG&E representatives in court. He wants to look the “PG&E people in the face,” explain how victims of the fire “were real people, they had lives.” And how “in four hours, it was all gone.”

“They gotta hear my pain, and feel my pain, to get past this,” LeBlanc said.

Robert Weisberg, a professor at Stanford Law School, said having a defendant acknowledge guilt in detail in a courtroom is an important symbolic function of the criminal justice system.

“Often the purpose is to give victims a better sense of justice,” he said. “With PG&E it may be intended to constructively humiliate the company.”

But Weisberg also said that given the scrutiny, penalties and settlements PG&E now faces, it isn’t necessary for Butte County to add another layer of formal probation.

“PG&E is just an open book now,” Weisberg said. “Its activities are so rigorously controlled by the bankruptcy court, civil suits, and the federal monitor.”

The case is People of the State of California v. Pacific Gas and Electric Co., 20CF01422, California Superior Court, Butte County (Oroville).

--With assistance from Mark Chediak.

To contact the author of this story:
Joel Rosenblatt in San Francisco at jrosenblatt@bloomberg.net

To contact the editor responsible for this story:
Joe Schneider at jschneider5@bloomberg.net

Peter Blumberg

© 2020 Bloomberg L.P. All rights reserved. Used with permission.

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