Jury finds PG & E guilty in 6 of 12 criminal charges for pipeline violations that caused San Bruno explosion, killed 8, destroyed 38 homes and for misleading investigators. In big victory for PG & E, judge cut nearly all of potential $562 million fine to $6M, “Prosecutors made the surprising decision several days into jury deliberations not to pursue a potential $562 million fine if PG&E was found guilty of any of the counts.”

PG&E Guilty Of Misleading Investigators In San Bruno Pipeline Explosion by San Francisco CBS Local, August 9, 2016

A federal jury found California’s largest utility guilty on Tuesday of misleading investigators about how it was identifying high-risk pipelines after a deadly pipeline explosion in the San Francisco Bay Area.

The jury found PG&E not guilty of six of 11 remaining counts that alleged pipeline violations.

The blast of a Pacific Gas & Electric Co. natural gas pipeline six years ago sent a giant plume of fire into the air, killing eight people and destroying 38 homes in the city of San Bruno.

During the investigation, prosecutors say, the San Francisco-based utility misled federal officials about the standard it was using to identify high-risk pipelines.

PG&E pleaded not guilty and said its employees did the best they could with ambiguous regulations they struggled to understand. [Blame the regulations/regulators for causing an explosion that killed so many and destroyed so many homes?]

The stakes in the case dropped dramatically, however, when prosecutors made the surprising decision several days into jury deliberations not to pursue a potential $562 million fine if PG&E was found guilty of any of the counts.

The decision, which was approved by a judge, reduced the company’s maximum liability to $6 million, prompting criticism that prosecutors were not holding PG&E accountable.

According to prosecutors, the standard PG&E used to identify high-risk pipelines violated safety regulations and led to a failure to classify the San Bruno pipeline and others as high risk and properly assess them.

The company also did not subject the pipelines to appropriate testing, choosing a cheaper method to save money, prosecutors told jurors.

“The motive was profits over safety,” Assistant U.S. Attorney Jeffrey Schenk said during his closing argument in the more than monthlong trial.

PG&E engineers did not think the pipelines posed a safety risk, and the company did not intend to mislead investigators, PG&E attorney Steven Bauer said during the trial.

The utility inadvertently sent officials a draft policy about its standard for identifying high risk pipes, not one the company was actually following, he said.

“Nobody at PG&E is a criminal,” he said during his closing argument. He accused prosecutors of engaging in an “elaborate second-guessing exercise.”

Investigators have blamed the blast in part on poor PG&E record-keeping that was based on incomplete and inaccurate pipeline information. [Emphasis added]

PG&E guilty of obstructing investigators by ABC7News, August 9, 2016

SAN FRANCISCO — A federal jury found California’s largest utility guilty on Tuesday of violating pipeline safety regulations before a deadly natural gas pipeline explosion in the San Francisco Bay Area and then misleading investigators about how it was identifying high-risk pipelines.

After deliberating for seven days, jurors convicted Pacific Gas & Electric Co. of obstruction and five of 11 counts of pipeline safety violations, including failing to gather information to evaluate potential gas line threats and deliberately not classifying a gas line as high risk.

The blast of the PG&E natural gas pipeline six years ago sent a giant plume of fire into the air, killing eight people and destroying 38 homes in the city of San Bruno.

No PG&E employees were charged, so no one is facing prison time. A judge could fine PG&E as much as $3 million for the convictions when the company is sentenced. [Emphasis added]

JUDGE CUTS POTENTIAL FINE AFTER CALIFORNIA PIPELINE BLAST by ABC7News, August 02, 2016

In a big victory for Pacific Gas & Electric Co., a judge on Tuesday cut nearly all of a potential $562 million fine against the giant utility in a criminal case alleging it violated safety regulations before a deadly natural gas pipeline explosion in California and then obstructed investigators.

U.S. District Court Judge Thelton Henderson issued the order without explanation late in the day, hours after the U.S. Attorney’s Office requested it in a court filing.

Prosecutors also offered no explanation for their surprising decision to seek a lower fine against PG&E after more than a month of testimony at trial and four days into jury deliberations.

Jurors are deciding whether the company is guilty of multiple charges filed following the 2010 blast that sent a giant plume of fire into the air, killing eight people and destroying 38 homes in the San Francisco Bay Area city of San Bruno.

PG&E now faces a maximum fine of $6 million if convicted of 11 pipeline safety violations and obstructing investigators after the blast. No PG&E officials are facing prison time.

The potential $562 million fine was double the amount of money prosecutors said PG&E saved by skirting pipeline safety requirements. The utility argued in court filings that determining any savings would be complicated and unduly prolong a penalty phase of the trial.

Prosecutors may have been concerned that jurors would think they were asking for too much money and too much of their time to sit through a possible penalty phase, said Robert Weisberg, a criminal law professor at Stanford University.

He said jurors might be so angry at prosecutors that they would side with the company on every count.

Brandon Garrett, a professor at the University of Virginia School of Law who studies corporate crime, said the larger fines the government was initially seeking are meant to act as a deterrent and prosecutors appeared to be giving PG&E “a massive and unexplained discount” in the revised proposal.

“Obviously, if a company does not have to pay a fine that is larger than its gains, then its crime becomes profitable,” Garrett said.

[Emphasis added]

 

Jury can hear about San Bruno explosion in PG&E trial by George Avalos, July 12, 2016, , Mercury News

SAN FRANCISCO — Declaring it “time to be honest with the jury,” the judge in PG&E’s federal criminal trial on Tuesday ruled witnesses will be allowed — for the first time — to mention the deadly San Bruno pipeline explosion.

U.S. District Court Judge Thelton Henderson previously had imposed strict limits on questions and evidence to prevent jurors from hearing about the September 2010 blast. Until now, the trial has been narrowly focused on allegations that PG&E violated pipeline safety regulations by giving priority to profits over safety and whether the utility moved to obstruct the federal investigation into the explosion.

Henderson’s ruling clears the way for witnesses, in response to questions, to discuss the blast, which killed eight people and leveled much of a San Bruno neighborhood.

The issue came up last week as federal prosecutors questioned William Manegold, a retired senior engineer with PG&E.

During Manegold’s testimony, evidence was introduced in which another PG&E engineer lamented the utility’s “near-criminal” indifference about gas pipeline safety and that PG&E was aware of “prevalent” hazards in its pipeline system. [Like Encana’s callous, (criminal?) disregard for a community’s drinking water aquifers and the resulting dangerous post-fracing explosive gases released and venting from household and business water taps?]

But the testimony also related to PG&E’s activities after the explosion, including an effort to revalidate all data connected to Line 132, the pipeline that ruptured in San Bruno.

After testimony concluded Friday, PG&E defense attorneys expressed concerns that jurors had heard testimony about company officials launching reviews of the utility’s pipeline safety program — after the explosion occurred.

The judge criticized PG&E for attempting to exert undue control over San Bruno references.

“PG&E moved for a jury questionnaire that was replete with references to San Bruno and explosions” months before the trial began, Henderson noted. “That PG&E continues to deny these realities is at best puzzling and at worst self-serving.” [Like Encana, the Alberta government and AER blaming bacteria to cover-up Encana’s law violations and resulting life-threatening contamination of a community’s drinking water supply?]

Prior to the new court order, the jury — despite hearing evidence of numerous leaks and unauthorized pressure spikes in the pipeline — was not even allowed to know that Line 132 was the line that exploded in San Bruno.

“The court is pleased that PG&E finally agrees that the best course of action in this criminal trial is to mention the San Bruno explosion to the jury, but to mention it carefully,” Henderson wrote in his ruling.

PG&E had requested the judge to remove from evidence an array of emails from before the explosion that placed the utility in a poor light. Henderson denied that request.

Instead, the judge decided that it would be possible for the jury to hear about the San Bruno explosion to provide context for questions to witnesses.

The jury is also hearing evidence about investigations into the explosion by the state Public Utilities Commission.

But the judge limited what jurors could hear about the PUC probes, and he ordered the panel to avoid concluding that PG&E is guilty of criminal transgressions just because the PUC decided to punish the utility for the explosion.

“The jury may not conclude from the mere fact of the PUC inquiry that PG&E violated any of the charged regulations, and may not speculate about the results of any such inquiry,” Henderson told jurors.

In April 2015, the PUC levied a $1.6 billion penalty on PG&E, the largest regulatory punishment ever levied on an American utility. [What penalty will Husky get for contaminating the N Saskatchewan River and drinking water for numerous communities after misleading the public and regulators on when the spill started? One dollar Canadian? Likely less.]

San Francisco-based PG&E faces 13 criminal counts in the case, including 12 allegations by prosecutors that it violated pipeline safety rules, and one charge that it obstructed an official investigation into the explosion.

PG&E has pleaded not guilty to all the charges. If convicted on every count, PG&E faces a fine of up to $562 million. [Emphasis added]

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