PG&E Ordered To Develop Compliance And Ethics Program (and fined) For Engaging In Crimes

[nitpicker]

https://www.justice.gov/usao-ndca/pr/pge-ordered-develop-compliance-and-ethics-program-part-its-sentence-engaging-criminal

Department of Justice
U.S. Attorney’s Office
Northern District of California

FOR IMMEDIATE RELEASE
Thursday, January 26, 2017

PG&E Ordered To Develop Compliance And Ethics Program As Part Of Its Sentence For Engaging In Criminal Conduct

Five years of probation and fines make up sentence for PG&E’s violations of the National Gas Pipeline Safety Act and for Obstructing Agency Proceeding

SAN FRANCISCO— Pacific Gas and Electric Company (“PG&E”) was sentenced today to submit to an expansive program of probation after having been found guilty of multiple willful violations of the Natural Gas Pipeline Safety Act of 1968 (“PSA”) and obstructing an agency proceeding, announced U.S. Attorney Brian J. Stretch, San Mateo County District Attorney Stephen M. Wagstaffe, U.S. Department of Transportation Office of Inspector General Special Agent in Charge William Swallow, and FBI Special Agent in Charge John F. Bennett. Among the provisions included in the program of probation issued by the Honorable Thelton E. Henderson, District Judge, are the obligation to submit to a corporate compliance and ethics monitorship, the obligation to complete 10,000 hours of community service, and the requirement to spend up to $3 million to inform the public in print advertisements and television commercials to notify the public of the utility’s criminal and neglectful behavior.

On August 9, 2016, after a 5 ½ week trial, a federal jury found PG&E guilty of multiple willful violations of the PSA and obstructing an agency proceeding. The PSA-related charges stem from PG&E’s record keeping and pipeline “integrity management” practices and were uncovered in the course of the San Bruno investigation. The obstruction charge was added after investigators discovered PG&E attempted to mislead the National Transportation Safety Board (NTSB) during its investigation. The evidence at trial demonstrated that, between 2007 and 2010, PG&E willfully failed to address recordkeeping deficiencies concerning its larger natural gas pipelines knowing that its records were inaccurate or incomplete. The evidence further demonstrated that PG&E willfully failed to identify threats to its larger natural gas pipelines and to take appropriate actions to investigate the seriousness of threats to pipelines when they were identified. In addition, PG&E willfully failed to adequately prioritize as high risk and properly assess threatened pipelines after they were over pressurized, as the PSA and its regulations required. These charges were filed in an indictment on April 1, 2014. In finding PG&E guilty, the jury concluded the company knowingly and willfully violated the PSA and its regulations between 2007 and 2010. The jury found PG&E guilty of six felony counts—five willful violations of the PSA and one count of corruptly obstructing the federal investigation into the 2010 fatal pipeline explosion in San Bruno, in violation of 18 U.S.C. § 1505. The jury acquitted PG&E of an additional six alleged violations of the PSA.

The charge of obstructing an agency proceeding was included in a superseding indictment filed July 29, 2014. The evidence at trial demonstrated that during the course of the NTSB’s investigation, PG&E provided a version of a policy outlining the way in which PG&E addressed manufacturing threats on its pipelines, and then sought to withdraw the document. According to PG&E’s letter, the policy was produced in error and was an unapproved draft. In finding PG&E guilty of obstructing an agency proceeding, the jury concluded PG&E intentionally and corruptly tried to influence, obstruct, or impede the NTSB investigation, in violation of 18 U.S.C. § 1505.
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In handing down the $3 million monetary penalty, Judge Henderson ordered PG&E to pay the maximum statutory penalty allowable for each count charged under the PSA and for obstruction of justice. In addition to the monetary penalty, Judge Henderson ordered PG&E to the maximum term of five years’ probation. While on probation, PG&E will submit to a corporate compliance and ethics monitorship, pay for advertising in national media outlets to publicize its criminal conduct, and engage in community service.
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