SACRAMENTO, Calif. — The silence from Sacramento echoes into the hills of California’s wildfire country where 70,000 people affected by man-made disasters are still waiting to receive settlement money from PG&E.
A lack of answers about their plight – being paid low-and-slow in a PG&E bankruptcy settlement California Gov. Gavin Newsom brokered, blessed, and bolstered – adds to growing scrutiny of how the Newsom administration handles tough questions and provides answers to pressing issues.
As Newsom assumed office in January 2019, the power monopoly filed for federal bankruptcy protection to settle damages with 70,000 victims of 24 different wildfires.
PG&E was a major donor to Newsom’s 2018 campaign. Just 30 hours after he became governor-elect in November 2018, PG&E sparked the deadly Camp Fire leading to 84 felony manslaughter convictions against the company.
"He doesn't care,” said fire survivor Carol Cassel. “Isn't the governor supposed to be for the people of the state that he lives in?"
After Cassel escaped the deadly Butte Fire in 2015, Cal Fire investigators found PG&E at fault.
But settlement talks were frozen by the bankruptcy, which PG&E declared after starting fires that killed more than 100 people in 2017 and 2018.
The survivors of all of the 2015-2018 fires settled by PG&E were lumped together in the bankruptcy plan, to be paid from a new entity: the Fire Victim Trust.
Nearly three years after PG&E emerged from bankruptcy in 2020, no fire survivors have been paid in full.
They’ve been warned not to expect to receive their full settlements.
“The state should ensure fire victims are treated fairly and fully compensated,” Newsom’s own task force on the crisis declared in 2019. “Any reorganization plan should not disadvantage current and future wildfire victims.”
FEW OPPORTUNITIES FOR ACCOUNTABILITY
ABC10 has lodged 12 interview requests with Newsom since he was governor-elect, all of which have been rejected or ignored.
In 2021, the governor walked away when asked at a news conference about the shortfall to fire survivors.
It’s not a problem isolated to this issue. The Newsom administration has made a habit of avoiding interviews and comments on stories.
“It's just making it impossible sometimes to do this job,” said reporter Alexei Koseff, who recently reported on the lack of press access in Governor Newsom’s administration for nonprofit news site CalMatters.
“It is a strange position to be in as a reporter, because you never want to make yourself the story,” Koseff said. “But this has been a growing issue for the press corps over the past few years.”
Koseff chronicled a shift away from granting in-person interviews with the governor and state agency officials, urging reporters to submit questions by email instead.
His report also noted multiple occasions when staffers “physically blocked journalists” from approaching Newsom.
ABC10 aired footage Saturday of Newsom staffers using their bodies to block its journalists from asking the governor questions after a March news conference.
“The governor is not obligated to answer our questions,” Koseff said. “But to physically block reporters at an event from even trying to do their job… it's beyond simply ignoring a question then it becomes obstruction.”
QUESTIONS ABOUT FAIRNESS AND MAKING IT RIGHT
With the governor evading questions and refusing to provide answers, the frustration and anger from the victims and their families continue to mount.
In an investor call, PG&E recently announced plans to restart dividend payments to shareholders in the second half of this year.
This means PG&E plans to resume paying profits to Wall Street while its fire survivors go without full payment.
ABC10 wanted the governor to answer two main questions: How is this outcome fair? And what is he prepared to do to help get the survivors paid?
They are questions survivors want to be answered.
"No one should be making any extra money until those victims have been paid for,” said Steve Bradley, whose grandmother Colleen was one of PG&E’s 84 manslaughter victims. “I know legally there is no way to hold them to that standard, but it is the right, moral thing for them to do."
PG&E’s dividends had reached $1 billion annually prior to the Camp Fire.
Before PG&E’s federal criminal probation for its San Bruno felonies expired, a federal judge banned the monopoly from paying dividends as a way to protect public safety. He found PG&E had paid billions in profits to investors, some of which should have been spent on maintaining a safe power grid.
QUESTIONS AND NON-ANSWERS
In an exchange of emails with Newsom deputy communications director, Alex Stack -- who promised on-camera in March to help get answers to our questions -- the administration received and rejected our 12th request for an interview with the governor about PG&E.
In April, we finally had the opportunity to ask the governor the two questions during a press conference the governor called to talk about protecting abortion access:
ABC10: “Governor, PG&E on its most recent earnings call said it was going to go back to paying a dividend later this year. Meantime, the 70,000 wildfire victims are still waiting on their payments. They’re being told not to expect to be paid in full. I’m curious to know whether you think that’s fair and why. But more importantly, after your administration said that ‘the state should ensure fire victims are treated fairly and fully compensated…’ what do you plan to do to try to get those victims to 100 percent of what they’re owed?”
NEWSOM: “Well, we’re here talking about the pending, looming fire that’s in front of us. I appreciate the question on PG&E. That’s well established territory in terms of the public comments we’ve made and the work we did collectively, not only this administration but in partnership with the legislature. I don’t know about the dividends call at PG&E and I’ll have to get back to you on that.”
ABC10: “Why is it fair that they pay their shareholders but not their victims?”
NEWSOM: [Ignores question]
With neither question answered, we emailed Stack to ask the governor to get back to us on that.
Stack replied with a line the governor’s office has sent ABC10 on multiple occasions before: “No governor in California history has done more to hold PG&E accountable.”
The statement, which appears in its entirety below, goes on to describe the bankruptcy process. It does not answer the two questions: Does Newsom think this treatment of PG&E’s victims is fair? And does he plan to help them?
EMPTY BULLY PULPIT
Some fire attorneys asked the governor for a state loan to help pay the victims. It went nowhere.
“PG&E created that debt. They need to pay that debt,” said Bradley, who doesn’t want the state to pay.
If PG&E has enough money to pay dividends, he says the company should pay.
He wanted to hear the governor say that. He wanted to hear Newsom speaking from his bully pulpit as the chief executive of the state, which governors frequently do.
“He could call out PG&E, he could mention the payment to the shareholders, to put public pressure or public shaming on them,” said Sacramento State University Political science professor Kristina Flores Victor.
The governor’s response makes it clear he’s not planning to use his bully pulpit for the fire survivors.
“It seems like ‘we've already dealt with this,’” she added. “Whatever political energy has been expended on this topic is done.”
Newsom has raised his national profile, frequently booking interviews with national outlets about hot-button issues.
But some of the issues the California press wants to ask about: homelessness, problems with state programs, or the bailout of PG&E.
“They don't get him the good headlines. They maybe get him the bad headlines,” Koseff said. “You can understand the strategy, right? Say nothing, and perhaps the story will go away. And sometimes it does. That's what makes it an effective strategy and that's why people continue to do it.”
A CALL FOR COMPASSION
For Carol Cassel and thousands like her, the story won’t go away.
It’s her life.
She finally has a real roof over her head. She bought a house from friends who sold it below market value.
“I wanted to emphasize this isn't because of PG&E. We're not home because of something they did to make up for what they did,” Cassel said. “This is because I have good friends and there are good people in this world.”
She’s received 60 percent of her PG&E settlement. Fire survivors are being held at 60 percent as the trust liquidates shares of PG&E stock used to fund their claims.
The Fire Victim Trust acknowledges victims won’t be made whole in the end, but won’t say by how much.
Some projections forecast that victims will only get 80 percent of their money. Survivors have also asked Congress for help. On top of paying lawyers’ fees out of their settlements, they must also pay federal income tax on them.
Cassel would like to pay only 80 percent of her PG&E bill, but knows she can’t.
“Would we get away with that? They would come after us until the day we died,” she said.
Survivors also have a bone to pick with Congress. Efforts by members of California’s congressional delegation, a majority of which accepted campaign funds from PG&E after the company became a convicted felon, have fallen short of winning tax relief for these 70,000 survivors.
If she gets less than 100 percent of her settlement, Carol will struggle harder to keep the roof she finally has over her head.
She sums up what she wants to hear from Governor Newsom in one word: “Compassion.”
“When you're in that position, you can change the world, you can be part of the solution instead of part of the problem,” she said. “Where's your humanity?”
MORE FROM FIRE - POWER - MONEY: www.FirePowerMoney.com
EDITOR’S NOTE: The following is a complete, unedited statement received via email from Alex Stack in Gov. Newsom’s communications office, responding to our questions:
No governor in California history has done more to hold PG&E accountable. The Newsom Administration worked with the Legislature to ensure that PG&E could not exit bankruptcy without first entering into a settlement agreement with fire victims, while also protecting ratepayers from rate increases. That settlement had to be approved by both the bankruptcy court and by a vote of the fire victims themselves, with the help of their lawyers and financial advisors.
Regardless of the settlement terms approved by the court and fire victims, the state is supporting communities hardesthit: providing additional relief for communities devastated by wildfires, including property tax backfills for schools, stabilizing finances of local critical infrastructure, debris and tree removal, and more.
Additionally, the state held PG&E accountable by forcing the company to make fundamental changes by passing strict new safety requirements, creating new protections for PG&E customers, getting PG&E shareholders to pay billions for safety improvements, and more.
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