No More Getting Away With Murder
The second-deadliest corporate crime ever, according to the human death toll, is British Petroleum’s Deepwater Horizon explosion. But the deadliest corporate crime ever remains Pacific Gas and Electric’s entire town blaze, killing 84 people. “Guilty, your honor,” now utters the chief executive to all 84 counts of involuntary manslaughter.
The “Camp Fire” burned down Paradise, California. If a single person caused the spark, the state’s laws would sentence that person to a lifetime in prison. But PG&E isn’t a single person, so the multi-billion-dollar utility company faced just $10,000 per death, plus state fees and the cost of prosecution, which topped it up to $4 million.
Fortunately, victims have managed to reach a separate deal to get properly compensated, and investors have managed to drive down shares so far that PG&E’s only ‘out’ post-bankruptcy is state-ownership or a Warren Buffett deal.
Civil suits handcuff the business. Concerns now are rightly about how regulations can help prevent more disasters, and how rule changes might confiscate powers from other mega-utilities like American Electric Power and CMS Energy.
It was impossible to pin down managers and engineers directly at fault for incomplete maintenance work on Paradise power lines. PG&E’s corporate structure was too complicated. There were layers upon layers of bureaucracy and mountains of paperwork.
Hence, analysts fear a political impetus to disrupt bureaucratic companies will spook the utilities sector, especially as ludicrous fines for $10,000 go viral. We recommend keeping American Electric Power and CMS Energy on your watchlist!