United States

Opening Statements in PG&E's Federal Pipeline Safety and Obstruction Case Could Begin This Week

The company could face as much as a half-billion dollar fine if found guilty of the 12 pipeline safety violations and with the obstruction of justice count.

Opening statements are expected as soon as Thursday morning in the federal case against Pacific Gas & Electric Co. on pipeline safety counts and a lone charge of obstructing the federal investigation into the 2010 San Bruno blast.

The company could face as much as a half-billion-dollar fine if found guilty of the 12 pipeline safety violations and with the obstruction of justice count.

Prosecutors contend PG&E made willful decisions not to maintain records and proper testing of its pipelines to assure safety, as a “part of a corporate culture of prioritizing profits over safety.”

At a jury screening on Wednesday, lawyers for the government and the utility delved into what the prospective panelists knew about the blast. Clearly, most had heard something about the disaster.

Only one prospect raised her hand as having never heard of the Sept. 9, 2010, explosion that left eight people dead in San Bruno’s Crestmoor neighborhood.

Steve Bauer, the lead defense attorney for PG&E, took pains to remind the jurors that they had the obligation to keep an open mind.

“People, you have to give us an honest, fair shake,” Bauer told them. “You have to give it to companies. You even have to give it to PG&E.”

Several would-be jurors expressed doubts that they could do that. Others expressed outrage of the conduct of corporate executives in general. One said she had trouble taking them “seriously.”

Asked by Bauer to elaborate, the prospective juror cited news about executives having “coke and hookers” in their offices, but said that involved Fortune 500 firms, not utilities.

After questioning on Tuesday and Wednesday, 10 out of the original pool of 96 were removed for cause by U.S. Judge Thelton Henderson. Another dozen jurors were removed after they claimed last-minute hardships, leaving 74 available for final selection. The panel will have 12 jurors and six alternates for a trial expected to last up to eight weeks.

Henderson said he expected the final selection to be wrapped up quickly on Thursday morning.

Federal prosecutors are expected to summon several current and former company officials to testify in the case, some of whom were granted immunity. One that was given no such assurance is Peter Darbee, who left the company as CEO in 2011 with a $34.8 million severance deal.

They also hope to call Leslie Banach McNiece, who was hired after the blast to clean up the company records but now says company officials resisted her efforts to reform record-keeping practices.

The company issued a statement this week on the eve of the trial.

“Regardless of the next legal steps, we want our customers to know we are focused on the future and on re-earning their trust by leading in safety, reliability, affordability and clean energy,’’ the statement read. "We've made unprecedented progress, and we're committed to maintaining this focus."

Last year, PG&E paid a $1.6 billion regulatory penalty – the largest such punishment in U.S. history – for various regulatory violations leading to the blast.

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