Column: PG&E, headed once again to bankruptcy, is anything but a master of disaster
When PG&E announced Monday that departing Chief Executive Geisha Williams will receive a golden parachute of as much as $4.5 million as the Northern California utility heads once again into bankruptcy, my first thought was, “Are you kidding?”
Then I remembered what company we’re talking about and I thought, “No, of course not.”
PG&E has a long and unfortunate history of enriching its executives while displaying the most shameless corporate behavior imaginable.
I know what I’m talking about. PG&E and I go way back.
Before I became the paragon of consumer advocacy you see before you, I was shanghaied by my employer at the time, the San Francisco Chronicle, into covering the California energy crisis that introduced us to “rolling blackouts” nearly two decades ago.
That meant San Francisco-based PG&E became ground zero for my reporting, and it didn’t take long for me to establish myself as the utility’s biggest pain in the you-know-what.
Such as when I reported in 2001 that PG&E handed its top brass $17.5 million in bonuses for being such good guys, except for, you know, steering the utility into bankruptcy.
Or when I reported in 2004 that, after giving themselves $83 million more in bonuses that year for doing such a good job during the bankruptcy proceedings, the utility’s senior executives gave themselves an additional $89 million in bonus money a few months later for, well, doing such a good job during the bankruptcy proceedings.
Or when I reported in 2006 that PG&E was spending $25 million to replace a 32-seat, propeller-powered plane with a much spiffier private jet for its executives. The company said in a regulatory filing that it needed the new aircraft “to meet utility objectives.”
Such as when PG&E flew its top execs and a dozen business partners to San Diego in 2003 for the Super Bowl? A utility spokesman told me at the time that the Super Bowl junket was an example of “customer relationship management.”
PG&E’s biggest problem isn’t that the utility keeps finding itself in hot water. Its biggest problem is that it responds to corporate crises in the most tone-deaf, thoughtless ways possible.
The company moved its annual shareholder meeting in 2000 to Boston, which was too far from its California home base for most protesters to follow.
It just so happened that the Julia Roberts movie “Erin Brockovich” was released only weeks earlier, dramatically detailing how PG&E had allegedly poisoned the drinking water of the Southern California town of Hinkley, allegedly tried to cover up the problem, fought lawsuits accusing the utility of giving people cancer and then settled the case in 1996 for $333 million.
I flew to Boston for the shareholder meeting. It wasn’t hard for me to sneak into the luxury hotel dining room where PG&E board members would feast that night on gourmet food — which was the last image the company wanted while trying to convey to the public that it had turned over a new leaf since Hinkley.
Brockovich — the real woman, not the movie — and I chatted in 2002. She was spearheading legal efforts at the time to hold PG&E accountable for allegedly poisoning the Kings County town of Kettleman Hills.
“They did what they did, and they’re going to pay for it,” she told me.
Her boss at the Los Angeles law firm of Masry & Vititoe, Ed Masry, played so memorably in the movie by Albert Finney, told me the case against PG&E was rock-solid.
“We have clients who are literally dying,” he said. “We will prevail in the end.”
That lawsuit was settled in 2006 for $295 million.
One thing I learned in covering PG&E was that the company’s rank-and-file workers were exceptionally dedicated, trustworthy people. They were genuinely aggrieved by how their managers had treated customers and employees.
One in particular — I never learned the person’s identity — made sure I understood what was happening at the highest levels of the utility by leaving me envelopes full of confidential documents at a secret drop behind a statue in the lobby of a San Francisco office building.
I heard that senior execs would regularly complain about my work at meetings. Bob Glynn, PG&E’s CEO and chairman at the time, reportedly responded: “Is he wrong? No? Then let’s move on.”
I liked Glynn. He was old school. I got along reasonably well with the head of the company’s utility subsidiary, Gordon Smith.
But it was clear from my interactions with both men that they had no flair whatsoever for public relations. They were so busy circling their wagons to protect themselves and shareholders that they completely lost track of ratepayers being asked to shoulder the company’s financial woes through rate hikes and surcharges.
This current bankruptcy is different from the earlier one. Back in 2000 and 2001, PG&E and other California power companies were, to a large extent, victims of circumstance. They were being screwed by Enron and other out-of-state energy companies, which were viciously gaming the system to profit from our vulnerabilities.
This time, PG&E is facing billions of dollars in legal jeopardy for possibly playing a role, through faulty equipment, in California’s costly and deadly wildfires. The new bankruptcy filing is intended primarily to keep lawsuits at bay and possibly facilitate a sale of some or all of the utility’s assets.
But the decision to allow the company’s CEO to announce her resignation prior to the bankruptcy filing and remain eligible for millions of dollars in severance — that’s the PG&E I know from days gone by.
They say we learn from our experiences.
In PG&E’s case, the only lesson learned from repeat PR disasters is how to make bad situations worse.