PG&E Criminal Trial Over Pipeline Blast Begins

SAN FRANCISCO (CN) — Prosecutors on Friday kicked off a long-anticipated criminal trial against Pacific Gas and Electric by telling a jury that the company deliberately shirked safety laws for the sake of profits, leading to a fatal pipeline explosion in 2010.

In his opening statement, PG&E attorney Steven Bauer accused the government of oversimplifying the case. He said safety regulations the company is accused of violating were unclear and that PG&E employees worked hard to keep pipelines safe.

"If only the world were that simple," Bauer said of the government's narrative. "If you rail against a corporation, that somehow we're safer. The world is not that simple."

The trial comes nearly six years after a gas pipeline exploded from the ground in a suburban neighborhood of San Bruno, south of San Francisco, killing eight people, injuring at least 66 and leveling 38 homes.

PG&E is accused of violating 12 counts of the Pipeline Safety Act and of obstructing an investigation into the explosion. If convicted, the company faces an unprecedented $562 million fine.

U.S. Assistant Attorney Hallie Hoffman said PG&E knowingly failed to maintain accurate pipeline records, used a cheaper, illegal method to test its pipelines, increased pressure on pipelines beyond the maximum allowed, and tried to cover up its misconduct after the explosion.

"This case is about the deliberate illegal choices and cover-up," Hoffman said. "PG&E knowingly and willfully violated these standards."

In his opening statement, Bauer tried to put a human face on his corporate client, telling jurors that PG&E is made up of everyday people like construction workers, customer service employees and engineers.

"It's easy to snarl at a logo," Bauer said. "It's much harder to look a person in the eye and say you're a criminal."

Bauer told the jury that by pleading not guilty, PG&E is in no way trying to minimize the severity of the explosion or disrespect the victims or first responders.

"I'm certainly not disrespecting them," Bauer said, acknowledging the uniformed San Bruno firefighters sitting in the front row of the courtroom.

The PG&E attorney also emphasized that this case is not about the pipeline blast, but rather whether the energy company knowingly and willfully violated laws. Jurors will hear no evidence that PG&E's actions caused the blast, he said.

"Mark my words," Bauer said. "That's not what this case is about."

Meanwhile, the government painted a different picture of the utility giant — one in which the company allegedly lied to regulators by telling them it had integrated all its pipeline records into one accurate and up-to-date system.

Hoffman said the government had "tons of emails" from PG&E employees about missing and inaccurate information in its record system.

PG&E knew it was missing critical files, such as a leak repair record for Line 132, which it uncovered several months after that pipeline exploded, Hoffman said.

In response, Bauer repeatedly told jurors they would see no evidence that PG&E intentionally discarded a record. That means the company did not "willfully and knowingly" violate the law, he said.

Hoffman detailed all the ways that PG&E allegedly broke the law. Instead of conducting required hydro-pressure tests or in-line inspections to assess the strength of its pipes, PG&E intentionally used a cheaper method to maximize profits at the expense of public safety, she said.

Additionally, Hoffman accused the company of increasing pressure on its pipes 10 percent beyond the maximum allowed and then trying to hide that practice from investigators.

She said a senior engineer shredded a document showing the company's 10 percent overpressure policy after an audit, but the file was recovered on a computer.

The document Hoffman referred to was simply a draft policy that PG&E mistakenly sent to investigators on a cover sheet, Bauer said, adding that was not the company's actual policy in effect.

Hoffman also previewed evidence the government plans to present showing PG&E dangerously exceeded maximum pressure on 80 miles of pipelines in densely populated areas.

Responding to the scathing allegations, Bauer attempted to give jurors a crash course in pipeline integrity management, telling them that PG&E engineers determined staying within 10 percent of a pipeline's maximum pressure posed only a regulatory problem, not a safety risk.

U.S. District Judge Thelton Henderson twice warned Bauer to limit his comments to what evidence the jurors will see and hear during trial, and to stop making arguments about how the jury should rule on the charges.

Bauer apologized, saying he was trying to tell the jury they would see and hear evidence that PG&E did not willfully and knowingly violate the law.

"It's a fine line," Bauer said.

"It's a fine line, and you crossed it," Henderson replied.

Wrapping up his initial presentation, Bauer told the jury they would hear no testimony from a corporation at this trial. All the testimony would come from people, he said - employees at PG&E who live and have families living in the communities where the pipelines run underground.

"Keep that in mind when assessing if they would willfully and knowingly violate the law," Bauer said.

Before Bauer's speech, Hoffman also urged the 12-member jury to remain cognizant of what PG&E employees did and said. A company "acts through its employees," she told the jury, and the government plans to submit evidence showing PG&E employees knowingly violated the law to maximize profits.

The government presented its first witness on Friday — Stephen Klejst, deputy managing director of the National Transportation Safety Board, who talked about issues getting PG&E to cooperate with the federal agency's requests for data during a year-long investigation into the explosion.

The trial is expected to continue on Tuesday, June 21.

Follow @NicholasIovino

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