PG&E, Feds Debate Past Sins in San Bruno Case

SAN FRANCISCO (CN) – Pacific Gas & Electric on Monday urged a federal judge to partly dismiss charges that its failure to keep pipeline safety records led to a fatal San Bruno explosion in 2010.
The United States indicted PG&E in July 2014 on 27 counts of violating the Natural Gas Pipeline Safety Act, alleging the company willfully and knowingly failed to maintain proper records, identify threats and fix parts of the pipeline.
Eight people were killed in the explosion, which also leveled 38 homes. In April, PG&E was fined $1.6 billion for the blast – the largest penalty ever assessed against a utility by the California Public Utilities Commission.
During a motion to dismiss hearing Monday, PG&E argued that seven of the government’s 27 criminal counts against it are based on acts that allegedly occurred long before 2007, when the statute of limitations clock started ticking.
“While the government may wish to present evidence of recordkeeping that occurred when rotary phones and eight-track tapes were still the norm, basic principles of law and fairness bar it from doing so,” PG&E wrote in its July 27 motion to dismiss.
The U.S. government says PG&E’s repeated failure to maintain records during the period constitutes a continuing offense for which it can be held criminally liable.
Assistant U.S. Attorney Hallie Hoffman said PG&E failed to keep records of leak repairs from 1979 and 1988, despite pledging to conduct an exhaustive search for records in compliance with a baseline assessment plan it signed in 2010.
The fact that PG&E “suddenly claimed they found” a 1988 leak repair report in September 2010 after the blast occurred serves as evidence of its willful failure to maintain records, Hoffman argued.
She said PG&E also willfully and knowingly failed to preserve strength-test pressure records for 8,600 pipelines in highly populated areas.
“[PG&E] received notice of these missing records from employees and regulatory agencies,” Hoffman said. “Despite knowing of these deficiencies, they did not create a record-keeping system to make sure the records were accurate and complete.”
PG&E’s attorney, Steven Bauer of the San Francisco firm Latham & Watkins, said missing a record does not constitute a criminal or continuing offense. He questioned whether an engineer commits an illegal act each day he comes to work after noticing a missing record, until the record is found.
U.S. District Judge Thelton Henderson asked Bauer how his logic might apply to the company’s record-keeper, who has a responsibility to maintain those records.
“The government needs to allege that somebody did something within the statute of limitations,” Bauer replied.
Hoffman pointed to judicial rulings involving illegal aliens and sex offenders, whose failure to leave the country or register with authorities constituted a continued offense – not based on a specific act but rather a continued, willful failure to obey the law.
“The government intends to prove at trial that the defendant knowingly and willfully did not maintain records,” Hoffman said. “We do not believe maintaining or retaining describes a discrete act. We believe it describes a continuing offense.”
Monday’s hearing covered just one of six motions to dismiss that PG&E has filed against U.S. government’s criminal indictment.
After about an hour of debate, Henderson concluded the hearing with no overt hints on how he intends to rule.
Pacific Gas & Electric told Courthouse News: “We do not believe that PG&E employees intentionally violated the federal Pipeline Safety Act, and that, even where mistakes were made, employees were acting in good faith. Regardless of how this court proceeding evolves, nothing will distract us from our goal to become the safest, most reliable energy provider in America. We’ve made tremendous progress, but we have more to do and we are committed to doing it right.”

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