Six years out from the Butte Fire and three years out from the Camp Fire, many people who have lost their houses due to conflagrations caused by Pacific Gas & Electric equipment have not been compensated. California newspapers are full of accounts of victims still living in trailers, their lives changed forever, yet never having seen a dime from PG&E.
It is becoming evident that AB 1054, the legislation passed in 2019 to manage PG&E's bankruptcy, was mainly designed to protect utility shareholders, not wildfire victims. In fact, it marked the first time that utility ratepayer dollars were allocated to pay for wildfire costs (see CEM No. 1548).
Gov. Gavin Newsom, who signed the bill into law, issued a statement at the time calling AB 1054 "thoughtful and decisive action to move our state toward a safer, affordable and reliable energy future, provide certainty for wildfire victims and continue California's progress toward meeting our clean energy goals."
The ironies of this proclamation are evident today, as there is definitely very little "certainty" for wildfire victims, and fires likely caused by PG&E continue to rage across the landscape. And for all the outrage and the ink that has been spilled on the matter, nothing seems to change.
One individual, Will Abrams, himself a wildfire survivor, has taken on the interests of wildfire victims as his own personal cause. His current focus is on what he says are conflicts of interest among attorneys who supposedly represent the interests of wildfire victims.
Abrams has been enough of an agitator in the process that he was recently threatened by U.S. Bankruptcy Judge Dennis Montali with financial sanctions for what the judge says are repeated and unfounded statements. But if it weren't for Abrams, the plight of fire victims might be even worse.
Abrams on Aug. 23 wrote 25 attorneys who represent wildfire victims, requesting financial disclosures, citing the California Bar Associations rules of professional conduct and other legal standards. Abrams, who is not an attorney, told California Energy Markets that so far he has received responses from core parties in the case who were integral to the negotiated settlement and to oversight of a victim trust fund. He said that the responses deflected the questions rather than directly responding to them. He hopes the call for disclosures will help victims understand how they were put in what he calls an unjust position, and help ensure that current and future victims will not be "re-victimized" by the legal process.
"All I am asking for is they disclose their financial interests," Abrams told CEM in a phone interview.
Of Montali, Abrams said: "He is just encouraging silence."
"The message is clear that he is sending—which is nobody should be talking about this," Abrams said.
As the judge overseeing the case, Montali doesn't want the integrity of the whole proceeding questioned, and "he doesn't want any of that coming out . . . He's making efforts to make sure it doesn't."
"Needless to say, it doesn't sit well with me that our attorneys steered this thing in a way that undermines the safety goals, the settlement goals," Abrams said.
Abrams' letter alleges that throughout the case, many victims have become increasingly concerned that a growing number of actions taken by certain victim attorneys have been in conflict with victims' interests and more closely aligned with the interests of certain PG&E investors.
The letter alleges six occasions where attorneys' actions appear to be in conflict with victims' interests. They include:
- Turning away from an all-cash proposal for victims' claims resolution and instead initiating and negotiating a risky stock-inclusive settlement designed to delay just settlements.
- Withholding the status of the registration rights agreement and other key pieces of information that should have been included within voting information and written disclosures prior to the victims' vote on the plan.
- Overvaluing stock allocated to victims and dismissing rational financial-valuation formulas in an effort to allegedly misinform victims.
- Allegedly undermining AB 1054 and other legislation to "trade away" safety and financial security for victims in order to enable future litigation favorable to victim attorneys through "shadow lobbying" efforts.
- Allegedly leveraging the victim stock to shield institutional investors from increasing wildfire liabilities.
- Allegedly establishing a trust-administration framework to slow the monetization of the victim stock and to slow the claims administration process.
Following the billions of dollars flowing through PG&E's bankruptcy case is an enormously complex undertaking (see CEM No. 1593). Abrams' letter names dozens of banks and financial institutions that he says have "adverse interests" in the case. He wants the attorneys to disclose any and all financing received by themselves or their firms from any investor with interest in PG&E Corp. through lines of credit, litigation financing, personal or professional loans or in any other manner, as well as the terms of that financing so wildfire victims can reasonably assess the degree to which the financing terms are in conflict with the interests of victims.
When PG&E was recently put into the next step of an "enhanced" oversight process at the California Public Utilities commission, CPUC members posted on social media how they are holding the utility "accountable." More than a decade after the fatal San Bruno pipeline explosion—and the improper ex parte communications that occurred with PG&E in its wake (see CEM No. 1546)—it's hard to take these claims seriously.
It's also hard to imagine what sorts of injustice wildfire victims would be facing from PG&E, the state Legislature and attorneys in the case without the efforts of Abrams, who holds no illusions about the process at this point.
"AB 1054 was such a catastrophe," Abrams told CEM.