◼ Thread · Corporate Manslaughter
Deregulated to Death
PG&E paid $4.5 billion in dividends. It didn't replace a $1.50 hook. 85 people died and an entire town was incinerated. The criminal fine was $3.5 million. No executive went to prison.
Paradise, November 8, 2018
At 6:15 a.m., a worn metal hook on a 99-year-old transmission tower in Feather River Canyon snapped. The Caribou-Palermo line — built in 1919, last thoroughly inspected in 1979 — sparked. Within two hours, the Camp Fire was consuming the town of Paradise, California, at roughly one football field per second.
By nightfall, 18,804 structures were destroyed. 85 people were dead — trapped in cars, found in driveways, some so burned they could only be identified by dental records. The deadliest, most destructive wildfire in California history was caused by a $1.50 piece of steel that Pacific Gas & Electric had failed to replace.¹
PG&E had been warned. Its own engineers flagged the aging Caribou-Palermo line for inspection in 2012. The CPUC had cited the company for inadequate vegetation management. A federal judge overseeing PG&E's probation — from an earlier explosion that killed 8 people in San Bruno in 2010 — had repeatedly ordered the company to audit its equipment. PG&E's response: $4.5 billion in shareholder dividends between 2015 and 2017.²
84 Felony Counts. $3.5 Million.
In June 2020, PG&E CEO Bill Johnson walked into a Butte County courthouse and entered guilty pleas on 84 felony counts of involuntary manslaughter and one count of unlawfully starting a fire.³
"Our equipment started that fire," Johnson said.⁴
The maximum criminal fine the court could impose: $3.5 million. Plus $500,000 for investigation costs. Total criminal penalty for 85 deaths and the destruction of an entire town: $4 million — on a company with a market capitalization of over $30 billion at the time of the plea.⁵
No PG&E executive went to prison. No individual was charged with a crime. The company filed for Chapter 11 bankruptcy in January 2019 — not from the weight of the criminal penalty, but to structure the payout of civil liability. Bankruptcy courts approved $13.5 billion in settlements for wildfire victims — a number that sounds large until you divide it by the losses: destroyed homes, businesses, community, the 85 dead.⁶
The Utility Monopoly Model
The Camp Fire was not a natural disaster. It was a structural one. PG&E is an investor-owned utility — a government-granted monopoly over electricity and gas distribution for 16 million Californians. It has no competition. Customers cannot choose another provider for the wires that carry power to their homes.
In this model, profits flow to shareholders. Risks flow to ratepayers — and, when infrastructure fails, to the surrounding communities. California's regulatory framework allows the CPUC to approve rate increases while the agency has no authority to control how PG&E uses its profits. Dividends are legal. Deferred maintenance is legal. The hook that fell was legal.⁷
This is the pattern: California deregulated electricity in 1996, promising competition and lower rates. By 2000-2001, Enron and other energy traders were manipulating California's wholesale electricity market, triggering rolling blackouts and costing the state an estimated $40-45 billion. PG&E went bankrupt in 2001. Customers paid higher rates for years to cover the losses. The franchise monopoly model was preserved. Risk socialized. Profit privatized.
After the Camp Fire, the CPUC placed PG&E under "Enhanced Oversight and Enforcement" — the mildest form of regulatory sanction. The company continued paying dividends (they were suspended temporarily, then reinstated as PG&E emerged from bankruptcy). By 2024, PG&E was reporting $2.6 billion in net income.⁷
What It Means When the Fine Is $3.5 Million
Federal Judge William Alsup, who oversaw PG&E's probation from the San Bruno explosion, summed it up in 2019 — a year before the guilty plea — when he reviewed the company's conduct: "PG&E pumped out $4.5 billion in dividends and let the tree budget wither."²
PG&E made a rational calculation under the rules as written. Infrastructure maintenance is a cost. Dividends reward shareholders. The CPUC grants rate increases regardless. When equipment fails, the company files for bankruptcy and restructures liability in court. The criminal fine — capped by statute — amounts to rounding error on a quarterly earnings statement.
85 people died because this calculation was legal. The town of Paradise — population 26,000 — effectively ceased to exist because maintaining aging infrastructure didn't pencil out as well as dividends.
There is a word for a system that lets the powerful convert public risk into private profit, then limits their criminal exposure to $3.5 million when 85 people die. The word is not "deregulation." The word is capture.