An investigation by a Sacramento television station found California Democratic Governor Gavin Newsom allegedly crafted policies to help the Pacific Gas and Electric Company (PG&E) after it pleaded guilty to involuntary manslaughter for causing a massive fire in 2018 that killed 84 people.
ABC10 reported, “In the months after the crime, Newsom not only signed new financial protections for PG&E into law, his office hired private lawyers in New York who wrote the legislative language.”
“Confidential emails and documents obtained by ABC10 reveal the New York law offices of law firm O’Melvany and Myers drafted AB 1054 in the Spring of 2019, before it was introduced in the state legislature,” the ABC10 report said. “The law was written by the lawyers under a contract to represent Newsom’s office in PG&E’s bankruptcy, state records show.”
PG&E reportedly contributed more than $208,000 to help Newsom become governor in 2018.
The outlet previously described Assembly Bill 1054 as “a law designed to bail out PG&E.”
According to the San Diego Union-Tribune, the law created “a $21 billion wildfire fund that the state’s big power companies can tap if their equipment ignites a fire that leads to significant damages, provided the commission determines the utilities acted responsibly.”
NEW only from @ABC10:
— Brandon Rittiman (@BrandonRittiman) August 11, 2021
ABC10 analyzed private emails that showed legislative staffers referred to AB 1054 as “the governor’s bill on utility stability.”
More details from ABC10:
After AB 1054 was already signed into law, drafting of legislation was added to an amended version of O’Melvany’s contract.
Payment records obtained through state transparency laws show O’Melvany billed California taxpayers $3 million during the time when the law took shape.
Investment bank Guggenheim also participated in crafting AB 1054 and charged $3.7 million during that time.
Adding to concerns about a lack of independence of PG&E’s state regulators, the emails reveal that the California Public Utilities Commission (CPUC) was assigned to write sections of AB 1054 by Newsom’s hired attorneys.
The ABC10 report said CPUC did not respond to a list of questions and “is refusing to hand over its communications with key Newsom staffers around the time it waived a $200 million fine to help PG&E exit bankruptcy.” The outlet has sued the state agency to release the messages.
Newsom’s office “declined or ignored at least ten interview requests on the PG&E crisis” over the past three years, the report said, and did not directly answer questions submitted by email.
The governor’s deputy press secretary Amelia Matier did provide ABC10 with a statement which reads, in part:
No governor in California history has done more to hold PG&E accountable and force the company to make fundamental change. Governor Newsom has used every tool at his disposal – passing strict new safety requirements, tying PG&E executives’ compensation to the utility’s safety record, creating new protections for PG&E customers, demanding a public utilities commission investigation into the company, forcing PG&E’s investors to pay billions for safety improvements, and establishing a mechanism to hold PG&E ultimately accountable by authorizing its dissolution and takeover if it fails to adhere to the strict new safety requirements and follow through on its commitment to compensate victims.
The ABC10 report is the first of a three-part investigation called “FIRE – POWER – MONEY: How Governor Gavin Newsom Protected PG&E.”
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