Critics: How did PG&E bosses escape criminal charges?

San Bruno Mayor Jim Ruane (center), consultant Craig Bettencourt (left) and special counsel Britt Strottman confer. San Bruno Mayor Jim Ruane (center), consultant Craig Bettencourt (left) and special counsel Britt Strottman confer. Photo: Lea Suzuki, The Chronicle Buy photo Photo: Lea Suzuki, The Chronicle Image 1 of / 20 Caption Close Critics: How did PG&E bosses escape criminal charges? 1 / 20 Back to Gallery

(04-03) 08:18 PDT SAN BRUNO -- Survivors of the San Bruno pipeline explosion joined critics of Pacific Gas and Electric Co. and safety advocates Wednesday in questioning why none of the utility's bosses will face prison time for the 2010 disaster that killed eight people.

A federal grand jury in San Francisco, acting at the request of a task force of federal, state and San Mateo County prosecutors, handed down a criminal indictment Tuesday accusing PG&E of 12 violations of the federal Pipeline Safety Act. The charges carry a maximum penalty of $6 million and the possibility that a judge will appoint a monitor for PG&E's natural-gas operations.

But the indictment, while accusing PG&E of knowingly breaking the law, spares company executives and managers who made crucial decisions over the years leading up to the Sept. 9, 2010, pipeline explosion.

Those decisions included using a pipeline inspection method that couldn't detect what was wrong with the San Bruno line - a badly made seam weld - and operating a 6,000-mile natural-gas-transmission system knowing that records were missing for large sections of it, the indictment said.

"If there's 12 counts, the company didn't commit the counts - it's the individuals there who committed them," said Bob McNichol, a former Hillsborough police chief whose house was damaged in the blast. "If they charged the counts, they must have some information on those who were responsible for them."

'It's frustrating'

Carl Weimer, who runs the Pipeline Safety Trust advocacy group in Washington state and has followed the San Bruno case, said he was surprised prosecutors did not "call out" current or former PG&E executives and managers.

"It's frustrating that it's just corporate charges and not the individual, because the individuals are hiding behind the corporate veil," Weimer said.

"The more you could hold people accountable the better," he said. "It really drills down to who really the wrongdoers were. The way it's left now, it's just the general corporation, with no individuals accountable."

Prosecutors would not discuss the indictment Wednesday. But Joseph Russoniello, a former U.S. attorney in San Francisco, said they would have a difficult job pinning blame on executives or employees.

No one person to blame

"When you have environmental-related crimes with public utilities involved, it's almost impossible to fix responsibility on one person," Russoniello said. "They are so huge and so diversified - responsibilities are so dispersed."

Russoniello defended PG&E in a 1990s case in which the company was convicted of 739 misdemeanor counts of criminal negligence for tree-trimming violations that contributed to a Sierra wildfire. He said prosecuting a company still sends a message "that the conduct is not going to be tolerated, and that there is no safe harbor."

There is precedent for criminal charges being filed against individuals for a pipeline disaster.

In the only previous case in which federal prosecutors sought criminal counts under the Pipeline Safety Act, three employees of Olympic Pipeline Co. were charged along with the company in connection with a 1999 rupture of a gasoline pipeline and explosion in Bellingham, Wash., that killed two 10-year-old boys playing in a park and a teenager who was fishing.

The company pleaded guilty in 2002, as did Olympic's vice president of pipeline operations, a control room supervisor and a computer operator. Prosecutors said the company and the employees had been negligent in failing to monitor pipeline pressure and had ignored warnings of a defect that was ultimately blamed for the rupture.

Sentenced to prison

The vice president was sentenced to six months in prison and the control room supervisor served one month, while the computer operator got probation. The company agreed to pay an $11 million fine and another company with part interest in the line, Equilon Pipeline, paid $15 million.

Olympic also agreed to report to a monitoring committee with the city of Bellingham.

Weimer said the fact that managers had been locked up sent a strong signal to the industry. And "the community embraced that, because the Justice Department had done its job and found the people who were responsible," he said.

San Bruno problems

In the San Bruno case, Weimer said, he suspects that part of the problem for prosecutors "is that a lot of people claimed that they were following the law, even though it seemed haywire."

PG&E officials themselves have made that case, emphasizing even before the indictment was handed down that none of its employees had knowingly violated the law.

Company Chairman and CEO Tony Earley called the explosion "a tragic accident" and said PG&E had "taken accountability." Earley took over at PG&E the year after the disaster, succeeding Peter Darbee, who had run the company since 2005.

State Sen. Jerry Hill, D-San Mateo, whose district includes the devastated neighborhood, said he had hoped for a more sweeping indictment.

"The sad part is, I don't think they (prosecutors) could connect the dots to any one individual who ordered someone to do something that directly caused the explosion," Hill said. "It was the corporate culture that was established that emphasized shortchanging safety and appropriate regulatory responsibility that caused it to happen."

'Just the beginning'

San Bruno Mayor Jim Ruane said the indictment could be "just the beginning."

"There are a lot of people they could point their fingers at here," he said. "The shareholders did not cause this to happen - the management did.

"We just want justice," Ruane said. "If that means a corporate entity gets fined and penalized, or if that means the charges are filed on the individuals who caused it, so be it."

Frank Pitre, an attorney who represented San Bruno residents who sued PG&E and now is suing management on behalf of shareholders, said prosecutors could have strategic reasons for not naming names.

"Legally, you don't limit yourself to individuals in a case like this," Pitre said. "There's no doubt in my mind they are going to pursue this case as far up the chain as possible."