On January 29th of this year, the mega utility Pacific Gas and Electric Company (PG&E) filed for bankruptcy, citing billions of dollars in liabilities stemming from wildfires in the 2018 California Camp Fire that destroyed the town of Paradise, California, and killed 86 people. PG&E has acknowledged likely responsibility for triggering the Camp Fire.

Although PG&E has assets estimated at around $70 billion and liabilities of approximately $50 billion, the tort claims are estimated to amount to around $35 billion, and PG&E filed what is termed a defensive bankruptcy to protect its assets, and to cap the amount it may have to pay in claims against it. And, in addition, PG&E canceled the planned distribution of $130 million in bonuses to rank and file employees.

Some have stated that PG&E is the first major corporate “victim” of global warming, but while global warming was certainly a factor in exacerbating the damage caused by the fire, what tends to get overlooked is that PG&E has a half-century long history of environmental irresponsibility.

Not only had PG&E not built and insulated its power distribution system all that well, which led to the Camp Fire disaster, but way back in 1952, PG&E began dumping chromium-tainted wastewater into unlined wastewater spreading ponds around the town of Hinkley, California, located in the Mojave Desert (about 120 miles north-northeast of Los Angeles). From 1952 through 1966, PG&E dumped some about 370 million gallons. To date, PG&E has spent over one billion dollars for damage claims and remediation. The movie Erin Brockovich told the story of the damage claims and how PG&E denied and tried to cover up what it had done. Today, Hinkley is almost a ghost town.

Then PG&E filed for bankruptcy in 2001 because it was caught in a cash-flow squeeze when the wholesale price of the power the company purchased on the open market rose above the rates the company was allowed to charge by the California Public Utilities Commission. Prior to the 2001 filing, PG&E could see in advance what was happening, and, as part of its “bankruptcy estate planning” process, “pushed” extensive cash holdings into subsidiaries for distribution to shareholders, effectively “ring-fencing” those profits to “protect” them from creditors. As a result, the 2001 PG&E bankruptcy resulted in a settlement that would ultimately cost its ratepayers approximately $7 billion.

During none of these disasters were any PG&E executives ever held criminally liable or negligent, and the costs of dealing with the problems never fell on them, while they collected hefty compensation and foisted the costs of on the rate-payers, rather than on either stock-holders or corporate executives.

The original idea of limited corporate liability was to limit liability claims to the corporate body, and not to those who ran the corporation, on the grounds that no one would undertake building massive steel mills, factories, or the like when a single disaster could destroy them personally. That rationale, unhappily, still makes sense, but the evolution of law and the corporate structure means that even when corporate actions, as in the case of PG&E, kill people and destroy entire towns in violation of laws and standards, no individual is ever held responsible, and the corporation shifts the costs of those violations onto its customers, rather than to the stockholders or executives.

Until executives are personally held responsible for such violations, nothing will change, and interestingly enough, right after PG&E declared bankruptcy, the stock price went up almost twenty percent.