High-stakes battle brewing over wildfire liability at Calif. Capitol
The current system in California could leave PG&E on the hook for as much as $15 billion for the fires last year
By Taryn Luna
SACRAMENTO, Calif. — A high-stakes battle over wildfire liability is turning ugly between interests at the California Capitol.
The International Brotherhood of Electrical Workers Local 1245, which represents PG&E employees, is working with PG&E on a controversial pitch asking state lawmakers to reduce property damage liability for utility companies in the aftermath of the devastating 2017 fire season. The insurance industry, consumer attorneys and other groups are pushing hard against changes to existing state law.
There's big money for special interests and financial consequences for consumers on all sides. The current system in California could leave PG&E on the hook for as much as $15 billion for the fires last year. Changes could put more of the responsibility on insurance companies and, as some argue, make it harder for homeowners to recoup losses.
On Wednesday, the union filed a complaint with the Fair Political Practices Commission alleging that trial lawyers created a misleading "shadow lobbying" front group purporting to represent wildfire victims to influence California officials. The union also paid for a full-page newspaper ad claiming "the trial lawyers are hiding in the shadows" and calling out the group for representing itself as a coalition of wildfire victims.
“The problem here is that instead of presenting themselves as trial lawyers on this issue they appear saying they are fire victims," said Scott Wetch, a lobbyist for IBEW. "It’s misrepresenting to the Legislature who they are. "
Patrick McCallum, a lobbyist for the group "Up From the Ashes" and victim of the wine country blazes, told lawmakers he represented "a coalition of the thousands of fire victims that we had last fall" in testimony in the Senate Energy Committee last month.
Existing liability laws say utilities are responsible for providing compensation if a property is damaged by their equipment, even if investigators fail to prove the company behaved negligently to cause a fire. Interests are lobbying heavily on the issue before any bill has been introduced to let utilities off the hook.
McCallum said in an interview Wednesday that "Up From the Ashes" is funded by law firms that represent fire and mudslide victims. He said lawyers initially reached out to him in early April and are paying him $110,000 to work on the issue this year. He's hired at least one other law firm.
Frank Pitre, a lead counsel for wildfire victims in the North Bay in a class action lawsuit against PG&E, is listed as the responsible officer for the coalition. Pitre previously served as the president of the Consumer Attorneys of California. A call to his law firm was not returned.
McCallum said other lawyers involved include Elizabeth Cabraser of Lieff Cabraser, Steve Campora of Dreyer Babich Buccola Wood Campora and John Fiske of Baron and Budd, among at least 10 total.
Under California law, a group of 10 or more organizations that pool their funds to hire a lobbyist must file as a lobbying coalition, which McCallum's group hasn't done.
"Up From the Ashes" describes itself as working "for victims of California wild fires" and disclosed a "group of individual law firms" as a common economic interest or principal financial backer on an FPPC filing. The group did not classify itself as representing the legal industry.
McCallum said his group conducts email and phone outreach to 6,500 wildfire and mudslide victims.
"Every day I get a call or two or an email from victims," McCallum said. "They are hurting. They’re in shock. They don’t understand the legislative process. They don’t understand why insurance companies aren’t paying."
McCallum said he discloses the consumer attorneys' connection in private conversations with lawmakers and often walks into meetings with a lawyer by his side.
"You don’t lead with who funds you. Who does in lobbying?" McCallum said about his testimony at the Senate hearing. "I have been quick and open to say we’re funded by consumer attorneys and I rely on them. We simply want to ensure that the rights of victims are protected."
He shot back and questioned whether he should file a similar grievance with the FPPC alleging that IBEW is its own front group working to advance the interests of PG&E.
"Does Scott Wetch come up and say, 'Hey, I’m representing PG&E on this stuff'?" McCallum said. "Shame on IBEW to be the front for them and to play hardball with the FPPC. This is a way to distract from the real issue."
"The real issue is that there are thousands of people who lost their homes who are underinsured or renters and will not be able to rebuild," McCallum said.
Wetch said he's working with PG&E at the Capitol to ensure that the utility can remain viable and continue to employ IBEW workers.
Steve Churchwell, a lawyer at the firm Churchwell White in Sacramento, said the First Amendment generally protects lobbyists from running into any legal trouble for not fully disclosing whom they represent in testimony or in conversations with lawmakers.
The state watchdog agency isn't quite as forgiving if groups attempt to hide their true backers.
"The FPPC has been vigilant in enforcing the lobbying laws, and folks try to comply as far as I can tell," Churchwell said.
A spokesman for the agency confirmed that it received a complaint from IBEW against "Up From the Ashes" on Wednesday.
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