Original subtitles

In this episode of American Greed, in California, a convicted criminal is

wreaking havoc, blowing up neighborhoods,

burning entire

towns, claiming the lives of more than 100 people.

Who is that criminal?

The state's powerful utility.

Pacific Gas and Electric, P, G, and E.

How does one company get so much so wrong over and over?

From the shocking evidence of neglect to the wrenching stories of survivors.

Fire comes filling up the whole house. I'm like melting alive.

It's over.

To the inside account of a longtime employee.

Had I followed my supervisor's instructions, it could have killed the

that household.

American Greed digs deep into the deadly crimes of a company that kills.

On the morning of November 8, 2018, in the small town of Megalia, California,

Skye Sedgwick's life is about to be upended.

The day begins with alarming news from her father.

I woke to him knocking on my door loudly and saying, Skye,

get up, there's fire coming up over the ridge. And I just shot out of bed.

This is no small fire.

Skye decides to get out on foot.

When I was walking through the woods, there was huge embers falling because at

one point I had fire on both sides of me.

Propelled by high force winds, the flames move fast toward a small town

Paradise. The spark started the fire in my eye.

The fire is where? In my yard. Resources are coming as fast as they can.

What follows for people in the path of the fire is a day of living hell.

Are you trapped?

Yes.

The house next door to me is on fire.

Before it all ends, 84 people die.

When the smoke clears, the so -called campfire has burned 150 ,000 acres.

It has destroyed more than 18 ,000 buildings.

I kept telling myself, something will be left.

There wasn't anything.

There wasn't a thing.

The cars melted to the ground. There was nothing.

I didn't know you could lose so much in one day.

And the cause of all this destruction, not a bolt of lightning or a careless

match tossed in the woods, but instead the policies and practices of a multi

-billion dollar corporation, Pacific Gas and Electric, PG &E.

PG &E is the largest investor -owned utility in the United States. In

for more than a century.

PG &E has grown into a behemoth. Its thousands of high -voltage power lines

gas pipelines crisscross 70 ,000 square miles.

It delivers electricity and gas to 16 million customers.

But energy is not all it delivers.

For years, as a publicly traded company, PG &E pays out hundreds of millions of

dollars in dividends to shareholders, making it popular on Wall Street.

And that's where things get complicated.

How can an entity that size, providing energy to its large customer base, be

beholden to public safety and at the same time be beholden to shareholders?

Put another way, what is more important, safety or profits?

It's a question that plagues PG &E and comes into sharp focus in 1994.

In the foothills of the Sierra Nevada Mountains is a small town called Rough

Ready.

The summers here are hot, dry.

People know they are living in a tinderbox.

This is what's called a California flashy fuel.

This grass is, what, three feet high right now, all across this hillside.

Captain Ken Hale, now retired.

Fights fires here for 21 years.

This stuff, when it's pushed by a wind, burning uphill the way it is right here,

it's capable of at least 50 -foot flame lengths.

All it takes is a spark.

And on a hot day in August 1994, a spark makes contact.

Quickly, Hale finds the source of the fire, an oak tree.

I walked around this tree and I could hear buzzing above me.

And, you know, looking up, I saw a branch in direct contact with a 21 kV

power line.

It is known as a burner, a branch coming into contact with the electrical

current in a power line that ignites a wildfire.

The fire blew up through this canyon, went straight up this hill.

This is where they primarily did, or the fire did, most of the damage that it

did. In all, the Rough and Ready Fire burns 500 acres and destroys 12 homes.

And that is why PG &E is required by law to keep its lines clear of trees and

bushes.

But is PG &E obeying the law?

Ken Hale and fellow firefighters take to the country roads of their

jurisdiction.

Nevada and Placer counties and come up with a shocking answer.

We found 743 violations in Nevada County and about 750

in Placer County with six to eight people in two weeks. And a

good chunk of those were burners. Hale's findings are later turned over to Jenny

Ross, the deputy district attorney for Nevada County.

I was angry.

Frankly, I was angry at the behavior, at the arrogance, at the complete

disregard, the blatant disregard of the danger they were causing for

hundreds of thousands of people all across Northern California.

Ross recently left a major San Francisco law firm looking for a quieter pace of

life in a rural setting.

But now she becomes the first criminal prosecutor to take the giant utility to

trial, charging PG &E with more than 700 misdemeanor criminal counts.

This was criminal behavior.

This was not merely negligence.

After Ross issues subpoenas, Ken Hale takes off his fire jacket and heads to

downtown San Francisco as Ross's lead investigator.

My first impression going into the PG &E building was that they could certainly

afford to trim trees if they can afford to fill that building with bosses.

And PG &E is ready for him. On the floor was this small mountain of

documents that PG &E had simply brought in and dumped the boxes on the floor.

But inside that mountain is just what Ross is looking for.

Internal records incriminating evidence showing that PG &E is decimating its

tree trimming budget. One contractor reports that its workforce has been

49 .7%. And even PG &E's own employees send warnings. The

potential for a major fire is very real.

And it's not just cutting budgets.

Ross learns that PG &E actually diverts nearly $80 million earmarked to trim

trees into company profits.

They sacrifice safety.

Money that should have been put into making sure their lines were safe went

their own pockets and into the pockets of their shareholders.

It's hard for people to imagine how a large, wealthy, well -established

corporation could be that callous.

But it's all about the money.

It's all about greed.

It really boils down to dollars.

The rough and ready trial against PG &E opens in March 1997.

And they certainly didn't think that one little deputy district attorney in

little rural Nevada County was going to do them any harm.

PG &E defends its effort to trim trees, but Jenny Ross prevails.

The company is convicted on 739 counts of criminal negligence.

We were pleased.

I didn't think there was any other verdict they could come to.

The company is fined close to $2 million.

Not a lot of money for the huge utility.

But what it was, was being found criminally responsible.

PG &E had a big label across its forehead saying, I'm a criminal.

But whether PG &E has actually learned a lesson, well, that's another question.

Up next, every mother's nightmare.

I could see the flames were shooting from the neighborhood.

You could.

See the panic in people's eyes, and I couldn't get to her.

In a business like PG &E, corporate culture is set at the top.

in the C -suite.

And when leadership changes, culture can change.

And that's what many say happens to PG &E, a company once run by engineers who

get replaced by people with MBAs. And when the people who had MBAs started to

run the company, they started looking at financial performance first.

And safety and engineering took a back seat.

Steve Segali sees that shift.

He works on the gas side for PG &E, starting as a meter reader in 1981.

I was very proud to work there.

I loved what I did. And, you know, after a while, I got an apprenticeship.

I couldn't be happier.

But over 40 years, he watches the company he loves slowly disappear.

The culture went from you will work hard, you will not take shortcuts.

Now, we talk safety, but there's too much pressure to meet budgetary

requirements on maintenance.

And those budgetary requirements can spell disaster.

In the spring of 2005, Segali says he gets a call about a gas leak in Marin

County, north of San Francisco.

It is serious, posing a threat to nearby homes.

But it's late in the day.

Repairing the leak will mean overtime pay for Sigali and his partner.

Sigali checks in with his supervisor, a man he knows is under pressure to keep

costs down.

He told me to fill the hole back in and go home. And I said, no, this isn't a

business decision. This is public safety.

I'm not going home. I have an obligation to protect the public. I have a job to

do. And I wasn't going to do the wrong thing.

Sagali fixes the leak. And several families in that neighborhood have no

how lucky they are that he is on the job that day in 2005.

Had I followed my supervisor's instructions and left, later that day,

day, the day after, could it have blown up one of those houses? Absolutely yes.

It could have killed the members of that household.

In a bold move, Sagali later attends a shareholders meeting.

and reports his concerns directly to PG &E's CEO.

An investigation is opened, and widespread problems in the gas

are discovered and addressed.

But an even more dangerous threat still looms in a town 25 miles south.

This is San Bruno, a small suburb bordering San Francisco.

It's where Joe Rugomez grows up.

It's a great little tight -knit community.

Went to elementary school, middle school, high school there, college

San Bruno was home.

San Bruno is also home to Renee Morales, a mother of four.

The neighbors were wonderful, very welcoming.

The schools were excellent.

In time, Renee and Joe's lives become intertwined when her daughter Jessica

Joe... Start dating.

We couldn't stay away from each other. It was literally every day.

We'd hang out all day, every day.

On a fall day in 2010, Joe and Jessica are at Joe's house watching a game.

And we're sitting on the couch.

And out of nowhere, you just hear this excruciatingly loud noise that sounded

like a jet engine, like right in your ear.

It starts accelerating for like four or five seconds, and then boom.

Fire comes filling up the whole house.

It's like a huge blowtorch, if you will.

I don't know what's going on, but all I know is that I'm like melting alive.

It's over.

People away from the center of the explosion see what looks like a plane

It appears that we have a plane.

Watching the news, Renee Morales recognizes the supposed crash site.

It is Joe's neighborhood where Jessica is spending the evening.

I could see the flames were shooting from the neighborhood.

You could see the panic in people's eyes.

And I couldn't get to her.

James Haggerty, at the time, is a San Bruno police detective and is among the

first on the scene.

The odd thing was that the fireball kept going, and it raged for approximately

90 minutes. And I had a sense that this was something different than a plane

crash. Something kept fueling the fire.

PG &E employees nearby recognize what is happening.

This is not a plane crash.

Their own gas pipeline has exploded.

And I'm seeing the news. I'm talking to coworkers.

And I was just, it was gut -wrenching.

It was surreal.

Up next, how PG &E gambles with customers' lives.

Every time they raised that pressure inside that pipe, they made the crack

bigger.

The day after a PG &E gas transmission pipeline explodes in San Bruno,

return to unbelievable destruction.

The aftermath was this large crater that was in the middle of the street, and

everything around it had been instantly vaporized and melted and burned.

In all, 38 homes are completely destroyed.

Joe Rugomez.

Covered in second and third degree burns, is rescued by a neighbor who gets

to a hospital.

I remember them putting a mask on me and I didn't wake up till like Halloween.

This was September 9th and I didn't wake up till Halloween.

On the night of the explosion, Renee Morales races from one hospital to the

next, searching for Jessica.

About two o 'clock the next day, the coroner's office drove up to my house

and...

They delivered the news that they had found something that could be identified

as Jessica.

Seven others also die.

The trigger for the explosion is a power failure at the PG &E Milpitas Control

Center, 35 miles away.

It causes a surge of gas through a segment of what is known as Line 132.

A pipe installed by PG &E in 1956 to service a new housing development in San

Bruno. When the line explodes years later, a 3 ,000 -pound piece of pipe is

thrown out on the ground.

When the pipeline rupture occurred, a section of about 30 feet long

portion of the pipeline was launched about a quarter way up this hill.

And that section of the pipeline has been a disaster in waiting for years.

Investigators from the National Transportation Safety Board immediately

the problem.

We did find a longitudinal seam on the pipe, which means it started as a flat

piece of metal, which was then curved on itself and then welded longitudinally.

And that seam that should hold the pipe together?

doomed from the start.

You're supposed to weld pipe like that both on the exterior and the interior.

So you have double welds. The pipe that exploded only had one weld. And so the

pipe is at risk for a crack.

The defective weld is visible when the pipe is installed. But since it is

missed, it could be discovered before the gas is turned on through a safety

check called a hydrotest.

The hydrotest is real simple. You throw water pressure in there, and you crank

it up to see if there are any leaks.

Because if there's a leak, there's a crack.

And if there's a crack, that's a big problem.

But PG &E does not conduct a hydrotest.

It does not know if the pipe has a crack.

Later, it checks the line for corrosion from primarily above ground with a test

not capable of finding the defective weld, which would be hugely expensive to

fix.

Haggerty believes the choice of an ineffective test is deliberate.

This is why the corrosion assessment was preordained. It could not locate these

flaws in the pipeline because if they discovered these flaws, they would have

fix them.

And so in 1956, PG &E buries the untested pipeline with a dangerous

knowing that families will be moving into the neighborhood expecting to be

It's just something that you would never even fathom. I mean, the fact that

there's a ticking time bomb.

On my front lawn, of all places, it's just unbelievable.

But it gets worse.

In order to ensure future capacity, PG &E deliberately increases the pressure

the line beyond what is needed.

They actually exacerbated the problem with the one piece of pipe that only had

single well. Every time they raised that pressure inside that pipe, they made

the crack bigger.

With so much at risk, why would PG &E not play it safe and properly test the

pipe? A possible answer is inside PG &E's own records later used as evidence

court. One senior manager writes, a pressure test is not economically

Another describes financial, not technical reasons.

In other words, it seems again, profits matter more than safety.

They can talk all they want about public safety, it's cost.

It is cost.

Even when they talk about safety, it's safety to a point of, well, if it costs

too much, we're not going to do it. The company even says as much in a draft of

an internal document from May 2008, just over two years before the explosion.

What is not up for debate?

8 % earnings per share growth.

What is up for debate?

Safety. That was a very clear and succinct expression of PG &E's

of profits over safety.

And it is not only shareholders who are rewarded with good earnings. When the

CEO in charge of PG &E in the years leading up to the explosion retires, he

leaves with a package reportedly worth more than $35 million.

In 2014, 17 years after PG &E's rough -and -ready conviction, the company is

indicted and convicted once again.

PG &E maintains that it follows the law, but a federal jury finds it guilty of

violating the Pipeline Safety Act and obstructing justice.

It is placed on probation, ordered to pay billions of dollars in fines and

penalties, and to make a public apology.

We are deeply sorry. We failed our customers in San Bruno.

In its ad, PG &E describes improvements it makes in its gas distribution system.

We've replaced hundreds of miles of gas pipeline.

And makes a commitment.

That's why we're working every day to make PG &E the safest energy company in

the nation.

It's an admirable goal, but so far out of reach.

Especially as the electric side of the business faces an increasing threat,

climate change.

California temperatures are breaking records.

Trees and grasses are bone dry.

The danger posed by a spark thrown from a power line is greater than ever, and

PG &E is not prepared.

They could have chosen to put insulated lines, but they didn't. They could have

chosen to bury lines underground, but they didn't.

Both of those are expensive.

So they choose to put naked conductors in rural areas, and now they have to

guard against the risk of tree line contact.

And so the deadly fires begin.

In 2015, in Jackson, California, a tree hits a wire and the Butte fire takes off

torching 70 ,000 acres.

Burning more than 500 homes and killing two.

In 2017,

Twelve different fires caused by trees hitting PG &E lines killed 18 people.

California reels from the death and destruction.

Sadly, the deadliest fire of all is still to come.

Up next, panic in paradise.

The entire town of paradise is under mandatory evacuation. Please leave

immediately.

In 2018, as Northern California struggles to recover from a series of

devastating wildfires,

PG &E crews work to trim back trees dangerously close to power lines.

But there is another looming threat that is missed entirely.

It is here in the Feather River Canyon that runs through the Sierra Nevada

northeast of Sacramento.

This is PG &E's Caribou Palermo power line.

part of the company's hydroelectric stairway of power that once brought

to the entire Bay Area.

At the time that it was built, it was considered an engineering marvel.

For almost a century, the towers that hold the line take a beating from the

winds that rip through these canyons every fall.

The clock.

at between 30 and 50 miles an hour most of the night and into the morning. And

so these are devil winds.

Just above the canyon is a collection of small mountain towns, both beautiful

and affordable.

One is Megalia, where Skye Sedgwick lives with her father, John.

We lived in an old cabin that had so much family history.

We used to joke about every person that came through that house would leave a

bit of them.

What Skye admires about her dad is that at the age of 82, he is still full of

energy. A retired volunteer fireman, there is not much he can't handle.

We actually had a chimney fire in our house the winter before the

campfire, and my dad put it out by himself.

I climbed up into the rafters and put it out.

Just five miles south of Magalia is a town called Paradise, where Richard

Salazar moves in 1979 with four siblings, all adopted out of foster care

Phyllis and Chris Salazar.

We're all pretty damaged. You have problems in that kind of life.

You don't know who to trust.

And I felt I could trust them.

And in paradise, Richard finds an ideal family life.

I played little league and dad coached. Mom was always doing something with the

church or something like that.

A coach drive. She baked for Christmas.

It just, it felt like a hometown.

As idyllic as life is in these small towns, everyone lives with the threat of

fire.

My dad, every night at dinner time when the winds were blowing and the

temperature was high, he would say, please, Jesus, no fires.

On November 8, 2018, the canyon winds are blowing.

Early in the morning, a fire is reported near Camp Creek Road, adjacent to a

tower on the Caribou -Palermo line.

And from there, the campfire takes on.

storming up the walls of Feather River Canyon.

In Magalia, Skye Sedwick watches a mounting tower of smoke.

That was the closest I'd ever seen it. We'd seen smoke before, and we'd been

evacuated before, but I'd never seen it that close.

When Skye makes the decision to leave, her dad says that he will wait for a

I started to walk away, me and my dog, and I stopped, and I turned

around.

I gave him a hug, and I said, I love you, Dad.

At the time, Richard Salazar is at work, away from town, when he hears about the

fire heading toward paradise and toward his parents.

It was the norm up there for shelter in place until you were told what to do.

So the day of the fire, there was shelter in place. My niece called my

she said, Grandma, you need to get out of there.

It's on fire. He says, no, no, no, they haven't told us what normally they tell

us.

Shortly after nine, the order to evacuate Paradise comes in. I'm

entire town of Paradise is under mandatory evacuation. Please leave

But like Richard's parents, many residents are elderly and disabled and

Yes, I don't have a vehicle.

She is paraplegic. She can't. She's in a wheelchair.

She can't move.

We can't breathe. Please help us.

Can you get out of the house?

The next

day,

as embers turn into ashes, state fire investigators are focusing on a

source of the spark that touched off the fire.

A tower on PG &E's Caribou Palermo line.

Tower 27222.

Its 150 -volt line gets loose and hits the steel tower.

It creates an arc of current so hot that it actually melts the tower.

Molten metal showers down into the dry brush below.

And so Butte County law enforcement takes immediate action.

We needed to block it off, rope it off, make sure that for the duration.

that that was now going to be treated as a crime scene.

Up next, the failure of PG &E.

That, in a sense of homicide case, this is the

smoking gun.

In November 2018, after 17 days of extraordinary destruction, the campfire

finally contained, and residents return home to see what has survived.

There was nothing, and not even a tree.

There's not even one tree left on my property.

For Skye Sedgwick, by far the greatest loss is the loss of her father.

She learns he fought the fire all day.

His body is found behind their house.

I just hope that he wasn't frightened, that he wasn't scared.

And when I think about how he was when we had that chimney fire, he wasn't

afraid at all.

I think he was okay.

In paradise, hundreds of people are missing.

It takes several weeks for Richard Salazar to learn that his parents did

make it to safety.

I know my parents. During challenging times, my dad was always holding Mom's

hand. They were always comforting each other.

So I know, I know, my dad was, you know, they were comforting each other at that

moment.

That's what I want to believe, that's what I'm going to believe.

Because that's who they were.

In all, 84 people do not survive the campfire.

What is inconceivable to many is that the cause of the deadly fire all boils

down to a single hook.

A small but essential component of Tower 27222.

That hook holds up that aluminum line.

through which 115 ,000 volts of higher energy, electricity,

is going through.

For 100 years, the Seahook is buffeted by the canyon's high winds.

Rocking back and forth in its steel housing, the hook wears through, breaks,

the line falls.

And that was what's left, and that's...

That, in a sense of homicide case, this is the

smoking gun.

This is the weapon that took out the lives, hopes,

dreams, and souls of some 84 of our Butte County

citizens. And the question to answer seems obvious.

regular thick hook like this, and then a hook that is

worn through, and no one sees it. Why has this major utility company

not done the proper maintenance?

At some point in the past, PG &E does recognize the danger of wear on its

infrastructure and adds reinforcements to the arm that holds the C -hook. PG &E

said, oh, the steel structure itself may be a little too soft, so

we'll put in a harder angle iron or a hanger plate.

And in its own records...

PG &E has documentation that suspension hooks wear thin.

And this was many years before the Butte County campfire.

That tells prosecutors that the cause of the campfire, the failing C -hook,

should have been foreseeable.

It's not like these hooks are going to get more steel on them. They're wearing.

Every day they're flipping around in the wind.

Every day they're wearing thinner and thinner.

But to eliminate dangers, a company has to look for them.

And at PG &E, routine climbing inspections of the towers are repeatedly

back. In the late 1980s, the policy is to regularly climb the towers for safety

checks. But that changes in 1995.

In 1995, they got rid of climbing inspections.

They reduced the number of overall inspections and patrols. 2005,

they did that again.

Yeah, and they went from doing an inspection every year to doing an

every other year to the current, which is doing an inspection every five years.

And that seems counterintuitive.

Someone gets older, you better inspect it more.

What we saw was as it got older, it got inspected less.

But PG &E is still doing aerial inspections, just not like they used to.

According to Butte County prosecutors, PG &E used to take a day and a half to

inspect the towers of the Caribou -Palermo line.

Not anymore, prosecutors say.

In 2017, PG &E inspected more than 400 towers in just over two hours.

The air patrols are just a flyby. They're flying high, they're flying

they're just looking down to make sure that the towers are still standing

upright.

For James Haggerty, the issues surrounding the campfire sound familiar.

And when I met with the investigative team in Butte County, slowly but surely,

lot of the themes that we discovered in San Bruno could be applied to the Butte

County investigation.

They had an old electrical tower. We had an old pipeline.

We had a pipeline that was improperly assessed.

They learned that this electrical tower was improperly assessed.

And what is infuriating to victims is that for years, while PG &E fails to

ensure that its equipment is safe, it pays out billions of dollars to

shareholders.

That says safety is not number one.

Giving money to shareholders is number one.

In March 2020, after a year -long investigation, Butte County indicts PG

84 counts of involuntary manslaughter and one count of unlawfully starting a

fire. We were going to do it. We were going to go to the end and make sure

justice was found.

Up next, faced with 84 dead, who does the court send to prison?

In the spring of 2020, in the Butte County Courthouse in Chico, California,

&E enters its plea to 84 counts of involuntary manslaughter.

The prosecutors have set the scene.

We had pictures of 84 people on that wall there that paid the price

of PG &E's greed in a very real way.

William Johnson, at the time the company's newly hired CEO, is there to

for PG &E. As it relates to count one, as alleged in count five, count 13, as

alleged in count 36, count 52, count 68, on behalf of PG &E, have you pleaded?

The answer is repeated an astounding 84 times.

For the families of the victims, PG &E's failure is bewildering.

And I just don't understand why.

Is money that more important? I would rather have the people.

If I give it all away, I'd rather have my parents.

That's all we have is each other.

In 2019, facing billions of dollars in liabilities and lawsuits from wildfire

victims, PG &E declares bankruptcy and emerges in 2020 with what it says is a

new commitment to safety.

In publicity videos like these, it points to a long list of improvements,

including inspecting and repairing aging equipment and installing weather

stations and using drones to mitigate fire risk.

The company denies that it has placed profits over safety.

In a statement to American Greed, it says, in part, while we cannot change

past, we can learn from it. And adds, we can never let up in our pursuit of

safety and doing what is right.

But victims ask, why does it seem to take a disaster to make things right?

We are trusting the utility.

to uncover defects, to replace infrastructure before they fail.

And they also wondered if the answer is more technology or more accountability

at the top.

Not one CEO saw the inside of a jail cell.

If you're going to be in a power position making key decisions that are

affect the public entity, they should be accountable for those actions and for

those decisions.

And they weren't. Butte County prosecutors agree.

We wanted to get individual liability.

We wanted to be able to snap the handcuffs on the people that are

responsible for this. We didn't achieve that goal.

And that's because decisions that lead to PG &E's disasters are made over the

course of decades, making it difficult to place blame on individual offenders.

But it is Butte County's hope that this time the criminal conviction will have a

compelling impact on the culture at PG &E.

Hopefully the people at PG &E take us seriously and make changes, that they

learn from their mistakes, that they don't continue making the same mistake

and over and over again.

That wish is shared by thousands of people in California.

who are tired of catastrophes caused by a company that repeatedly promises to

keep them safe.

I think about how many different people didn't do their job or how many people

said, no, we're not spending that money today.

Or, you know, that's not important right now.

How many missed opportunities to prevent this?

It's mind -numbing.

It really is.

Because it didn't have to be like this.