State Lawmakers to Attorney General: Probe PG&E Fire Victim Trust

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Lily jamali | KQED

A bipartisan group of state lawmakers have asked California Attorney General Rob Bonta to investigate the expenses and administration of the PG&E Fire Victim Trust.

The request comes after a KQED survey overheads of the Trust, which was created as part of a bankruptcy settlement in December 2019 between the utility and nearly 70,000 victims of fires caused by PG&E equipment.

The survey found that the Trust spent nearly 90% of outgoing funds on overhead last year, while the vast majority of fire victims awaited help.

“We urge you to use the full authority of your office to review recent fund expenditures and the fund administrators,” said the letter, which was signed by 11 state senators and assembly members representing areas affected by the PG&E fires between 2015 and 2018.

“We hear from residents every week who have been waiting two years for their settlement payments. Their lives are on hold until they receive these dollars, ”said Senator Mike McGuire, D-Healdsburg, whose district includes parts of Sonoma County.

“This is unacceptable. This is blatant and this must change, and that is why we are asking the trustee to speed up payments to fire survivors in northern California, ”he added.

State Assembly Member James Gallagher, a Republican who represents the fire-ravaged town of Paradise, was first announced last week on KQED Forum that he and his colleagues were preparing a letter calling for more transparency. KQED’s investigation “raises many questions and concerns that require answers,” said Gallagher. Other signatories include State Senator Bill Dodd, D-Napa, Assemblyman Cecilia Aguiar-Curry, D-Winters and State Senator Jim Nielsen, R-Tehama, all of whom have voters injured by the fires caused by PG&E equipment and are awaiting compensation.

KQED found that the Fire Victim Trust accumulated $ 51 million in overheads last year, while $ 7 million was distributed to fire victims during that time. The investigation was based on an analysis of files filed by federal bankruptcy court, court transcripts and correspondence between the Fire Victim Trust and victims of the fires. Most of the overhead, $ 16.3 million, went to claims processor fees and expenses, and $ 12.7 million to start-up costs. Another $ 6.8 million went to an item described as “insurance, data and other expenses” – almost as much as the fire victims themselves.

“It’s outrageous,” lawmakers wrote to Bonta, “especially in light of the fact that thousands of fire victims are struggling to rebuild their lives.”

In response to a KQED investigation, Bonta’s office said the attorney general would not comment – even to confirm or deny – a potential investigation.

Members of Congress have also expressed outrage at the pace of payments to victims of the fires. In separate emails, Representative Mike Thompson, a D-St. Helena, and Representative Doug LaMalfa, R-Richvale, both called for faster payments.

The pace of payments has accelerated in recent weeks. According to the most recent data available, the trust had distributed $ 255.4 million as of May 19. Yet only 565 of the nearly 70,000 people had their claims processed and paid, according to the data. While the Trust collects all of its fees, these families receive 30% of what is owed to them. This is in part the result of the terms of PG&E’s settlement agreement with the victims of the fires. The company funds the trust, half with cash and the other with PG&E shares. Today, the Fire Victim Trust owns almost a quarter of the shares of PG&E.

A court record showed the Fire Victim Trust trustee, retired California Court of Appeals Judge John Trotter, billed the Fire Victim Trust $ 1,500 an hour. In a video released last week, he said he now earns $ 150,000 a month. All overheads come from funds earmarked for fire victims.

Courtesy of KQED

The Trust did not offer comment for this story and declined all interview requests from KQED over the past month.

In his video post, Trotter acknowledged the frustration of fire victims even as he anticipated further delays.

“We’re still working on this,” Trotter said. “We’re not near the top yet. We’re making progress. We’re getting there. Go much faster.”

Fire victims say this is not enough.

Earlier this month, retired Police Chief Kirk Trostle wrote to U.S. bankruptcy judge Dennis Montali to demand more transparency from the Trust.

“Families still live in cars, travel trailers and FEMA trailers,” wrote Trostle, who lost her home in Paradise in 2018, in a letter citing KQED reporting.

Over the past weekend, around 100 Camp Fire survivors staged a rally in Paradise to express their frustration, saying survivors have a right to know exactly where all of the Trust’s administrative funds are going.

“I thought I was healing,” said Teri Lindsay, whose daughter, Erika, wiped away tears as she watched. “Until this report was released, it changed my life and brought me back to the day. I had no idea how well paid they were and we still live in poverty.


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