Judge approves PG&E settlements with wildfire victims. Families of Ghost Ship fire victims can sue PG&E. State wrestles with how to tax weed.
Good morning, California.
“Nobody was listening to me. My own congressperson didn’t listen to me.”—Democratic presidential candidate Tom Steyer, to The San Francisco Chronicle.
- Steyer, a San Francisco hedge fund founder, has been campaigning for impeachment since 2017.
- Steyer’s congressperson? Speaker Nancy Pelosi.
- The House is expected to vote for impeachment today.
PG&E gets a win in court
U.S. Bankruptcy Judge Dennis Montali handed PG&E a win Tuesday by approving nearly $25 billion in settlements with wildfire victims and insurers and allowing the utility to move forward with reorganization.
- Montali: “I don’t think that I have the wisdom or the knowledge or frankly, my role, to second-guess the decisions of those victims who have told their lawyers this is how we want to go with the plan.”
The deal leaves in place PG&E’s current board of directors, and allows Abrams Capital Management, Knighthead Capital Management and Redwood Capital Management to retain control.
The settlements include:
- $13.5 billion with wildfire victims and their attorneys, plus another $11 billion in claims.
- A lock-out provision preventing negotiations with hedge funds that own billions in PG&E bonds. Bondholders will return with a new strategy.
PG&E and lawyers representing fire victims told Montali that avoiding a costly trial over the utility’s liability in the 2017 Tubbs Fire offered their clients the most certainty.
Frank Pitre, one of the leading attorneys representing victims: “It is the best that it gets. It is not playing chicken. Chicken games are over.”
Gov. Gavin Newsom is demanding changes to the board. The governor’s attorney, Nancy Mitchell, said Newsom would not stop PG&E’s settlement, but the reorganization plan, as it stands, doesn’t meet the criteria for accessing a new state wildfire fund.
The California Public Utilities Commission, whose members are appointed by the governor, also must approve the reorganization.
Ghost Ship fire claims
Family members of the 36 people who perished in the 2016 Ghost Ship fire in Oakland can pursue a lawsuit against PG&E under a decision by U.S. Bankruptcy Court Judge Dennis Montali.
- The San Francisco Chronicle: Officials never determined a cause for the inferno, but a lead investigator testified during criminal proceedings that she believed it was sparked by an electrical failure.
The California Public Utilities Commission announced a $1.675 billion settlement with PG&E over 2017 and 2018 wildfires that killed more than 100 people.
- The Wall Street Journal: Under the terms of the settlement the regulator reached with PG&E, the company won’t be able to pass along the amount of the penalty to customers in the form of higher utility rates.
How to tax marijuana
To counter marijuana’s negative health impacts, California should scrap its methods of taxing cannabis and instead impose taxes based on its potency, the Legislative Analyst’s Office concludes.
Remind me: California taxes marijuana at every step of production and sale, including a 15% tax on retail sales.
Representatives of the legal weed business want legislators to cut taxes, contending that by lowering prices, legal dealers could better compete with the thriving underground market.
- The LAO is skeptical: “[W]hile a tax cut clearly would reduce the size of the illicit market to some extent (and a tax increase would expand it), we cannot quantify the extent of this effect.”
Lowering taxes would make legal weed more accessible to minors who are most sensitive to pricing, the analyst said.
The big recommendation: Base cannabis taxes on potency, similar to Canada’s marijuana tax.
Citing “substantial evidence” linking marijauna to schizophrenia or other psychoses, the LAO wrote:
- “We recommend that the Legislature replace the state’s existing cannabis taxes with a tax designed to reduce harmful cannabis use more effectively—namely, a potency‑based tax or tiered ad valorem tax.”
Political prospects: The marijuana lobby has clout in the Legislature, and the industry resists claims of ill-effects.
- Most recently, the industry tried to block a state effort to place a warning on marijuana products that they can cause low birth weight, early deliveries, infant mortality or cognitive or health problems with children.
Taking on Trump
A high-profile group of conservative campaign consultants jolted politics Tuesday by announcing plans to work to defeat President Donald Trump and his congressional allies—including those in California.
In an op-ed in The New York Times, George T. Conway III, Steve Schmidt, John Weaver and Rick Wilson wrote:
- “As Americans, we must stem the damage he and his followers are doing to the rule of law, the Constitution and the American character.”
Sacramento consultant Mike Madrid is part of the group, called The Lincoln Project. Madrid intends to focus on the seven California congressional seats held by Republicans:
- “First, there is triage to stop what has happened to the Republican Party, and hopefully remove the cancer that is Trumpism. Where the party goes from there, I don’t know. I don’t know how much is salvageable.”
Schmidt’s California roots include running campaigns for the late Matt Fong and Gov. Arnold Schwarzenegger. I detailed some of Schmidt’s conservative credentials in this column.
Schmidt helped run the George W. Bush White House campaign to win confirmation of Chief Justice John Roberts, and led the confirmation campaign for Justice Samuel Alito.
He framed the card showing the 58-42 U.S. Senate vote in 2006 for Justice Samuel Alito. It includes a note:
- “Steve, You do great work. 2 for 2 on the Supreme Court. Dick” That would be Vice President Cheney.
A murderer dies on Death Row
Lawrence Bittaker, a murderer nicknamed “pliers,” died at age 79 on San Quentin death row last week. The cause is to be determined, but he was an old man in 2016 when we spoke briefly, separated by the steel mesh of his cell door.
Bittaker spoke with a twang and showed off a weird greeting card he made.
A friend, the late Frank Candida, covered Bittaker’s trial and told me and the readers of the old Herald Examiner plenty about the murders of his five teenage victims, and how he came to be known as pliers.
Bittaker told me medical care was good but that he had a panic attack. I asked if he feared death.
- “I’m getting a little afraid of it lately.”
Had he ever written to the families of the girls?
- “I wouldn’t know what to say to them. Too ashamed to even try to beg their forgiveness.”
Upon learning of Bittaker’s death, Stephen R. Kay, the retired L.A. County deputy district attorney who prosecuted Bittaker and his accomplice, Roy Norris, told me:
- “I was really upset that he defeated he criminal justice system and he didn’t suffer the death penalty.”
- “The victims have been dead for 40 years. They didn’t get to have much of a life. They didn’t get married, have children, grandchildren. The last thing they saw on earth were these two monsters.”
Death row houses 729 men; 82 have died of natural causes. Bittaker’s co-defendant, Norris, is serving a life sentence.
Take a number: 32
There were 22 executions nationally in 2019, all but one of which was in a Southern state. It was the second fewest since 1991, the Death Penalty Information Center reports.
- 3 death sentences were imposed in California in 2019, though Gov. Gavin Newsom imposed a moratorium on executions in California and ordered that the death chamber at San Quentin be dismantled.
- 32 states have abolished the death penalty or have not executed anyone in more than a decade, California among them.
Commentary at CalMatters
Joel John Roberts, PATH and PATH Ventures: We need to respond to homelessness like it is a natural disaster. That means not building a limited number of permanent buildings for shelters but setting up enough temporary structures immediately, perhaps on county and city property, to get people off the streets now. A half a million-dollar studio apartment for one homeless person feels like a design-by-committee solution.
Dan Walters, CalMatters: Gov. Gavin Newsom doesn’t like Pacific Gas & Electric Co.’s plan to emerge from bankruptcy, but does he want a state takeover of the utility?
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See you tomorrow.