Sacramento developer Phil Angelides served as state treasurer, ran for governor and jousted with titans of Wall Street over the cause of the 2008 financial meltdown. Now he’s part of a group backed by a dissident PG&E Corp. shareholder trying to seize control of the battered utility.
Angelides was one of 13 candidates nominated for a board of directors’ seat Friday by BlueMountain Capital Management, a New York hedge fund that owns about 1.5 percent of PG&E Corp.’s shares. If elected at the PG&E annual meeting in May, Angelides and other BlueMountain nominees would replace the current PG&E board.
Fixing PG&E “is going to be a very arduous challenge,” Angelides said in an interview. “What the company needs ... to be able to confront the challenges in front of it, and turn the corner, is a fresh start, a new board.”
BlueMountain has been an outspoken critic of PG&E in the weeks since PG&E filed for Chapter 11 bankruptcy protection in January, saying the utility could have avoided bankruptcy. Shareholders such as BlueMountain are in danger of losing most if not all of their investment in PG&E, depending on how the bankruptcy is resolved.
Angelides declined to say whether he agrees with BlueMountain’s stance on the bankruptcy filing, but said a new board is essential to “restoring the public trust .... You need a board that cannot be tone deaf to public needs.”
Besides Angelides, the slate include Christopher Hart, a former chairman of the National Transportation Safety Board. While he was vice chairman, he oversaw the NTSB’s investigation into the 2010 natural gas pipeline explosion that killed eight people in San Bruno — a disaster that cost PG&E more than $1 billion and left the utility with a criminal conviction.
Another nominee is Kenneth Feinberg, a lawyer who has overseen the 9/11 victim compensation fund and the BP Deepwater Horizon oil spill victim fund — experience that Angelides said would be critical in dealing with the wildfire liability claims that drove PG&E into bankruptcy.
The nominations came a day after PG&E acknowledged that a faulty transmission tower probably triggered November’s Camp Fire, which destroyed most of the town of Paradise and killed 85 people in California’s worst-ever wildfire. PG&E also said its debts “raise substantial doubt about PG&E Corporation and the utility’s ability to continue as going concerns.” Along with the 2017 fires, PG&E estimates that its wildfire liabilities could exceed $30 billion and it said bankruptcy was its only viable option.
PG&E has vowed to ramp up its safety program and overhaul its corporate culture. It has installed a new interim CEO and promised last month to replace at least five of its 10 current board members.
BlueMountain argued that PG&E’s steps don’t go far enough. In a filing early Friday with the Securities and Exchange Commission, the investor group said its slate can lead PG&E “to a better future for its customers, employees and communities consistent with acting in the best interests of its shareholders.”
Responding to BlueMountain’s nominations, the PG&E board issued a statement saying it expects “to continue discussions with shareholders, including BlueMountain, and other stakeholders regarding the appropriate composition of the board.”
Angelides is a familiar figure to many in Sacramento. He most recently developed McKinley Village in Sacramento and was state treasurer from 1999 to 2007. He was the Democratic nominee for governor in 2006, losing to Arnold Schwarzenegger.
After the market crash of 2008, he was appointed by Congress to lead the Financial Crisis Inquiry Commission, which conducted an 18-month investigation into the causes and consequences of the crisis. The commission held hearings in Sacramento and Bakersfield — two of the hardest hit real estate markets in the country.