Californians Want More Transparency Over Spending By Fire Victim Trust
RACHEL MARTIN, HOST:
Tens of thousands of California wildfire survivors are still waiting for compensation for all of the loss that they've suffered. The fires were sparked by equipment belonging to the utility company PG&E. Now an investigation from Lily Jamali at our member station KQED has found a special trust responsible for those payments has racked up millions of dollars in fees while the vast majority of fire victims haven't seen a dime.
LILY JAMALI, BYLINE: Lately, 67-year-old Theresa McDonald has spent a lot of her time house hunting. The 2018 Camp Fire destroyed her home and most of the Northern California town of Paradise. On a recent trip to look at new houses, she struggled.
THERESA MCDONALD: Every street that I drove down, the first thing that popped into my mind was, what would this street be like if all those trees were on fire?
JAMALI: McDonald is retired and on a limited income, so she's been counting on help from the Fire Victim Trust. That trust began charging fees dating from January 2020, after PG&E declared bankruptcy because of the wildfires.
MCDONALD: Our lives are never going to be the same.
JAMALI: So far, the help McDonald needs hasn't come.
MCDONALD: Would it help to have that money? Yes. Would it help to even just have an idea of what amount of money we're talking about? Yes.
JAMALI: That information has been hard to track down.
MCDONALD: The people who are running this trust, who are controlling the entire process, none of them are victims of these fires. Therefore, they don't understand the need for speed.
JAMALI: McDonald's concern goes beyond the pace of payments. She wants more transparency over spending by the Fire Victim Trust. A KQED investigation found that last year the trust spent big on its own overhead, a host of lawyers and financial advisers, at least $51 million. Meanwhile, fire victims saw just $7 million. And every dollar spent on administration is a dollar less in the pockets of victims.
SCOTT MCNUTT: I'd say to Theresa McDonald, I beg forgiveness on behalf of all the professionals who work in this industry.
JAMALI: That's Scott McNutt. He's a former member of the Board of Governors at the California State Bar. The pace of payments to fire victims has ticked up this year, rising to about $250 million total. Still, that's just a tiny fraction of the approximately $13.5 billion that fire victims were promised.
MCNUTT: The issue is, what's going to get this money that's in the wildfire trust distributed to victims as quickly as possible?
JAMALI: The trust has declined repeated interview requests. University of California Hastings law professor Jared Ellias says with 70,000 people filing claims, the process will take time.
JARED ELLIAS: If you're working for the trust, one of the big things you're terrified of is that you're going to pay out people who are undeserving and then you won't have enough to pay people who are deserving.
JAMALI: So he says people should try to sit tight. But State Assemblyman James Gallagher, who represents the town of Paradise, has a different take.
JAMES GALLAGHER: It's totally unacceptable.
JAMALI: He says KQED's reporting raises questions about the trust's operations.
GALLAGHER: We need to have complete transparency where that money has gone, and victims need to be compensated immediately.
JAMALI: One thing slowing down payments is the unusual way this trust was set up. PG&E has been funding it partly with cash, but also with the company's own languishing stock. Assemblyman Gallagher, only half-jokingly, had this suggestion.
GALLAGHER: (Laughter) Maybe some of these administrative expenses, would they mind getting paid in stock?
JAMALI: Because then, he says, administrators might feel the same pain of uncertainty felt by fire survivors. For NPR News, I'm Lily Jamali in San Francisco.
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