Fire Victims Trust lobbyist forced out

Resignation comes two days after lobbyist had asked legislators for $1.5 billion

Judge John K. Trotter announced Wednesday that the Fire Victims Trust has parted ways with its lobbyist Patrick McCallum.

McCallum has been accused of sexual harassment by several women at Sonoma State University according to published reports. Trotter, the trustee in charge of the trust, indicated that it’s those allegations that led to the departure of McCallum.

“Providing economic benefits as quickly as possible to the trust’s 70,000 wildfire victims has been our highest priority,” Trotter said. “We want our entire focus to be on what we’re doing to help fire victims rebuild their lives, not on unrelated issues that have become a distraction in recent days.”

According to the trust, McCallum was hired as its legislative advocate in an effort to find means to benefit wildfire victims with its assistance from the state.

“The wildfire victims remain our top priority,” Trotter said Wednesday, “and in this regard, we had hoped that Patrick would be able to guide us through the state of California administration, given his extensive lobbying experience. Unfortunately, we were unaware of the regrettable circumstances that have come to light in recent days, which have necessitated our actions today.”

McCallum’s ouster comes just a day after he had asked California legislators for $1.5 billion to help make sure it can fully compensate fire victims.

In late February, with a potential shortfall forecasted, State Assembly Minority Leader James Gallagher (R-Yuba City) introduced legislation that was set to address any potential shortfalls in funding for the trust that was created to compensate victims of wildfires that were caused by the Pacific Gas and Electric Co. The trust was expected to have a certain value that it now says it may not be able to meet.

When the bill was introduced, Gallagher spokesman Jim Stanley said its purpose was to begin the conversation about what to do with the trust if, in fact, it doesn’t reach its full value of $13.5 billion.

It appears that the trust may be about $1.5 billion short of that mark.

Instead of being a full lump sum of $13.5 billion the total value of the trust was set up to be a combination of cash and PG&E stock.

At the time of the legislation’s introduction, the stock had yet to reach its target price of $14.15 and Gallagher’s office noted that the company’s stock was trading at $9 per share for about $4.2 billion.

However, the first stock sale in January actually priced higher ($12.09) than it was originally thought, raising $40 million for the trust.

On April 18, a Securities Exchange Commission filing by the trust shows it raised $60 million with the next sale valued at $12.04. In order for the trust to be fully funded, the stock needed to be valued at $14.15.

At the time, Gallagher’s office ruled out the idea that taxpayers would make up the shortfall.

“There are a lot of ideas but the one thing will rule out right now using taxpayer dollars to bail out PG&E. These fires were started by PG&E,” Stanley said. “The California taxpayer is not going to be on the hook for this.”

Stanley also said that any attempt to have taxpayer dollars bridge what was then forecasted to be a $2.5 billion gap would be a non-starter.

“That is off the table,” Stanley said. “He would not support a bill that did that; he would not author a bill that did that, and he would not vote for a bill that did that.

“It’s really a starting point. It’s an opportunity and a vehicle to bring people together to start a conversation about how to make sure the fire victims who were relying on the trust are made whole.”

Gallagher wants the legislature to make clear that it intends to make sure the victims are fully compensated. Stanley said at this point the conversation would be about how they would make the trust fully-funded, but the one thing that will not be open for discussion is that the shortfall would be covered by taxpayer dollars.

He said that his office wasn’t ready to discuss what those options are to make sure it’s fully funded, because it was so early in the process.