New Hedge Clippers-AFT Report Exposes Hedge Fund Investments in Calif. Utility Company PG&E

WASHINGTON, June 20 -- The American Federation of Teachers issued the following news release:

A new report by the Hedge Clippers and the American Federation of Teachers exposes the Wall Street hedge funds that are trying to take control of Pacific Gas and Electric Company, the California utility currently in bankruptcy after causing massive wildfires across the state.

The report comes a day before the PG&E shareholder meeting this Friday, where hedge funds will try to seat three managers on the PG&E board.

PG&E plunged into bankruptcy earlier this year after decades of irresponsible corporate practices, most recently failure to maintain power lines that resulted in massive wildfires in 2017 and 2018. The resulting damage to property and loss of lives throughout California created billions in new liabilities for the company. In an effort to save it, the board is expected to overwhelmingly approve (link is external) the new board members. But as the new report shows, the potential rescue of PG&E could have catastrophic effects for the people of California. The rich investors are more concerned with profits than they are with protecting the safety and security of the state's residents.

In "Hedge Papers No. 67: Vulture Hedge Funds Attack California," the Hedge Clippers campaign and the AFT dig deeper into hedge fund speculation in PG&E and detail the dozens of hedge funds currently engaging with California's biggest utility. This report:

* Provides new information showing that hedge fund control of PG&E is likely to increase the danger of more fires and more climate crises for California communities.

* Contains a scorecard of the hedge fund managers now seeking huge profits from speculation in PG&E shares and debt, and their track records of profiting from human misery, including recent attacks on Puerto Rico and General Motors.

* Shows how hedge fund control of PG&E almost certainly will drive up utility rates, hitting homeowners, renters and small businesses in the pocketbook.

* Demonstrates how hedge fund control of PG&E will harm California's efforts to move toward environmental sustainability and a clean energy future, due to their predatory, profit-driven business model.

"This report exposes greed at its worst," said AFT President Randi Weingarten. "We know this playbook: Big company puts a community at risk and then goes bankrupt, only to be preyed upon by billionaires trying to profit off the insecurity off their financial ruin. This is a story of rampant greed and structural deficiencies in the economy, which incentivize the hollowing out of our communities for short-term financial gain and allow the super-wealthy to profit at the expense of everyday people.

"This doesn't help teachers and nurses rebuild their homes in fire-ravaged California--it just makes them more vulnerable the next time disaster strikes, because the companies that are tasked with keeping them safe are more concerned with their own bottom line."

Michael Kink, executive director of the Strong Economy for All Coalition and a leader of the Hedge Clippers campaign, said, "Hedge funds have one goal in their effort to control PG&E: ensuring short-term payouts to billionaire hedge fund managers. They want money for themselves--not for investments in safety or cheaper zero-carbon energy. And they'll do just about anything to get the money."

The new report calls on PG&E shareholders to block hedge fund control of the company by voting against the three proposed hedge fund board members. It also calls on Washington, D.C., lawmakers to pass legislation that amends the 1940 Investment Company Act and the 1996 National Securities Market Improvement Act to push risky and speculative hedge fund managers back into limited business lines and limit investment from pension funds, endowments and other institutional investors.

Such legislation would fix legislative loopholes that have allowed hedge funds to evolve from niche firms making speculative investments for high net worth individuals, to giant pools of largely unregulated capital that have had a decidedly harmful impact on workers and communities.

The full report is available here (http://hedgeclippers.org/hedge-papers-no-67-vulture-hedge-funds-attack-california/).