A boy walks through the remains of his home, one of thousands destroyed by the Camp Fire in Paradise, California, in November 2018, which was caused by PG&E electric lines. Josh Edelson/AFP/Getty
For indispensable reporting on the coronavirus crisis and more, subscribe to Mother Jones’ newsletters.This story was published originally by ProPublica, a nonprofit newsroom that investigates abuses of power. Sign up for ProPublica’s Big Story newsletter to receive stories like this one in your inbox as soon as they are published.
It was a last-ditch effort to save a scofflaw business. For years, the owners of Bay Area Concrete Recycling had run an unlicensed dump in the city of Hayward, California. Neighbors complained about dust blowing off a massive pile of crushed concrete. A city water pollution expert warned the runoff could be contaminating San Francisco Bay. City planners had fined the company nearly $60,000 and ordered it shut down.
The company appealed in hopes of winning a permit to operate. But at a city Planning Commission meeting in November 2018, commissioners were unmoved.
“At the end of the day, this is really an illegal business that’s asking to continue operating,” Commissioner Gary Patton said at the meeting, “and it’s been illegal since 2013.”
The unanimous vote to deny the permits was a potentially devastating blow to Bay Area Concrete. But that same day, a spark ignited brush in the remote foothills of the Sierra Nevada in Northern California. The blaze grew into the most destructive wildfire in state history and destroyed the town of Paradise. More than 80 people were killed.
It turned out to be a lucrative business opportunity for Bay Area Concrete—thanks to Pacific Gas & Electric, the giant Northern California utility company whose electric lines had caused the conflagration.
Within weeks of Bay Area Concrete losing its battle before the Hayward Planning Commission, PG&E had hired the company to build and run a dump outside of Paradise, 180 miles to the north. Trucks began dumping potentially toxic slurry at the disposal site, which did not require environmental review as an emergency project and helped speed cleanup operations.
Operating under the name Slurry Waste Solutions, the company profited handsomely. After contracting for the Paradise cleanup, Bay Area Concrete’s annual revenue jumped from $16.5 million to $43.5 million, according to documents filed with a lease application.
In selecting Bay Area Concrete for the environmentally sensitive job, however, PG&E ignored the firm’s history of illegal dumping and conflict with regulators, as well as its employment of a senior manager connected to environmental crimes, according to interviews and a review of court records, public documents and business filings by the Bay City News Foundation and ProPublica.
The decision would prove the latest in a series of dubious choices by PG&E that have raised questions about the utility’s commitment to safety and the environment, the review found. Since 2010, the power and gas company has been found responsible for 117 deaths and hit with more than $15 billion in fines and damages for failing to maintain gas and power lines that stretch across California. On June 16, PG&E CEO and President William Johnson pleaded guilty on behalf of the company to 84 counts of felony manslaughter and one count of failing to maintain the lines that caused the fire near Paradise, known as the Camp Fire. The company, which declared bankruptcy in January 2019 after the fire, is expected to emerge from it as soon as Wednesday.
This February, as the news organizations began investigating, PG&E publicly accused Bay Area Concrete of defrauding the utility and bribing PG&E employees. Bay Area Concrete’s contract with PG&E was terminated, and the company is under criminal investigation.
Corporate records unearthed by the news organizations show that while the fire still burned in Paradise, an attorney for Bay Area Concrete’s owners registered a limited liability company at the business address of another one of the owners’ companies. Ownership of that new company was later transferred to a PG&E employee who oversaw Bay Area Concrete’s work in Paradise. The employee, Ryan Kooistra, lost his job as PG&E went public with the allegations, according to industry insiders. Kooistra did not respond to attempts to contact him by phone, mail or social media.
In response to a long list of questions, PG&E provided a brief statement that did not directly address how warning signs like the company owners’ long conflict with the city of Hayward and participation in an illegal dumping operation were overlooked.
“PG&E has initiated an internal review to determine why this wasn’t detected earlier, and we will be enhancing our protocols to ensure this doesn’t happen again,” a PG&E spokesperson wrote.
In multiple interviews with the news organizations, Bay Area Concrete officials denied the firm had done anything wrong.
Chris Packal, Bay Area Concrete’s operations manager, downplayed the citations the company received from regulators in Hayward and other cities as minor corrections. He said the company may have overlooked some details as it grew its business.
“We’re a hypergrowing company, we were exploding,” Packal said. “Everything was focused on the core competency of what we do.”
Bay Area Concrete CEO Kevin Olivero declined to be interviewed. In a statement posted to the company’s website, he accused PG&E of falsifying accusations to avoid paying bills.
PG&E bankruptcy filings from March 2019 showed that the utility owed Bay Area Concrete nearly $4 million. Olivero wrote that PG&E owed the company more than $14 million. He said the utility had offered to pay $9.3 million after the company made a statement accusing PG&E of trying to avoid outstanding fees.
“It is unfortunate that you decided to terminate our contract without first consulting us or making sure that your purported grounds had merit,” he wrote.
Olivero also said his firm had saved PG&E and its customers nearly $80 million by setting up the dumpsite outside of Paradise.
“This is in addition to avoiding the significant negative environmental impacts that trucking and processing these materials elsewhere in the state would have caused,” he wrote.
One Hundred Trucks a Day in the Wetlands
Bay Area Concrete is part of a sprawling network of hauling, recycling and construction companies owned by Bay Area couple Preet Johal and Yadwinder “Kevin” Singh. In 16 years, the pair’s business empire has grown from a single trucking firm to more than a dozen companies operating in 11 cities throughout the West Coast.
The company declined to make Singh or Johal available for an interview. Attempts to reach the couple through their attorney, phone calls, social media and mail were unsuccessful.
Those who have met the pair describe them as smart and friendly. They throw lavish holiday parties for their employees and clients and sometimes give expensive presents, like $1,000 gift cards. In business meetings, Singh tends to take the reins, while Johal listens quietly, occasionally asking a question. Their extensive network of businesses has funded an upscale lifestyle: In 2014, they purchased an 8,500-square-foot home on a wooded ridge outside of Pleasanton for $3.6 million. Listing photos showed a home gym, billiard room and in-ground swimming pool with panoramic mountain views.
They founded their first hauling company, Economy Trucking Services, in 2004. Since 2012, most of their businesses have operated out of Hayward, a Bay Area suburb of Oakland. That year, the couple used a holding company to buy a property at 24701 Clawiter Road.
The site sits on a narrow street dotted with other office buildings and industrial facilities. A slumping chain-link fence with barbed wire surrounds most of the property. A small white sign on the fence reads “Slurry Waste Solutions” in orange.
Soon after buying the property, Singh applied to use it to recycle concrete, but Hayward officials opposed the plan. In November 2013, Hayward officials received a complaint alleging that Singh and Johal had ignored the city and begun operating the recycling facility without a permit. Concrete dust was covering neighbors’ cars.
In the summer of 2014, Economy Trucking used an illegal dump site in Newark, a nearby suburb, to get rid of thousands of tons of concrete and asphalt, court records show. Singh and Johal negotiated use of the site through Olivero, whom they would later hire to run their flagship company.
Singh and Johal met Olivero for lunch along with his boss, Jim Lucero, at a high-end restaurant in Oakland. Lucero, who pleaded guilty in a 2008 case involving the payment of bribes to landfill operators in San Jose, told one of Johal and Singh’s employees that he had permission to dump on a national wildlife refuge site on the shores of San Francisco Bay.
Singh and Johal wanted to negotiate an exclusive contract to dump on the property. But Lucero wasn’t interested. Still, over the next six weeks, Singh and Johal’s Economy Trucking Services was one of the most prolific dumpers at the site, dumping up to 100 truckloads every day, each weighing between 10 tons and 12 tons, according to court transcripts.
Police shut down the site in September 2014. Not only did Lucero not have permission to dump there, but it was on wetlands adjacent to the wildlife refuge, which is home to endangered salt marsh harvest mice and burrowing owls. The U.S. Environmental Protection Agency opened an investigation. On March 15, 2016, Lucero was indicted for violations of the federal Clean Water Act.
Olivero reached an agreement with federal prosecutors to testify against Lucero. During the 2018 trial, he testified that Lucero had hired him in June 2014 to run the site. His duties included collecting money from contractors dumping dirt and demolition debris and using a bulldozer to spread the dumped material. He received $10 to $15 per truckload. A jury convicted Lucero, and he was sentenced to 30 months in prison.
After the site was shut down, Singh and Johal hired Olivero to be the CEO of Bay Area Concrete.
“These Guys Have Been a Problem”
In the same year they hired Olivero, Johal and Singh expanded into the business of disposing slurry waste collected by specialized disposal trucks known as hydrovacs.
Hydro excavation trucks use pressurized water to dig around delicate equipment and avoid accidentally rupturing a gas pipeline or destroying buried wires. A powerful vacuum sucks up the slurry created in the process.
But slurry can be tough to get rid of. Adding water to dirt makes it illegal to take to ordinary landfills, since dumping it can allow common pollutants like lead or hydrocarbons ￼to seep into groundwater.
In August 2017, Bay Area Concrete hired an environmental engineer, Tim Bauters, to oversee the process. Bauters, who would become the company’s top environmental officer, brought with him impeccable credentials. Originally from Belgium, he earned his bachelor’s and master’s degrees at KU Leuven in his home country and then a doctorate in soil and water engineering from Cornell University in 1999. In addition to his work with Bay Area Concrete, Bauters did training for the California Stormwater Quality Association.
By then, Singh and Johal’s Hayward site included the slurry disposal operation, the hauling business and the unpermitted concrete recycling business. Johal and Singh continued to clash with city regulators over the concrete recycling. A mound of crushed concrete got bigger and bigger and workers could no longer reach the top of it with hoses to control the dust.
Elisa Wilfong, who oversees Hayward’s water pollution investigations, said her inspectors issued Bay Area Concrete repeated verbal warnings since 2015. When those did not work, they issued three violations in 2018 for allowing concrete dust into the street, where it clogged storm drains. Dust from recycled concrete, she said, may have polychlorinated biphenyls, or PCBs, carcinogens that were banned in 1978. If the dust was allowed to drain into the bay, it could be harmful to fish.
“I’ve spoken to [Bauters] several times, we have a very different opinion about what is appropriate discharge onto the street and what is not,” Wilfong said at a Hayward Planning Commission meeting in 2018. “You need to know what you need to do to control this dust. Clearly what you are doing now is not working. So you need to do more. Something. Anything. And it’s not being done.”
T.J. Simmons, then-senior vice president of ConXtech, a neighboring business, wrote a letter to the city in 2018 to complain. He provided photos showing that the concrete stockpile had grown so large it leaned against the fence between the two properties, bulging over the boundary. He wrote he was concerned rocks would tumble onto his property and hit someone.
In an interview, Simmons said that dust blowing into the ConXtech factory, where the company manufactures steel structures for health care facilities and office buildings, would interfere with their machinery. “It was pretty much out of control the entire time they were in operation,” he said. “These guys have been a problem.”
Between December 2016 and October 2018, the city levied $59,500 in fines against Bay Area Concrete. In 2018, the company applied for a temporary permit to continue operating while it moved to a different facility. City staff denied the application. Bay Area Concrete appealed.
Neither Singh, Johal nor Olivero attended the Hayward Planning Commission hearing on Nov. 8, 2018. City staff described broken promises, obstruction and apparently willful violation of the law.
Bauters spoke in defense of Bay Area Concrete, arguing that city staff had not responded to the company’s attempts to come into compliance.
During public comment, Gerald Carroll, an attorney for another neighbor, D.W. Nicholson, pleaded with the commission to deny the appeal, citing concerns about the health of their employees from dust. Bauters sat behind him, shaking his head and rolling his eyes.
“They have obviously factored into their business model that they can afford these fines and they can afford these violations because they’re making enough money,” Carroll said. “Imagine how cavalier they will be if you approve this permit.”
PG&E Hires Bay Area Concrete
By this time, Johal and Singh’s companies had expanded rapidly. In 2017, Bay Area Concrete opened new slurry waste disposal facilities in Richmond and Sacramento. In 2018, Singh and Johal acquired a property in Tracy in California’s Central Valley and opened new facilities in Seattle and San Jose. In 2019, they leased land on Treasure Island in the San Francisco Bay for concrete recycling.
Some of those sites ran afoul of regulators as well. In July 2018, the Central Valley Regional Water Quality Control Board issued a notice of noncompliance saying that the Sacramento facility, still under construction, lacked proper state permits. The county cited the company for ￼illegal importation of dirt used in construction.
The same month, San Jose code enforcement officials cited the company for operating a recycling transfer facility without permits. In October, the Washington Department of Ecology ordered the company to keep its site clean and halt discharge of wastewater to storm drains.
Singh and Johal’s companies also have a history of not cooperating with inspectors. In Richmond, a Contra Costa County Environmental Health Division inspector was asked to leave while investigating complaints of an unpermitted solid waste facility. A sign outside the Sacramento location warns state, city and county inspectors and code enforcement officers that they are not allowed to pass and must call for an escort. “Absolutely no photos or videos taken on these premises without permission,” it says.
Packal characterized these issues as minor. He said some facilities had been incorrectly ordered shut down. He argued that there were legitimate differences in opinion over what zoning allowed for the site in Hayward.
“It was definitely a battle with the city the whole time,” Packal said.
But while the city and Bay Area Concrete’s neighbors sought to shut the company down, another wanted to do business.
PG&E operates a service center across the street from Bay Area Concrete’s main facility in Hayward. The sprawling complex includes parking for utility trucks, a repair station, outdoor storage for large spools of wires, pipes and other equipment, and a compressed natural gas vehicle fueling station.
One day, a PG&E employee crossed the street and offered Bay Area Concrete a contract to use street sweeping trucks to clean the PG&E facility, according to Packal. It paid a low hourly rate, but it was a steady contract that soon expanded to include sweeping PG&E sites from Sacramento to Monterey and east into the Central Valley.
It is not clear whether or how PG&E vetted Bay Area Concrete before hiring the firm. But the same morning Hayward’s Planning Commission officially denied Bay Area Concrete’s appeal to continue operating, a PG&E employee called 911 to report a fire in a heavily wooded area by the 115,000-volt Caribou-Palermo transmission line.
Driven by gusts of up to 36 mph, the fire was heading straight for Paradise. And soon PG&E would be doing more business with Bay Area Concrete than ever.
The Camp Fire Clean Up
The wildfire grew rapidly, driven by winds that fanned flames across the region. By 8 a.m., local authorities issued evacuation orders for Paradise’s roughly 26,000 residents.
The blaze burned for weeks, destroyed 18,804 structures and killed 85 people. Entire neighborhoods were reduced to ash and rubble. Over the next year, crews working for the state Department of Resources Recycling and Recovery removed nearly 3.7 million tons of debris, including 673,244 tons of contaminated soil.
To assist in the cleanup, PG&E hired a fleet of as many as 180 hydrovac trucks, which flocked to Paradise from as far away as Kansas City and Montana.
From Paradise, the truck operators would have to drive long distances to dump their loads, to places such as Chico, Sacramento or Tracy, slowing down the work and making it more expensive. Kooistra, a PG&E supervisor in charge of liquid waste disposal whose area included Paradise, found a solution.
Under Kooistra’s supervision, PG&E hired Bay Area Concrete to build a new slurry disposal center at a former Waste Management facility in Paradise.
Work began on the site in December. Once it was up and running, trucks could dump their slurry in 20 minutes and leave with a clean tank of water. Packal said the arrangement resulted in substantial savings for PG&E in the labor and gas for trips to faraway disposal sites.
“We built that site in Paradise for [PG&E], growing an entire site dedicated to rebuilding Paradise,” Packal said. “We were doing a ridiculous amount of volume at a much lower rate than what they could possibly have done.”
Meanwhile, Kooistra and Bay Area Concrete grew a lucrative business relationship separate from PG&E, according to records and interviews.
Days before the Paradise fire was officially declared contained on Nov. 25, an attorney for Singh and Johal, Steven Benjamin of Sacramento, filed papers with the state for a new real estate company, Regal Rose LLC. In state filings, its business address was listed as 1580 Chabot Court in Hayward, where another of Singh and Johal’s companies is located.
In July 2019, a new filing for Regal Rose LLC listed its managers as Kooistra and his wife, Celia, a real estate agent and swimsuit model.
Records show that Kooistra owned another company, CCI Management LLC, which was founded in June 2019. The company, Packal said, had a truck to haul water from site to site. The driver would pick water up from PG&E yards to haul to Bay Area Concrete’s Paradise facility for process and disposal.
That summer, PG&E expanded its business with Bay Area Concrete. Singh and Johal built a slurry dumpsite at a PG&E substation in Petaluma, a small town about 40 miles north of San Francisco.
The dumpsite proved its worth in October 2019, when a 77,000-acre blaze known as the Kincade fire broke out north of Santa Rosa. PG&E dumped truckloads of slurry waste as they began digging up damaged gas lines.
PG&E also hired another company owned by Singh and Johal, PMK Contractors, to help build its command center for the fire, according to Packal.
An Abrupt Ending
On Feb. 24, 2020, PG&E released the memo from CEO William Johnson to the media. In it, Johnson accused Bay Area Concrete of fraud by overcharging PG&E and bribery by paying “large sums of money and gifts” to two PG&E employees who were no longer with the company.
On March 3, PG&E sent a second internal memo clarifying that it had also ended its business relationships with Johal and Singh’s other companies, including Bay Area Hydrovac, Economy Trucking, PMK Contractors and Slurry Waste Solutions.
“We have confronted the two PG&E employees supervising BAC with the evidence that they received large sums of money and gifts from the vendor; those employees are no longer with the company,” Johnson wrote. “We have already redirected the work to new vendors to make sure our efforts rebuilding in Paradise and Butte County will not be delayed.”
Neither the memos nor media reports identified the employees. But two industry sources with knowledge of Bay Area Concrete’s work in Paradise identified Kooistra as the PG&E employee accused of receiving gifts. Kooistra resigned and his supervisor, superintendent of gas transmission and distribution Ron Huggins, also no longer works at PG&E, they said. Huggins did not respond to written questions mailed to his home in Auburn.
Packal confirmed that Kooistra lost his job over the allegations. Kooistra sold his home in California in February and returned to Arizona, where he founded a pool cleaning business in May.
Butte County District Attorney Michael Ramsey confirmed that PG&E contacted his office regarding the allegations and said he is waiting for further information from the utility. Johnson’s memo said that PG&E had alerted the California Public Utilities Commission, which oversees PG&E for the state, but CPUC officials said there was no investigation.
Packal denied that Bay Area Concrete had paid out any bribes. He said the company received only a day’s warning when PG&E canceled its contracts and released the CEO’s memo.
“It stunned us,” Packal said. “We were a little concerned because they owe us a substantial amount of money. They have since only paid us a portion of that. I don’t know what they’re going to do.”
A Muddy Fight
When Bay Area Concrete faced tough questions from regulators, Bauters, the company’s environmental officer, could usually smooth things over. However, on Feb. 14, he died in what investigators said was a snowboarding accident in Oregon’s backcountry slopes. (Another skier died on the same slope that same weekend.)
But even without Bauters, Bay Area Concrete says its fight with PG&E is just beginning.
Packal said PG&E attempted to use equipment Bay Area Concrete had installed on PG&E property in Petaluma, and the company sent PG&E a cease and desist letter.
Packal also alleged that PG&E-contracted hydrovac trucks were dumping illegally. He filed complaints with the Regional Water Quality Control Board regarding five different disposal sites. PG&E then suspended business with the five sites, all competitors of Bay Area Concrete, pending the outcome of the water board’s investigation.
The water board declined to comment or confirm the existence of any ongoing investigations.
“We think we got completely screwed by PG&E,” Packal said. “Their accusations are wrong, and they’ll wind up paying us one way or another.”
This article was produced in partnership with the Bay City News Foundation, which is a member of the ProPublica Local Reporting Network.