Former Ukrainian Prime Minister Sentenced to 97 Months in Prison Fined $9 Million for Role in Laundering $30 Million of Extortion Proceeds

U.S. Attorney’s OfficeNovember 19, 2009

Northern District of California(415) 436-7200

SAN FRANCISCO—Pavel Ivanovich Lazarenko was sentenced yesterday to 97 months in prison, ordered to pay a $9 million fine and forfeit $22,851,000 and various specified assets resulting from his money laundering convictions, First Assistant United States Attorney David Anderson announced. The court deferred decision on restitution.

“The U.S. Attorney’s Office has maintained throughout this case that Pavel Lazarenko misused his office to extort tens of millions of dollars from a Ukrainian citizen, lied to the people of Ukraine about his assets, and abused our banking system in an attempt to establish a safe haven in the United States,” First Assistant U.S. Attorney Anderson said. “Yesterday’s sentence should send a strong message to corrupt foreign public officials—they will be held accountable if they misuse their office and try to make safe harbor in the United States.”

After a 10-and one-half week trial, Lazarenko was convicted by a jury on June 3, 2004, on 29 counts of money laundering, wire fraud, and interstate transportation of stolen property. During the trial, evidence showed that starting in the early 1990s, when he was the governor of an industrialized region in Ukraine, Lazarenko abused his official authority to extort Ukrainian businessman Peter Kiritchenko of 50 percent of his profits. Over time, and as Lazarenko rose in office to become the Prime Minister, Kiritchenko paid Lazarenko $30 million, which was half of Kiritchenko’s $60 million in profits. At Lazarenko’s direction, Kiritchenko assisted him in laundering the proceeds of that extortion through accounts in Poland, Switzerland, Antigua, and, ultimately, the United States, where Lazarenko used a shell company to conceal his purchase of a multi-million dollar residence in Marin, Calif. Kiritchenko pleaded guilty to one count of receipt of stolen property and testified against Lazarenko.

After trial, the court dismissed 15 counts and sentenced Lazarenko on 14 counts. The Ninth Circuit Court of Appeals later affirmed all of Lazarenko’s money laundering convictions (eight counts) dismissed the other charges and vacated the original sentence. Yesterday’s sentencing was on the eight counts of money laundering. Because the judge who presided over the trial and initial sentencing, the Honorable Martin J. Jenkins, left the federal bench, the case was reassigned to the Honorable Charles R. Breyer, who handled the resentencing.

“We are pleased Mr. Lazarenko has been held accountable for his crimes,” said FBI Special Agent in Charge Stephanie Douglas. “The wanton abuse of official power undermines people’s faith in their elected leaders and the effectiveness of any government. In this age of internationalization, we must diligently pursue corruption wherever it takes hold to help ensure public officials act for the benefit of their constituency, not for their own personal gain.”

“Uncovering the trail of money was key in identifying the corrupt actions of Mr. Lazarenko,” said Scott O’Briant, Special Agent in Charge, IRS Criminal Investigation. “If you put illegal money gain ahead of obeying the law, you can expect to be investigated, prosecuted and sent to prison."

This case is the first prosecution of a foreign leader for laundering the proceeds of extortion through financial institutions in the United States.

Peter B. Axelrod, Stephanie Hinds, Patricia Kenney and Hartley West are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of Wilson Wong, Alicia Chin, and Carolyn Jusay. The Department of Justice Organized Crime and Racketeering Section supported this prosecution. The prosecution is the result of a six-year investigation by the FBI and IRS.

Further Information:

Case #: 00-284 CRB

This content has been reproduced from its original source.

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PG&E Announces New IT Officers

PG&E Announces New IT Officers

Release Date: August 06, 2015
Contact: PG&E External Communications (415) 973-5930

SAN FRANCISCO, Calif. — Pacific Gas and Electric Company (PG&E) today announced the appointments of Bernard Cowens as vice president and Chief Information Security Officer and Kathleen Kay as vice president, Business Technology.

Cowens and Kay, who were both elected by the Board of Directors as officers of the utility, will report to Senior Vice President and Chief Information Officer Karen Austin.

"Our ability to effectively manage and protect information is vitally important and challenging. We are very pleased to welcome Bernie and Kathy, who both have exceptionally strong backgrounds, to the PG&E team," said PG&E Corporation Chairman and CEO Tony Earley.

Cowens joins PG&E, effective Aug. 24, from his role as Chief Information Security Officer at First American Financial Corporation. Cowens has extensive experience in information technology and cyber and physical security and previously held senior and executive-level roles in the private sector and the military.

Cowens served in the military from 1980 to 2000, completing his service as Chief Technology Officer and Chief Security Officer for the Defense Intelligence Agency in Los Angeles. Thereafter, he held executive-level roles in information technology with SafeNet Inc., where he was Chief Information Officer; and PricewaterHouseCoopers LLP, where he was director of risk and security advisory services. He subsequently served in senior information security roles for Experian and the Automobile Club of Southern California before joining First American Financial Corporation.

He holds a bachelor's degree in information systems management from the University of Maryland and a master's degree in management information systems from Bowie State University.

Kay, in her new role at PG&E, effective Sept. 1, will be responsible for business technology delivery, primarily focused on PG&E’s strategic solutions such as mobile, data analytics and customer applications.

Kay had a career spanning more than two decades at General Motors. She began as an associate programmer and systems analyst and worked in progressively more responsible roles, concluding with her role as director of application development and support for OnStar.

She served as senior vice president of business technology services for Comerica Bank in Michigan from 2007 to 2012. Kay left Comerica to serve as senior vice president of application services for SunTrust Bank in Atlanta, where she also served as the executive chair for diversity.

Kay holds a bachelor's degree in computer science from Wayne State University and a master's degree in engineering science from the Rensselaer Polytechnic Institute.

About PG&E

Pacific Gas and Electric Company, a subsidiary of PG&E Corporation(NYSE:PCG), is one of the largest combined natural gas and electric utilities in the United States. Based in San Francisco, with more than 20,000 employees, the company delivers some of the nation's cleanest energy to nearly 16 million people in Northern and Central California. For more information, visit www.pge.com/ and www.pge.com/en/about/newsroom/index.page.

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Pete Bennett, PG&E Ethics Program by WilmerHale - The Baloney Files

PG&E TAKES ACTION TO ADDRESS EX PARTE COMMUNICATION ISSUES IDENTIFIED IN SELF-REPORT TO CPUC TODAY; PLEDGES 'NO EXCUSES' COMPLIANCE


Release Date: September 15, 2014

Contact: PG&E External Communications (415) 973-5930

San Francisco, Calif.— Pacific Gas and Electric Company (PG&E) today notified the California Public Utilities Commission (CPUC) that an extensive internal review of nearly five years of emails between the company and officials at the Commission has identified a number of instances in which PG&E believes it violated the CPUC's rules governing communications with the state regulator in the pending Gas Transmission & Storage rate case.

The communications reported to the CPUC today occurred over a three-week period in January, 2014, during which time a number of e-mails were sent to the CPUC concerning the assignment of administrative law judges and commissioners to the Gas Transmission & Storage rate case. These e-mails may have violated CPUC rules prohibiting certain ex parte communications -- meaning communication with decision-makers that takes place without the knowledge of all parties to a proceeding.

These communications were identified after the company voluntarily chose to broaden its internal review of any potential ex parte communications well beyond those communications referenced in a San Bruno motion filed last July. The expanded review included more than 65,000 emails to and from the Commission since early 2010.

Actions to Address

"As a company, we must be committed to complying with both the letter and the spirit of the law and PG&E's own Code of Conduct at all times. No excuses. That is, and must be, the standard for our behavior individually and as a company," Chairman and CEO Tony Earley and President Chris Johns said in a joint letter to employees today.

They outlined actions resulting from the internal review process:
Three officers will no longer be employed by the company. They are the senior vice president of regulatory affairs, vice president of regulatory relations, and vice president of regulatory proceedings and rates.
PG&E has appointed Steve Malnight as senior vice president of regulatory relations. Previously, Malnight was vice president of customer energy solutions. Malnight will report to PG&E President Chris Johns.
The company is creating the new role of chief regulatory compliance officer, whose mandate will be to help oversee compliance with all requirements governing PG&E’s interactions with the CPUC. The position will report to Chairman and CEO Tony Earley and to the Audit Committee of the PG&E Board of Directors.
The company has engaged Ken Salazar, a partner in the WilmerHale law firm, as special counsel on regulatory compliance matters to assist in developing a best-in-class regulatory compliance model. Salazar has deep experience in regulatory and energy matters. Among his roles has been service as Secretary of the U.S. Department of the Interior, U.S. Senator from Colorado, Attorney General of Colorado and Executive Director of the Colorado Department of Natural Resources.
PG&E plans additional, mandatory training for all employees who routinely interact with PG&E's regulators.


Letter to Employees


In their joint letter announcing these actions to employees, Earley and Johns said, in part:


"As a company, we must be committed to complying with both the letter and the spirit of the law and PG&E's own Code of Conduct at all times. No excuses. That is, and must be, the standard for our behavior individually and as a company.


"We all have a responsibility to know, understand and comply with all of the rules, including PG&E's own Code of Conduct, as they apply to our respective roles.


"In these instances, there was behavior that clearly failed to meet that standard, and we greatly regret that. Even absent an ex parte violation, these actions did not represent the company in the manner we expect of our officers. As a result, we took immediate and definitive action. We’re continuing this review and will take additional actions if warranted.


"Beyond that, it is also clear that we need to take additional steps to raise the level of professionalism and propriety in our interactions with regulators. While many of us have felt that criticism characterizing PG&E's relationship with the CPUC as 'cozy' has been unfair, we need to acknowledge that we have earned some of the criticism and we need to take action to change that.


"As we have said previously, we have been very disappointed by the tone of some emails that have been reviewed. While not violations of regulations, they are unprofessional and unacceptable.




"We've made truly incredible progress in terms of our operational focus and in creating a strong safety culture at PG&E. But to be successful, it's also critical that our culture demonstrates an unfailing commitment to conducting our business in compliance with both the letter and spirit of the law and our Code of Conduct and with a high degree of professionalism."


PG&E's filing with the CPUC can be read here.


About PG&E




Pacific Gas and Electric Company, a subsidiary of PG&E Corporation (NYSE:PCG), is one of the largest combined natural gas and electric utilities in the United States. Based in San Francisco, with more than 20,000 employees, the company delivers some of the nation’s cleanest energy to nearly 16 million people in Northern and Central California. For more information, visit www.pge.com/ and https://www.pge.com/about/newsroom/.

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Pete Bennett - PG&E Witness

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Ethics and Compliance - A World Class Lie

Ethics and Compliance

At PG&E, we are committed to complying with both the letter and the spirit of the law, and our own Code of Conduct, at all times. We hold ourselves to these standards in all actions, both as a business and as individuals. To accomplish this, PG&E promotes a culture in which employees are empowered to raise concerns and are supported by a structure to ensure compliance.

On this page:

• Our Approach
• 2016 Milestones
• Measuring Progress
• Looking Ahead

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Our Approach

Compliance and ethics at PG&E are managed on three levels:

Business-Wide

Within senior leadership, compliance and ethics are managed by the Senior Vice President, Chief Ethics and Compliance Officer and Deputy General Counsel (CECO), who reports to the PG&E Corporation Chief Executive Officer (CEO) and President. The CECO has additional reporting responsibility to the Audit Committees of the PG&E Corporation and Pacific Gas and Electric Company Boards of Directors, and the Compliance and Public Policy Committee of the PG&E Corporation Board.

The CECO is responsible for:

• Building a best-in-class compliance and ethics program and managing its implementation,
• Overseeing enterprise-wide programs for compliance monitoring, reporting, assessment and remediation,
• Strengthening ethics- and compliance-related training,
• Reinforcing PG&E’s compliance and ethics culture, and
• Identifying areas of compliance and ethics risk, and developing action plans to prevent, detect and correct risks and issues.

As part of our enterprise-wide strategic planning process, PG&E’s senior executives from every line of business meet annually to review and assess our compliance obligations, including establishing focus areas for the year. Broadly, this process enables PG&E to assess compliance risks, determine the best way to address them and then allocate resources to successfully manage our work. In 2016, we focused on strengthening the integration and management of regulatory compliance risk and operational risk.

In addition, we developed and implemented a standardized framework for PG&E’s lines of business to enhance their respective compliance and ethics programs. The framework is composed of eight elements derived from the U.S. Federal Sentencing Guidelines. The framework also provides an objective assessment tool to measure PG&E’s overall compliance program. We completed an initial assessment of each line-of-business compliance program in late 2016, and established maturity targets for 2017 and 2018.

Two management-level governance bodies help drive and coordinate our compliance activities:

• Compliance and Ethics Committee: Comprised of senior officers, this committee provides leadership, strategic guidance and oversight of PG&E’s compliance and ethics program and works to promote an organizational culture committed to integrity, ethical conduct and compliance with all applicable laws, regulations and company requirements.
• Compliance and Ethics Leadership Team: This cross-functional team of non-officer compliance leaders within PG&E is accountable for promoting the effectiveness of PG&E’s compliance and ethics program by coordinating across the lines of business on strategy, goals and programs, as well as sharing best practices.

To provide guidance on conduct requirements, PG&E maintains codes of conduct for the following:

• Employees
• Boards of Directors
• Contractors, Consultants and Suppliers

In addition, we maintain a Chairman’s Ethics Council—composed of management and union-represented employees at multiple levels—that helps raise and address issues relating to ethics and conduct at PG&E. The Council meets regularly throughout the year, including one meeting that is open to all employees.

Boards of Directors

Certain PG&E Corporation and Pacific Gas and Electric Company Board committees have specific oversight responsibility for compliance management in their respective substantive areas:

ENTITY	RISK OVERSIGHT RESPONSIBILITIES
Compliance and Public Policy CommitteeFootnote1a	Coordinates the compliance-related oversight of the various committees of the Boards, with respect to: The companies’ compliance and ethics program, Compliance with laws, regulations and internal policies and standards, and Internal or external compliance reviews or audits. Oversees public policy, sustainability and corporate responsibility issues that could affect customers, shareholders or employees
Audit Committees	Oversees and monitors compliance with legal and regulatory requirements, in concert with other Board committees
Nuclear, Operations and Safety CommitteeFootnote1b	Oversees matters relating to safety, operational performance and compliance issues related to Pacific Gas and Electric Company’s nuclear, generation, gas and electric transmission, and gas and electric distribution operations and facilities

• 1. Refers to committees of the PG&E Corporation Board of Directors only. ▲1a, 1b

For a full description of Board committee oversight responsibilities, please see the webpages of the Boards of Directors of PG&E Corporation and Pacific Gas and Electric Company, as well as our 2017 Joint Proxy Statement.

Lines of Business

Each of PG&E’s lines of business has employees who are responsible for implementing the line of business’s compliance program. The line of business compliance programs are overseen by the respective senior officer for each line of business.

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2016 Milestones

In 2016, PG&E focused on enhancing our governance structure and “speak up” culture, which aims to create a work environment where everyone feels safe to express their views and concerns—and where everyone is confident that those concerns will be heard and taken seriously. Highlights included the following:

• Updated our compliance program framework to create a road map for each line of business. This model will be used to assess and monitor each line of business’s compliance program.
• Improved our misconduct investigations and reporting process. The redesigned, centralized process promotes thorough and timely investigations of all allegations of misconduct; centralized oversight and record-keeping; consistent outcomes on an enterprise-wide basis; improved tracking and reporting on trends and lessons learned; and follow-up with employees who raise an issue.
• Promoted a “speak up culture.” All employees were invited to attend two events focused on compliance and ethics:
  • Chairman’s Ethics Council: PG&E Corporation’s Chairman, CEO, and President (at that time) hosted the annual all-employee meeting of the Council. More than 2,500 employees participated in the meeting, which featured guest speaker Keith Darcy, one of the world’s foremost experts in corporate compliance and ethics.
  • Compliance and Ethics Week: The theme was Speak Up in Action and featured a keynote with Cynthia Cooper, an internationally recognized speaker on ethical leadership and best practices in corporate governance.
• Surveyed employees on compliance and ethics. PG&E’s biennial employee survey included an index of compliance- and ethics-related questions, which provided us with an assessment of PG&E’s speak-up culture.

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Measuring Progress

In 2016, PG&E’s annual compliance and ethics training, which we aim for all employees to complete annually, focused on speaking up. Specifically, the training was designed to build awareness of how to enhance an open communication environment; improve understanding of how to appropriately handle misconduct reports, as measured by the volume of calls to our Compliance and Ethics Helpline; and help employees understand how our attitudes and actions may inadvertently foster perceptions of retaliation. Video vignettes were based on real-world issues that supervisors and their teams might face.

In addition to the annual compliance and ethics training, management employees are required to complete Code of Conduct training and certify that they have read, understand and will comply with our Employee Code of Conduct.

COMPLIANCE AND CONDUCT TRAININGFootnote1

	2014	2015	2016
Compliance and Ethics Training	99.8%	99.9%	99.4%
Code of Conduct Training	99.8%	99.8%	99.8%

• 1. For a variety of reasons, a statistically small number of PG&E’s employees are unable to attend a training session in any calendar year. ▲

The volume of Helpline calls received in 2016 was roughly 4.0 calls per 100 employees, falling within the normal range of 0.3 to 10.0 calls per 100 employees, according to a benchmark report prepared by NAVEX Global. The total call volume increased 5 percent over 2015, with a 3 percent increase in calls requesting guidance. This suggests that more employees are turning to the Helpline for advice before taking actions that might be in conflict with PG&E’s Code of Conduct, policies, procedures or the law.

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Looking Ahead

To achieve PG&E’s commitment to establish a best-in-class compliance and ethics program, we intend to drive continuous improvement by:

• Continuing to encourage a speak-up culture through annually updated training and communications campaigns, and by leveraging results from our employee survey,
• Revising PG&E’s Employee Code of Conduct,
• Engaging our governance bodies to develop and drive cross-organizational enhancements to PG&E’s compliance and ethics program,
• Strengthening our processes to ensure that all allegations of employee misconduct are consistently investigated and remediated,
• Enhancing our approach for identifying, managing and mitigating compliance-related risks, and
• Fortifying our program to improve enterprise-wide monitoring and analytics, and support compliance with federal contract regulations.

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