A court official in U.S. District Judge F. Dennis Saylor IV's fifth-floor courtroom swore in Columbia Gas President Mark Kempic to enter the plea on behalf of the NiSource Inc. business unit.
"Does the corporation plead guilty because it is, in fact, guilty?" Judge Saylor asked.
Kempic replied, "Yes, your honor."
Judge Saylor accepted the plea deal that Columbia Gas signed with prosecutors two weeks ago, under which NiSource will pay a $53 million fine, sell off Columbia Gas, forfeit all proceeds from the deal, and submit to outside monitoring.
Specifically, Kempic admitted to a violation of the Pipeline Safety Act for failing to prepare and follow a procedure for starting up and shutting down a pipeline designed to assure operation within the maximum allowable operating pressure.
Over-pressured gas lines led to a series of fires and explosions on Sept. 13, 2018, damaging 131 homes and buildings. More than two dozen people were injured, and about 8,600 people evacuated their homes and relocated. Leonel Rondon, 18, was killed when a falling chimney crushed the car he was inside. Another person was severely disabled.
During Monday's hearing, Assistant U.S. Attorney Neil J. Gallagher Jr. recounted for the court all it would have sought to prove had Columbia Gas gone to trial. According to prosecutors, Columbia Gas knew as early as 2015 of the dangers associated with its underground control lines, specifically the risk of a faulty or damaged line leading to over-pressurization, followed by fires and explosions in a densely populated area.
Prosecutors have said that Columbia Gas relied on "informal communications" between engineers and work crews, which U.S. Attorney Andrew E. Lelling previously likened to "relying on informal communication to run a nuclear reactor or land an airplane."
Columbia Gas' attorney, Alejandro N. Mayorkas of WilmerHale, stood at the end of the government's recitation of its case and objected to several contentions presented by Gallagher, such as that the blasts were connected to the company's staffing levels or to an upcoming rate adjustment case.
"We certainly admit to the underlying factual allegations, just not the nexus that has been drawn, which is more the theory of the case," Mayorkas said.
Judge Saylor will formally sentence Columbia Gas during a hearing on April 6, when victims of the blasts will have an opportunity to speak. Citing the coronavirus outbreak, the judge said that victims will be able to call in if they wish.
Addressing reporters outside the courthouse after the hearing, Mayorkas said that Columbia Gas had accepted responsibility "from the very outset."
"Today's entry of its plea was another step in that process," he said.
The company's $53 million fine represents twice the amount it made on its Gas System Enhancement Plan in Massachusetts from 2015 through 2018. The government's agreement includes a deferred prosecution agreement with NiSource to ensure it holds up its end of the plea deal.
The day after the company and prosecutors unveiled the plea, NiSource announced it would sell Columbia Gas to Eversource Energy for $1.1 billion.
Columbia Gas in July settled class action lawsuits on behalf of thousands of Massachusetts residents and businesses affected by the explosions and fires, with a $143 million total payout. In May, Columbia Gas agreed to pay three Merrimack Valley towns $80 million. The company also settled with Rondon's family. All told, the company said it has spent more than $1 billion due to the disaster.
The government is represented by Evan J. Gotlob and Neil J. Gallagher Jr. of the U.S. Attorney's Office for the District of Massachusetts.
Columbia Gas is represented by Alejandro N. Mayorkas and Emily R. Schulman of WilmerHale.
The case is U.S. v. Bay State Gas Co., case number 1:20-cr-10066, in the U.S. District Court for the District of Massachusetts.
--Editing by Adam LoBelia.
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