SMOGTOWN

WAS CONVICTED SMOG-CREDIT SWINDLER ANNE SHOLTZ PART OF SHADY INTERNATIONAL ‘MONEY REPATRIATION’ SCHEMES?

August 20, 2009

By Chip Jacobs for the Pasadena Weekly

The demise of Anne Sholtz’s once-grand life is evident in the smaller things. It’s there in the GPS-tracking bracelet — standard issue for felons in home detention — that looped around her ankle for a year, and in her near-dormant passport. It’s traceable in her pillow, which rests today in leased home miles from the $5-million hillside estate that had broadcast her transformation from Caltech economist to business phenom.

Yes, the wreckage from that existence — the economizing, the isolation from connected friends who now shun her — is graspable.

Where the picture turns as murky as whisky-brown Southern California smog is how Sholtz, as a then-thirtysomething go-getter, was able to deceive the very air-pollution market she helped conceive, and the lessons that holds for keeping financial crooks out of the trillion-dollar, greenhouse-gas trading system that President Obama has trumpeted as a key to curbing global warming.

Unless you’re in the arcane field of emissions trading, chances are you’ve probably never heard of Sholtz before. Last April, the former Pasadena emissions-broker was convicted in federal court of fraud relating to a multimillion-dollar deal for credits in Southern California’s novel smog-exchange. Despite pleas that she sock Sholtz with years behind bars, US Central District Court Judge Audrey Collins gave her just a year in home confinement.

Fortunate with a light sentence in that downtown LA courtroom, Sholtz nonetheless sustained heavy losses outside of it, squandering, among other potential, her chance to build a unique and lucrative pollution-trading business, with access to Obama or Gov. Arnold Schwarzenegger as an industry confidante. Those opportunities gone, she now drives her mother’s car, not the Mercedes or SUV she once did. Rather than expanding her ideas into climate change, she checks in with her parole officer.

Blown prosperity for Sholtz, it’s been no bonanza for others, either.

Between criticism over its secretive, mixed-bag prosecution of her and evidence of Sholtz’s role in a scheme to extract millions in overseas US aid with men purporting to be American intelligence and military operatives, the Department of Justice’s LA office probably wishes she would just fade away. Local smog regulators at the South Coast Air Quality Management District (AQMD), whose market-based regulation proved vulnerable to her deceptions, can relate.

Trouble is some events are just too big to disappear. And the Sholtz case, no matter its relative obscurity or connection to complex regulations, fits that mold because it underscores the need for vigorous oversight of emissions markets against seemingly inevitable Wall Street-style chicanery.

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David Lange, writing to us and to the L.A. Times reporter who recently did a piece about the cash-for-clunkers program, reflected in this little commentary what a lot of silent folk feel. He’s not a partisan, apparently, of the automobile culture that has made world airsheds so treacherous:

“On a daily basis I am plagued by these clunker/spewers. Anytime I am near them, and especially when they are under acceleration, my lungs and sinuses burn, and my brain tells me I am being poisoned and that I should flee. And I ask myself why any human or any living creature should be exposed to these deliberate acts.

Now, I now some of the reasons why this is allowed to happen. Someone somewhere is making a buck or getting some gratification from either operating, selling, or repairing these known health hazards.

Our public leaders are obviously easily corrupted or distracted and fail to protect the public, and so innocent citizens are made sick or sent to an early grave.

The term “global warming” dangerously understates the severe nature of our filling up our breathable air supply with engine exhaust. Earth’s atmosphere is a finite and closed space that allows life to flourish.

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Can the GM Volt really get 230 MPG? Story

If you’re skeptical about that, how do you feel about carbon sequestration. Count us as skeptics here, until that “ah-ha” moment of truth in science and consensus in D.C. Link.

The public’s de-prioritizing environmental cleanup during hard economic times is both common sense and old hat in Los Angeles, where anti-smog campaigns often were killed, delayed or made all marshmellow-like whe those jobless numbers went up and the booster types snarled that detoxifying the air was polluting the California business cliimate. Read our book Smogtown for a stroll down memory lane. This latest poll is pretty insightful about the American mind right now.

Idealab and solar power. What a marriage! Story.

Of all the recent enviro stories, this one from the New York Times about how climate change may wind up being a national security threat might be the most important.

People, we have lots of ground to cover. Let’s get started.

From the Los Angeles Times story

“In an effort to clean the air along the nation’s choked highways, the federal Environmental Protection Agency has proposed a major regulation to control nitrogen dioxide, a key factor in respiratory illness …”

Consistent with other GW news of late, scientists are discovering the glaciers are melting faster than previously believed. Story link:

“Global warming has melted glaciers in the United States at a rapid and accelerating rate over the last half-century, increasing drought risks and contributing to rising sea levels, the federal government will report today based on data from a 50-year study of glaciers in Alaska and the Pacific Northwest.

Federal officials say the study includes the longest records of glacial melt recorded in North America …”

Some good news on solar power. It’s the mirrors. Story link.

Very interesting tale of tort action, agribusiness, Nicaragua and public health involving the pesticide DBCP.

Lastly, a terrific piece of environmental reporting about health concerns connected to a former NASA site. One of the suspect chemicals is hexavalent chromium, the so-called “Erin Brockovich chemical” that I’ve written extensively about over the years. Link.

Here’s a teaser opening from the Pasadena Weekly story about congressional interest in this case.

“A former Pasadena businesswoman convicted of engineering a fraudulent cap-and-trade pollution credit deal involving millions of dollars and one of the world’s biggest oil companies is at the heart of a congressional inquiry into the government’s latest response to global warming.

Republican Congressmen Joe Barton of Texas, a ranking member of the House Energy and Commerce Committee and one of the Capitol’s leading critics of global warming, and Greg Walden of Oregon, a ranking member of the Oversight and Investigations Subcommittee, want to know more about Anne Masters Sholtz, who in the early 2000s bilked investors out of millions of dollars through her now-defunct Old Pasadena-based companies EonXchange and Automated Credit Exchange.

Sholtz — as the Pasadena Weekly’s Chip Jacobs has reported — ultimately pleaded guilty in Los Angeles federal court in 2005 to one count of wire fraud related to a transaction in which Sholtz represented to New York-based energy trader A.G. Clean Air that Mobil Corp. (now ExxonMobil Corp.) needed a large number of credits to operate in Southern California …”

Without being coy or glib, all I can say is stay tuned. It’s about to get much more interesting. Though this case is delved into our book, Smogtown: The Lung-Burning History of Pollution in Los Angeles, details begging to come out had to wait until basically now.