In 2005, the U.S. Department of Justice announced in this press release that Anne Sholtz, a then-high-flying entrepreneuer instrumental in creation of the planet’s first smog cap-and-trade, had admitted to defrauding an obscure New York-based energy trader called AG Clean Air. Sholtz’s little-noticed plea and corporate bankrutpcies ignited a mess that still has many smarting and confused, while giving global warming skeptics such as Texas Rep. Joe Barton ammunition to question the prudence of Pres. Obama’s hope for a greenhouse gas market. Oh yeah, there’s also this issue of whether Sholtz, a former Caltech economist and owner of a resplendent mansion, perpetrated an earlier fraud –with the supposed help of ex-CIA and military operatives — that never went investigated or flagged by authorities. See my story about her and “Operation Bald Headed Eagle” for the particulars.
Now, lookie here. The apparent parent company of AG Clean Air, is one of the creditors of the Tribune Corp. bankruptcy. For those who don’t know, Tribune owns the Los Angeles Times, our hometown paper, the Chicago Tribune and other media assets. As this story shows, former Disney chief executive Michael Eisner is bidding to become Tribune’s post-bankruptcy chairman.
Here’s a crucial passage: “… Tribune and its creditors are still struggling to negotiate a settlement around charges that (Sam) Zell’s 2007 leveraged buyout was a case of “fraudulent conveyance,” meaning the transaction rendered the company insolvent from Day One. That settlement would serve as the basis for a plan of reorganization, but depending on how negotiations go, it could be months in coming or the case could easily devolve into litigation.
Nobody in the case doubts that senior creditors led by money center bank JPMorgan Chase and two hedge funds, Angelo, Gordon & Co. and Oaktree Capital Management, will end up owning Tribune by virtue of their $8.6 billion in claims …”
In a earlier article, the L.A. Times depicted Angelo, Gordon & Co. as a “distressed-debt hedge fund.” Here’s the company’s website, so judge for yourself.
When I contacted the company for comment about my last story on Shotz last summer, the PR flack initially denied there was a connection between AG Clean Air (which apparently stood for Angelo, Gordon Clear Air) and Angelo, Gordon & Co. until I disputed otherwise and said the court documents show the exact same New York address for both entities: 245 Park Ave., 26th floor, New York, NY 10167.
Coincidene? I think not.
Whether AG Clean Air still exists is not clear. That the parent is the same one entangled in the debacle that Sam Zell created with his highly leveraged Tribune purchase some years back seems undeniable.
* The startling picture of smogged out L.A. was the cover shot for a Wired magazine feature story about Southern California’s epic fight for blue skies against it’s own people’s auto addiction. They were gracious to highlight our book, Smogtown: the Lung-Burning History of Pollution in Los Angeles, and interviewed me. Here’s a little blurb:
“… People in Los Angeles were very proud of their air,” said Chip Jacobs, one of the authors of Smogtown: The Lung-Burning History of Smog in Los Angeles. “They said that L.A. was the land of pure air, and that moving there could cure tuberculosis and alcoholism. They thought there had to be one simple answer.” The day after the first big smog, city officials pointed to the Southern California Gas Company’s Aliso Street Plant as the source of the thick cloud. The facility manufactured an ingredient in synthetic rubber called butadiene. Public pressure temporarily shut down the Aliso Street Plant, but the smog episodes continued to get even worse. Undeterred, Los Angeles Mayor Fetcher Bowron announced in August that there would be “an entire elimination” of the problem within four months. But the search for the culprit of the “gas attacks” — and the ensuing battle to curb the culprit’s emissions — was just beginning …”
* An interesting MSNBCpiece about scientists’ progress in creating artificial lungs. Gosh, L.A. would be the perfect test city.
” … Nearly 400,000 people die of lung diseases each year in the United States alone, according to the American Lung Association, and lung transplants are far too rare to offer much help. But how to replicate these spongy organs? Niklason’s team stripped an adult rat’s lung down to its basic structural support system, its scaffolding, to see if it would be possible to rebuild rather than start completely from scratch …”
* For now, forget using the prospect of a green-jobs bonanza to convince Congress and the American public to support the national climate bill stalling in Washington, D.C. From the L.A. Timesblog.
* Speaking of cap-and-trade, California and other regions, though not the first ones envisioned, may enact their own greenhouse market. Good luck getting voters to support it in this jobless recovery or keeping fraud at bay. From the L.A. Timesstory.
“As the nation’s most populous state and the world’s eighth-largest economy, California wields significant influence. International and national controls are needed to curb global warming, Gov. Arnold Schwarzenegger said Tuesday, “but California and the rest of the Western Climate Initiative partners are not waiting to take action.”
” … The Western initiative would cut emissions 15% below 2005 levels. It would transition the region to “a green economy that will reduce our dependency on oil, increase our energy security and create jobs and investment now,” Schwarzenegger said in a statement. The trading program would allow companies to meet targets by purchasing less expensive “offsets” from forests, agriculture or garbage dumps when companies in those sectors store carbon dioxide beyond what they would have emitted in the normal course of business …”
* I’ve probably written a dozen stories about L.A.’s unheralded crisis with deadly hexavalent chromium (otherwise known as “chrome-six,” or the Erin Brockovich chemical) creeping and moving through its acquifiers and land. In 2004, I did a series about it for Southland Publshing and in 2000 I covered the subject for the L.A. Times. Unfortunately, the problem is getting worse. Here’s the L.A. Daily Newscoverage (and the Daily News deserves lots of credit for its mid-1990s stories on chrome-six related to Lockheed Corp; I was lucky to have on the team that wrote about it). With all the focus on greenhouse gases and the drought, we’ve all forgotten about a deadly industrial poison spreading through wells and leaving local officials with tricky decisions to make.
Texas Congressman Joe Barton, along with fellow Republican Greg Walden, last year pressured the Justice Dept. to release documents on the secretive prosecution of former high-flying, emissions-broker Anne Sholtz. Barton, a global warming skeptic and longtime champion of big oil, made news again recently for his comments that the federal mandate for BP to set aside $20 billion for cleanup of the massive Gulf of Mexico oil spill amounted to a “slush fund” and shakedown. Guess what? He was forced to apologize.
Washington Post story on his outburst, which was curious to say the least. Here’s the official contrition from him in an MSNBC update.
I’m just wondering when Barton will get around to explaining why he and House lawyers and investigators were chomping at the bit to learn more about Sholtz and what her air pollution-exchange scandal says about a possible greenhouse gas cap-and-trade, when a national energy/climate bill was on the front burner, and why he’s allowed it slip from it from his political consciousness now that the bill’s propsects faded. Could it be Barton’s entire reasoning was to slam Obama, via California, and shield the petroleum sectors? Naw, couldn’t be.
In any event, my story on Sholtz — and it’s contexualized and expanded in our book Smogtown: the Lung-Burning History of Pollution in Los Angeles– won gold in the Southern California Journalism Awards Sunday night. I dislike even mentioning this, because I am ambivalent about subjective honors, but in this case I make an exception because after all these years, there is still more heat than light about the Sholtz caper and Barton’s real motives, let alone why the Justice Dept. handled her the way it did and all that CIA stuff.
“Metropolitan Los Angeles, extending to Riverside and Long Beach, remains the smoggiest city in the United States, with an average of more than 140 days a year of dangerous ozone levels, the American Lung Assn. reported Wednesday in its annual assessment.
All of the nation’s 10 smoggiest counties are in California, with San Bernardino, Riverside, Kern, Tulare and Los Angeles leading the pack. And the state’s cities and counties, with their ports, refineries, power plants and crowded freeways, rank near the top for particle pollution.
“This is not just a nuisance or a bother,” said Bonnie Holmes-Gen, the lung association’s California policy director. “Thousands of people are being rushed to emergency rooms. Thousands of people are dying early as a result of air pollution…. It is a crisis.”
The report comes at a time of conflict over the state’s efforts to slash emissions. Citing the recession-battered economy, trucking and construction firms are seeking to delay California’s rules to limit diesel pollution from operating big-rigs, forklifts and other equipment …”
Let Freddie Mercury reinforce the point: We are the champions … of smog … mostly by our own making!
* Excellent perspective on the phoniness and promise of Earth Day from the Washington Post. Link.
* California Solar Initiative: billions on the line, millions of lives potentially at stake, and yet most are in the dark. For your enlightenment, link up. California: meet Spain. Link to New York Times story on their solar-lifestyle.
*Boeing scientists use organic remedies to remove toxins at Santa Susana Field Laboratory site. Enough said with the L.A. Daily News headline. Link.
*When it comes to long distance running, L.A.’s toxically perfumed air give local athletes that competitive edge. Coughing will knock you off that medal stand. See the L.A. Marathon. Link to L.A. Times blog.
* An EPA man of substance: where was this guy when I was reporting on chromium, et al? Link from the Patt Morrison radio show on KPCC.
* Now this is a real-mini, but will the Third World embrace it in the name of post-climate change and unglamorous function. At least GM is trying, which is better than wallowing in bankruptcy blues. Link to MSNBC story.
* A couple of morsels on California’s climate law, which right now is anything but orderly. L.A. Times story on opponents pouring in money for initiative to delay the climate-change-fighting legislation. Link. On the same subject of global warming, here’s what the California Air Resources Board projects will be the economic benefits of the bill. Link to L.A. Times piece.
* The law of unintended geology – how the Haitain quake will reverse ecological repair. From the Newsweek story
” … Since the earthquake decimated Haiti’s capital city, much has been said about the country’s dire poverty. But Haiti is not only the poorest country in the Western Hemisphere; it’s also the most environmentally degraded. Less than 1 percent of its original forest cover remains, and 6 percent of the land has virtually no soil left. Both are due to a vicious cycle of overpopulation, poverty, and natural disasters. Each increases susceptibility to the other and as time wears on, it’s evident that to be effective, all problems must be attacked at once. For what some say was the first time, scientists were trying to do just that—Levy and Fischer’s work was among the first steps toward a more integrated development program addressing both economic and environmental concerns. Now that work has been put on hold …”
* Here come the fast-talking men from L.A. again – interesting piece on turning pillaged Owens Valley into a giant solar energy farm. From the L.A. Timesstory:
“First it was silver ore that streamed to Los Angeles from the rim of the Owens Valley, then the water from the valley floor.
Now, L.A. has come back for the sunshine.
The Los Angeles Department of Water and Power, the agency responsible for turning Owens Lake into a dusty salt flat and snatching up nearly every acre from Lone Pine to Bishop, has its sights on transforming the Owens Valley into one of largest sources of solar power in America …”
* Erin, where art thou? An update on the legal career of activist Erin Brockovich. Los Angeles Business Journal story
* Pretty good story from the L.A. Weekly about the health effects of living near freeways. Their toxic, as if we didn’t know that. Some relatively new studies here and a rambling search for City Hall accountability. Link
* Steak AND Smog: the cows of the Central Valley and the greenhouse- methane problem. L.A. Timesstory
* A potential game changing way to produce electricity at home with a fuel cell that combiones air and different fuels without combustion. Think of the countless benefits. L.A. Times link:
From the story titled, Electrical pollution from cell phones and WiFi may be hazardous
“In 1990, the city of La Quinta, CA, proudly opened the doors of its sparkling new middle school. Gayle Cohen, then a sixth-grade teacher, recalls the sense of excitement everyone felt: “We had been in temporary facilities for 2 years, and the change was exhilarating.”
But the glow soon dimmed.
One teacher developed vague symptoms — weakness, dizziness — and didn’t return after the Christmas break. A couple of years later, another developed cancer and died; the teacher who took over his classroom was later diagnosed with throat cancer. More instructors continued to fall ill, and then, in 2003, on her 50th birthday, Cohen received her own bad news: breast cancer … ”
This one falls under the environmental “Duh” category. Can you believe that Chinese smog drifts over the Pacific Ocean, adding to the West Coast’s pollution problem. It’s only a phenomenon that’s been heavily reported for years, and makes it way into our book, Smogtown: the Lung-Burning History of Pollution In Los Angeles based on a 2005 Wall Street Journal story. Well, the L.A. Times is catching up. Hooray. They can use a “recent study” to explain why they’re just awakening to a seriously scary pattern of atmospheric assault. Story link.
“Ozone from Asia is wafting across the Pacific on springtime winds and boosting the amount of the smog-producing chemical found in the skies above the Western United States, researchers said in a study released Wednesday.
The study, published in the journal Nature, probes a phenomenon that has puzzled scientists in the last decade: Ground-level ozone has dropped in cities thanks to tighter pollution controls, but it has risen in rural areas in the Western U.S., where there is little industry or automobile traffic.
The study, led by Owen R. Cooper, an atmospheric scientist at the University of Colorado, examined nearly 100,000 observations in the free troposphere — the region two to five miles above ground — gathered from aircraft, balloons and ground-based lasers.
It found that baseline ozone — the amount of gas not produced by local vehicles and industries — has increased in springtime months by 29% since 1984. The study has important implications both for the curbing of conventional pollution that damages human health and for controls on greenhouse gases that are changing the planet’s climate, experts said.”
Finally, Bill gets a little digital ink in the Huffington Post with a book review about the Southwest’s perennial drought. That silky prose dances on the page.
“The Environmental Protection Agency proposed the nation’s strictest-ever smog limits this morning, a move that could put large parts of the country in violation of federal air quality regulations.
The EPA proposed allowing a ground-level ozone concentration of between 60 and 70 parts per billion, down from the 75-ppb standard adopted under President George W. Bush in 2008.
That means cracking down even further on the emissions from power plants, factories, landfills and motor vehicles which bake in sunlight and form smog.
Obama administration officials and environmental groups say the new standards align with the levels scientists say are needed to safeguard against increased respiratory diseases, particularly in children, and that they could save $100 billion in heath costs over time. The EPA also said compliance costs could total up to $90 billion nationwide.
A 65-ppb standard — the middle of the proposed range — would avert between 1,700 and 5,100 premature deaths nationwide in 2020, compared to the 75-ppb standard, the EPA estimates. The agency projects the stricter standard would also prevent an additional 26,000 cases of aggravated asthma, compared to the Bush-era standard, and more than a million days when people miss work or school …”
“In the first global assessment of the impact of ozone on climate warming, scientists at the NASA Goddard Institute for Space Studies (GISS), New York, evaluated how ozone in the lowest part of the atmosphere (the troposphere) changed temperatures over the past 100 years. Using the best available estimates of global emissions of gases that create ozone, the GISS computer model study reveals how much this single air pollutant and greenhouse gas has contributed to warming in specific regions of the world.
Ozone was responsible for one-third to half of the observed warming trend in the Arctic during winter and spring, according to the new research. Ozone is transported from the industrialized countries in the Northern Hemisphere to the Arctic quite efficiently during these seasons. The findings will be published soon in the American Geophysical Union’s Journal of Geophysical Research-Atmospheres …”
On the same day that California unveiled details of its proposed West Coast cap-and-trade to attack greenhouse gases, two House Republicans vehemently opposed to President Obama’s national greenhouse-gas cap-and-trade announced they convinced the U.S. Department of Justice to unseal many of the documents in the enigmatic case of former-hotshot pollution broker Anne Sholtz. Barton and Walden had been pressing for answers about the case from the Justice Department for months now, igniting a whole bunch of behind the scenes activity and rather long-winded and vague regulatory defenses from the regional South Coast Air Quality Management District, which oversees the RECLAIM cap-and-trade for oxides of nitrogen and sulfur, and the U.S. Environmental Protection Agency, which oversees the district’s progress against smog. RECLAIM, short for the Regional Clean Air Incentives Market, began in 1993 as the planet’s first of its kind.
In those letters, which I’ll dig up later, the AQMD insists its systems are essentially scam-proof and the agency does seem to have a good regulatory track record if not for the Sholtz case and the rampant speculation that nearly detonated the market with spiking prices during California’s 2000 and 20001 electricity blackouts — the ones that exposed the likes of Enron’s. Curiously, the AQMD board is still waiting to fully hear an explanation of what occurred, so I’m told. Do the individual members even know about Sholtz’s alleged (but uncharged) misappropriation in mid-1998 of some 500,000 RECLAIM credits from Chevron, Exxon and Aera Corp. that she later sold to Southern California Edison? And how she poured the proceeds form that un-noticed transaction into a daring, alarming and apparently unsuccessful effort — code named “Operation Bald Headed Eagle” — to extract millions of dollars worth of cash, gold, and bonds of former U.S. aid to the Philippines using a cache of CIA and military Special Ops personnel, with supposed diplmomatic immunity no less?
The EPA, meantime, says it’s on top of RECLAIM and that, as of this summer, had no active investigations into any emissions markets anywhere in the country.
All in all it’s a complex, provocative story, one fraught with policy implications and headscratching human behavior, with spy-book sidelines and institutional hubris, and the charge in D.C. to get the lowdown on this now-closed criminal fraud case, in our opinion, is pretty nakedly political.
But wouldn’t it be something if Rep. Joe Barton of Texas (picture above) and Greg Walden of Oregon proved us wrong with a sincere, nonpartisan investigation into:
* how Sholtz TWICE gamed the system she helped concoct?
* why the AQMD and EPA failed to stop her sooner, and nobody at either agency seems very accountable?
* why the Justice Dept. has acted so secretly and oddly in this matter, apparently never following up on Sholtz’s explosive whistleblower tips once she was in custody?
* and how widespread the supposed-CIA and national security types Sholtz worked with in one cap-and-trade-financed “venture” have penetrated situations like this, and why there seems so little interest in probing whether we have a mini-Iran-Contra playing out while we all figured that was so 1980s of the Oliver North dimension?
I know. Click your heels three times and you’ll land in Kansas faster than the answers come here.
Here’s the link to Barton and Walden’s announcement. At the bottom are links to the motion and background documents, which I encourage the interested to read carefully. This was not some flimsy legal effort. It was surgical and well-researched.
If you want a more colorful and detailed look at the Anne Sholtz caper, please read my story, which ran in August in three different publications (before a bunch of blogs snatched ‘em). Here’s the definitive link to “Air of Deceit.”‘
The Hill, which covers the Capitol, has this brief story about the Barton-Walden initiative to get these secret records released.
“Senior Republicans on the House Energy and Commerce Committee are looking to a closed federal wire fraud conviction in California to bolster their argument against climate legislation.
Rep. Joe Barton (Texas), the senior Republican on the committee, and Rep. Greg Walden (Ore.), the top Republican on the committee’s oversight panel, have asked a federal court to unseal documents in the 2005 conviction surrounding a California pollution credit trading program. Barton calls the case a cautionary tale about setting up a massive nationwide carbon emissions trading market.
The two Republicans, who filed a motion Monday in the United States District Court for the Central District of California, want the pleadings unsealed in the case of Anne Masters Sholtz, who pleaded guilty in 2005 to one count of wire fraud following a six-count federal indictment for trying to game a Los Angeles-area pollution abatement initiative …”
In other news:
A somewhat predictable shift in American public opinion about global warming. Washington Post story
President Obama is not going to Copenhagen empty handed. He’s vowing to push for U.S. reductions in a bid to persuade the world, particularly India and China, to get serious as well. From the L.A. Timesstory
Happy Thanksgiving everyone! Let’s remember what’s important when we return from the break. It’s called sincerity.
