Posts Tagged ‘Pasadena Weekly’

AIR OF DECEIT Anne Sholtz & “Operation Bald-Headed Eagle:” a cap-and-trade tale unlike any other

Thursday, August 20th, 2009



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.


In preparation for coming stories, may I present a cap-and-trade morality story: Anne Sholtz, RECLAIM, the free market, and good ol’ L.A. smog

Thursday, August 6th, 2009

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.