By WAYNE LUSVARDI

Are babies being damaged by too much perchlorate in the water? Should the amount be reduced by a mouthful of a bureaucracy, the Office of Environmental Health Hazard Assessment, part of the California Environmental Protection Agency?

New regulations could cost Californians billions as the state finally is rising from a deep three-year economic recession. Moreover, according to reputable scientists, there are no proven health benefits from reducing the level of perchlorate in drinking water from an infinitesimal 6 parts per billion to 1 part per billion, as proposed by OEHHA.  The science behind the OEHHA’s proposed new standard smacks of the recent scandal in the Delta Smelt court case.

Repeating the Delta Smelt Case?

From 2007 to 2010, water agencies such as the Metropolitan Water District of Southern California jacked up water rates by about 34 percent due to a court-ordered drought to protect a fish in the Sacramento Delta. But federal Judge Oliver Wanger eventually found that the environmental science on which the case was based was bogus and the government scientists were “zealots.” None of the water agencies across the state repealed their rate hikes — even though the drought was contrived. Water ratepayers are still not laughing.  In fact, they didn’t even get the joke. They just got stuck with a higher water bill.

And now the California OEHHA wants to lower the level of perchlorate in drinking water from 6 parts per billion (ppb) down to 1 ppb.  That is equivalent to one drop of water in an Olympic size swimming pool. But this is what might be called “dark humor.”

As Bill Romanelli of the Perchlorate Information Bureau wrote to me in an email: “The real issue on this is that given that there are no public health benefits in going from 6 ppb down to 1 ppb, it’s an unjustifiable expense regardless of the ‘solution.’  Drilling further down, the problem is one of cost.  The stricter the standard, the more ‘clean’ water is needed to dilute the supply, and the costs can go up geometrically (and will be borne by customers).”

Like California’s contrived court-ordered drought, reputable scientists are saying the new perchlorate standard is scientifically indefensible. Dr. Richard Pleus, toxicologist and managing director of Intertox consulting in Seattle and adjunct professor in the Department of Pharmacology at the University of Nebraska Medical Center, wrote in an email to me, “The [scientific] record demonstrates that, in over 60 years of research, no study has reported adverse effects on human health with exposure to environmental levels of perchlorate.”

But will water agencies have to build costly new treatment plants to comply with this new standard, only to find out much later that the scientific basis of the new rule is bogus? This is what happened in California’s infamous “wet” drought.

Perchlorate does not cause cancer, nor is it a poison.  Perchlorate is suspected to cause a nutritional deficiency of iodine in the fetus and infants. The perchlorate compound is roughly the same shape and has the same negative chemical electric charge as iodine (iodide).  Thus, perchlorate is believed to be capable of blocking absorption of iodine in the thyroid gland.  Iodine is needed for natural growth and educational development and can be obtained from fish and other foods.  Perchlorate occurs naturally. And it is industrially added to fireworks, solid rocket fuels and road flares as a booster because it is oxygen rich.

Perchlorate has been selected for regulation partly because it has an image of “rocket fuel.” And the deep pockets of industries can be made to pay mega millions to clean up groundwater basins without any direct cost to taxpayers or drain on the state budget.  But products such as soy that have a “green” image and no deep pockets haven’t been regulated. Neither have products that have a “home made by mom” image such as breads with bromide.  Yet industrial perchlorate is the perfect target for regulators.

The Bureaucratic Vetting Process

In California, the approval of a Minimum Contaminant Level (MCL) for an environmental substance goes through a 10-step process before being adopted into law.  The first five steps involve internal scrutiny by the California Environmental Protection Agency. The five steps follow the administrative departments dealing with regulations, budget, finance, health, and law must put the law on the books.

Once approved, the rule is published in the California Regulatory Notice Register.  The publication signals the start of a 45-day comment period.

Once the comments have been received, an additional 15-day public comment period is held before the final rule is drafted for review by the director of the California EPA.  If the rule is signed, there is a 30-day review by the Office of Administrative Law.

If the new rule advances that far, it is then filed with the Secretary of State and is enacted into law in 30 days.

California is presently in the process of reviewing comments and undertaking a scientific peer review before forwarding the new rule to the head of the state EPA.

Bureaucratic Kangaroo Court?

But unlike the Delta Smelt case, there will be no impartial judge, no evidence code to comply with and no cross-examination. Instead there will be public comments and a peer review by a panel of scientists hand-picked by the OEHHA bureaucrats.  Unlike picking a jury, there will be no way to challenge the selection of a peer reviewer.

The peer reviewers are not peers drawn from the community, as in done in court juries. The OEHHA has picked them from other states.

The bureaucratic review process is not democratic.  There are no checks and balances in the review process.  The governor can’t veto an adopted new standard.  A lawsuit to strike down an environmental regulation as unconstitutional would be difficult and costly.

The Lockheed and Kerr McGee corporations sued OEHHA in 2002 by claiming that they were legally entitled to a second scientific peer review of the perchlorate level proposed at that time.  The judge in the case ruled that the two firms’ request for a second opinion was valid and ordered such.

The Proponents and the Opponents

In favor of more costly and unrealistic standards are: Clean Water Action, the Environmental Working Group, National Resources Defense Council and Citizens for Safe Water.

The NRDC is the same organization that filed the 2006 lawsuit in California to protect the Delta Smelt fish based on bogus science. Teresa Heinz Kerry, former senator and the wife of Sen. John Kerry, D-Mass., has provided past funding for the Environmental Working Group.  Clean Water Action is a group of self-described activists, lobbyists and community organizers in San Francisco.

Opposed to more costly and unrealistic new standards are: the Association of California Water Agencies, the East Bay Municipal Water District, the Riverside Public Utilities Department, San Bernardino County, Golden State Water Co., the Perchlorate Study Group, the Partnership for Sound Science and Environmental Policy, the U.S. Department of Defense, numerous agricultural associations, Health Risk Strategies consulting and Exponent Science and Technology Consulting.

Ask yourself whom you trust the most: your local water agency, which is accountable to you to keep water rates low — or activists, lobbyists, and community organizers?

Who Are the Science Peer Reviewers?

None of the three science peer reviewers was asked to evaluate the costs versus the benefits of reducing the level of perchlorate in drinking water.  Their review was confined to strictly narrow scientific and statistical issues concerning the proposed 1 ppb new standard for perchlorate in drinking water.

All three of the science peer reviewers are well qualified. None of them can be characterized as “zealots,” as were the scientists in the Delta Smelt case.

But why OEHHA picked three out-of-state science peer reviewers, when there are so many equally or more qualified scientists in California, is a question. The three peer reviewers selected by the OEHHA are:

* Dr. Andrea Kirk, PhD., professor of environmental health at North Texas University.  Dr. Kirk has made $470,426 from research grants mainly on studying perchlorate levels in breast milk.  Her science peer review of OEHHA’s new rule can be found here.

* David Rich, Sc.D., MPH, is a professor at the Department of Community and Preventive Medicine at the University of Rochester Medical Center in New York.  His principal focus of research has been on strokes, diabetes and growth defects in the unborn triggered by air pollution.  Rich’s one science paper on perchlorate was co-authored with eleven other researchers. It found no evidence of lack of iodine (iodide) or deficiencies in weight, length, or head size in newborns due to perchlorate.  I couldn’t find where Dr. Rich mentioned this in his peer review of OEHHA’s new perchlorate standard.  Rich’s science review of the OEHHA new rule can be found here.

* Stephen H. Lafranchi, M.D., is a baby doctor and professor at the Oregon Health and Science University. It might be questioned why a medical practitioner was selected.  His science review of OEHHA’s new rule can be found here. 

None of the peer reviewers was asked to indicate whether perchlorate is more or less a health threat to the unborn and infants than such foods as soy, broccoli, Brussels sprouts and bromate in bread, all known also to block iodine absorption.

Neither were the researchers asked to indicate whether reducing the level of perchlorate in drinking water from 6 ppb to 1 ppb would result in demonstrably greater health benefits to vulnerable subpopulations, other than mere statistical projections.

The reviewers were also not asked whether it would be more effective to reduce perchlorate to 1 ppb in drinking water by costly treatment methods, instead of just ingesting added iodine by eating cheap iodized salt, as has been done for decades.  To answer this question might pose a threat to the livelihoods of perchlorate scientists and the public health bureaucracies that regulate it.

Iodine Supplements

The U.S. EPA’s Office of Inspector General essentially stated in a 2010 scientific analysis of perchlorate that ensuring proper prenatal supplementation of iodine in pregnant women, rather than individual chemicals, was the best approach.

The reviewers were not asked if there could be what is called a “confounding variable” — alcohol consumption during pregnancy — that could be a contributing cause of retarding or intellectual deficits in children.  Statistics don’t separate out mothers who alcohol drinkers from non-drinkers; or healthy babies from those born with congenital defects.

Most of the perchlorate studies involve measuring iodine or perchlorate levels in milk or blood, or perchlorate levels in drinking water.  There never has been a long-term comparison and control study of whether educational deficits in children significantly decreased in a community that has reduced perchlorate levels in its drinking water.

All the past cleanups of perchlorate in drinking water have focused on underground water basins where perchlorate gets trapped. Perchlorate on the ground surface can get diluted by rain and rendered relatively harmless.  Contaminated water from a well mixed with uncontaminated water in pipelines can be diluted to an acceptable level. As the old saying has it, “The solution to pollution is dilution.”  That is, unless you move the acceptable level of perchlorate to near zero, which is what the OEHHA is proposing.

Intertox: No Scientific Basis to New Rule

Intertox, a scientific consulting firm in Seattle specializing in toxic exposures, prepared scientific comments to OEHHA’s new perchlorate standard for the Environmental Study Group.  The Environmental Study Group is an association of industries that have been subject to perchlorate regulation. On its website, Intertox lists that it has worked on both sides of environmental risk assessments — both for the government and for defendants in toxic lawsuits.

Intertox is especially well qualified with perchlorate safety standards.  Intertox experts co-authored the definitive study assessing health risk exposure to perchlorate.  Intertox’s comments to OEHHA’s new rule is here.

Intertox states that reducing the level of perchlorate in drinking water from 6 ppb to 1 ppb is “unlikely to have a public health benefit.”  Intertox additionally concludes that perchlorate, a natural substance, can’t be compared to other potentially toxic substances such as mercury, beryllium, nickel and simazine.

Instead, perchlorate should be compared with other food substances that can block iodine absorption in young children such as soy, broccoli, Brussels sprouts and bromide in bread.

Intertox concluded that the most vulnerable population segment to perchlorate exposure — pregnant women and their babies — were protected under the existing standard by a factor of three times what would be considered safe.  The new standard would increase the safety factor to 10 times the safety level, without proven reductions in birth defects or educational deficits.

The California OEHHA’s own document, “Public Health Goals for Chemicals in Drinking Water — Perchlorate,” dated March 2004, states that there is no scientific justification for increasing the safety margin from 3 to 10 times the safe level for infants (p. 86).

Who Will Be Affected?

As shown in the table below, it will mainly be Southern California that will be affected by reducing the Maximum Contaminant Level (MCL) of perchlorate in drinking water from 6 ppb to 1 ppb.

Active and Standby Sources with Perchlorate Detections — 2002 to 2007

A 2005 study conducted by the National Academy of Science concluded that perchlorate in drinking water below 245 ppb does not have a measurable effect on human health.

None of the drinking water sources or systems shown in the table above is close to the threshold of 245 ppb.  The lowest is 5.4 ppb and the highest is 100 ppb, with an average of 40.1 ppb.

The level of perchlorate in the Colorado River Aqueduct is about 6 ppb.  The Colorado River Aqueduct serves all of Southern California.  This massive system would now need to construct costly treatment plants to remove perchlorate.

A 2004 study conducted by Kennedy/Jenks Consultants indicated that the cost to comply with a lower Public Health Goal (PHG) of 4 ppb of perchlorate from water wells would be from $1 billion to $2.2 billion over 20 years.  The cost to reduce perchlorate to a level of 1 ppb.  Nor was the cost to treat Colorado River Aqueduct water included.

You’re Next

If the safety level for perchlorate is dropped to 1 ppb, it likely won’t be just single-point sources of perchlorate, such as water basins, that will be targeted.  It is likely that fertilizer in home lawns that contain nitrates will eventually be the next target for regulation. Nitrates are also suspected as a potential blocker of endocrine glands. Say goodbye to your lawn and rose garden.  You may be added to the list of “baby killers or retarders.”

A Ph.D., thesis in 2008 titled “Nonpoint Sources of Nitrate and Perchlorate in Urban Land Use to Groundwater: Suffolk County, New York,” found low-level sources of perchlorate in lawns, sewage systems, turf grass and road runoff.  If acceptable perchlorate levels are going to be reduced to 1 ppb in drinking water, it won’t be long before homeowners will also be regulated.

A Matter of Cultural Values, Not Science

Environmental scientist William Cooper has asked the question, “What does it mean to reduce the level of some potential contaminant to effectively zero?”  His answer is not solely a scientific issue, but one of cultural values and what is acceptable risk.

Paraphrasing Cooper:  “Is the cup half empty or half full?  You can view the existing 6 ppb standard as a ‘license to kill’ or as regulatory overkill. What you will find that you do risk assessment for human health is that it is halfway between black magic and a Ouija board.  It basically comes down to common sense and judgment.  You cannot print money fast enough to solve all the environmental problems to the level of zero risk.”

Science has evolved to be able to measure substances that heretofore were undetectable at infinitesimally low levels. But science is not mere measurement.  Nor is it the ability to make statistical predictions that are not validated in the empirical world.  There is too much measurement and statistical projection and no valid evidence anywhere in the scientific record, or otherwise, of adverse effects from low doses of perchlorate.

How did a dietary and nutritional problem of mostly pregnant mothers and infants morph into a huge scientific and water treatment industry that proverbially strains at gnats — parts per billion of perchlorate in drinking water — but ignores swallowing a camel — alcohol consumption during pregnancy or other food substances?  Why is it science to measure the amount of perchlorate in drinking water approaching a zero limit and its statistical probability, while avoiding the monitoring of the actual number of children with retardation or educational deficits exposed to perchlorate in the real world?  Has “regulatory science” become a substitute for real science?

The uncertainty factor in minute low dosages of any environmental substance is bound to be high.  Common sense dictates that marginally lowering perchlorate levels from 6 ppb to 1 ppb won’t result in demonstrable health benefits.  If lowering perchlorate to a near zero level is a cultural value, then why do we entrust this decision to a bureaucracy that, like all bureaucracies, can be self-serving?

Perchlorate wasn’t “discovered” in California until about 1985.  Most of the major contamination sites are already in the process of being cleaned up.  What are left are the low-level sites. In a time when the governor is downsizing state agencies and the state budget has been running deficits, is it beyond questioning whether the OEHHA’s actions are a protection of bureaucratic turf more than public health?  Can government bureaucracies just unilaterally impose costs on private industries without any proven health benefit?  Where are the checks and balances to expansionist government bureaucracies?

Elite vs. Mass Politics

This is why nearly anything having to do with environmental regulation in California reflects elitist politics. There are little to no checks on the power of agencies regulating the environment.  There is no ballot initiative that could invalidate the OEHHA’s standard to reflect the “will of the people.”  The courts have not provided an adequate check and balance to expansionist policies of government bureaucracies.

If the Howard Jarvis Taxpayers Association reflects mass politics, the OEHHA reflects elite politics. That is why California’s environmental agencies, regulations and projects often are the playground for elites and the politically well connected.

The Fable of the Bear and the Hunter

At the end of David Woodbury’s novel, “You’re Next on the List: A Satire on Modern Bureaucracy,” is the following fable:

“Once upon a time a hunter cornered a bear in the wilderness and took careful aim at close range.  Just before he was about to pull the trigger, the bear held up a paw and said: ‘Wait a minute, Mr. Hunter, there’s no reason you and I can’t negotiate this matter and coexist peacefully. After all, you want a fur coat and all I want is a full stomach.  So let’s sit down and talk it over.’

“Being a typical American who knows there’s nothing to be hurt by sitting down and talking things over, the hunter agreed. So they sat down and negotiated. And both did get what they wanted. The bear got a full stomach and the hunter got a fur coat.”

Moral: You can’t negotiate with the California Bear about the nutritional standard of bears of 1 ppb — one person per bite — that is based on the bear’s self interest, not science.

By WAYNE LUSVARDI

Like Disneyland, Hollywood and Silicon Valley, the Tournament of Roses Parade is a symbol of California’s sun-blessed creativity. It crests with the crowning of the Rose Queen and her Royal Court, a bit of monarchism even die-hard democracy lovers won’t object to.

Countless Americans back East, watching TV as it snowed outside, have envied parade participants and spectators clothed in shorts and floppies.  The Easterners then started working to make their California Dream come true by moving here.

But it isn’t coming up roses for this year’s Rose Parade, as it’s commonly called, which will roll this year on Jan. 2, 2012

One reason is the element of politics that has crept into the celebrations. The Occupy movement plans to march behind the parade with the “crazies” as the 44^th “human float.”

And who knows what else could happen. In 1992, then-Pasadena mayor Rick Cole rode in the parade wearing a T-shirt stamped with the slogan, “Tournament of Racists.” That year, a direct descendant of Christopher Columbus was appointed grand marshal of the parade during the 500^th aniversary of the voyage to America of the Admiral of the Ocean Seas. Cole branded the descendant a reminder of European America’s heritage of “greed, slavery, rape and genocide.”

Which hasn’t prevented Cole from taking lucrative government jobs paid for by the taxpayer-descentants of those he attacked. He’s currently city manager of Ventura, where he has been promoting “smart growth” — a policy that raises home prices and suppresses home ownership by blacks, Latinos and others he claims to be helping with his politically correct positions. His total 2010 taxable compensation is $191,940. And what a pension that will bring.

Fortunately, the  local branch of the Tea Party — known as the Pasadena Patriots — has decided to back off its earlier decision to also appear at the end of the parade.  Tea Party spokesman Michael Alexander said, “We have decided to not be a part of this piece of drama and exercise in street theater.  Pasadena is entitled to one day without politics.”

Aside from political protests, there are deeper economic reasons why it’s raining on the routes the Rose Parade will wind through in Pasadena.

Corporate Parade Sponsors

The Rose Parade has been officially renamed, “The Rose Parade by Honda.” And the Rose Bowl Game is now named, “The Rose Bowl by Visio.” These corporations have banned the city of Pasadena and the media from using the old names without the corporate identities.

Banks and big corporations mainly make the Pasadena Rose Parade possible today.  Nineteen floats will be sponsored by corporations: American Honda, Bayer Advanced, California Clock Company, China Airlines, Dick Van Patten’s Natural Balance Pet Foods, Discover Card, Dole, Farmers Insurance, HGTV, Macy’s, Microsoft Kinect for XBOX 360, Paramount Pictures, NAMCO Bandai Games America, Paramount Pictures, RFD-TV, Trader Joe’s, Kaiser Permanente, U.S. Bank and Wells Fargo Bank.

Other nonprofit and service organizations with floats include: AIDS Healthcare Foundation, City of Hope, Donate Life, Girl Scouts of Greater Los Angeles, Kiwanis International, Odd Fellows and Rebekahs, Rotary International, Shriners Hospitals for Children and three schools and religious organizations. Plus two floats for each of the teams playing in the Rose Bowl football game the same day, the Wisconsin Badgers and the Oregon Ducks.

Interestingly, the Ministry of Tourism and Creative Economies of the Republic of Indonesia is sponsoring a float.  But the local Chamber of Commerce, the San Gabriel Valley Economic Partnership, the Los Angeles County Economic Development Corporation and other local pro-business organizations do not have floats.  It’s telling that a float touting capitalism is now sponsored by Asia, not the United States or California.

Many of the local cities that entered floats in past parades have dropped out due to financial pressures.  Absent will be a float from the small city of Duarte that teamed with the City of Hope cancer treatment center for decades.  The City of Hope will continue a solo entry for 2012.

The neighboring cities of Alhambra, Burbank and Glendale all pulled out, but private donations rescued them.  West Covina won’t make it, however.  Even wealthy Beverly Hills has dropped out.

Surprisingly, the Anheuser-Busch brewery, which had entered a team of famous Clydesdales horses for 58 years, decided to spend its money elsewhere.

Behind the Corporate Façade — Non-Profit Parasites

Years ago, current Pasadena Mayor Bill Bogaard, a Democrat, pressured the parade sponsoring organization — the Pasadena Tournament of Roses — to accept non-profit agency members on their governing board.  He also forced a sort of coup of the governing board of the local Chamber of Commerce.  So today unions and non-profits, not corporations or small businesses, actually control the Chamber.

The image of the corporation-dominated Rose Parade and Rose Bowl may be what is conveyed to the public through the mass media. But behind the facade, Pasadena is a postmodern, anti-corporation community controlled by unions and with 1,000 non-profit agencies. That’s one nonprofit for every 54 households in Pasadena.

Nobody addresses the hole that nonprofits create in municipal budgets. The Occupy movement has urged bank customers to withdraw their funds and put them in nonprofit credit unions. But Pasadena has so many nonprofits that they are an invisible drain on the community that defies their glorification by the Occupiers.

Local conservative activist Mary Dee Romney wrote in an email, “There is growing acceptance by well-heeled folks in the Pasadena area that their income-producing endeavors are of such essential ‘virtue’ as to be entitled to non-profit status, thereby exempt from taxation.”

Romney provided an example. She said, “On Sept. 9, 2009, a Pasadena Star News editorial revealed that ‘insiders’ from the Thoroughbred Racing Association of California would bid for the Santa Anita Race Track (303-acres in nearby Arcadia) and run it as a ‘nonprofit arm of the Thoroughbred Owners of California’.”

The Chairman of TRAC, Arnold Zetcher, said, “We’re putting together a ‘not-for-profit,” which doesn’t mean we don’t want to make a profit — we do. We take the money and put it into the purse structure.”

Romney concluded, “Who in the Pasadena area needs a Swiss bank account when they can avoid taxes through phony non-profits? The very same folks who hide their income from taxes through non-profits are the first to call for taxes on the rest of us.”

Auto Dealers Crash Along the Rose Parade Route

Today, “the Little Old Lady from Pasadena,” who became the “terror of Colorado Boulevard” in the old Jan & Dean song, wouldn’t be buying her Super Stock Dodge in Pasadena. It doesn’t have any Dodge dealers.

There is probably no greater marker in Pasadena of the economic downturn than the closure of nearly all the major new auto dealers along Colorado Boulevard, the route of the Rose Parade.

John Martin, a boutique auto broker in Pasadena, explained why the dealerships died.  It wasn’t only because of the real estate meltdown or bank fraud.  Martin said, “Pasadena auto dealers set up shop on Colorado Boulevard in the 20s, 30s, 40s, 50s and 60s. The unfortunate fact is hundreds of thousands drive down the 210 Freeway since it was built in 1970. Out of site out of mind.

“Dealerships expanded to many communities in the 70’s. Alhambra has four strong markets to draw from North, South, East and West. Pasadena loses.

“Thinning of the herd is important. Land Rover strategically places dealerships 50 to 60 miles apart. Chevy, Ford, GM and Chrysler have dealers 10 to 15 miles apart.

“With the saturation, dealers pull folks from all over,” Martin said. “And many times it is the last contact with the client after the sale or lease. Not to say that a salesman at the dealership does not have a repeat clientele. But many salespeople do move from place to place. The Rusnak luxury auto dealerships of the world do compete with a location on Colorado Boulevard. But they are specialty cars: Porsche, Bentley and so forth.

“Your dealers in Glendora are on the freeway route.  All of the old U.S. Route 66 new car dealers made the jump 30 to 35 years ago. A good example is Person Ford in the city of La Verne.  The city subsidized the dealership for 15 years with free loans not to move from Foothill Boulevard, which is two miles from the freeway.  Person closed four years ago. Out of site from the masses on the freeway.

“There are no guarantees of success for a dealer with a spot on the freeway, but the odds are better. Good service backed by good management, with helpful sales staff, is part of the equation. Auto brokers are relationship-built organizations. Many consumers are afraid of the dealership process. Thus there is a niche for the boutique auto broker.”

Fools Gold

Also contributing to the decline of auto sales and dealerships in Pasadena that Martin speaks about is the construction of the Gold Line light-rail project.  The Gold Line runs down the median of the 210-Foothill freeway that cuts through Pasadena.

It is being extended to the easterly portion of the San Gabriel Valley, heavily subsidized with $700 million in federal transportation funds championed by Rep. Adam Schiff, D-Pasadena. Local politicians brag that the Gold Line created 6,900 jobs.  They don’t calculate how many jobs it unintentionally wiped out.

The Gold Line is a highly inefficient and costly form of public transportation. Its main economic benefit is the many transit-oriented housing projects created along the light-rail route.  The Gold Line is just another form of mixed-use redevelopment with inclusionary housing masquerading as a public-transit project.  But after the real-estate bubble burst,  California has overdosed on luxury housing located on expensive commercial land, built at the expense of business creation.

The real-estate bubble may have masked the economic downturn in Pasadena for a couple of decades. But when the bubble popped, the auto dealerships that remained located along old Route 66 abruptly died because they weren’t by the freeway.  The regional and municipal land planners had failed to rezone enough large land tracts along the new freeways for new auto dealerships. In some cases, redevelopment actually relocated dealerships away from the freeway; those dealerships predictably died.  Those communities that relocated auto dealers along the freeways captured customers away from nearby cities such as Pasadena.

But will the extension of the Gold Line light rail wipe out their gains in order to create transit-oriented retail and affordable housing?

In-N-Out University

One of the few unheralded bright spots in the local economy is the In-N-Out Burger chain.  In-N-Out hires many young people out of high school.  It also has a management training program called “In-N-Out University,” which it has run since 1984 in Baldwin Park, where the chain was started.

In contrast with In-N-Out’s success is Mama’s Small Business Kitchen Incubator.  Mama’s is a nonprofit funded with a $2.6 million grant and a land loan by the city of Pasadena.  Mama’s cost $9,000 a week to operate.  Its extensive marketing campaigns brag about allowing more than 100 people to “rent” its kitchens to make food to load onto “roach coaches.” Many of these mobile restaurants compete with local, for-profit restaurants that are already hurting for business.  Despite the hype, government-sponsored restaurant incubators are a costly failure.

Green Paint from Red Arizona

If one read the local newspapers in Pasadena, one would get the impression that only government created new jobs or job training.  An example of a private program that doesn’t get any media attention is Dunn-Edwards Paint Company’s jobs and training program.

Dunn-Edwards Paint is jointly owned by the Edwards family and its employees.  It has been in business since 1925.  The company has about 100 retail outlets.  Professional architects, homebuilders and property managers account for about 90 percent of its sales.

In July 2011, Dunn-Edwards announced it was building the “world’s first” LEED-certified paint manufacturing facility. LEED stands for Leadership in Energy and Environmental Design.

But the 336,000 square feet facility was being built in Arizona, not California.  The obvious market for “green” paints and coatings is California.

The city of Pasadena provides financial incentives for LEED certification on all new buildings.

Pasadena may have been able to assemble land to accommodate the Dunn-Edwards new paint production facility. It could have used the former site of Stuart Pharmaceuticals, previously owned by Johnson and Johnson. Instead, that freeway-adjacent site was downzoned for transit-oriented housing and historic preservation.

Pasadena Wilts Roses

The coincidental theme of the Occupy the Rose Parade Movement is: “It’s Not Coming Up Roses.”

Pasadena is a fitting location for its demonstration. Not only is Pasadena the location of the corporation-sponsored Rose Parade. It was also the epicenter of the Mortgage Money Bubble.  Pasadena headquartered Fannie Mae, IndyMac Bank and Countrywide Savings.  Even Pasadena’s mayor is a former banker who helped merge Security Pacific National Bank and the Bank of America.

Pasadena is a wealthy city that had about $666 million in reserves, investments and cash in 2008.  But it is not immune to economic stagnation.  Pasadena recently rolled $74 million of its public pension obligations into a 20-year bond to be financed with pension obligation bonds that will double the cost of paying for pensions.  Paying for public pensions with bonds will double their cost to the taxpayers and suck more money out of the community that could have been used for business development.

Pasadena is also running a $20 million deficit in its $160 million renovation of the Rose Bowl, financed with federal Build America Bonds.

But the Occupy Movement will have to look beyond its anti-corporatist ideology if it is going to have anything more than symbolic political influence on the economy.

Local Problems

Most of the economic problems of Pasadena are local, not global.

Pasadena over-zoned and overbuilt transit-oriented mixed-use developments and inclusionary housing on pricey commercial land next to freeways.  Such freeway-close developments gobbled up sites that could have been used to relocate auto dealerships from obsolescent locations along the old historic Route 66.  They also crowded out any chance of new facilities for contrived green industries being built in the suburbs.  Such facilities are now being built out of state.

Over the last few decades, Pasadena grew non-profit agencies instead of small businesses.

Its attempt to “incubate” start-up restaurants is not only a failure and redundant but mostly politically motivated.  Private businesses starved for start-up financing after the collapse of the Mortgage Money Bubble.  Many restaurants closed or have struggled to stay open.  But government and local churches have collaborated to fund a “restaurant business incubator” project that only serves to put other restaurants out of business.  Those who cannot afford up-front capital needed to start restaurants should not be in that business.

But not according to local politically correct local government and churches that want to transfer money from the 1 percent to the so-called 99 percent no matter the result.

Pasadena’s, and California’s, economic stagnation has little to do with Wall Street.  It has more to do with an anti-business culture.

An overwhelming percentage of voters still believes that pro-growth policies for the economy are better than reducing inequality. That doesn’t mean restaurant business incubators, luxury affordable housing, or counterproductive redevelopment and public transit projects.

As you watch the pictures of whatever demonstration marches at the Rose Parade on New Year’s Day in Pasadena, be aware that things are not what they are portrayed to be.

It’s not coming up Roses in Pasadena because Pasadenans no longer want to grow roses.

By DAVE ROBERTS

“A well regulated militia being necessary to the security of a free state, the right of the people to keep and bear arms shall not be infringed.”

– Second Amendment to the United States Constitution

You still have a few weeks to strap on your Glock while you do your holiday shopping.

The constitutional guarantee of the right of citizens to bear arms has been under assault by California’s Legislature for decades. The latest salvo was AB 144, which makes it illegal to openly carry an unloaded handgun in public. It takes effect January 1, 2012.

Like a lot of bad legislation, AB 144 passed largely along party lines on the last day of the session when the sausage is cranked out by the barrelful. It is aimed at the so-called “right to carry” or “open carry” gun rights activists, who have in effect shoved their guns in the face of liberal legislators by showing up in groups at Starbucks and other places while packing heat or at least unloaded heat. Naturally, the Democrats shoved back.

“AB 144 seeks to close a loophole, which allows individuals to openly carry unloaded guns almost anywhere in the state of California,” said state Sen. Kevin de Leon, D-Los Angeles, in the Senate floor debate on Sept. 8. “The absence of a prohibition on an unloaded open carry has created a problematic increase of guns carried in public, alarming unsuspecting individuals and causing issues for law enforcement.

“Open carry creates potentially dangerous situations. In most cases when a person is openly carrying a firearm, law enforcement is called to the scene with very few details other than the fact that there’s one or two or three or four individuals carrying what is presumed a loaded weapon. In these tense situations the slightest wrong move by a gun carrier could be construed as threatening to a responding police officer, who may feel compelled to respond in a manner that could be lethal. The practice of open carry creates an unsafe situation for all parts involved: the police officer, the gun-carrying individual as well as all individuals nearby. Additionally, the increase in open carry calls is very taxing to law enforcement agencies.”

Firing Back

Three Republican senators fired back.

“The Second Amendment is not a loophole. OK?” said state Sen. Doug La Malfa, R-Butte. “It’s something put there by people a lot wiser than us over 200 years ago to give people a chance for self protection, to protect their property, their families, themselves. This open carry thing is another infringement, the further narrowing of people’s Second Amendment rights, because it’s not in style for some. There’s no problem with this. Cops have very few incidents of a problem with somebody open carrying. Very few people use it much. But they ought to have that right to do so. It isn’t a problem for anybody except for the gun grabbers that continually chip away and narrow our basic rights.

“If you don’t want them in the cities, don’t have them. Up where I’m from, it’s seen as a basic component of everyday life. You might have your thermos, your lunch box and, yeah, you have a sidearm. Especially if you’re out in the rural area where drug laws aren’t being enforced in California anymore. So why in the world wouldn’t you have this right? I’m sick and tired of it being chipped away. And it certainly causes more and more of the impetus for people to want to divide the state between the urban areas that seem to want to lose all their rights on everything, as opposed to people in rural California that just want to be left the hell alone.”

No Complaints

State Sen. Ted Gaines, who represents much of the Sierra Nevada from Mono to Modoc counties, said, “I’ve never had a complaint from my 12 counties, I’ve never had a constituent call with a complaint on open carry. When we take a look at the challenges we are having in much of the forest land across my district where there’s a lot of illegal growing of marijuana, I have talked to individuals that are fearful of going to certain places within their own county. They see a drip line or irrigation line going down a path that they are too afraid to walk down. This, in my mind, is just over the top, it’s unnecessary.”

It’s not just rural Republicans opposed to further restrictions on gun rights.State Sen. Joel Anderson, who represents part of San Diego, said, “It was just a short time ago when this body was concerned about concealed [carry] permits – ‘that if we can’t see the weapons, then it makes us nervous and how are the police going to respond if they can’t see the weapons?’ The one thing that we know is open carry people who are doing that are abiding by the law. We are sending a clear signal to law enforcement: ‘We have a weapon, it’s not loaded, we are playing by the rules.’ Criminals hide their weapons. Criminals carry their weapons illegally. Don’t turn law-abiding citizens into criminals. The more we chip away at our ability to protect ourselves, it’s undermining our freedoms.”

Law Enforcement Backing

De Leon, who was carrying the bill in the Senate for Assemblyman Anthony Portantino, D-La Canada Flintridge, had the last word.

“If it impacts only law-abiding citizens, then why is all of law enforcement behind this measure,” asked de Leon. “Let’s be very clear, this is not the Wild West. This does not infringe on the Second Amendment of the Constitution of the United States, the right to bear arms. How discomforting can it be if you walk into a restaurant, a Starbucks, to Mickey D’s or wherever it is you may go to, and all of a sudden you see someone walking around with a handgun and you can’t discern whether they are a law enforcement agent or undercover, perhaps maybe they are not.

“If you’re a law-abiding citizen, you can buy all of the ammunition you’d like. If you’re a law-abiding citizen, you can buy long guns as well as a handgun. All it says is it makes it a misdemeanor if you carry an unloaded gun openly. This is 2011. It’s nonsensical that we would walk into any public space, any private space and then you see someone with a holster walking around with guns. It just doesn’t make sense whatsoever. This is not a third world country. This is the eighth largest economy in the world. This is the United States of America.”

Fighting Back

Some would argue that restricting gun rights is actually bringing the United States closer to the gun confiscation typical in third world despotic regimes than the country that fired the ‘shot heard ’round the world’ when the British attempted to raid an armory in Concord. And some are fighting back.

Charles Nichols, president of California Right To Carry, has filed a civil rights lawsuit in the Federal Central District Court for California against the ban on open carry of both unloaded and loaded weapons. He intends to serve it on Gov. Jerry Brown, Attorney General Kamala Harris, the City of Redondo Beach, its police department and police chief on Thursday, Dec. 15, which is the 220th anniversary of the Bill of Rights.

Reagan Ban

The lawsuit notes that the ban on unloaded open carry is an extenuation of the ban on loaded open carry enacted by the California Legislature in 1967 in response to Black Panther intimidation tactics. Panthers would show up at the scene of arrests of black suspects in Oakland with loaded firearms to ensure against police brutality.

The Panthers put a scare into state Sen. John Nejedly, who agreed to meet with the family of a Richmond man killed by a deputy sheriff  in the course of a burglary. “I met with the family in good faith only to be confronted with an armed group, the Black Panthers,” Nejedly wrote to then-Gov. Ronald Reagan in April 1967. “This group was armed with pistols and shotguns and threatened to obtain ‘justice’ if their demands were not met. Today, this same group is appearing before the County Administration Building similarly armed.”

In response, Oakland Assemblyman Don Mulford introduced AB 1591, banning the open carry of loaded weapons. The Panthers protested the bill by invading the Assembly Chamber carrying loaded pistols, rifles and a sawed-off shotgun. Chaos ensued and legislators dove under their desks. Needless to say, the Mulford bill passed easily and received Reagan’s signature.

Nichols’ lawsuit states that he received a death threat in September and would like to carry a loaded handgun in public for self-defense. The suit argues that he should be allowed to do so, based on the Second Amendment and legal precedent. Nichols expects to lose at the District Court level, but is confident of victory in the 9th Circuit Court of Appeals.

NOV. 11, 2011

By STEVEN GREENHUT

To say that the unions have undue influence in the California Legislature, as many critics allege, is to understate the problem. The unions – and the public sector ones in particular – don’t just control the Legislature. They are the Legislature. Senate President Pro Tem Darrell Steinberg, D-Sacramento, previously worked as an attorney for a public sector union. Assembly Speaker John Perez, D-Los Angeles, is best known as the union organizer who led the Southern California grocery strikes of 2003-2004.

The Democratic Party, which controls every state constitutional office and holds strong majorities in both houses of the Legislature, functions as the cat’s paw for the unions. Gov. Jerry Brown was elected with the help of a record-setting $30 million in expenditures from the state’s unions, and despite disappointing them on a handful of matters including an encouraging new pension-reform proposal, has governed largely as their advocate in Sacramento.

So even as California sinks under the weight of an unfunded pension liability estimated by Stanford University to be as high as a half-trillion dollars, and even as various cities teeter on the brink of bankruptcy, there is little or no appetite for serious reform in the state Capitol. Pension reform has been a non-starter despite some modest criticism by legislative leaders of some of the more outrageous pension abuses. To illustrate how extreme the situation is, a 2010 proposal to strip pensions from government employees convicted of on-the-job felonies couldn’t even get a hearing. As Republican insiders told me, the unions exerted their political muscle by saying that such a measure was unfair to the families of the felons – and the legislation was pulled.

Instead of paring back union benefits and rooting out various abuses, ranging from those double-dipping DROP programs (Defined Retirement Option Plan) to “airtime” benefits that allow employees to buy additional retirement credits at a fraction of the cost to the taxpayer, the state Legislature continues to, at best, nibble around the edges of reform and even in some cases expand benefits, in the case of those cancer and heart-attack presumptions for public safety workers. Once, when asked what it is he ultimately wants for his members, a union president retorted, “more.” But despite lean times – in a state where unemployment averages above 12 percent, and where those numbers often exceed 20 percent in rural locales – the unions continue to implement more aspects of their benefit-expanding agenda.

GOVERNOR BROWN TILTS TOWARD UNIONS

Many observers had hoped that an aging Gov. Brown, back as the governor after a decades-long hiatus, would want to create a legacy rather than become too closely aligned with any interest groups. There was the much-discussed “Nixon goes to China” references to Brown, who could be the one person with the credibility to stand up to the unions that are a stumbling block to the state’s fiscal improvement. In a New York Times article before Brown’s victory over Republican billionaire Meg Whitman, Democratic consultant Chris Lehane echoed this common viewpoint, “He may be a career politician, but nothing about him has ever been conventional. If he is able to get through a lot of obstacles — and that is a big if — he could be the right person at this time, the sort of Nixon-goes-to-China way.”

Yet a year into his governorship, Brown has functioned in a “Nixon goes to San Clemente” way. He is less the unconventional politician and more a traditional pro-union politician. Brown is an interesting character, who offers varied rhetoric and prides himself on his Canoe Theory of Politics (paddle a little to the Left, then a little to the Right), but until very recently he failed to confront the unions.

As the Los Angeles Times reported after the close of the legislative session: “When the dust settled on Gov. Jerry Brown‘s first legislative session in nearly three decades, no group had won more than organized labor, which heralded its largest string of victories in nearly a decade. At the urging of the food workers’ union, Brown agreed to crack down on the use of automated checkout machines in grocery stores. At firefighters’ request, he approved new restrictions on local governments seeking to void union contracts. He guaranteed wages for workers in public libraries that are privatized — a bill sponsored by another labor group. … ‘Finally, after seven long years of [Gov. Arnold] Schwarzenegger, we’re moving in the right direction again,’ said Steve Smith, a spokesman for the California Labor Federation.”

Brown did, however, surprise most Sacramento observers when on Oct. 27 he introduced a 12-point pension-reform plan that goes much further than most Democrats and Republicans expected. The response from Sen. Bob Huff, R-Diamond Bar, the GOP caucus chairman, epitomizes this viewpoint: “The governor’s admission today that California is not on a sustainable path when it comes to unfunded pension liabilities is a refreshing step in the right direction. While I believe that all of the governor’s proposed reforms should be placed on the ballot for voter approval, I am ready to support his ideas to rein in costs by raising the mandatory retirement age for all new employees and the adoption of a hybrid risk-sharing plan. These proposals are similar to what Senate Republicans brought to the governor last year, and I believe the governor is on the right path.”

Specifically, the Brown plan – which still must get pushed through a Democratic-controlled Legislature – would raise the retirement age for non-public-safety new hires from 55 to 67, increase employee health-care contributions, ban “airtime” and other pension-spiking methods, and create a mandatory hybrid system for new retirees that apparently applies to public-safety categories also. Unfortunately, as my colleague John Seiler wrote in CalWatchdog, the details are left for a study and who knows what the study will conclude? Brown also calls for an initiative to change the nature of a retirement fund board in the wake of myriad scandals. The good news: the unions already are complaining.

Republicans called for a special session, but Brown rebuffed that idea.

San Diego Councilman Carl DeMaio, known for his statewide pension reform activism, said, “It takes some baby steps forward. But in the end, it’s completely inadequate for protecting taxpayers. It’s deja vu because it’s not reforming existing pensions.” And the pension liability doesn’t go away by reforming things only for new hires.

The Brown pension plan comes against a backdrop of his many pro-union bill signings. As I reported in the Orange County Register: “For instance, the governor signed a bill that makes it nearly impossible for municipalities to declare bankruptcy, forcing them instead to go through a mediation process that is dominated by union supporters who would oppose bankruptcy at all costs. Salaries and benefits are consuming such a large portion of city budgets that officials have no choice but to shut down parks and lay off workers. The unions won’t budge on benefits, so their goal is to make it impossible to abrogate those overly generous union contracts that are the source of the problem.”

Furthermore, the governor signed SB 202, which pushes citizen initiative measures to November general election ballots, thus undermining one of the key measures Californians have to tackle union power – the initiative process. The unions control the governor’s office and the Legislature, so reform can only come at the ballot box. Limiting initiatives to the general election makes it that much harder to qualify initiatives for the ballot and that much easier for big players, such as the unions, to dominate the process and squelch direct democracy.

Brown claims to be promoting democracy – at least that’s his explanation as he pushes Californians to approve new taxes and promotes a measure that would make it easier for localities to pass taxes. But the governor doesn’t like democracy when it comes to bans on those union-only Project Labor Agreements for public works projects. He signed a law that stops local governments from banning PLAs. At the bidding of the police unions, Brown vetoed a bill that was supported overwhelmingly by Democrats and Republicans in both houses of the Legislature.

It would have overturned a recent state Supreme Court ruling that allows police to search everything on an arrestee’s cell phone – a troubling development given the amount of information and number of databases available in a modern smart phone. By allowing police unlimited ability to search these phones, the court has given them unlimited ability to go on fishing expeditions of, say, a reporter’s databases if that reporter were arrested for any reason. The bill would have required a warrant, but Brown did what the unions asked him to do.

Brown signed a deal with the powerful prison-guards union that made it clear that he would not be standing up for taxpayers. As I wrote in City Journal: “The state’s old contract with CCPOA allowed retiring prison guards to collect a payout for up to 80 unused vacation days. In practice, that limit was often unenforced—but the new contract removes it altogether, letting guards bank an unlimited amount of vacation time. That will make it much easier to retire with six-figure payouts. Already, as a Sacramento Bee story has revealed, some state employees have walked away with as much as $800,000 in banked vacation time; the new CCPOA contract will make that more common. In fact, the San Francisco Chronicle reports that guards and their supervisors have 33 million vacation hours banked, which could cost taxpayers $1 billion or more. All this is in addition to prison guards’ ‘3 percent at 50’ retirement arrangement, which allows them to retire as young as 50 with up to 90 percent of their final year’s pay—and the guards commonly spike those generous pensions with various gimmicks, such as filing disability claims shortly before retirement.”

Brown also signed legislation to crack down on contraband cell phones that make their way to prison gangs. But the bill completely ignores the main source of those illegal phones – prison guards who take bribes and sneak them in. The California Correctional Peace Officers Association refuses to allow the guards to be searched unless they are paid for additional time.

Here we see that union power does more than impose financial costs on California taxpayers. It restricts accountability by public officials. It makes it nearly impossible to debate policy issues in terms of what’s best for the public. Such debates – ranging from pensions for felons to police searches of phones to keeping contraband out of prisons – don’t get much of a hearing when a dominant interest group flexes its muscle.

DEPTH OF THE PENSION PROBLEM

When Stanford University analyzed the state’s pension problem, it argued that the state’s main pension funds should use a discount rate of 4.1 percent in determining the size of the unfunded pension liability or debt. In the private sector, of course, most employees receive 401/k-style defined-contribution plans. The employer will, for instance, promise to match a certain percentage of the employee’s pay and place that in a retirement account. When the market goes up, the employee’s account grows and when it falls, obviously it too falls.

By contrast, most public sector employees receive defined-benefit plans. They are promised a defined level of benefit based on a formula regardless of how the stock market performs. Taxpayers are backing the promises made by politicians and must pay up if the pension fund investments don’t perform as promised. In California, these formulas can be rich. For instance, public safety officials receive the most generous formulas, including the common “3 percent at 50” formula. Police, deputy sheriffs, firefighters, prison guards and an expanding list of safety officials (such as lifeguards, who can earn more than $200,000 a year in Orange County) can retire at age 50 with benefits equaling 3 percent of their final year’s pay times the number of years worked. If an officer begins his police career at age 20, that means he can retire at age 50 with 90 percent of his final year’s pay – and that’s before the various pension-spiking gimmicks that can push those numbers even higher. In most California communities, firefighter pay and benefit packages average more than $170,000 a year, so these are expensive for taxpayers.

The agency that hires the employees and the employees contribute a portion of their salary into the pension funds, which then invest the money. In many instances, the agency – i.e., the taxpayer – pays the employer and the employee portion of the contribution. Especially with public safety, the employee often contributes nothing to his own retirement plan. Investment income is supposed to pay for the future pensions, so this becomes a guessing game.

The pension funds estimate the highest-possible rates of return on their investments because the higher the discount rate the less the predicted liability. The nation’s largest pension fund, the California Public Employees’ Retirement System (CalPERS) estimates that its investments will earn 7.75 percent a year for the next 30 years, which strikes most observers as optimistic. The goal of CalPERS and the public employee unions are to minimize the size of the problem so that politicians do not tinker with the generous pensions they receive.

In an April 2010 study called “Going for Broke,” Stanford University suggested using the risk-free rate of 4.1 percent to determine the true unfunded pension liability for the state’s three major pension funds. According to the report, “Adjusting the discount rate used on liabilities to a risk-free rate, we estimate the combined funding shortfall of CalPERS, CalSTRS, and UCRS prior to the 2008/2009 recession at $425.2 billion (see Table 2). At the time of this writing, the funds have not released more recent financial reports, but due to the previously mentioned $109.7 billion loss the three funds collectively sustained, we estimate the current shortfall at more than half a trillion dollars.”

CalPERS was aghast at this study and its officials have been blasting it ever since, even though it was produced by a highly respected academic institution and its research was led by a well-known former Democratic state legislator who has taken particular interest in the pension crisis.

Ironically, as I reported recently in the Orange County Register, CalPERS’ own numbers actually make the case for an even lower discount rate than the one used in the Stanford study: “When the taxpayer is backing up the entire liability for the pensions received by members of the California Public Employees Retirement System, then CalPERS officials are exuberant about the stock market. They insist that a predicted rate of return of 7.75 percent is perfectly realistic. When their own funds are on the line, however, CalPERS can be extremely conservative as it embraces one of the lowest annual return rates imaginable: 3.8 percent.”

The latter number is what CalPERS uses when it pays localities that are interested in exiting the CalPERS plan. It’s the “rubber meets the road” number CalPERS uses when its own funds, rather than our funds, are on the line. It also is vindication that the Stanford study is on the mark and that the state’s unfunded liability is higher than expected. Former Orange County Treasurer Chriss Street pins that number at nearly $900 billion if the 3.8 percent figure is used.

But thanks to union power, reform has gone nowhere in the Capitol and even the discussions about reform – and local initiative-based reform measures – deal almost solely with new hires. But reforming pensions only for new hires doesn’t stave off economic problems. During one state Senate hearing about a Republican-backed pension reform measure last year that would have lowered pensions and increased contributions for new state employees, Democrats objected by arguing that it wouldn’t do anything anyway – it would be too many years down the road before savings would be realized. They weren’t arguing for a tougher measure that lowered pensions for current employees. Rather they wanted to do nothing. They said that this issue ought to be resolved at the negotiating table. Never mind that unions control both sides of that table, especially at the local governmental level.

The unions essentially elect their own bosses. In many local pension negotiations, the employees who supposedly represent that taxpayer are actually members of the union that sits at the other side of the negotiating table. They have every incentive to negotiate a deal that improves their benefits regardless of what it means for taxpayers. These negotiations are done in closed session, so the public rarely learns about the deals until it’s almost too late to organize to stop them. City council members and supervisors love to gain the union endorsements and to pose next to the squad cars and fire trucks. The average citizen hardly has a chance.

TACKLING REFORM AT THE BALLOT BOX

The pension issue won’t be fixed at the negotiating table. In California, which has liberal rules governing the initiative process, the only hope for reform is direct democracy. Last November, for instance, eight out of nine local pension-reform initiatives were approved by voters. The one losing measure was in liberal San Francisco, and this November’s election is dominated by pension reform even in that city.

In San Francisco, voters will choose between Proposition C, the “city family” measure backed by the establishment and the city’s public-sector unions, and Proposition D, a more hard-hitting measure championed by Public Defender Jeff Adachi, who also is a candidate for mayor.

The city establishment has rigged the game to ensure C’s passage. As I wrote for City Journal: “Prop. D is clearly the better of the two initiatives, which is why city officials are taking no chances that Adachi’s reforms will prevail over the establishment’s compromise half-measure. Mayor Lee pulled a sneaky behind-the-scenes stunt to ensure that Adachi’s measure would be less effective, even if it wins the most votes. Under a memorandum of understanding Lee negotiated with the police and firefighter unions in July, most of the city’s highest-paid workers would be exempt from the provisions of Prop. D that require higher pension-contribution rates. Despite an exposé by the San Francisco Examiner and ensuing controversy, the city’s board of supervisors unanimously approved the memorandum. Adachi rightly was appalled at the anti-democratic nature of a secret deal exempting particular classes of public workers from a ballot measure that the public hasn’t even had a chance to consider. He also was angered at the way the city’s controller, a Lee ally, skewed a supposedly independent analysis of the two measures to minimize the expected savings from Prop. D.”

The San Francisco Chronicle argued that “Neither would come close to covering the escalating general-fund obligation to meet promised pensions and health-care coverage for retired city workers.” But instead of siding with the more far-reaching measure, it backed Prop. C because that proposition has backing from the establishment and is less divisive. But given the degree to which pensions are consuming public budgets, officials in San Francisco and elsewhere are going to have to embrace measures that cut deeply into the problem.

Adachi, a progressive Democrat, has been making the progressive case for pension reform. In his view, unless San Franciscans cut back on millionaire’s pensions for public employees (a person would indeed need several million dollars saved to receive these six-figure cost-of-living adjusted deals), then the city will face a continued decline in the quality of life and in the quality of services there. David Crane, the liberal Democrat who was former Gov. Arnold Schwarzenegger’s chief pension adviser, said at a Senate hearing: “One cannot both be a progressive and be opposed to pension reform.  The math is irrefutable that the losers from excessive and unfunded pensions are precisely the programs progressive Democrats tend to applaud. Those programs are being driven out of existence by rising pension costs.”

Instead of embracing modest reform, Californians might soon need to listen to the reform-oriented official government watchdog called the Little Hoover commission, earlier this year “urged the Governor and the Legislature to establish the legal authority for the state and local governments to freeze pension benefits for current workers. The Commission recommends that, going forward, current workers accrue benefits under more sustainable pension plans. Payments to current retirees would not be affected.”

This was a groundbreaking suggestion. We’re not talking about stripping pensions from current retirees or changing the retirement formula going backward – even though unions have repeatedly succeeded in increasing pension benefits retroactively. Little Hoover simply is calling for the state to do what many private-sector companies have done: Make good on pension promises up until today, then implement a new, lower benefit tier starting tomorrow. Unless this is done, the current unfunded liability will not be addressed and pension and other retiree benefits will continue to consume an ever-larger portion of city budgets.

CUTTING PENSIONS OR CUTTING SERVICES

After Vallejo, Calif., went bankrupt – the result of excessive pensions and pay packages, including average compensation of more than $170,000 a year for firefighters and a $300,000 pay package for a police captain – the city had to shutter fire stations, parks and community centers and reduce the police force by a third. Citizens were warned to use the 9-1-1 system only in the most dire emergencies. So as governments pay too much to public employees, the services the public receives are greatly diminished. The Sacramento Bee once opined that city governments are becoming pension providers that offer services on the side.

The problem has been bipartisan. Although the state’s Democrats are most closely aligned with the unions, at the local level Republicans have been particularly eager to expand pay and benefits for police and firefighters.

Meanwhile, the state’s key pension reform activists have not been able to agree on a pension reform initiative, which leaves reform to the local level. A Paycheck Protection measure is going forward, however, which would limit the ability of unions to tap their members’ paychecks for political funds without them first opting in. The new measure includes restrictions on corporate donations also as a way to blunt some of the expected criticism from the Left.

And the SEIU has been dispatching action teams to places where signature-gatherers are collecting signatures for this measure in an effort to confront and even intimidate voters away from signing the petition. Unions still like to flex their muscle, whether at the Capitol or in front of grocery stores. Researchers at union-backed think tanks affiliated with the University of California have produced easily debunked studies that claim to show that public sector workers earn less than their private-sector counterparts. Clearly, they are fighting back as public opinion shifts in favor of pension reform.

Reformers are winning the debate but losing the policy battle thanks to the deep roots the union movement has sunk in California. It’s hard to overcome a union-backed governor, a union-owned Legislature and big union money that come into play during statewide initiative battles. But running out of money focuses the mind, which seems to explain Gov. Brown’s pension-reform proposal. As states and municipalities go broke, elected officials will have no choice but to reform overly generous pension deals for public employees and not just for new hires.

Steven Greenhut is director of the Pacific Research Institute’s Journalism Center in Sacramento. He is editor in chief of www.CalWatchdog.com, a columnist for the Orange County Register, a contributing editor to City Journal California and author of Plunder! How Public Employee Unions Are Raiding Treasuries, Controlling Our Lives And Bankrupting the Nation (2009 The Forum Press).

By WAYNE LUSVARDI

Wind power is a medieval technology that most people visualize coming from Dutch windmills in the 1600’s and 1700′s.  The 1600’s were also known for the Tulip Bulb Mania, which the Dutch fittingly called “windhandel” (“wind trade”) because no tulip bulbs were actually trading hands. Tulips were traded on the decentralized stock exchanges in the taverns of Dutch towns, typically using a slate board to post bid prices.

The famous Dutch artist Hendrik Gerritsz Pot’s 1640 painting “Flora’s Wagon of Fools” depicted Flora, the goddess of flowers, riding in a “wind powered car” with attached tulip bulb flag, a drunk openly drinking an alcoholic beverage, a monk or priest with tulips in his hood and carrying a money bag, a two-faced Goddess of Fortune, and followed by a horde of corrupt weavers seduced by a get rich quick scheme. The painting is eerily contemporary to our times.

Replace tulips with wind power, and slate boards with “asset-backed security,” “feed-in-tariffs and “advance mitigation funds,” and you have the makings of a modern day Wind Power Mania.

Not to be deterred by the worldwide collapse of green energy and the threat posed by the drop in natural gas prices due to new drilling and “fracking” technologies, Ryan Wiser of Berkeley’s Lawrence Livermore National Lab, recently calculated that 5,000 more wind turbines would need to be added to the 13,000 existing turbines in order to meet California’s proposed mandate of 33 percent renewable energy. Modern day wind turbine spacing methods call for no more than four turbines per square mile, which would encompass 1,250 square miles (or 800,000 acres) of additional land visually blighted by wind turbines. This would comprise nearly the entire area of Santa Clara County.

Mark Jacobsen, a Stanford engineer, calls for full “decarbonization” of worldwide energy production, which would require 4 million turbines. Jacobsen states that if 90 percent of the world’s power were supplied from green energy, it would only encumber 10 percent of all the land, including spacing between wind turbines and solar panels.

Jacobsen doesn’t say if sufficient high grade wind, solar, geothermal resource lands are even available near transmission lines to meet the 10 percent requirement in California, such as lands located in high wind resource zones and mountain passes, in deserts not prone to frequent dust storms, hot springs for geothermal plants, and off shore ocean bottom land for 400 to 500 feet high wind energy platforms, which would require permits from both the State Lands Commission and the Coastal Commission.

A new study indicates California has an amazing 587.7 gigawatts of potential wind energy along its coastline. But 97 percent of it would be located in deep ocean waters (200+ feet) that would make wind turbines economically infeasible, and currently banned by the California Coastal Commission. Wind energy mania continues in California unabated even as green power is collapsing in Holland, Great Britain, Spain and Canada.

Jacobsen further states that to be able to provide enough electricity to meet “base load” power needs, green power would have to rely on hydropower.  But hydropower is forbidden under California’s Green Power Law (AB32).  Wind power is only about 10 percent to 20 percent efficient due to the variability of wind and is not reliable for supplying everyday base load power, as opposed to peaker power, which is needed when there is a heat wave or cold snap.

Jacobsen adds that energy from fossil fuel results in health damages mainly due to air pollution.  This is refuted by Joel Schwartz of Harvard University who has “documented…evidence that even air pollution levels far higher than any we experience in the U.S. are perfectly safe, and that the nation’s air does not cause adverse health effects” to children’s health, asthma rates, premature deaths and that even diesel fumes are harmless.

Air pollution is a nuisance, an irritant, and a visual blight, not necessarily a health hazard. And is it any more a nuisance than a wind turbine?

Wind power mania reached its peak in 2010 when California passed SB34 and AB1012 for the provision of “advanced mitigation” funds and fast tracking of land use permits for green energy projects. The American Recovery and Reinvestment Act (“Stimulus”) funded this legislation with a $1 billion revolving fund. This funding and legislation provides for green power developers to reimburse the government for acquisition of advanced “mitigation land” so that their projects aren’t delayed. Real estate appraisers report that the panic to buy mitigation land has reached such desperation that in many areas such land is getting in short supply because for every acre impacted, three acres needed to be acquired for mitigation. If there is a collapse of green power in California what will happen to all the acquisition of “advance” mitigation land that should have been optioned or leased instead?

Wind farms don’t supply the taxpayers who subsidize them with annual reports, with audits, or, using President Obama’s term, the percent of return on “investment.”  And what about insider trading with all the crony capitalism involved with green energy projects?  Such abuses would make Martha Stewart’s insider trading conviction look like she was a girl scout who won the ethical investing badge.

Government has been manic about replacing conventional energy with wind power.  Wind power was unable to survive on tax credits alone, so Congress granted the wind energy industry up-front tax grants. Wind power developers didn’t have the upfront money to buy mitigation land to fast track their zoning approvals fast enough, so they were granted advanced mitigation funds using Federal Stimulus monies. After the Federal Energy Regulatory Commission (FERC) denied then-attorney general Jerry Brown’s appeal to force electricity ratepayers to pay premiums for high-priced green power, Brown proceeded to stack the CPUC in the hopes of forcing electricity ratepayers to do what FERC denied. Now wind energy lobbyists are demanding Federal and state mandates to use wind power. Green power will get to trump all competitors regardless of price and put providers of conventional energy out of work.  Wind power in California is a governmental tulip bulb craze.

JAN. 25, 2011

By WAYNE LUSVARDI

A Green Tech Martin Luther may have emerged in California, but the state is unlikely to convert to his brand of economic religion.

On Oct. 31, 1517, the Catholic monk Martin Luther posted his 95 theses on the door of the All Saints Catholic Church in Wittenberg, Germany, thus triggering the Reformation and the separation of church and state.  The basis of Luther’s protest was the church’s sale of indulgences and emphasis on monetary donations for building large churches as a way to earn one’s way into heaven.

On Jan. 20, 2011, in Palm Springs, T.J. Rodgers, a top green technology industrialist and de facto high priest, told 500 participants at the 7^th Annual Green Tech Summit that they should reject government green energy subsidies, “run like hell” from selling or buying cap and trade pollution credits, and reject the notion that 95 percent of climatologists agree on global warming.  The true believers of green religion in the audience received Rodger’s address about as well as the indulgence salesman of 1517 who burned Luther’s 95 theses.  According to one reporter, there were outspoken uncomplimentary remarks made by the crowd after Rodger’s speech.

Parallels can be made between Luther and Rodgers.

Martin Luther held a doctorate in theology and taught at the University of Wittenberg.  Luther’s father was a smelter who used carbon to extract iron and copper from raw ore. Green technology such as windmills became prevalent in the Netherlands when it was still part of the Holy Roman Empire during the medieval period.

T.J. Rodgers is no outsider to the green tech industry. He became wealthy converting sand into silicon computer chips. He is described as a Republican of libertarian persuasion, with a PhD in electrical engineering from Stanford, the inventor of VMOS transistor technology, licensor of American Microsystems, and founder of Cypress Semiconductor that made computer chips from silicon.  Rodgers was an equity investor in Sun Power Solar where he made a return 24 times his initial $750,000 investment, partly due to government subsidies. He was for Prop 23 in California on the November 2010 ballot that would have suspended the state’s mandate for green power until the economy improved.

At the Palm Springs Green Tech Summit, T.J. Rodgers’ pointed out that California is unlikely to see any significant boom in green jobs: “Green jobs are almost all offshore – you ain’t gonna make them in Fremont (California), just ask Solyndra.”

Solyndra is a solar panel company that closed its California plant in November 2010 after receiving $535 million in Federal subsidies to build its factory. Solyndra was held up by President Obama as a model of home grown green tech industry. Solyndra’s green tech jobs are reportedly now being outsourced to China.

Rodgers talk included criticism of Al Gore and his global warming theory and such environmental alarmists as Paul Ehrlich, both now residing in California and respectively the symbolic Pope and archbishop of modern environmentalism.

Rodgers’ blunt talk comes at a time when the green energy industry is facing a new Republican-controlled House of Representatives that is likely to be hostile to continuing green subsidies given Federal and state budget deficits. The U.S. House is expected to reverse the EPA’s E-15 gasoline blend (15 percent ethanol, 85 percent gasoline) despite its subsidy to farmers. And by curtailing wind power the U.S. may push back China’s control of the rare earth elements market needed for wind turbines.

In July 2010, even the Obama-controlled Federal Energy Regulatory Commission (FERC) denied then-California Attorney General Jerry Brown’s appeal for Feed-In Tariffs (FITS) that would have shifted the high cost of green power development to electricity ratepayers. But Gov. Jerry Brown is in the process of stacking the California Public Utilities Commission (PUC) with euphemistic “consumerists” in a possible attempt to save the state’s green power initiative by tacking the high cost of green power onto the backs of ratepayers. Modern-day indulgences will be mandated by the regulatory state.

As pointed out long ago by California longshoreman and philosopher Eric Hoffer, environmentalism is a secularized religious movement “that starts out idealistic, then becomes a corporation, and eventually becomes a racket.”

From Silicon chips to cognitive bargaining chips

The question arises whether T.J. Rodgers message will result in a reformation in the green tech industry and the religious-like green environmental ideology that pervades every part of American culture.

A cultural clue to what direction that green technology might take is a sign hanging over T.J. Rodger’s office desk from noted economist Milton Friedman that reads: “Get everything they (shareholders) are legally entitled to and still argue for an end to government subsidies.”

The obvious contradiction of the above quotation underscores what is called “cognitive dissonance” – the psychological conflict of holding of two contradictory beliefs at the same time (George Orwell’s “doublethink”). Just as Luther didn’t totally reject Catholicism, T.J. Rodgers does not reject green startup subsidies but says long-term subsidies should be refused.  In other words, green tech ideology should now be open to compromise and accommodation with the wider political culture shift from government to the private sector.

The very existence of a green tech occupational subculture necessitates a process of cognitive bargaining with the new emerging “Tea Party” political culture outside California (“OK, we’ll agree to accept start-up subsidies but not operational subsidies”).

In his book The New Holy Wars: Economic Religion versus Environmental Religion (2009), Robert H. Nelson argues that religion is still a powerful force in economic life even if unrecognized by the media and academia. The dominant cultural forces are secularized versions of Catholicism (socialism and cap and trade indulgences and medieval wind mills) and Protestantism (capitalism and the Protestant work and savings ethic and natural gas fracking technology). Oddly, green technologies and cap and trade do not offer a cleaner environment because wind and solar power merely clean the air in California’s deserts not in its urban smog traps.

T.J. Rodger’s is a missionary trying to convert the Green Tech industry to symbolically bargain even to the point of abandoning its dogmatic quasi-religious global warming ideology. But the majority of California voters and the Green Tech industry are not buying the appeal for religious conversion.  Culture and religion, not merely taxes, are crucial to any economic renaissance in California. In short, California may not have the cultural capital for an economic recovery as does Middle America and the South.

Look for California to continue its counter cultural religious resistance to any shift from environmental religion back to economic religion, as it continues to embrace an Old World form of religious economy and medieval energy technologies such as windmills using such double think terms as Progressivism and Environmentalism.  California’s public religion of environmentalism is still unwilling to separate from the state. Any softening or abandoning of such resistance would require a broader cultural religious reformation and conversion as pointed out by green industrialist T.J. Rodgers.

By KATY GRIMES

Last Thursday a mentally ill young man walked into a mall in Placer County, and started a fire in a game store. He also told the store’s manager that he had a bomb in his backpack. Within hours, more than one-quarter of the mall had burned down or collapsed under the weight of the water used to fight the fire, and from the mall’s sprinklers.

By the next day, Gov. Arnold Schwarzenegger declared a State of Emergency in Placer County.

But many are scratching their heads and asking why the governor is assisting a privately-owned mall with taxpayer money. Or, if that’s not the purpose of the state’s emergency declaration, what is?

On Saturday, small business radio host Mark Montgomery had Congressman Tom McClintock, R-Rocklin, on as a guest. I called the radio show and asked McClintock why the governor would have made the emergency declaration for a mall in Placer County in McClintock’s district. McClintock also questioned the decision, and acknowledged that the privately-owned mall has insurance that will cover the damage.

For answers, Kelly Huston at the California office of Emergency Management was able to offer clarification.

Huston said, “The emergency declaration pays for things not covered by private insurance.”

To understand what this means, reading the governor’s declaration is helpful.

The first area of assistance is to the victims, and in this case, the mall employees, who will now find themselves unemployed. The declaration states, “…the provisions of Unemployment Insurance Code section 1253 imposing a one-week waiting period for unemployment insurance applicants are suspended as to all applicants who are unemployed as a direct result of the fire and damage to the regional shopping center in Placer County.”

Additionally, Huston said that anyone who lost a purse or wallet containing identification documents as a result of the mall evacuation, can get documents replaced quickly and at no charge by the DMV.

But the crux of the declaration, according to Huston, is to suspend the usual state-level bureaucracy that takes place during the cleanup, repair and rebuilding phases.

The emergency declaration reads, “...the statutes, rules, regulations and requirements are hereby suspended to the extent they apply to the following activities: (a) removal, storage, transportation and disposal of hazardous and non-hazardous debris resulting from the disaster; (b) necessary restoration; and (c) related activities.”

The California Environmental Protection Agency and the Secretary for the California Resources Agency were ordered by the governor to “use sound discretion in applying this suspension to ensure that the suspension serves the purpose of accelerating cleanup and recovery.”

Solid waste facility permits, waste discharge requirements for storage, disposal, and emergency construction activities, waste discharge requirements and/or Water Quality Certification, all have the usual permitting procedures suspended.

The governor’s emergency declaration appears to be for the purpose of getting state government out of the way of the recovery process.

Huston said, “Anything involving public infrastructure is also covered. If water pipelines were damaged, the state would reimburse the cost of repairs to the local government.”

Huston said that the state will reimburse the cost of the emergency responders, up to 75 percent. “Emergency responders are the largest cost,” said Huston. “Firefighters, investigators, police, all respond, and their local governments are struggling.”

According to Huston, without state of emergency declarations, local emergency responders could be hesitant to send local resources because of the cost to the local agencies. “They cannot pay for it,” said Huston.

“We are trying to reduce the amount of bureaucracy that slows down progress,” Huston added.

With an emergency declaration in place, state and local agencies can enter into contracts and arrange for the purchase of materials and necessary services, without the usual time-consuming procedures, in order to “quickly remove dangerous debris, repair damaged resources, and restore and protect the impacted area.”

The irony is that usual procedures are acknowledged to “prevent, hinder or delay.” The declarations states, “because strict compliance with the provisions of the Government Code and the Public Contract Code applicable to public agency contracts would prevent, hinder, or delay these efforts, applicable provisions of those statutes, including, but not limited to, advertising and competitive bidding requirements, are suspended to the extent necessary to address the effects of the fire.”

Contrast the massive state support of the mall fire with the state support offered to Placer County after the 49er fire in August 2009. Much shorter than the Placer County mall fire executive order, the governor ordered for the 49er fire, “all agencies of the state government utilize and employ state personnel, equipment and facilities for the performance of any and all activities consistent with the direction of the California Emergency Management Agency (CalEMA) and the State Emergency Plan, and that CalEMA provide local government assistance under the authority of the California Disaster Assistance Act.”

In his Proclamation of a State Emergency, the governor ordered the agencies to utilize personnel to help fight the fire. The order did not suspend the usual bureaucratic practices within the agencies in permitting, licensing or rebuilding.

The victims were also offered a waiver of the one-week waiting period for unemployment insurance, and Cal EPA statutes, rules, regulations and requirements were suspended during the recovery.

340 acres burned, 66 homes were destroyed, nine commercial businesses were destroyed or suffered major damage, and it took 355 emergency responder personnel to combat the fire in 2009.

The previous May, the governor issued an Executive Order ahead of fire season in the state, preparing for and readying CAL FIRE resources and personnel during the fire season. But neither order addressed, as comprehensively, the needs to rebuild business the way the latest emergency declaration has.

The latest emergency declarations appear to pave the way for reimbursements to local governments for the costs of police and fire crews responding to emergencies.

And locating the costs of these reimbursements within the state budget is not easy. CalWatchdog is still researching this information.

And yet, it was almost immediately reported that Roseville city officials said that the unburned sections of the mall could reopen within weeks, in time for the holiday shopping season.

As nearly all shopping malls are notorious for requiring exceptional insurance coverage by their shops and stores, with the top-of-the-line insurance policies about to kick in for the mall and store owners, people are still scratching their heads asking why a state of emergency was declared over a mall fire set by one mentally-disturbed young man in a game store.

Photo: Creative Commons

SEPT. 13, 2010

By DAVE ROBERTS

There are few companies more successful – and more loathed by liberals – than Walmart. The company employs more than 2 million people in 8,500 stores in 15 countries, raking in $405 billion in sales in the last year. It ranked first among retailers in Fortune Magazine’s 2010 Most Admired Companies survey. But Walmart also annually ranks first among the Left’s most despised companies, in large part because it has resisted unionization. The company’s lower salaries and more modest benefits allow for lower prices that appeal to customers but undercut unionized retailers.

Environmental regulations have become the cudgel with which to beat down Walmart’s plans to locate a new store in a city or expand an existing store. Voluminous environmental impact reports are produced analyzing things such as increased traffic, noise and the potential for “urban decay” resulting from Walmart shuttering less-competitive stores, leading to the closure of shopping centers and increased unemployment, blight and crime.

Walmart has fought these EIR-led battles all over California, sometimes successfully, sometimes not, but always incurring the extra costs (in the tens or hundreds of thousands of dollars) and potential delays of several years as the draft EIR is prepared, vetted by various public agencies, hearings held, a final EIR prepared with more agency and public comments and hearings before it’s finally certified by a city council or rejected. The City of Antioch has stymied Walmart’s expansion plans in that city for the past five years through this EIR-roulette.

But a recent appellate court ruling in San Diego may tip the scales against the wanton enviro-bashing of business. In 1992 the city of San Diego approved an EIR for development of a downtown waterfront area, the San Diego Navy Broadway Complex. A developer has a lease with the Navy to build an administration complex, hotels, offices and shops where there currently are dilapidated buildings and government-only parking, according to Wikipedia. An opposition group sued, claiming that the city is required to update the project’s EIR to include impacts such as its affect on global climate change.

In June the California Fourth District Appellate Court ruled that San Diego did not have to do another EIR because it actually does not have the authority to rule on the project’s environmental impacts. “Courts have concluded that the ‘touchstone’ for determining whether an agency has undertaken a discretionary action that requires the preparation of an EIR is whether the agency would be able to meaningfully address the environmental concerns that might be identified in the EIR,” the ruling states. “If an agency lacks such authority, then environmental review would be a meaningless exercise.”

There have been many such meaningless exercises in California for Walmart. Only two Walmart proposals – a new store in Willows and a store expansion in Folsom – have not been opposed in the 10 years that Miriam Montesinos, land-use counsel for Walmart, has been engaged on the front lines of the Walmart battles. In what has become a traveling dog and pony show, 15 or more of Walmart’s proposals have been opposed by two lawyers: Bret Jolly and Mark Wolfe, the latter with the California Healthy Communities Network. They are skilled in using anything they can find among the minutiae in scores of potential environmental impacts as weapons to shoot down Walmart’s plans.

Walmart has been so beaten down by the environmental mau-mauing, that it springs for an EIR even if not legally required to do so. In 2005 it began the process to expand its store in Antioch, which got shot down in 2007 by the city council based on concerns about environmental impacts. The store has come back with a scaled-down expansion – just a grocery department – but agreed to do another EIR. That EIR was used by Jolly and Wolfe to persuade the council to not allow the expansion.

Asked by a councilman why Walmart had agreed to do another EIR, Montesinos said, “There had been months of battling with (city) staff on the issue. It just seemed to be at loggerheads. Walmart, not foreseeing the repercussions that would be raised by the opposition down the road, said, ‘OK, let’s just move this process forward.’ Everyone believed that once those (council) concerns were addressed in good faith we could get beyond being told the EIR was not adequate.

“There have been instances where they have challenged Walmart projects without an EIR. The legal threshold (for requiring an EIR) is very low. All they have to do is show there’s a fair argument. So Walmart is caught in a difficult position. You can keep sticking to your guns and make the case ‘We don’t need to do this.’ And you can end up in a court that throws you out and says ‘Go back and do an EIR.’ Walmart said, ‘Let’s skip that step.’ From a legal tactical decision, given the challenges they would raise, that was the most conservative route.”

In effect, the company agrees to provide opponents with the rope that’s often used to hang it or tie it up for months and years. In July, for the second time in three years, the Antioch City Council denied the Walmart grocery department expansion, citing the inadequacy of the EIR concerning urban decay and other impacts. The 3-2 vote was greeted with cheers from the unionized grocery workers who packed the chambers, pleading for the protection of their jobs. But the mayor said he was “ashamed” and “embarrassed” by the council’s vote, noting that the company had addressed all of the city’s concerns and that it sets Antioch up for a lawsuit, perhaps bankrupting it (Antioch is looking at a $4 million budget deficit next year.)

But in August, the council backtracked a bit after the city attorney brought the San Diego ruling to its attention. She said when it’s the council’s job to review the design of the store expansion, the council may be outside of its legal authority to base its decision on extraneous environmental information. She was backed by a legal consultant who said the law does not give the council “the authority to consider urban decay in whether to approve the design review application.”

Jolly disputed that, saying that the “San Diego Navy case is an apples and oranges case.” He pointed out that the ruling sided with the city of San Diego in its judgment on whether an EIR was needed, and that the court would likewise support Antioch’s government when it decides environmental review is required.

He failed, however, to convince a council member who had voted against Walmart in July. She switched her vote in August and made a motion that was carried 3-2 to allow more time for the city attorney to study the impact of the San Diego ruling. That will include whether the ruling makes moot the council’s concerns about potential urban decay, thereby saving Walmart from having to pay for and wait for additional environmental studies. The issue may come back to the council on Sept. 28. For now, it’s a small victory for Walmart.

Mirroring the San Diego ruling was a legislative effort in Sacramento. AB1581, which was sent to the inactive file at the end of the current legislative session, would have allowed store expansions in existing buildings up to 120,000 square feet without requiring environmental review. It was dubbed “The Walmart Bill,” although it was supported by the California Retailers Association, to which Walmart belongs.

By ANTHONY PIGNATARO

For Kening Ma of Ontario, bail was set at $150 million. His wife Shirley Ji got a slightly better deal – a mere $75 million. These are, to say the least, extraordinary figures. The previous highest bail on record appears to be the $100 million set in the indictment of Raj Rajaratnam, who was arrested last year in New York for allegedly masterminding a $20 million insider-trading scheme.

“I’ve never seen bail set that high, and I’m a bail bondsman by trade,” Assemblyman Curt Hagman, R-Chino Hills, said. “I’ve been in the business 25 years, and the highest bail I’ve ever seen is $10 million.”

In any case, the 70-count indictment of Ma and Ji – president and vice president, respectively, of Ontario-based Goldenvale, Inc. – is the culmination of a five-year felony criminal investigation. The San Bernardino District Attorney’s office executed the indictment on March 4 of this year. San Bernardino County Sheriff’s deputies arrested the couple six days later.

Given the bail amounts and the size of the indictment, you’d think Ma and Ji – both of which are U.S. citizens, having moved here from China a decade ago – were being charged with international terrorism or corporate skullduggery on an epic scale. In fact, they’re charged with violating California Air Resources Board regulations – specifically, they’re accused of importing motorcycles and ATVs equipped with engines that fail to  meet state emissions control laws and then selling them. The indictment lists one count of conspiracy, 33 counts of grand theft (the selling of the ATVs and such, for a total of $27,000), six counts of money laundering (to the tune of $440,000) and 30 counts of “possession of a false certificate” (in this case, smog certificates).

On April 28, Ma cut a deal with prosecutors and agreed to plead no contest to four counts of felony grand theft and pay restitution to victims (customers who bought the company’s vehicles) while Ji plead guilty to two counts – one of grand theft and another of conspiracy to commit grand theft. Their sentencing occurs on July 20, though a civil action remains ongoing.

“The felony pleas, sentencing and the amount of time in custody are very significant for a case which had its beginnings in an investigation over air quality issues,” San Bernardino County Deputy District Attorney Doug Poston said in this statement (Poston didn’t respond to several phone calls requesting more information on the case and bail amounts; ARB officials refused to comment on the ongoing civil action against Ma and Ji).

The Air Resources Board and Goldenvale go way back, according to ARB Enforcement Investigator Michelle Shultz-Wood. “We had a settlement previously with this company in 2005,” she said.

On Aug. 31, 2005, Goldenvale signed a settlement agreement with ARB concerning 320 alleged violations California Health and Safety Code section 43106 (all new motor vehicles must meet state emissions standards) and section 43150 (dealers must only sell vehicles meeting the state’s emissions standards). The company agreed to pay $39,034 in penalties and promised to stop their air quality regulation violations.

But Shultz-Wood said the violations continued, which ARB investigators discovered not long after the settlement agreement was finalized. In response, she said they contacted the San Bernardino County District Attorney, who promptly took over the case. It’s a practice ARB has apparently been doing for some time, and intends to continue in the future.

“When we refer a case to the District Attorney, the case becomes theirs,” Shultz-Wood said. “They are the lead and we just give support,” which she defined as air quality law expertise and assistance in carrying out investigations.

In 2002, Shultz-Wood was involved with a case against National Car Rental that ARB handed off to the Los Angeles District Attorney and eventually led to a $60,000 settlement. “National Car Rental, Inc. repeated rented or offered for rent, non-California certified vehicles within the state,” says page 24 of this report on ARB’s 2002 enforcement activities. “An investigation by ARB staff revealed that on multiple occasions, 49-state vehicles that had been rented in other states and dropped off in California, were repeatedly rented in state prior to being sent to out-of-state destinations.”

ARB has also teamed up with the state Attorney General’s office to prosecute air quality regulation violations. In June 2007 Anderson-based Sierra Pacific Industries, a logging company and “California’s largest private landowner” agreed to a $13 million settlement in a case involving alleged “numerous violations of their air pollution control permits” at various sawmills statewide, according to this ARB statement. That case involved ARB, the Placer County Air Pollution Control District and the AG’s office.

“It’s very normal for us to work with district attorneys and the Attorney General in our cases,” Shultz-Wood said.

Others, like Assemblyman Hagman, don’t think “normal” is quite the right word.

“Businesses are scared to death,” Hagman said. “It’s one thing to get fined [for air quality regulation violations], but getting thrown in jail? We’re not going to be encouraging a lot of businesses if they do this. There are other things they can do.”

JUNE 1, 2010

By JOHN SEILER

California’s unemployment rate remains stubbornly high, at 12.6 percent. That’s 2.7 percentage points above the national average. The persistence of unemployment also is something Californians haven’t seen since the Great Depression. The May 30 Sacramento Bee reported:

To a degree not seen in recent recessions, unemployment has become a drawn-out affair.

About 6.7 million Americans have been unemployed for at least 27 weeks, including nearly 880,000 Californians. The ranks of the state’s long-term unemployed more than doubled in the past year and now account for about 40 percent of all those out of work, according to the Employment Development Department.

Are “green jobs” the answer?

“Green jobs” are those associated with producing a cleaner environment, such as manufacturing solar panels, which reduce dependence on electricity produced by coal and fossil-fuel generation plants; or high-mileage hybrid cars depending partly on battery power, such as Toyota’s popular Prius.

One of the major arguments for passing AB32, the Global Warming Solutions Act of 2006, was that it would create California jobs in new industries in which the Golden State then would take a global lead, much as our companies led in computers and medical devices. AB32 mandates cutting greenhouse gas emissions in the state by 25 percent by 2020.

Gov. Arnold Schwarzenegger made such arguments when he signed AB32 in 2006:

Some have challenged whether AB32 is good for businesses. I say unquestionably it is good for businesses. Not only large, well-established businesses, but small businesses that will harness their entrepreneurial spirit to help us achieve our climate goals.

He said something similar recently at a May 12 meeting on green jobs at the University of California, Davis. The symposium’s title itself speaks of green jobs creation: “E3: Economic Prosperity, Energy and the Environment — A Roundtable to Set the Agenda on Clean and Sustainable Paths to Economic Prosperity.”

Opposing the November 2010 initiative to effectively repeal AB32, which is called the California Jobs Initiative, the governor insisted:

Our policies that have been put in place have created jobs, it has increased the productivity in the green sector. We have seen it, if it is solar, if it is building solar panels, installing solar panels, if it is building solar plants, if it is the technology in battery development, if it is electric cars. We’re the only state that really is producing now electric cars. You have the only state right now, we have hydrogen cars here. And there is a tremendous amount of job growth because of all that.

What’s green?

A major problem in discussing green jobs is defining exactly what they are, David Zetland told me; he’s Wantrup Fellow in Natural Resource Economics and Political Economy at the University of California, Berkeley, and editor of the Aguanomics.com Web site on water policy.

“The government doesn’t know what is a green activity,” he said. “Even if they did know, they can’t say that one solution is preferable to another because it’s hard to know the real impact of each green activity. Finally, politicians and bureaucrats are often persuaded – bribed – to favor one solution over another.”

He said that, when green jobs are subsidized, “then everybody will want to be classified green. The unions will want a law requiring solar panels to be installed by union workers, who will be paid $35 an hour, instead of $18 an hour for non-union labor. This will stimulate demand for union labor. But you will get fewer put in at a much higher price, which also lengthens the payback period for recovering installation costs through lower monthly bills.”

Another problem with solar panels is that many are manufactured in China, which has less stringent environmental controls on its factories. So all that’s happening, Zetland said, is that subsidized solar panels made in high-pollution Chinese plants will replace electricity being generated in America or Canada by relatively clean natural gas, nuclear and hydro power plants.

It is true that solar companies are growing in America. But for now, notes CalFinder, a site for Nationwide Home Solar Power Contractors and Information:

There are a slew of notable solar manufacturers around the world including BP Solar, Shell Solar, Kyocera Solar, Mitsubishi Solar, and GE Solar, which are offshoots of larger corporations. There is a noticeable lack of US companies among the list of top solar manufacturers, although several companies have divisions based in the United States. This is not to say that the US is a slouch in the solar industry. The main reason the US is behind in manufacturing is that other countries like Germany and China were faster and more aggressive in subsidizing the solar industry. Nonetheless, the US market is growing as fast as anywhere and is a leader in the thin film, building integrated PV [photovoltaic] sector.

Manipulation

In general, Zetland said, “Subsidies can be manipulated; the vast majority of them are.”

He said that one example could be a gardener who cuts lawns, spewing pollution into the air from his lawnmower for $30,000 a year in pay. He then is turned into a Landscape Architect “xeriscaper,” who replaces a lawn with rocks, gets his pay subsidized up to $50,000 a year, and gets counted in the “green job” category.

“So someone doing a green job may be getting paid to do a job that he would do anyway,” Zetland said. “That subsidy is wasted because it didn’t change anyone’s behavior.”

A big problem with subsidies is that there’s an added cost: that of the government bureaucracy that distributes the tax money. “The government doesn’t operate at zero cost,” Zetland said. “They need people to collect and distribute money. And the more complicated the distribution, the more discretion required, and the more employees needed to do the job. More employees means that the cost of subsides is higher.”

The Prius example

About five years ago when I was on the editorial board of the Orange County Register, we met with then-Insurance Commissioner John Garamendi, since lieutenant governor and now a U.S. representative. He was so proud to boast that he was driving a Prius, then as now a status symbol among the green set.

But Zetland said, “Look at the life cycle of the Prius. It’s an environmental disaster. Unless you drive 100,000 miles a year, the batteries” create more pollution than the car saves in reduced energy use. “It’s better to drive an old car that gets 20 mpg than scrap it for a new Prius.”

Impact Lab notes:

Building a Toyota Prius causes more environmental damage than a Hummer that is on the road for three times longer than a Prius. As already noted, the Prius is partly driven by a battery which contains nickel. The nickel is mined and smelted at a plant in Sudbury, Ontario. This plant has caused so much environmental damage to the surrounding environment that NASA has used the ‘dead zone’ around the plant to test moon rovers. The area around the plant is devoid of any life for miles.

When you pool together all the combined energy it takes to drive and build a Toyota Prius, the flagship car of energy fanatics, it takes almost 50 percent more energy than a Hummer – the Prius’s arch nemesis.

Through a study by CNW Marketing called “Dust to Dust,” the total combined energy is taken from all the electrical, fuel, transportation, materials (metal, plastic, etc) and hundreds of other factors over the expected lifetime of a vehicle. The Prius costs an average of $3.25 per mile driven over a lifetime of 100,000 miles – the expected lifespan of the Hybrid.

The Hummer, on the other hand, costs a more fiscal $1.95 per mile to put on the road over an expected lifetime of 300,000 miles. That means the Hummer will last three times longer than a Prius and use less combined energy doing it.

Complications

Zetland brought up an economic precept: “If you want to do two things, don’t use one tool.” In this case the two things are: 1) create jobs and 2) improve the environment. If you want to create jobs, he said, government should “make it cheaper to hire people,” such as by reducing taxes and regulatory burdens.

But if it wants to improve the environment, then it should “subsidize green or penalize brown,” for example, by the emissions standards on cars that have been implemented since the early 1970s across America, and since the 1960s in California, helping clean our air.

John Seiler, an editorial writer with The Orange County Register for 19 years, is a reporter and analyst for CalWatchDog.com. His email: writejohnseiler@gmail.com.