California Air Resources Board Exempts Itself From Regulations and State Laws

This week, Thomas Buckley reported that a slew of new California Air Resources Board (CARB) regulations roll out this year and next, but the government will not have to worry about compliance for its own car and truck fleets.

The regulations have a very specific exemption for government agency fleets, with far more time to convert to a “zero emission vehicle” (ZEV) fleet than the private sector, Buckley reported. State and local government agencies will also be able to count “near-zero emission vehicles” (NZEV) towards their compliance with the new rules, something private fleet owners will not be able to do.

This is not the first time the CARB has exempted itself from its own rules, or exempted itself from state law – or federal banking laws.

Twelve years ago in 2012, I reported that the California Air Resources Board finagled a way to conduct state business without any of that pesky transparency stuff required of state and government agencies by state law. Their motive was blatant.

The CARB Board, with help from then-Democratic Assembly Speaker John Perez, D-Los Angeles, figured out a way to exempt itself from the state’s open meeting act.

Government Code 11120, the Bagley-Keene Open Meeting Act, is explicitly exempted in the language of budget trailer bill Senate Bill 1018. “That was the final nail in the coffin of transparency,” a Capitol staffer commented.

The government cover up of legally require transparency is specifically with Western Climate Initiative Inc (WCI, Inc.), the corporation created by California Air Resources Board to manage the then-new cap and trade auctions. The problem was that Western Climate Initiative Inc. was formed in Delaware, and not California. Delaware is not subject to California state open meeting or sunshine laws, leaving many questioning why CARB opted for such secrecy. The only reason to register the corporation in Delaware is the lack public or legislative scrutiny on any of their meetings or actions they take.

CARB operates like no other state agency. The rogue agency conducts its business in private, without the scrutiny of the public it is accountable to. Despite legislative and public outrage over the shroud of secrecy at CARB, Assembly Speaker John Perez was said to have crafted the language for SB 1018.

SB 1018 specifically exempted CARB from open meeting rules in upcoming cap-and-trade auctions, allowing CARB’s WCI Inc. to manage carbon trading auctions without any public scrutiny.

The outrage comes from the sole purpose of WCI Inc. — to impose hidden taxes on energy customers, as well as large and small businesses, without accountability or public knowledge. The CARB says in a November 2011 document that “WCI Inc., a new non-profit corporation formed to provide administrative and technical services to support the implementation of state and provincial greenhouse gas emissions trading programs.”

The CARB “CERTIFICATE OF INCORPORATION OF WESTERN CLIMATE INITIATIVE, INC”

is indeed filed in Delaware.

Notably, at the May 24, 2012  CARB workshop hearing, then-Assemblywoman Diane Harkey (R-Dana Point), expressed her concerns about how the cap and trade program will work, and whether the program will actually result in lower greenhouse gas emissions, as mandated by AB 32. Harkey suggested that California’s cap and trade may just be a scheme to allow vast sums of money to change hands, with investors eventually getting rich off of market speculation, and with no improvement in the reduction of emissions.

Harkey warned that CARB was entering the sophisticated financial world of derivative markets and hedge derivatives, where investors get involved in betting, trading and profiting on the value of carbon credit shares. She warned that such sophisticated financial dealings should be managed by specialists, and not a state agency tasked with a mission of cleaner air.

Her warnings fell on deaf ears.

But because CARB’s money-making scheme doesn’t coexist legally with state laws which require a clear nexus for taxing, CARB and then-Director Mary Nichols apparently decided to take the agency out of the open meeting rules, and conduct business the way they want to, without the keen eye of the public watching.

This scheme sounded at the time like something out of the Soviet Union, not California.

To date, the California Legislature has continued to allow CARB to make law, and run ride roughshod over California businesses – while exempting themselves from their own draconian regulations. And who knows where the cap and trade funds have gone?

Next: Where is the CARB cap and trade money going? Where has it gone?