Pasadena’s fabled Colorado Street Bridge consumed eleven thousand cubic yards of cement, each yard weighing roughly two tons, during its lengthy—and sometimes harrowing—construction at the onset of the automobile era in 1912 and 1913. 

During construction of this historical novel, there were points when I felt like one of its hefty, Beaux-Arts columns were strapped around me. 

The structure still curving over the Arroyo Seco, you see, isn’t only an ode to bravura engineering of the Progressive Age, when steel-reinforced concrete heralded a modernization kick soon to remake cities, architecture, and this futuristic concept known as freeways. The bridge rested in the same vicinity many of my ancestors have resided in since my maternal grandfather, Hollywood musician Lee Zahler, relocated here from New York’s Tin Pan Alley in the early 1920s. 

Given that familial connection—and the edifice’s split personality as both a noir-ish beauty emblematic of Pasadena’s grandeur and one of the most blood-soaked places in the San Gabriel Valley—penning a historical novel about the bridge wouldn’t be, as they once said in the day, duck soup. On the contrary, it loomed as a weight-bearing excursion through a minefield. Nobody calls the roadway that helped braid Los Angeles’ two great valleys together by its formal appellation. They call it “Suicide Bridge” on account of the more than 150 souls who’ve leapt to their deaths from its creamy-gray ledges. 

Nonetheless, I’d been mesmerized by this bridge—arguably Pasadena’s foremost beauty queen, sorry Rose Princesses—since I was a partying, girl-crazy prep high school student. On the night I crumpled the back of my parent’s Pontiac Grand Safari by stupidly backing into a buddy’s car in the parking lot below her, I swear I could feel the queen staring down at me, as though she already knew we’d enjoying a literary rendezvous later. 

It wasn’t a simple journey to her. All I knew, as a former journalist and non-fiction author, was that my maiden stab in fiction would somehow involve a quixotic dreamer and a rascally dog able to occasionally read his companion’s oft-distracted mind. The spark for that concept shared my last name, just not my identity. It was my big brother, Paul, who scolded me that I was squandering my unrelenting sarcasm and affection for irony 

and absurdity by genre jumping, from biography to environmental to true crime in the non-fiction universe. Go with your nature, he said, and your love of the pureness of dogs. What’s annoying at family get-togethers might appeal to certain readers. 

Not long after, in the course of freelancing an unrelated topic, I stumbled across an afterthought mention in a Pasadena coffee-table-type book about a gruesome construction accident that struck the bridge near quitting time on August 1, 1913. Soon I was obsessed about how the bridge saved repeatedly by good-hearted preservationists, the bridge whose romantic sightlines prop up local art galleries and organizations had such tragic 

origins. It just goes to show: the best story is the one you never set out to write. 

I started kicking up dirt like an unsupervised Labrador, resurrecting details in the microfiche cubbyholes at the Pasadena Central Library and the subterranean stacks at the Pasadena Museum of History. I downloaded old engineering stories that tested the tensile strength of my liberal-arts brain. 

What I discovered about the inception of this old gal was juicy—it’s own gas-lamp soap opera rampant with feuds, missed deadlines, intrigue, and scant justice for those responsible for that semi-collapsed arch, which took a trio of innocent men to their demises from more than a hundred feet in the air. The citizenry, back in a time of a lapdog journalism, knew precious little about this strife and secrets, including how the tycoons living in mansions on the Orange Grove Boulevard’s “Millionaire’s Row” influenced the bridge’s design. 

A pilot light flicked on in me: this is the backdrop I coveted for my man-dog morality tale. 

I probably bought Jeff Bezos a tony, new blazer with the twenty-odd books about the city and general atmosphere I purchased off Amazon. From them and other sources, I saw that turn-of-the-century Pasadena held a constellation of big names I could use: Teddy Roosevelt, muckraker Upton Sinclair, Renaissance Man Charles Fletcher, and Adolphus and Lillian Busch, whose magical gardens of terraced slopes, fairytale huts, and winding paths were once crowned “the eighth wonder of the world.” 

Looking back, I realize I’d collected the essential ingredients for a historical novel: romance, parasol-twirling splendor, political trickery, and hidden conflict surrounding a famous bridge infamous today for rampant suicides and ghosts. 

But what I was missing could’ve filled a dozen concrete vats. In early versions of Arroyo, my characters were feebly drawn individuals in the thick of either dangerous or entertaining circumstances. My celebrities were gaudy showpieces who played no role in advancing or arresting my protagonist, his suffragette girlfriend or his precocious dog. The bridge itself had nothing to add – a stoic royal indifferent to the escapades created in her name. 

Around the time I was about to start writing, my elderly father’s health nosedived, and I used his death as a pretext to delay the inevitable rolled-up sleeves grind. So, I disgorged an overwrought 30,000-word outline instead of a first draft doomed to fail. When I finally produced a miserable second draft, my editor critiqued my book-in-progress as “original,” “fun” and nowhere ready for publication. 

He was right. I couldn’t tackle such an important and uber-delicate subject with a tissue- thin storyline where events subsumed the characters’ journeys. And I’d be damned if I was going to make the Colorado Street Bridge’s association with suicide the centerpiece when the better story was the provenance of her dark alter-ego. 

A gutless historical novel about my city’s most enigmatic creature: what was I thinking? 

It was a return to basics. I buried my nose into writers who’d brought history in Technicolor brilliance: Pete Dexter (Deadwood) and T.C. Boyle (Road to Wellville). I studied how they developed their heroes, black hats, and side characters within the realm of their time. I read John Irving’s latest, Avenue of Mysteries, to decipher how he so effortlessly integrated magical realism into his engaging morality play. 

Still, the writing wasn’t as simple as the inspiration I drew from Messrs Dexter, Boyle, and Irving. It was perspiration time – no more Internet distractions, excuse making, or delusions my story would materialize, to quote John Lennon, “on a flaming pie.” I had to accept I’d fail in draft after painful draft, in storylines that tried to be all things to all people, in prioritizing clever phrasing over crisp exposition. And when the sheer tonnage of my ambition put my bone strength to the test, I quaffed Diet Coke and reminded myself that my novel demanded to be about unique characters living fishbowl existences within little-known history. 

For four months starting last Thanksgiving, I buckled down like I had on no other book, pushing myself to the brink (while paying for my previous posturing as a future novelist). I made myself a rumor to my family. I forsook weekends, favorite Netflix shows, vacations, and the Pasadena sun. I cut, edited, and revised through flu-bugs and a trigger- finger caused by repeated use of the delete key. 

By Easter, I’d lopped twenty thousand words and, with the assistance of my patient editor and understanding publisher, created a storyline far more nuanced and magical than I ever dreamed I could. 

Suddenly, the concrete felt a whole lot lighter. I hope I made Pasadena’s weighty queen proud as her un-sought biographer. 

Author and journalist Chip Jacobs grew up in northeast Pasadena. He’s written four non-fiction books, and his reporting has appeared in the Los Angeles Times, the Chicago Tribune, The New York Times and other well-known publications. Arroyo is his first novel. 

Note: this essay, first published on the blog A Writer of History in November 2019, has been slightly amended. Link to the original version: https://awriterofhistory.com/2019/11/14/pasadenas-infamous-suicide-bridge-by-chip- jacobs/ 

The post THE QUEEN AND ME appeared first on Chip Jacobs .

The dealmaker behind the Hotel Green, the Grand Opera House, and Raymond Avenue’s opening typified a boomtown spirit champing to wring fortunes from the land. And what a spirit it was. Between 1886-1887, a foothill plain known for citrus groves, sheep pastures, and a single saloon transformed into, arguably, one of the hottest real estate markets in America.

Pasadena’s founding fathers in the “Indiana Colony,” who a decade earlier had espoused equitable property division among its members, surely cringed at the frenzied activity. If you had cash, you were cajoled to invest. If you owned a tract, you were wooed (or badgered) to subdivide. 

Take the case of O.H. Conger, who accepted a syndicate’s $15,000 offer (about $406,000 today) for his twenty-acre orchard south of Colorado Street in this period. He netted a $5,000 windfall. Craving more, the buyers held an auction they marketed with free train rides, complimentary grub, and a brass band. Though some deemed the event indecorous, seventy-seven of the eighty-seven lots divvied up from Conger’s property sold for a collective $22,000. 

The county recorder’s office illustrated this was no fluke. During the “great” land rush, Los Angeles, then twelve-times larger in population, filed 549 subdivision maps. The future home of the Rose Parade submitted seven times more. 

Speculators, or “boomers” as were tabbed, seemingly crept everywhere in a town still lacking a charter, reliable water system, or decent bridge across the Arroyo Seco. They and the fifty-three local real estate agencies brokered transactions in Victorian-age offices and on plain sidewalks. They shadowed rivals doing site tours to swoop in once they left. They pounded on homeowners’ doors at midnight dangling can’t-miss sales-contracts. They twisted fancy moustaches, soliciting clients with fountain pens and promises. 

Conservative financiers fretted the real estate bubble would burst, but it wasn’t a universal opinion. As the Valley Union wrote with a racial tweak: “Put your money to soak in real estate rather than in a Chinese washhouse.” 

Many heeded that siren of temptation. A landowner pestered to sell five acres he purchased in 1881 for $2,000 eventually acquiesced to chop up his parcel. He turned a sixty-fold profit. In another case, a lot at Marengo Avenue and Colorado Street where the First Methodist Church once stood became—what else—a residential subdivision. 

One evening, a druggist was compounding medication with a mortar when speculator Johnny Mills rushed into his pharmacy. In his hand was a map displaying a plot that he urged his would-be client to snap up before other bidders the next day. The preoccupied druggist refused to glance at the document, so Mills gestured to a jingling streetcar outside waiting for him to say final chance. 

Five minutes later they had an agreement. Shortly after that, Mills represented the pharmacist reselling the plot in a classic flip you’d see today on HGTV. 

All told, twelve millions dollars ($324 million now) in deals were transacted in 1887. Weed-strewn lots, forlorn houses, vine-covered bungalows; crumbling shacks—all what mattered was their future worth! Why not, when a $300 parcel on Fair Oaks two years later fetched $10,000? 

Years before Old Money Pasadena crystallized on Orange Grove’s Millionaire Row, the nouveau riche lived high on the proverbial hog. Men booked hotels for boozy stag parties and poker games. Others flashed diamonds, rode in fine buggies, and ditched nickel cigars for gold-banded ones. 

Amid the feverish wheeling and dealing, bigger investors jumped in ways that expanded Pasadena’s reach. An electric light and power company hung out a shingle. Developments on new streets—Los Robles, El Molino, and Lake avenues— pushed activity eastward. Colorado Street underwent a partial street paving, and welcomed the new Arcade building and fresh shops. To keep pace will all the building, a dirt-streaked tent city to shelter workers popped up in what’s now Central Park. 

Then, as quickly as it started, the law of economics prevailed once the market bottomed out. Sellers now dwarfed buyers. Commercial lending slowed to a trickle. Auctions proved duds. Before long, some of those high-flying speculators vanished (probably with investors’ money). One hustler who’d made six figures in real estate resorted to selling peanuts on trains for his keep. Another drove a mule pulling a streetcar. 

The way amateur historian J.W. Wood saw it, “The paper fortunes, and some more substantial, had collapsed with amazing celerity, and the dazed and sickened boomers’ dream was over!” 

Pasadena’s future might’ve tanked, too, if the banks, whose net assets had plunged by two-thirds, didn’t grant loan-repayment extensions, or aid customers staving off bankruptcy. The population nosedived anyway, as people left behind their failures, only resurging in the next century. 

As for E.C. Webster, Wood reported he abandoned his “castles in the air” for a docile life in Missouri. 

Unless indicated, monetary figures were not adjusted for inflation.

The post The Boom that Blew the Petals off the Rose City appeared first on Chip Jacobs .

Los Angeles County Transportation Commission auditors are questioning tens of thousands of dollars in overhead expenses involved in cost overruns that the agency allowed major Metro Rail contractor Tutor-Saliba Corp. two years ago, according to a preliminary audit obtained by the Business Journal.

Among the “general and administrative” expenses LACTC examiners are either questioning or disallowing entirely are bonuses, donations, rent payments, executive pay hikes and airplane travel the Sylmar-based company spent in 1990. Those overhead costs were a small part — perhaps $100,000 to $150,000 — of the estimated $13.3 million that Tutor-Saliba granted in change orders from the LACTC in 1990. Auditors, under federal law, are only allowed to examine overhead expenses contained in change orders and not in competitively bid contracts.

Los Angeles subway builders historically have filed change orders to recover extra expenses they incur when there are alterations in construction design, work scope, schedule or site conditions. By policy, the LACTC grants the requested additional funds to avoid delays in ongoing work, then audits to monitor the validity of the request and may disallow expenses that are involved, in which case the contractor would have to reimburse disallowed funds to the agency.

Such alterations by many contractors pushed the cost of the subway’s first leg, a 4.4-mile stretch from downtown Los Angeles to Mid-Wilshire, $200 million over budget to $1.4 billion.

Since work on Metro Rail’s segment one began in the mid-1980s, Tutor-Saliba has landed seven tunneling and station-building contracts worth $220.1 million, nearly four times what the nearest contractor won, records show. Tutor-Saliba received an additional $58.8 million in change orders — including the $13.3 million approved in 1990 — for its work on the subway’s first leg.

Local transportation officials last week emphasized that the audit was only a draft, subject to negotiation before any funds are returned to the LACTC, and a routine function performed when any contractor wins change orders or files claims for them.

They also stressed that the federal government’s accounting and acquisition standards, which they follow, enable contractors to recoup general and administrative expenses in some instances. Overhead charges typically comprise about 3 percent of change orders.

“If a change order increases the amount of time a contractor or a subcontractor is on a job, then it obviously extends the overhead cost,” said Charles Stark, who oversees Metro Rail segment one for the commission’s building arm, the Rail Construction Corp. Because the Tutor-Saliba audit is one of the first examinations of a contractor’s overhead, Stark did not know how much the commission had won back previously from Tutor-Saliba or other companies in disallowed expenses.

Nonetheless, the audit comes at a critical point, with the RCC striving to contain costs on Metro Rail’s second leg. Meanwhile, the federal government has begun to probe allegations of reckless spending, fraud and corruption at the LACTC itself.

Upcoming audits will focus on the non-overhead elements of Tutor-Saliba change orders expenses for labor, equipment and materials — as well as change orders granted to rail construction- and design-management firms like Parsons Dillingham and O’Brien-Kreitzberg & Associates Inc., auditors said.

Meanwhile, Ron Tutor, chief executive officer and president of Tutor-Saliba, said many of the expenses being debated “weren’t worth arguing over,” though he added the audit was proof his operations are constantly under the microscope, despite several LACTC commissioners’ criticism of him.

“Everybody thinks these big government projects are a gravy train when really it’s a traumatic process,” he said. “People who say we bid low and just come back for change orders later don’t know the contracting process is like pulling teeth. They’re wrong.”

A few months ago, Los Angeles Mayor and LACTC Commissioner Tom Bradley at a commission meeting called Ron Tutor the “greatest change-order artist” he’s ever seen, according to published reports. Last week, meantime, Commissioner James Tolbert said he was outraged to learn from the audit that the LACTC had paid a private company such an array of overhead expenses.

“I have a hard time faulting Tutor for maximizing his hand because he is an American businessman, and it’s up to us to maximize to public interest,” said Tolbert, a Bradley appointee to the commission. “But it’s beyond me how any of these expenses could be a claim. Why should we pay one nickel for someone’s entertainment or fitness trainer?”

According to the audit, Tutor-Saliba rang up $255.81 million in expenses for materials, labor and equipment rental — known bureaucratically as the “cost of earned revenue” — for all its company projects during 1990. Of that, Tutor-Saliba had $7.7 million in general and administrative expenses for all its projects, roughly 40 percent of which was attributed to Metro Rail and the rest to work for Caltrans, the federal government and private developers, according to Ron Tutor.

While Tutor-Saliba has already received the $13.3 million for its 1990 change orders, LACTC auditors do not yet know precisely how much of that money was for overhead. The reason is that change-order agreements sometimes vary in how much overhead is allowed and it takes a long time to go through hundreds of pages of change order documents, according to LACTC Contracts Audit Manager Filberto Martinez, who worked on the Tutor-Saliba audit.

Reviewing Tutor-Saliba’s books, the auditors either questioned or disallowed what turned out to be 25 percent of the overheads. In turn, that ratio becomes a rough yardstick for how much Tutor-Saliba may have to reimburse from the 1990 change orders.

Before Tutor-Saliba is required to return change orders funds to the commission, auditors will arrive at that figure, Martinez said. All change orders above $200,000 must be approved by the LACTC’s 11 voting commissioners.

The preliminary audit, stamped “confidential” on each of its six pages, was completed last July, with Tutor-Saliba officials providing the records and commission auditors generating the overhead statement. Before the audit is completed early this fall, the draft will be sent out to Tutor-Saliba and the Rail Construction Corp for comments and revisions.

Looking at the company’s overall overhead outlays, auditors questioned an assortment of overhead items contained in a category called “other outsider services.”

In the case of entertainment, where $5,825 was spent in 1990 for things like Los Angeles Raiders and USC football tickets, the auditor quotes federal rules, which state “the costs of amusement, diversion, social activities … are unallowable.” The federal government is paying for roughly half of the multibillion-dollar, 17-mile subway system.

LACTC auditors said a $10,240 outlay for a physical trainer was also questionable because only Ron Tutor and a company executive vice president benefited. Without giving specifics, the $61,149 Tutor-Saliba spent for public relations was also questioned.

On other overhead fronts, commission inspectors questioned Ron Tutor’s salary increases because of U.S. government rules dictating that compensation for owners of private corporations be “reasonable” and “not a distribution of profit.” Tutor’s pay, the audit said, went from an estimated $312,000 in 1988 to $924,976 in 1990.

“They can disallow it, but I don’t have to ask their permission to raise my own salary,” said Tutor.

The draft audit stated Tutor-Saliba agreed with the LACTC auditors on most of the costs they questioned or said they would disallow, except for those dealing with rent, CEO compensation and its overall cost of earned revenue.

copyright Los Angeles Business Journal

The post Transit Commision Auditors Cast Eagle Eye On Tutor’s Costs appeared first on Chip Jacobs .

It was an affair to remember, a swank black-tie gala for some 600 Hollywood luminaries and friends ready to open their wallets in November to help build a $45-million shrine spotlighting Tinseltown’s storied past.

Actors Laura Dern, Keith Carradine and Jeff Goldblum were at the Hollywood Palladium that evening, scattered among the celebrity throng munching catered salmon and mugging for the paparrazi.

Councilwoman Jackie Goldberg and other pols were drawn to the glamour and flash as well.

Yet, all the schmoozing and cocktail banter couldn’t muffle what some had already begun to worry about in private. A decade after it was conceived by an influential Valley-area lawmaker, the Hollywood Entertainment Museum project was in trouble.

“As long as the locusts don’t come, we’ll be fine,” Phyllis Caskey, the museum’s normally upbeat chief executive officer, said that evening of the project and its hometown.

In the 10 months since then, the locusts have gathered.

Hundreds of pages of public records and more than a dozen interviews show the following:

Despite consuming more than $1.4 million in public funds, the nonprofit organization behind the museum since 1985 has not moved a single shovel of dirt and has raised only a fraction of the project’s cost from private sources.

Officials are now lobbying city redevelopment leaders to forgive a $500,000 taxpayer loan spent trying to purchase a building they have abandoned.

Among other public funds, the museum convinced the MTA to pay $25,000 for a benefit cocktail party.

Caskey’s salary has been the group’s chief expense. She was paid $96,000 in 1993. The next year she made $85,000, in addition to a $6,600 car allowance, health insurance and other benefits.

On several occasions, museum officials overstated both their private fund-raising achievements and their progress in purchasing a permanent home. Now, instead of buying, they want to lease space in a retail complex – a decision that could cost them vital city support.

The group would not release its financial information for 1995.

How could a project touted by a powerhouse cast of politicians and entertainment figures – among them Carol Burnett, Jimmy Stewart, Debbie Reynolds and Richard Riordan – in the cradle of the world’s entertainment business fizzle?

Critics say the failure of the museum to move from blueprints to brick and mortar reads more like an urban tragedy than a happy-ending feature presentation. Mismanagement, they say, torpedoed the original plans, depriving the community of an economic boost.

“Hollywood is a dream factory and what the museum has produced is a fantasy that cost the public tens of thousands of dollars,” said John Walsh, chairman of a Hollywood community advisory group. “After ten years, this has been a yellow brick road to nowhere.”

After loaning the group $500,000, Los Angeles redevelopment officials who made the proposed facility their top priority are now having second thoughts about a pending loan because of HEM’s sluggish fund-raising record.

“It’s one thing to talk a good game, but they need to come up with the money,” said Shelby Sloan, a commissioner at the Community Redevelopment Agency. “We certainly won’t fund a fiasco.”

Defending their actions, Caskey and other museum brass contend their biggest mistake was being ambitious and that they were victimized by plunging real estate values, tight-fisted philanthropic giving and other misfortunes.

They still vow a Hollywood-themed museum will materialize, albeit a much smaller version of their original plan.

“You are going to be blown away by what comes about,” said Earl Lestz, HEM’s board chairman and president of Paramount Pictures Studio Group. “This could be the impetus for turning Hollywood around.”

Like a hot young actor tearing up the silver screen, the museum’s concept circa the mid-1980s seemed to have all the ingredients for fast-track success: impeccable timing, insider connections and a compelling delivery.

Drowning under a sea of tacky retail shops, degenerating office buildings and street crime, Hollywood Boulevard had lost its glitter and become a civic albatross. Public officials hell-bent on revitalization scurried for answers.

Enter David Roberti, the state Senate’s then-top lawmaker whose districts have encompassed the San Fernando Valley and Hollywood over the years.

Convinced a museum spotlighting the history of film, television and radio would be a tourism bonanza, he got Gov. George Deukmejian in late 1984 to free up $140,000 to study whether the project made fiscal sense.

The result was a resounding yes: The report concluded such an attraction would draw 1.4 million visitors and spur roughly $24 million in economic activity yearly.

Six months later, Roberti convinced the Legislature and Deukmejian to approve $785,000 in seed money for such a project. A few weeks later he formed the nonprofit Hollywood Exposition Corp., with himself as chairman; former aide and then-Councilman Michael Woo secretary-treasurer; and his then-community liaison, Caskey, the museum’s top staffer.

The final state act played out around Christmastime 1985. The California Department of Commerce, the agency charged with overseeing the seed money, was cleared to prevent other nonprofit groups from bidding on the funds so it could be whisked to Roberti’s freshly created organization.

But the waiver short-circuited others interested in designing a entertainment-themed museum, including a plan by the prestigious Academy of Motion Pictures Arts & Science. Roberti, nonetheless, said it was the Commerce Department that sought the waiver.

“They came to us,” he said.

Mike Marando, a spokesman for that department, renamed the Trade and Commerce Agency, disputed that contention, saying records indicate Roberti’s office fully consulted with them in urging the exemption.

Locally, officials rejoiced. While Southern California boasted myriad visitor theme parks, from Disneyland and Magic Mountain to Universal Studios, the birthplace of the movie business was a wasteland, except for a few small, specialty museums focusing on Hollywood makeup techniques, wax figures and the like.

“People come here from all over the world but a lot of them don’t know what to do except go to Mann’s Chinese Theater and the Walk of Fame,” said Leron Gubler, executive director of the Hollywood Chamber of Commerce.

Out of the gates, Exposition Corp. executives thought they had discovered a perfect home at a mammoth commercial-retail complex that Indianapolis-based developer Melvin Simon wanted to wrap around the Chinese Theater on Hollywood Boulevard.

With a price some estimated in the $300 million range and plans for 675,000 square feet of new office and retail space, the Hollywood Promenade was touted as the vanguard of the area’s rejuvenation. And to sweeten the deal for museum officials – who were banking on private donations to finance their facility’s $60 million tab – Simon agreed to kick in $5 million to $10 million for HEM’s building and shell, project officials said.

If fund raising and other plans went smoothly, a Tinseltown shrine would open its doors in phases, starting in 1991. There would be exhibits from the “Silent Era” and other film periods, recordings of old Jack Benny shows, interactive computers and other elements, according to promotional materials.

But that dream slowly died.

Declining property values and a depressed economy, coupled with anti-redevelopment litigation in Hollywood, derailed the Promenade. By 1989, Caskey and her board were searching for a new museum locale.

Two years later they thought they had found it a few blocks to the east at the Pacific-Warner Theater, a venerable, 67-year-old structure built in the “Golden Age of the Movie Palace,” city records show. By renovating it and adding new space, the spot would only have slightly less exhibit room than their Simon proposal, a $45 million cost and an initial 1995 opening date, records show.

There was a new financial partner to boot: the Los Angeles taxpayer.

Just weeks before the city was bloodied by the April 1992 riots, the City Council approved a $3.5 million loan to help Roberti’s group – renamed the Hollywood Entertainment Museum – acquire the Pacific if a final deal could be struck. An additional $500,000 pre-development loan to subsidize planning and design work was another slice of the funding package cobbled together by Woo.

“The museum was taking a chance, but one worth taking,” said Woo, who left the HEM board to avoid a conflict-of-interest appearance.

Others civic leaders, among them Riordan, Council President John Ferraro and Woo’s successor, Goldberg, were also enthralled by the museum’s potential to spawn an urban comeback. Some penned glowing testimonials about it.

“It’s the only facility that will be able to bring back the Academy Awards, the Emmy Awards and the Grammy Awards to the Entertainment Capital of the world,” Goldberg wrote two years ago in a newspaper supplement.

The numbers were certainly there. According to HEM projections, their facility would attract 700,000 visitors annually while pumping $85 million into the local economy in direct and indirect spending. Construction alone would produce nearly 1,000 jobs, the report estimated.

But, like the Promenade concept, the museum’s Pacific deal has since faded into history.

In the meantime, Caskey has formally asked the redevelopment agency for forgiveness of the $500,000 pre-development loan due January 1 and for the transfer of the pending $3.5 million loan to a new site they hope to lease at a semi-deserted retail center just west of the Pacific.

To drum up support for that move, museum patrons, including publishing magnate Hugh Hefner and comedian Norm Crosby, have blitzed the agency with letters in recent months,

But CRA officials are voicing their own sentiments about the museum’s third location change and the organization’s tepid fund raising.

In its five-year plan for Hollywood, the agency has earmarked more money for the museum than any other program, including senior housing, street improvements and transportation, records show.

Ironically, one of the latest skeptics is Dan Garcia, CRA chairman – and a former museum board member. Like others, he is concerned what collateral there would be on the $3.5 million if HEM’s leased attraction at the Hollywood Galaxy flops.

“If the agency is just providing money which is going to wind up in the hands of a landlord for rent, that is typically not the kind of transaction we would support,” said Garcia, a Warner Bros. executive.

Even Goldberg, who shepherded through the Council two 180-day extensions on the loan agreement, said she has her own doubts. “We don’t wave wands,” she said. “These are tax dollars.”

Citicorp, which owns the Galaxy and is negotiating with HEM on a 10-15 year lease in the bottom floor of the complex’s food court, declined comment. Caskey, though, said their proposed museum would eat up 33,000 square feet, contain two exhibit areas, an educational wing and could showcase coveted memorabilia, like the sets from “Star Trek” and “Cheers.”

Not only does the Galaxy sit in a less blighted part of Hollywood and have ample parking, she contends, but the museum’s plan there is more realistic than the grandiose visions mapped out for the Promenade and Pacific.

“We started this in the 1980s,” she said. “There wasn’t anything in L.A. that could not be done. It was as if we were saying, `San Francisco, we know about culture, too.’ This site is right for HEM in 1995-1996.”

In some ways, the museum’s quest for tens of millions of dollars in private donations was a derivation of the “Field of Dreams” phrase, “If you build it they will come.” For HEM brass, it became “If you plan it, the industry will finance it.”

But tax records show the museum’s effort to stockpile funds largely failed.

Excluding the state’s contributions, Caskey and her board have raised only $2.7 million between fiscal year 1986 and 1994 – six percent of what they needed to acquire for the Pacific site.

Major backers, some of them longtime board members, and smaller donations generated another $1.2 million during that period.

And not withstanding a $55,000 donation from Stephen Cannell Productions, many of the largest contributions have come from outside the movie world. Melvin Simons’s company, for instance, pitched in $888,000, consumer products maker Proctor & Gamble gave $100,000 and a Roberti campaign committee coughed up $13,000.

The star-studded galas brought in an additional $330,000 after expenses were deducted. One of the parties, though, only paid for itself, records show.

Three years ago, a Legacy Awards soiree brought in about $150,000. Yet two years later, museum officials reported on their taxes it cost them $160,949 to stage the event – the precise amount they said they raised.

Caskey, a 51-year-old Chatsworth resident, said that notation was an error, and that the museum in fact grossed $357,000 from the party. Without disclosing specifics, she conceded the November 1994 ceremony did not fare well.

Ex-museum fund-raiser Bob Coontz said the biggest problem with the money drive has been no permanent structure to link it to.

“Unfortunately, HEM has been seriously handicapped by its failure to identify and close on an appropriate site,” said Coontz, who left the organization late last year. “There are a lot of non-profit cultural groups out there fund raising.”

Former museum board member Bob Dowling, publisher and editor of the Hollywood Reporter, agreed, saying it’s opened a credibility gap.

“You don’t have a museum if you don’t have a site,” said Dowling. “I was disappointed by the lack of progress. I think everyone is . . . If promises have been made, it’s legitimate to ask whether they have been executed.”

For retired actress Marjorie Lord Volk, the fund-raising hurdles have a different hue: the non-involvement of industry moguls like Disney’s Michael Eisner and MCA’s Lew Wasserman in the trying philanthropic age that is the 1990s.

“In the old times we had businessmen and moviemakers, people like Samuel Goldwyn, they would care,” said Volk, an HEM board member who noted Tinseltown-themed facilities have sprouted in London and New York. “Now everyone is owned by big corporations. It’s very hard raising money.”

Still, in aggressively peddling their vision, museum executives have told supporters they had more headway than records and interviews show they actually had.

Lestz, the museum’s chairman and perhaps its most highly regarded industry champion, wrote to Hollywood businessman Jerry Sneiderman and others in February 1994 soliciting donations for one money-raising bid, documents show.

Called “Best Seat in the House,” the campaign was aimed at raising funds to help purchase and redesign the Pacific site, with contributors getting their names engraved on the seats in return. Riordan and his companion, Nancy Daly, each gave $5,000 for that drive, Caskey said. Carol Burnett, restaurateur Wolfgang Puck and other celebrities also contributed.

According to the Lestz letter, the campaign had “achieved nearly $1 million in donations in less than a month.” But HEM’s tax returns show they had just $341,000 in savings half a year later.

Asked to explain the difference, Caskey said they had won assurances for the $1 million but that the group stopped fund raising once the Pacific site acquisition appeared in jeopardy.

“The campaign was successful,” she added.

Even so, City Hall was honing in on HEM’s bank account.

In extending the loan agreement last year, the Council’s housing and redevelopment committee November noted the organization still needed $2.83 million for their share of the Pacific site. Because of that, they concluded “project feasibility cannot be determined.”

Bolstering that view, Garcia, the CRA chairman, said he was convinced the museum officials had a “substantial shortfall” that probably would have handcuffed them from purchasing the landmark. “It was too big a gap,” he said. “I wasn’t anxious to publicize because we could be in negotiations.”

Museum officials, nonetheless, believed, they would snap up the Pacific for $7 million. So confident were they that their newsletter trumpeted that sale figure, saying HEM had “reached final agreement” to buy the Pacific.

But Garcia, Goldberg and Pacific’s general counsel, Ira Levin, all say that statement comes as a surprise to them.

“There was never a final agreement,” said Levin.

According to him and others, the acquisition talks reached loggerheads when HEM agrued that the building’s value had plummeted. In making that case, museum negotiators pointed to still-declining real estate values and the damage inflicted on the structure by Metro Red Line tunneling under Hollywood Boulevard when parts of the thoroughfare sank in August 1994.

“It’s very, very simple,” said Lestz. “There was no way we could pay $7 million for a property the CRA appraised at $3.2 million.”

Redevelopment officials confirmed there was an appraisal and analysis of the Pacific building but can’t release its appraised value because of state confidentiality rules.

Meantime, an official with the California Department of Justice’s charitable trust section has his own questions about the museum’s financials.

Auditor Harold Statz said the group’s financial position is “weak,” in large part because of its low assets and fund raising.

“If you are serious about constructing a museum, you should have cash set aside, but they don’t,” said Statz, a 20-year department veteran. “They dont have a steady stream of income despite being in the same city as the major film studios and TV production centers.”

In fiscal year 1994, tax records show, HEM listed assets of $1.3 million — $200,000 less than four years earlier. By far the biggest asset was $933,000 in “deferred development costs.”

Museum officials said those costs are related to plans and schematics developed for the Pacific site that are transferable to the Galaxy. They could not provide more details.

On the other side of the ledger, the group listed $545,000 in liabilites last year, the lion’s share of it built on the half-million dollars they owe the CRA. The organization also had $341,000 in savings, an improvement over 1993 when savings had dwindled to $18,000.

But the largest expenditure has been Caskey’s salary, which amounted to $646,000 over nine years, records indicate. When she worked for Roberti, she said she made about $44,000 – $36,000 less than she was earning at HEM by 1988.

Another $48,000 has been spent on travel, tax returns indicate. Much of it financed Caskey trips to Europe and various U.S. cities to visit other museums and related conferences. Some of the money also went for her and staffer’s mileage, parking and related expenses.

Other costs include nearly $200,000 for legal bills, $211,000 for consultants and $26,000 for graphic design.

Board members and other supporters say Caskey deserves her salary package, praising her as an enthusiastic, driven leader who has weathered a stormy economy and two star-crossed developments deals.

“The (museum) is going to happen, and it’s going to happen after a lot of hard knocks,” said Roberti, who left office in December. “And Phyllis is great. She’s got the dynamism, the enthusiasm and stick-to-it-ness against great odds few people have.”

Critics see it differently, blistering Caskey as ineffective and unable to make good on promises to erect an anchor development project for Hollywood.

“It was like a make-work situation for Phyllis. She has never come near expectations,” said Michael Kellerman, a longtime Hollywood entrepreneur. “The entertainment museum is sort of a joke. A lot of people who backed it are embarrassed now, though they won’t admit it.”

One state official, asked how Sacramento sees viewed museum project, called it “pure pork barrel.”

Then there’s Caskey’s former assistant, Bonnie McCourt. She said she resigned after about a year working for HEM around 1993 because she was so upset about the way the organization was run. In particular, McCourt said, donated memorabilia like a mask used by comedian Ernie Kovacs was stored inappropriately.

“It was in with a pile of junk. It wasn’t protected,” said McCourt, who left in 1993. “The disregard for this collection was outrageous.”

Caskey said she would not respond to that allegation and said her memorabilia has been properly stored.

While they trolled for greenbacks from the corporate boardrooms to high-brow Tinseltown affairs, museum organizer’s had one thing on their side: good connections.

One of Caskey’s brothers, Jerome Gross, for example, is director of engineering at CRA and, according to records, has been active to some extent with his sister’s project.

His relationship to her was noted in agency documents that concluded there was no conflict-of-interest since he has “not been involved” in any decision related to the museum or the loan package.

But in July 1994, Gross wrote and initialed a memo to the CRA’s real estate director that discussed some of the environmental problems at the Pacific Theater site, records show. In February, he also received an agency letter to Caskey discussing the financial, engineering and other documents Caskey needed to provide CRA.

Despite that paperwork, Gross said he has kept an arms-length distance from the museum and that his aides handle issues related to it.

“My participation on any decision influencing this has been nil,” he said.

At last June’s Legacy Awards, meanwhile, an organization called the Hollywood Leadership Alliance picked up honors for its role raising money for police computers and other community deeds. Unknown to many, Caskey and her husband were founding members in that small federation, meaning they won an award from an organization Caskey leads.

In addition, Paramount Pictures has won the award five consecutive years, even though one of its executives, Lestz, has been a longtime HEM board member.

Caskey said she sees no problem with those overlapping ties since the recipients are chosen by celebrity or media “jurors” who don’t work for her.

Caskey’s husband, Marshall, a prominent area attorney, himself has been involved, albeit indirectly. He was chairman of a 15-member citizens committee monitoring subway construction and making recommendations how to spend $27.7 million in mitigation funds, said MTA spokesman Steve Chesser.

The transit agency used $25,000 from those coffers to sponsor the cocktail party that preceeded the museum’s November 1994 awards gala, and another $700 to buy an full-page color advertisement in the group’s newsletter.

Phyllis Caskey said she solicited the party money from the Metropolitan Transportation Authority’s marketing department, and that the transit agency used the event to promote Metro Rail. It was subway construction, ironically, that helped derail the Pacific deal.

Marshall Caskey added he doesn’t remember ever voting on the $25,000 appropriation and said he would have not have participated if it did.

“I would have recused myself if it came up,” he said.

On other fronts, Garcia said he feels free to vote on the loan issue because he left the HEM board about two years ago. However, commissioner Christine Essel said through a spokeswoman she will abstain from voting to avoid the appearance of conflict of interest.

Essel is a vice president of planning, development and public affairs at Paramount, and her boss is Lestz.

Besides the transit money, the museum has also received $10,000 from the hotel tax sent to the Los Angeles Convention and Visitors Bureau; the president of that organization, George Kirkland, is a museum board member.

HEM several years back also won another $75,000 from the redevelopment agency for a “Windows-on-Hollywood” program that displayed film and recording industry memorabilia in the front of retail shops.

In hindsight, Garcia said he believes one of the museum’s fundamental flaws was its political creation – hatched without a visible support from the same executives HEM officials hoped to wring millions of dollars from.

“The studio heads were not involved,” he said. “They had not blessed it because there was was really nothing to bless.”

The post History Of Hollywood Museum Reads Like Horror Movie Script appeared first on Chip Jacobs .

Few things unite a neighborhood like an open dumpster.

Park a large, lidless container in front of your house for construction debris or a seasonal de-cluttering and within days you may feel like your block’s unofficial trash man, if not its junk collector. Accepting other people’s unwanted stuff sure makes you popular.

During the roughly two months a tan, boxcar-sized metal dumpster squatted curbside for the remodel of my Pasadena home, word of the bin’s accessibility for public use saturated the area like an ad for free iPods. Suddenly, it was open season for garage clean-outs, liquor-bottle disposal, mystery trash and dog waste, not to mention a place to jettison dearly departed Aunt Tillie’s old furniture.

Filthy or not, my dumpster became a sort of waste-disposal Mecca, with neighbors and assorted opportunists visiting it regularly to pay tribute.

As a neat freak, it’s not as though I can’t sympathize with the need to rid oneself of excess. Plus an open dumpster has the thrill of pirated cable, a serendipitous chance the universe wants you to seize. Unless, of course, you’re the guy who actually paid for the cable line your neighbors rewired for their enjoyment. Or, if you value sleep, and that concussive boom in the wee hours means yet another unauthorized junk tosser has dumped-and-ditched again.

Like owning a home in Southern California, renting a dumpster isn’t cheap. The monster 40-cubic-yarder I rented cost about $350 for 10 days. Once packed to its corrugated rafters, it has to be emptied — also not inexpensive. So when the neighbor’s moth-eaten curtains gobble up your highly prized dumpster space, well, it’s a call to surveillance.

Not long after my bin was hauled to my house by a flatbed truck, I noticed an ancient-looking, wood-paneled television listing on top of the mound of debris that was supposed to be only the gutted remains of my old patio. The castoff TV, which must have taken a hardy heave to clear the container’s 8-foot wall, piqued my curiosity. So, in the name of suburban sociology, I took my first dumpster dive.

Next to the ancient TV was a thick roll of floral carpeting only your grandma would steam-clean. Keeping it company was a large jug three-quarters filled with a whitish, watery goo of uncertain composition and undeniable stench. Whoever had planted the container placed it carefully across from other flotsam also not from my remodel: three 12-pack beer containers, some bag-sealed dog doo, the legs of what appeared to be an old chrome chair, half a couch, a potpourri of twisted fabrics and grocery bags of junk buried too deep for a look-see without a spacesuit.

I hadn’t known this before, but bin companies catering to home remodelers say that neighbors who stealthily unload their stuff into their customer’s rented dumpsters are carrying on a cat-and-mouse tradition as old as the subdivision. To keep your dumpster yours, experts advise covering the top with a tarp. Doing that means accessing your bin through ground-level doors that can be locked at night, when opportunists prowl.

People who ignore this counsel — like me — have found decaying mattresses, construction drywall from somebody else’s job, old-fashioned gas stoves, palm fronds, mementos of the recently deceased and the occasional dead critter in their rentals.

A dumpster is often an easy mark for laborers needing quick disposal of hazardous waste — paint, solvents, asbestos — that’s supposed to get special handling under environmental laws.

Elizabeth Randall, the seen-it-all general manager at Chatsworth-based Rent-a-Bin, dubs trash cheats “bin pirates.” It’s the single biggest customer complaint she hears.

“If you’re paying $85 for a bin and somebody fills it up halfway with their stuff,” she said, “you’ve been pirated, ripped off.”

Not long ago, Randall said a woman who regularly leased a smallish dumpster phoned Rent-A-Bin in hysterics.

“She said, ‘This thiiiing is in my bin. Come take it out!”

When the worker looked inside, he began laughing uproariously. Somebody had deposited a freakishly large paper-mache clown head and neck in there.

“We put it in the back of the truck (and drove back to our yard), where we promptly set it up on display and had fun with it until it rained and the head melted into a grotesque shape.”

Randall’s company, as others, will charge more if your bin is found to be over its weight limit at the landfill scale. For one with a 6-ton limit, renters can get stuck with a fee of $35 per extra ton.

My across-the-street neighbors own a city-issued mini-dumpster for their large house that serves as my block’s private landfill. Everybody unloads in it. Though I have permission to use it for my periodic cleaning blitzes, I feel like a criminal — eyes darting, neck craning — when I do and exhilarated when I’m done. There’s just something about de-cluttering at someone else’s expense that can twang the guilt and liberate simultaneously.

Dumpster freeloaders, even the renters themselves, can be a resourceful bunch. Steve Pivovaroff, general manager at South El Monte-based General Waste Disposal, said people sometimes line the insides of dumpsters with plywood to extend the height of the walls so they can pile in more debris. The larger the bin, the more inviting it is for abuse.

And abuse there is.

“A lot of times, I’ll pull up on a job, and there are neighbors there waiting to dump stuff,” Pivovaroff explained. “I’ll say that’s not yours, and they say no, they are buddies” with the renter when no OK was given. Some “clients will say take the bin away as soon as it’s finished because I don’t want my neighbors to use it! Some will be asking for a locking lid.”

Pivovaroff believes there’s probably a subtle form of remodeling NIMBY-ism playing out. Neighbors annoyed that your new patio or master bedroom construction has slapped them with months’ worth of dust, early-morning racket, street-hogging trucks and legions of workers may feel they have some implicit dumpster rights. Or at least an excuse.

Determined to catch a bin pirate in mid-toss, I kept alert when my communal dumpster filled to the point I feared it might tip over. Rustling outside grabbed my attention one Wednesday, so I raced out of my home office to chastise the offender that I’m not Pasadena’s Fred Sanford.

Some bust: It was merely a worker from across the street using my port-a-potty.

Copyright Los Angeles Times

A nearly identical version of this story ran in the Times.

The post Who’s Been Using My Bin? appeared first on Chip Jacobs .

When a 16-year-old girl was raped in a parking lot stairwell at downtown’s Union Station in July, authorities cautioned that it was only a violent blip in an otherwise safe area. A heinous crime, but an anomaly. When another sexual assault occurred there a week later, it became clear this was about more than crime. This was a matter of national security.

If a sexual predator could repeatedly slip behind unlocked doors near the heart of Los Angeles’ main rail terminus to commit his deed, what is to stop a well-trained terrorist laden with explosives or chemicals from taking out hundreds or more in a dense passenger area? It is a scenario officials are reluctant to discuss publicly for fear of tipping off carnage-minded extremists, but one not far from the public imagination, especially after Al Qaeda operatives used cell phone-rigged bombs to attack Madrid commuter trains in March.

All this matters because as Union Station goes, so goes L.A.’s mass transit. An estimated 30,000 people traverse the hub daily on their way to trains, buses, and rail lines. Ever since Al Qaeda hijackers slammed three hijacked jetliners into the World Trade Center towers and the Pentagon, counter-terrorist efforts have focused on preventing a repeat incident. Fortifying security at train depots and along rail corridors has been trickier, and L.A.’s Union Station has peculiarities that make it even harder.

The 65-year-old Spanish-style building just east of City Hall is one of the region’s marquee structures. Catellus Development Corp., the real estate firm spun off from the Santa Fe Railroad empire, owns it and has refurbished it. Walk around the station’s original great hall and you’ll notice adobe tile, throwback leather chairs, car-sized chandeliers and other features of the Fedora Age. What you won’t see, however, are high-tech surveillance cameras there or in the main hallway leading to the Red Line subway, Metrolink commuter trains, the Pasadena-to-Los Angeles Gold Line, and Amtrak trains. Neither will you see waves of armed police or metal detectors. Posted signs remind only that loitering is illegal. There’s nothing about random searches.

Rail terminals by design are free-flowing spaces. Headways between trains are relatively short, and the assumption is that riders paying a few bucks to travel a minor distance wouldn’t tolerate the kind of screening typical for airports nowadays. The question is what’s reasonable. Though Catellus has barriers at the station’s arched entryway and unarmed guards with walkie-talkies, some say it’s not enough. Efforts by law enforcement to get the company to install closed-circuit security cameras in the space it controls have been rebuffed, multiple sources told CityBeat. Catellus’s reluctance apparently stems from the high price of retrofitting in compliance with national historic preservation standards.

“I’m frustrated,” said Frank Roberts, board chairman of the Los Angeles County Metropolitan Transportation Authority. “We need to get a handle on surveillance. Anybody can walk in and about. It’s the complexity and nature of the association with Catellus and other folks.”

“We’ve suggested putting in cameras and they said they can’t do it,” added another MTA official. “They say they’ve put [private] security in there and they have the LAPD.”

Catellus executives declined repeated attempts to comment for this story.

The Los Angeles County Sheriff’s Department patrols MTA’s rail and bus grid under a $50-million-a-year contract. The agency won the rights after a bruising competition with the Los Angeles Police Department. There’s certainly no shortage of people on the lookout at Union Station. Besides the Sheriff’s Department, there’s Amtrak security, deputies assigned to Metrolink, and private guards employed by MTA, Catellus and the Metropolitan Water District; the MWD’s headquarters sit across a courtyard from the station. The LAPD has a role. So does the FBI and the Department of Homeland Security.

Capt. Dan Finkelstein, who runs the Sheriff’s Transit Bureau, said to date there have been no terrorist arrests or activities detected at the grand dame depot. Finkelstein said turf battles aren’t an issue, either, especially since the March Madrid bombings put everyone on a heightened state of alert.

“There is a mixture of manpower, animals, and technology to make the environment as safe as possible with the resources we have,” Finkelstein said. “Certainly more [federal] money would be a good thing, but from what I’m hearing from other transit agencies across the country I can’t complain. I’m pretty confident we have the resources to handle these things.”

Finkelstein would not disclose how many of the 437 people in the transit bureau are assigned to Union Station, but said a dedicated group of uniformed and undercover officers patrol it. The department, he added, has several gun- and bomb-sniffing dogs with “more on the way.” A handful of passengers have tossed drugs overboard when they’ve seen the dogs approach.

Last May, the MTA board voted to spend $4.7 million to add 60 more fare inspectors to the system, which does not use turnstiles to collect tickets. (There are now 110 total inspectors.) The main reason was to free up deputies for more crime prevention and surveillance. The fare evasion rate was just 2.24 percent last year, barely denting the more than $223 million in rail and bus fares shelled out by riders, according to MTA figures.

Zealous about secrecy, transit and Sheriff officials would not spell out everything they’re doing. Since February, Sheriff deputies have been seen riding Segway scooters to bolster their visibility and zip around faster. Nonetheless, there is a patchwork feel to security. Some rail platforms such as the Gold Line have cameras. Others don’t. One source said he’s seen officers from different agencies squabble about responsibilities.

No precaution stopped the first rape, or the attempted second one exactly a week later in the same spot: the second level stairwell of the MTA’s $300-million headquarters building, which is at the south end of the so-called Gateway property. A suspect is in custody. Because of the media coverage, another woman came forward and said she’d been attacked on the Gold Line in February. A fourth victim claimed to have been battered on the Red Line in July.

“One person committed four sexual assaults, and if you take him out of the equation, compared with the hundreds of thousands of people traveling safely, the ´´ odds are pretty darn small of something happening to your mother or daughter,” Finkelstein said.

Playing the odds, though, has some upset. Longtime transit gadfly John Walsh believes the MTA board has been so gung-ho to build politically rewarding rail systems it’s neglected post-9/11 security at Union Station. He said there aren’t enough dogs, too few cameras and antiquated equipment.

“What MTA should do is form a peer review panel of experts to give them a ballpark figure on how many tens of millions it would take to raise the security level to average,” said Walsh. “If it means delaying construction of a new project, so be it. The only reason there’s a gun dog [now] was that a woman got raped. How much more blood has to be spilled before we get a bomb- and chemical-sniffing dog?”

~ Sitting Duck ~

The Madrid train bombings drove home the possibility it could happen here. Finkelstein said a working group comprised of the different security entities at Union Station now meets regularly. They run drills, including one last week that emptied out the MTA headquarters. They also conduct “table-top” exercises to think up attack scenarios.

It’s unclear whether the terminal is on the list of 100 top local terrorist targets, as Los Angeles International Airport and some downtown skyscrapers are, because the list has not been made public. But trains are clearly a target: Last month, a U.S. citizen and Pakistani national were arrested in what police suspect was a thwarted plot to blow up a Manhattan subway station. Three days later, a suicide bomber tied to Chechen separatists blew herself up outside a Moscow subway station, killing 10. Terrorists and insurgents have long regarded rail lines as a good target because they are relatively easy pickings, according to a study recently presented to Congress by the Rand Corp., a Santa Monica think tank. Between 1998 and 2003, there were 181 attacks on them from India to South America.

“Passenger rail facilities present potentially inviting targets for terrorists for a variety of reasons,” the report said. “They are easily penetrated and may have high concentrations of people … . Casualties can be inflicted with a backpack-sized bomb. This is a substantially lower logistical burden than the one faced by the terrorists who committed the September 11 attacks. In addition, terrorists likely perceive psychological benefits to attacking transportation networks.”

Until the Madrid incident, the world’s most infamous terrorist train attack occurred in the Tokyo subway in 1995. A doomsday cult there released sarin gas that killed a dozen people and made 5,000 ill.

~ Short-Changed ~

Union Station’s vulnerability was not lost on Los Angeles Mayor Jim Hahn. In October 2001, he successfully pushed through the MTA board a motion for a security reassessment there. A month later, the panel was briefed about it in closed session.

Not long afterward, the Federal Transportation Administration began analyzing safeguards at the nation’s 50 largest passenger-rail depots. This report is due out next month but won’t be made public because of its sensitive nature, a FTA spokesperson said. The 9/11 Commission was so concerned about possible attacks on subways, trucks, and ships that it issued a 20-page addendum to its main report. Checking passenger names against terrorist watch-lists was one recommendation.

“When the feds came back, they were very impressed” with the changes at Union Station since 9/11,” said Paul Lennon, the MTA’s director of intelligence and emergency preparedness. “There are a lot of enhancements that could be added, but under the circumstances we’ve done what we can. There is a huge presence of security people.”

Some of these upgrades have been financed by a $4.6 million grant from Homeland Security. MTA officials are studying new technologies, including a closed-circuit television system inside rail cars that would beam real-time images to a control center.

Yet despite being the nation’s second biggest city, Los Angeles has received comparatively little federal rail security money, according to the American Public Transportation Association. New York City has secured about $28 million; Chicago took $5.1 million. Southeastern Pennsylvania received $3.4 million.

Public-transit advocates have complained that federal money spent on airline safety since 9/11 has come at the expense of bus and rail, which carries 16 times more people daily than air travel. They claim to need $6 billion, well short of the $3.5 billion the House of Representatives has proposed spending on mass-transit security over three years.

“We know that Los Angeles remains a target for terrorists, and that’s why we are working to convince Washington that L.A. needs its fair share of Homeland Security Funding,” Hahn said in a statement prepared for this story. “Receiving the funds with which we are entitled to will go a long way toward securing key sites in L.A. like Union Station.”

At the Metropolitan Water District, vigilance is a serious business. Cameras ring their property. Enter the lobby and a guard watches you. The MWD has spent $20 million on fencing, cameras, sensors and other precautions system-wide since the attacks, said Jill Wicke, the district’s manager of water system operations. At their headquarters, underground parking has been restricted and concrete barriers have been installed, among other moves.

“The whole (Union Station) area is a public facility and there are constraints associated with the security of public spaces,” Wicke said. “People have free access to come and go, and that complicates things. If something affects the property that everyone else needs to know about, we’ll call the Sheriffs and LAPD.”

Amtrak has also made changes, limiting passenger bags and requiring identification to buy a ticket.

Tom Rubin, a transit consultant and former chief financial officer for one of MTA’s predecessor agencies, said Union Station has a way to go before it is safe.

“You need somebody in charge, and it starts at the edge of the property,” Rubin said. “What we are primarily concerned about is prevention. There should be an overall plan and coordination among the agencies. One of the key things should be a closed circuit television [system] because it’s very effective. It’s my understanding there is closed circuit television for the Red and Gold Lines, but not for Union Station.”

Finkelstein reiterated that the Sheriffs are the ones in charge. He declined discussing surveillance specifics. A spokesman for County Supervisor and MTA board member Mike Antonovich said his office is looking into the issues raised by CityBeat.

Catellus, which is based in San Francisco, is no stranger to L.A. politics. The firm contributed $29,000 to the anti-San Fernando Valley secession movement spearheaded by Hahn. It’s also given about $19,000 to various council members and candidates since 1998, records show.
A Hahn spokesperson called it “totally illogical” to believe the anti-secession funds influenced policy, noting that LAPD is not the lead agency in charge at Union Station.

A nearly identical version of this story appeared in L.A. CityBeat. Copyright Chip Jacobs

The post State Of The Union appeared first on Chip Jacobs .

The post MWD Paid Developer Millions appeared first on Chip Jacobs .

Suddenly he was there, inside a chic Lincoln Continental, spectacularly unprotected as he grinned at onlookers probably dumbfounded at what raw luck had dropped right in their laps. The city of movie legends and rocks stars had been expecting this VIP, just not in the cool shadows outside of downtown’s Biltmore Hotel. History, it appeared, had pulled a fast one. And a brown-haired college student, then palming 35mm when he stumbled across this scene, had no intention of squandering his brush with chance fate. With nobody cordoning him off, he edged close enough to read the man-of-the-hour’s expression.

The college kid with the shiny camera had no idea about the little piece of history he was about to make.

Zooming out, the whole world was gnawing its cuticles watching to see if the polarizing face in the car could reproduce Camelot within any reasonable facsimile. Of course, the mob despised him, the political left was torn over him and Wall Street and the Kremlin harbored their own sharp opinions. But, as the college kid discovered in the year of the Tet Offensive and LSD-mixed Kool-Aid, the guy behind the excitement was mortal –a floppy-haired man weary around the eyes, facing backwards in the rear seat of somebody’s chrome-and-leather luxury sedan. Robert Francis Kennedy might’ve wanted to take a whiz or a grab a Philippe’s French-Dip nearby if not for his excursion in the filtered sunlight near Fifth Street and Grand Avenue.

RFK, an adventurer the first to dive into frigid waters and an armchair philosopher apt to quote the ancient Greeks, was achingly aware of his vulnerability to assassins by the time he’d arrived here for the 1968 California primary. Outwardly, the New York Senator and former U.S. Attorney General in his older brother’s administration ridiculed his fear of being murdered as tiny compared to his determination to achieve a higher good. Even so, palpable threats made him flinch, if not more fatalistic where the public couldn’t see. “Everybody,” one insider explained, “remembered Dallas.”

But did anyone learn from it where it counted? The young man with the camera—my older brother, Paul Jacobs—was able to get within about a dozen feet of the next potential leader of the free world until, finally, a staffer shooed him away. The resulting two photographs from a borrowed Nikon Nikorrmat caught RFK in unscripted poses, and not just any, either. Because Paul likely took them hours before infamy doubled down in the kitchen of the sprawling, Myron-Hunt-designed Ambassador Hotel, he unknowingly had on film a pair of the last privately captured photos of the second Kennedy to die on the job.

In grainy black and white, there he is fist-pumping wellwishers, including a woman in a polka dot scarf, while a couple of men with small movie cameras film from the driver’s side. A curious fellow in a fedora, sunglasses and a patterned shirt observes the action, and a bespectacled aide in the front passenger seat is caught mouth agape communicating with someone outside his door. In a more intimate photo, there he is again seated sideways with an absorbed expression and his hair parted in that hard, Ivy League sweep. To his right is the regal, brick façade of the Biltmore, L.A.’s VIP address that had hosted under its Italian-like cathedral ceilings Academy Award ceremonies, Jack Kennedy during the 1960 Democratic National Convention, and The Beatles (via helipad) four years later. To the left are the Central Library and the office towers of Figueroa Boulevard.

This, however, is the sadly noble tale about the scar fate rolled over, not geography. Examine both photos carefully and you’ll notice a mark on RFK’s head that might mean more than anything or anyone in the frames. The misshapen, dime-sized blemish high up on the right side of his forehead, in fact, might have spared him from a killer’s bullet had the injury that caused it kept him away from the Ambassador. My brother had his own life-or-death component here, one connected to the figure in the Lincoln, which was probably light blue like the L.A. sky before chronic smog painted it taupe grit. By providence, he was bumping into the man perhaps best able to end the unpopular war that Jack green-lighted under the anti-communist “domino theory.” A war that Paul and his chums were convinced could very well get them killed in olive green military uniforms within a year or so of college graduation.

At the time of their brief encounter, my twenty-one-year-old brother with Dustin Hoffman “Graduate”-esque hair and a boy-next-door face was a part-time statistician for L.A. County’s Probation Dept. — when he wasn’t taking his senior year classes at USC and getting used to life as a newly married man with tremors about the humid jungles of Southeast Asia in his head. As usual, after quitting time, he walked up from Temple Street to the west side of the Biltmore, where his then wife picked him up in their egg white VW Bug. This Tuesday was different. Paul, dumbfounded he could get within a football first down of Kennedy, clicked away, dwelling less on his subject’s political iconography than his rendezvous with celebrity, as if he’d lucked into a long elevator ride with Elvis.

Unintentionally exposing the safety of a presidential candidate whose own brother was executed was the last thing Paul contemplated. Yet, the camera he carried with him as an amateur shutterbug could have been a pistol; and that open, unprotected sedan—named after the slavery-abolishing president himself shot in the head 103 years earlier—another Kennedy casket. RFK’s entourage had already relived that parallel after firecrackers exploded next to the motorcade as it passed through San Francisco’s Chinatown during a campaign rally a few days earlier. Ethel, Kennedy’s pregnant wife, flung herself to the bottom of the car upon hearing the bursts. Though her husband had continued waving and smiling defiantly, a Newsweek columnist traveling with him noticed what others missed. The candidate’s knees buckled.

Such came with the territory only he could occupy. On a barnstorming tour of California the day before the primary on Tuesday, June 4, 1968—where he was contesting Minnesota Senator Eugene McCarthy and Vice President Hubert Humphrey for the Democratic Party’s presidential nomination after Lyndon Johnson declined to seek reelection—the junior Kennedy was everywhere. On the Monday before, he’d flown from L.A. to the Bay Area, returned south to Watts and Long Beach, and then continued on to San Diego. Hitting those three big media markets for the news cycle required 1,200 miles worth of travel in 13 hours.

Big crowds whooped for him, even if not everyone was beguiled with his candidacy or his promise to bring peace to Vietnam and comfort to the disenfranchised. “How ‘bout your brother? Who killed your brother?” someone shouted. RFK, who was the third youngest of nine children, faltered in his speeches that day. A journalist with him said he acted “spaced-out,” his mind someplace else. “I don’t feel good,” he acknowledged to an aide, a rare admission for a man who’d been surviving on four hours of shuteye with nary a gripe. A campaign volunteer meeting him later that day likened his handshake to a “noodle.” RFK was acting withdrawn and mousy when his persona needed to be outsized and embracing.

At his last stop in San Diego, where 3,000 supporters turned out to hear him at the El Cortez Hotel, he was unable to finish his remarks on the first stab. He had to sit down on the stage before an aide took him to a bathroom, where he vomited. Returning to the audience, he tried completing his speech, wrapping up with a favorite proverb by George Bernard Shaw: “Some men see things as they are, and ask why? I dream of things that never were, and ask, why not?” On the plane back to L.A. near midnight, the candidate shriveled in near-exhaustion. Ethel admonished the noisy reporters on board to leave him be. People meeting him for the first time then were struck by how aged he looked, his youthful face slightly wrinkled, brown-blond hair graying, blue eyes staring from a gaunt skull typical for an old man, not one 42. Was this really the leader who liked ending his day on the hustings with a bowl of chocolate ice cream and a Heineken?

Besides the enormity of what he was attempting, RFK was also stricken by the possibility that he had neglected his own family. In April, police in Hickory Hill, Indiana had apprehended David, one of his eleven children, for throwing rocks at passing motorists. A child psychologist that RFK queried about the behavior suggested the boy was hurling objects at people he didn’t know because he couldn’t lob them at someone he did. Like his Dad! Kennedy, thus, saw the upside of defeat. “If I lose,” he said, “I’ll go home and raise the next generation of Kennedy’s.” Probably thinking alone those lines, he took the six of his kids with him in California to Disneyland the Sunday before his Monday dash up and down the state ahead of primary balloting.

Something else that was neglected, appallingly, was his safety from madmen. Presidential candidates back then, even ones named Kennedy, traveled without U.S. Secret Service Protection. Equally absent was assistance from the Los Angeles Police Department, one of whose officers ticketed RFK’s motorcade for running a red light. Sam Yorty, the city’s feisty, attention-loving Republican mayor who’d supported JKF over Nixon in 1960, considered the younger Kennedy a radical. An East Coast subversive. Rather than all professionals, RFK’s bodyguards sometimes were celebrity athletes like Roosevelt Grier, the husky former-tackle for the Los Angeles Rams, and Olympic decathlete Rafer Johnson. In South Central, an activist group called the “Sons of Watts” watched out for him only a few months after a lone gunman had taken out Martin Luther King in Memphis. Why not ask the Hells Angels, as the Rolling Stones would do with deadly consequences at the Altamont in Northern California the next year, to guard his flank?

RKF shouldn’t have had to worry about any of it because it was hard enough being in the shadow of Jack—the war-hero-turned 35th president, America’s glamour-boy-in-chief, hand tucked stylishly in suit coat, a bedroom-eyed, political natural whether behind a podium or tossing out one liners with Hyannisport savoir faire. Robert, for much of his life, had been a tagalong bringing up the rear of a privileged New England family committed to public service (and private enjoyments). After Lee Harvey Oswald and/or others murdered his older brother that autumn day in Texas, RFK, then U.S. Attorney General, surrendered himself to existential grief, to questioning God with brooding indignation. But having battled the Mafia, J. Edgar Hoover, bullwhip segregationists, and the nuclearizing Soviets in his mid-thirties, he knew he had something to offer a divided country despite withstanding character attacks on him as an opportunist hanging ten on his family’s magic brand. In a way, RFK was harder to dissect than Jack, and tougher to promote. It wasn’t just the superficial—the semi-buck teeth, the reedy voice, and what one writer called a “shy gawkiness”—but a spirit coopted by innocent hope and raw cunning difficult to express on a bumper sticker.

When Robert needed California peace, he often headed toward the setting sun. In May, he’d spent time at the Malibu beach home of John Frankenheimer, who’d risen from actor to cameraman to director for such classics as “The Birdman of Alcatraz” and the Cold War mind-control thriller, “The Manchurian Candidate.” Out there with him on that visit were Shirley MacLaine, her brother Warren Beatty, actress Jean Seaberg and her novelist husband, Romain Gary. Comfortable on the coast, RFK returned with some of his family to Frankenheimer’s place on June 3rd, the night before the primary. Observing Robert’s bone-weary appearance, Frankenheimer let his guest and his wife stay in the master bedroom.

The next morning broke gray and chilly in a soupy, seasonal mist that Angelenos call “June Gloom.” If RFK was about to assume pole position over the two other Democrats by winning California, he needed a breather following nearly three months of nonstop campaign activity as a late-entering candidate. He spent a good part of what would end up his last earthly day sleeping in, playing with his kids in the choppy water, and sunning once the fog burned off. Transistor radios hyped the election before moving on to traffic and Dodger pitcher Don Drysdale’s bid for a sixth shutout. Rumors of George Harrison’s rental home off the Sunset Strip, on a street called Blue Jay Way, stayed off the airwaves.

On this same day was an incident that history stupendously has never zoomed in on in the post-mortems of what was to come. While swimming outside the director’s house, his son David was knocked off his feet by a crashing breaker and sucked beneath the waterline by California’s notorious undertow. Near him, RFK dove under to rescue his boy, pulling him to the surface. Both emerged from the saltwater bruised and scraped from being thrust onto the rocky ocean floor. Indeed, the elder Kennedy now sported a noticeable abrasion on his forehead mere hours before he might appear on national television. His terrified son was so grateful for his father’s nimble reflexes that he promised him he’d return the favor when he could.

Sometime later, the sapped presidential candidate got horizontal, falling asleep on two poolside chairs as Frankenheimer’s guests noshed from a buffet. One attendee studied RFK’s limp body and parted lips, dreading that he wasn’t breathing. Once awake, Kennedy suggested skipping his own election night celebration at the Ambassador Hotel. Just hang there. Defy convention. Family, friends and others could watch the primary results trickle in from Malibu. The media could travel out, too. By mid-afternoon, after exit polls showed him ahead of McCarthy in the California race, the notion of being a no-show at his own fete crumbled. Around 6:00 p.m., Frankenheimer, who was collecting footage for a campaign documentary and providing TV and film footage for RFK, daubed his forehead blemish with theatrical makeup so he wouldn’t appear like he had taken a hard Frisbee off the noggin.

The thirty-eight year old director then drove RFK, outfitted in a handsome, blue pinstriped suit, to the event about an hour east. Some accounts suggest that Frankenheimer, who had a passing resemblance to actor Leslie Nielsen, ferried him in his Rolls Royce Silver Shadow. A tantalizing online clip about the journey narrated by Fred Dutton, RFK’s campaign director, though, was filmed from a powder-blue convertible identical to what my brother photographed. Whatever car was used, Frankenheimer pressed the accelerator like “a bat out of hell that night…carried away” in the moment, Dutton said. Hollywood and Washington were never more incestuous than the day before the inevitable unthinkable. Frankenheimer, all the same, was berating himself for inviting over to RFK’s Malibu sendoff a batch of distracting showbiz types, among them Roman Polanski, director of the upcoming Rosemary’s Baby, his stunning wife, Sharon Tate, and future Walt Disney Corp. president Frank Wells. Cursing his decision-making, Frankenheimer drove past the Vermont Avenue turnoff, entangling himself in the traffic of the Harbor Freeway Interchange too far east. “Take it easy, John,” his passenger told him kindly. “Life is too short.”

In his suite at Mid-Wilshire’s Ambassador, an Establishment stomping ground in the experimental sixties, Kennedy found more celebrities—Milton Berle, George Plimpton, Budd Schulberg, John Glenn— in boisterous, party mode. Did RFK hear the news? He had clinched four out of five state primaries, giving him crucial tailwind needed to make him the Democratic nominee if California later fell into his column. RFK took nothing for granted whatever others’ excitement about his chances, edgy that McCarthy, the so-called “peace candidate,” might stymie him from a dominating victory in his home state of New York. Still, there was a difference in him from hours earlier when he’d pined to remain in Malibu. At the hotel, he acted unshackled, giddy, marginally cheeky, observers noted. He smoked a cigar in the hallway and quoted Lord Tweedsmuir about politics being an “honorable adventure.”

“I feel now for the first time that I’ve shaken off the shadow of my brother,” he told Kenny O’Donnell, his other campaign manager, in a phone call that evening. “I feel like I made it on my own.”

Everyone by now knows the bloodshed that prevented him from striding into the Oval Office. Just after midnight, after winning the all-important California primary, Kennedy appeared in the muggy, raucous hotel ballroom of the Ambassador. “We are a great country, an unselfish country, and a compassionate country…” he told supporters. “Now it’s on to Chicago, and let’s win there.”

“We want Bobby! We want Bobby!” the crowd chanted back.

En route to a victory party already underway at The Factory—a nightspot owned by Pierre Salinger, Sammy Davis Jr., and other liberal glitterati—RFK was led through the hotel kitchen. Some of his aides had psychedelic garb with them for the revelry. Just as their boss turned around to scout for his wife, a Palestinian-born drifter supposedly angry with Kennedy’s recent pro-Israel comments fired a snub-nosed .22 caliber Iver-Johnson cadet revolver. One bullet caught Kennedy behind the right ear. He fell backward onto the concrete floor with a hole in his head. Grier, Johnson, and faithful bodyguard Bill Barry wrestled with the shooter—24-year-old Sirhan Sirhan,—to make him drop the pistol. Somehow in the chaos Sirhan squirmed away and got his weapon again until he was subdued with hands around his throat. “Don’t kill him!” hollered Jesse “Big Daddy” Unruh, speaker of the California legislature, from the top of a serving table. “We want him alive,” meaning not executed before he could confess, as had happened with Jack Ruby in Dallas.

A total of 13 bullets were fired and five others besides RFK were struck, none lethally. “Is everybody else all right?” Robert Kennedy asked Ethel as she caressed him on the kitchen floor. He passed out from there, never to wake again. He was pronounced dead at 1:44 a.m. the next day. Hearing the news early the following morning, Paul felt a chill dash up his spine and blood vacate his stomach. Not only had he seen RFK through the lens of his camera the previous day, he had voted for him, too. Later, Kennedy’s body traveled by funeral train, just like Lincoln’s cortege, with tens of thousands of people lined up along the tracks to bid farewell.

Endorse or denounce his politics all you want, bath in his family’s mystique or harpoon it; one can still argue, even mawkishly, that with RFK’s final breath in a local hospital went America’s fleeting hope to redeem itself before its decade of disenchantment in the 1970s, before Nixon and his Watergate burglars, before Vietnam bled into deadly misadventure, before hyper-partisanship transmogrified into our fetid national state of being.

In the years that passed after his assassination, conspiracy theories twirled just as they had after Dallas, with some persuaded the mob or other conspirators engineered it. Could there have been a second gunman in the Ambassador kitchen that evening? Could the obscure Sirhan Sirhan have been a mind-controlled patsy planted to distract attention from the real assassin? Could the CIA have been involved, still livid with how the Kennedy’s treated the agency after the Bay of Pigs fiasco? Could another group have done it? How else to explain bullet trajectories that make little sense, skeptics asked? Sirhan’s lawyers in March 2012 officially contended their client did not discharge any of the bullets that killed RFK, no matter official conclusions to the contrary. In January 2012, in a strange compacting of time, Robert Kennedy Jr. revealed his father’s belief that Oswald did not act alone in assassinating John F. Kennedy and that the Warren Commission report that settled on the single-gunman theory was a “shoddy piece of craftsmanship.” RFK, said one son, even felt “some guilt” that his efforts against organized crime might have incited the mafia to put the hit on JFK.

I was a rascally six-year-old kid from distant, older parents living in the Pasadena foothills, not far from where Sirhan Sirhan resided, when the Ambassador’s floor ran red. My bedtime came after prime time Batman ended. Paul was 15 years older than me, meaning I idolized everything about him, from his insouciant popularity, to his brown MG sports car that he drove blasting the Beatle, to his feats of waterskiing derring-do. In 1969, the draft tapped him, and he was sent to Ford Ord in Monterey for Army training before a likely deployment to Vietnam. At first, it seemed bitchen-squared, as TV romanticized war and made heroes and villains absolute to a junior G.I. Joe like me. Before long, I had a military buzz-cut to imitate Paul and my own itchy Army jacket. The sergeant high on Paul’s leadership potential showered me with comic books, mess hall donuts, and niceness on one trip to Ford Ord.

Later, after the Army had Paul for some months, my intoxication with heroic combat began sobering. Every night, it seemed, the news showed the wounded being ferried to helicopters followed by “kill” numbers. Grownups openly bickered about whether Vietnam was worth the blood sacrifice. Back up to Ford Ord on another visit, the military staked a chain-link fence to separate adults from children to reduce their chances of contracting meningitis that had infected the base. I could only touch the brother I missed so tremendously through small, diamond-shaped squares in a cold fence. For some reason, my little-kid mind equated that distance with a more permanent one, where Paul returned dead from Vietnam in a body bag and my own joy was embalmed for good with him.

Safe to say that after serving his country, Paul survived. Decades later, when I became a writer, he emailed me the black-and-white photographs and explained the gut-wrenching timing behind them. I had no idea of their value. Busy with other projects, I let them stagnate on my hard drive for couple of years. Finally, with his permission, I posted them online, where bloggers, Kennedy experts and the Los Angeles Times made them an Internet sensation. The poignancy of them was undeniable. People tried deciphering who was driving the Lincoln and the Brylcreemed men in it. Was it a young John Kerry, Timothy Wirth? And what was the little motorcade doing outside the Biltmore on a campaign event nobody can peg?

The issue of when my brother took the pictures soon washed out other mysteries about them. Over the transom came an email from another Paul, Paul Schrade, and he was spitting BBs at the suggestion that the photos were taken mere hours before the killing at the Ambassador. Schrade at first dubbed the contention an “innocent mistake.” RFK had spent the entire day of the primary in Malibu, never near downtown, he said. Case closed. Fred Dutton, he said, “confirmed it.” As time went on the leonine-haired Schrade grew more livid with me, despite my and Paul’s acknowledgement that the photos might have been snapped a day or two earlier. Outsiders weighed in with a magnifying glass, examining RFK’s striped tie with others he’d donned.

I hit search engines for answers and within a millisecond understood that Schrade had justification for boiling feelings on the subject. June 1968 was still his private horror. At the time, he was a United Auto Workers chief and RFK’s labor campaign chief standing near the candidate when Sirhan opened fire. One bullet struck Schrade in the head with a jolt that he likened to being “electrocuted.” A signature photo from that evening’s slaughter, besides a bus boy leaning over the fallen Kennedy, was of Schrade’s head resting on a blood-soaked straw campaign hat while someone fanned him with a Newsweek magazine featuring RFK overlaid on JFK’s image. When Schrade heard Kennedy had died, someone told him Kennedy’s last words. “Is everyone all right? Is Paul all right?”

Schrade, not surprisingly, lived everyday with that traumatic moment, battling depression, losing his job, and working to uncover a conspiracy he believes killed his friend less than five years after his brother was cut down. “I was so angry,” Schrade told a reporter. “We should have realized it was going to happen again.” He has also tried keeping RFK’s flame alive as a person worth emulating. A few years ago, the $568 million Robert F. Kennedy Community Schools, a cluster of schools built on the former Ambassador site at a record cost, opened, thanks largely to Schrade’s 23 years of work. In dedication to him, there is the “Paul Schrade Library.” Bullet fragments are still lodged in this skull.

My brother’s pictures seemed to have rattled them. Schrade accused me of exploiting them for personal aggrandizement, of using a remote connection to a remarkable family like a fame-mongering paparazzo. When I expressed sympathy with his perspective and asked for his assistance identifying the people with RFK in the Lincoln, he terminated his communication by saying he was “disappointed” in me. Paul Schrade wasn’t buying the timing of Paul Jacobs’ pictures, maybe because he believed all the knowable facts were in about Robert’s movements and pondering otherwise meant processing a more nuanced reality than his psyche could bear.

Remembrance, not self-serving controversy, had been my intention in posting them, and yet by bringing out what had been unseen, it was if I’d waded into territory still too radioactive for outsider exploration. Another stranger with an opinion on the matter, this one from North Carolina, fortunately was more revelatory than accusatory. Dave Loughlin, a music publisher who had read about the photos online as a self-described Kennedyphile, educated me in a long, twangy voicemail that my brother’s snapshots were taken June 4th because RFK’s scrape from saving his son are clearly visible there and not in previous stills from the campaign. In the pre-digital era, the mark was equal to a time stamp. After I learned about Kennedy’s day in Malibu, I thanked Dave as my archaeologist. That scrape was a pinpoint. Whether it was also an omen (or pre-stigmata) I cannot say.

So what was RFK doing on sloping Bunker Hill on primary day 1968, if that’s the correct date for the photos, when he had already delivered a speech at the hotel in April? Maybe, just maybe, RFK was in downtown L.A. being filmed by Frankenheimer’s people for the documentary on this most extraordinary of days on a trip his associates never knew about or forgot to mentally warehouse in their miasma of grief and regret. Maybe, just maybe, it had happened after Frankeheimer missed his turn and circled back through downtown. I can only wish with quixotic delusion that there had never been any photographs, that Kennedy had smacked his head harder into the ocean floor, requiring stitches, concussion testing, and bed rest keeping him out of peril and in line for a presidency all about binding wounds and finding common ground again. RFK could have been our painkiller, our collective Vicodin, but Los Angeles robbed us of that fairytale.

“Historians have argued…about what Kennedy might have become, just as journalists and commentators in his lifetime debated who he really was,” author Evan Thomas wrote in his excellent biography, Robert Kennedy: His Life. “Was he the hard, bullying, McCarthyite, wiretapping, Hoffa-Castro-obsessed hater forever scowling and vowing to ‘get’ his enemies? Or was he the gentle, child-loving, poetry-reading, soulful herald of a new age? None of these images is wholly right; none wholly wrong. A better way to understand him is to examine his fear. He was brave because he was afraid. His monsters were too large and close at hand to simply flee. He had to turn and fight them.”

Treacherous endings were in store for many of those at Frankenheimer’s Malibu compound the day RFK suffered his watery scar. Killers from Charles Manson’s “Family” murdered Sharon Tate, her unborn child and four others in a Benedict Canyon house in August 1969. Nine years later, Tate’s widow, Roman Polanski, fled to France after he was charged with statutory rape. Frank Wells made it to 1994, dying in a helicopter crash in his tenth year as Disney’s profit-making president. Then there was David Kennedy, who had heard about his father’s murder on TV hours after his father had plucked him from the undertow. He perished from a drug overdose in Palm Beach, Florida in April 1984.

Frankenheimer might have taken a bullet himself had it not been decided last minute that Schrade was a better person to be on stage with RFK than a Hollywood personality. He’d been waiting in the Ambassador parking lot to whisk his friend to the victory party at The Factory until he heard a woman run out yelling, “Kennedy’s been shot.” The paradox could drive a man insane. RFK had left his clothes at the house of the director of a movie about U.S. soldiers brainwashed to kill. “I really had a nervous breakdown after that,” Frankenheimer said later. “That’s when I went to France, and that’s when I went to the [Cordon Bleu], because I just had to do something else with my life, and I really couldn’t go near politics for a long time after that.” He passed away in 2002.

My brother agonized in his own fashion, too, seeing Kennedy’s face close up and then getting word hours later that Dallas and Los Angeles were synonymous now, that the Texas Book Depository and the Ambassador’s Kitchen were forever joined as cushy nests for snipers. In ensuing years, Paul, a real estate executive, family man, pilot, and philanthropist, often drove to legal appointments at Fifth and Grand wondering what Kennedy was thinking as he sat in that Lincoln with monsters milling around. Nobody may ever know. Immediately after what happened at the Ambassador, LBJ ordered the Secret Service to guard presidential candidates. By then, Kennedy’s scarred forehead had been forgotten in L.A.’s last picture show.

This story is drawn from photographs, personal recollections, the book “Robert Kennedy: His Life” by Evan Thomas (Simon & Schuster – 2002),“Bobby’s Last, Longest Day (Newsweek), “Robert F. Kennedy’s Assassination Remembered by Paul Schrade” (Huffington Post, June 4, 2011), “John Frankenheimer: Renaissance Auteur,” (hollywoodinterview.blogspot) “RFK Children Speak about JFK Assassination” (USA Today, Jan. 12, 2013), “Robert Kennedy’s Final Day” (Woodstock Journal) and “Robert Kennedy’s Last Day” (budgetfilms.com).

The post The Last (Los Angeles) Picture Show appeared first on Chip Jacobs .

They found him on the sidewalk, a block from his boyhood home, with a shotgun blast to his handsome face and a ghastly bullet wound through his chest.

Townsfolk skipped a breath hearing that he’d been killed, let alone in an execution-style butchery that terrified the neighborhood. It was understandable. Stephen Ballreich was hardly your ordinary murder victim, because his history had been so extraordinary in the concrete suburbia normally ruled by stiff, paunchy men from older generations. When he assumed Alhambra’s mayoral seat in 1977 at the age of 26 in post-Watergate America, it slingshot him to instant celebrity as America ’s youngest mayor and Golden Boy of the San Gabriel Valley.

Charismatic and hard charging, a natural before any crowd, the blond-haired, blue-haired Ballreich had a seemingly limitless future. Congress, a run at governor: Republican pundits believed it was all his for the asking. Carelessness, however, would cost him his chance to shine on a bigger stage. 

Shortly after his landside re-election in 1978, the electricity that’d once distinguished him curdled into scathing headlines against him, as activists accused him of misspending about $2,700 of city travel funds on a trip to Washington, D.C. the previous year. The District Attorney’s office declined to press charges, but the scandal punctured Ballreich’s confidence, if not his mystique as a prodigy that others better seeing coming. He abruptly resigned his post, relocating for ten years to Arkansas, where he’d later brag about hobnobbing with Bill and Hillary Clinton.

Ballreich returned to Southern California in 1988 as a political consultant and a single dad, still dynamic as ever, though no prodigal son. Savagely killed at 41, he was never able to do what he confided to his girlfriend: seek office again to fulfill the promise so many saw in him.

A COLD RED SCENT

If all this seems like a distant memory about a once-famous person, it is. Stephen (Steve) Lynn Ballreich was mowed down across the street from the leafy grounds of the Ramona Convent where he once played as an outgoing kid around 8 P.M. on Nov. 14, 1991 months after the American military ousted Saddam Hussein’s forces from Kuwait. 

Some 14 years later, the Los Angeles County Sheriff’s Dept. remains stumped about who murdered him in such a public fashion. It is officially a cold case with no active suspects and no motive ever established. Several veteran homicide detectives assigned to investigate it have come and gone. One drifted into a retirement on the East Coast feeling “haunted” by its unresolved status, a source said. “All the leads have been exhausted,” acknowledged Sheriff’s homicide detective Susan Coleman. “We’ve been hindered by a lack of witnesses and evidence.”

So much time has elapsed that a jaded sense exists today the case is practically unsolvable. Even Ballreich’s own mother has stopped calling officials for updates. Adding to the cynicism is the virtual information blackout imposed by authorities. Neither the Alhambra Police Dept., which first responded to the shooting, nor the Sheriff’s Dept. that took over the investigation will release the crime report. They say publicizing it could jeopardize what leads they have, including clues lifted from the murder site, a modest, tree-lined block between Valley Boulevard and the San Bernardino (10) Freeway.

At the top of the missing evidence is the murder weapon itself: a 12-gauge shotgun that cannoned two or three close-range pellet-salvos into Ballreich as he walked or jogged in the 1700 block Marguerita Ave. in the primetime-TV hour. Another crucial item that authorities failed to locate, at least initially, was an address book kept at his apartment. 

“I ask some of the police chiefs once in a while when I am trying to be funny how the Ballreich case is coming,” said former Councilman Parker Williams, who served with him at City Hall in the 1970s and was later prosecuted in a bribery scandal. “You know without asking that nobody has any information … I think it’s just tragic.”

While several of Ballreich’s longtime friends question whether the Sheriff’s Dept. pursued the case as tenaciously or competently as it could have — especially in light of a newly disclosed 1989 death threat he allegedly received and his entanglement with possessive women – it’s never been a slam-dunk whodunit. Ballreich’s habit of infuriating people he once impressed, gambling fever and oft-murky doings made him a jigsaw-like personality excruciating for police to piece together. 

Hence, the more you dig into his existence, the more you appreciate detectives’ quandary. It wasn’t so much who wanted Stephen Ballreich dead but, at times, who didn’t?

Williams, like others, said authorities told him that Ballreich’s killer probably first shot him in the back from a slowing car, and then stood over him as he lay supine on the sidewalk to bury a second round into his face. The point-blank force from it penetrated his skull, blowing off the back, according to the autopsy report, a copy of which the Pasadena Weekly obtained.

In the days following the bloodshed, wild theories circulated around town that a hit man commissioned by an obsessed woman, jealous husband, or incensed father had masterminded it, or that it’d tumbled from a snowballing bookmaking debt. Fringe scenarios envisioned the ex-mayor with a slightly receding hairline and a trademark blond moustache was targeted because of politics. Had someone put out a contract on Ballreich (pronounced Ball-ridge) because he’d learned something sinister or switched allegiances? “Obviously, because of his political activity, we’re having to check that out,” Curt Royer, a Sheriff’s sergeant who’d become one of the lead investigators, told the Los Angeles Times.

For many, the fact that he perished where he did was more than gut-wrenching coincidence. People close to him knew that he was so fond of his childhood block that he often drove from his sparsely furnished South Pasadena apartment, where he’d been living upon his from Arkansas, to jog there after work. Someone out to knock him off who appreciated Ballreich’s sentimental attachment there could easily have exploited it. Authorities tried tempering the rabid speculation about that and similar theories by suggesting it might’ve been a more mundane robbery or a gang assault responsible.  

Again, those acquainted with Ballreich’s background doubt it was a crime of opportunity. Besides, he was an athletic 6’1,” 239-pound Caucasian outfitted in a red jacket, sweatpants, and sneakers when he took his last stride. He didn’t fit the profile of someone a gang would hurt, even for a suburb a short hop from East L.A.’s deadliest barrios.

Ballreich’s behavior in the months leading up to his demise, on the other hand, paint a man frantic for cash and eager to commit to paper where his assets would go should he perish. Shortly before he did, Ballreich evidently spread $5,000 cash on the floor of his apartment. On the Wednesday he was murdered, one source said, an occupant from his apartment complex saw him peel “rubber” in his car in a rush to get a meeting spot. 

Overall, if you polled those in Ballreich’s inner-circle, the way he died seemed to them to holler the motive in capital letters— VENGEANCE!

The local Baptist church that hosted his funeral drew 150 mourners, many of them numb. Eulogies by dignitaries and officials from this gray, cliquish city where mercurial rock producer Phil Spector murdered a date in 2003 and Hillary Rodham Clinton’s mother grew up lamented what was lost, what could have been. His landlady, who seemed to have an abiding fondness for him, praised his uniqueness. Talmadge Burke, a pillar of Alhambra’s political Establishment and one of California’s longest serving politicians, was devastated, though he was as different as could be from the victim. “He loved beauty and the aesthetics of Alhambra,” Burke quipped to a local newspaper. “He always helpful. He liked people of all ages. It’s difficult to say goodbye.”

Less mentioned amid the black suits and sodden tissues was the deceased’s compulsion for illicit romances and fast living, a “thrill junkie” who cleaned up beautifully in a suit and tie. Those proclivities slid with him into the grave or, perhaps, dispatched him there.

A ‘HORRIBLE VOID’

Jo Hartman, a special education teacher in Santa Maria, remembered the heartbreak of 1991, when she breezed into her apartment to notice her answering machine blinking crazily. Played back, the messages had an awful theme — the local news was all over the story of her boyfriend’s death.

Ballreich and her got to know each other in tenth-grade algebra. Mischievous humor and chemistry kept them close but Hartman wouldn’t let it go further, aware of the girls who swooned for Ballreich without him even trying. One buddy compared him to actor Tom Selleck with a “Marlboro Man” swagger. You needed a calculator to keep up with his conquests. It was in March 1991, after a fundraiser for a Pasadena candidate that Ballreich was guiding, when romance sparked between them. There was inevitability to it. Once involved, they laughed they were the real life version of the movie “When Harry Met Sally.”

Ballreich, twice divorced by now, talked marriage, Hartman said. She wavered. They’d quarreled over money she owed him and his devil-may-care style. Hartman also recognized that Ballreich sometimes drank excessively, and had other weakness going way back. She was not the first to come to that conclusion. Binges and reckless abandon fueled the paradox about him, as if periodic self-destruction was programmed in his genes. Ballreich could be tender and fun loving, the star of the room, just as he could be deceitful, slippery or a flake that stood up friends within the course of the same week.

Steven Born learned this about him in the early-1970s. They’d met as volunteers for the Young Republicans doing grunt work on a San Fernando Valley congressional campaign. Born watched his friend alienate peers with sordid behavior that undercut what he said was Ballreich’s uncanny “power of persuasion.” Born and others from that era perceived a guy with an outsized personality with difficulty taping the brakes of self-control when it came to laying wagers, hitting on attractive females or barroom brawling. 

“That was part of the problem: (Steve) could manipulate people so well,” said Born, a science teacher. “He remembered everybody’s name. He could get people to do things and work hard on campaign, even for inferior candidates. He was a wonderful salesman There was that a part of him that did really care about people. Then he’d switch on the selfish part and regret it later. It was like he was telling himself he had to do that to be a good person.”

In July 1991, the last time Hartman saw him alive, Ballreich unexpectedly — and for reasons still unexplained — asked her to witness a legal will that he’d had drafted. It was strange, foreboding and uncharacteristic. “Here was someone who didn’t plan things out,” she said. “Common sense would make you question why he was concerned about not being around.”

By fall of ‘91, the pair had started to warm up again romantically. He was sanguine about his future, telling Hartman that he wanted to “toss his hat in the political ring” a final time without specifying which race. Simultaneously, he prodded her to repay the $1,000 that he’d lent her that summer, phrasing the money “imperative” for him to recoup. His last communication with her was contained in an amusing Halloween card that he mailed. Her final words to him were a phone message that went unreturned. She left it on Nov. 14 at 6:51 p.m., roughly 90 minutes before his murderer aimed that shotgun at him. “I was in despair, beyond despair with the news,” Hartman said. “At first I didn’t believe it. At the reception after the funeral is when it hit me. He was really gone! It was that horrible void. ”

Hartman said she spoke to the police several times trying to help them apprehend the killer. Another longtime friend, who asked that their name be withheld out of safety concerns, joined the effort to winnow down suspects. This friend sent detectives a detailed, nine-page memo listing Ballreich’s friends, associates, and lovers, theorizing who might have wanted get payback on him and why. The memo, a copy of which the Weekly has obtained, points most strongly at two women with whom he’d been involved. (The Weekly does not divulge the names of people if they have not been arrested or sentenced for a crime.)

Ballreich had met one of the women when he was a twenty-something mayor and she was a petite, attractive teenager from a local high school. They dated periodically and often brazenly. The illicit relationship ignited doubts about Ballreich’s character among his older Council peers. “He screwed himself up at an early age with drinking, gambling, liking young girls,” said Barbara Messina, a former councilwoman and current Alhambra School Board member. “He had too much too soon and couldn’t handle it. (But) he’d brought the community together and started Project Pride. He could’ve charmed a snake out of a tree.”

RED FLAGS

Or, alternatively, invited vipers into his nest after he’d come home from Arkansas. According to his friend’s memo, this younger woman later studied the cello at USC, but never finished there because of drug problems. She eventually married someone else and moved to the New York area. Despite that separation, she and Ballreich continued their love affair when she visited the West Coast. Their favored hook-up spot was at a Best Western motel in Arcadia near the Santa Anita racetrack, the memo said.

In Jan. 1989, this woman’s husband allegedly threatened to kill Ballreich if he persisted with the tryst, the memo said. Ballreich, worried enough to interview bodyguards, told the friend who penned that memo that the woman was in town at the beginning of Nov. 1991 and that he had seen her. “Obsessed with Steve, extremely possessive, constantly looking for Steve’s suspected infidelities despite (the) fact that she, herself, continued to be married,” the memo read. “Violently jealous … (Steve) described his continuing concern for her welfare as his ‘weakness …’”

Ballreich, Hartman said, never confided in her about any threat, but she knew about the “obsessed” cellist. A few years earlier, when she and Ballreich were still on a platonic terms, she’d called him about playing tennis. He abruptly told her he couldn’t and hung up. Hartman’s phone soon rang and Ballreich put the woman on the line. “She said, ‘This is so and so and I’d like you never to call Steve again,’” Hartman recalled. “She said, ‘He’s my fiancé and I want you out of my life.’ It was almost like Steve was intimidated. I said Steve’s happiness is important to me and if I’m upsetting that, I won’t call again. She slammed the phone in my ear. Steve called the next night to say he was ‘horribly sorry.’ I told him, ‘Steve, what are you doing? This was a red flag. ’”

When detectives questioned this woman about her whereabouts and activities the day Ballreich died, she warned them that the next time they contacted her she’d have a lawyer represent her, Hartman was told. “As soon as she said that, they stopped. To me that would’ve been pay dirt,” Hartman said. “They should have been running this down. I’m not blaming the police. I thought it was one of those hard-to-solve cases. But there was a real suspect and the Sheriff’s Department didn’t follow through.”

She and the friend who authored the memo said they queried the Sheriff’s Dept. if a crime show like “America’s Most Wanted” might consider airing a segment about the case to generate leads and publicity. The idea went nowhere, they said, because detectives told them that producers of those shows wouldn’t feel Ballreich’s rogue personality made him a sympathetic-enough victim.

The comings-and-goings into his apartment during the immediate search for his slayer was another area where Ballreich’s friends butted heads with investigators. Hartman, for instance, had used her own key to enter his place on Nov. 16 to retrieve his will, finding that it’d gone missing. When she came back the next day, it’d magically appeared. Hartman said she informed detectives about it with little effect. Ballreich’s other friend experienced the same thing. She reported 10 items that’d been lifted from his place. Among them were a gold watch, two rings, a bible with his daughter’s name in it, a pair of negligees, and, curiously, his address book. “His apartment wasn’t taped off,” Hartman said. “There was no yellow (police) tape.”

The Sheriff’s Dept. Coleman disagreed, contending that Ballreich’s apartment was secured by all the “appropriate” measures. She declined to elaborate on the items allegedly taken. Other sensitive areas – what tips authorities explored and whether a volatile, older woman from the political world that Ballreich had slept with passed their polygraph test under interrogation – have drawn official silence, too. 

“There were several friends, several associates and several acquaintances who were interviewed by us, but no one has been identified as the suspect,” Coleman said. “There are many things that could have happened, and maybe even the thing you expected least. You just can’t have guesses. You have to have facts.” As with all unsolved murders, she said, detectives have reviewed Ballreich’s case within the last five years. Coleman said they failed to uncover any disregarded clues.

Over at Alhambra City Hall, the enduring mystery that has flummoxed police and demoralized his loved ones has elicited paltry attention. Nobody there can cite regular contact with the Sheriff’s Dept. asking to be briefed about the investigation or expressing alarm about its dwindling scent. It’s almost as if the city’s leadership would prefer the issue fade away because Ballreich’s personal failings were a municipal embarrassment best forgotten. If not for his toothy photograph on the wall or yellowing newspaper stories about him, an outsider never would’ve known that Alhambra’s onetime favorite son had ever banged the council gavel. 

 “I don’t mean to sound cavalier, but there are probably thousands of unsolved murders in L.A. County over 15 years,” said Alhambra mayor Paul Talbot. “Stephen Ballreich’s murder, though more sensational, is just as tragic as thousand of others. I’m more interested in the more current types of crimes.” The Sheriff’s Dept. has about 1,200 cold cases it’s working, including Ballreich’s, officials estimated.

Councilman Daniel Arguello, who split with Talbot in a juicy power struggle in the last few years, disagrees that his colleague should be so passive about the taking down of one their own. “This isn’t Los Angeles, where you have 4 million people living there – it’s Alhambra!” said Arguello. “It was a very serious crime and nobody knows who did it, even the Alhambra spin doctors who say Ballreich was an evil guy.” 

PROJECT PRIDE AND THE KID

Ballreich’s mother, Jean, said she’s lost track of the probe. For the three years after it happened, she said she stayed in touch with authorities from her home in Prescott, Arizona. A highly devout Christian, now twice widowed, she moved to the Southwest in 1980 to ease her asthma. “At first, I really, really wanted to know,” she said. “I would keep calling the Sheriff’s Dept., and the detective said, ‘As long as I’m here,’ they would pursue it. There are many things about it that are hard to understand. “But it won’t bring (Steve) back. God knows all things, and he knows what happened. If I could talk to whoever did this, I would just say. ‘I forgive you,’ not because I because I didn’t love my son, but because God will.”

She and Stephen’s father, Barney, had once foreseen exquisite things for him. From an early age, he schmoozed neighbors on his paper route, had terrific writing and speaking abilities, and possessed an allure everybody recognized. Shackling those talents, his mother said, was a manic-depressive streak and pigheadedness from an early age that he was destined for life in politics and only politics.

The family’s Beverly Hills-based jewelry business disinterested him as an occupation. Ballreich’s father then died suddenly when he was in his early-twenties. “From the time he was born, a lot of (Stephen’s) problem was being too high or too low,” in a possible sign of bipolar syndrome. “I couldn’t convince a lot of people about that,” Jean Ballreich said. “Emotionally, he was unstable. If he hadn’t been that way, he might’ve been the governor of California. I would’ve loved it if he’d gone into TV.”

One matronly Republican Party volunteer recalled meeting Ballreich when he was a gung-ho teenager with a cast on his leg stuffing mailers for a conservative candidate. Ronald Reagan and former Sen. Barry Goldwater were his icons. He quoted Thomas Jefferson the way some teenagers quote rock lyrics, though Stephen was a Beatles fan entranced with the White Album. He collected vintage political pins, assembling an impressive collection.

Despite obvious brains, his grades were average, his mother said. After graduating from Alhambra High School, he attended various colleges without earning a degree. To earn money – and he always seemed to scrambling for it — he acquired a Burbank restaurant named the Pizza Pantry. He did seasonal campaign work for local Republicans, as well, and may have taken odd jobs under the alias “Richard Aldridge,” sources said.

He married young, but the union was tumultuous and he and his first wife, Cindy, subsequently divorced. She did not respond to requests for comment. “He wasn’t a follow-througher unless it was something he wanted to do,” Jean Ballreich said. “Politics ruined his marriage. He gave Cindy a bad time. He did so many contradictory things.” 

But he achieved some landmark ones, too. In 1974, in the midst of Watergate and Vietnam, Ballreich blindsided the Alhambra status quo by unseating incumbent Councilman T. D’Arcy Quinn. Though it made for a magical storyline, he’d used hustle and chutzpah to win, staying up to 4 a.m. election-day dropping campaign fliers on doorsteps while his opponent slept. When he rotated in as mayor three years later, after winning re-election in 1978 with a record 75 percent of the vote, laurels were thrown at his feet. 

Parker Williams said that he introduced Ballreich about this time to renowned political consultant Stuart Spencer, who’d later counsel Reagan as President. Spencer, Williams said, believed that Ballreich had a sparkling career ahead if pushed aside the distractions and focused. Certainly, someone with his zippy charisma was bound for bigger things than a city whose most provocative issue was getting the Long Beach (710) Freeway extension completed so local streets were less bottlenecked. The local Jaycee’s named Ballreich, who seemed to have a little John McCain in him, one of California’s “five most successful young men.” 

His signature initiative was “Project Pride” a community cleanup regimen. Local TV stations did segments showing the Baby Boomer mayor painting over graffiti with ex-gang members. He also pushed for the opening of a boxing club.

Yet only three months after his re-election victory party, a citizen’s group called “All We Can Afford” accused him of misusing and failing to report $2,650 in travel expenses following a March 1978 trip to Washington, D.C. for the National League of Cities. Questions swirled around whether he had receipts for his time at the Mayflower Hotel or whether he’d even stayed there.

A District Attorney probe netted no formal charges. Prosecutors never turned up any proof that Ballreich had intentionally broken Alhambra’s then-vague travel rules. Ballreich reacted defensively, all the same, bitterly resigning from the council where he’d been its telegenic star – a decision he said he later regretted. “I will not subject the city or any member of this City Council to the continual meaningless harassment, such as it has had to endure during the last 55 days,” he said publicly at the time. His adversaries, he added, had contorted an innocent incident into something “criminal.” 

From there, the city’s chastened prince did the unexpected. He boxed up his things and hotfooted it 1,700 miles or so to Arkansas.

DREAMING GRANDLY

He was there during most of the 1980s, doing what nobody is quite certain. Everybody he spoke to from Arkansas heard different stories, the truth either, grafted, nuanced or fabricated whole cloth. Maybe he was just airbrushing over his shame about tripping himself up just as new doors were about to open for him. What is known is that he stayed in a house that his mother purchased in a lakeside resort town called Heber Springs in Arkansas’ north-central Ozark Mountains. He also spent time in Little Rock, apparently doing campaign work for state Democrats. Interspersing his political work was a stint as a radio talk show host for a station whose call letters or format nobody can pinpoint all these years later.

Longtime friend Born visited him in Heber Springs in 1988. As usual, Ballreich didn’t show up to their agreed meeting place. Perplexed, Born asked a local where he could find the town’s big radio personality. “The guy laughed,” Born recalled. “He said Steve fries fish for a living.’ I thought typical Steve.”

Wherever his paycheck was signed, Ballreich spoke constantly about associating with then-Gov. Clinton and his wife, Hillary. Depending on whom you ask, he worked for Clinton, advised him, socialized with him, or some combination thereof. There were conspicuous similarities between the two. Both were political junkies and bubbly ambitious during the workweek, Good-Time Charlies hooked to pathological libidos after hours, and magnetic one-on-one around the clock.

“If you were in a crowded room with Bill Clinton, he’d talk to you like you were the only one there, and Steve was the same way,” quipped Glenn Thornhill, who knew Ballreich from his Young Republicans days. “Steve said he knew Bill and Hillary, and hung around in the same circles. Who knows? It could’ve been bull. But I can see why Steve liked him: Clinton was a successful Steve Ballreich.”

While in Arkansas, Ballreich fathered a daughter, Noelle. One source said he wed the mother in a shotgun marriage that did not last long. Before he died, he admitted he’d been an absentee father, and at least Noelle wouldn’t be influenced by his poor decision-making. 

Unfortunately, there wasn’t always so much clarity. Ballreich, for instance, tried convincing folks he was part Irish in spite of the imposing, blond appearance that confirmed his German heritage. Whether that blarney was a symptom of a delusional personality or a fanciful one, it helped him compartmentalize his life with slick divisions. Even longtime family friends had little inkling of his wild side, or the fact that he’d done semi-pro boxing or battled health problems. 

One characteristic he was unable to deflect from public consumption was the sexual appetite that incessantly put him in hot. He acknowledged to a family friend that he had little restraint over his urges around a pretty face, and that when his “hormones percolated” he was a slave to them. “Light and dark,” this friend used to describe him. “Light and dark.”

Arkansas’ weather and backward climate helped propel him West back to Southern California. He returned almost broke, but with his love of politics and patriotism intact. At first, he stayed with friends until he’d saved enough money to rent in South Pasadena, the quaint city of Craftsmen homes that’d been Alhambra’s arch-enemy for decades over the Long Beach Freeway controversy. 

If he lived cheaply, he dreamed expansively. Ballreich in early 1989 hooked arms with failed Alhambra Council candidate Allen Co in a novel bid to boost voting rates and political participation within the city’s Asian American community. It was a prescient move by a wily tactician; Asian Americans today comprise 60 percent of the town’s population. Ballreich told the media at the time that he was shocked at the level of prejudice towards them among whites and the surge of Asian businesses since he’d left in 1979. Someone, he said, had to prepare the city of about 90,000 for a multi-ethnic future once its white bread past slipped away. Co, who later served on the South El Monte Council, did not return phone calls.

Ballreich’s interests crackled beyond the coming minority-majority. In 1988, he and Merrill Francis, a longtime Alhambra lawyer and civic leader, launched a political consulting business called Pegasus after the mythical flying horse. Their gimmick: Francis, the Democrat and Ballreich, the centrist Republican, would bring a spectrum of campaign experience to their clients. Together only a few years, they mostly ran local council and school board races, generally with little success, branching out to manage then-Councilman Michael Blanco’s losing bid for California insurance commissioner.

Though creeping towards middle age, Ballreich was devoted to outdoor exercise, either running or playing tennis practically daily, Francis said. But there were issues. Though few knew it, Ballreich had gone back to Arkansas to have laser heart surgery performed. His autopsy report did reveal coronary blockages. 

Francis said he has difficulty recollecting Ballreich’s murder because it coincided with the death of his first wife and his mother. Some memories remained un-dimmed.  “Steve was very approachable and there was an excitement about him – a sex appeal. He made a strong impression.” At the time of his murder, Francis said, his partner was still a “lady’s man with a pretty active social life.” Among other women he was dating was a youngish one who worked in the court system, Francis added. He did not know if detectives interviewed her. Authorities did disclose to Francis that Ballreich’s answering machine tape had given them promising leads. They said the murder had the earmarks of a “professional job,” what with shots to his face and heart area.

During their years together, Francis said Ballreich’s spent part of it traveling around the country promoting a patriotic cause for a man who later refused to pay him. Though angry about being stiffed on that job, Ballreich routinely took chances that almost no one else would, be it with spec assignments, pranks, or women half his age. It was as if he required the adrenaline kick to keep him interested. “Steve was a natural risk-taker,” Francis said. “He’d bet beyond his paying capability. One time he put up the pink slip on his car on a prize fight … What I’m seeing (today) is that he was a like a piece of quartz shining through many facets.”

Francis, now 72, spoke at the funeral and tried assisting police. He doesn’t subscribe to conspiracy theories that others whisper suggesting that Ballreich’s murder was politically motivated. “That scuttlebutt didn’t mean anything,” he said. “But there is disappointment there hasn’t been retribution for whoever killed him.”

Ballreich’s allegiance to Clinton was as strong as ever after he re-migrated from the South. He told many in 1991, including Francis, that he would not only support the Arkansan for President but would raise money for him. If Ballreich was on the Clinton team, it’s news to some of the ex-presidents key advisers. Los Angeles lawyer John Emerson, who was involved with Clinton’s 1992 campaign to win the California primary, said he didn’t know who Ballreich was. Linda Dixon, assistant manager for volunteer and visitor services for the Clinton Foundation, parroted the same line. “I’ve been with President Clinton 23 years and I’ve never heard his name before,” Dixon said. “I’m only speaking for myself.”

Ballreich’s Young Republicans chums kept in contact with him to the end. Over drinks, they razzed him about how a died-in-the-wool conservative could champion a liberal-tilting Southern Democrat. When the needling stopped, these same longtime acquaintances noticed that while Ballreich was still the impulsive, flirtatious guy he’d always been, he had a more serious bent to him, a sort of “world-weariness.”

DIFFERENT MASKS

His death was quick, brutish, and well orchestrated. Residents who heard the shots summoned Alhambra police. Witnesses relayed they’d seen a dark, 1970s-era Camaro flee the scene. Fear clenched Marguerita Avenue in the following days. The nearby elementary school — the same one Ballreich attended in the 1960s — went into lockdown after someone reported a prowler lurking. It was not the last suspicious sighting, not with a cunning murderer running free.

Police discovered Ballreich lying face up with what the coroner’s office described as “massive open head trauma.” The second wound came from a gunshot that struck him in the upper, left side of his back and exited through his chest, leaving behind a grisly, seven-inch gash. Either blast was lethal. Police extracted gunshot residue from the scene.

The coroner’s office reported three salvos were fired, but only described two of them. Ballreich, it said, appeared to have been “walking on the sidewalk” when the gunman pulled up. This may be critical. While he was an avid runner, he was wearing underpants, not an athletic supporter, at the time he died. Some have speculated whether that meant he was meeting somebody under the pretext of exercise. No drugs were detected in his system. Overall, the autopsy determined that Ballreich had been healthy except for coronary occlusions. Still in his wallet was his old Arkansas driver’s license.

Detectives mulled the possibility street gangs were involved. Four days before the murder, a 20-year-old gang member had been killed about a mile away. They also interviewed members of the Lincoln Club, a Republican political action committee that Ballreich volunteered at and advised. Before he’d died, he’d counseled the PAC about its donations and involvement with various campaigns.

The Sheriff’s Dept. interviewed Lincoln Club employees at the PAC’s El Monte offices, a former worker there confirmed. Nerves were already on edge at the small organization after employees complained about a bizarre series of petty crimes directed at them. Staffers had reported a slashed tire, a tampered car gas tank, a stolen purse and signs of an intruder at one of their houses, among other unexplained events. Suspicion fell on a recently fired employee – a woman who’d known Ballreich well.

Bill Ukropina, a volunteer with the Lincoln Club and former chairman of its Pasadena branch, said he was unaware that the homicide investigation touched the group. Nor, he said, did he know of Ballreich’s personal issues. “I never saw any side of Steve other than a cordial, professional one,” Ukropina said. “He was such a talented guy. He made excellent presentations. He brought a lot to the world, a lot to the community. I miss him.”

Ultimately, the Sheriff’s Dept. decided both the Lincoln Club and roving gang violence probably had nothing to do with what happened to him. It was not clear why detectives ruled them out. Perhaps other avenues were more fruitful. Ballreich’s landlady, a longtime friend said detectives told her, had watched him rush out of his South Pasadena apartment on the November 1991 afternoon that he was shot. “The day Stephen died, he’d come home, and all of a sudden left in great haste,” said this source. “He peeled rubber out, like it was some big emergency. If he was upset and in a hurry, somebody must’ve called him.” 

Born, the friend from their days together in the Young Republicans, said police were curious in learning about Ballreich’s gambling habits. For years, Ballreich had wagered on football games and prizefights. Williams, the former councilman, acknowledged remembering one of Ballreich’s bookies from the 1970s. So, could’ve a new debt from a lingering vice precipitated what transpired on Marguerita Ave.? There are tantalizing aspects to the idea. The Sheriff’s Dept., Born said, located somebody who remembered seeing $5,000 in cash in Ballreich’s apartment not long before he left it a final time. “The Sheriff’s Department thought he was meeting someone the night” said Born. “Why (else) would he have $5,000 on the floor of his apartment? Why not keep it in the bank?”

Which leads us back to the beginning — November 1991. If it wasn’t an indiscriminate drive-by, and it wasn’t something else random, then why was a once high-profile person drawn to his old neighborhood and effectively assassinated? Was it a violent exclamation point about an unforgivable sin or a warning to others?  “(Sheriff detectives) had a particular interest in who might know he was running in that area on that street on that day at that time,” said Francis, his ex-business partner. “Who knew him well enough to know that? It narrows the circle of people who would be of primary interest.”

The question may be unanswerable. When you sweep everything else aside, you realize that Stephen Ballreich died the same way he’d lived — spectacularly, disturbingly. It’s symmetry not lost on longtime buddy Glenn Thornhill. “One of my friends ran into an Alhambra policeman, and the cop said, ‘We don’t know who did it. Steve Ballreich told so many different stories to so many different people we could be talking to the responsible person and we wouldn’t even have a clue.’”

The post The Intimate Execution of America’s Youngest Mayor appeared first on Chip Jacobs .

The remnants of Anne Sholtz’s old life are evident in the smaller things. They’re visible in the GPS-tracking bracelet — standard issue for felons in home detention — that looped around her ankle for a year, and in her idled passport. They’re traceable in her pillow, which rests today in a leased home miles from the $5-million hillside estate that once broadcast her transformation from Caltech economist to business phenom.

Yes, the wreckage from that existence — the economizing, the isolation from connected friends who now shun her — is graspable. Where the picture turns as murky as Southern California’s whiskey-brown smog is how Sholtz, as a then-thirtysomething go-getter, was able to deceive the very air-pollution market that she helped to conceive, and the lessons it holds for keeping financial crooks out of the trillion-dollar, greenhouse-gas trading system that President Obama has trumpeted as a key to curbing global warming.

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

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

Blown prosperity for Sholtz, it’s been no bonanza for others, either. Between criticism over its secretive, mixed-bag prosecution of her and evidence of Sholtz’s role in a scheme to extract millions in overseas US aid with men purporting to be American intelligence and military operatives, the Dept. of Justice’s LA office probably wishes she would just fade away. Local smog regulators at the South Coast Air Quality Management District (AQMD), whose market-based regulation proved vulnerable to her deceptions, can relate. Trouble is some events are just too big to disappear. And the Sholtz case, no matter its relative obscurity or connection to complex regulations, fits that mold because it underscores the need for vigorous oversight of emissions markets against seemingly inevitable Wall Street-style chicanery.

Saying that she hopes to reconcile the events that dragged her from eco-visionary to convicted felon and industry pariah, Sholtz, 44, gave the Pasadena Weekly her first public comments in seven years. These days, she’s a freelance auditor examining white-collar fraud (ironically, for the federal court system that processed her case) and proclaims herself “happy” and “debt-free.” Just don’t mistake that resilience for satisfaction, or expect to hear weepy remorse from her about the ruins smoldering in her wake. Channeling other emotions, Sholtz said that she was “disappointed” in how prosecutors and bankruptcy officials treated her, and was perplexed over why the whistleblower tips she furnished them about bank money laundering and environmental corruption seemed to have fallen on tin ears.

“Years ago, I was depressed I’d made bad decisions, which led to one disastrous deal and my companies unraveling,” Sholtz said over lunch at a location that she asked go undisclosed, fearing former associates she claimed have threatened her. “I’ve never said anything about this whole experience until now. The only reason I’m speaking is because I’m tired of the misperceptions.”

BOUND TO HAPPEN

If two Republican congressmen skeptical about Obama’s carbon-cutting blueprint have their way, Sholtz’s story may yet capture national attention. This spring, US Rep. Joe Barton of Texas, the ranking member of the House’s powerful Energy and Commerce Committee, and Greg Walden of Oregon, ranking member of the House’s Oversight and Investigations Subcommittee, demanded the US Environmental Protection Agency provide a welter of information about Sholtz to them, based partly on the Pasadena Weekly’s coverage. “We believe this case has great relevance in the context of the pending legislation on climate change,” Barton and Walden wrote in a May statement. In it, they cited doubts that federal authorities have the money and legal punch to adequately police a national greenhouse-gas market.

All the same, those doubts may be road-tested. An Obama-backed bill requiring industry and public utilities nationwide to buy and sell federally auctioned permits to discharge carbon dioxide and other greenhouse gases under a so-called “cap-and-trade” regimen narrowly passed the House in June. Formally titled “The American Clean Energy and Security Act of 2009,” the legislation, which includes numerous new energy-efficiency standards and initiatives, represents the most seminal change in US environmental policy since passage of 1970’s Clean Air Act. The 1,300-page bill, co-written by House Democrats Henry Waxman of Los Angeles and Edward Markey of Massachusetts, next goes to the Senate. The overriding objective is to reduce US greenhouse gases from 2005-baseline levels so that by 2020 aggregate levels are down 17 percent and by 2050 they’ve shrunk a colossal 83 percent. (Global warming is caused by the atmospheric buildup of carbon dioxide and other gases that reflect some of the Earth’s heat back towards the planet instead of dispersing into space. Many scientists contend the phenomenon is imperiling the Arctic, biodiversity, food production and weather patterns.)

Hopeful as the White House is about cap-and-trade as a lever to reign in heat-trapping emissions, even enthusiasts acknowledge that the intricacies are jaw-dropping, if not for the sheer mechanics of it, then the geographic lines, industrial sectors and differing populations it will transect. Roughly six billion tons of emissions could be traded yearly at first, estimated David Kreutzer, an economist at the conservative Heritage Foundation in Washington, DC. Entities discharging more than 25,000 tons of greenhouse gases annually — non-nuclear power makers, oil refiners, natural gas producers, coal-fired steel plants, among others — will participate.

Detractors believe with the money at stake, white-collar cheating is practically inevitable. Between now and 2035, greenhouse-gas permits may reach $5.7 trillion in value, Kreutzer said. Some investment houses are already gearing up to act as trade middlemen. Oddly, the watchdog angle was barely touched on during congressional deliberations. Attention mainly focused on provisions allowing companies to soften emission damage offsite, even overseas, if it’s cheaper, and the initial giveaway of 85 percent of credits to carbon-dependent businesses and regions facing sharply higher energy prices. As the bill stands, market oversight will be spread out among the Federal Energy Regulatory Commission, the EPA and several unspecified agencies. “Most of the people I talk to think [the market] will be set up for fraud,” said policy analyst Joel Kotkin. “There’s scamming and then there’s scamming.”

Simultaneously, seven Western states and parts of western Canada are considering launching their own regional cap-and- trade under a Schwarzenegger administration plan. It’s aimed at rolling back carbon dioxide emissions to 1990 levels by 2020. The Western Climate Initiative may be dissolved or modified if a national market is approved. Until then, West Coast officials are studying how to ward off cheaters in areas such as insider-trading, excessive speculation and market manipulation. Sometimes, however, the threat hides in the open.

ANOTHER DIRECTION

LA’s implacable smog problem stood to make the Sholtz rich and maybe more influential. A dark-haired woman with wide-set eyes and a slight Midwestern twang, she grew up the brainy daughter of an aeronautical engineer. Schooled in Minnesota and elsewhere, Sholtz said her aptitude in math and science won her countless honors and early interest from NASA. It was a job offer teaching economics at Caltech that pulled her from Washington University in St. Louis, where she was in a doctoral program, to Southern California. Her timing was superb.

The Cold War had just ended and California’s recession was buzz-sawing thousands of blue-collar jobs. Bigwigs then weren’t debating carbon footprints. They were grouching about regulatory overkill in the fight against chronic smog. Legislators, lobbyists and boosters, convinced that costly rules were suffocating manufacturers, saw their chance to emasculate the AQMD’s power. To neutralize the threat, the air district offered something chancy.

The AQMD hadn’t invented the concept of injecting market principles to detoxify the environment and allow industry leeway in deciding how and when to run its smokestacks, towers, generators and other machinery cleaner and greener. It originated with academics decades earlier, and then was embraced by the first Bush Administration to address “acid rain,” a harmful, sulfur dioxide-laced mist emitted from Midwestern power plants that drifted over Northeastern states and into parts of Canada. Most consider the congressionally adopted program a success. Whether the same system will translate for a prodigiously larger, national greenhouse-gas market is anyone’s guess.

It’s for this reason that LA’s experience is instructive. Instead of continuing to rely on fine-print dictates to regulate individual machinery at power stations, oil refiners, cement companies, defense plants and other manufacturers, as smog officials had done for decades, the AQMD in 1994 gambled on economics. Some tactic was needed to chop emissions by 70 percent to meet national clean air standards. Environmental groups fretted that cap-and-trade here was a recipe for stalling progress, but regulatory chic was in trader’s garb. The spectacle of LA’s notorious air pollution being traded like a blue-chip stock sounded exotic and the world press flocked to the district’s eco-conscious Diamond Bar head- quarters to hear the details.

GREEN FAIRYTALE

Under the now 15-year-old market, 332 of the area’s heaviest polluters are allotted credits based on their aggregate emissions of two harmful chemicals: oxides of nitrogen and sulfur. These credits, calculated from baseline production levels, essentially are permits to pollute by the pound. If an entity reduces more of its discharges than required under its cap set by regulators — usually by installing high-tech, gunk-trapping equipment — it can sell the differential between what it’s allowed to emit and what it actually released into the skies (or expects to) to others in the form of credits. (A company can choose not to trade, just as long as its emissions fall below its limits.) Every year, firms’ emission allotments shrink by a certain percentage so pollution dips regionally. Each credit is assigned a period for its one-year use, the date it was issued and one of two geographic zones it can be used in.

To date, there have been 5,170 trades worth $980 million in the “Regional Clean Air Incentives Market” (RECLAIM). District officials argue that it’s achieved it goals, shrinking nitrogen oxides 73 percent and sulfur oxides 59 percent. Trades are made company to company, or through broker-type middleman. Here’s where symmetry enters. During the RECLAIM design phase, the district solicited technical expertise from lawyers, academics and others, bidding out consulting contracts to some of them. The Pacific Stock Exchange and Caltech received work performing market analyses, with Sholtz one piece of their brainpower. It was there she hobnobbed with AQMD staff and there she promoted two concepts of her own: a plan to stabilize prices and planning by establishing two staggered cycles for RECLAIM credits expiring in a given year, and to deter fraud by assigning credits identifying numbers, somewhat akin to a bar code, so officials could track their movements. Only the staggering portion of Sholtz’s plan was approved.

Jack Broadbent administered RECLAIM for the district back then and remembered Sholtz. “She came across in a very professional manner, pretty slick, part advertising, part substance,” said Broadbent, now executive officer of the Bay Area AQMD. “Anne (also) did a good job of ticking a number of us off. She asked what air pollution regulators know about these … ideas.” Arrogant or merely self-assured, few seemed as poised to capitalize on RECLAIM as the ever-hustling Midwesterner. While still working out of her apartment and teaching at Caltech, as well as at USC as an environmental law scholar, she founded a smog-credit exchange allowing buyers and sellers to arrange favorable deals. Every RECLAIM transaction in this eBay-like auction made her a 3 percent to 6 percent commission.

Her company, Automated Credit Exchange, touted itself as the first-ever electronic trading system for pollution credits. Unlike traditional brokerages such as Cantor Fitzgerald, Sholtz’s system relied on analytical, NASA space-exploration software licensed through Caltech to create mathematically optimal trades from a mishmash of data. Industrial heavyweights like Disney, Northrop-Grumman, Chevron and the LA Dept. of Water and Power signed up as clients; the Pacific Stock Exchange, Bank of America and US Trust served as trade clearinghouses.

In February 1996, Sholtz celebrated her company auctioning a record 2.4 million RECLAIM credits in a single week. A Los Angeles Times story the next year exalted Sholtz’s ingenuity, quoting one client who called it “absolutely wonderful.” She later set up shop with an office on South Raymond Avenue in trendy Old Pasadena. With money and publicity flowing, and nibbles about selling her analytical software to advertisers and officials auctioning federal airwaves, Sholtz appeared destined for the cover of Forbes. There were trips to the United Nations, meetings with Al Gore, her 7,000-square-foot estate festooned with koi ponds in gated Bradbury a few miles east of Pasadena, not to mention exhilaration for what lay ahead.

It was a Horatio-Alger-meets-green-entrepreneur fairytale. Unfortunately, some fairytales end miserably. In 2002, nine of Sholtz’s clients complained to the AQMD that the fast-riser known for her wonky lingo and oft-clingy outfits had bamboozled them in what would become a convoluted bankruptcy of her firms, with claims in the $80 million range. The EPA was summoned. Before long, investigators had zeroed in on a particular transaction.

Beginning in fall 1999, Sholtz informed one of her clients, a New York-based energy trading firm called A.G. Clean Air, that then-Mobil Corp. (now Exxon-Mobil) needed to purchase about $17.5-million in RECLAIM credits to operate in the LA Basin. Mobil indeed had an option contract with her to acquire those credits, and if A.G. sold them to the oil titan through her, it could make a bundle, perhaps $5 million, depending on credit prices. But when A.G. couldn’t buy enough credits to complete the Mobil transaction itself, Sholtz discovered that credits from her own company that she needed to use had been committed elsewhere by an employee while she was out ill. She had a dilemma: come clean or try to fix the muddle herself.

To trick A.G. into believing she could still consummate the deal for credits, Sholtz staged an elaborate act, court records show. From November 2000 to April 2002, she emailed and faxed fraudulent sales documents to A.G., including phony invoices showing, Mobil owed her about $16 million when in fact it did not under the option contract. In more artifice, she emailed A.G. officials “falsified” correspondence between her and a Mobil executive that she was impersonating. The fakery was intended to buy her time until she could unload A.G.’s credits to someone else besides Mobil and pay A.G. what it could’ve made with the oil company if the original deal could’ve been completed. Eventually, A.G. caught on to the stonewalling, technically known as “lulling,” demanding to be paid in full. By then, authorities were onto her. A.G. and Mobil declined comment for this story.

AN EASY FIX

Sholtz asserts, as she has in court documents, that the initial federal charges against her were overblown, and in this regard she has a point. Contrary to early media accounts and government reports about her, she never trafficked in counterfeit credits because there weren’t any.

Her downfall, she insisted in interviews and in her plea agreement, traced from her entanglements with a smooth-talking Texas financier named Jimmy Keller. He was on Sholtz’s payroll from 1998 to 2000 before she fired him, and Sholtz said she last spoke with Keller in 2002. (One of her ex-cohorts said he died several years ago.) Sholtz said it was Keller who committed the credits that could’ve stopped her prosecution by encumbering them in a phony, high-yield investment scheme involving bank notes. It took her about eight months to reconstruct what had happened. When she had, though, RECLAIM credit prices had plunged, diminishing the money she had to throw at the problem. “I wasn’t panicked — I was angry,” Sholtz said. “I should have just said, ‘I will find a way out,’ and admit I messed up. I could’ve sold my part of the company and learned a big lesson. But I thought nobody would’ve traded with us anymore or that A.G. might’ve forced us to sell the company to them and fire our employees. I didn’t have the courage or maturity to ask for help.”

Because AQMD regulators were blind originally to what had transpired, Sholtz continued barreling forward. Among other actions, she solicited money from new investors to pay off existing ones in a “Ponzi-type” scheme, Howard Grobstein, the court-appointed bankruptcy trustee, wrote in filed documents. In another instance, she blamed the destruction of the World Trade Centers during the 9/11 terrorist attacks for missing deal paperwork. Sholtz disputes that she misled as many people as some have charged, and said she felt demonized by a few of the accusations against her. “There’s been so much misinformation, it’s astounding,” she said. “Some people really didn’t want to know the truth. They just wanted to blame me without looking at themselves or their associates.”

Nonetheless, in February 2001, while still misleading A.G., Sholtz assisted the Netherlands government test its own nitrogen-oxide emissions-trading program. Months later, she tried playing white knight when RECLAIM credit prices soared during the California electricity crisis by offering to stabilize trading through a centralized auction similar to hers. Gov. Gray Davis had ordered power plants statewide to generate electricity however they could, even from high-polluting machinery. Traders and speculators from Texas to New York seized the opportunity, hoarding credits to sell at huge markups to utilities frantically buying more than their allotment. With RECLAIM approaching meltdown, district brass temporarily pulled utilities from the market. They also spurned Sholtz’s rescue plan.

The next year, her two promising companies flopped into bankruptcy. What she hoped would be a reorganization plan ossified into dissolution. It got messier. Individual investors claimed losing retirement accounts, college funds and nest eggs in the collapse. Multimillion-dollar settlements were cut with two large energy entities, Calpine and Intergen. The Bradbury mansion was sold. Where she was once hailed as brilliant, foresighted and charming, she was now characterized as dishonest and, according to one official, “manipulative.” Just as that was occurring, questions arose about her PhD cited in stories, the Netherlands and elsewhere. As the Weekly reported, she had no doctorate because she hadn’t completed her dissertation at Washington University. Sholtz said that a colleague had introduced her at a public function as “Dr. Anne Sholtz” and since she was close to earning her advanced degree, she let the lie stand. “That would have been so easy to fix,” she said, “but, again, it required a level of maturity that I didn’t have.”

GAMING THE SYSTEM

EPA agents arrested her at a Monrovia gym in 2004. The theatrics of it, Sholtz suspected, were meant to intimidate her. “I was handcuffed and outside there were guys with big guns,” she recalled. “They wanted to embarrass me. Did they think I was going to flee in my Spandex?” The incarceration of a niche-green celebrity chummy with AQMD brass at the Metropolitan Detention Center rattled others, too. Inside local environmental and regulatory circles, feelings of betrayal, fury and anguish erupted.

She’d eventually be indicted on six federal counts stemming from the A.G.-Mobil transaction. One knowledgeable source said Sholtz lucked out, because federal investigators had turned over to the Justice Dept. enough evidence for more than 80 counts. Charges filed, the white-collar case seemed to turn invisible, as if the region’s virulent smog — still the unhealthiest in the nation for ozone and particulate matter — had devoured it. Four years lapsed from her 2004 arrest to her 2008 sentencing, and even then her punishment warranted no Justice Dept. press release.

The two prosecutors handling the case, Assistant US Attorneys Joseph Johns and Dorothy Kim, have steadfastly refused comment beyond Johns saying last year it was a calculated gamble to have Sholtz plead guilty to a single count. Adding to the mystery in United States v. Anne Sholtz, many of the key court documents, the transcript of her sentencing hearing among them, remain quarantined by judicial order. Justice Dept. spokesman Thom Mrozek said one reason is that her case involves “under seal filings” that might signal ongoing investigations into other areas. Wayne Nastri, the EPA’s West Coast administrator, was virtually the only significant suit to speak up. In a January 2008 letter to Judge Collins, Nastri recommended that she hand Sholtz a message-sending sentence. “Environmental regulatory programs which utilize market mechanisms,” Nastri wrote, “will fail if the integrity of such programs can be seriously compromised.”

At the April 2008 sentencing hearing, which caught many off guard because of the case’s frequent delays, Sholtz wept and foretold of family harm if she were given hard time. But what mattered to Collins, according to numerous people present that day, was that Sholtz’s companies had paid A.G. so it actually turned a profit in its trade-dealings with her over time, in spite of her misleading actions. (Sholtz estimates that amount at $28 million.) Alluding to that and other factors, Collins stunned the Justice Dept., EPA and some of Sholtz’s victimized investors by giving her a skimpy sentence: one year of home detention as part of her five years of probation, plus a conditional ban on AQMD emissions trading.

In a surreal coda to one of the bigger cases of cap-and-trade criminality, Collins chided prosecutors for their strategy while praising Sholtz’s defense attorney, Richard Callahan of Pasadena. Even so, environmentalists and others say it’s incumbent on regulators to learn from Sholtz’s gaming so it’s not repeated on the bigger carbon stage. “We definitely see [this] fraud as a cautionary tale for the state 35 and the country as we move toward greenhouse gas regulations and potential market mechanisms,” said Bill Magavern, director of Sierra Club California. “In discussions about it, I’ve brought up the fact that there has been outright criminal fraud and I find that most people don’t know about it.”

OPERATION BALD-HEADED EAGLE

Thumb through the federal government’s case file on Sholtz and you’d think she’d confined her ambitions to smoggy Southern California. The felony that torpedoed her career, after all, involved Torrance refiner ExxonMobil Corp. What you’d never glean from the available prosecution documents was Sholtz’s involvement in a spectacular and alarming international venture — one intersecting the worlds of espionage, foreign policy, environmental markets and con-artistry — in the years before authorities were chasing her. All of that has been buried until now. A months-long Pasadena Weekly investigation, based on business records, operational memos, wire transfers, invoices, resumes and other documents scooped up by federal and bankruptcy officials and obtained by the paper, coupled with Sholtz’s own rendition of events, tells part of this bizarre story of cap-and-trade money gone sideways into areas it was never intended to occupy.

Peel back to 1998. After losing about $1.7 million in soured deals in the AQMD’s smog-cap-and-trade program when a credit’s buyers’ check bounced, Sholtz said that Keller confided to her about an opportunity to dig her way out. The seemingly well-connected financier-dealmaker she’d hired that year told her that not only could she recoup her losses and then some but simultaneously serve her country. The US government, he said, farmed out contracts to private firms for an extraordinary purpose: returning to federal coffers some of the government bonds, gold, cash and other valuable items distributed to America’s allies, in some cases going decades back. Whether they were first allocated as foreign aid, secret payments or other forms of funding from Washington, D.C. was not evident. 

Keller, according to Sholtz, explained that once the booty was returned to the US, it could be converted into high-yield securities able to generate revenue. Contractors involved in this so-called “repatriation” or “extraction” effort could use the interest from the securities for their own business and charitable purposes before delivering the items back to the US Treasury. Sholtz said Keller introduced her in Las Vegas to a cadre of men supposedly able to pull off these sensitive assignments. Many of them had CIA and military special-forces backgrounds, and she said Keller told her it was “normal business” to employ them. “He said, ‘You’re special, the government has been watching you.’ I fell for it hook, line and sinker.”

Sholtz wasn’t exactly dispassionate about the older Keller in those days. In fact, she was in a romantic relationship with him, impressed by his smarts, interests and charms. “He swept me off my feet,” Sholtz said. “He had that Southern air about him.” So, during the same summer the Monica Lewinsky scandal exploded, Sholtz, then 33, launched a money-retrieval mission dubbed “Operation Bald Headed Eagle.” Its specific target was a pallet of boxes stashed near the Philippine capital of Manila allegedly containing $20 million in mid-1930s US Federal Reserve notes, plus German bonds, platinum bars and other commodities of mysterious origin and undisclosed value. Based on her correspondence, Sholtz seemed transfixed by it all.

With the money she expected to rake in, Sholtz said she hoped to pave over the financial hole she claimed Keller created for her, re-capitalize her companies and support local philanthropies. To accomplish this trifecta, she founded a “charitable trust” supposedly blessed by the United Nations to take initial possession of the goods, memos show. Sholtz said one of the lawyers assisting her set up “Gold Ray Ltd,” which was chartered in the British West Indies. Technically, her companies, Automated Credit Exchange and its parent, EonXchange, were not part of Gold Ray. Like the Iran-Contra scandal of the late-1980s, Operation Bald-Headed Eagle married profit to American foreign policy. In the place of the enterprising, buck-toothed Colonel as its shot-caller, it was an entrepreneurial economist who seemed to fancy herself as an Olivia North.  

Mission financing wasn’t quite as daring as selling arms for hostages, but it was dicey, nonetheless. According to a Sept. 14, 2004, memo by Kathy Phelps, the lawyer for the court-appointed trustee overseeing Sholtz’s bankruptcy proceedings, an outwardly normal series of RECLAIM trades actually was Sholtz misappropriating roughly 500,000 credits owned by clients Chevron Corp., Mobil and oil-and-gas producer Aera Energy, which she then sold to power maker Southern California Edison for $1,913,162. In a June 18, 1998 letter from Sholtz to Edison, Sholtz instructed the utility to pay that amount to a Florida attorney assisting her with “Eagle.”

Phelps, approached about her memo entitled “EonXchange – analysis of stolen credits,” said she and the bankruptcy trustee handed over evidence about “Eagle” to the government because it wasn’t their focus. Even so, Phelps wondered if the losses Sholtz incurred from “Eagle” were a reason why she initiated some of the financial improprieties later alleged. “The depth of what [she] was involved in was extensive,” Phelps said. Shown Phelps’ memo, Sholtz adamantly denied the RECLAIM credits sold to Edison were stolen but conceded she lacked the records to pinpoint where they’d originated. “The money we made from the Edison deal was our money!” Sholtz added. “We just sold [Edison] credits we got stuck with from another transaction. It wasn’t some grand scheme.”

The paper trail suggests otherwise. Within days of receiving the windfall from the Edison transaction, it became the down payment on her plan to ferry former US aid fro the Philippines, records show. At its core, “Eagle” involved retrieving the treasure in a meticulously choreographed, special-access transfer from a holding company near Clark International Airport outside of Manila and flying it 7,400 miles to McCarran International Airport in Las Vegas without the usual inspections.

An aviation outfit on Imperial Highway in El Segundo that called itself “Air America Holdings, Inc.” agreed to transport the goods on an executive Boeing 707. Sholtz negotiated with the firm’s president, who claimed to have been a veteran CIA pilot for the agency’s Air America charter airline, which gained notoriety as an American paramilitary asset during the Vietnam War. The airline later disbanded. 

This pilot, in a missive on a conspiracy-focused Web site, said that after Vietnam ended the CIA formed a new, covert airline under his last name. With the agency’s assistance, he flew missions from 1974 to 1988, delivering arms to Asia, the Middle East, even the Soviet Union. By the late-1980s, he said he shut the charter down because he believed CIA operations were harming US interests. Two years later, he asserted the Justice Dept. charged him with wire fraud to “silence and discredit” him. The book, Drugging America: A Trojan Horse, also captured his story. The pilot, whose name and others the Weekly is withholding because none of them were charged for their participation in “Eagle,” did not return phone calls seeking comment.

‘EAGLE’ LANDS (SORTA)

Sholtz said this pilot not only told her he was still associated with the CIA; he instructed her on what to write in operational documents. Whether you believe her insistence she was merely the front, and not a ringleader, this was no standard mission. Members of her “Eagle” team declared holding “diplomatic immunity” and other high-level governmental protections freeing the 707 from customs, immigration and security scrutiny, Gold Ray letters signed by Sholtz stressed repeatedly. 

The team itself was no less formidable. A retired US Army lieutenant colonel with 14 years in US Special Forces and a Philippine colonel were two of the point men. Another, the overseas lawyer representing the Philippine company maintaining the booty, was once connected to Philippine President Ferdinand Marcos’ administration, several knowledgeable sources said. Sholtz recalled meeting this lawyer to discuss “Eagle” in Sri Lanka, where she said he told her the money and others commodities were given to Marcos’ people by US authorities who supported them. Marcos was deposed in 1986. Emails and calls to the Philippines embassy about the colonel and to the Philippine bar association about the lawyer went unreturned.

Sholtz and Air America Holdings settled on a $200,000 fee for the chartered 707 to make the three-leg trip that would take it from Los Angeles International Airport to the Philippines and finally to Las Vegas, invoices show. On June 26, 1998, the pilot warranted in a short memo to Sholtz that their aircraft would not face the usual restrictions and protocols landing in Las Vegas, implying Nevada airport personnel were in on the operation and that they’d lined up a protected spot to unload the plane’s cargo. “This is to certify that entry into and departure from the drop off point of the merchandise has been cleared and traditional formalities for the personnel and merchandise will not be observed,” the pilot wrote. No government body, in other words, was going to be hassling them about the contents of the 707’s belly.

But three weeks later, “Eagle” had yet to lift off. The jet they intended to use had experienced “severe mechanical malfunctions,” the pilot wrote in a “sincere” apology to Sholtz. “Obtaining an alternate aircraft is not as simple as telephoning a (typical) charter service,” he said in a July 13 letter. “The only aircraft we can utilize must meet rather narrow parameters of ownership, nationality, crew requirements and most importantly range.” As an alternative, the pilot suggested switching to an older, slower, propeller-driven DC-6 or another Boeing 707 standing by in London. Sholtz would only have to pay $25,000 more for the round trips. “Air America also owns a C-130 but this aircraft is considered too high profile for this mission, and is too expensive to operate,” the pilot wrote. “We therefore have discontinued its use.”

Despite the hiccups and apparent pressure that Sholtz felt to hasten the mission, her plan still retained its VIP access in and out of international airports. The retired-lieutenant colonel working with the ex-CIA pilot, she wrote July 17, had “full diplomatic papers” that conferred on him “full diplomatic immunity,” a flag, which may been code for something else” and an inspections clearance-pass alternatively called the “raincoat” or “rain repellent.” All she needed from her Manila contacts was confirmation, preferably in writing, that everything was synched in the Philippines, she said in a July 22 memo. “We prefer the (plane’s) tail number not be recorded, but we have been able to alter this as a strict requirement, and we can allow it be recorded … The most important verification is that the diplomatic flight will be able to skip customs and proceed strictly to the hanger” to load the merchandise and related equipment. Air America Holdings, she added, was ready to take off within 72 hours of payment. 

Asked why she believed Washington would condone such furtive actions when the Air Force could simply dispatch its own C-130 to collect the pallets, Sholtz responded: “I wasn’t looking at the mechanics. We were meeting real people who were supposedly working with the US government. We needed to help our country. I was starry-eyed, thinking this is going to be fantastic! You don’t think something this big could not be true.” Guy Bailey, a Miami attorney who represented Sholtz on “Eagle” before a falling out, remembered her recounting the same story as the documents paint. “She said she was in some sort of contractual arrangement with the CIA and the Treasury Dept. to go retrieve currency, gold or something from the Philippines,” Bailey told the Weekly. Bailey said that as far as he knew, the 707 arrived in the Philippines, waited a week there to collect the goods and left with an empty cargo hold for unexplained reasons.

Sholtz said she’s heard that version and another one where the booty was returned to the US, and everybody profited but her because she’d been swindled. By mid-summer 1998, Sholtz said “Eagle” team members wouldn’t answer her questions, then her phone calls. It was as if they’d vanished. “I don’t know what happened. Sometimes it depends on the day,” she said. “I thought they’d chosen us to do this great work, and it was so flattering and if you have any narcissism, it’s ‘Oh boy.’ Nobody said it was illegal. Now I’m thinking there has to be a conspiracy.”

NO PRESSURE

While it seems likely “Eagle” was little more than a Nigerian-type scam on Sholtz, the fact that RECLAIM money was alleged to have helped finance it infuses it with relevance in understanding how well authorities have policed cap-and-trades heretofore. There’s also the issue of Washington’s awareness of former — or phony — spies and soldiers portraying themselves as agents on government-sanctioned missions. If something like Eagle would deliver gold bars into a U.S. airport un-checked, what else could be brought into the country? 

For its part, the CIA denied involvement with “Eagle” and its participants. “These individuals, to my knowledge, neither have, nor have had any affiliation with the agency,” said agency spokesman Paul Gimigliano. “We’re not part of this tale.” State Dept. spokeswoman Laura Tischler said diplomatic officials knew nothing about “Eagle,” either. She did note it’s illegal to claim diplomatic immunity if it’s not officially conferred. The Treasury Dept. never answered the Weekly’s inquiries. In New York, the UN office of legal affairs found no evidence after searching its records that the organization was affiliated with Sholtz or Gold Ray. A UN official said the organization doesn’t typically approve private charities, and says it’s illegal to misuse the UN’s name.

Meanwhile, back in Los Angeles, the silence over “Eagle” today is crushing. All three companies allegedly fleeced of their RECLAIM credits to help finance the scheme — Chevron, Mobil and Aera —refused comment or never returned calls. Edison spokesman Steve Conroy would only say the utility was reviewing the matter after the Weekly’s inquiries.

In spite of ample documentation and a four-year investigation, the US Attorney’s Office never charged Sholtz, Keller or their associates with a potential array of felonies stemming from alleged misuse of smog-credit money or the extraction scheme. One natural question that arises is whether the US intelligence community or other federal officials pressed the Justice Dept. not to prosecute “Eagle” for unstated reasons, and whether that prompted the record-sealing and prosecutorial silence. Justice Dept. spokesman Thom Mrozek rejected the notion of external arm-twisting. In fact, his only elaboration on the entire Sholtz matter was that his office “has never been influenced by political pressure” from outside.

For all the Dept. of Justice’s explanations, EPA officials were disappointed “Eagle” wasn’t prosecuted or fleshed out by the FBI and others. In a statement to the Weekly, the EPA said: “[We] investigated this fraudulent scheme because companies and individuals must legally and accurately trade air pollution credits if cap-and-trade programs are to succeed and air emissions are to be actually reduced.” The agency had known about the offshore ventures for years. In 2004, Ronald Modjeski, the EPA criminal investigative agent assigned the case, filed an affidavit confirming Sholtz’s deal-making for federal-reserve notes, currency, gold and other financial instruments for “large amounts of money.” The EPA refused to allow Modjeski, who spent nearly 4,000 man-hours investigating Sholtz, to be interviewed.

 ‘HOOKY SPOOKY’

In hindsight, Sholtz said that she believes Keller and the others on the “Eagle” team targeted her all along. They probably knew from research that her maternal grandfather, David Sholtz, had been governor of Florida during the 1930s, and decided to appeal to her public-service instinct, she added. Soon after she fired Keller in 2000, Sholtz said the tone of their relationship changed. She claimed that he began placing threatening phone calls describing what she was wearing, her location and how he didn’t plan on serving any jail time to intimidate her from testifying about him. In Pasadena in 2002, Sholtz said another “Eagle” participant tried frightening her with the warning: “You know people disappear all the time.” She refused to identify him. “I told the US attorney during my prosecution that there’s this whole world where people are roped into thinking they are working with the CIA and military personnel or [the National Security Agency] and they didn’t seem interested. I got scammed, but so do a lot of people and they’re too embarrassed to talk about it.”

After “Eagle” fizzled, Sholtz didn’t lose her appetite for cloak-and-dagger currency repatriation. Just months later, in February 1999, she set her sights on the western coast of Africa, documents and interviews indicate. This time, Sholtz hired Dale Toler, a former combat pilot with an intelligence background who was now CEO of a Virginia electronics-technology company. His assignment: to haul back $35 million in US currency supposedly squirreled away in Ghana. A mission report about the venture, prepared by the squad acting on Sholtz’s behalf, said the U.S. Treasury Dept. suspected beforehand that the U.S. cash that the Africans contended holding was “potentially fraudulent.” Even so, the report said, “preliminary arrangements were also made with United States Customs officials for a prearranged arrival point” should the “recovery” be successful. The millions at the center of it had originally been appropriated for Sierra Leone, a small, mineral-rich, war-torn country west of Ghana.  

The trip to extract the $35 million for Sholtz formally kicked off when her squad’s lead agent met a burly, bespectacled doctor who’d represented himself as Ghana’s security chief at the Golden Tulip hotel in the capital city of Accra. (Toler, in an interview with the Weekly, confirmed he was there without letting on whether he was the negotiating agent.) Detective work soon confirmed the Ghanaian had lied about the position he supposedly held, but he knew plenty about the $35 million. The agent drove with him in a black Dodge Dakota pickup for about 45 minutes to a private, walled residential compound topped with shards of glass for a discussion on how the money would be transferred. Security personnel concerned about the agent’s safety tailed the pickup as long as they could. 

Inside the property, the Ghanaian told the agent he required $80,000 for his cut to arrange the movement of the U.S. currency to the Accra airport for its repatriation to America. Not so fast, the agent said. Under the original agreement, the Ghanaian was to receive his commission after the transfer. The Ghanaian said his terms had changed: he needed early compensation to pay others involved. For an hour, the two men squabbled back and forth over logistics and promises to no avail. Afterwards, the Ghanaian drove Sholtz’s representative back to the Golden Tulip hotel in a circuitous route so the agent would be unable to retrace where he’d been. 

A few hours later, at a night meeting at the Kata International Hotel, the two tried reviving the negotiations. Sholtz’s agent insisted on seeing the $35 million with his own eyes; his counterpart demanded $10,000 for the privilege. After being arm-twisted further, the Ghanaian agreed to the inspection. The next day he picked up the agent at the Golden Tulip and took him to a different walled compound. At a picnic table inside, the agent was shown stacks of what appeared to be American currency “five wide and two across,” the mission report said. They money was wrapped in thick plastic and stored in a small, metal box. When the agent tried touching the currency, he was warned he was not allowed to by one of the Ghanaian’s associates. The associate tried delicately unsealing a packet to show him it was genuine, only to clumsily reveal ordinary paper with the dimensions of U.S. dollars tucked under the real ones.  

Realizing his own vulnerability in the midst of a flimsy con, the agent pretended he was satisfied and requested to be driven back to the Golden Tulip by the Ghanaian’s associates. The car took a long, winding path in the dark until the agent determined they were headed in the opposite way of the hotel and maybe to someplace from where he’d never return alive. When traffic slowed, the agent jumped out of the car and “evaded” the men, the mission report said, in what might’ve been a scene out of an espionage flick. From solicitation to dangled treasure, the whole setup was a “scam,” the report concluded. 

Sholtz estimated she lost more than $125,000 of her own money on the failed excursion. There’s no indication RECLAIM credits were involved. Toler said one of the chief reasons he agreed to go, despite suspecting beforehand the $35 million was bogus, was that Sholtz herself was planning to make the trip, and that she likely would’ve been either kidnapped for ransom or killed by the Africans. (Sholtz acknowledged she had intended to go.) Toler, overall, blamed Keller for whipping up Sholtz, who he described as dishonest and gullible. “Much of this [currency repatriation] is fantasy,” Toler added. But Sholtz “believed there was money in the Philippines and Ghana, even though she’d been advised by me it didn’t exist. It was her greed. People made a lot of money off her. I’ve seen over the years folks who think the world revolves around a deal.” Toler said that Keller died in the Bahamas a few years ago; this may explain why the feds have had difficulty saying whether they ever charged him.

In October 1992, about five years before the Ghana operation, a congressional probe into international bank fraud suggested that Toler’s firm, a now-defunct Virginia machine-tool company called RD&D, was part of an alleged, clandestine effort quarterbacked by the CIA to arm the Iraqi military and curry favor with Saddam Hussein’s government. A federal prosecutor appearing before a Senate intelligence committee testified that Toler’s company was not a CIA front, but wouldn’t respond when asked if Toler had worked for the US National Security Administration, which conducts global eavesdropping operations. Whatever his background, Sholtz said she was stunned at Toler’s negative comments about her. Sholtz said that Toler in 2002 tried to locate money she contends that Keller had “stolen” from her. “Toler said we were the victims, and now he’s changing his story,” Sholtz said. “I’m speechless.” 

Also involved in the Ghana operation, records and interviews show, was the Jedburgh Group, a Lake Mary, Florida-based firm that provides intelligence, security and financial-services to industry and governments worldwide. Former US intelligence and military officers work for Jedburgh. By far the best known is retired US Major General John Singlaub, a decorated military officer involved with the CIA’s predecessor agency, the Korean War and American counterinsurgency efforts. In the late-1980s, he was connected to the Iran-Contra scandal and ultra-right-wing, anti-communist groups in Central America.

Jedburgh executive David Keith Freeman confirmed to the Weekly that his company was a client of Sholtz’s “for a short time a very long time ago,” and said it helped evaluate the mission’s “potential for recovery.” He refused further comment about Ghana and other work the firm provided for Sholtz, citing client-confidentiality rules. Freeman did say the practice of people posing as former or current US intelligence officers in financial scams is fairly widespread and known in the industry as “hooky spooky. It’s the frog and the scorpion,” he said.

Roughly six months later after the Ghana-operation debacle, in Nov. 1999, with authorities still unaware of what had occurred, Sholtz wasn’t a marked smog-credit broker, by any means. She was an invitee to a major climate change conference at the United Nations as a member of the Emissions Marketing Assoc., records show.

IT COMES AND GOES

So why weren’t these activities in the Justice Dept.’s crosshairs if they wanted to send a message about tainting cap-and-trades as the regulatory milieu shifts toward them? Furthermore, even if there are legitimate ex-spies and soldiers traveling around the globe for f someone like Sholtz, shouldn’t there be some transparency? USC law school professor Rebecca Lonergan, who worked in the US Attorney’s Los Angeles office for 16 years, said prosecutors probably made a judgment call based on what they could prove in court, what evidence they could gather overseas, the intricacies of her different schemes and other factors. “When you have a person like [Sholtz] one of the difficulties is sifting through the mass of seemingly exculpatory evidence,” Lonegran said. “You have a person who would make a great movie living as a con artist but you have to find out the individual schemes. Criminal prosecutors simply can’t charge a person with being a fraudster.”

True as that may be, there’s still interest. Larry Neal, deputy Republican staff director for the House Energy and Commerce Committee, said Congressmen Barton and Walden believe it’s important to remove the veil of secrecy over the Sholtz matter to follow where it leads. “We haven’t seen allegations on currency-repatriation scams, but it is our aim to gather all facts surrounding the Sholtz case, regardless of what they entail,” Neal wrote via email. “… It has been more than a year since the sentencing and there’s still no public justification for all the judicial (secrecy). After all, the case was an about an Anne Sholtz cap-and-trade scam, not an al Qaeda terrorism cell.”

For his part, AQMD Executive Director Barry Wallerstein both refused an interview about Sholtz and forbade anyone at the air district from commenting for this story. (His feelings about Sholtz aside, Wallerstein is said to be upset about a book on the iconic Los Angeles smog crisis this writer co-authored with a former AQMD staffer.) But that doesn’t mean he’s not talking. In a seven-page letter to US Rep. Henry Waxman, the Los Angeles Democrat who chairs the House’s Energy and Commerce Committee, Wallerstein portrayed the RECLAIM cap-and-trade as virtually bulletproof to criminality. In this letter, prompted by congressional interest in Sholtz, Wallerstein ticked off the AQMD’s “robust” computer database that checks the availability and ownership of credits, well-scrutinized trade registration forms and a three-person trade-approval team. “The safeguards … have been successful in preventing any fraudulent trades from ever being registered,” Wallerstein contended.

Yet considering the breadth of Sholtz’s activities, questions about whether RECLAIM bankrolled attempted asset-repatriation ventures, much less speculators’ profiteering of the market during the 2001-02 electricity crisis, there are obviously cracks in the machine. Would stamping the credits with identification numbers and developing methods to police their ownership history in real time have helped? “What this points up is that there had to have been a failure in the design,” said EPA Senior Counsel Allan Zabel. “It’s ridiculous if people can get away with this sort of stuff. The system must be sufficiently designed so that somebody trying to do it would trigger a red flag that brings in investigative interest.”

In answering some of Barton and Walden’s questions about cap-and-trade fraud, the EPA said its criminal investigative agents meet with AQMD officials weekly. As of June, though, the EPA reported it had no criminal cases with filed charges involving emissions-trading crimes —anywhere. But the story doesn’t end there. Between the time of her arrest and the date of her sentencing, Sholtz tried softening her punishment. In 2005, she testified in the trial of a con man who stole about $4.5 million from an Idaho businessman in a wire fraud case that she was knew about from her financial dealings. More provocatively, she offered to spill about sensitive subjects closer to home.

On April 9, 2005, her lawyer, Richard Callahan, emailed the US Attorney’s Office a two-page letter entitled “Areas of Possible Cooperation for Anne Sholtz.” Callahan wrote that his client would share “credible firsthand information” on four different subjects if it would help Sholtz’s plea agreement. Sholtz, Callahan wrote, knew about a “major US bank” that was engaged in money-laundering, check kiting, manipulation of subpoenaed documents and even murder. In a direct reference to the “Eagle” scheme and others, Callahan said Sholtz had details about “fraud, money laundering [and] wire fraud by people claiming to work for the US government … in the ‘extraction of assets’ overseas …”

Sholtz’s last tipoff was a humdinger. Callahan said that she had knowledge of “repeated and flagrant violations” inside the air district’s RECLAIM program that resulted in retribution — and threats of more of it — against potential whistleblowers, and the release of over one million excess pounds of nitrogen oxide when AQMD personnel could’ve offset it. By 2007, RECLAIM had transacted about 40 million pounds of air pollution credits, reports show, so one million pounds in unauthorized discharges would be no small addition. Sholtz, Callahan said, also knew about “manipulation of data [or presenting it in a misleading fashion] to choose projects that would lead to personal gain for … (AQMD) Board Members …” This document was the only one in which Sholtz declined comment. It’s not evident if any of her tips sparked arrests or investigations because there have been no publicly revealed inquiries into RECLAIM since Sholtz’s arrest. A district spokesperson asked for comment referred back to Wallerstein’s gag order.

If all this seems like a crippling, humiliating and tragic slide for someone who might’ve ascended to legend of the Green Economy, Sholtz said she’s largely put it behind her as she moves towards new horizons that she aimed to keep private. She’s not sure if she’ll re-approach the cap-and-trade world again if she’s allowed to broker. “The RECLAIM business was exciting,” Sholtz said, her eye- brows arching. “Being able to do a transaction, solve a problem, make software do new things, help the environment. The money just comes in and it goes.”

LA Weekly News Editor Jill Stewart contributed to this story.

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