Legislation

SACRAMENTO – Attorney General Edmund G. Brown Jr. today hailed the signing of AB 2514 (Skinner), the country’s first energy storage bill, as “a major step towards energy independence.”

Brown sponsored the new law to facilitate the development of solar and wind power, create jobs and increase California’s energy independence by providing a mechanism for storing wind and solar power for use at times it can’t be generated, such as nighttime. Governor Schwarzenegger signed the bill this afternoon.

“Californians want clean, renewable energy, and energy storage is an important part of that,” said Brown. “This law will help reduce global warming emissions, improve air quality, and will be a major step towards energy independence.’

The law will jumpstart the state’s energy storage industry and lead to the creation of up to 10,000 manufacturing jobs, according to the California Energy Storage Alliance. Companies already have invested in some technologies for storing energy, such as using a thermal reserve or pumped hydroelectricity. Newer technologies include storing energy in various kinds of large-scale batteries, transforming it into flywheels and compressing it into air fields.

Energy storage is important for an expanding renewable energy future because solar and wind power are not available at all times. Increasing storage allows California to take greater advantage of its renewable resources while making our electric power grid more reliable.

Expanded storage will also protect public health by reducing the need for the most polluting “peaker plants” that only operate during peak demand, usually during the summer when air conditioners in the state are in most intense use.

Attorney General Brown has fought to protect California’s environment and worked to build a clean-energy infrastructure for the 21st century. He has successfully defended the state’s landmark clean cars law, leading to improvements in fuel efficiency nationwide, and has worked with local governments to ensure that their long-term growth plans improve air quality by reducing traffic and greenhouse gas pollution. For more information, please see: http://ag.ca.gov/globalwarming/

SACRAMENTO – California Attorney General Edmund G. Brown Jr. today released a detailed forensic analysis showing that DNA collected at arrests –- even for non-violent offenses -- is “cracking cold cases” by providing positive identification of suspects in violent crimes such as rape, murder and robbery.

Proposition 69, which voters passed in 2004, required law enforcement officials to take DNA samples from all adults arrested for felonies in the state. So far it is working: more than 800 crime-scene samples have been matched since the beginning of last year to DNA collected from suspects under arrest.

In its analysis, the Attorney General’s office surveyed 69 DNA matches made over 15 months. The study revealed that in 78 percent of the matches to an unsolved violent crime, DNA was collected from an adult arrested for a non-violent offense such as fraud, drug or property crimes.

“Collecting DNA at the time of arrest is cracking cold cases that might have gone unsolved forever,” Brown said. “It is particularly significant that individuals arrested for non-violent crimes have been linked to the commission of violent crimes such as murder and rape.”

Since the 1990s, California law enforcement officers have collected DNA samples from people convicted of serious felony offenses. In January 2009, as part of changes mandated by Proposition 69, officers began collecting DNA samples from adults arrested for felonies by swabbing the inside of the cheek.

The effort is already yielding results.

For example, DNA collected from Donald Carter, 56, arrested in Sacramento in 2009 on a felony drug charge, was linked to the unsolved 20-year-old murder of Sophie McAllister, 80, in the capital. Although Carter’s drug charge was dismissed, he was later charged with murder and his trial is pending. (There are other examples at the end of this press release.)

In October, the ACLU filed a lawsuit seeking to stop the DNA arrestees program. The Attorney General prevailed in U.S. District Court, and the ACLU has appealed to the Ninth Circuit Court of Appeals. In support of the Attorney General, the California District Attorneys Association filed a brief in March arguing that “the collection of DNA samples from felony arrestees serves an overwhelming interest in the pursuit of justice.” Oral arguments in the case are scheduled for July 13.

In its analysis of 69 DNA matches linking felony arrestees to violent crimes between January 1, 2009, and March 19 of this year, investigators found that 32 percent of the DNA matches were from adults arrested for felony property crimes, 26 percent from adults arrested for drug-related felonies, 10 percent from adults arrested for fraud and 10 percent for other non-violent crimes. Only 22 percent were for violent crimes.

Cases were selected for the analysis from arrests of suspects from whom DNA had never been taken. Here are some of the other findings:

• In 16 percent of the DNA matches involving unsolved rape cases, the new DNA sample came from a person arrested for fraud.
• In 34 percent of the DNA matches involving an unsolved murder case, the new DNA sample came from a person arrested for a drug crime.
• In 36 percent of the DNA matches involving an unsolved robbery case, the new DNA sample came from a person arrested for felony DUI.

A summary of the analysis can be found at http://ag.ca.gov/bfs/pdf/arrestee.pdf

Some cases that illustrate how collecting DNA at arrests helps to nab suspects in crimes that might otherwise remain unsolved:

• In May 2009, Anthony Vega was arrested in Los Angeles County on felony drug charges, which were later reduced to misdemeanors. However, his DNA, collected at the time of arrest, was linked to two separate crimes committed in Orange County, a burglary in 2007 and a 2008 armed home invasion robbery. A preliminary hearing is scheduled for next month.
• Earlier this year, Joshua Graham Packer, 20, was arrested in Santa Barbara on armed robbery charges. His DNA, collected at the arrest, was matched to a sample taken at the site of an unsolved 2009 triple murder in Ventura County. He was arrested for that crime in April and charged with murder.
• In April 2009, Christopher Rogers, 34, was arrested in Sacramento for assault with a deadly weapon, which was ultimately reduced to a misdemeanor. But his DNA, collected at the time of arrest, was matched to DNA taken at the scene of a 2004 murder in Sacramento. In October, Rogers was arrested and charged with murder. He awaits trial.

Overall, the state’s DNA Data Bank is the fourth largest such program in the world. It has aided more than 12,000 criminal investigations.

For more information about Prop. 69, see the California Department of Justice website: http://ag.ca.gov/bfs/prop69.php.

OAKLAND — Attorney General Edmund G. Brown Jr. today sent a letter to House Speaker Nancy Pelosi, calling on Congress to pass tough financial services reform legislation that contains strong consumer protection and allows state attorneys general to “enforce all federal consumer protection laws against national banks, not just regulations that may be adopted by the new Consumer Financial Protection Agency.”

Brown’s letter:

Dear Speaker Pelosi:

In anticipation of a compromise on the House and Senate financial services reform bills, I urge you to press for the strongest possible language to protect consumers and our economy from another debilitating crisis caused by reckless Wall Street banking practices and complicit federal regulators.

Two elements of a compromise bill are key to that protection. One, national banks should be subject to the same state consumer protection laws as state banking institutions and virtually all companies operating in industries other than financial services. And, two, state attorneys general should have the authority to enforce all applicable consumer protection laws against national banks.

The House language is preferable on both points, and I recommend that you push for its adoption. It would establish a higher burden for the OCC to preempt state consumer protection laws. It also would allow state attorneys general to enforce all federal consumer protection laws against national banks, not just regulations that may be adopted by the new Consumer Financial Protection Agency.

Sincerely,

EDMUND G. BROWN JR.

OAKLAND — Attorney General Edmund G. Brown Jr. today demanded that federal authorities keep their hands off a popular California program that allows property owners to install solar panels and other energy efficiency improvements and repay the cost later on their property taxes.

The voluntary program known as PACE (Property Assessed Clean Energy) has the ability to assist thousands of California homeowners and businesses from Berkeley to Palm Desert in securing billions of dollars to make their structures greener, reduce energy waste and shrink their utility bills.

“This is an enormously popular and powerful program that helps to drive the state’s green economy and creates thousands of jobs,” Brown said.

Half the counties in the state either have such a program or are in the process of starting one. Sonoma County alone has already financed more than 800 solar and other projects worth more than $30 million.

PACE is designed to encourage property owners to make energy efficiency improvements to their buildings, such as installing solar panels or better insulation, through a 20-year tax assessment that is paid back through their property taxes. If the property is sold before the bill is fully paid, the new owner takes over the remaining payments as part of the property’s annual tax bill.

Federal officials have sent mixed signals about federal support for the program, which was launched in California. In a letter today, Brown insists that the Federal Housing Finance Agency must pledge it will not interfere with California’s successful operation of PACE.

“California’s program creates reliable markets for new green technologies,” Brown said. “It has put Californians back to work installing and maintaining energy efficient equipment up and down the state.”

Brown’s letter follows:

Edward DeMarco
Acting Director
Federal Housing Finance Agency
1700 G Street, N.W.
Washington, DC 20552-0003

Dear Acting Director DeMarco:

Property Assessed Clean Energy (PACE) programs authorize local governments to finance energy efficiency and renewable energy improvements to the benefit of homeowners and small businesses. In California, PACE financing is not accomplished through loans in the traditional sense, but rather through local governments’ long-standing and well-recognized powers to assess and tax. PACE programs in California can assist thousands of individual participants statewide, help to drive the State’s green economy, and create thousands of jobs.

On May 5, 2010, Fannie Mae and Freddie Mac issued short, somewhat cryptic lender and industry advice letters concerning PACE programs. While the advice letters do not expressly mention California PACE programs, they have nonetheless caused confusion and concern among California PACE stakeholders. By this letter, we request that the Federal Housing Finance Authority (FHFA) immediately confirm in writing that the advice letters do not affect PACE in California.

As you are likely aware, the California Attorney General’s Office at the end of last year began a discussion with FHFA staff about PACE in California. During these discussions, your staff assured this Office that we would continue to work together on issues related to PACE. Relying in part on this assurance, California has invested substantial resources in PACE programs, consistent with the White House’s “Recovery Through Retrofit” policy document and with the express support of the Department of Energy. A substantial portion of the approximately $300 million in Energy Efficiency and Block Grant funding, and a substantial portion of the over $220 million in additional American Recovery and Reinvestment Act funds administered by the California Energy Commission through its State Energy Program, have been dedicated to PACE programs. Moreover, California recently passed legislation creating a $50 million state reserve fund that will allow participating local governments to obtain financing for PACE on more favorable terms.

The disruption caused by Fannie Mae and Freddie Mac’s recent actions may have serious financial implications for participating local governments and the thousands of homeowners and small businesses currently participating in these programs in California. To take just one example, Sonoma County, through its PACE program, already has financed over 800 energy improvement projects. But the repercussions will be wider still. PACE programs in California create reliable markets for new technologies in energy efficiency, renewable energy, and water efficiency. They thus support green manufacturing jobs and thousands of additional jobs associated with installation and maintenance of energy efficiency and renewable energy projects. Now is not the time to create unnecessary uncertainty in these important emerging businesses and industries.

Based on our recent conversation with your General Counsel, Alfred Pollard, we understand that the May 5, 2010, letters were not intended in any way to signal a change in the position of FHFA, Fannie Mae or Freddie Mac regarding PACE in California. Accordingly, we request that FHFA immediately confirm in writing that participants in California PACE programs are not in violation of Fannie Mae/Freddie Mac Uniform Security Instruments prohibiting loans that have a senior lien status to a mortgage. We are open to discussing with you what form that confirmation should take, including, but not limited to, withdrawal of the May 5, 2010, letters.

We would prefer not to have to pursue some form of declaratory relief to resolve the confusion, but, because of the importance of the issue to California, we certainly reserve that as an option if a clear and unequivocal response is not forthcoming.

Once this immediately pressing matter is resolved, we look forward to discussing with you what longer-term solutions may be warranted to foster the continued responsible development of PACE programs in California.

Sincerely,

EDMUND G. BROWN JR.
Attorney General

OAKLAND – Following nearly five years of court battles, the U.S. Supreme Court agreed today to grant the request of California Attorney General Edmund G. Brown Jr. and Governor Arnold Schwarzenegger to review a state law prohibiting the sale or rental of violent video games to children.

Brown petitioned the U.S. Supreme Court to consider the case last year after California’s ban was struck down in federal court. The case is expected to be heard by the high court later this year.

“It is time to allow California’s common-sense law to go into effect and help parents protect their children from violent video games,” Brown said.

California’s petition for a writ of certiorari was filed with the U.S. Supreme Court in May 2009 on behalf of the state of California. The case stems from a 2005 California law that requires violent video games to be labeled with an “18”, prohibits the sale or rental of these games to minors, and authorizes fines of up to $1,000 for each violation.

The Video Software Dealers Association (now part of the Entertainment Merchants Association) filed suit in federal court to block the law before it could go into effect.

On August 6, 2007, the U.S. District Court for Northern California invalidated California’s law. Brown immediately appealed the ruling. On February 20, 2009, the Ninth Circuit Court of Appeals affirmed the district court ruling.

Brown’s petition asked the U.S. Supreme Court to take up this case and overturn the appellate court decision.

The petition argued that violent material in video games should be subject to the same flexible legal standard the courts have applied to limitations on sexually explicit material sold to children – that it is lawful for the state to determine that some content is harmful to children.

Currently, states may regulate the sale of sexually explicit magazines to children, but their authority to place similar limits on the sale of extremely violent video games is in dispute.

The U.S. Supreme Court has never addressed the question of whether extremely violent material sold to children can be treated the same as sexually explicit material. Brown’s petition asked the Court to resolve this question and hold that states can place reasonable restrictions on the distribution of extremely violent material to children.

A copy of Brown’s petition, filed last May, is attached.

LOS ANGELES - As a financial reform package advances in the Senate and an unrelenting swarm of Wall Street lobbyists descends on Capitol Hill to block it, Attorney General Edmund G. Brown Jr. today urged senators to preserve a critical portion of the legislation which allows states to join the fight against financial fraud on the front line.

Provisions of the Senate’s current bill restore the authority of attorneys general to prosecute financial crimes at the state level, a move that would safeguard consumers, bolster federal oversight, and halt reckless, quick-money schemes before they spiral into national crises.

“Today, more than two years after the recession began, as thousands more Americans lose their homes, jobs and savings, states remain hamstrung in the fight against financial fraud. Even if a state witnesses a crime on its own front porch, it has limited, if any, authority to act,” Brown said. “If Congress is committed to preventing another downturn and enacting robust reform, it must preserve the provisions in the current package that untie states’ hands and allow us to join the fight.”

To press for these provisions, Brown sent letters today to Senators Reid, McConnell, Dodd, Shelby, Feinstein and Boxer urging them to uphold the role of the states in enforcing consumer protection laws. This follows a letter Brown and 39 other state attorneys general sent in November to members of Congress on the same issue.

While big banks on Wall Street announced billions in quarterly profits this week, another 200,000 California homeowners received a foreclosure notice between January and March. During the first three months of 2010, California alone accounted for almost a quarter of the nation’s foreclosure activity. Meanwhile, since the recession began, the state’s unemployment rate has more than doubled, rising to 12.6 percent in March.

Brown’s letter is copied below:

Dear Senator:

As California continues to struggle through the current financial crisis, with one of the highest foreclosure rates in the nation and a 12.6% unemployment rate, I urge you to adopt financial reform legislation that protects consumers against the predatory banking practices that led to this collapse. Ensuring that state Attorneys General have the authority to protect consumers against reckless Wall Street practices is critical to that protection. The current version of the Restoring American Financial Stability Act (SB 3217) gives back to states the authority to take action against national banks. I call on you to ensure that that state authority remains in the final bill, and that you resist the pressure exerted by Wall Street and its lobbyists to maintain the status quo of no government oversight.

Predatory lending and the avalanche of foreclosures it triggered lie at the core of our current crisis. Missing-in-action federal agency enforcement, and, indeed, active federal agency protection of national banks engaged in predatory lending, enabled this crisis. The federal laws and regulations that barred my office from stepping into the void to prosecute those banks and their subsidiaries for their deception contributed significantly. In the end, our current regulatory system gave national banks a free pass, while consumers and our economy paid the price.

The pending Senate bill gives Congress the opportunity to reverse course and provide a much-needed level playing field between Main Street consumers and Wall Street. The bill does away with regulations that shielded predatory practices and allows states to enforce their own consumer protection laws, and laws adopted by the new federal Consumer Financial Protection Agency, against Wall Street banks.

Wall Street's warning against a resulting unmanageable patchwork of state laws is a red herring. States routinely seek to harmonize their laws with related state and federal laws, and they often work together to bring multistate enforcement actions. Moreover, national banks have demonstrated their ability to market differently to different states when it suits them, as in the case of Pay Option Arm loans targeted to markets like California that, at the time, experienced steeply escalating property values.

And while the bill’s new Consumer Financial Protection Agency moves federal oversight in the right direction, it isn’t enough. One agency in Washington, regardless of how well-intended, can’t have its ears to the ground in all 50 states to prosecute misconduct the way each Attorney General can in his or her home state. State Attorneys General are the cops-on-the-beat who consumers turn to to sound the alarm on new threats targeting them. Prompt state action can limit the spread of those threats before they become national crises.

Congress need look no further than the failure of Washington Mutual to see why state Attorney General enforcement is an essential component of the reform needed to stop opportunistic, predatory actors from taking advantage of lax rules and absent enforcement. The Senate panel investigating the current crisis concluded that WAMU’s deceptive lending practices and employee incentive plans that promoted them created a “mortgage time bomb” with toxic loans destined to fail. When that time bomb exploded, and WAMU loans started plunging into foreclosure, federal laws and regulations prevented state Attorneys General from suing WAMU to halt its predatory practices. Instead, that responsibility was reserved for federal regulators who did nothing, notwithstanding the findings of at least one of those regulators that WAMU had engaged in a pattern of fraud and weak risk management.

By contrast, my office and other state Attorneys General have worked together to hold state-licensed banks accountable for their fraudulent practices. After suing Countrywide Financial Corporation and its subsidiaries for predatory lending practices in the Summer of 2008, our settlement with Countrywide forced it to modify loans of homeowners facing foreclosure and to pay restitution to consumers who had lost their homes.

Unfortunately, I couldn’t take action against WAMU for the harm it caused Californians in the way I could against Countrywide. And if the existing regulatory structure remains in place, banks will continue to flock to national charters to avoid state action like ours against Countrywide. But, if the Senate steps up and does the right thing now to protect consumers, and the nation’s economy, by adopting financial reform that protects the authority of states to enforce consumer protection rights, then we will have real change, and unscrupulous banks won’t be able to hide behind federal regulators who were complicit in their misdeeds.

Sacramento—Attorney General Edmund G. Brown Jr. today sent a law-enforcement bulletin to California’s district attorneys and sheriffs in which he asserted his position that California Penal Code Section 4019, the new law that reduces jail time for prisoners in local facilities, applies prospectively.

The Attorney General has begun filing briefs in a series of court cases advancing his position that Penal Code 4019 provides enhanced good-time and work credits to prisoners during the time spent in prison after January 25, but not before.

“In response to numerous inquiries, this bulletin states the position of the Department of Justice,” Brown said. “After analyzing the code section, it seems reasonably clear that the law should apply prospectively.”

The bulletin, distributed today throughout the state, is below:

BULLETIN TO ALL CALIFORNIA LAW ENFORCEMENT AGENCIES

Re: CALIFORNIA PENAL CODE SECTION 4019

Effective January 25, 2010, Penal Code section 4019 was amended to change the calculation of good-time and work credits earned by prisoners not guilty of sex or violent crimes while they are confined in local facilities. The amendment states that these prisoners will earn one day credit for every day they are confined so long as they comply with applicable rules and do not refuse to perform labor. Before this section was amended, these prisoners generally earned one day credit for two days they were confined.

District Attorneys and county counsel have differing views on whether the amendment is retroactive (i.e., applies to the time prisoners were confined before January 25) or prospective (i.e., applies only to the time prisoners are confined after January 25). These differences are understandable since the Legislature was silent on the issue when it enacted the amendment.

Ultimately, the courts will have to decide whether the amendment is retroactive or prospective, and it is not normally the role of the Attorney General to resolve differences in possible interpretations of criminal statutes affecting local law-enforcement matters. But in light of numerous questions that have arisen, this Law Enforcement Bulletin summarizes the position that the Attorney General set forth in a brief filed last week, and will continue to advance in briefs that will be filed today and in subsequent weeks, in cases before the state courts of appeal. That position is that Penal Code section 4019 should be deemed prospective because there is no clear evidence that the Legislature intended it to be retroactive.

“[I]n the absence of an express retroactivity provision, a statute will not be applied retroactively unless it is very clear from extrinsic sources that the Legislature . . . intended a retroactive application.” (Evangelatos v. Superior Court (1988) 44 Cal.3d 1188, 1209) (citing Penal Code section 3).) Here, there are no clear extrinsic sources demonstrating that the Legislature intended a retroactive application.
Rather than simply reducing sentences, the amendment is designed to encourage good behavior on the part of prisoners by increasing the amount of work and good-time credits that they can earn. In concluding that a similar amendment was prospective, the appellate court in In re Stinnette noted that the public purpose behind such laws “is the desirable and legitimate purpose of motivating good conduct among prisoners so as to maintain discipline and minimize threats to prison security. Reason dictates that it is impossible to influence behavior after it has occurred.” (In re Stinnette (1979) 94 Cal.App.3d 800, 806.) Although People v. Doganiere (1978) 86 Cal.App.3d 237, found that an amendment to the calculation of conduct credits could be imposed retroactively, the holding is unpersuasive because the court failed to address the point that conduct credits are intended by their nature to influence future behavior.

If the Legislature had intended to lower incarceration costs by reducing prison sentences retroactively, it could easily have done so through a more direct means, such as increasing credits in a manner unrelated to prisoner conduct. The fact that it declined to do so, combined with its failure to expressly address retroactivity, supports our position that the amendment should be applied prospectively.

Sacramento—Attorney General Edmund G. Brown Jr. today called on the nation’s two largest public pension funds—the California Public Employees’ Retirement System (CalPERS) and the California State Teachers’ Retirement System (CalSTRS)—to “honor the state law” that requires them to divest from companies doing business in Iran.

“CalPERS and CalSTRS need to honor the state law requiring them to divest from companies doing business in Iran,” Brown said. “It’s time for our public pension funds to show some leadership and stop supporting companies that do business with a tyrannical regime.”

The California Public Divest from Iran Act was signed into law in October 2007 after the state Senate and Assembly passed the bill by unanimous vote. The law requires CalPERS and CalSTRS to annually report holdings in companies doing business in the defense, nuclear, petroleum, and natural gas industries in Iran and to divest from any company that fails to take substantial action to cease or limit operations in Iran.

Although CalPERS and CalSTRS both filed annual reports at the end of 2009, these reports fail to:

• Explain whether investments in companies with ties to Iran have been reduced;
• Describe when the funds anticipate fully divesting from these companies;
• Summarize investments transferred to funds that exclude these companies; and
• Calculate divestment costs or losses.

The full text of the California Public Divest from Iran Act can be read at: http://leginfo.ca.gov/pub/07-08/bill/asm/ab_0201-0250/ab_221_bill_200710...

According to the U.S. Department of State’s “Country Reports on Terrorism 2008,” Iran remains “the most significant state sponsor of terrorism.”

CalPERS is the largest public pension fund in the nation with more than 1.6 million members and more than $200 billion in assets. CalSTRS is the largest teachers’ retirement fund in the country with 833,000 members and more than $130 billion in assets.

Brown’s letters, sent today to CalPERS and CalSTRS, are copied below:

Anne Stausboll
Chief Executive Officer
California Public Employees’ Retirement System
Lincoln Plaza East
400 Q Street, Suite E4800
Sacramento, CA 95811

Re: Violations of Iran Act

Dear Ms. Stausboll:

We have reviewed the December 31, 2009 Iran Related Investments – Second Legislative Report issued by the California Public Employees’ Retirement System (CalPERS). Unfortunately, in violation of state law, the report fails to explain why CalPERS continues to invest in companies that do business in Iran.

In 2007, the Legislature enacted the California Public Divest from Iran Act, declaring it “unconscionable for this state to invest in foreign companies with business activities benefiting foreign states such as Iran that commit egregious violations of human rights and sponsor terrorism.” This law, commonly called the Iran Act, requires CalPERS to report annually on its holdings in companies that are doing business in the defense, nuclear, petroleum, and natural gas industries in Iran, and to divest from any company that fails to take substantial action to cease or limit its Iranian operations.

Although CalPERS has filed annual reports, these reports lack enough detail to enable the public and CalPERS members to know whether CalPERS is complying with the Iran Act. On page 3 of its most recent report, CalPERS declares that it decided “to not divest shares . . . as specified in the Iran Act.” Apparently, this decision was based on a conclusion made by the Board almost a year ago that divestment would violate CalPERS’ fiduciary duty to its members. But the report utterly fails to explain how and why this is the case.

In addition, the report fails to include many of the Iran Act’s specific reporting requirements. The report merely lists 24 CalPERS holdings that do business in Iran (up four from the last report) and states—without analysis or elaboration—that “substantial progress has been made through the engagement process, in the curtailment and cessation of business operations in Iran.” Nothing in these general comments complies with the Iran Act’s requirements for CalPERS to explain whether it has reduced its investments in these companies, to describe when it anticipates fully divesting in these companies (or to explain the reasons for not divesting), to summarize investments transferred to funds that exclude these companies, or to calculate divestment costs or losses.

Please let us know as soon as possible what specific actions you plan to take to comply with the provisions of the Iran Act.

Sincerely,

EDMUND G. BROWN JR.

--------

Jack Ehnes
Chief Executive Officer
California State Teachers’ Retirement System
100 Waterfront Place
Post Office Box 15275
Sacramento, CA 95851-0275

RE: Violation of Iran Act

Dear Mr. Ehnes:

We have reviewed the December 31, 2009 Response to Iran Risk Report issued by the California State Teachers Retirement System (CalSTRS). Unfortunately, in violation of state law, the report fails to explain why CalSTRS continues to invest in companies that do business in Iran.

In 2007, the Legislature enacted the California Public Divest from Iran Act, declaring it “unconscionable for this state to invest in foreign companies with business activities benefiting foreign states such as Iran that commit egregious violations of human rights and sponsor terrorism.” This law, commonly called the Iran Act, requires CalSTRS to report annually on its holdings in companies that are doing business in the defense, nuclear, petroleum, and natural gas industries in Iran, and to divest from any company that fails to take substantial action to cease or limit its Iranian operations.

Although CalSTRS has filed annual reports, these reports lack enough detail to enable the public and CalSTRS members to know whether CalSTRS is complying with the Iran Act. The most recent report refers to several lists of companies with varying degrees of ties to Iran. The report neither identifies all of the companies nor states which ones are actually held by CalSTRS.

Nothing in the report complies with the Iran Act’s requirements for CalSTRS to explain whether it has reduced its investments in companies with ties to Iran, to describe when it anticipates fully divesting in these companies (or to explain the reasons for not divesting), to summarize investments transferred to funds that exclude these companies, or to calculate divestment costs or losses.

Please let us know as soon as possible what specific actions you plan to take to comply with the provisions of the Iran Act.

Sincerely,

EDMUND G. BROWN JR.

San Francisco—Attorney General Edmund G. Brown Jr. today petitioned the California Supreme Court to review the Second Appellate District Court of Appeal’s ruling which “wrongly threw out” the law banning felons from possessing body armor.

“The appellate court wrongly threw out an important law that prohibited felons from possessing body armor,” Brown said. “We’re asking the Supreme Court to review the decision and restore important protections for the men and women in law enforcement.”

In 1998, the California Legislature enacted the James Guelff Body Armor Act to prohibit felons convicted of a violent crime from possessing body armor.

On December 17, 2009, the Second Appellate District Court of Appeal struck down the statute, ruling that the law was too vague.

Brown’s petition argues that the Court of Appeal’s Opinion:

• Fails to follow the test for determining whether a statute is vague;
• Contradicts the Legislature’s intent in enacting a body armor statute; and,
• Needlessly abrogates the entire body armor statute.

A copy of the Petition is attached.

Los Angeles –Attorney General Edmund G. Brown Jr. today sued a Los Angeles car wash for $2.6 million for illegally forcing employees to work nearly 60-hour weeks without overtime, ignoring minimum wage laws and denying injured employees workers’ compensation benefits.

Brown's legal action was part of his statewide crackdown on companies that break worker-protection laws.

"Most companies in California comply with state wage and benefit laws, but if you're running a firm that's exploiting your workers in this economy when people are desperate for jobs, we want you to know that we will find you, we will stop you and we will file some of the toughest legal actions in the nation against you,' Brown warned.

Brown’s lawsuit was filed in Los Angeles Superior Court today against Auto Spa Express, Inc. and its owner, Jonathan Min Kim, and Sunset Car Wash, LLC. The violations occurred at Auto Spa Express car wash facility located at 2028 Sunset Blvd., which employed between 23 and 41 people, depending on the time of year. The facility was sold to Sunset Car Wash, LLC earlier this year.

The suit contends that from 2006 to 2008, the company failed to:

• Pay the state minimum wage to its employees. Employees were often paid $6.32 an hour; the state’s minimum wage is $8.00 an hour. On days when there were no customers, employees sometimes would not be paid at all.

• Pay overtime. Employees were often forced to work six days a week, from 8 a.m. to 6 p.m., without overtime pay.

• Provide accurate itemized statements of hours and wages to employees. Employees were often paid in cash so that the company would not have to pay into the State Unemployment Fund or withhold pay for state taxes.

• Provide safe working conditions or report industrial injuries suffered by employees.

After receiving numerous complaints from Auto Express Spa employees, the Underground Economy Unit of the Attorney General's Office conducted an investigation into Auto Spa Express’ practices and uncovered the violations.

Brown seeks to recover $630,000 in unpaid wages for the company’s workers and to assess $2 million in penalties for violating California’s Unfair Business Act. The Attorney General is also seeking an injunction to prevent the defendants from committing similar violations in the future.

Today's action is part of Attorney General Brown’s ongoing crackdown on businesses that engage in unfair business practices by evading payroll taxes and failing to provide employees with state-mandated protections and benefits. Similar lawsuits were filed against a drywall contractor in Bakersfield and several trucking companies in Los Angeles.

The lawsuit is attached.