Legislation

RIVERSIDE--California Attorney General Edmund G. Brown Jr. and Riverside District Attorney Rod Pacheco today announced a 37-count indictment against Mark Anthony Leggio, James Lloyd Deremiah, and father-son team Nicola Cacucciolo, and Nick Vito Cacucciolo, for exceeding $3,300 Senate and Assembly campaign contribution limits by laundering money through various friends and associates.

“Leggio contributed $50,000 in excess of campaign contribution limits to six candidates for Senate, Assembly and Board of Equalization by filtering money through friends and associates,” Attorney General Brown said. “Today’s charges send a strong message that the state will crack down on those who try to exceed California’s campaign finance limits.”

In November 2006, the Riverside County District Attorney’s Office launched an investigation into possible campaign money laundering, in violation of Government Code Section 84301, in a Riverside County State Assembly race for the 65th District. The timing and pattern of campaign contributions suggested that various individuals were being reimbursed for contributing to Leggio’s candidate of choice, in violation of the Political Reform Act.

“Democracy is the foundation of our society. The process by which we citizens elect our leaders and representatives must be honest and free from all corruption. Money laundering in elections hides a candidate’s true support. When it is of this significant magnitude a fraud is perpetrated on the public,” Riverside District Attorney Rod Pachecho said.

Investigators found that Leggio funneled money through various friends and employees of the Mark Christopher Auto Center in Ontario and Mountain View Chevrolet in Upland. Nicola Cacucciolo and his son Nick Vito Cacucciolo assisted with the illegal campaign donation scheme, as did James Llloyd Deremiah.

The alleged fraud involved contributions to six state campaigns for Senate, Assembly and Board of Equalization in Riverside and San Bernardino Counties. The prosecutor from the Riverside District Attorney’s Office, who launched the original investigation, was granted the status of Deputy Attorney General which allows him to prosecute violations in other counties.

The accusations in today’s indictment include: 11 felony counts of perjury, filing false statements, conspiracy, and 26 misdemeanor violations of campaign contribution limit and reporting laws. The indictment was unsealed in San Bernardino Superior Court and the arraignment is scheduled for July 11, 2008. If convicted of the most serious charges, Leggio faces up to 6 years in state prison and the other defendants face up to 3 years.

The indictment, which was filed under seal on June 11, 2008 and made public today, is attached.

In 20 days, a full California State Grand Jury transcript including all other findings in this case will be made public. Until that transcript is unsealed, no additional details of this case can be released.

For more information, please contact Michael Jeandron at the Riverside County District Attorney’s Office: (916) 955-9215

LOS ANGELES--California Attorney General Edmund G. Brown Jr. today invited more than five hundred mayors, local planning directors, and county Supervisors to attend statewide workshops where they can learn practical ways to combat global warming by reducing dangerous greenhouse gas emissions.

"California must adopt the necessary changes that will encourage economic growth while reducing greenhouse gases,' Attorney General Brown said. 'This difficult transition from our current escalating dependence on fossil fuel, demands that cities and counties encourage maximum building efficiency and innovative land-use.

The Global Warming Solutions act, AB 32, requires California to cut greenhouse gas emission to 1990 levels by 2020, but the rules and market mechanisms will not take effect until 2012. Meanwhile, local government will make hundreds, if not thousands, of planning decisions that will have decades-long implications. Brown has called upon local officials to take action now to limit long-term greenhouse gas emissions.
Encouraging local officials to meet with the attorney general's office, Brown said, 'These workshops will launch the first statewide movement to reduce the negative impact of local planning decisions on global climate.'

In 534 letters mailed statewide today, Brown invited public officials from all 58 California counties and nearly 200 cities to join the attorney general's office for regional conferences on climate change and the California Environmental Quality Act. The Act requires local agencies to analyze and reduce greenhouse gas emissions from projects with significant impact, including regional transportation and development plans.

During the upcoming workshops--to be held from March to May in Oakland, Sacramento, Visalia, Los Angeles and Monterey--methods of modeling greenhouse gas emissions will be discussed in detail. Representatives of the Attorney General's Office and the Governor's Climate Action Team will brief the local officials about how government at all levels can reduce greenhouse gas emissions.

Some of the questions that will be addressed at the workshops include:

* How should cities and counties analyze the global warming-related impacts of development?
* What mitigation strategies should local governments employ to reduce their CO2 emissions?
* How can cities and counties undertake the required analysis efficiently and on limited budgets?

To date, the Attorney General has submitted formal comments to twenty three local jurisdictions throughout the state under CEQA, encouraging them to evaluate and avoid or reduce the increases in CO2 emissions caused by land use decisions. Attorney General Brown has also reached landmark agreements with San Bernardino County and ConcoPhillips on specific greenhouse gas reduction strategies.

Other local jurisdictions across California including Los Angeles, San Francisco, Sonoma, Santa Monica, Berkeley, Marin, Palo Alto, Chula Vista, Modesto and Healdsburg are also initiating measures to reduce greenhouse gas emissions. The City of Berkeley, for example, is developing an innovative program that funds solar projects with public monies and allows the property owners to repay the city through property tax assessments. Other greenhouse gas mitigation strategies being employed across California are the following:

* High-density developments that reduce vehicle trips and utilize public transit.
* Electric vehicle charging facilities and conveniently located alternative fueling stations.
* Transportation impact fees on developments to fund public transit service.
* Regional transportation centers where various types of public transportation meet.
* Energy efficient design for buildings, appliances, lighting and office equipment.
* Solar panels, water reuse systems and on-site renewable energy production.
* Methane recovery in landfills and wastewater treatment plants to generate electricity.
* Carbon emissions credit purchases that fund alternative energy projects.

In addition, over one hundred and twenty California cities have joined the Cool Cities campaign which commits the local jurisdictions to take concrete steps including the development of greenhouse gas emissions inventories and a local Climate Action Plan to fight global warming.

In July 2007, Alameda County became one of twelve charter members of the Cool Counties initiative. Participating counties establish a greenhouse gas emissions inventory and regional plan to cut greenhouse gas emissions to 80% below current levels by 2050.

Recently, Attorney General Brown expanded the Department of Justice Website to provide information that can help local agencies join the fight against global warming: http://ag.ca.gov/globalwarming/ceqa.php

Brown sent letters to 534 local government officials: cities with populations greater than 50,000, 178 Mayors, 171 Planning Departments, 58 County Board of Supervisors Chairs or Presidents, 58 County Planning Agency Directors, 33 Councils of Government and 36 Air Quality Control Districts.

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WASHINGTON DC – Citing the potential “to manipulate the system,” California Attorney General Edmund G. Brown Jr. today recommended that the Federal Trade Commission sharpen its guidelines for businesses that sell carbon emission offset credits.

“The Federal Trade Commission must set clear guidelines for the sale of carbon offset credits,” Attorney General Brown said, “As more Americans try to offset their carbon emissions, the danger grows that some individuals will attempt to manipulate the system. Consumers must feel confident that they actually get what they pay for—real carbon reduction offsets.”

Ordinary activities, such as driving cars and running power plants, produce greenhouse gas emissions which trap heat from the sun, causing global temperatures to rise. Under a carbon offset program, consumers are able to purchase emissions credits—which reflect specific environmental projects that reduce CO2 and other greenhouse gases elsewhere in the environment.

The national market for carbon offset credits is expected to reach $100 million annually within the next four years. Currently, the market for these offsets is volatile, largely unregulated, and has serious potential for fraud.

The Federal Trade Commission is responsible for ensuring that carbon offset projects are fairly and honestly marketed to consumers. Recently, the Federal Trade Commission requested comments, by January 25, 2008, on the marketing of carbon offsets and renewable energy certificates.

In a letter sent today to the Federal Trade Commission, Attorney General Brown and several other state attorneys general outlined potential problems with carbon offset markets and offered recommendations to the Federal Trade Commission aimed at protecting consumers. Other states joining today’s letter include: Vermont, Arkansas, Delaware, Maine, Mississippi, Oklahoma, Illinois, Connecticut and New Hampshire.

Among the recommendations to the Federal Trade Commission are the following:

• Conduct research on consumers’ understanding of carbon offsets
• Ensure that offset projects do not double sell credits or claim credits for practices that are already required by law
• Engage in aggressive education and outreach to ensure that consumers understand the nature of carbon offsets and the potential for fraud

The states also called for a clearer definition of what qualifies as a carbon offset. Currently, the U.S. Environmental Protection Agency asserts that offset credits can be backed by projects that will go forward regardless of whether emissions credits are sold. An alternative offset definition would only allow the sale of credits from projects that would not otherwise have gone forward.

The states also demanded that the Federal Trade Commission consider whether renewable energy certificates—proof that energy was generated by a renewable source—should count as a valid offset. The certificates may not qualify as offsets because renewable energy does not always displace traditional energy sources.

The states recommended that the Federal Trade Commission offer consumer tips on its Website and place explicit details about offsets—including the name, location and project owner—on all marketing material.

For more information on the Federal Trade Commission’s review of carbon offset markets, visit: http://www.ftc.gov/bcp/workshops/carbonoffsets/index.shtml

The state’s letter is attached.

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WASHINGTON DC--California Attorney General Edmund G. Brown Jr. today blasted the United States Environmental Protection Agency’s rejection of California’s request to impose greenhouse gas emissions limits on motor vehicles.

“It is completely absurd to assert that California does not have a compelling need to fight global warming by curbing greenhouse gas emissions from cars,” Brown said. “There is absolutely no legal justification for the Bush administration to deny this request--Governor Schwarzenegger and I are preparing to sue at the earliest possible moment.”

Under the Clean Air Act, California can adopt stricter standards by requesting a waiver from EPA and such requests have been approved more than 50 times in the past. California’s law requires a 30 percent reduction in greenhouse gas emissions standards from motor vehicles by 2016.

Sixteen other states—Arizona, Colorado, Connecticut, Florida, Maine, Maryland, Massachusetts, New Jersey, New Mexico, New York, Oregon, Pennsylvania, Rhode Island, Utah, Vermont, Washington—have adopted, or are in the process of adopting California’s emissions standards

Approval of California’s waiver would have meant that other states get approval automatically.

Congress passed the Clean Air Act in 1963 and subsequent amendments in 1967, 1970 and 1977 expressly allowed California to impose stricter environmental regulations in recognition of the state’s “compelling and extraordinary conditions,” including topography, climate, high number and concentration of vehicles and its pioneering role in vehicle emissions regulation. Brown said Congress intended the state to continue its pioneering efforts at adopting stricter motor vehicle emissions standards, far more advanced than the federal rules.

Section 307 of the Clean Air Act gives California the authority to challenge a waiver decision by the US Environmental Protection Agency. The state must file a petition to review the EPA’s waiver decision within 60 days after it is published in the Federal Register.

Earlier this month the U.S. District Court in Fresno concluded that both California and the United States Environmental Protection Agency are equally empowered under the Clean Air Act to set regulations limiting greenhouse gas emissions from motor vehicles. The court also ruled that California regulations do not conflict with federal authority.

Under the Clean Air Act, California can adopt stricter emissions standards than the federal government—thereby allowing other states to also adopt the standards—but the state must first obtain a waiver of federal preemption from the Environmental Protection Agency. California filed its request in December 2005 and has been awaiting a response ever since.

There are 32 million registered vehicles in California, twice the number of any other state. Cars generate 20% of all human-made carbon dioxide emissions in the United States, and at least 30% of such emissions in California. If California’s landmark global warming law—and the corresponding 30% improvement in emissions standards—were adopted nationally, the United States could cut annual oil imports by $100 billion dollars, at $50 per barrel.

FRESNO—California Attorney General Edmund G. Brown Jr. today hailed the United States Eastern District Court’s “stinging rejection” of an automobile industry challenge to California’s landmark motor vehicle emissions standards. The emissions standard, established by AB 1493 in 2002, requires a 30 percent reduction in tailpipe greenhouse gas emissions by 2016, starting with model year 2009.

“This is the fourth major legal victory for California and a stinging rejection of the automobile industry’s legal challenge to greenhouse gas emissions standards,” Attorney General Brown said. “This court ruling leaves the Bush administration as the last remaining roadblock to California’s regulation of tailpipe greenhouse gas emissions,” Brown added.

Under today’s decision, the Court concluded that both the United States Environmental Protection Agency and California are equally empowered under the Clean Air Act to set regulations limiting greenhouse gas emissions from motor vehicles. The court also ruled that California regulations do not conflict with federal authority. Under today’s decision, the Court:

• Rejected the automakers’ claim that United States foreign policy and federal fuel economy laws preempt state authority to curb emissions.
• Ruled that if California’s motor vehicle regulations are approved by EPA, enforcement of the regulations will be consistent with federal law.

The court held that there is no conflict between EPA’s or California’s duty to regulate emissions and the federal National Highway Traffic Safety Administration’s authority to set fuel efficiency standards. The court held that mileage standards should be harmonized with the California’s emission regulations.

Today’s decision leaves the EPA, which has failed to act on California’s request to impose tough emissions standards, as the last remaining roadblock to implementing the law. Under the Clean Air Act, California can adopt this standard if it obtains a waiver from the EPA. The Bush administration has been ducking California’s request since 2005.

After two years of delay on this request, Attorney General Brown and Governor Schwarzenegger sued the EPA in November, demanding a response. Fourteen other states— The Commonwealth of Massachusetts and the States of New York, Arizona, Connecticut, Illinois, Maine, Maryland, New Jersey, New Mexico, Oregon, Rhode Island, Vermont, Washington, and the Commonwealth of Pennsylvania Department of Environmental Protection—joined California as interveners in that lawsuit against EPA. Under the Clean Air Act, other states can adopt California standards after California gets a waiver from EPA.

EPA has said it will make a decision by the end of the year.

In September, a Vermont District Court also ruled in favor of the state regulations, rejecting a similar challenge from the automobile industry.

There are 32 million registered vehicles in California, twice the number of any other state. Cars generate 20% of all human-made carbon dioxide emissions in the United States, and at least 30% of such emissions in California. If California’s landmark global warming law—and the corresponding 30% improvement in emissions standards—were adopted nationally, the United States could cut annual oil imports by $100 billion dollars, at $50 per barrel.

The court's decision is attached.

LOS ANGELES — Calling aviation a “large and rapidly growing source” of greenhouse gas emissions, California Attorney General Edmund G. Brown Jr. today petitioned the United States Environmental Protection Agency to adopt global warming regulations for aircraft. The request comes on the heels of a landmark petition filed last month that asked the EPA to set limits on greenhouse gas emissions from ocean-going vessels.

“Aviation is a large and rapidly growing source of greenhouse gases and the EPA should have taken action by now to curb these emissions. Not to do so, ignores the tremendous opportunity for technological innovations that can increase efficiency and reduce emissions,” Attorney General Brown told a news conference at the Los Angeles International Airport. “Aircraft engines burn massive quantities of fossil fuels and inject greenhouse gas pollution at high altitudes—right where these emissions have a heightened negative impact.”

According to estimates by the EPA, aircraft in 2005 contributed three percent of the United States’ total carbon dioxide emissions and 12 percent of the transportation sector emissions. The Federal Aviation Administration estimates that emissions from domestic aircraft will rise 60 percent by 2025, primarily due to expected increases in air transportation.

Because aircraft release emissions at high altitudes, the impact of aviation on global warming is greater than other major greenhouse gas emission sources. When nitrous oxide, for example, is emitted at high altitudes it generates much greater concentrations of ozone than when it is emitted at ground-level.

Because aircraft contribute large quantities of global greenhouse gas emissions and the volume of air traffic is expected to increase substantially in the future, California is asking the EPA to:

• Make an explicit finding that greenhouse gas emissions from aircraft contribute to air pollution that may endanger public health and welfare
• Adopt regulations to control greenhouse gas emissions from aircraft

Under the Clean Air Act, the EPA must first make such findings before establishing emissions standards. The petition filed today asks the EPA to respond within 180 days and initiate a formal process to ultimately limit emissions from all aircraft arriving or departing from U.S. airports. These emissions controls would reach the majority of aircraft operations in the United States—domestic aircraft accounted for 97% of the air operations in 1999.

There are currently no greenhouse gas emissions controls on aircraft and only limited controls for some conventional pollutants such as carbon monoxide. Last year, the International Civil Aviation Organization—a United Nations agency—passed a resolution to set international emissions reduction agreements but the organization has taken no additional action to further this goal.

In response to the persistent lack of aircraft emissions rules, the European Parliament gave preliminary approval last month to a global warming control plan that limits carbon dioxide emissions from airlines flying to and from Europe beginning in 2011.

In today’s petition, California asserts that the Environmental Protection Agency has the authority and the duty to adopt greenhouse gas emissions standards for aircraft. In Massachusetts v. EPA, the Supreme Court held that greenhouse gases are pollutants and therefore within EPA’s regulatory authority under the Clean Air Act. Section 231 of the Act reads:

The Administrator shall, from time to time, issue proposed emission standards applicable to the emissions of any air pollutant from any class or classes of aircraft engines which in his judgment causes, or contributes to, air pollution which may reasonably be anticipated to endanger public health or welfare.

On Monday, a team of three dozen scientists called upon Congress to make an annual $30 billion public investment in energy technologies—across all sectors of the economy—to reduce climate risk, increase energy security, and enhance competitiveness. The team of scientists, which includes Nobel Prize winners in chemistry, economics and medicine, said such an expenditure would be less than half of what America already invests in military research and development.

There are currently few controls on aircraft emissions and therefore the opportunity for technological innovation is substantial. The Massachusetts Institute for Technology, in a recent report to Congress, identified several strategies to increase fuel efficiency and reduce aircraft greenhouse gas emissions including:

• Increase the capacity of airports to handle more landings and thereby reduce unnecessary fuel expenditures on the ground and in the air
• Reduce auxiliary power usage by plugging aircraft into ground-side power supplied by the airport
• Use single engine taxiing
• Select more fuel-efficient routes and speeds
• Reduce excess fuel carried by aircraft
• Increase maintenance and cleaning of engines and airframes.

A recent study in the American Institute of Aeronautics and Astronautics Journal found that engine technology improvements, combined with design improvements and operational changes, could result in a 10% reduction over 2005 levels in carbon dioxide and other emissions.

The need for action to combat climate disruption is urgent. Last month, Rajendra K. Pachauri, the chief of the Noble-prize-winning Intergovernmental Panel on Climate Change stated that, “if there’s no action before 2012, that's too late. What we do in the next two to three years will determine our future. This is the defining moment.” Impacts that will continue to occur include: increasing temperatures, heat waves, melting of glaciers, changes in precipitation, increased hurricane intensity, coastal flooding, and increased heat-related illnesses.

California acknowledged the impact of greenhouse gas emissions on climate change and adopted the ground-breaking Global Warming Solutions Act, commonly known as AB 32. AB 32 requires California to reduce greenhouse gas emissions to 1990 levels by 2020—approximately a 25% reduction.

Other states, local governments, and national environmental organizations that joined California in petitioning the EPA today include: the South Coast Air Quality Management District, City of New York, District of Columbia, Connecticut, New Jersey, New Mexico, Pennsylvania Department of Environmental Protection, Oceana, Earth Justice, Friends of the Earth, and the Center for Biological Diversity.

Today, Brown also launched a significant expansion of the Attorney General’s Website to provide valuable and up-to-date information about how public officials, industry leaders, and private citizens can join the fight against global warming. For more information visit: http://ag.ca.gov/globalwarming/

California’s petition is attached.

SAN FRANCISCO--California Attorney General Edmund G. Brown Jr. today hailed the 9th Circuit’s decision striking down national automobile mileage standards, calling it a “stunning rebuke” to the Bush administration's failed energy policies.

Commenting on the decision Attorney General Brown said, “This decision sends a clear message that the Congress must get serious about combating dangerous foreign oil dependency and global warming. This is a major victory and a stunning rebuke to the Bush administration and its failed energy policies.”

In May, Attorney General Brown had argued that the administration had failed to consider the effects of vehicles’ greenhouse gas emissions on global warming, a requirement under the National Environmental Policy Act, when formulating new mileage standards. Brown asserted that the National Highway Traffic Safety Administration’s mileage standards violated federal law by ignoring both global warming and America’s “dangerous foreign oil dependency.”

Under the Energy Policy and Conservation Act—adopted four decades ago in response to the Arab oil crisis—the National Highway Traffic Safety Administrations sets gas mileage standards for motor vehicles. The Administration, under Bush, ordered a pathetic one mile per gallon increase, from 22 to 23 miles per gallon by 2010, which Brown challenged in court as a violation of federal environmental law.

“A paltry one-mile-per gallon increase in gas mileage was clearly unlawful,” said Brown, “and today’s decision to reject that dangerously misguided policy is a victory for states that want to fight climate disruption and oil dependency.”

Other states and national environmental organizations that joined the lawsuit against the Bush Administration include: Connecticut, Maine, Massachusetts, Minnesota, New Jersey, New Mexico, New York, Oregon, Rhode Island, Vermont, New York, the District of Columbia, New York City, the Center for Biological Diversity, Natural Resources Defense Council, Environmental Defense and the Sierra Club.

Last week, Attorney General Brown joined sixteen states in petitioning Congress to protect California’s landmark motor vehicle greenhouse gas emissions law, known as the Pavley Bill, from federal preemption. Brown sent a letter to Senate Majority Leader Harry Reid and House Speaker Nancy Pelosi, urging Congress to “clearly and unambiguously protect the States’ existing authority to set new motor vehicle emission standards under the Clean Air Act.”

Brown wrote the letter because influential members of Congress are threatening to change federal automobile fuel economy standards, and at the same time preempt California’s ability to set tailpipe restrictions on greenhouse gas emissions.

The Energy Bill is a federal effort to improve fuel efficiency and reduce dependency on foreign oil. Congress is currently working to reconcile House and Senate versions of the energy bill—HR 3221 and HR 6.

Attorney General Brown asked Congress to make sure that the Energy Bill would not undermine state authority to set tough greenhouse gas emissions standards. Brown suggested that the most direct way to protect California’s greenhouse gases would be to adopt the following provision: “Nothing in this title shall be construed to conflict with the authority provided by sections 202 and 209 of the Clean Air Act.”

Under the Clean Air Act, there are two sets of emissions standards for motor vehicles—those adopted by EPA and those adopted by California, which are approved by the EPA in a formal waiver process. In addition, there are also federal Corporate Average Fuel Economy (CAFE) standards set by National Highway Transportation Safety Association.

The case is California v. National Highway Traffic Safety Administration, 06-72317.

WASHINGTON D.C.—California Attorney General Edmund G. Brown Jr. today joined sixteen states in petitioning Congress to “back California’s fight against global warming,” and protect the state’s motor vehicle greenhouse gas emissions law from federal preemption.

In a letter sent to Senate Majority Leader Harry Reid and House Speaker Nancy Pelosi, Brown urged Congress to “clearly and unambiguously protect the States’ existing authority to set new motor vehicle emission standards under the Clean Air Act.” Brown wrote the letter because influential members of Congress are threatening to change federal automobile fuel economy standards, and at the same time preempt California’s ability to set tailpipe restrictions on greenhouse gas emissions.

“Preemption of state tailpipe greenhouse gas emission standards would be a death blow to California’s pioneering effort to fight global warming,” Brown stated. “Congress should both improve fuel economy standards and back California’s fight against global warming through its tailpipe emissions standards—these goals are complementary.”

Attorney General Brown asked Congress to make sure that the Energy Bill did not undermine state authority to set tough greenhouse gas emissions standards. Brown suggested that the most direct way to protect California’s greenhouse gases would be to adopt the following provision: “Nothing in this title shall be construed to conflict with the authority provided by sections 202 and 209 of the Clean Air Act.”

Under the Clean Air Act, there are two sets of emissions standards for motor vehicles—those adopted by EPA and those adopted by California, which are approved by the EPA in a formal waiver process. In addition, there are also federal Corporate Average Fuel Economy (CAFE) standards set by National Highway Transportation Safety Association.

In response to California’s greenhouse gas emissions law, the automobile industry has brought suit against the state alleging that the law impermissibly establishes a “de facto” fuel economy standard, preempted by Congress. California vigorously asserts that its greenhouse gas emissions standards, set under Clean Air Act, are different from federal CAFE fuel economy standards and therefore not preempted. This view of the law was recently upheld by a federal district court in Vermont.

California’s motor vehicles greenhouse gas emissions standards, known as the Pavley regulations, require a 30 percent reduction in global warming emissions from vehicles by 2016, starting with model year 2009. Eleven other states have also adopted California’s emissions law and are—like California—awaiting EPA approval.

The Energy Bill is a federal effort to improve fuel efficiency and reduce dependency on foreign oil. Congress is currently working to reconcile House and Senate versions—HR 3221 and HR 6. A vote may take place next week.

Sixteen other states joined the attorney general’s letter requesting protection from federal preemption: AZ, DE, CT, IL, IA, ME, MD, MA, MN, NJ, NM, OR, PA, RI, VT, and WA. Attorney General Brown’s letter to Congress is attached.

LOS ANGELES – California Attorney General Edmund G. Brown Jr. today sued PacifiStaff, a Southern California corporation that trained construction companies to violate workers’ compensation laws by the use of “fake corporations with phantom executives.” Today’s lawsuit comes on the heels of an underground economy lawsuit filed last week against Brinas Corp., a Los Angeles drywall company.

Commenting on the lawsuit, Attorney General Brown said, “PacifiStaff developed a sophisticated scheme whereby companies would fire their workers and rehire them in fake corporations with phantom executives. These illegal maneuvers enabled construction companies to avoid state laws which require all employers to provide workers’ compensation insurance.”

The California Department of Justice opened an investigation into PacifiStaff after receiving reports that a growing number of Southern California construction companies were starting to drop workers’ compensation for their construction workforce. These companies improperly labeled their employees as shareholding corporate executives to take advantage of Labor Code Section 3351 which does not require workers’ compensation insurance for such executives.

During the investigation, undercover agents attended PacifiStaff sales meetings where representatives pitched an illegal scheme to help construction companies avoid paying workers’ compensation to their employees. On print advertising, Internet promotions and during these sales pitches, the company falsely stated that their scheme was approved by a government agency.

Undercover investigators found that construction companies were directed, under advice from PacifiStaff, to fire their construction workers and rehire them as corporate officers of a sham corporation. These construction workers were then given executive titles and a single share of worthless stock in the new corporation. This sham corporation then sent the new fake executives back to construction sites—without the required workers’ compensation insurance.

Investigations revealed that PacifiStaff brushed off questions about what might happen if a construction worker were actually injured on the job. Investigators also found that staff representatives engaged in the unauthorized practice of law by offering legal advice without a license.

State law requires employers to provide workers with the no-fault protection of workers' compensation insurance. Workers' compensation provides benefits such as medical care for work-related injuries, disability payments while injured, and death benefits for the families of employees. Companies who evade workers’ compensation costs gain an unfair advantage over competitors who protect their workers by following the law.

According to the California Department of Industrial Relations, there were nearly 49,000 nonfatal injuries and illnesses among California construction workers in 2006. 30,000 of these cases resulted in missed days at work, transfers, or restrictions of duty. In 2005, there were 102 construction industry fatalities due to transportation accidents, falls, or exposure to harmful substances. There were approximately 935,000 Californians employed in the construction industry in 2006.

“Construction work can be extremely dangerous and those workers injured on the job deserve and depend upon the benefits afforded by California law,” Attorney General Brown said. “Today’s lawsuit sends a strong message that employers who try to short-circuit the system will be prosecuted to the full extent of the law,” Brown added.

PacifiStaff, using the trade name “Workforce Solutions,” has billed itself as the “Antidote to Workers’ Compensation.” PacifiStaff continues to market its services to its prospective clients through trade shows, print advertising and over the Internet at: www.theworkforcesolutions.com. PacifiStaff also conducts direct sales meetings with prospective client employers. PacifiStaff maintains an office at 2125 E. Katella Avenue, Suite 330, in Anaheim, California.

The lawsuit against PacifiStaff was brought under Business & Professions Code, Section 17200, which expressly prohibits unlawful or unfair business practices.

The state’s lawsuit is attached.

LOS ANGELES – Citing the “threat of global climate disruption,” California Attorney General Edmund G. Brown Jr. today joined three national environmental organizations in petitioning the United States Environmental Protection Agency to adopt strict greenhouse gas regulations for ocean-going vessels. The petition asks the EPA to make specific findings that ships significantly contribute to global warming.

At a news conference at the attorney general’s headquarters in Los Angeles, Brown said: “The U.S. EPA has the authority to curb greenhouse gas emissions and our petition today asks the agency to exercise that authority without delay.”

Ocean-going vessels, in total, emit more CO2 emissions than any nation in the world except the U.S., Russia, China, Japan, India and Germany. Ominously, these emissions are projected to increase nearly 75% during the next 20 years.

“International law guarantees a right of ‘innocent passage’ for all ocean-going vessels, but this right does not include polluting the air or water near our coastal cities,” Brown said. “If the U.S. is to do its part in reducing the threat of global climate disruption, then EPA must limit the global warming emissions from ships that enter the ports of the United States,” Brown added.

Under the Clean Air Act, California has the authority to file a petition asking the EPA to establish CO2 emissions standards. In the petition filed today, Brown asks the EPA to:

• Make a finding that carbon dioxide emissions from ocean-going vessels contribute to air pollution and endanger human health and welfare.
• Set standards for reducing such carbon dioxide emissions.

Brown said that under the reasoning of the United States Supreme Court’s holding in Massachusetts v. EPA, the Environmental Protection Agency has the authority to adopt standards for greenhouse gas emissions from vessels that enter U.S. territorial waters.

The United Nations International Maritime Organization (IMO) has authority under international treaties to establish pollution standards for vessels but to date has failed to adopt controls on greenhouse gas emissions. At a recent meeting of the IMO Marine Environment Protection Committee, it was agreed to inventory greenhouse gases by 2009, but no commitment was made to regulate such emissions.

The state’s petition to EPA is attached.

For more information, please visit http://www.oceana.org/climate/solutions/oceana/no-more-free-ride/