Cap and Trade manipulation leads to WCI Inc.

Oct. 23, 2012

By Warren Duffy

Cap and Trade is coming — good and hard. So far, numerous pleas to Gov. Jerry Brown, California Air Resources Director Mary Nichols and the California Legislature to delay the start of the first Cap and Trade carbon credit auction have fallen on deaf ears.  Following a dry-run test of the program in August, CARB is poised to launch the auction on November 14, 2012.

California will become the second largest carbon trading market in the world, just behind the European Union, whose Cap and Trade program began in 2005.  Although there is much to be learned from the EU experiment, those in charge of California’s agenda cannot be bothered with such nonsense.  After all, this is not just America, but California.  Any American knows that, “As goes California, so goes the nation.”

In Brown’s budget for fiscal year 2012-13, which began on July 1, there is a line item for the upcoming auction listing income of $1 billion. Being a rather complex operation, the auction requires expert and diligent oversight to avoid anyone “gaming” the system.  Not only will the state’s business community participate, but commodity speculators will be anxiously joining in the trading as well.  So who, exactly, will oversee this complicated auction that is now three weeks away?  Western Climate Initiative Inc.

On November 28, 2011, WCI was established as a not-for-profit corporation in the state of Delaware, as Katy Grimes was the first to report here on

James Goldstene, the CEO of CARB, is also listed as the Chairman of the Board of WCI Inc.   In other words, the head of the auction oversight group is also the CEO of the organization he is overseeing.  According to a document filed with the California Secretary of State’s office on December 23, 2011, WCI’s principal place of business is listed as 2 Wall Street, New York City, N.Y.

On September 25, 2012, papers were filed with the California Secretary of State listing the address of WCI as 980 Ninth Street, Suite 1600, Sacramento, Calif.  However, that address is listed as a branch office of a statewide personal injury law firm.  The person verifying the Statement of Information is listed as Patrick Cummins, who was recently hired as the interim executive director of WCI.  Since 2000, Cummins has served as the project manager for the Western Governors Association in Denver, Colo.

Filing papers

As required, the state filing papers also included WCI’s IRS Form 990 for the year ending December 31, 2011.  It was signed by CARB CEO and WCI Chairman Goldstene, showing a post office box in Sacramento as WCI’s address.  The CPA who prepared the 19-page set of documents is in Lafayette, Colo.  So we have a Colorado CPA filing tax documents for a California oversight group that is incorporated in Delaware, but has a Wall Street business address for some documents and a Sacramento address for others.

The Western Regional Climate Action Initiative began on February 26, 2007  under Gov. Arnold Schwarzenegger.  He called upon four governors from the states of Washington, Oregon, Arizona and New Mexico to form an organization and sign a document with the lofty goals of solving the “effects of a hotter, drier climate including prolonged droughts, excessive heat waves, reduced snow packs, increased snowmelts, decreased spring runoff, altered precipitation patterns, more severe forest and rangeland fires, widespread forest diseases and other serious impacts.”

From these humble beginnings, the California Legislature adopted Assembly Bill 32, the Global Warming Solutions Act of 2006, which was signed into law by Schwarzenegger.  The unelected CARB bureaucracy then was authorized to oversee the program of reducing carbon emissions in the state to 1990 levels by the year 2020.

Cap and Trade program

The bill also provided for a statewide Cap and Trade program. CARB eventually entered into an agreement with WCI Inc to oversee this commodity trading program.

As “climate alarmism” grew to an international movement in the first decade of the new millennium, WCI expanded quickly and at its peak included seven western states by adding Montana and Utah to its original member states and four Canadian provinces.  Mexico, several Pacific islands and California Indian Tribes were considering joining the group. But when the global economy collapsed in 2008, one by one every WCI partner dropped out of the agreement except for California and the Canadian province of Quebec.

From all of this, we have the state of California now launching an expensive campaign of carbon credit auctions to supposedly alter the impact of greenhouse gases (GHG’s) on the planet’s environment, with only one partner in North America, Quebec. WCI announced that Patrick Cummins of Quebec would be its interim executive director.

The board of directors of WCI now includes twice as many Canadian representatives as Californians.  The vice chairman of WCI is Robert-Noel de Tilly, the senior policy adviser in the Climate Change Office of the Quebec Ministry of Environment. And the WCI treasurer is Jean-Yves Benoit, an economist in the same office.

Tim Lesiuk, the secretary of WCI, is also the executive director of business development and chief negotiator for the Climate Action Secretariat of British Columbia. And another director, James Mack, is the head of the British Columbia Climate Action Secretariat.  The only other Californian on the WCI board of six members is Matt Rodriguez, the secretary for the California Environmental Protection Agency.


None of the resumes of the WCI board members lists any background or oversight with the kind of commodity trading the California Cap and Trade carbon auction promises to introduce.  All board members are environmental bureaucrats.

The WCI board held an organizational meeting January 12, 2012 at the Sheraton Fisherman’s Wharf in San Francisco. The minutes of the meeting report that Michael Gibbs, an employee of the California Environmental Protection Agency, told the attendees the WCI Financial Committee is “establishing bank accounts, support for transactions in two currencies, (and) prudent management in conformance with an adopted investment policy.”

“Adopted investment policy”?  Is that why WCI located its office on Wall Street?  Is WCI planning to invest in carbon credits, and can it do that as a not-for-profit 501(c)3 organization under the IRS code?  Investments of any kind would appear to stray far afield of the original goals of the Western Climate group in 2007 to simply coordinate efforts to “solve effects of a hotter, drier climate including prolonged droughts, excessive heat waves, reduced snow packs.”

The lingering question remains for so many: What exactly is the role of this newly incorporated Delaware corporation in the overall scheme of California’s Cap and Trade carbon credit auction program?  WCI reportedly was tasked with developing “a multi sector, market based” Cap and Trade program in September 2008 and July 2010. Which brings up more questions.

Can an international corporation create a complicated state environmental program without any input from the California Legislature?  Can CARB honcho Mary Nichols outsource the design, implementation and oversight of this expensive program with the only partner being in Canada? And can she enter into a treaty with that foreign country receiving no approval through the legislative process of California’s state elected officials?

Rather than this being accepted as California business as usual, these questions and many others need answers.  Californians deserved answers long before any auction could be held.  The reason for the auction is to “cap” the emissions of oil refineries (think higher prices at the pump to pay for the scheme), power plants (think higher utility bills), diesel truck operators (think higher costs for all consumer goods) and 400 other separate California business categories.

No other state in America is participating with California in this Cap and Trade scheme. No one in California will escape the heavy costs this catastrophic scam will bring our state.

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