Freeman: Carbon Trade Swindle Behind Gore Hoax

2007-12-27

Richard Moore

Original source URL:
http://www.larouchepub.com/other/2007/3413carbon_swindle.html

This article appears in the March 30, 2007 issue of Executive 
Intelligence Review.

Carbon Trade Swindle Behind Gore Hoax
by Richard Freeman and Marcia Merry Baker

Look behind-if you dare-Al Gore and his science hoax, and you find 
the very same London-centered oligarchical financial crew that drove 
the 2003-2006 oil and commodity price increase, amidst the bubbles 
and hyperinflation that characterize the breakdown-phase of the 
financial system. The centerpiece of the U.S. emerging market for 
carbon emissions trading, is the Chicago Climate Exchange (CCX), 
created in 2003 as a "voluntary," or pilot agency, part of a 
London-based network positioned to reproduce the oil bubble on a 
scale orders of magnitude greater and more dangerous, while at the 
same time, destroying what's left of the physical economy.

The idea is that if governments cap CO2 emissions, then the "market" 
will take off for the buying and selling of emissions "allowances." 
This is the whole point of the "cap-and-trade" plan for CO2. If it 
sounds crazy, it is. But Gore is just one of the most visible parts 
of the elaborate (and bi-partisan) schemes that have been set in 
motion under cover of climate change. Gore's personal financial 
involvement is blatant, especially through Goldman Sachs-a large 
shareholder of CCX, and in 2004, the creator of Gore's very own 
London-based hedge fund, Generation Investment Management.

CCX has multiple interconnections with the London-run 
Intercontinental Exchange, Inc. (ICE), whose subsidiary is the 
International Petroleum Exchange, the world's largest petroleum 
futures and options market. The dirty details of ICE and the Great 
Oil Price Swindle came out extensively at a May 8, 2006 Senate 
Democratic Policy Committee hearing, where Sen. Carl Levin (D-Mich.) 
said that futures speculation on the ICE was the driver for adding 
$20 to 25 to the price of every barrel of oil, causing hardship to 
industry and households, and suffering to underdeveloped nations. 
(The report, "The Role of Market Speculation in Rising Oil and Gas 
Prices," is still posted on Sen. Levin's website).

Yet Al Gore got away with advocating cap-and-trade CO2 speculation at 
his much ballyhooed appearance before the joint House Hearing of the 
Energy and Science Committees March 21. Gore repeatedly told 
Congressmen to "put a price on carbon." In response to Rep. Roscoe 
Bartlett (R-Md.), Gore said, "As soon as carbon has a price, you are 
going to see a wave [of investment] in it ... there will be unchained 
investment."

But why have neither Republicans nor Democrats challenged Gore on 
this? And why have they conspicuously refrained from confronting Sir 
Nicholas Stern-of the 2006 "Stern Review" on global warming, British 
Environment Minister David Miliband, and the other British "experts" 
streaming into Washington, D.C. in 2007, to demand U.S. "economic 
response" to climate change? Political amnesia. Elected officials are 
tightly locked in the grip of the Synarchist gamemasters-the Felix 
Rohatyn wing of the Democratic Party, and the George Shultz wing of 
the GOP-who have been in on creating this and prior swindles all 
along.

Look, for example, at the who's who involved in the blatant staging 
of a "pro-green investment" press conference on the eve of the March 
21 Gore House and Senate appearance. On March 19, the "Investors 
Network on Climate Risk" (INCR) held a Washington event to demand 
Federal action to impose mandatory reductions in greenhouse gases, 
claiming they represent a $4 trillion pool of funds demanding green 
ventures. Members of INCR, founded at the UN in 2003, include British 
Petroleum, Allianz Insurance, the world's largest insurance firm; 
DuPont, and hosts of state, labor, and church funds of various kinds, 
that have been herded into line. The INCR is chaired by British 
activist Norman Dean, who is simultaneously Director of Friends of 
the Earth.

Al Gore spoke at the May 2005 INCR Investors Summit at the United 
Nations, in his capacity as Chairman of his Generation Investment 
Management. He called for following the model of the European Union 
Emissions Trading Scheme, which started up in 2005. "Monetize 
emissions; trade them; reduce them," was Gore's mantra.

Gore again plugged green markets trading in April 2006, at Oxford 
University, at the annual Skoll World Forum for Social 
Entrepreneurship. This was held at the Skoll Centre, set up by Jeff 
Skoll, the E-bay billionaire, whose Participant Productions funded 
Gore's propaganda movie, An Inconvenient Truth. Gore pushed carbon 
swaps and other green investments, along with his co-chairman of 
Generation Investment Management, David Blood, formerly Chief of 
Goldman Sachs Asset Management.

But now in Washington, the pace of lobbying Congress for carbon 
markets has reached a frenzy. A March 15 forum was titled "From Kyoto 
to Chicago," because of the theme, that no new, long-lead time 
successor treaty to the expiring Kyoto Protocol is required for 
getting world carbon markets going. Carbon trade can commence if just 
the United States, Europe and Japan start it up, said Jonathan 
Pershing, emissions trading expert for the World Resources Institute, 
on whose board sits Al Gore. The same point was stressed by OECD 
spokesman Brice LaLonde, advisor to the European Carbon Fund (ECF), 
and head of Friends of the Earth in France said the same. His 
co-advisor to the ECF, founded in 2006, is William K. Reilly, the EPA 
director for President George H.W. Bush, and long-time World Wildlife 
Fund president.

The Investors' Network for Climate Risk's prime social action 
affiliate, the Coalition for Environmentally Responsible Economies 
(CERES; founded in 1989), released a January 2007 report entitled, 
"The Power to Save," which outlined a step-by-step process to put an 
end to all new power plant construction in Texas, the nation's 
second-most populous state. The concept is simple: cut emissions; 
then trade in the scarce emissions "allowances"!

In the current buyout bidding for TXU-the major, 62-year-old Texas 
electric utility, the offer by KKR and Texas Pacific would acquire 
TXU on condition that eight of 11 planned coal-fired generator 
projects be cancelled. The advisor on this so-called environmentalist 
deal is William K. Reilly, an official in the Texas Pacific Group.

Reilly is co-author of a recent report, "Allocating Allowances in a 
Greenhouse Gas Trading System"-a how-to booklet for trading in 
carbon-published by the National Commission on Energy Policy. 
Launched in November 2002, the NCEP's founding 20 members included 
Andrew Lundquist, the Executive Director of the 2001 Dick Cheney 
Energy Taskforce; R. James Woolsey, former CIA Director and long-time 
Al Gore neo-con advisor, William K. Reilly; John Rowe, CEO of Exelon, 
and other notables. Funding agencies include the MacArthur 
Foundation, the Pew Charitable Trust and others.

In the face of this political onslaught, it is useful that so far, 
the House Democratic and Republican leaderships have agreed not to 
rush into "cap-and-trade" emissions legislation. They are saying that 
a go-slow approach is desirable, but the amount of top-down pressure 
to act now-from Wall Street and City of London speculators, cannot be 
underestimated. On March 15, Rep. Joe Barton (R-Tex.), the ranking 
member of the House Energy and Commerce Committee said, "I'm glad to 
see that this week, Speaker Pelosi had indicated that any bill on 
global warming considered this year doesn't necessarily have to 
include a mandatory cap-and-trade scheme." But in reality, these 
emissions schemes, and their backers should be stopped cold.

The following dossier gives summary references of the major players 
behind the carbon market swindle.

Chicago Climate Exchange

The mechanisms can best be understood by starting with the Chicago 
Climate Exchange, listed on the Chicago Board of Trade, and the web 
of figures and entities connected to it. Since CCX was created in 
January 2003, it has operated as a "voluntary" pilot project, 
demonstrating that emissions trading can be done, and developing a 
functioning operation. Its sister organization, the European Climate 
Exchange (ECX) has been up and running since 2005, as a result of 
adoption and implementation of the European Carbon Trading Scheme. 
After action by the European Union, 12,000 European installations are 
mandatorily trading CO2 and other emissions.

CCX was initiated through a feasibility study funded by the Joyce 
Foundation in 2000. As CCX describes it, "Members make a voluntary 
but legally binding commitment to reduce GHG [greenhouse gas] 
emissions" over set periods, and then trading can take place in 
standardized units of carbon emissions. Projects to "offset" 
emissions are reviewed and licensed; farmland, for example, is 
qualifiable as a carbon sink under certain standards.

Among the 85-plus members of the CCX to date are DuPont, Duquesne 
Light Co. (owned by Macquarie), Ford, American Electric Power, and 
Smithfield Foods, plus the state of New Mexico, city of Chicago and 
other governments. One prominent CCX participant is Green Mountain 
Energy, run by the Wyly family of Texas, and big moneybags for Bush 
in the Presidential elections; three Wyly family members each gave 
$10,000 to the Swift Boat "527 Committee" to slander John Kerry in 
2004. Now the Wyly hedge fund, Maverick Capital, has the distinction 
of being the worst example of tax-evasion in the United States, by 
using 58 offshore trusts to hide more than $700 million in income 
from taxation (Feb. 17, 2007 Senate hearing; Sen. Carl Levin).

Approved aggregators of farmland so far are the Iowa Farm Bureau, the 
Kentucky Corn Growers Association, and others. The Lugar Stock Farm 
is a participating "Offset Provider." Sen. Richard Lugar (R-Ind.) 
boasts that he was the first farmer in his state to sign up. The 
going rate per unit of carbon emission is about $3.65 (see 
www.chicagoclimatex.com).

The founder and chairman of CCX is none other than Dr. Richard 
Sandor, considered one of the fathers of derivatives and futures. He 
concocted weather futures, earthquake futures, Ginnie Mae futures, 
and others, and has been working overtime in recent years on the new 
carbon offset "instruments for transaction." Sandor is a director on 
the board of London International Financial Futures Exchange (LIFFE), 
the largest derivatives trading market in London and many other 
boards.

Getting financing to start up CCX is credited to one Neil Eckert, who 
at the time was CEO of the firm Brit Insurance, which is in the orbit 
of Eagle Star Insurance, Ltd., a keystone of the inner core British 
City of London. The former CEO of Eagle Star Insurance, Clive Coats, 
now heads up Brit Insurance, and Mr. Eckert has moved on to be CEO of 
Climate Change Plc, the holding company for CCX and ECX.

Sandor has been hyperactive in lining up participation in these 
carbon casinos. In March this year, he addressed the annual 
convention of the National Farmers Union in Orlando, Florida, 
praising the progress being made on methods of carbon sequestration, 
and the benefits of trade in carbon credits. He said that there is 
vast opportunity for international growth in "market-based climate 
change mitigation." In Fall 2006, the NFU launched its Carbon Credit 
Program.

As for who owns CCX, according to filings it made between Feb. 6, 
2007 and March 14, 2007, the three largest beneficial owners are, 
with their percent of CCX shares owned: Goldman Sachs Holdings, Inc., 
17.87%; Harbinger Capital Master Fund I, 10.4%; Black Rock Investment 
(i.e. Blackstone Group), 8.95%.

The Board of CCX includes Maurice Strong, and Stuart Eizenstat. 
Eizenstat, who held posts under President Jimmy Carter and subsequent 
Administrations, led the U.S. delegation to the 1997 Kyoto Protocol 
conference on global warming.

Maurice Strong has made an international career in service of 
financial rip-offs in the name of the environment. In the 1970s, he 
became first Executive Director of the United Nations Environment 
Program. In 1992, he was the Secretary-General of the United Nations 
Conference on Environment and Development (UNED)-known as the Earth 
Summit. Out of this, the first World Business Council for Sustainable 
Development (WBCSD) was created, at Strong's instigation. Then in 
1999, the WBCSD, in cooperation with UNCTAD, set up the International 
Emissions Trading Association to push for the greenhouse gas (GHG) 
market.

In 1992, the same year as Strong's conferencing for "sustainable" 
business, Richard Sandor co-authored a UN Conference on Trade and 
Development study, pushing for international trade in emissions. 
Already, the U.S. market for trading allowances in sulfur dioxide 
emissions (among 110 power plants) had been launched, under the Bush 
Administration's 1990 Clean Air Act (Title Four). Sandor told the 
Wall Street Journal that year, "Air and water are no longer the free 
goods that economics once assumed. They must be redefined as property 
rights so that they can be efficiently allocated."

At the time, Sandor was a Director of the Chicago Board of Trade, and 
an Executive Managing Director for Kidder Peabody, where he pioneered 
Collateralized Mortgage Obligations (CMOs)-the precursor of the 
innovative home mortgage securities blowing out today. At one point 
in the mid-1990s, Kidder Peabody alone had bought up 28% of all 
CMOs-earning the sobriquet "nuclear waste disposal." Then, when the 
CMO market burst, threatening the entire financial system, Kidder 
Peabody was shut down and sold off in parts.

ICE-Global Emissions Speculation

Following the trail of super-speculator Richard Sandor brings out the 
full scope of the carbon cap-and-trade bubble potential. Two months 
before launching CCX, Sandor joined the Board of Directors of the 
Intercontinental Exchange Inc. (ICE), in November 2002, which entity 
had already acquired the International Petroleum Exchange (IPE) a 
year before. This placed Sandor in the league of historic commodity 
rip-offs, going back to the British and Dutch East India 
companies-entities Sandor has praised explicitly. The Chairman of IPE 
since 1999, is Sir Robert Reid, chairman and CEO of Shell U.K. 
Limited from 1985 until 1990, after spending most of his career at 
Shell.

On Sept. 7, 2004, the ICE released a statement which in its own 
words, indicates the scope of the strategic transatlantic carbon 
trading operations, headlined, "CCX and IPE Sign Co-Operation and 
Licensing Agreement for EU Emissions Trading Scheme/Chicago Climate 
Exchange Sales and Marketing Subsidiary To Be Based in Amsterdam."

The release states that, "Chicago Climate Exchange, the world's first 
multi-national and multi-sector marketplace for the reduction and 
trading of greenhouse gas emissions, and the International Petroleum 
Exchange (IPE), Europe's leading energy futures and options exchange, 
announced today the signing of a cash and futures contracts in 
European Climate Exchange (ECX) Carbon Financial Instruments (CFI)....

"Under the agreement, a series of futures contracts on ECX, CFIs 
relating to the EUR Emissions Trading Scheme will be launched by the 
end of the year, with cash products to follow in early 2005. Both the 
cash and futures products will be listed by the IPOE and traded on 
the IPE's electronic platform, under licenses from CCX. It is 
intended that the products will be cleared by LCH.Clearnet, Ltd.

"In conjunction with this significant agreement, CCX announced the 
establishment of its wholly owned subsidiary ECX, which will serve as 
a sales and marketing office headquartered in Amsterdam.

"Dr. Richard L. Sandor, Chairman and CEO of CCX, said 
"Exchange-traded spot and futures contracts on ECX CFIs will 
facilitate trading for compliance with EU laws, and will being this 
market the liquidity it needs to operate efficiently. This agreement 
positions CCX as a global leader in emissions trading, and 
complements IPE's leadership in the European energy markets."

Thus, a single, integrated speculation machine is ready and waiting 
for the U.S. Congress to mandate emissions controls, and make way for 
the "market."

ICE, though juridically located in London, is headquartered in 
Atlanta, operating as a de jure off-shore agency. "No-action letters" 
between the Bank of England and the U.S. Commodity Futures Trading 
Commission, protect the ICE from any form of regulation or 
record-keeping required by American agencies. ICE is thus literally a 
British "offshore financial center." The 2006 Senate Democratic 
Policy Report calling for forcing regulation of the ICE, was 
subtitled, "Put a Cop Back on the Beat."

Among the latest developments, ICE is making a play for acquiring the 
Chicago Board of Trade.

Who are the major owners of ICE? The major Anglo-Dutch financial 
entities. According to ICE's 2006 filings with the SEC, as of Sept. 
30, 2005, with percent of ICE shares owned: Morgan Stanley Capital, 
11.62%; Goldman Sachs Group, 11.59%: Total Investments USA Inc., 
8.12%; BP Products, 7.59%.

Others include Duke Energy, AEP, Continental Power Exchange, Societe 
Generale Financial Corp.

Rohatyn/Shultz Bum's Rush Is On

This then is the context for the many front groups and political 
patsies leading the bums' rush for governments to mandate 
carbon-emission reductions and unleash the "markets." On Jan. 22, 
2007, in Washington, D.C., the "United States Climate Action 
Partnership" (USCAP) announced itself, consisting of ten major 
corporations including Lehman brothers, Duke Energy, DuPont, Florida 
Power & Light, BP America, Alcoa, Caterpillar, General Electric, 
Pacific Gas & Electric, and PNM Resources. They released a "Call to 
Action," which, in global warming lingo, "lays out a blueprint for a 
mandatory economy-wide, market-driven approach to climate protection" 
(see www.us-cap.org).

The World Bank is also on the bandwagon in a big way, led by WB 
president Paul Wolfowitz since 2005, when he moved in from the 
Bush-Cheney Administration. The World Bank has a Carbon Finance 
Organization (www.carbonfinance.org), working as part of the 
International Emissions Trading Association, to further carbon 
markets. Wolfowitz personally spoke on Feb. 14 in Washington on 
global warming, making the pitch that underdeveloped nations can 
expect to see a flow of some $100 billions from the developed 
nations, if carbon-reducing schemes are allowed to proceed in the 
markets.

The Felix Rohatyn wing of the operation is seen in Lehman Brothers 
participation. Lehman's CEO, Richard Fuld is their spokesman on 
environmental economics. Fuld's advisor is Rohatyn, whose long career 
as "bankers' dictator" has specialized in forcing governments to 
submit to private financial dictates.

The Lehman/USCAP has supplied witnesses all over Capitol Hill in 
February and March, lobbying for government action on mandatory 
carbon control. On March 20, a day before Al Gore's celebrity 
appearance in Congress, the CEOs of Duke Energy and PNM Resources 
testified to the House Energy Committee that they supported a 
cap-and-trade program.

The George Shultz wing of the carbon swindle, operating throughout, 
is most visible in its front-man, Arnold Schwarzenegger. He appeared 
by satellite at a March 13 press conference at No. 10 Downing Street, 
along with Chancellor Gordon Brown and Environment Minister David 
Miliband, to announce a new British legislative proposal to radically 
extend carbon trading in Britain, even beyond what's up and running 
in the European Union. This is a precursor for "global carbon 
markets."

On March 15, Schwarzenegger's Secretary of Environmental Protection, 
Linda S. Adams, testified to the House Energy Committee on all the 
initiatives of Schwarzenegger, especially for carbon trading. "I am 
pleased to announce that on Feb. 26, 2007, Governor Schwarzenegger 
joined with the governors of Arizona, New Mexico, Oregon, and 
Washington to sign an historic memorandum of understanding that 
commits these five Western states to jointly develop a regional 
greenhouse gas emissions cap and a market-based trading system in our 
region." In March, Schwarzenegger and British Columbia committed to 
working together on emissions reductions, as part of a Pacific bloc 
of states.

A counterpart bloc exists in the Northeast, of ten committed or 
member states, to trade electricity sector GHG emissions, named the 
Northeast Regional Greenhouse Gas Initiative.

At the Federal level, Sens. John McCain (R-Ariz.) and Joe Lieberman 
(I-Conn.),the leading bipartisan warmongers, have been the leading 
bipartisan GHG markets advocates. Since 2003, they have repeatedly 
filed joint bills to cap emissions and launch GHG markets. Their 2007 
version, filed in January, is S. 280. In an article they co-authored 
in the Los Angeles Times, Jan. 8, 2003, titled, "Tap U.S. Innovation 
To Ease Global Warming," McCain and Lieberman wrote the format line 
that, "Global warming is a serious threat. There is overwhelming 
evidence that increasing amounts of carbon dioxide and other 
greenhouse gases are heating up the Earth's climate and that inaction 
could be disastrous.... One way to limit the release of greenhouse 
gases is a simple but powerful idea called 'cap and trade,' which is 
at the core of a bill we are introducing in the Senate.... The 'cap 
and trade' system is a constructive, business-friendly approach to 
countering global warming...."

Thus, the intent is evident for the Shultz/Rohatyn supranational 
financial networks, to impose their green swindle schemes, either 
through, or despite, an ineffectual Congress.

On March 15, Schwarzenegger's Environmental Protection Secretary 
Adams demurely informed chairman John Dingell's House Energy and 
Commerce Committee, "In October 2006, the Governor issued an 
Executive order (S-20-06), calling on the Air Resources Board to 
develop a multi-sector, market-based compliance system that could 
permit trading between the European Union Trading System and the 
Northeast Regional Greenhouse Gas Initiative and others. It also 
called on me to create a Market Advisory Committee of national and 
international experts to advise...on the design of such a 
market-based compliance system...."
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