Features

LOS ANGELES — Federal and regional environmental agencies are investigating a smog-credit swapping program already mired in lawsuits from participating companies. 

Investigators from the South Coast Air Quality Management District are probing a Pasadena broker that operated an Internet-based auction in which companies exchange pollution credits for cash. 

A regional Environmental Protection Agency office is also investigating the credit-trading program, which it regards as a possible model to cut pollution nationwide. 

Several companies involved in the program had filed lawsuits in past years saying they lost millions through a key middleman in the trading process. 

At the center of the probe and court cases is Anne Sholtz, who heads the online service Automated Credit Exchange. The exchange handles about 8 percent of the trades made in the Regional Clean Air Incentives Market, known as Reclaim. 

The Air Quality Management District has already fined Sholtz $1,000. 

Sholtz, who is also a developer of Reclaim, said the legal disputes arose from “a few accounting problems” which have since been corrected. She said the new allegations of wrongdoing were “absolutely false.” 

The market-driven Reclaim, established nine years ago with 300 polluting businesses, allows those that cut their emissions below the required level to sell credits to large polluters hoping to avoid more costly emission-reducing measures. 

The Air Quality Management District said alleged problems at the emissions exchange have not resulted in any reduction in air quality.