R.G. Knox Company LLC

We are back after a month of preparation for our next round of installments. Our absence has been spent delving into the finer details of earlier stories.

In prior installments, we touched on Bob Knox’s new investment banking firm, R.G. Knox Company LLC, located in Park City, Utah. This is the investment firm that at present is approved by the California State Treasurer’s Office to provide and underwrite investment activity of taxpayer funds.

It was brought to our attention the website for R.G. Knox Company LLC has a very conspicuous public misrepresentation which after investigation looks as if it were intentional. The website states “R.G. Knox Company, Established 1975.” In fact, public records from the State of Utah reflect R.G. Knox Company LLC was registered in 2005….NOT 1975. Further evidence of this intent to mislead clients arises from SEC Filings prepared, signed and filed by Bob's wife, Karla. These filings state for the record R.G. Knox Company LLC was not an active company until 2007. Ms. Knox is a registered CPA in California and Utah. Her involvement in this matter has been referred to the California and Utah agencies that oversee CPA's and their certification.

A source contacted Mr. Knox in an effort to sort out this matter. Bob stated he "started the company in San Francisco in 1975.” Well, last we checked San Francisco is NOT in Utah. Zion’s Bank (for whom Mr. Knox was recently employed) was contacted to determine their involvement, if any, with R.G. Knox Company LLC. As a publicly traded company, as well a bank, Zion’s has strict reporting requirements which must be followed. Any such involvement with R.G. Knox Company LLC must be publicly disclosed. Zion’s Bank did not appear to have any such records.

What we at The Back Story found very fascinating is Mr. Knox’s Utah based investment-banking firm was formed and active during a period of time for which he was an employee of Zion’s Bank in their investment banking division. This may raise relevant questions concerning conflicts of interest, self-dealing, and perhaps insider trading. The SEC, as well federal laws have strict guidelines for officers and employees of publicly traded banks and investment firms. Acting on behalf of your own private firm while an officer/employee of a publicly traded bank/investment firm is an area of interest in this post Madoff era.

Environmental Cesspool

The fourth installment of The Back Story starts with recognition for those who lost their lives 10 years ago today. Those people were innocent victims of a terrorist act and will forever be remembered in our history books and our memories. The courage of the passengers of Flight 93, many whom were residents of California, and the firefighters in New York City who faced, without fear, overwhelming odds and the grave consequences are examples of what defines a hero. They are all hero’s!

In this installment I will be writing about an environmental cesspool which may cost California Taxpayers over 9 million dollars as reported in the LA Times. Public records reveal that former Alameda County Treasurer and Supervisor Bob Knox and companies he owns are responsible for a toxic nightmare in California.

Here is what we know. Companies owned by Bob Knox, as determined by the California Department of Toxic Substance and Control (DTSC), have been involved in the handling of a hazardous substances with very high Zinc, Lead and Cadmium content. All three base metals have health hazards. However, Lead and Cadmium have very serious health perils which include irreversible brain damage and lung tumors.

In 1996, Bob Knox apparently acquired, via a holding company by the name of CPC Holdings Inc., Chemical & Pigments located in Contra Costa County, and subsequently owned and operated the Chemical & Pigments facility. This business produced numerous products high in Zinc, Lead and Cadmium. The address given for CPC Holdings is the same Park City Utah address that Bob Knox list as his home address.

In May 1998, Chemical & Pigments filed for Chapter 11 Bankruptcy. It appears all valuable assets were sold off shortly thereafter and the facility left unattended.

In January 2002 and again in October 2002 the State of California sent their Emergency Response Unit (ERU) from the DTSC to the Chemical & Pigments facility to address serious and numerous environmental problems that had been left unresolved by its prior owner. ERU found the facility abandoned and unsecured with serious security breaches. There were storage tanks leaking hazardous substances and large amounts of unsold product containing high levels of hazardous substances on the property.

On October 18, 2002, the State of California issued an Imminent and Substantial Endangerment Determination Order. The order was issued out of serious concern for public health and welfare due to prior releases and the serious threat of future releases of hazardous substances that could endanger the health and welfare of the public. The order made clear that remediation and removal of hazardous substances and resulting contamination is required. The goal outlined by the State of California was to prevent any future danger to public health and welfare and allow for safe future use as productive industrial property.

The order made clear the respondents, as listed in the order, which included Chemical & Pigments, Robert G. Knox III(Bob Knox), and CPC Holding Inc. were to act in a manner required by the State of California.

Based on a public document, Bob Knox and CPC Holdings. Inc. have subsequently failed to pay cost associated with the remediation of the Chemical & Pigments site. In April of this year, the State of California sent a letter requesting repayment of taxpayer funds used to remediate the site. The cost to taxpayers as of April 2011 is nearing seven million dollars. To be exact, $6,774,967. The letter also indicates a lien for over a million dollars has been placed on the Chemical & Pigments property in an effort to force repayment of taxpayer funds.

It is difficult to grasp that a former California elected public servant, who even to this day professes the “importance of safeguarding the public’s limited funds” would seemingly dump on the residents of California the toxic cesspool for which he and his companies share responsibly for creating. More appalling is Bob Knox now ostensibly wants the taxpayers of California to pay for his share of this environmental mess. These do not appear to be the actions of a person safeguarding the public interest and funds of the residents of California.

Finally, keep in mind Bob’s Utah based investment-banking firm has been accepted by Bill Lockyer and the State Treasures Office as a company whom may be trusted to manage and invest California taxpayer money. It would appear strikingly ironic that the State of California is seeking the collection of nearly seven million dollars of taxpayer funds from Bob Knox and his companies, all the while potentially entrusting him to properly manage and invest additional taxpayer funds. I wonder how a majority of California Taxpayers would view that decision?

Bill Lockyer, can you please comment on this matter?

Welcome

At one time Alameda County was perceived as a bright star and a rock of upstanding politicians in a sea of corrupt counties and local governments within California. Much of this changed back in the 80’s around the time of Pete Stark, Bill Lockyer, Don Perata, Bob Knox, Elihu Harris and many more. To this day Alameda County is yet to fully recover from that period.

The list of supporting players is long and twisted. There are the ex-wives, girl friends, mistresses, illicit drug enablers, back room campaign financiers, pay-to-play business associates, and unsuspecting volunteers.

Sadly, there were also a number of well meaning, honest, hard working people whom sought to help make a difference, but found the politicians of that period a disgraceful wake-up call to the changes rapidly occurring within Alameda County. Many of those people have enlightened me over the years.

The Back Story will chronicle some of what I personally experienced, as well provided to me by other insiders. Some of my sources remain active in Alameda County and California level politics, both as political insiders and individuals doing business with local and State level government entities. (I would enjoy any additional information or post from people familiar with Alameda County politics, in particular with the politicians and time frame covered)

My chronicles start with Bob Knox’s (Robert G. Knox III) initial campaign for Alameda County Treasurer. I was an uncompromising individual with goals for higher education and doing great things to help others. In an odd meeting with mutual friends, I found myself volunteering to help Bob Knox’s election campaign. I continued to help and work for him on-and-off for over a decade thereafter.

Almost from the start, I saw things that were improper: fund raising events where cash and checks from investment bankers and business associates of Bob Knox’s were slipped to him or his campaign manager in back rooms, which for some reason did not get reported on required financial disclosures. A source once asked why those funds did not make it to the reports. Bob’s reply was a warning never to ask or discuss the matter “if you want my help in the future.” I witnessed the consumption of illegal and illicit drugs at Bob Knox’s home in the Oakland Hills during “thank you parties” and gathering of campaign staff. The drugs were provided by campaign staff and consumed by many. A source indicated the drugs were supplied by Bob Knox’s mistress at that time. The mistress was also providing campaign assistance, but it is unclear if she was paid for her role.

Sometime during Bob Knox’s Treasurer’s campaign, Bill Lockyer, current California State Treasurer, and Bob Knox formed their political and personal relationship. That relationship continues today, and is as robust as ever. The foundation of this relationship from the onset was the exchange of political favors and business benefits in exchange for access to fund-raising assistance and resources from Lockyer’s long list of supporters. This exchange of favors has continued uninterrupted and has mutually benefited both parties. As of just over a year ago, Bob Knox provided Bill Lockyer a substantial political favor by financially supporting Bill Lockyer’s new wife Nadia, in her successful campaign for Alameda County Supervisor. This is a position Bob Knox held for many years. Bob’s support for Nadia went well beyond financial, as Bob called in many of his long-time political and business associates to contribute and volunteer end-less hours on Nadia’s campaign. Bob was also front and center on a campaign mailer for Nadia that referenced his former position as County Treasurer. Bob’s daughter, Kati Knox, who owns a business in San Leandro, and has been politically active in San Leandro for many years and romantically connected to numerous San Leandro businessmen and an active San Leandro Police Officer, worked relentlessly on Nadia’s campaign.

Bob Knox recently formed an investment banking firm, R.G. Knox Company LLC, (www.rgknox.com) based out of his home in Park City Utah and is currently one of only a few small firms (below normally accepted capital levels) to be accepted by Bill Lockyer’s office to the “Public Finance Underwriter Pool for 2011-2013”. Acceptance as an underwriter provides these firms access to potential fees (substantial in many cases) for managing funds for the State of California and the Treasurer’s office.

Bob Knox’s new investment banking firm surfaced after he shutdown his California based investment-banking firm and resigned as a VP at Zion’s Bank in Salt Lake City. I have some unconfirmed details regarding the reasons behind these recent events. I will share them once they can be confirmed.

(The Back Story will continue to grow in the weeks and months to come)