In an era of increasingly stringent air quality regulations, Ruben Garcia developed a cowl that covered a ship’s chimney while it idled in port, an innovation that promised to capture up to ‘to 80% of its emissions.
But in bankruptcy court, one of his more than 50 creditors alleges that Garcia’s companies were some sort of Ponzi scheme, built “at the expense of employees, vendors, lenders and investors.”
State regulators have also questioned whether Garcia has kept his guarantees. In November, they shut down its operations at the Port of Long Beach after it failed to show its hood was functioning as intended.
Garcia did not respond to two requests for comment for this story.
Garcia’s rise to environmental tech stardom began in 1992, when he helped found the company Advanced Cleanup Technologies. Its original purpose was to clean storage tanks and engines.
In 2010, the company won a contract with BP America to help clean up the 210 million gallons of oil that spilled into the Gulf of Mexico when the Deepwater Horizon oil rig exploded.
Three years later, Garcia focused on operating an Advanced Marine Emissions Control System barge at the ports of Long Beach and Los Angeles. The barge helps ocean-going vessels comply with dockside state regulations by hoisting a cowl over the ship’s chimney, containing their emissions while allowing them to run their engines at the dock.
Such pollution control devices are essential to meet California’s stringent environmental regulations. Updated regulations, scheduled for next year, impose a 90% reduction in emissions from ships.
In 2013, Garcia launched a campaign to operate its barges in the ports of Long Beach and Los Angeles.
He started some of the same establishments as Los Angeles City Attorney Carmen Trutanich, according to a May 2013 LA Weekly story. Garcia chatted regularly with Trutanich at a San Pedro cigar bar, agreed to have his company AEG give the extracurricular organization THE BEST $ 25,000 to help honor a pledge of $ 100,000 that Trutanich promised to make when he broke an earlier promise not to apply for a position. beyond two terms (although City of LA Ethics Board records show only a donation of $ 10,000), and AEG funded $ 50,000 mail for an independent group supporting re-election from Trutanich, LA Weekly reported.
Trutanich ultimately lost his candidacy for the 2013 re-election, and although Port of Los Angeles officials agreed to bring in a barge, it was operated by Clean Air Engineering, Garcia’s competitor.
At the same time, Garcia began distributing campaign contributions to various officials and political candidates in Long Beach, including Congressman Alan Lowenthal, Mayor Robert Garcia (unrelated) and City Councilor Rex Richardson.
But in at least two cases, checks to Mayor Garcia ($ 750) and Richardson ($ 350) were bounced, officials for both campaigns confirmed.
But officials at the Port of Long Beach agreed to work with Advanced Cleanup and even provided $ 2 million in seed money to help test the system.
Shortly after Trutanich’s loss, Advanced Cleanup sued BP America, alleging that it had paid only a small fraction of the $ 4 million it was owed, according to court documents filed in 2014. two companies finally settled two years later.
This was Garcia’s highlight. After extensive testing and evaluation, the California Air Resources Board approved its application to operate the emission control barge in October 2015, and the barge began operating in Long Beach Harbor shortly thereafter.
Garcia called the barge a “game changer in emissions control and air quality” that could remove thousands of tons of pollutants each year, in a press release at the time. Port officials agreed.
“It’s really important to make it available to ships in the port of Long Beach,” said Matt Arms, director of environmental planning for the port.
Good publicity began to arrive shortly after the barge began to operate. The Los Angeles Business Journal profiled it. Grist Magazine even reported that Garcia was planning to operate a fleet of 20 barges.
“We have come to see the heroes of the tech world as creative and educated people who dream of saving our world with their ideas,” Grist reported on March 24, 2016. “Ruben Garcia’s story is irrelevant. like. Born in Mexico, he grew up as an undocumented farm worker, picking onions when he was only 5 years old and never attended college. But Garcia’s remarkable innovations are helping to clean up the shipping industry.
But at the same time, Garcia had stopped paying some bills, according to court records (although they were not specific on why he quit). Just a year after her barge began operations in Long Beach, Judge Christina Snyder tied two previous Advanced creditors to the BP America case and ordered Garcia to pay them. But when Advanced deposited a check for its part of the settlement, it bounced back, according to court documents.
Snyder then found Advanced in contempt and ordered her to pay a fine of $ 250 for each day she was not in compliance with her 2017 order to pay both creditors.
According to Carmen Batriz, one of the creditors, the company never paid these fines. “Ruben Garcia did not appear and did not pay any part of the fine ordered by the court,” she said in a July 13 email. “On that date, the cumulative amount of the court-ordered fine would be $ 310,500.00.”
Regarding the actual settlement with her, Batriz said the company “paid $ 18,944 and did not pay the balance of the settlement amount of $ 33,000.”
A June 2021 court file from Garcia’s attorney lists more than 50 creditors, including investors, various tax collectors, lawyers and utilities. (One of the investors suing Garcia in bankruptcy court is Pacific6 Environmental LLC, which is a subsidiary of Pacific6, owner of Pacific Community Media, the parent company of the Long Beach Post).
A March bankruptcy filing by Signal Hill-based GOLO Inc. estimated “well over $ 70 million” in unpaid debts for Garcia’s companies over the past two decades. The documents describe Garcia’s businesses as something akin to a Ponzi scheme.
“But instead of running and growing businesses with prudence and honesty, Garcia is holding them open as a bait to attract ever more loans and investments from existing and new lenders and investors,” the file said. GOLO. “Over the years, debtors, with Garcia as their brains, have sucked capital at an incredible rate, but collectively they have offered creditors and investors next to nothing in return.”
The GOLO case further alleged that Garcia had “dazzled” a wide variety of investors, not all of whom were wealthy, “with his illusory promises of if only he had an immediate injection of short-term cash to meet his needs. to impending operational needs, its business ventures would be immensely successful and help solve thorny environmental problems and benefit the community and mankind.
As for Garcia’s emissions control barge in Long Beach Harbor, which is currently inactive at Pier T126, port officials say, its clearance was revoked by the Air Resources Board late last year. .
Their reason was that as early as 2016, board officials noted that Garcia’s company was sending insufficient data on how the barge was reducing nitrogen oxide emissions, meaning the Air Resources Board was “unable to confirm the efficient operation” of the barge, according to the board of directors. records. Council officials were also concerned about Garcia’s inability to explain an equipment failure in 2017 that could have degraded the barge’s emission control capabilities.
These concerns got to the heart of why the barge existed in the first place: The Air Resources Board cleared it as a compliance measure, a way to help freighters clean up their toxic emissions. But if the barge was not cleaning up the emissions effectively, there was no reason for it to be in port.
Council records show that Garcia and various council officials exchanged correspondence about it for four years, from 2017 to mid-2020, but Garcia never sent the required data to their satisfaction. At the end of 2020, board officials asked Garcia to shut down the barge.
Port officials have pledged to put a similar barge into service soon, from Garcia or another operator.
A spokeswoman for the Air Resources Board confirmed that Garcia had requested the restart of barge operations, but declined to comment on the process due to commercial confidentiality concerns. Garcia’s bankruptcy case, in which he could owe creditors up to $ 70 million, continues.
Editor’s Note: Originally this story distorted the nature of Garcia’s $ 25,000 non-campaign donation regarding Carmen Trutanich as well as other independent campaign donations on behalf of Trutanich from one of Garcia’s companies , and has been corrected.