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Profiteers Plunder California’s Public Water Resources, New Report Shows

Dec. 19, 2003

Profiteers Plunder California’s Public Water Resources, New Report Shows

Free From Public Oversight, Agribusiness and Development Corporations Have Grabbed Too Much Control

OAKLAND, Calif. – Through deals shrouded from public scrutiny, private and semi-private entities have taken control of some of California’s most vital water resources, a new Public Citizen report shows. The report, Water Heist: How Corporations are Cashing in on California’s Water, shows how the private control of water has enriched and empowered a few, to the detriment of the environment and consumers throughout California.

Control of the Kern Water Bank, an underground water storage facility in the Southern Central Valley that can store a million acre-feet of water (enough to serve 2 million households for one year), illustrates the problem. The water bank is an integral part of California’s public water system and could be used to store water for emergencies or drought. It also is a gold mine for agribusiness and development corporations. Although ostensibly controlled partially by public water districts, the Kern Water Bank is effectively controlled by private interests.

The Kern Water Bank Authority is run out of the offices of a private company – Paramount Farming Co., owned by Roll International Corp., a Los Angeles-based holding company. Paramount owns 48 percent of the water bank and has built an almond and pistachio empire during the past 20 years. Company officials say they are involved in the Kern Water Bank to ensure a water supply for their crops, but Paramount’s vice president has stated that the company has always considered using the bank to sell water to the city of Los Angeles. Paramount also has ties to water contracts with Newhall Land and Farming Co., a huge developer that is planning to build a “master-planned” city in northern Los Angeles County.

Through its control of the water bank, Paramount ensures that it will have ample water for its massive farms and to feed new construction – and sprawl – in Southern California.

“The Kern Water Bank is a priceless public resource, but under corporate control, the bottom line will always be about price and profit, not the public interest,” said Wenonah Hauter, director of Public Citizen’s Water-for-All campaign. “Access to clean and affordable water is a right that every American should be granted. The Kern Bank’s giveaway scheme corrupts our democratic process.”

Roll International is owned and directed by Stewart Resnick, a well-known Los Angeles figure and major donor to former Gov. Gray Davis and his anti-recall committees. In 1998, then-Gov. Davis appointed Resnick as co-chair of his “agriculture and water transition group.” Resnick’s co-chair was Keith Brackpool, CEO of Cadiz, Inc., which pushed a controversial plan in 2002 to store and mine water in the Mojave Desert.


Public Citizen’s report also reveals that major water policy decisions, some of which violate California’s state constitution, have been made behind closed doors. In 1994, the state’s largest water contractors and the Department of Water Resources (DWR) developed the Monterey Amendments, deregulating the state’s water projects and permitting the giveaway of the formerly public Kern Water Bank.

“This water giveaway is unconstitutional,” said John Gibler, author of the report and researcher in Public Citizen’s Oakland office. “California’s constitution and Water Code state that water is a public good, held in trust by the state to ensure the greatest benefit to the public.”

Another result of the Monterey Amendments was to permit “paper water,” so private water contractors can now buy and sell contracts for water that doesn’t exist. In July, private and public water interests met again and reached an agreement, called the Napa Proposition, which will permit further private control of state and federal water resources, to the benefit of agribusinesses, developers and water marketing barons.

Click here to read the report, Water Heist: How Corporations are Cashing in on California’s Water.