Skip to comments.California: Davis adviser's influence shows water and money can mix?
Posted on 06/02/2002 4:01:00 PM PDT by Ernest_at_the_Beach
SACRAMENTO -- A British-born water mogul who has directed more than $250,000 to Gov. Gray Davis is drawing conflict of interest complaints as he pushes a massive Southern California water project that could earn his company half a billion dollars over 50 years.
Davis has turned to Keith Brackpool repeatedly for advice on water issues, and the governor's aides have asked him to weigh in on key policymaking sessions, even when Brackpool's companies stood to gain.
An early Davis supporter, Brackpool is a prominent example of the entrepreneurs who have contributed heavily to Davis and been rewarded with high-profile appointments and other assistance.
Brackpool's Cadiz Inc. is currently shepherding his biggest project through local and federal bureaucracies -- a plan to pump diverted Colorado River water into an aquifer under the Mojave Desert to serve nearly 17 million people in Southern California. Because the project would also involve selling the existing groundwater supply, it is opposed by some environmentalists.
Davis and Brackpool, through their aides, denied Brackpool's money and access to the governor unduly influenced water decisions -- for instance, Davis has no direct authority over the Cadiz project.
"He's been a longtime supporter of the governor, and beyond that you guys are going to say what you're going to say," said Davis campaign spokesman Roger Salazar.
Cadiz spokeswoman Wendy Mitchell said "the facts don't back up that we've benefitted -- none of our interests have benefitted."
However, others say Davis has been overly reliant on Brackpool.
"I think it's more than questionable, it's an inappropriate use of private interest to influence our public decisions. That shouldn't happen," said Thomas Graff, California regional director for Environmental Defense.
Brackpool led a group that spent $2 million promoting a $1.9 billion water bond package approved by voters in 2000. And when it came time to distribute the money, he consulted with a top Davis aide to delay a construction project that could have affected a Cadiz subsidiary.
The Department of Water Resources staff and a review committee had already recommended fully funding a nearly $2 million water banking grant to the North Kern Water Storage District in Kern County, also home to Bakersfield-based Cadiz subsidiary Sun World International Inc., when department secretary Mary Nichols called Brackpool for his input.
Sun World and other landowners worried the North Kern project would not divert enough water to feed the for-profit water banking projects they had in mind, said North Kern district engineer-manager Dana Munn.
Mitchell disputed Munn's account, saying Brackpool, Sun World's local representative, and other land owners raised concerns about the project even though they stood to benefit from it.
Also denied last year was a $1.4 million project proposed by the United Water Conservation District to recharge water aquifers that serve 300,000 people between Oxnard and Santa Paula.
"It would have looked bad to kill just the one project, so they killed all construction funds," alleged Dana Wisehart, that district's general manager.
"I felt it was a huge conflict of interest for the governor to have this man, who has a huge groundwater banking project himself, to be giving advice to him or anyone else on water banking grants," Wisehart added.
Nichols took Brackpool's advice to wait a year and consider a wider selection of construction-ready projects, said Resources Agency spokesman Stanley Young. He said she didn't consider that Brackpool might have a conflict of interest.
"The secretary valued his advice, and since he was an important part of putting the water bond together, as a representative of the water community," said Young, adding that "other sources" also were recommending a delay.
As for Cadiz, "We didn't make any calls" -- literally or figuratively, said Mitchell. The phone call came from Nichols, and it was Nichols who made the decision on funding, she said.
Brackpool has been stirring a mix of water, money and political influence for years.
He is a founder, president and chief executive officer of Cadiz, which contributed $133,000 to Davis's first gubernatorial campaign and $128,605 since then, campaign records show.
He's loaned his company's airplane to the governor and Nichols, and hosted fund-raisers at the country club he owns in Manhattan Beach.
When Davis was elected governor in 1998, he named Brackpool co-chairman of his transition team committee on agriculture and water issues. Davis later appointed Brackpool to his Commission on Building for the 21st Century, alongside other donors like developer Eli Broad ($115,000 to Davis in 2000-01), hotel and casino builder Ronald Tutor ($177,000) and investor Ron Burkle ($243,000).
The commission's final report contained a recommendation -- suggested by a Davis aide, according to meeting minutes -- that federal agencies delegate environmental protection to California, and that the state's Environmental Quality Act be "streamlined" to speed water projects.
The U.S. Bureau of Land Management most recently has delayed Cadiz' project by taking longer than expected to consider the environmental impact of drawing groundwater from under the Mojave desert.
Cadiz' partner is the Metropolitan Water District of Southern California, a quasi-governmental agency that sells water to companies serving Los Angeles, Orange, San Diego, Riverside, San Bernardino and Ventura counties.
District spokesman Adan Ortega said the water board is awaiting the BLM's decision and hopes to vote on the project this summer.
While water banking projects qualify for funding under the terms of the bond, Cadiz and the water district are paying the $150 million construction costs without seeking bond money, Ortega said.
Brackpool's co-chair, Michael Paparian, formerly of the Sierra Club and now on the California Integrated Waste Management Board, said "it didn't seem like he was pushing a personal agenda" on the commission.
Brackpool's company has benefited in other ways from his political connections and contributions to prominent Democrats including Hillary and Bill Clinton.
Brackpool accompanied Davis on a 1999 trade mission to the Middle East, after securing a $300 million investment from a Saudi prince for a Sun World project to divert Nile River water for irrigation.
In March, Cadiz named former Interior Secretary Bruce Babbitt to head water development projects in the Middle East. Babbitt's agency had been involved in negotiations over CalFed -- a joint federal-state effort to restore the fragile Sacramento-San Joaquin Delta and provide a reliable supply of water for farmers, nature and municipal water users, in which Brackpool participated -- and over California's overuse of Colorado River water, which is helping prompt interest in Cadiz' water banking project.
"It certainly looks bad after the fact that Brackpool and Babbitt negotiated the plan, and then Babbitt went to work for Brackpool," Graff said.
Despite repeated requests, Brackpool wasn't available to comment personally because he has been in the Middle East on business, said Cadiz spokeswoman Mitchell.
Mark Watton, formerly on the Metropolitan Water District's board, had worried that Cadiz' political connections would prompt the board to accept the Santa Monica-based firm's proposal too hastily.
"We all knew the governor was flying around in Cadiz' plane and all those things," Watton said.
"I never thought Brackpool or Cadiz would do anything on the sly, because they had too much to lose. I was more concerned they would dazzle the staff and then we'd have an Oracle deal," he said, referring to the Davis administration's controversy over a $95 million, no-bid computer software contract.
Brackpool and his staff lobbied hard but fairly, said Watton, adding that the district did its homework to make sure the Cadiz project will, "pardon the pun, hold water."
Cadiz , this has a history!
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calgov2002: for new calgov2002 articles.
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Of course for Gov. Dufus this is not conflict of interests, but a confluence of interests, therefore he has not broken any laws....
They want influence and contracts, I want their "contributions"... no conflict here...
Saudi Financier To Bail Out Cadiz
Cadiz Inc., an agribusiness company that plans to store and sell water from a Mojave desert aquifer, is seeking a bailout from a Saudi prince to stay afloat. The investor is the Kingdom Agricultural Development Company (KADCO), a private Egyptian company controlled by Prince Alwaleed bin Talal bin Abdul Aziz Alsaud, the member of the Saudi royal family whose $10 million contribution for post-September 11 reconstruction was rejected by former New York Mayor Rudy Giuliani.
The Cadiz project would pump water from the Colorado River during wet years, store it in an underground aquifer, and sell it along with native groundwater to Los Angeles during dry years. Environmental groups, members of the scientific community, and native rights groups oppose the Cadiz project on grounds that the rates of water extraction that Cadiz plans are unsustainable. The project must be approved by the Metropolitan Water District of Southern California (MWD) board of directors.
The MWD board vote is subject to strong political pressure. Keith Brackpool, campaign contributor to Governor Gray Davis and currently serving as Davis' water advisor, is the chairman and founder of Cadiz, Inc. Brackpool's relationship with the governor is solid enough for Brackpool to substitute for Davis at public speaking events.
Cadiz, however, is on shaky financial footing, with significantly more debt than assets. Those assets are owned primarily by Sun World International Inc., a wholly owned subsidiary of Cadiz, making Cadiz and Sun World virtually the same enterprise.
A Cadiz press release dated January 16 reveals that Cadiz and KADCO reached an initial agreement on that date under which KADCO would buy 49.75 percent of Sun World. Cadiz and its chairman would retain Sun World's remaining 50.25 percent, along with putative control of the project.
The deal between KADCO and Cadiz won't be sealed until April 30, according to Cadiz.
Environmentalists were quick to point out the risk involved in embarking on such a massive development project when the company backing the project is in financial straits.
"This demonstrates the inadequacy of this company as a reliable or stable partner for the MWD," said Jane Kelly of the California office of Public Citizen. "The investment Cadiz is seeking should alarm the MWD board."
Clock Ticking on Cadiz Project
Activist group Public Citizen is calling on federal officials to give the public a greater opportunity to evaluate a massive water project in Californias Mojave Desert that could dry out natural springs, create dust bowls and put threatened animals and plants - including the bighorn sheep, golden eagle and desert tortoise - at greater risk of extinction. The project has been criticized on numerous grounds, including the close relationship between California Gov. Gray Davis and the CEO of the corporation that stands to earn a half billion dollars from the project.
"This project is the mother of all bad ideas," said Jane Kelly, director of Public Citizens California office. "It is the standard against which flawed natural resource management should be judged."
The US Bureau of Land Management (BLM), a division of the US Department of Interior, has given the public until Nov. 5 to review and comment on a nearly foot-thick environmental study of the project. Public Citizen is asking the BLM to extend the comment period by 90 days and to release details about how depletion of groundwater will be prevented.
Under the proposed arrangement, fruit growing company Cadiz Inc., which owns land atop an aquifer in the Mojave Desert, could sell as much as 60,000 acre-feet of native groundwater per year - 20 billion gallons - to the Metropolitan Water District of Southern California (MWD), which serves 17 million people, including the population of Los Angeles. MWD is in search of new sources of water because California must reduce its take of Colorado River water, on which the district relies heavily.
In addition to selling the water, the company plans to use the site to store "surplus" water from the Colorado River, which is already so depleted that it no longer reaches the Pacific Ocean. The project alarms many ecologists and conservationists, who say this would devastate groundwater resources, dry out springs and wells, jeopardize threatened species and result in dust bowls on the scale of Owens Valley. The 35-mile pipeline and elaborate infrastructure that Cadiz wants to build could further damage habitats of imperiled animals and plants. As if that wisn't enough, testing in 2000 disclosed that the aquifer's water contains high levels of carcinogenic chromium 6. Chromium 6 is the toxic chemical found by activist Erin Brockovich in groundwater in Hinkley, a Mojave Desert town one hundred miles west of Cadiz.
Sacramento insiders have raised questions about the relationship between Cadiz CEO Keith Brackpool and Governor Gray Davis, who has the power to shape the outcome of the project. Brackpool was a leading contributor to Davis gubernatorial campaign. After scandal forced Davis to sever ties with representative Gary Condit, Central Valley politico and the Governor's longtime water policy maven, Brackpool has become Davis' leading water advisor.
In addition, John "Rusty" Areias, Director of the State Parks and Recreation Department, is a former Blackpool consultant and lobbyist. Providence Mountains State Park, a botanically diverse wildland astride the Providence Mountains, lies at the northern edge of the Cadiz aquifer. The effect of a potential aquifer drawdown on groundwater in the Providence Mountains is unknown.
Disruption of the water cycle in ranges closer to the project site is more certain. The Marble Mountains near Amboy sit atop the center of the aquifer; one of the Mojave's largest herds of bighorn sheep inhabits the Marbles' Trilobite Wilderness, and would likely perish if the mountains' springs dry up. Deep-rooted plants that tap into the native water table, known as phreatophytes, will also suffer if the aquifer is depleted.
Parts of the Cadiz aquifer underly the 25 million-acre California Desert Conservation Area, established by an act of Congress in 1980 "to ensure as nearly as humanly possible [that] the recognition that the California Desert is not a wasteland but a precious public resource."
Public Citizen activists maintain the EIR sidesteps the issue of the rate at which the Cadiz aquifer will be refilled by natural sources. The US Geological Survey has questioned Cadizs estimates. And the BLM has failed to define its authority over the project, thus shielding the nature and depth of its oversight role from public review. Limited BLM oversight would put the MWD and Cadiz in the position of policing themselves.
"To avoid an inherent conflict of interest, federal officials must take an active role to ensure that the taxpayers will not be ripped off," Kelly said. "Federal lands have already been plundered for their timber and minerals. Water should not be next on the list."
CADIZ LAND COMPANY, INC., Plaintiff and Appellant,
RAIL CYCLE, L.P., et al., Defendants and Respondents.
CADIZ LAND COMPANY, INC., Plaintiff and Respondent,
COUNTY OF SAN BERNARDIONO et al., Defendants and Appellants.
No. E024373., No. E024532.
Court of Appeal, Fourth District, Division 2, California.
Aug. 18, 2000.
An agricultural company filed an action challenging, under the California Environmental Quality Act (Pub. Resources Code, 21000 et seq.) (CEQA), a county's certification of an environmental impact report (EIR) and related approvals of a landfill project located in a desert area within the vicinity of plaintiff's agricultural operations, alleging that the landfill would have adverse impacts on those operations and would contaminate the groundwater. Plaintiff used the groundwater in an aquifer underlying the landfill and its own land for its agricultural operations, and plaintiff also intended to extract the groundwater and sell it to a water agency. The trial court entered judgment in favor of the county and the proposed operator of the landfill. (Superior Court of San Bernardino County, No. BCV02340, Carl E. Davis, Judge. [FN*] )
FN* Retired judge of the San Bernardino Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.
The Court of Appeal reversed, with directions to issue a writ of mandate setting aside the county's decision to certify the EIR and related trial court decisions that were contingent upon the certification of the EIR. The court held that the EIR was not in compliance with CEQA. Although it mentioned that an aquifer containing potable water underlay the landfill site, it did not discuss the volume of water contained in the aquifer or its size, which was a valuable and relatively scarce resource in the desert region. Although the EIR discussed factors such as groundwater recharge, groundwater downgradient, groundwater flow, change to slope of the water table due to pumping, risk of contamination, overdraft, projected drawdown, groundwater velocity, and cone of depression location, the failure to discuss the volume of groundwater in the aquifer constituted prejudicial error and invalidated the *75 certification of the EIR. The EIR did not provide a sufficient description of the environmental setting or adequate information for the public and governmental agencies to evaluate whether the landfill presented a significant adverse impact on the groundwater contained in the aquifer. In order to weigh and evaluate the risk of groundwater contamination, the volume of water subject to contamination was required. The court held that the other portions of the EIR were adequate, and disagreement among experts concerning certain conclusions did not constitute grounds for overturning the EIR. (Opinion by Gaut, J., with McKinster, Acting P. J., and Ward, J., concurring.)
How does he stay out of jail?
There are a whole lot of hits!
Through a complex series of land exchanges, Catellus Corporation, a subsidiary of Santa Fe Pacific, will receive land that contains some of the richest gold deposits in the world.
This is the project mentioned above:
I think this makes sense!
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