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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."
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