When it rains in this border town, toxic goo from Mexican slums and factories flows down the Tijuana River onto U.S. soil. It winds through tidal marshes and ends up in the Pacific Ocean, closing the beach to swimmers and diehard surfers 198 days last year. The U.S. government found a novel fix: pay a private developer an estimated $700 million to build and manage a treatment plant in Tijuana, Mexico. If the plant sells recycled water to thirsty Mexican factories, U.S. taxpayers will get some of their money back. Ground has not yet broken and the 7-year-old agreement between...