Looks like it’s official: Come 2012, California governor Jerry Brown is gonna try to trick voters into approving one of the most brazen water heists in American history. Gov. Brown’s plan would give control over a huge chunk of Northern California’s water supply to a handful of billionaire Central Valley plantation owners and Southern California real estate developers, allowing them to use even more of the state’s over-tapped water supply, a shared public resource, as a private commodity that they can then turn around and sell on the open market for huge easy profits.
While I took my eye off the California water beat the past few months, the Sacramento Bee reported this shocking detail, buried in a story on Brown’s plan to build a high speed rail:
The rail project is one of two major infrastructure projects on Brown’s agenda. He said today that he will have a plan for the other project – a peripheral canal or other way to move water through or around the Delta – within a year.
What’s a “peripheral canal”? It’s a massive, multi-billion dollar aqueduct that has been a dream-project of California’s oligarchy for a long, long time. The reason: it would give a few billionaire farmers and real estate developers—the two most powerful interests in the state—a new and exclusive way to tap into Northern California’s vast water supply, and pipe it down south via the 700-mile California Aqueduct, handing an unprecedented amount of water-commodity wealth to the state’s megarich. On top of expanding their farm holdings and fueling future real estate developments in the southlands, the peripheral canal will be a key part of a long-term strategy by powerful interests to lay down infrastructure that would enable the creation of a full-fledged “water market” and allow these interests to privatize and sell state water to the highest bidder on the open market, just like any other commodity—and they’d get ahold of this commodity all at the taxpayers’ expense.
It’s a scam of such monumental proportions that even Enron’s deregulation con artists were eager to get in on the action, back when they set up a water trading subsidiary in California at the height of the dot-com bubble.
PPIC, a think tank funded by the billionaire Bechtel family, recommends building the peripheral canal
I’ve written about a few of the water marketing schemes currently available to California’s billionaire farmers and assorted water interests, many of which include nothing more than buying water at subsidized rates from the state, then turning around and selling it back to a different government agency for a massive profit. Here’s what I wrote about in 2009:
Take the deal that went down this summer between a farmer with a stake in the Kern bank and a McTractHome paradise in the Mojave Desert, 100 miles east of Los Angeles. For roughly $73 million, the Mojave Water Agency acquired permanent rights to 14,000 acre-feet of water pumped out of the Sacramento Delta and delivered via the State Aqueduct, enough water to flood an area the size of San Francisco six inches deep or hydrate up to 30,000 families for a whole year.
The farmer selling the water was not really a “farmer” in the poor, homesteading, buck-toothed sense of the word, but a private Bay Area-based company called Sandridge Partners owned by the Vidovich family. In addition to running a lucrative cotton and almond growing operation in the heart of the Central Valley, the Vidoviches also control a small real estate empire in the Silicon Valley, building and managing estate developments: office complexes, condominiums, mobile home parks, hotels and shopping centers.
John Vidovich, the current patriarch of the family business, and his wife Lydia live in an $11.4 million Los Altos Hills home. Hilly, wooded and overlooking the bay just south of San Francisco, it’s one of the ritziest places to live in Northern California and the 8th most expensive zip code in America.
Despite — or maybe because of — the family’s extreme wealth, Sandridge Partners is one of the top welfare queen-farmers in the country. In 2007, it received $1 million in federal farm subsidies, more than any other farmer that year, raking in an additional $6.8 million between 1995 and 2006…But their $73-million water deal shows that farm subsidies aren’t the only, or even the most, lucrative handout that has the Vidoviches living well. The money paid out via farm subsidies pale in comparison to the massive profits that can be reaped from simply reselling the heavily taxpayer subsidized water they receive from the state.
…Just look at these profit margins: these days, Central Valley farmers buy water from California’s Department of Water Resources for a heavily-subsidized $100 to $500 per acre-foot, while city slickers in San Francisco pay around $8,500 for the same water. With this kind of discount, Vidoviches could score a ten- to fifty-fold spread on their purchase-to-sale price. Even if they paid the maximum price of $500 per acre-foot, the water they sold to the Mojave Desert for $73 million would have only cost them $7 million. That’s $66 million in pure profit, and all they have to do is let a couple of hundred acres of almond groves wither and let California taxpayers, their ritzy Los Altos Hills neighbors included, fill up their bank accounts.
With the peripheral canal, the John Vidoviches of California would be able to rip off residents and taxpayers on a bigger scale than ever before. So it’s not surprising that, over the years, they’ve made several attempts to get the thing built. Hell, even Jerry Brown is no stranger to the sleazy scheme. His father, Governor Pat Brown, was responsible for laying down the original California Aqueduct (now called “Governor Edmund G. Brown California Aqueduct”), which the peripheral canal would feed into, more than 50 years ago.
Jerry tried to push his father’s plan to completion back in the late 70s and early 80s, during his first term as California governor. But he failed after wealthy Central Valley farmers threw their support behind a coalition of environmentalists and Northern California water districts to defeat the project. It’s not that the billionaire farmers were against the peripheral canal — they simply feared that Southern California real estate developers were trying to pull a fast one on them and cut them out of the water racket.
The next big push came nearly 30 years later, with Arnold Schwarzenegger spending his entire last term as California governor trying to make the peripheral canal work for everyone, with ample help from both the Democrats and Republicans. Here’s how I described it back in late 2009:
Governor Schwarzenegger has been trying to push the project through California’s legislature … and has received ample support from both sides of the isle. In September, Democratic Senator Dianne Feinstein backed the governor and badgered the Obama administration to step in and help California’s struggling farmers…That same month, second-rate FOX news anchor Sean Hannity jetted to Fresno to lead an AstroTurf campaign — complete with paid Latino “protesters” and funded by the PR firm Burson-Marsteller, which has done work for a wide range of evil clients, from the tobacco industry to Blackwater to the junta in Argentina — and push for exactly the same thing.
It looked like Arnold had the project in the bag. California voters were primed with years of unrelenting drought hysteria that predicted imminent doom and total collapse of agriculture in the state unless the peripheral canal was built. The state legislature lashed together a $12 billion bond package, confident that it would pass if put to a statewide vote in 2011. But just as Arnold was getting ready for an easy victory, GAIA rained on his billionaire parade, dumping historic amounts of water on California that wiped out the state’s drought in just a matter of months, undercutting the entire “drought” argument for building the pricey canal. California pols had no choice but to table the peripheral-canal bond issue until the 2012 elections, and to hope that they’d be able to come up with a new PR strategy next year.
Drilling large tunnels to divert water around the delta would create more than 129,000 jobs, almost all of them during the seven-year construction period, according to a recent analysis.
The report by a University of California at Berkeley economist does not examine how the peripheral canal or tunnel plan might create or destroy jobs in other ways, such as the proposed conversion of tens of thousands of acres of delta farmland to wetland habitat.
It is not the full cost-benefit analysis that some observers have called for before the Bay Delta Conservation Plan is put into action…
Terry Erlewine, general manager of the State Water Contractors, said that beyond the long-term economic benefit of protecting the state’s water supply, the jobs report shows “clear immediate benefits.”
“Investing in new conveyance will put tens of thousands of Californians back to work during the seven-year construction phase,” he said…
Sunding’s analysis considers a large and small tunnel. His estimates include not only direct construction jobs, but also indirect jobs such as the production of steel and concrete. His report assumes jobs will be created new hires spend their earnings.
Of the 129,000-plus jobs, more than 50,000 would be in San Joaquin County.
Today, the peripheral canal—or “delta water tunnel” as they’re calling it—is no longer about saving poor California “small farmers” (who don’t really exist), nor is it about rescuing millions of water-starved Southern Californians from death by dehydration. It’s about jobs, jobs, jobs, and recharging the economy with a shovel-ready public works project. So what if it costs $12 billion (not including interest and financing charges), privatizes a good chunk of California’s water, enriches a handful of billionaires at taxpayer expense and only creates a few temporary construction jobs?
- The Story of How Beverley Hills Billionaire Farmers Stewart and Lynda Resnick Have Privatized California’s Water Supply
- Billionaires Scheme to Pull Off Katrina-Style Wealth Transfer That Could Destroy California
- Billionaire Thugs Plot to Steal California’s Water and Everything They Tell You is a Lie…
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