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Water Wars / October 25, 2011

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.

And so here we are, in the era of mass unemployment, the peripheral canal is the answer to our problems: “Delta water tunnel could bring 129K jobs, study says,” reported Stockton’s The Record a few weeks back:

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?

Yasha Levine is an editor of The eXiled. You can reach him at levine [at] exiledonline.com Want to know more? Check out some of my California Water Wars reporting out of Victorville, California:

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19 Comments

Add your own

  • 1. atlas_lied  |  October 25th, 2011 at 8:14 am

    I wonder when the neoliberal/Koch whore/useful idiots will show up and talk about welfare queens and killing infidels?

    The HSR is another pathetic story. It’s actually needed, but right now it’s supposedly too destructive to be built.

  • 2. wengler  |  October 25th, 2011 at 1:12 pm

    Sometimes I think of all the Soviet crimes against the environment borne out of stupid decisions like the agricultural canals that destroyed the Aral Sea or the morass known as Baku.

    Then I look at the US.

    It doesn’t take a totalitarian one-party state to screw shit up. Just a bunch of greedy, self-interested corrupt people all huddled around a table, figuring how best to enrich themselves while screwing the rest.

  • 3. josh holland  |  October 25th, 2011 at 7:03 pm

    Speaking of Kochsuckers, I’m still so bothered every minute of my life that you guys nailed John Tyner as a Bircher who faked the “don’t touch my junk” anti-TSA thing (which I, Kochtard, bought into hook line and sinker), and I’m so annoyed that all the junktards since who’ve claimed to be victims of TSA oppression are Kardashians, or Miss USAtards, or Meg McLain junktards, that the very second something happens that finally looks like it might be a real example of TSA naughtiness–you know, I’ll be sure to send it to you! It’ll be the greatest day of my life!

    Meantime, check out Radley Balko shilling for Big Tobacco companies here, pretty awesome how he’s all about freedom and liberty:

    http://www.tobacco.org/news/214588.html

  • 4. Grimgrin  |  October 25th, 2011 at 7:20 pm

    These fuckers have a very long history, and VERY good win loss record.

  • 5. Mike  |  October 25th, 2011 at 8:28 pm

    California!

    Über Alles!

  • 6. Cokzone  |  October 25th, 2011 at 8:46 pm

    Thanks, Yasha. Will be sure to snap some photos for you when I’m down in the SJ valley again. The ag barons are unbelievable.

  • 7. Anarchy Wolf  |  October 25th, 2011 at 10:24 pm

    California uber alles indeed. I dunno how to make an umlaut over the U.

  • 8. Jedi Mind Trick  |  October 26th, 2011 at 12:41 am

    Good lord. Right under peoples noses like that.

    Of course the people who object to such shady dealings will be mocked in the media, if even given coverage.

    Meanwhile, “Free Market Solutions” will be adding more and more mud to the water to increase profits. Thank god for the libertarian fuckwits and their innovative ways to screw over everybody.

  • 9. Toni M.  |  October 26th, 2011 at 3:22 am

    Soon the Fremen will rise from the sand, to strike at the Harkonnen water-hoarders.

  • 10. Martin Finnucane  |  October 26th, 2011 at 4:36 am

    @Jedi

    The ones fucking us over are not the libertards. The ones fucking us over are the billionaire overlords of the libertards, who secretly laugh at their ‘tard water carriers. I suspect that the Koch bro.s and all that are not really personally invested in libertardian ideology, and I’m sure CA’s neo-feudal water barons are not.

    Libertardianism is free market ideology for the angry, stupid, white peasant masses (i.e., “real Americans”). It is a tool for out neo-feudal masters, who don’t really give a shit about Von Mises and Hayek and Ayn Rand, except to the extent that the gods of libertardianism can be used as accessories in the on-going rape of America.

  • 11. cassandra  |  October 26th, 2011 at 6:38 am

    we’re doomed aren’t we

    they will just keep winning and we will just keep talking it and things will keep getting uglier and crueler and nastier until we die

    shit fuck shit

  • 12. Hosswire  |  October 26th, 2011 at 10:24 am

    Thank you, Yasha. I think about these smart & well-researched articles every time I drive up & down the 5 and read the retarded “Congress-Created Drought” and “Where Water Flows, Food Grows” billboards the ag barons post on their freeway-facing property.

  • 13. Edmund Dorkey and Anne Applebutt  |  October 26th, 2011 at 10:39 am

    Dear ExHoles,

    Hows about them apples?

    Edmund Dorkey and Anne Applebutt, “Chinatown”

  • 14. my talkative ringpiece  |  October 27th, 2011 at 4:22 pm

    Two parties but ONE oligarchy.

  • 15. Ro  |  October 28th, 2011 at 9:26 am

    Thanks for bringing this out into the open, Yasha. There is NOTHING more critical to life than water, and who controls water controls life. The oligarchs know this, and if we let them control our water supply then we are in deep deep trouble. This is probably the most important story anybody can read today. The sad part is that since water supply is not a problem for most people right now they take it for granted and as a result don’t realize what is at stake.

  • 16. radii  |  October 28th, 2011 at 12:11 pm

    don’t forget the israeli connection: people such as POM owners are staunch zionists who want to send even more U.S. taxpayer money to the apartheid murder state

  • 17. josh holland  |  October 31st, 2011 at 9:35 pm

    You edit me now but one day I’ll write for you and th…

  • 18. iiiears  |  November 11th, 2011 at 5:39 am

    We need water in the south. Damn the environment full speed ahead. /sad

  • 19. Dieder  |  July 2nd, 2012 at 10:49 pm

    Time for a revolution to restore constitutional governance,(not that we have ever had it) in California as well as in the rest of the nation! As a US Military Vet I need not leave our borders to find the real enemies of the American People. If real “change” isnt forthcoming and quick the blood in this country will be knee deep ,and those responsible for it wont be the ones blamed by government and media but rather fault will belong to the vested interests behind the same. Millions of Americans are waking up and will hopefully continue to do so ! Much to the distress of oligarchs and their lackies.. What they fail to realize in the police state that they have constructed however is they are not only vastly outnumbered, but surrounded as well. As the AEC once said, the chin of liberty much be slapped from time to time with the bags of patriots.


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