How Limousine Liberals, Water Oligarchs and Even Sean Hannity Are

[ensho]

Hijacking Our Water Supply


http://www.alternet.org/story/144020/


A group of water oligarchs engineered a disastrous privatization scheme to make a fortune out of California's most precious natural resource.


A group of water oligarchs in California have engineered a disastrous deregulation and privatization scheme. And they've pulled in hundreds of millions of taxpayer dollars without causing much public outrage. The amount of power and control they wield over California's most precious resource, water, should shock and frighten us -- and it would, if more people were aware of it. But here is the scary thing: They are plotting to gain an even larger share of California's increasingly-scarce, over-tapped water supply, which will surely lead to shortages, higher prices and untold destruction to California's environment.

California is in year three of a fairly nasty dry spell. And some very powerful forces are not letting this mini-crisis go to waste, fiercely lobbying Governor Schwarzenegger and Senator Dianne Feinstein, paying off corporate shills like Fox News' Sean Hannity and capitalizing on people's fear of drought to push a massive waterworks project that will pump more water, build more dams and keep sucking the state's rivers dry. The fearmongering schtick goes like this: California is on the brink of a water crisis of cataclysmic proportions, with a life-or-death struggle just around the corner, pitting small farmers who want to save their livelihood against big city elitists who care more about the environment than they do about American jobs. But in reality, this drought hysteria is nothing more than political theatrics, a scare tactic backed by big agribusiness to strong-arm California voters into building a multi-billion dollar system of dams and canals that would not really help small farmers -- of which there are very few anyway -- but would deliver more water to corporations, subsidize their landholdings, fuel real estate development and enable large-scale water privatization. At its core, it is a war waged for water by California's megarich on everyone else.

The leader of these recent water privatization efforts in California is a Beverly Hills billionaire named Stewart Resnick. Stewart and his wife, Lynda Resnick, own Roll International Corporation, a private umbrella company that controls the flowers-by-wire company Teleflora, Fiji Water, Pom Wonderful, pesticide manufacturer Suterra and Paramount Agribusiness, the largest farming company in America and the largest pistachio and almond producer in the world. Roll Corp. was ranked #246 on Forbes' list of America's largest private companies in 2008 and had an estimated revenue of $1.98 billion in 2007.

They are a limousine liberal power couple. Hyperactive in politics, business and philanthropy, the two raise huge amounts of cash for the Democratic party, donate to the arts, support education and hobnob with influential progressives like Arianna Huffington and the anti-global warming activist and producer of An Inconvenient Truth, Laurie David. Stewart Resnick gave over $350,000 to the Gray Davis campaign and various anti-recall groups between 2000 and 2003, a favor Governor Davis returned by appointing Resnick to co-chair his agriculture-water transition team. A shrewd businesswoman, Lynda is credited with single-handedly creating the pomegranate health fad to sell her Pom Wonderful and catapulted Fiji Water to its recent success, one that environmentalists love to hate as was recently documented in Mother Jones by Anna Lenzer.

-snip-

It all comes down to Stewart Resnick's involvement in the creation of a powerful but little-known entity called the Kern County Water Bank -- an underground water storage facility at the center of a plan to bring deregulation to California's most important public utility: water.

-very long snip-
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well, first they screwed Califorians out of electricity money

and now they want to screw them out of water money

its past time the people fought back

[Nikki Stone1]

1. We told you this was coming. Privatized ownership of public utilities includes water.

Please read The Globalization of Poverty and The Shock Doctrine. Then stuff like this won't be a surprise.

[lonestarnot]

5. After water, air.

[Cleita]

7. Apparently the Bush family is involved in this privatization of water scheme

if one is to believe all the rumors about them buying water preserves in Uruguay and all so you just can't blame it all on the Resnicks. There are some real complications here. We have well water ourselves from our local aquifer. I understand though that eminent domain can be used to take the water from us, if it comes to that. It seems that with all the problems that we have in California, we have forgotten to do two things and that is to keep our water in the hands of the commons or the people and our oil as well. It's time to treat our oil as belonging to the people of California just like they do in Alaska, one of the smart things Alaskans have done.

[Nikki Stone1]

8. Not surprised to see the Bushes in anything about stealing public resources

You have hit the nail on the head, and I hope you can find some way of safeguarding your aquifer. My big fear is that multinational corporations will be able, with the help of their stooges in big and little corrupt government, to claim rights to everything, even if it belongs to the people or to one particular person. These are evil, evil people and they want control of every aspect of human life so that no one will be able to live without paying them. It's already starting with this health insurance bill masquerading as health care reform. It is the same playbook. The piratization of education is also along the same lines.

[Le Taz Hot]

2. I have a completely different perspective on this.

L.A. and the Bay area have been STEALING OUR water for decades. We (the farmers) are trying to take some of it back and the Bay Areans are throwing a fit. Tough shit! I don't see these so-called "environmentalists" calling for the restoration of Hetch Hetchy. In fact, every time THAT subject is brought up all of a sudden they're struck deaf and dumb. And news flash, the Central Valley has been screwed out of OUR water for years.

Bullshit propaganda.

[Cleita]

4. The Central Valley gets its water the same way the south does, through

a series of dams and canals that divert water from the rivers that flow from the Sierra Nevada mountains. Both are guilty. I say blow up all the dams and let the rivers from the Sierras flow the way they were meant to into the ocean where nobody can use them. The Central Valley and the Southland can just dry up like it did before Mulholland did his evil water engineering in California creating the behemouth cities in the south. I'm all for it. Let's return California to the way it was before the Spaniards arrived.

On edit: The southland gets its water from the Owens Valley from the eastern side of the Sierras. We aren't stealing the Central Valleys water as is alleged. Read this bit of history: http://www.ladwp.com/ladwp/cms/ladwp001006.jsp. The Central Valley, including Fresno does divert water from the rivers in the Sierras to irrigate it, otherwise it would be a desert.

[Nikki Stone1]

6. Once it's completely privatized, none of this will matter. We'll all be paying through the nose

to water oligarchs. The inequity in water usage was the crack in the state armor that the pirateers are using to piratize a natural resource. I hope your anger keeps you satiated when you can't buy water because it's too expensive. Hey, at least you got to screw SoCal.

[Nikki Stone1]

12. Le Taz, look at how the north in complicit through Piratization:

"...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. (The president of Resnick's Paramount Farms, Joseph MacIlvane, rubs shoulders with the Vidovich family, sharing a post on the board of directors of the Dudley Ranch Water District, a private water district that owns 9.62% the Kern bank, along with John Vidovich.)

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, according to the Environmental Working Group. Known as "direct payments," the subsidies are made each year mostly to growers of corn, wheat, rice and cotton, with payout amounts based on past production, sometimes even regardless of whether the crops are still being grown.

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.

According one state water official, the Vidovich's $5,200 per acre-foot deal with the Mojave Water Agency was nearly double previous record price paid for water in California.

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. .."

[Cleita]

17. There are no poor farmers in the Central Valley. There are thousands of poor farm workers.

The farm land is owned and operated by agricultural mega-corporations. They actually are doing tremendous damage from their farming practices and uses of chemicals that is actually making the residents sick. I worked for a Congressional candidate who was running in my district against the Republican although my district is mostly in Kern County so I learned a bit about the agricultural abuses and bad water and sewage management.

Also, when my husband retired we bought an RV and spent years traveling through California, the Sierras and the various valleys. We saw first hand the dried up rivers and the dams that accomplished that task to divert water to the agricultural once desert known as the Central Valley. Somehow I have a feeling that the agricultural mega-corporations that own the valley will object strenuously if any scam of privatizing large amounts of that water goes through. Also the Department of Water and Power in Los Angeles is government run and owned. I think it will be very hard to privatize it unless we become a feudal state and it is stolen out from under us the people.

[Nikki Stone1]

19. See, this is where I disagree

I think agribusiness will sell out to privatized water schemes if they are allowed to pen sweetheart deals. I also think that my LA, the one island of sanity when it comes to water, will end up being pressured out of the water business. Want my prediction on how this will play out? Clear Channel's KFI will use John and Ken (as they have been using them for all kinds of pet projects) to harp every day on how bad the municipal water system is. KFI will create a small but vocal "grass roots" movement to privatize the water system. I am not joking about this nor am I overestimating the power of "John and Ken", which now reaches from San Diego to Sacramento through Clear Channel affiliates. This show, which is hooked in with the Howard Jarvis people, has been at the forefront of things that are bad for California.

[Cleita]

21. I have to admit as a former LA resident

that the water isn't as sweet tasting as spring water, but actually it's very safe. It tastes bad because of the sulfur content. My well water does too for the same reason. Time to start petitioning the clear channel stations to make them stop the propaganda. In LA there are more liberals than not so if you get all your friends to do so as well they might listen. As an aside, I ran our local clear channel sales reps out of my boss's office who were trying to sell him ad time on their radio stations. I convinced him (an uniformed liberal, unfortunately) that clear channel carried Rush Limbaugh, whom he was familiar with and hated, among all the other hate mongers, and that he shouldn't support them with his money even though it would be for music stations. He listened to me. I have their business card now though and am trying to figure up some tactic to get them to remove Rush and company off the air in my area. I know. I'm David up against Goliath but you have to try.

[Nikki Stone1]

25. You're right. We do have to organize against Clear Channel

I wonder how we could do that in LA.

[Sinti]

15. Water problems for the dry parts of Cali are nothing new

I appreciate the seriousness of the issue. What's new here is the fact that Coca-Cola, Nestle, Danone and similar large corporations are, and will be making an all out effort to privatize water worldwide. They are very serious. I've done some work on this, they intend to sell it to you as the more efficient way of doing business - just like electric.

Disputes such as the one between farmers and city-dwellers can and should be handled at the local level, but privatization affects you both. They will use these disputes to push for their privatization schemes if you let them. They'll be the solution to your problem - a problem they would create if they had the opportunity (and they might). They see water as the new oil - those are the words they used, not mine. All citizens need put aside their differences, get together and fight back against them, then sort out their internal problems.

We're not sure they're not already draining aquifers, and so on, wherever they can in order to promote their new plan. They intend to have people request them to privatize, because the water situation is so bad. At least, this is what they say in private meetings that they know no one is listening to.

[Nikki Stone1]

18. You've hit the nail on the head.

Do you have links to the Coca-Cola etc. Piratization plans?

I've been hearing about this from different sources, but I'd love to see something really informative about the details. Thanks!

[Cleita]

23. Try googling CocaCola and India.

I remember reading something on DU awhile back about how they got the rights to all the fresh water from a certain region in India or maybe Bangladesh and now the locals have to buy the bottled water from them if they want fresh water or just drink the dirty water from gutters.

[Nikki Stone1]

26. OMG

There's evil behind that. And yeah, I think that's the right word for it.

[Sinti]

28. Here's some of what I know so far

This is an exchange from a private meeting - both participants are very well-known multinational private business figures, and only a single, simple exchange in a several day long event.

*****: The reason why -- the only way to upgrade urban infrastructure for water is to price it fairly, fairly is the key word. And in many places around the world, unfortunately, populism does not allow for water to be priced fairly. It is a subsidy for votes. It's a subsidy simply for votes. It's the price we pay for democracy in many parts of Latin America, Eurasia, Middle East, Africa. Every single city mayor, prospective mayor will go and promise that they'll bring the price of water down, or they'll eliminate the price for water.

XXXX: That it's a right.

*****: It's a right, and that is not sustainable. And therefore that's why it is imperative for more cooperation than we have today between government, business, and civil society. That's why we are going to go into one country in Africa, we've selected it with a number of our partners here, and we're going to say, this is the model and we want this -- and we're going to make sure that we can implement it properly with the support of the government, but not only the government, also support of the local governments. Local governments here are the key, not just the central government. And we'll see what success we have. But, I'm certainly cautiously excited about the prospects for success. And we can then replicate that across the continent of Africa. That will be really big if we can.

It won't be successful everywhere, because there's a lot of corruption, there's a lot of populism that goes on. But, if we get -- we have nothing today to speak of as a role model that we can take to other places to show this is how cooperation needs to look. So, certainly cooperation and innovation and infrastructure development are the key. And innovation, as I said, we're working on many technologies. We've invested about $100 million in different companies around the world where there is -- in Latin America, in Israel, in India, different small technologies that will look at different innovation that will help us as we move through this period over the next 10 years.

XXXX: How much of this do you look at as almost a philanthropic point of view?

*****: Zero.

XXXX: A marketing point of view, or a business --

*****: We looked at -- nothing about this is philanthropic, nothing. It is all part of our business model.

other links....remember news is also corporate, they aren't going to tell you anything they don't think you need to know. But here's a few, in most you have to read between the lines. We need to be aware of how they will sell it, and fight back tooth and nail. Dividing us would be the first step - it's what I would do, make us fight us and not them. Historically, they've used this strategy with good results time and time again.

http://www.businessweek.com/mediacenter/podcasts/cover_stories/covercast_06_12_08.htm

http://video.aspeninstitute.org/2009/03/is-water-new-oil.html - remember Aspen Institute is a sidecar to C Street.

http://www.guardian.co.uk/environment/2008/nov/02/water

http://www.corpwatch.org/article.php?id=6670

http://www.solidarity-us.org/node/469

http://docs.google.com/viewer?a=v&q=cache:t6Eq9us4PwoJ:jubileesouth.org/upload1/water_lo.pdf

This is how they'll sell it to you by protecting you from thirst, and polluted water:

http://www.newsdesk.org/archives/003804.html

[Cleita]

3. So we aren't supposed to like liberals now?

Limousine liberals? That's a new one. I guess latte liberals got old. Isn't RushBo infamous for defining liberals with a bunch of code word adjectives like this? Kern County FYI is very red, not liberal. I think the allegations in this article need further scrutiny.

[Nikki Stone1]

9. I think it accurately describes the Resnicks. But read the article further:

You'll see that Kenneth Lay was also involved. Greed know no politics. Money speaks its own language.

"Every large real estate development in California has to prove that a secure water source will be available for the project decades into the future. It was a requirement that, until "paper water" came along, posed a serious hurdle to developers building low-income suburban paradises in the Southern California desert. Water is not a easy resource to come by in the West. Underground sources are being depleted at a record pace and the state's aqueduct system, which pumps rainwater and snow that melts hundreds of miles south, does not have the capacity to support both exponentially growing sprawl and massive farming operations out in the desert. Even if there were an abundance of virgin rivers to dam and redirect, the hundreds of millions of dollars such projects would cost would eat into the fat profit margins of real estate developers and bring suburban sprawl expansion to a crawl. The "paper water" market banished this pesky problem once and for all. From the mid-90s on, real estate developers could satisfy all their hydration needs by shopping for "paper water," meaning that they were able to satisfy planning regulations simply by convincing a city or county to purchase virtual water rights. They weren't securing a real water supply, or even transferring a single ounce. But it didn't matter as long as the water was on their books. ..

...And so, with no warning and negligible media attention, the Monterey Agreements created the strange, new and unregulated "paper water" market, not unlike mortgage-backed securities and other exotic debt instruments dreamed up by Wall Street, if only because the "paper water" market trades in pure fantasy and is built on deception. For decades, California's water authorities have been in denial about the amount of water they can deliver to their customers. Contractually, the state is obligated to deliver 4 million acre-feet a year. (Los Angeles uses roughly 600,000 acre-feet a year). But in reality, the state can only deliver half the water it promises. Which means that half of the "paper water" being traded on the open market simply does not exist, and never has. And everyone who deals in water knows it, too. Naturally, this posed a problem. Why would anyone buy water that didn't exist?

The Monterey Amendments got around this problem by making a few legal alterations that made the state explicitly accountable for its original water contracts, regardless of whether there was water or not. This gave buyers the confidence to fuel real estate developments with non-existent water because the government was contractually obligated to bail them out, rain or shine. Where will the state get that water? Well, it could take it away from small farmers, rural communities and anyone else who is poor and politically unconnected.

California's newly established "paper water" market was a speculator's wet dream. It was a scam opportunity too promising for the deregulation con artists at Enron to pass up. A few years after the Monterey Amendments, Enron apparently took a cue from the Kern bank, set up a water division, bought up a huge chunk of land in the Central Valley that sat atop a natural underground reservoir and started working on a water bank of their own. But Enron's snake oil brain trust was scheming on a bigger, more global level. Still in the grips of the Dot Com Bubble, Enron wanted to spark an Internet-based water trading revolution and launched a site that they hoped would become the etrade.com of H20. Called Azurix, it would function as an "exchange on the Internet for buying, selling, storing and transporting water in the West, hoping to make water a traded commodity much like natural gas or electricity," the Wall Street Journal wrote in 2000.

An e-water market where people could buy, sell, trade and speculate on water like any other tradeable commodity? It was the kind of delusional that only people in the grips of a speculative boom centered on the limitless possibilities of a technological revolution could believe in. To think that you could wake up in Shanghai, check out a few weather forecasts and purchase a few million gallons of California water, aiming to buy wet and sell dry -- a scam built on insane dreams. A few years later, Azurix went belly up.

But while Enron's futuristic vision of water speculation may have come before its time, a more modest version of the water trade was thriving in the Golden State, and it apparently owed it all to one man: Stewart Resnick. ..."

[Cleita]

14. Sorry Nikki but I find the article suspect considering how it is framed.

If they are selling paper water, well it's part of the unregulated climate brought to us first from Governor Ronald Reagan and perpetuated by a series of Republican Governors culminating in Arnold. Maybe it's time to start taking these asses to court for RICO or whatever we can pin on them. California is a failed state and we need to have a revolution to boot the Ken Lays and other crooks out of here permanently.

[Nikki Stone1]

16. I agree with you about what we need: but the people who would do that kind of fighting are

leaving. The exodus of the middle class out of California (especially Southern California) is leaving fewer people who are adequately informed enough and of adequate means enough to fight this stuff. What is left are the poor and undocumented (who won't make waves out of fear), a working class that is making less and less and is unwilling to sacrifice the little they are making, and a very wealthy predator class. This, I think, is the goal of the transnationals: Most people poor, afraid and surveilled; a small but controlling and powerful predator class; and a small class of educated information workers, like professor/researchers and the like, to continue the scientific work that will allow the transnationals to continue controlling things. This last, by the way, is why education needs to be controlled and taken out of public hands.

I think in California, we are seeing the blueprint of the new America, the one the robber barons would have created in the 19th century if Marx's ideas and the Russian revolution hadn't gotten in the way, forcing them to "act nice" and create a more livable society for most Americans over a 40 year period so that they wouldn't rebel here. Now that the competition has been clobbered, there is no reason to be "nice" any more. Russia's gutting in the 1990s, along with the piratization of Eastern Europe, allowed the gloves to come off during the Bush era. Dubya just did openly what had been going on behind the scenes for a long time, behind a stage set of "helpful government." The American people couldn't take open, so now it's being done a little less blatantly.

But we in California can't hide from this. It's going to affect every aspect of our lives directly.

[Cleita]

20. There are other immigrants from Asia and the Middle East whose

children might be willing to even though all the white middle class people are leaving. When I worked at UCLA twenty years ago, the student body was becoming increasingly Asian. Last night I watched the student takeover protests at UCLA on video. (Nothing hardly in the MSM about it.) These were the children of Asian immigrants among others who were tasered and arrested because they managed to keep the UC regents boxed up in a hall where they were raising student fees by 33%. It's time that California stopped this Minute Man nonsense at our border and let the Mexican immigrants come in with work permits so that they can bargain for better wages and not be afraid of challenging the oligarchy.

[Nikki Stone1]

27. I totally agree with you on work permits

This would completely undercut agribusiness too.

[Nikki Stone1]

11. And here:

"But while Enron's futuristic vision of water speculation may have come before its time, a more modest version of the water trade was thriving in the Golden State, and it apparently owed it all to one man: Stewart Resnick.

Public Citizen's "Water Heist" report uncovered evidence that the Beverly Hills farmer was instrumental in the privatization of the Kern Water Bank. Not surprisingly, Resnick's Paramount Farms emerged with a majority stake in the venture. In fact, Resnick's farm empire controls the Kern Water Bank so thoroughly that it is not easy to discern where Paramount ends and the Kern Water Bank begins. The Kern Water Bank Authority, which administers the bank, is located in Paramount's corporate office building outside of Bakersfield, California.

This has brought in massive profits to owners of the Kern bank at taxpayers' expense, and frequently involve 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 tidy profit.

Just as the Federal Reserve allows banks to borrow money from taxpayers so they can reap huge profits by lending it right back to the masses at a higher rate, the Kern bank allows a handful of corporate farmers to sell a public resource back to the public at markup. According to Public Citizen, in 2001, the Kern County Water Bank bought subsidized water from the State Water Project at $161 an acre-foot and flipped it back to the state's Environmental Water Account for $250 an acre-foot, making a cool $6.3 million for its owners -- just for having the right friends in the right places. "

[rufus dog]

22. The Resnick's are not Kern County folk

They are Beverly Hills and Limousine Liberal is an accurate description. (well sort of, he drives a hybrid, she arrives in a Limo)

[Cleita]

24. No kidding! Duh! Kern county which is right next door to San Luis Obispo County

is red. I guess I should have said. Hey, I'm not talking about BH anymore.

[ddeclue]

10. The vast water wing OLIGARH?

:rofl:

[Nikki Stone1]

13. That's the problem with Glenn Beck: he destroys words and concepts that accurately

describe what is happening. Maybe that is his real job.