The Big Con: New Report Exposes The Real Beneficiaries Of Proposition 18

By Elanor Starmer
Food&Water Watch

The legislature reconvened on Monday with a hefty set of tasks ahead of it. Passing a budget will clearly be the most painful, but let’s not underestimate the intensity of the battle over the fate of Proposition 18, the massive water bond currently on this November’s ballot. The legislature’s decision – widely believed to be forthcoming before August 20th – on whether to postpone, scrap or leave untouched this controversial measure is actually a referendum on who should control water in California. Legislators have an opportunity to weigh in in favor of the public by voting to permanently remove the bond from the ballot.

The battle over the bond has been framed in many circles as a battle between farmers and fishermen, or between Northern and Southern California. But a report released by Food&Water Watch yesterday suggests that the real battle is between private and public interests, with private interests across the state set to gain measurably if the bond is passed.

Bond beneficiaries would include the Obayashi Corporation, a large Japanese contractor working on the San Vicente Dam in San Diego; Warren Buffet, whose Berkshire Hathaway subsidiary Pacificorp would have costs associated with the removal of its dams on the Klamath River offset by bond funds; and Cadiz, Inc., which could access bond money for a groundwater bank in the Mojave Desert, where it would store Colorado River water and resell it at a profit to Southern California communities.

That puts the bond’s cheery title, the “Safe, Clean and Reliable Drinking Water Act of 2010,” in a whole new (and suspect) light. And it makes the fact that the bond would be paid for out of the same pot that funds essential public services like education, public safety, and health care seem positively reprehensible.

These interests stand to benefit from the bond because the main emphasis of the package is the construction of new dams. Entities like the Friant Water Users Authority, representing east San Joaquin Valley agribusinesses, and the powerful Westlands Water District could see new dams constructed in their regions using bond funds. Although the cost of building the dams would fall on taxpayers across the state, most of the water would flow to these powerful Valley interests. That water could then be resold to developers at a significant profit. The dams themselves could also be owned and operated by private companies, even though their construction was financed with public money.

It shouldn’t be surprising that over half of the contributions to pro-bond PAC have come from the construction industry, agribusiness, and developers. An additional 20 percent came from Governor Schwarzenegger’s California Dream Team, which raises money to support the Governor’s agenda. For the 2009-‘10 election cycle, Dream Team contributors included the energy industry (e.g. $325,000 from Occidental Petroleum Company), agribusiness (e.g. $35,000 from billionaire Steward Resnick, owner of Paramount Farms), and developers (e.g. $150,000 from Henry Segerstrom of C.J. Segerstrom&Sons).

The remaining 29 percent of contributions to the pro-bond PAC came from land conservancies, which could receive significant funding for land purchases and related projects in the bond. Unfortunately, the way the bond is written forces dams to be funded first, arguably offsetting any environmental benefits that might be associated with these projects.

And who would lose if the bond passes? Our communities and our wallets. Only 2 percent of bond funding is guaranteed for conservation programs, the most cost-effective and urban-friendly way to improve water supply reliability. Only one percent of funding is guaranteed to reach disadvantaged communities that struggle with polluted drinking water and other problems. And with interest, the bond would shoulder California taxpayers with an additional $22 billion in debt, to be paid off over 30 years at a cost of some $800 million per year. That’s enough to pay for 13,000 teachers’ salaries or four years of the Healthy Families program, which insures 900,000 children in the state.

The findings of this new report are clear. The bond is a continuation of failed policies that have funneled California’s public water to private interests that overuse, pollute, and profit from it. Our legislators should take advantage of the scuffle over the bond to stop the measure in its tracks and remove it from the ballot permanently. We can, and must, do better.

Elanor Starmer is the Western Region Director at Food & Water Watch. She has worked as a policy advocate for human rights, sustainable agriculture and family farms. She helped launch a research program on federal policy and factory farming at Tufts University’s Global Development and Environment Institute.

Published on California Progress Report