Westlands Water Distr
==
trump whisperer?
==
predictable, but still omg permanent
https://www.alternet.org/2019/11/as-corrupt-as-it-gets-oil-lobbyist-turned-interior-secretary-proposes-giving-coveted-contract-to-former-client/
no lnx
‘As corrupt as it gets’: Oil lobbyist turned Interior Secretary proposes giving ‘coveted’ contract to former client
Written by Jessica Corbett / Common Dreams November 10, 2019
Watchdog and conservation groups called out former oil lobbyist and current Interior Secretary David Bernhardt Friday over the department’s attempt to give a “coveted”permanent water supply contract to one of Bernhardt’s ex-clients.
“Bernhardt might as well still work for his former lobbying firm, where he represented oil and gas, mining, and agribusiness interests for many years,” declared Public Citizen president Robert Weissman.
Weissman’s national advocacy group previously waged a campaign highlighting Bernhardt’s conflicts of interest, opposed his confirmation, and filed an ethics complaint demanding a department investigation into him.
“If Bernhardt would like to return to his former lobbying job at Brownstein Hyatt Farber Schreck and pursue the interests of his corporate clients, he certainly is free to do so, subject to the ethics rules,” Weissman said. “But for now, he is secretary of the Interior, and his duty is to serve the public, not his old clients.”
Invoking President Donald Trump’s rallying cries from the 2016 campaign, Weissman added that “if anyone still has any illusions that Trump is working to ‘drain the swamp’ or ‘take on elites,’ here is the definitive proof that it ain’t so. A former lobbyist delivering the goods for his old lobby clients is about as corrupt as it gets. Bernhardt is fast making a play for title of ‘Shadiest Trump Cabinet Official.'”
Holy hell. The oil lobbyist running Trump’s Interior Department is awarding one of the first *permanent* water supply contracts to…. wait for it…. his former lobbying client.
This is as corrupt as it gets. https://t.co/a7JwhfFyuu
— Public Citizen (@Public_Citizen) November 8, 2019
Center for Western Priorities policy director Jesse Prentice-Dunn concurred, tweeting late Thursday that the situation represented “the absolute epitome of the swamp.”
Their condemnation came in response to an Associated Press report that the Interior Department “is proposing to award one of the first contracts for federal water in perpetuity” to California’s Westlands Water District. The district, which “serves some of country’s wealthiest and most politically influential corporate farmers,” long employed Bernhardt as a lobbyist.
“As a lobbyist, he was involved in negotiations on a contentious 2016 federal law that made the Westlands’ proposed deal possible, allowing water districts to lock up permanent contracts for water from California’s federal water project,” AP noted. That law, which conservationists oppose over concerns for endangered native wildlife, “reshaped the federal handling of water in the U.S. state with the largest economy.”
After years of working for powerful industries, Bernhardt joined the Interior Department as deputy secretary in July 2017, despite opposition from ethics and environmental advocates who labeled him a “walking conflict of interest.” The GOP-controlled U.S. Senate confirmed him as secretary in March, following the December resignation of scandal-ridden Ryan Zinke.
“Despite Bernhardt’s clear conflicts of interest and his involvement in decisions that are currently under investigation for ethics violations, he can’t stop carrying water for his powerful former client,” Jayson O’Neill, deputy director of the advocacy group Western Values Project, said in a statement Friday.
“The flood gates of corruption flow through Bernhardt, who has manipulated scientific studies, prioritized resources, and tasked staff all to benefit a former client at the expense of the public,” he added. “Bernhardt’s level of corruption may only be eclipsed by that of his boss, but that should not prevent Congress from initiating an investigation immediately.”
==
// pruitt ding dong gulp!
https://earther.gizmodo.com/ryan-zinkes-replacement-is-a-fresh-nightmare-for-public-1831147375
Noted oil and gas lover Ryan Zinke is on his way out the door at the Department of Interior. And like fellow grifter Scott Pruitt who also left us too soon, Zinke’s temporary (for now) replacement is much less scandal-plagued and much more laser-focused on gutting the agency.
David Bernhardtis currently the Department of Interior’s second in command, but he’ll ascend to acting secretary once Zinke leaves at the end of the year (and could remain there since he’s already been confirmed by the Senate and the administration has recently struggled finding qualified people to fill key roles). Like Andrew Wheeler who took over for Pruitt at the Environmental Protection Agency, Bernhardt worked as a lobbyist for the exact industries that will now try to curry favor with him as acting secretary. He’s been called a “walking conflict of interest,” and if his past record is any indication, he’ll be more than happy to let the industries whose bidding he’s done get their way to the detriment of public lands.
Bernhardt worked for the George W. Bush administration, then became a lobbyist for companies with business before the department, and then came back to Interior last year. During his stint with Interior under Bush, Bernhardt rose to solicitor general. Along the way, he helped push for drilling in the Arctic National Wildlife Refuge(ANWR) while ignoring scientific guidance suggesting that might not be a good idea. But it’s his most recent efforts lobbying are the biggest red flags because they bring with them a host of entanglements.
After the Bush administration, Bernhardt joined Brownstein, Hyatt, Farber, and Schreck as a lawyer and lobbyist for all the bigs: Big Oil, Big Gas, Big Mining and Big Agriculture. His work for these groups has left him with a laundry list on his ethics forms of recusals whenever they have an issue come before the Department of the Interior. Halliburton, the U.S. Oil and Gas Association, Rosemont Copper Company, and Statoil are on that list. All have business on Department of Interior lands or proposals before the agency.
Along the way, he filed suits against the Department of Interior for a number of these groups. Among his greatest hits are suing on behalf of the Westland Water District—home to some of California’s biggest farmers—over a $375 million drainage dispute, or the state of Alaska to get oil exploration rights within ANWR. As a lobbyist, Bernhardt also pushed bills that would make offshore drilling easier. The Trump administration has pursued these issues with gusto and reports indicate that Bernhardt has been a driving force, showing that even though he has recused himself from dealing with firms he’s represented, he’s still helped create policies that benefit them. Not all those policies have been successful or even remotely close to popular, but the business-friendly turn of the department has been one of the Trump administration’s hallmarks.
“Bernhardt was behind most of that work already and will continue to ignore science and the input of career professionals to try to jam through his objectives,” Joel Clement, a former Department of Interior whistleblower and fellow at Harvard’s Belfer Center, told Earther. “The difference now is that the courts are no longer the only institutions in his way. The House will finally hold him and his team accountable so it’s unlikely they can play as fast and loose with rules and norms as they did the previous two years.”
With Democrats taking over the house next month, oversight promises to become more stringent. Before leaving, Zinke was set to enter what would likely have been a world of pain. He had at least 17 ethics investigations inside the department and more scrutiny was almost surely on the way, particularly after he personally attacked Representative Raul Grijalva, the likely incoming chair of the House Natural Resources Committee that oversees the department. Bernhardt doesn’t come with the personal baggage of Zinke, but his convoluted past is already on Grijalva’s radar.
“His years of lobbying on behalf of clients who stand to profit from Interior policy decisions are cause for serious concern,” the Arizona Democrat said in a statement to Earther. “We intend to continue conducting vigorous oversight of how Interior political appointees arrive at major policy decisions, who they consult, who they ignore, and who stands to benefit financially. Deputy Secretary Bernhardt should be prepared to answer those questions early in the new Congress, and so should Secretary Zinke’s successor.”
kpfa 8/28
1 mil acres almond san joachain vly ? (inpaired drainage, not much GNP?) Resnick?
denham amnedmnt, valadao
gut ESA [drollinger fish > man] David B esq
salt, flush chem, heat
jacobs doyle
https://www.eenews.net/stories/1060095217
California's biggest water players quietly gathered on the shores of Lake Tahoe this week, hoping to reconcile some long-standing differences involving tunnels, fish, rivers and more.
In an unpublicized summit that convened Monday, Bureau of Reclamation Commissioner Brenda Burman met with representatives from Democratic Gov. Jerry Brown's administration as well as officials from the state's major rural and urban water districts. And though the get-together was largely kept under wraps, some interested parties described it as an effort to reach a "global solution" to problems that until now have defied resolution.
Among the topics discussed: Brown's $17 billion plan to build twin tunnels under the Sacramento-San Joaquin River Delta, the coordinated operation of state and federal projects that shuttle water from the wet north to farms and cities in the arid south, and California's controversial proposal to reduce water deliveries to farmers from the San Joaquin River to benefit fish.
California Department of Water Resources spokeswoman Erin Mellon confirmed the meeting yesterday.
"The state and federal water projects are intertwined," she said in an email. "We have a joint interest in ensuring our water system meets the needs of California communities and ecosystems and will maintain an open dialogue to achieve these goals."
The meeting, held at a resort and conference center on Lake Tahoe's North Shore, comes as the Trump administration has ramped up pressure on California. Last weekend, Interior Secretary Ryan Zinke issued a memo asking for his staff to come up with recommendations within two weeks to increase deliveries to California farmers (*Greenwire*, Aug. 21).
Zinke's memo empowered Deputy Secretary David Bernhardt to provide the "final recommendation for action." Bernhardt is a former lawyer for the Westlands Water District, the state's largest agricultural water district.
In a letter dated the same day, Aug. 17, Reclamation formally called for renegotiating a 1986 compromise with the state concerning the operation of the state and federal projects.
The complicated coordinated operation agreement focuses in large part on the Sacramento-San Joaquin River Delta. At its core, it lays out requirements for how much water state reservoirs andfederal reservoirs must release to flow into the delta for ecological and water quality purposes. Most of that water flows through the San Francisco Bay and out to the ocean; it does not enter the projects' conveyance system to farms and cities in the south.
Under the agreement, the federal Central Valley Project reservoirs are required to release much more of that water, up to three-quarters of it.
Reclamation agreed to that in 1986 for two main reasons: It operates most of the large reservoirs in California — so it had more water available — and it needed to use the state's more powerful pumps south of the delta to effectively move water.
Conditions have changed since 1986, though, including federal Central Valley Project contractors wanting more of that water. The bureau and the state have long sought to update the 1986 agreement but have failed to do so.
The letter is the first time the agency has officially issued a "notice of negotiation" for a new agreement, and it set a one-year deadline for talks.
If the bureau comes out ahead, it could have a major impact on contractors who get water from the California State Water Project, including the Metropolitan Water District of Southern California — the country's largest water seller.
Metropolitan provides water to 19 million people and has been the biggest proponent of Brown's tunnels.
The district's board was briefed on the Lake Tahoe meeting this week, which staff said General Manager Jeffrey Kightlinger and Assistant General Manager Roger Patterson would attend. Kightlinger declined to comment on the meeting.
A few Metropolitan Water District directors expressed skepticism about the bureau's plans.
Director Mark Gold, who represents Los Angeles, criticized Zinke's memo on updating the Central Valley Project to increase deliveries to farms.
"The feds could be investing in updating CVP infrastructure," he said. "It's written in there pretty strongly, but there is no commitment in trying to put resources to do so, which I thought was also a pretty glaring loophole."
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==
trump fire tweet ca water to ocean, courts ca farm bureau
Monday, as California continued to struggle with the largest wildfires in the state's recorded history, which have killed seven people and burned over 750 structures, Trump took to Twitter to scold the state government and Gov. Jerry Brown, insinuating that their own mismanagement of the environment was responsible for the disaster:
California wildfires are being magnified & made so much worse by the bad environmental laws which aren’t allowing massive amounts of readily available water to be properly utilized. It is being diverted into the Pacific Ocean. Must also tree clear to stop fire from spreading!
— Donald J. Trump (@realDonaldTrump) August 6, 2018
Governor Jerry Brown must allow the Free Flow of the vast amounts of water coming from the North and foolishly being diverted into the Pacific Ocean. Can be used for fires, farming and everything else. Think of California with plenty of Water - Nice! Fast Federal govt. approvals. Donald J. Trump (@realDonaldTrump) August 6, 2018
Apparently, even Trump administration officials are unwilling to stand by this claim. As CNN reports, "administration officials declined to offer any clarity on Trump's series of tweets claiming environmental laws and water regulations in California are hampering the state's ability to fight the wildfires."
One simple reason Trump's White House might not be defending his Twitter outburst? It's absolute gibberish.
In a lengthy column taking down Trump's fabrications, Michael Hiltzik of the Los Angeles Times explained that water is not an issue for California firefighters:
The likeliest explanation for [Trump's] take on water is that he’s confused by the demands for more irrigation water he’s hearing from Republican officeholders in the Central Valley. They’re the people who grouse about water being “wasted” by being diverted to the ocean, rather than into their fields.
Their demands have nothing to do with the availability of water for firefighting. Fire agencies haven’t been complaining about a lack of water, especially water “diverted” to the Pacific. Major reservoirs are near the worst fire zones; the Carr fire is near Lake Shasta and Whiskeytown Lake and the Mendocino Complex fire is near Clear Lake. All are at or near their historical levels.
“There have been no issues getting water from them,” Scott McLean, a spokesman for the California Department of Forestry and Fire Protection, or Cal Fire, told me.
In fact, some of Trump's officials are actively contradicting him, including one FEMA official who told CNN that there is no issue in California with access to water for the purpose of firefighting.
Moreover, if Trump was really concerned about water shortages in California, he might pay more attention to climate change. A new climate model estimatesthat melting Arctic sea ice could reduce precipitation over the Golden State by up to 20 percent within three decades. Furthermore, rising temperatures threaten to reduce the snowpack in the Sierra Nevada mountains, which provides a third of California's water.
Trump has called climate change a hoax invented by the Chinese, is pulling the United States out of the Paris Climate Agreement, and has placed a former coal lobbyist in charge of the EPA. So it seems unlikely he will consider this side of the story.
Between all of this, it is no wonder that even the administration itself can no longer go out on a limb to defend Trump's bizarre lies.
==
==
David Longly Bernhardt, and he’s worked as the top lobbyist for California’s Westlands Water District, the largest agricultural entity of its kind in the nation. He’s sued the Interior Department and helped write legislation on behalf of his client. Largely because of his services, Westlands has paid Bernhardt and the law firm where he works $1.27 million since 2011.
On Friday, the Trump administration announced it was nominating Bernhardt to serve as deputy to Interior Secretary Ryan Zinke. If confirmed by the Senate, Bernhardt will be in a position to influence decisions that could benefit his former client.
Under a executive order signed by President Donald Trump, appointees such as Bernhardt are required to recuse themselves from matters involving former clients, although in the past, waivers have been granted for people in his situation. Zinke on Friday praised the nomination, saying in a statement that Bernhardt’s extensive experience “is exactly what is needed to help streamline government and make the Interior and our public lands work for the American economy.”
Bernhardt’s nomination, however, is already drawing fire from critics, who note that Trump, as a candidate, promised to “drain the swamp” of lobbyists’ influence over the White House and Congress. As president, Trump has placed lobbyists in key positions on his transition team and in his administration, and has adopted ethics rules looser than those of the Obama administration for appointees.
“Bernhardt is a walking conflict of interest,” said U.S. Rep. Jared Huffman, a California Democrat who’s a fierce critic of Westlands. “He should absolutely have to recuse himself from anything having to do with Westlands Water District. That is the most obvious of ethical fault lines here.”
Interior officials said Friday that Bernhardt would have to comply with all federal ethics statutes as well as the administration’s earlier ethics pledge. An Interior spokeswoman said he had undergone “an extensive preclearance examination with the department’s senior ethics officials and the Office of Government Ethics.”
Over the last five years, Bernhardt has sued the Interior Department and lobbied the Justice Department and Congress to finalize a settlement that could be worth more than $375 million to Westlands. The settlement, approved by the Obama administration, involves a decades-old dispute over the toxic irrigation drainage that flows from Westlands’ 600,000 acres. Federal courts have ruled that the federal government is responsible for constructing drainage, but for a variety of reasons – costs and potential environmental damage – the Interior Department has not done so.
Under legislation that Westlands is seeking, the federal government would relieve the water district of its roughly $375 million debt to the federal government and provide it with new water contracts. In exchange, Westlands would retire one-sixth of its acreage and free the federal government of its obligation to build a drainage system that could cost an estimated $3.5 billion.
Westlands officials say the settlement is fair to both farmers and taxpayers. Environmentalists and some in Congress have labeled it a “giveaway.” They complain that the deal includes no clear provisions on how Westlands would manage its tainted wastewater and no clear assurances the federal government will intervene if problems occur.
Bernhardt stepped down as Westlands’ lobbyist in November, when hejoined the Trump transition. Yet before that, he was involved with the drainage settlement and other legislation benefiting his former client. Documents obtained by environmental advocate Patricia Schifferle show he helped write amendments to a $558 million water bill, approved by Congress in December, that steers more water to Westlands and other water districts and eases construction of new dams.
Schifferle and others say that, as the number two official in Interior, Bernhardt could give Westlands preferential treatment in how Interior implements the 2016 water legislation and a future settlement on drainage. He will also be in a position to influence permitting for the $17.1 billion twin tunnels project in California, which could ease deliveries of water to the Westlands and Southern California water districts.
When President Barack Obama was in office, lobbyists were barred from taking jobs at federal agencies they had previously lobbied. When Trump took office, his administration removed such restrictions, with the proviso that former lobbyists had to sign an recusal oath. That oath says they cannot “participate in any particular matter of which I lobbied . . . or participate in the specific issue area in which that particular matter falls.”
Bernhardt’s appointment echoes a similar one from the administration of George W. Bush. His Interior Department hired Jason Peltier, director of the Central Valley Project Users Association, to serve as deputy assistant secretary for water and science. Upon joining Interior in 2001, Peltier recused himself from some decisions involving the water districts he previously represented, including Westlands. Then his superiors granted him an exemption, he said, because of his expertise in California water issues. “I was given dispensation early on because of my knowledge of these issues,” Peltier told The New York Times in 2006.
Made up of roughly 700 farms west of Fresno, Westlands grows about $1 billion in crops yearly, and it includes some of the most lucrative farming operations in the United States.
While Westlands does well during big water years, the U.S. Bureau of Reclamation has reduced its water deliveries during drier years, in favor of environmental requirements and water districts with senior water rights. Westlands has fought those reductions for decades, and last year’s water legislation, crafted at the end by California Democratic Sen. Dianne Feinstein and House Majority Leader Kevin McCarthy, R-Calif., was a partial victory.
Over the last five years, Westlands has spent more than $3 million lobbying the federal government, with more than a third of that going to Bernhardt’s employer, the Denver law firm of Brownstein Hyatt Farber Schreck. After Obama came to office, the water district also hired numerous Bush-era Interior officials, including Peltier, Susan Ramos, Craig Manson and Julie McDonald.
Prior to joining the Brownstein firm, Bernhardt worked at Interior, rising to the department’s number three job, as solicitor, from 2006 to 2008.
Colleagues who worked with Bernhardt – even those critical of the Trump administration – praise Bernhardt’s knowledge of resource law and his skills as a manager. One of those is Eric Nagle, who in February sent out an emailblast urging his fellow Interior lawyers to “stand your ground” and resist indefensible edicts from the new administration.
“I think he (Bernhardt) would be a good pick,” said Nagle, who retired last month from the Interior Department’s Pacific Northwest region. “He’s a principled guy and good manager. He understands the need to follow the law.”
Others, however, say Bernhardt has so many conflicts that many of his decisions will be second-guessed. Not only has he represented agricultural interests and industries that hope to influence Interior decisions, his law firm – Brownstein – represents hundreds of such clients. As McClatchy reported in February, Brownstein also has a financialstake in a California water venture, Cadiz, that was recently successful in overturning a unfavorable permit ruling from the Bureau of Land Management, an Interior agency.
Matt Lee-Ashley, an Interior deputy chief of staff during the Obama administration, said Bernhardt’s appointment was the inevitable result of Trump’s looser restrictions on lobbyist hiring. If Bernhardt is confirmed by the Senate, “It will be difficult for ethnics officials to unpack what kind of conflicts there are, and what kind of recusals are going to be in place,” said Ashley, who works at the Center for American Progress, a liberal think tank.
Bernhardt, who couldn’t be reached for comment, is hardly the only lobbyist hired by the Trump administration to serve in a department he previously lobbied.
Geoff Burr, formerly a chief lobbyist for a construction industry trade group, now has a job at the Department of Labor, where he reportedly is in line to be chief of staff. As a lobbyist, Burr opposed wage standards for federal construction contracts and standards to limit workers’ exposure to silica dust, according to a reportin ProPublica.
Huffman, who sits on the House Natural Resources Committee, said he didn’t expect that Bernhardt would completely recuse himself from matters involving Westlands and other former clients.
“This is the poster child of the swamp that people thought would be drained by this president,” said Huffman. “Instead it is being restocked by more swamp people.”
Stuart Leavenworth:
copied from coelo
Last year, as California endured one of its driest years on record, the Westlands Water District made it rain 3,000 miles away -- on Capitol Hill.
The nation's largest agricultural water district, located in the Central Valley, spent $600,000 on lobbying efforts, according to an analysis by KPCC in partnership with the nonpartisan Center for Responsive Politics. That's by far Westlands' biggest annual expenditure for lobbying -- about six times what it spent in 2010.
The lobbying comes as Congress and federal agencies consider how to respond to three years of drought conditions that have cut water supplies across the state and ratcheted up political pressure from the hard-hit agricultural sector, including many of Westlands' customers.
California farmers grow nearly half the nation's fruits, vegetables and nuts. The California Farm Water Coalition, an industry group, estimates farmers -- and the processors and truckers who get crops to market -- could lose $5 billion this year due to the drought.
How important is this issue? Well, in recent months it's brought President Obama, the House Speaker and the powerful House Natural Resources Committee to the Central Valley.
Congress is considering two major legislative packages -- one already passed by the House, authored by freshman Republican Rep. David Valadao of Hanford; and one introduced in the Senate by California Democrats Dianne Feinstein, with Barbara Boxer as a co-sponsor.
The bills have the common goal of redistributing water to meet farmers' needs, but they differ on execution and the ramifications.
The House bill, which was co-sponsored by the state's entire GOP delegation, would rewrite water contracts and in the process set aside protections, which has environmental groups up in arms.
The Senate bill would allow regulators to "provide the maximum quantity of water supplies possible" to where it's most needed and boost existing federal drought programs by $200 million.
As is true with many issues in Washington, money is part of the fight. As Bay Area Rep. George Miller, a Democrat, says, "You can make water run uphill if you have enough money."
The DC bucket brigade
California water politics is mostly about geography -- Northern California's watershed versus the Central Valley, which relies on that water coming south to irrigate crops, versus Southern California, with its massive and thirsty urban population.
As the drought has worsened, those various interests have pushed harder for relief through campaign contributions to key members of Congress and by employing lobbyists.
The two biggest spenders on water issues are Westlands, whose customers own 600,000 acres of farmland in Fresno and Kings counties, and the owners of Kern County-based Paramount Farms, the nation's largest grower of pistachios and almonds.
Just how serious is the quest for water? Last year, Westlands hired four different lobbying firms -- even as the overall amount spent by all groups and corporations on federal lobbying has been going down since 2010. All eight of Westlands' officially registered lobbyists previously worked in government -- including a former Republican congressman from Minnesota.
And the $600,000 Westlands spent in 2013 is only what was reported on required disclosure forms. According to an internal document obtained by Southern California Public Radio, Westlands also paid $90,000 last year to former California Democratic Rep. Tony Coelhofor "Washington representation," which was not included in Westlands' lobbying reports.
Coelho, who did not respond to requests for an interview, is related to one of Westlands' board membersand they are partners in a dairy farm. Westlands also paid another firm nearly $1 million for an "outreach and awareness" campaign.
Democratic lawmaker Miller, who has been on Capitol Hill for more than four decades, says lobbyists keep their "A-game" going all the time, rain or shine, "because you never know when the good Lord's going to turn off the water. So you'd better be ready."
Money is extremely helpful in obtaining access and influence, which is crucial whenever Congress gets involved. That's true whether the cash is in the form of spending on lobbying or campaign donations.
Paramount Farms is owned by Lynda and Stewart Resnick of Los Angeles. Their multi-billion dollar fortune comes from a diverse portfolio that includes Fiji bottled water. They have a controlling interest in the Kern Water Bank Authority, which stores underground supplies of water to irrigate Paramount's nut trees.
The Resnicks don't hire lobbyists at the federal level, but they're generous campaign contributors. They and people who work for their companies have given nearly $457,000 to candidates, political action and party committees since 2011. That includes nearly $321,000 from the Resnicks themselves. (See table at end of story.)
Setting the water table
You can't just read the House and Senate bills and point to paragraphs that directly help either Westlands or the Resnicks. But John Lawrence, a former Capitol Hill staffer who currently teaches at the University of California's DC Center, says water bills are "very often written specifically in a vague sort of way." Congressman Miller adds: "There's rarely any word in a piece of water legislation that's there accidentally."
The bill that passed in the House would mandate an increase in pumping from the Sacramento Delta. Doug Obegi, an attorney with the Natural Resources Defense Council, says that water would primarily go to Central Valley Project contractors, including the biggest -- the Westlands Water District.
The bill also extends for 40 years all existing federal water service contracts -- including the one for Westlands. Lawrence says that takes away any flexibility to make water decisions for a generation. He notes that once you've delivered a "signed, sealed contract, let alone been directed to do it by the Congress," you've taken away any chance at reviewing how future water should be allocated.
Feinstein's Senate bill includes several provisions that would allow Delta water to be sent farther south to Kern County. Patricia Schifferle of the environmental group Pacific Advocates says, because of previous legislative amendments, the water would be made available to the groundwater bank controlled byFeinstein's supporters -- the Resnicks.
(Neither Westlands nor the Resnicks' holding company, Roll International, responded to requests for interviews.)
Feinstein recently revised her bill. This latest version includes a provision to boost Colorado River storage in Nevada, home to Senate Majority Leader Harry Reid. This version could make it to the Senate floor for a vote without going through the committee process.
Horse trading on Capitol Hill isn't new. Some of the lobbying money goes to making sure everyone gets to wet their beak. Miller notes that deals get made -- trading something Midwest lawmakers want in the farm bill for something Central Valley interests need in the water bill. He says there are "a lot of chits out there that have been planted around the anticipation of a water bill coming to the floor of Congress."
If the House bill became law, Ron Stork of Friends of the River says not only would habitat restoration be hurt, but so would two other water consumers: farmers and residential users in the northern part of the state. Delta farmers, with some of the oldest water rights in California, and the city and county of Sacramento, which contract for drinking water, would find their supply "commandeered and delivered south."
The lobbying isn't limited to Capitol Hill. It also takes place at the agency level. John Lawrence says private meetings are held behind closed doors at places such as the Bureau of Reclamation or the Environmental Protection Agency, where there's "greater wiggle room" on how water policies are implemented. Those conversations are confidential, not debated openly in Congressional committee hearings.
Westlands' reports show it lobbied the EPA, the Agriculture Department, the Interior Department (which includes the Bureau of Reclamation) and the Council on Environmental Quality, in addition to Congress and the White House. Three of the water district's lobbyists are former high-ranking officials of the Interior Department.
There's even a place lobbyists and campaign contributions collide: Schifferle from Pacific Advocates notes a 2012 breakfast fundraiser for Feinstein in the offices of one of Westlands' lobbying firms, held "right around the time" of a budget amendment that gave water agencies access to federal water.
In Washington, certain wells never run dry.
Top Resnick family campaign contribution recipients from 2011-2013
Recipient Amount
Committee to Elect an Effective Valley Congressman (Henry Waxman) $100,000
Democratic National Committee Services Corp $30,800
Republican National Committee $30,800
Democratic Congressional Campaign Committee $21,700
Rep. David Valadao (R-Hanford) $17,900
Democratic Senatorial Campaign Committee $13,000
Rep. Jim Costa (D-Fresno) $12,300
Sen. Ed Markey (D-Massachusetts) $11,400
Rep. Jeff Denham (R-Fresno) $11,300
Sen. Cory Booker (D-New Jersey) $10,400
Sen. Tom Harkin (D-Iowa) $10,000
Rep. Joe Kennedy III (D-Brookline) $10,000
LA Political Action Committee $10,000
Rep. Kevin McCarthy (R-Bakersfield) $10,000
Peak Political Action Committee $10,000
To Organize a Majority Political Action Committee $10,000
Sen, Dianne Feinstein (D-California) $9,800
Data source: Federal Election Commission via OpenSecrets.org.
Westlands Water District board members' campaign contributions from 2011-2013
Board Member Democratic Republican Total
James Anderson $2,500 $1,000 $3,500
Thomas Birmingham $10,500 $17,500 $28,000
Frank Coelho Jr. $2,600 $4,750 $7,350
Larry Enos 0 $1,000 $1,000
Daniel Errotabere $875 $5,525 $6,400
Georgianne Errotabere $875 $875 $1,750
Jean Errotabere $875 $4,300 $5,175
Gary Esajian $1,000 $8,500 $9,500
Bridget Neves 0 $2,500 $2,500
Todd Neves 0 $18,850 $18,850
Donald Peracchi $13,600 $45,500 $59,100
Judith Peracchi $5,000 $2,500 $7,500
Alan Sano $2,500 $1,000 $3,500
Christopher Woolf $2,000 $9,374 $11,374
Sarah Woolf $3,000 $3,500 $6,500
TOTALS $45,325 $126,674 $171,999
Data source: Federal Election Commission via OpenSecrets.org.
| Akerman LLP | $80,000 | Westlands Water District | Findaro, Joseph |
|---|---|---|---|
| Brownstein, Hyatt et al | $240,000 | Westlands Water District | |
| Mercury | $160,000 | Westlands Water District | |
| Mercury/Clark & Weinstock | $80,000 | Westlands Water District | |
| Sidley Austin LLP | $40,000 | Westlands Water District | Karen, Catherine |
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AUGUST 24, 2009A Burston-Marsteller Greenwash
Westlands Hoards Surplus Water While Farmers Suffer
by DAN BACHER
Over the past several months, the mainstream media and right wing demagogues such as Sean Hannity have reported "heart rending" stories about the Westlands Water District having to fallow fields, putting farmworkers out of work and farms in jeopardy because of a lack of water, supposedly caused by pumping restrictions protecting Delta smelt and Sacramento River Chinook salmon. The movement by a broad coalition of commercial fishermen, recreational fishermen, Delta family farmers, California Indian Tribes and environmental justice advocates to restore the Delta and its collapsing fish populations has been falsely cast by Westlands and San Joaquin Valley agribusiness interests as favoring "fish over people."
The California Sportfishing Protection Alliance District (CSPA) has countered the lies behind this cynical g campaign by revealing that the district has been "squirreling away" surplus water it can’t use. CSPA has discovered a Westlands’ information bulletin dated July 23, 2009 revealing that the giant irrigation district, considered the "Darth Vader" of California water politics by fish restoration advocates, has been hiding considerable carryover storage from last year and is adding even more this year. The group is calling for an investigation into Westlands’ surplus water and possible surplus water hidden away by other water districts.
“The idea that Westlands Water District has been hoarding surplus water it can’t use while farm workers have been paid to hold vocal protests around the Central Valley accusing Congressman George Miller and federal agencies of starving farmers in order to protect Delta smelt is outrageous," said Bill Jennings, CSPA executive director. “Perhaps Congressmen Devin Nunes and Dennis Cardoza can use their influence to persuade Westlands to share some of their stored water wealth to benefit those less fortunate. Clearly an investigation is needed to see who else might be hoarding surplus water.”
At the end of 2008, Westlands had some 233,998 acre-feet (AF) of water stored in other facilities that it didn’t need, according to Jennings. Some 93,700 AF of that stored water were used through June 2009. However, the export pumping restrictions caused by the Delta Smelt Biological Opinion ended June 30 and the State and Federal Projects have ramped up pumping.
Westlands has made firm commitments to acquire 141,522 AF of supplemental water and is requesting additional supplies. "Consequently, Westlands staff projects that the District will end the water year with approximately 275,000 AF of water it is unable to use," Jennings disclosed.
The disclosure of the hoarding of water by Westlands occurs as the district and its front group, the Latino Water Coalition, have been campaigning to give a "human face" to corporate agribusiness by busing hundreds of farmworkers to "rallies" and "marches" in Fresno, Sacramento and Concord demanding increased pumping of water from the Delta. However, no legitimate farmworker organizations are supporting these efforts, organized by the public relations firm Burston-Marsteller, notorious for campaigns to cast a "democratic" image to dictatorships around the world for decades and for numerous corporate greenwashing campaigns.
Paul Rodriguez, a comedian and grower who frequently appears at rallies and marches with Governor Arnold Schwarzengger in support of increasing water exports out of the Sacramento-San Joaquin Delta in total disregard for Delta farmers, farmworkers, recreational fishing businesss and commercial fishermen that depend upon a healthy Delta for their livelihoods, is the chair of the Latino Water Coalition. The coalition includes three co-chairs – Orange Cove Mayor Victor P. Lopez, Ruben Guerra of the Latin Business Association and Tony Estremera, a director of the Santa Clara Valley Water District.
Arturo Rodriguez, president of the United Farm Workers of America, the 27,000-member union founded by Cesar Chavez, blasted the Latino Water Coalition’s so-called "March for Water" this April for being an event organized by corporate agribusiness, completely stripping away the coalition’s claims that it was lobbying on behalf of farmworkers.
"In reality, this is not a farm worker march,” Rodriguez told the New Work Times on April 17. ”This is a farmer march orchestrated and financed by growers.”
Ironically, the corporate farmers claiming to stand up for their workers against "radical environmentalists" represent the same San Joaquin agribusiness interests that have ruthlessly exploited farmworkers, crushed their right to organize and denied them their right to clean drinking water in the fields for decade after decade. Last year alone 6 farmworkers died due to heat exposure in unsafe working conditions imposed upon them by growers.
The disclosure of the hoarding of water by Westlands occurs as Governor Arnold Schwarzenegger, Senator Diane Feinstein and California Legislators, pressured by corporate agribusiness, are pushing for the construction of a peripheral canal to increase water exports to Westlands and southern California. A coalition of fishing groups, Delta family farmers, Indian Tribes and principled environmentalists is fighting the canal, an enormously costly government boondoggle that would result in pushing Central Valley salmon, Delta smelt, longfin smelt, striped bass, green sturgeon and other California Delta fish populations into the abyss of extinction.
On August 18, the California Legislature held a joint hearing of the Assembly Parks and Wildlife and Senate Resources and Water Committees to review a controversial package of five water bills that Jennings describes as a "road map" to the construction of the peripheral canal as Schwarzenegger, Westlands growers and the Latino Water Coalition held a rally pushing for a peripheral canal and more dams at the capitol. Canal opponents, including Barbara Barrigan-Parrilla, campaign director of Restore the Delta, Mark Franco, headman of the Winnemem Wintu Tribe, and Zeke Grader, executive director of the Pacific Coast Federation of Fishermen’s Associations, and others at the hearing spoke against the mad rush by the Legislature to push through a package that would result in the destruction of the Delta estuary and its fish.
"The peripheral canal is a big, stupid idea that doesn’t make any sense from a tribal environmental perspective,” Franco said during a rally at the Capitol on July 7. “Building a canal to save the Delta is like a doctor inserting an arterial bypass from your shoulder to your hand– it will cause your elbow to die just like taking water out of the Delta through a peripheral canal will cause the Delta to die.”
During a recent town hall meeting in Fresno featuring Interior Secretary Ken Salazar, the UFW’s Arturo Rodriguez was the only member of the meeting panel who didn’t call for the construction of the peripheral canal and more dams or overturning the biological opinions under the Endangered Species Act. In an interview with me, Rodriguez pointed out the contradiction between agribusiness asking for new water infrastructure when farmworkers are denied clean drinking water in the fields.
“We have no thoughts on the peripheral canal or dams at this time,” Rodriguez said. “We are looking at the plans and proposals to ensure that what is done takes into account the needs of farmworkers, including making sure that farmworkers have sufficient water to drink in the fields. This is about more than just ensuring water for agriculture – we want to sure that workers have good jobs with good wages and access to representation.”
Ironically, when Salazar randomly selected comment cards from the farmworkers to speak at the microphone before the crowd, not one of the workers themselves complained about unemployment. Their concerns were the same as those voiced by Rodriguez – the urgent need for clean drinking water in the fields, improved wages and working conditions and access to union representation. While the growers bemoaned the "loss" of farmworker jobs due to the favoring of "fish versus people," not one of the workers themselves brought this issue up!
State water standards violated to deliver Westlands surplus water!
The Westlands bulletin also points out that the Banks pumping plant of the State Water Project in the South Delta has been pumping about 1,000 AF of Central Valley Project daily. "Of course use of the ‘Joint Point of Diversion’ (JPOD) is illegal and violates D-1641, the State Water Resource Control Board’s (State Board) order implementing the Bay-Delta Plan. D-1641 explicitly prohibits use of JPOD when south Delta salinity standards are being violated," Jennings pointed out.
Presently the running 30-day average for electrical conductivity, the measure of salinity, at Old River near Tracy is 1.02 umhos/cm. The water quality standard for this period is 0.7 umhos/cm to protect Delta agriculture. "South Delta salinity standards have been continually violated the last seven months, imperiling Delta fish populations and Delta farms," Jennings stated.
Jennings said the U.S. Bureau of Reclamation (USBR) and California Department of Water Resources (DWR) have been ignoring the Cease & Deist Order issued by the State Board in 2006 for violation of south Delta salinity standards. Recently, they requested an extension of the compliance schedule for that Cease & Deist Order beyond the 1 July 2009 deadline.
CSPA was a party in the June 2009 State Board evidentiary hearing regarding the DWR/USBR request. Even though the State Board declared in 2006 they would not again extend the compliance schedule, they are expected to shortly issue a decision extending the schedule and excusing past violations. CSPA is prepared to sue over the Board’s continued refusal to enforce the Cease & Desist Order. However, the prohibition against using JPOD while standards are violated was neither raised nor discussed in that hearing.
"Earlier this year, the State Board held hearings to consider a relaxation of Delta outflow standards because they were being violated," Jennings stated. "While April rains eliminated the need for relaxed standards, the Board refused to penalize the USBR and DWR for violating existing standards. In June, the USBR acknowledged that Vernalis flows were only about 59 per cent of required flow. Again, the State Board took no action. Water quality standards in the southern Delta have been consistently exceeded since last December."
Jennings observed that, “the State Board continues to look the other way as virtually all of the standards protecting the Delta and its collapsing fisheries are ignored and DWR and USBR violate the law in order to supply Westlands with water they can’t use….CSPA remains concerned about the plight of unemployed farm workers, even as we note that data from the California Economic Development Department and annual reports from County Agricultural Commissioners reveal that both farm labor employment and the value of agricultural production has increased in the seven south-of-Delta counties over the course of the drought.”
I applaud Jennings and the California Sportfishing Protection Alliance for exposing Westlands’ hoarding of water while corporate agribusiness and the Latino Water Coalition engage in a false and misleading campaign portraying themselves as the "voice" of the "poor farmworker" while they clearly care nothing about farmworkers nor the thousands of people in the recreational and commercial fishing industries that are now unemployed, due to the collapse of Central Valley salmon and Delta fish populations spurred by increasing water exports from the Delta in recent years.
For more information and to read the Westlands report that Jennings based his analysis on, go to http://www.calsport.org/8-19-09.htm.
DAN BACHER can be reached at: Danielbacher@fishsniffer.com
Some Things Never Change: Westlands water rustlers' latest job
Westlands water rustlers’ latest job
FURTHER DOWN THE DRAIN BY LLOYD G. CARTER
“Since pre-Columbian times, the Westlands area was known to be part of the uninhabitable Great California Desert.” From the history section of the Westlands Water District Website, WWW.WestlandsWater.orgFor more than half a century, growers in the fabled Westlands Water District have been the “bad boys” of federal irrigation projects in the American West, ignoring residency and acreage requirements for taxpayer-subsidized water, getting Congress to change laws they didn’t like, seducing both Republicans and Democrat politicians with a river of campaign contributions, and reaping more crop, water and power subsidies, tax breaks, and debt forgiveness than any other group of farmers in America. Now they are poised to pull off the biggest coup in their controversial history. If they get what they are asking for, 260 billion gallons of publicly-owned water a year for 60 years, they will capture water worth anywhere from $20 to $40 billion - that’s billion with a B - with which they are free to farm tainted soils with, OR resell to urban interests at fantastic profit margins. At the current retail market price of $500-600 an acre-foot in Southern California, the Westlands water, purchased at a fraction of its true valley could be worth $2,000 an acre-foot by 2050, when there could be 60 million Californians. The potential value of 15.6 trillion gallons of water in a drought-stricken climate staggers the imagination. The catch? Westlands says it will solve a problem being caused by irrigation of its drainage-impaired, highly saline soils, contaminated with the toxic trace element selenium. Westlands makes this promise despite 52 years of federal research and hundreds of millions of dollars in studies that have failed to come up with a wildlife-safe, effective and affordable solution. It gets better. Westlands also wants forgiveness on an already interest free $489 million capital debt for taxpayer construction of its water delivery system it should have already paid off. But first a little history. After pumping a huge aquifer dry on the west side of the San Joaquin Valley in less than 40 years, the patriarchal families of the West Side, the Giffens, the Harrises, the O’Neills, the Dieners, the Wolfsens and a few others, turned to a folksy tire salesman from Texas named B.F. “Bernie” Sisk. They bankrolled Sisk’s try for Congress and in 1955 he landed in the nation’s capitol. Sisk spent the next five years tirelessly promoting a U.S. Bureau of Reclamation project to bring Northern California (Trinity River) water to western Fresno County. In a speech on the floor of the House of Representatives in 1959, Sisk promised that if the San Luis Unit (which would have been the last major leg of the Central Valley Project begun in the 1930s) was built, there would 6,000 family farmers on 100-acre ranches on the West Side and peace and prosperity would prevail. It was the first of many misrepresentations Westlands, or its supporters, would make over the next 48 years. Twenty-five years after Sisk’s promise, in 1984, there were still only 240 growers in Westlands and 40 of them, mostly from the original founding families, controlled over half the land and all the politics in the one-acre, one-vote district. Southern Pacific Railroad, Chevron, and cotton king J.G. Boswell were among the major Westlands landholders who influenced and directed district politics. The late Paul S. Taylor, a University of California economics professor who was a well known critic of Reclamation policies in the mid-20th century wrote a 1964 article in which he quoted Alabama Congressman Oscar Underwood’s1902 speech on the floor of Congress, the year the Reclamation program was created to protect and foster family farming: “Federal reclamation began as a program to help ‘farm boys’ who ‘want farms of their own’ to obtain them ‘without being driven into the already overcrowded cities to seek employment.’” Many of the “farm boys” from Westlands would eventually live in multi-million dollar mansions in North Fresno, on the San Joaquin River bluffs or toney Van Ness Extension Avenue, 50 miles from their industrialized farming operations, in a zip code that receives more farm subsidies than any other zip code in America, 93711. The first thing West Side growers did after the water delivery project was approved by Congress in 1960 was to annex another 200,008 acres known as the West Plains Water Storage into the 400,000-acre Westlands, a move a 1978 Congressional Task Force later concluded was unauthorized by Congress. Ironically, some land in the West Plains district had been designated too salty and unsuitable for irrigation by Bureau engineers in the 1950s when designing the original San Luis project, which included Westlands and three other adjacent small irrigation districts. Irrigation of the upslope West Plains lands, near the Coast Range along Interstate 5, would later worsen salty and selenium-plagued groundwater problems on the low-lying farmland near the trough of the Valley, where the San Joaquin River runs. Congressional funding intended for completing the drainage system was instead diverted to build a water delivery system for West Plains, according to the 1978 Task Force report. In exchange for bringing cheap subsidized water to the western valley, Westlands growers had agreed to break up the huge estates, including the 106,000 acres owned by Southern Pacific, and the 100,000 acres owned by the Giffen family, after 10 years. The excess land provisions in Reclamation law provided that a husband and wife could own 320 acres but no more than that. Of course, the Bureau of Reclamation had never enforced the residency requirement or the acreage limitation, which is what drew the wrath of Professor Taylor. When the mid-1970s rolled around, National Land for People, headed by George Ballis, sued to break up the huge ranches and actually give “farm boys” and farmworkers a chance to have ranches of their own. Fat chance. A celebrated 1977 San Francisco Examiner series titled “The Paper Farmers” chronicled how the big growers were evading the acreage limitations by, in some cases, adding the names of relatives, employees and even unborn children, to land deeds to increase the amount of cheap water they were eligible to receive. Westlands dragged its feet for several years in the National Land for People case, while the Bureau maintained the status quo on water deliveries, meaning big growers continued to get the cheap water for ranches which often exceeded 5,000 or 10,000 acres. Westlands also went to Congress and Rep. Tony Coelho, who had replaced his mentor Sisk in 1975. Coelho, who would become a powerhouse in the House before resigning following a real estate scandal, helped engineer the so-called “Reclamation Reform Act” in 1982, which didn’t really “reform” anything but did legalize a lot of the outright illegality occurring over the acreage limitation. Coelho was aided by western states congressmen subservient to their own local large growers getting federal water. The Reform Act eliminated the residency requirement and boosted the eligible acreage for the cheap water to 960 acres. It also created an even bigger loophole by allowing growers to get cheap water for lands they leased, rather than owned. As a result, leasing schemes mushroomed overnight and the mega-farms continued to get the cheap water. Then in 1983-1984, the Kesterson National Wildlife Refuge debacle hit, when word leaked out that drainage water from Westlands, being evaporated in 1,280 acres of diked ponds at Kesterson, was poisoning fish, ducks, and shorebirds at the dual purpose ”refuge.” Because of a subterranean clay layer underneath Westlands farmland, salty groundwater accumulated near the root zone. To protect crops the shallow groundwater had to be pumped out and sent somewhere else. The original plan was to funnel the salty drainage through the Delta to the Pacific Ocean. When Bay Area interests objected in the 1970s, Reclamation officials latched on to the risky idea of utilizing evaporation ponds at Kesterson as a stop gap measure while they undertook studies to convince the State Water Resources Control Board the drainwater would not harm the Delta. These studies revealed that much of Westlands’ acreage was riddled with selenium, a trace element which is a micronutrient in very small doses but toxic in slightly higher amounts. Selenium had been washing out of the Coast Range mountains for eons, accumulating in the western valley. Selenium’s toxicity to livestock was well known and Department of Agriculture studies in 1939 had actually detected elevated levels in Fresno County’s western foothills but that information had been overlooked or ignored by Bureau officials eager to build the San Luis Unit. Many federal scientists saw Kesterson coming although they did not know that it would be selenium, not pesticides, that would cause Kesterson’s Silent Spring. Despite the documented misgivings of field level biologists as early as 1962, the Department of Interior, parent agency of both the U.S. Fish and Wildlife Service and the Bureau of Reclamation, had actually claimed in the late 1970s that the Westlands salty drainage would be good for the Kesterson wetlands. Amazingly, much of the tab for constructing the Kesterson facilities was deducted from the Westlands’ repayment tab because it was designated a benefit to wildlife and the general public. The wetlands at the 5,900-acre Kesterson refuge adjacent to the San Joaquin River in Merced County were in the middle of the wintering grounds for hundreds of thousands of migratory ducks supposedly protected by an international treaty, the federal Migratory Bird Treaty Act. When full strength drainwater began flowing to Kesterson in 1981, high levels of selenium dissolved in the drainage water quickly moved into the food chain, killing fish and birds and triggering grotesque deformities in wildlife. Kesterson neighbors Jim and Karen Claus, who watched their cattle die after drinking water seeping from the evaporation ponds, filed a complaint with the regional water board and sounded the alarm. On March 15, 1985, following a year of intensive media scrutiny, including a segment on CBS’ “60 Minutes” and front page stories in the New York Times and the Washington Post, Secretary of Interior Donald Hodel ordered the Kesterson ponds closed and irrigation water deliveries to Westlands shut off. Hodel said the evaporation ponds were a violation of the Migratory Bird Treaty Act. A delegation of Westlands officials and growers, including former California Secretary of State Bill Jones (Jones’ family owned several thousand acres in Westlands), traveled to Washington to lobby Hodel to resume irrigation deliveries. In exchange for the Bureau to continue the flow of Northern California water to Westlands, the water district officials signed an agreement on April 3, 1985 in which they pledged to halt drainage flows to Kesterson even though this would worsen their drainage crisis. In that 1985 agreement, Westlands also assumed any liability for lawsuits from individual Westlands growers. In 1991, some growers in a 42,000-acre area of Westlands who had originally drained their wastes to Kesterson filed suit against Westlands and the Bureau of Reclamation for damages caused when the drainage system was closed and plugged. The suit was placed on the back burner during the Clinton years, as Reclamation officials plodded along spending tens of millions of dollars on drainage studies, including a $50 million, five-year investigation by a state-federal team. Their report, issued in 1990, concluded the cheapest solution was to take the high selenium lands out of production and drastically reduce the amount of drainage produced. When George W. Bush came to office, the growers who had filed the lawsuit a decade earlier began pushing it again. A career Justice Department attorney, Yoshinori H.T. Himel, representing the Department of Interior and the Bureau in the grower suit, filed a motion in August of 2002 to get it dismissed. Himel pointed out that Westlands, in the 1985 agreement, had agreed “to design, install, and operate alternative means for disposal of drain water in an efficient and environmentally sound manner.” Himel then noted that the 1985 Agreement “placed the obligation on Westlands “to design, install and operate alternative means for disposal of drain water from Westlands.” Himel said alternative means included evaporation ponds, salt tolerant crops and recycling. While Himel acknowledged it could be argued the 1985 agreement may not have required Westlands to assume long-term responsibility for drainage for the entire San Luis Unit he said Westlands assumed, at the minimum, responsibility for solving the drainage problems of the 49,000 acres that had been draining to Kesterson. Himel added “One thing the Agreement did alter, however, was Westlands’ obligation to indemnify the United States for, among other things, ‘losses, damages, claims and liabilities’ arising from Westlands’ performance or non-performance of the Agreement. The language ‘losses, damages, claims and liabilities’ indicates money claims, such as Plaintiffs’ money claims in this lawsuit . . . Westlands thus undertook at a minimum to indemnify the United States for lawsuits by those who might be dissatisfied with the results of Westlands’ ‘alternative means’ for drainage.” A federal court rejected this argument but critical issues of apportionment of liability for the drainage mess remained. Of course, we will never know what would have happened had the apportionment of fault issues been decided by a jury or a judge. Bennett Raley, a Colorado attorney who represented irrigation districts and was appointed Assistant Secretary for Water and Science by his Interior Secretary Gale Norton in 2001, made sure that a trial on the merits did not happen. Raley, undoubtedly with the support of Norton and the White House, undercut Himel and other Justice Department career attorneys defending the suit, agreeing to a $139 million settlement in December of 2002, with most of the money coming from U.S. taxpayers, not Westlands. Raley, of course, gained fame in 2002 for allotting water from Oregon’s Klamath River to irrigators rather than to endangered fish, leading to a massive salmon die-off. News reports later indicated Vice President Dick Cheney masterminded the Klamath decision. It is unknown if Cheney or former White House advisor mastermind Karl Rove were consulted or involved in the decision to concede victory to the Westlands growers without a court fight. In an October, 24, 2002 pre-trial order for partial summary judgment in the growers’ suit, U.S. District Court Judge Oliver Wanger noted that there was no dispute the growers continued to irrigate their lands knowing “that their lands would be damaged without drainage.” Wanger added, “There are multiple issues to address at trial, however, regarding the operative ‘cause’ of damage to plaintiffs’ land, whether that damage constitutes a public or private nuisance, whether federal defendants and Westlands are concurrent tortfeasors, apportionment of any comparative fault of plaintiffs, and whether plaintiffs[] consented to or assumed the risk of a nuisance or trespass by demanding water deliveries to their farmlands, despite the knowledge that no drainage facility existed.” (Emphasis added.) In other words, a jury or a judge may have found the growers knowingly ruined their own lands and might not have awarded them a cent in damages. But Raley, as already noted, pre-empted any jury determination of those issues and, contrary to the Justice Department attorneys’ written arguments, settled. Under the settlement, the federal government was to pay $107 million to have the farmers’ lawsuit dismissed. Westlands had to spend $32 million to settle its part of the case, buying 34,000 acres of the plaintiff’s ruined land and retiring it. “We weren’t batting a thousand with this court,” Raley claimed in a 2002 interview with the Sacramento Bee. “They were claiming that we had damaged them, damages in excess of $400 million.” Raley did not mention Westlands officials had signed the April 1985 agreement assuming liability for all such lawsuits or that his own government attorneys thought they had a good case and could win in court. Rep. George Miller and environmental activists howled at the settlement, which they warned would be used as a precedent for the still unsolved drainage problem facing the Western San Joaquin Valley. Having given away $107 million in taxpayer money, Raley returned to private practice representing water districts in December of 2004. Following the 2002 settlement (in which the federal government admitted no wrongdoing), Westlands worked on getting a new long-term water delivery contract and pressuring Reclamation to come up with a drainage solution because a district court, and then the federal Ninth Circuit Court of Appeal, had ruled Reclamation had a legal obligation to try and complete a drainage system for Westlands. Westlands growers had a powerful ally in Jason Peltier, a native Californian and deputy secretary at Interior who was the Administration’s point man on western water issues and was a former lobbyist for Westlands and other California federal irrigation districts. Peltier claimed in news interviews he had nothing to do with matters involving Westlands. However, Westlands recently hired Peltier at an undisclosed salary. A former regional Reclamation official, Susan Ramos, has also been hired by Westlands. Which brings us to the present. Westlands general manager and general counsel Tom Birmingham is now pushing a “global” settlement to the outstanding drainage lawsuits (filed by water districts downslope from Westlands) and Westlands’ desire for a long-term secure water supply. In recent closed door meetings with Sen. Dianne Feinstein, Valley congressmen Dennis Cardoza and Jim Costa (who represents the Westlands area), Natural Resources Defense Council attorney Hamilton Candee and a few others, the various stakeholders have tried to work out a deal. The news media is not permitted to cover these talks while decisions are made involving billions of taxpayer dollars. Ed Imhoff, a retired federal scientist who headed a post-Kesterson $50 million, five-year study of the drainage problem from 1985-1990, was also kept out of the talks. Feinstein reportedly insisted “too many” people were in on the talks. Imhoff has been critical of the proposed drainage solutions of both Reclamation and Westlands. His 1990 study, dubbed the “Rainbow Report” noted land retirement was the cheapest option. In the Central Valley Project, water supplies have always been distributed on a first in time, first in right priority system in which the oldest CVP irrigation districts get the water they need before irrigation districts down the totem pole get their water. Westlands, as the last CVP area to come on line, is at the bottom of the totem pole. This has often meant drastically reduced supplies for Westlands. For example, during the 1987-1992 drought, Westlands, in 1990 and 1991, only got 25 percent of its annual contract amount of 1.15 million acre-feet (an acre-foot is 325,851 gallons). Westlands has tried repeatedly in court to get on the same footing as more senior water contractors but to no avail. The drainage crisis, widely misunderstood and mishandled by both Reclamation and Westlands, has provided the growers an opening. A few months ago, Westlands announced it could solve the drainage dilemma for less than half of the $2.6 billion Reclamation officials say it will cost to provide reverse osmosis, bio-remediation, recycling, and land retirement. Birmingham said that in exchange for letting the Bureau off the hook on drainage, Westlands wanted the Bureau’s extraordinarily valuable state water permit and operational control of the huge San Luis Reservoir near Los Banos. As anticipated, the audacious claim provoked a hostile response from Rep. Miller, Northern California interests and environmental groups statewide. Birmingham then abandoned that strategy amid a torrent of negative publicity and, in the first week of August, just prior to another closed door meeting with Feinstein he came up with a revised, but still sketchy, proposal. Birmingham suggested that if the federal government would forgive a $489 million debt the Westlands owes for capital construction costs, and would exempt Westlands and other San Luis Unit water districts from acreage limitations and pricing provisions of federal law, Westlands would take over responsibility for the drainage mess. In addition, Westlands wants a 60-year water delivery contract with rights of renewal (federal law now prohibits federal water contracts in excess of 25 years) and wants the Bureau to authorize transfer of title to various pumping plants, internal distribution systems, and the Coalinga Canal. Apparently unmentioned in the Feinstein talks is that Westlands signed a “waiver/indemnity agreement” with Interior back on April 3, 1985, after the Kesterson closure or that the federal government admitted no liability in the 2002 settlement. The claim that the United States is somehow responsible for any damage to the former desert lands and thus should make major concessions on water delivery or drainage issues is simply unproven in a court of law. Feinstein also seems unclear on the concept that even though the Bureau estimates it may take up to $2.6 billion to produce a drainage program, Westlands is ultimately required under the 1960 legislation to pay for it, albeit over 40 or 50 years and interest free. Neither the district court nor the Ninth Circuit has ever held that Congress must appropriate money to build a drainage system or that Westlands would not have to ultimately pay for it. Moreover, few people in Washington seem to be questioning why Westlands should get off the hook for the $489 million still owed on the delivery system. If a man builds you a house and a plumbing system and fouls up the pipes underneath the bathroom, you don’t get the house for free. You just get your plumbing fixed. Following a meeting in her office on Aug.1, Senator Feinstein said of a potential agreement “the devil is in the details.” Environmentalists fear she isn’t really paying attention to the details or looking out for the interests of American taxpayers and especially Californians, who are cutting back usage in urban areas while Westlands’ 500-600 growers could get enough water annually to meet the needs of a city of eight million people, or two cities the size of Los Angeles. Consider this: If Westlands gets 800,000 acre-feet of water a year, which is what it would like, that translates to 260.68 billion gallons of water a year and 15 trillion, 640 billion gallons over the life of the proposed 60-year contract. If you calculate the urban retail value of 800,000 acre-feet of water at a conservative $500 an acre-foot (Rep. Grace Napolitano of Los Angeles, new chairwoman of the House Subcommittee on Water and Power Resources, says its $600 an acre-foot in Southern California) you come up with $400 million a year. Assuming the Westlands pays a generous $100 an acre-foot (they will argue for, and probably get, a cheaper price) that means they will pay $80 million for $400 million worth of water in a given year. Over 60 years, $400 million times 60 turns out to be $24 billion worth of water for a few hundred growers(Westlands claims 600 growers but has never produced a list and critics say it could be as few as 400). And many of those “growers are connected by blood or marriage, or simply entities operating under different corporate names but controlled by the same people. Of course, in my example, they would pay for 20 percent of that water ($100 an acre-foot) which means the retail value of that water delivered over the life of the contract, less what they paid for it, would be $19.2 billion. Actually, the potential profits of water sale could be much higher. First of all, you can bet that the current urban price of water will be far higher in 60 years, when the western San Joaquin Valley may look like the San Fernando Valley. Water then may be worth $2,000 an acre-foot or even more if climate change produces extended drought. Although Westlands’ Birmingham contends any guaranteed supply of water is strictly for farming in the district, there is no question it is legally permissible, thanks to a 1992 change in Reclamation law, for Westlands to sell its water on the retail market to the highest bidder, i.e. Metropolitan Water District of Southern California, which has an insatiable thirst. Indeed, several San Joaquin Valley irrigation districts are already selling water to developers or urban interests and some individual Westlands growers have already offered to sell water to Metropolitan. They understand very well that water is the new cash crop. Westlands’ so-called solution to the drainage problem is (1) conservation, (2) recycling and the most controversial and unproven, (3) use of sprinklers to disperse the tainted drainage water into the air, with the water evaporating and the salts and selenium falling back onto a gravel bed. The technology has never been tried large scale other than on one California Department of Water Resources test plot that was less than the size of a city lot. Westlands officials have not explained where the millions of tons of salts that would accumulate over the decades would be hauled for disposal. Or what would happen if their scheme did not work. Environmentalists worry the drift of the salty spray from the sprinklers, especially in windy conditions, could damage surrounding fields or further taint groundwater. And sprinklers, or puddling of water would surely draw wildlife to the tainted water. The spray drift zone downwind would be more than two football fields long. If trees were planted for a drift barrier that would created a selenium-charged terrestrial environment. Huge amounts of land for a safety zone around the sprinklers would be required for the amount of drainage Westlands generates. The district hasn’t said how much land. So if Westlands’ drainage scheme doesn’t work the growers will simply idle the bad lands and keep the very valuable water which they can resell to the highest bidder under the 1992 law. How fortunate. At Feinstein’s Aug. 1 meeting with Birmingham and others, U.S. Fish and Wildlife Service scientist Joseph Skorupa was not in attendance although Senator Feinstein reportedly asked for him to be there. Skorupa is probably the premier expert in the United States on the impacts of farm drainage water on wildlife, especially birds, and has been studying San Joaquin Valley drainage since the 1980s. Fish and Wildlife managers, under pressure from Bureau officials, told Sen. Feinstein that Skorupa was unable to attend the Aug. 1 Washington meeting. According to sources at Interior, however, this was an outright lie and Skorupa was both willing, and able, to attend the Feinstein meeting. Ironically, the same day Skorupa was told he could not attend the Feinstein meeting, U.S. Fish and Wildlife Director Dale Hall was testifying before the House Natural Resources Committee Hearing regarding Interior’s questionable scientific and policy decisions under the Endangered Species Act and claimed that “Science is the cornerstone of the Service’s work; it is what guides the agency’s decisions.” Unless, of course, Westlands is involved. Westlands growers have making campaign contributions to Feinstein for years, including nearly $5,000 personally from Birmingham. No one has calculated how much. But they have a lot to gain if Feinstein buys off on their proposal and sponsors legislation. According to the Environmental Working Group (EWG) website, in a recent year the largest 10 percent of the farms in the Central Valley Project - which stretches from Redding to Bakersfield - got 67 percent of the water, and of course, Westlands has the biggest CVP farms of all and uses the most water of any district. Twenty-seven large CVP farms, most in the Westlands, received water subsidies averaging in excess of $1 million annually (i.e. the cost of replacement water). One Westlands farm, Woolf Enterprises, received more water by itself than 70 water districts in the Central Valley Project, for a subsidy worth up to $4.2 million annually at urban prices for water. EWG has also documented that CVP farmers get power subsidies to pump that Delta water uphill into the San Joaquin Valley at rates that are about 1/15th what the average citizen pays for the monthly electricity bill. CVP growers’ water rates are about two percent of Los Angeles residents’ rates. Fortunately, any deal the Westlands/Bush Administration cabal makes with Feinstein must run the gauntlet of a Democratic Congress, which may not be as solicitous of the Westlands as Feinstein is. Rep. Miller and Rep. Napolitano promise to closely monitor any sweetheart water giveaway. California environmental groups, fishing groups and Northern California Native Americans are also mobilizing to fight the latest Westlands scheme. One question for Congress to ask is how many billions do American taxpayers owe the few hundred Westlands growers? Kesterson whistleblower Felix Smith, a retired Fish and Wildlife Service biologist who first leaked to the news media the selenium-caused bird deformities, has been writing about the Kesterson debacle for 25 years. He estimates the overall subsidy to the Westlands (cheap water, cheap power, interest free construction costs), per acre, is now well over $6,600 per acre, or $3 billion for the whole district. The per acre subsidy is far more than the land is worth. More worrisome is that if Westlands is guaranteed an enormous amount of water, it will increase the stress on a Delta that is already on the verge of ecological collapse due to overpumping by the State Water Project as well as the federal pumps. However, Westlands’ “farm boys” are hoping that public apathy and congressional confusion or ignorance will result in one more very big payday. Over 15.6 trillion gallons of water in the middle of a desert. Think of the riches. Their desert may be uninhabitable but it does rain money.
===
Frack ag pass:
But some groups have been exempted from the water restrictions, specifically big agriculture, which uses about 80 percent of California’s water, and oil companies. *Democracy Now!* discussed on their show today the new mandates and the implications of exempting some of the biggest water users in the state.
Food & Water Watch California is one of the groups critical of Governor Brown for failing to cap water usage by oil companies and corporate farms, which grow water-intensive crops like almonds and pistachios, most of which are exported out of state or overseas, reports Nermeen Shaikh of Democracy Now! “In the midst of a severe drought, the governor continues to allow corporate farms and oil interests to deplete and pollute our precious groundwater resources,” says Adam Scow of Food & Water Watch California.
Shaikh and fellow reporter, Amy Goodman, then turn to Mark Hertsgaard, author of a new book, Hot: Living Through the Next Fifty Years on Earth,and whose latest story is “How Growers Gamed California’s Drought.” Hertsgaard, an expert on big agriculture and the drought in California, discusses how the price of water is far too low and how we’re still wasting far too much water. “If we priced [water] properly, which means a little bit higher, there’s enormous strides California could be taking with water efficiency,” says Hertsgaard. “We could essentially wipe out the effects of the drought.”
But right now we have billionaire farmers like Stewart Resnick bragging about record profits and record production in water-intensive crops like pistachios, almonds and alfalfa, while poorer communities where farmworkers live “don’t have water coming out of their taps anymore,” says Hertsgaard.
Watch the full clip here:
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==
5/09
his is a rush transcript from "Hannity," May 8, 2009. This copy may not be in its final form and may be updated.
SEAN HANNITY, HOST: Farmers in California, they're losing their land, crops, and their livelihood, all because of a 2-inch fish. Ainsley Earhardt brings us this special investigation.
(BEGIN VIDEOTAPE)
AINSLEY EARHARDT, FOX NEWS CORRESPONDENT (voice-over):California's Central Valley is considered by many to be the richest and most productive farmland in the nation. But this land is being threatened by the small, harmless-looking minnow called the delta smelt.
Recently, it landed on the endangered species list, causing a federal court to shut down vital pumps to farmers to help preserve it.
• **Video: Watch the special investigation**
SARAH WOOLF, WESTLANDS WATER DISTRICT: This is the pumping station. And it is pumped out of the delta here and brought into this canal system that makes its way. And there's actually two that go along together.
Sarah Woolf is a spokesperson for the Westlands Water District, a company that oversees the manmade, complicated water delivery system in the Central Valley.
(on camera) How many years has this been a process?
WOOLF: It was completed in 1968.
EARHARDT: Decades.
WOOLF: Yes.
EARHARDT: All of the farmers along all of this land, 2/3 of the state OF California have depended on water for their crops.
WOOLF: Yes.
EARHARDT: The water is turned off here, so none of these farmers can expect to get any water.
WOOLF: That is correct.
EARHARDT (on camera): Two years ago, I wouldn't have been able to do this. This was a canal full of gushing water irrigating the farmland here in the San Joaquin Valley. But as you can see, it is all dried up. The pumps were turned off after environmentalists won a federal court case. But at least one lawmaker in Washington is fighting back.
REP. DEVIN NUNES (R-CALIF.): You're spending $1 trillion and you will not put in one provision that would create — save 60,000 jobs. This is an insult to my constituency.
What we have today is a manmade brought on by laws, passed by Congress, to where we're starting the breadbasket of the world and starving it of water to save little fish, which is outrageous.
EARHARDT: Green groups claim the smelt are critical to the delta's ecosystem, and if the delta's fragile ecosystem were to fail, so would the state's main water source.
NOAH GARRISON, NRDC: If we allow the delta to become polluted or to lose — or for the help of that ecosystem to collapse, we lose the supply of water for 23 million people.
EARHARDT: But this argument offers little solace to farmers who have watched their land go from this to this.
KOLE LIPTON, FARMER: This is our lifeline. And, you know, it was a promise by the government. We have kept our word. This Congress has reneged on their agreements and their promises.
EARHARDT: Kole Lipton is a third- generation almond farmer here, and he argues that the American consumer should get ready for produce prices to soar and food scares to become a common occurrence.
LIPTON: Very simply. I would say, do you want to depend for your food supply on a foreign country? If you think you have problems now with salmonella and finding out what part of the United States it came from, think of the problem if you have a food scare and your food is being imported from South America or China.
EARHARDT: Representative Nunes estimate 37,000 jobs have been lost due to the smelt issue and that number is rising higher by that day. In one town in California, unemployment is up to an astonishing 40 percent.
I can see the tears in your eyes.
TERRY INCH, FARM WORKER: I'll cry. This does not make me happy. Nobody wants this.
EARHARDT: What’s going through your mind?
INCH: I want a job. We don't have water, we don't have jobs.
EARHARDT (on camera): Stressful?
INCH: Yes. It hurts. Nobody likes a handout.
(END VIDEOTAPE)
HANNITY: Joining us now is Ainsley Earhardt. I can't believe this. Because of this little fish, up to 80,000 people are going to lose jobs. There's just enough water for farms that have been there for, what, generations?
EARHARDT: Generations. Third-general farmers, Sean. Their grandfathers were out there, blood, sweat and tears, making sure those crops are going to grow so you and I would have fruits vegetables. And let me tell you, they are shutting it down because they think the minnow could get caught or does get caught in the pumps.
Now, they're pumping the water out into the Pacific Ocean instead of streaming it down to the farmers, who live in the valley.
HANNITY: And they're all losing their jobs.
EARHARDT: They're all losing their jobs. Representative Nunes says up to 80,000 jobs could be lost. So we're talking about lots of jobs. We went to the food bank, the line was wrapped around the block because people don't have food.
HANNITY: And all they've got to do is turn the water back on.
EARHARDT: Right. All they have to do.
HANNITY: Crazy.
EARHARDT: And you now what? Now we're going to have to get our fruits and vegetables from other countries, from Mexico and from elsewhere.
HANNITY: Might as well. We get our oil and everything else. I'll tell you, this is madness. This is madness. Great report.
EARHARDT: It’s fish verses families.
HANNITY: It really is. They're choosing the fish. Two-inch fish.
EARHARDT: Two-inch minnow. Didn't you used to fish with them? Bait fish.
===
Westlands Water District, one of the consistent recipients of “Cold, Dead Fish”awards in past years and the largest water district in the world, is notorious as the “Darth Vader” of California water politics.They are the biggest pushers of the peripheral canal or tunnel and have launched numerous lawsuits to stop the restoration of salmon and other species on the Trinity, Sacramento and San Joaquin rivers.
However, they reached a new low in October when they masqueraded as the “Central Valley Tea Party” to instigate opposition to RTD’s film documenting the public subsidies of water for huge, unsustainable corporate agribusiness on the west side of the San Joaquin Valley.
“It is hilarious that Westlands – huge growers who receive millions upon millions of taxpayer dollars to subsidize their unsustainable practices wants to hide behind anti-tax groups. What utter hypocrisy,” summed up Barbara Barrigan-Parrilla, Executive Director of Restore the Delta. With this in mind, it is fitting that Westlands and Central Valley Tea Party are bestowed the “Corporate Welfare Queen” award for 2012.
Last year, as California endured one of its driest years on record, the Westlands Water District made it rain 3,000 miles away -- on Capitol Hill.
The nation's largest agricultural water district, located in the Central Valley, spent $600,000 on lobbying efforts, according to an analysis by KPCC in partnership with the nonpartisan Center for Responsive Politics. That's by far Westlands' biggest annual expenditure for lobbying -- about six times what it spent in 2010.
The lobbying comes as Congress and federal agencies consider how to respond to three years of drought conditions that have cut water supplies across the state and ratcheted up political pressure from the hard-hit agricultural sector, including many of Westlands' customers.
California farmers grow nearly half the nation's fruits, vegetables and nuts. The California Farm Water Coalition, an industry group, estimates farmers -- and the processors and truckers who get crops to market -- could lose $5 billion this year due to the drought.
How important is this issue? Well, in recent months it's brought President Obama, the House Speaker and the powerful House Natural Resources Committee to the Central Valley.
Congress is considering two major legislative packages -- one already passed by the House, authored by freshman Republican Rep. David Valadao of Hanford; and one introduced in the Senate by California Democrats Dianne Feinstein, with Barbara Boxer as a co-sponsor.
The bills have the common goal of redistributing water to meet farmers' needs, but they differ on execution and the ramifications.
CAdrought.jpg]
The House bill, which was co-sponsored by the state's entire GOP delegation, would rewrite water contracts and in the process set aside protections, which has environmental groups up in arms.
The Senate bill would allow regulators to "provide the maximum quantity of water supplies possible" to where it's most needed and boost existing federal drought programs by $200 million.
As is true with many issues in Washington, money is part of the fight. As Bay Area Rep. George Miller, a Democrat, says, "You can make water run uphill if you have enough money."
The DC bucket brigade
California water politics is mostly about geography -- Northern California's watershed versus the Central Valley, which relies on that water coming south to irrigate crops, versus Southern California, with its massive and thirsty urban population.
As the drought has worsened, those various interests have pushed harder for relief through campaign contributions to key members of Congress and by employing lobbyists.
The two biggest spenders on water issues are Westlands, whose customers own 600,000 acres of farmland in Fresno and Kings counties, and the owners of Kern County-based Paramount Farms, the nation's largest grower of pistachios and almonds.
Just how serious is the quest for water? Last year, Westlands hired four different lobbying firms -- even as the overall amount spent by all groups and corporations on federal lobbying has been going down since 2010. All eight of Westlands' officially registered lobbyists previously worked in government -- including a former Republican congressman from Minnesota.
And the $600,000 Westlands spent in 2013 is only what was reported on required disclosure forms. According to an internal document obtained by Southern California Public Radio, Westlands also paid $90,000 last year to former California Democratic Rep. Tony Coelho for "Washington representation," which was not included in Westlands' lobbying reports.
Coelho, who did not respond to requests for an interview, is related to one of Westlands' board members and they are partners in a dairy farm. Westlands also paid another firm nearly $1 million for an "outreach and awareness" campaign.
Democratic lawmaker Miller, who has been on Capitol Hill for more than four decades, says lobbyists keep their "A-game" going all the time, rain or shine, "because you never know when the good Lord's going to turn off the water. So you'd better be ready."
Money is extremely helpful in obtaining access and influence, which is crucial whenever Congress gets involved. That's true whether the cash is in the form of spending on lobbying or campaign donations.
Paramount Farms is owned by Lynda and Stewart Resnick of Los Angeles. Their multi-billion dollar fortune comes from a diverse portfolio that includes Fiji bottled water. They have a controlling interest in the Kern Water Bank Authority, which stores underground supplies of water to irrigate Paramount's nut trees.
The Resnicks don't hire lobbyists at the federal level, but they're generous campaign contributors. They and people who work for their companies have given nearly $457,000 to candidates, political action and party committees since 2011. That includes nearly $321,000 from the Resnicks themselves. (See table at end of story.)
Setting the water table
resnicks.jpgYou can't just read the House and Senate bills and point to paragraphs that directly help either Westlands or the Resnicks. But John Lawrence, a former Capitol Hill staffer who currently teaches at the University of California's DC Center, says water bills are "very often written specifically in a vague sort of way." Congressman Miller adds: "There's rarely any word in a piece of water legislation that's there accidentally."
The bill that passed in the House would mandate an increase in pumping from the Sacramento Delta. Doug Obegi, an attorney with the Natural Resources Defense Council, says that water would primarily go to Central Valley Project contractors, including the biggest -- the Westlands Water District.
The bill also extends for 40 years all existing federal water service contracts -- including the one for Westlands. Lawrence says that takes away any flexibility to make water decisions for a generation. He notes that once you've delivered a "signed, sealed contract, let alone been directed to do it by the Congress," you've taken away any chance at reviewing how future water should be allocated.
Feinstein's Senate bill includes several provisions that would allow Delta water to be sent farther south to Kern County. Patricia Schifferle of the environmental group Pacific Advocates says, because of previous legislative amendments, the water would be made available to the groundwater bank controlled by Feinstein's supporters -- the Resnicks.
(Neither Westlands nor the Resnicks' holding company, Roll International, responded to requests for interviews.)
Feinstein recently revised her bill. This latest version includes a provision to boost Colorado River storage in Nevada, home to Senate Majority Leader Harry Reid. This version could make it to the Senate floor for a vote without going through the committee process.
Horse trading on Capitol Hill isn't new. Some of the lobbying money goes to making sure everyone gets to wet their beak. Miller notes that deals get made -- trading something Midwest lawmakers want in the farm bill for something Central Valley interests need in the water bill. He says there are "a lot of chits out there that have been planted around the anticipation of a water bill coming to the floor of Congress."
If the House bill became law, Ron Stork of Friends of the River says not only would habitat restoration be hurt, but so would two other water consumers: farmers and residential users in the northern part of the state. Delta farmers, with some of the oldest water rights in California, and the city and county of Sacramento, which contract for drinking water, would find their supply "commandeered and delivered south."
The lobbying isn't limited to Capitol Hill. It also takes place at the agency level. John Lawrence says private meetings are held behind closed doors at places such as the Bureau of Reclamation or the Environmental Protection Agency, where there's "greater wiggle room" on how water policies are implemented. Those conversations are confidential, not debated openly in Congressional committee hearings.
Westlands' reports show it lobbied the EPA, the Agriculture Department, the Interior Department (which includes the Bureau of Reclamation) and the Council on Environmental Quality, in addition to Congress and the White House. Three of the water district's lobbyists are former high-ranking officials of the Interior Department.
There's even a place lobbyists and campaign contributions collide: Schifferle from Pacific Advocates notes a 2012 breakfast fundraiser for Feinstein in the offices of one of Westlands' lobbying firms, held "right around the time" of a budget amendment that gave water agencies access to federal water.
In Washington, certain wells never run dry.
Top Resnick family campaign contribution recipients from 2011-2013
Recipient Amount
Committee to Elect an Effective Valley Congressman (Henry Waxman) $100,000
Democratic National Committee Services Corp $30,800
Republican National Committee $30,800
Democratic Congressional Campaign Committee $21,700
Rep. David Valadao (R-Hanford) $17,900
Democratic Senatorial Campaign Committee $13,000
Rep. Jim Costa (D-Fresno) $12,300
Sen. Ed Markey (D-Massachusetts) $11,400
Rep. Jeff Denham (R-Fresno) $11,300
Sen. Cory Booker (D-New Jersey) $10,400
Sen. Tom Harkin (D-Iowa) $10,000
Rep. Joe Kennedy III (D-Brookline) $10,000
LA Political Action Committee $10,000
Rep. Kevin McCarthy (R-Bakersfield) $10,000
Peak Political Action Committee $10,000
To Organize a Majority Political Action Committee $10,000
Sen, Dianne Feinstein (D-California) $9,800
Data source: Federal Election Commission via OpenSecrets.org.
Westlands Water District board members' campaign contributions from 2011-2013
Board Member Democratic Republican Total
James Anderson $2,500 $1,000 $3,500
Thomas Birmingham $10,500 $17,500 $28,000
Frank Coelho Jr. $2,600 $4,750 $7,350
Larry Enos 0 $1,000 $1,000
Daniel Errotabere $875 $5,525 $6,400
Georgianne Errotabere $875 $875 $1,750
Jean Errotabere $875 $4,300 $5,175
Gary Esajian $1,000 $8,500 $9,500
Bridget Neves 0 $2,500 $2,500
Todd Neves 0 $18,850 $18,850
Donald Peracchi $13,600 $45,500 $59,100
Judith Peracchi $5,000 $2,500 $7,500
Alan Sano $2,500 $1,000 $3,500
Christopher Woolf $2,000 $9,374 $11,374
Sarah Woolf $3,000 $3,500 $6,500
TOTALS $45,325 $126,674 $171,999
Data source: Federal Election Commission via OpenSecrets.org.
| Akerman LLP | $80,000 | Westlands Water District | Findaro, Joseph |
|---|---|---|---|
| Brownstein, Hyatt et al | $240,000 | Westlands Water District | |
| Mercury | $160,000 | Westlands Water District | |
| Mercury/Clark & Weinstock | $80,000 | Westlands Water District | |
| Sidley Austin LLP | $40,000 | Westlands Water District | Karen, Catherine |
wiki
Westlands Water District is a water district in central California, formed in 1952. The Westlands Water District receives its water from the Central Valley Project, and provides water to farms in an area of approximately 600,000 acres (2,400 km²) in Fresno County and Kings County. Its headquarters are in Fresno.
Westlands has been the focal point for many controversial water issues in California because of its size--it is the largest agricultural water district in the United States. The Reclamation Act of 1902 required that farmers live on their land (Westlands had many absent landowners at the time of federal contracting) and only receive water for 160 acres (In 1968, 11% of the owners owned 84% of the land).
Farms within Westlands produce approximately $1 billion worth of food and fiber per year, more than 20 percent of the agricultural output of Fresno County.[1] That averages out to about $1,700 of gross revenues per acre.
Instead of enforcing the Act, Congress passed the Reclamation Reform Act in 1982, boosting allowable irrigated land to 960 acres (3.9 km²) and eliminating the provision that landowners remain near their lands. Furthermore, in building the San Luis Unit, the federal government agreed to build a drain as well, well aware the irrigation in parts of Westlands would saturate the root zone. However, only the first part of the San Luis Drain was ever completed, and this half-completed drain created Kesterson Wildlife Refuge. "Due to environmental concerns and budget constraints, the drain was never completed as originally planned."[2] The drain was closed by court order in 1985 for violation of environmental laws due to high levels of heavy metals, such as selenium, in the drained water.[2] The soil in the upslope regions of the district contains "extraordinarily elevated concentrations of selenium, boron, chromium, molybdenum, and extremely high concentrations of various salts that disrupt the normal ionic balance of the aquatic system."[2]
References
- :{Jump up:(style="top:-99999px;clip:rect(1px 1px 1px 1px);overflow:hidden;position:absolute !important;padding:0px !important;border:0px !important;height:1px !important;width:1px !important"):}:^ Fast Facts on Fresno County and California Agriculture< Local government in California
- Special districts of California
==
When California Gov. Jerry Brown (D) declared a drought emergency last week, his administration slipped a bit of legalese into the declaration that has some environmentalists worried.
It states that the California Environmental Quality Act (CEQA) will not apply to efforts by state agencies to “make water immediately available.”
CEQA, a landmark 1970s environmental statute, requires environmental analyses for major projects, which leads to delays as the studies are conducted and fought over, and as proposals for reducing environmental harm are debated. Brown, who hates the law, once remarked, “I‘ve never seen a CEQA exemption that I don’t like.”
The drought declaration says the limited suspension of CEQA will help “streamline water transfers and exchanges between water users” and help the state change limits on how much water can be diverted from reservoirs and from the Sacramento–San Joaquin River Delta.
That’s important because the Delta, a stressed waterway and estuary that flows from melting snow in the Sierra Nevada Mountains to San Francisco Bay and into the Pacific Ocean, is at the center of a decades-old fight between farmers on one side and fishermen and environmentalists on the other. Farming corporations that own desert-like land in California’s Central Valley fight tooth-and-nail to be allowed to draw more water from the Delta, which would boost their nut, fruit, and vegetable harvests. Fishermen, who rely on the ecosystem for salmon, and environmentalists fight tooth-and-nail to prevent that from happening.
The drought is ravaging California just as Brown is preparing to ask voters to approve a multi-billion-dollar overhaul of the state’s water system. His plan would, among other things, dig a controversial water tunnel that could be used to boost the amount of water that’s diverted from the Delta for use on Central Valley farms.
So environmentalists are understandably suspicious about Brown’s move to suspend CEQA for water projects during the drought.
“This is, of course, a back-door attempt to sneak through the change of place approval needed to build the peripheral tunnel project, which will divert more water from the Delta,” Jeff Miller of the Center for Biological Diversity told Grist. “If the governor was serious about addressing the drought, he would turn off the taps that water lawns in the desert and irrigate luxury crops on selenium-tainted lands in the San Joaquin Valley before killing salmon and smelt.”
Here’s the language from the drought declaration that has some environmentalists worried:
IT IS HEREBY ORDERED THAT: …
- The Water Board will immediately consider petitions requesting consolidation of the places of use of the State Water Project and Federal Central Valley Project [in the Delta], which would streamline water transfers and exchanges between water users within the areas of these two major water projects.
- The Department of Water Resources and the Water Board will accelerate funding for water supply enhancement projects that can break ground this year and will explore if any existing unspent funds can be repurposed to enable near-term water conservation projects. …
- The Department of Water Resources and the Water Board will take actions necessary to make water immediately available, and, for purposes of carrying out directives 5 and 8, Water Code section 13247 and Division 13 (commencing with section 21000) of the Public Resources Code [CEQA] and regulations adopted pursuant to that Division are suspended on the basis that strict compliance with them will prevent, hinder, or delay the mitigation of the effects of the emergency. Department of Water Resources and the Water Board shall maintain on their websites a list of the activities or approvals for which these provisions are suspended.
John Upton is a science fan and green news boffin whotwee
The case has lately turned into a mud-slinging-fest that, despite the legal verbiage necessary of court documents, reads like a soap opera scandal."
Denver Post July 3, 2013 article on
bankruptcy case of insider trading
suspect Roger "Mr. Fast Lane" Parker,
business associate and client of
Westlands Water District
lobbyist/lawyer Norman Brownstein
By Lloyd G. Carter
In every American city there is at least one, and usually more than one, power elite group which wields great influence and power over civic, economic and political affairs. There are at least two types of individuals in those power elites: People who inherit or marry into great wealth, and self-made multi-millionaires or billionaires. In Fresno, that elite is centered around dynastic agribusiness clans and real estate developers, who have no problem plowing up productive orchards and vineyards to make way for cookie cutter subdivisions.
In Denver, one power elite is centered around the oil and gas industries, which features both inherited wealth and rags-to-riches entrepreneurs. At the center of one powerful group of friends and business associates is Norman Brownstein, who proudly wears the mantle of America's "101st Senator."
What do Denver power brokers have to do with the California water issues I often write about? Plenty. For starters, Brownstein is a $20,000-a-month lobbyist for the Westlands Water District. I have already written here about the saga of Norman Brownstein and the embarrassment brought on by the shenanigans of his two sons, one imprisoned for insider trading and the other entangled with the creator of the Girls Gone Wild video goldmine.
But it must be conceded that Brownstein appears to have many friends(Republicans and Democrats) in high places, which attracts clients like Westlands. And scandal in high places is not new to Denver.
A quarter of a century ago, during the savings and loan scandals of the mid 1980s, soon-to-be presidential son Neil Bush at the tender age of 30 had a seat on the board of directors of the Silverado Savings and Loan in Denver, while simultaneously influencing Silverado loans to his two partners in a failing real estate business. Federal regulators were ready to shut down Silverado in the fall of 1988 when Daddy Bush (George Herbert Walker Bush, then vice-president running for the presidency), or one of his minions, told the regulators to back off until after the election. They did.
The failure of Silverado cost taxpayers $1.6 billion. The US Office of Thrift Supervision investigated Silverado's failure and determined that Bush had engaged in "breaches of his fiduciary duties involving multiple conflicts of interest." Nevertheless, he was not charged criminally and a civil action was brought instead. He ended up paying $50,000 to settle out of court.
Brownstein was no stranger to ethical problems, either his own or those of his sons or his clients.
Brownstein was involved in an ethical dilemma a decade ago when he served on the board of directors of Global Crossing, a short-lived telecommunications company that went bankrupt in 2002. Brownstein's older son Chad had become involved as a partner in a company - ITU Ventures - which was heavily financed by Global Crossing's chairman Gary Winnick. In newspaper articles, corporate ethics experts said Global Crossing's board members had several conflicts of interest and board member Norman Brownstein, who had a fiduciary duty to Global Crossing, should not have been involved in Global Crossing business dealings with a company in which his son was a partner.
In just three years, Winnick sucked up $20 billion from investors, all hoping that Global Crossing would keep growing and secure new customers. Global went public in August 1998, its shares rising from $9.50 to $13.40 the first day of trading. Less than two years later, with the stock at a peak of about $64, the market valued Global Crossing at $47 billion. Winnick became the quickest billionaire in history with an estimated worth of $6 billion.
Winnick used Global Crossing's briefly inflated stock value to buy other companies. Among his acquisitions were Frontier, a century-old phone company in Rochester, New York. Frontier was the nation's fifth-largest long-distance carrier.
Unfortunately for Frontier, Global Crossing's downfall was as quick as its rise. The Internet bubble burst and dozens of telecom companies collapsed. Global Crossing watched customers abandon its 100,000-mile fiber-optics network. Hemorrhaging cash and facing withering prices and $12 billion in debt it couldn't repay, Global filed for Chapter 11 bankruptcy protection in early 2002. About 12,000 people, including many Frontier employees, lost their jobs and their pensions.
Winnick, apparently slightly bothered by his conscience, put $25 million of his new billionaire's wealth in an escrow account to reimburse Frontier workers whose pensions vanished. His contribution was a fraction of the $300 million lost by the company's employees.
In one of the few media comments that Norman Brownstein, the consummate behind-the-scenes lobbyist, has made in the last two decades, he told the New York Times ''You can say he [Winnick] didn't put much money in vis-à-vis how much he made at Global Crossing, but what other C.E.O. has put any money into a company that collapsed?" A contorted ethical view, to say the least.
Another big profiteer in the Global Crossing fiasco was recently elected Virginia Governor Terry McAuliff, former head of the National Democratic Committee, who invested $100,000 and got back at least $8.1 million, according to the Richmond, Virginia Times Dispatch newspaper. Virginia Attorney General Ken Cuccinelli, McAuliffe's opponent in the recent gubernatorial race, claimed in controversial TV ads that McAuliffe actually made $18 million on his small investment while thousands of Global Crossing employees lost their jobs and pensions when the company went bankrupt.
McAuliffe, in a 1999 story in The New York Times, said Global Crossing head Gary Winnick hired him on retainer because he "wanted a stable of people around him with great contacts" to "help him work on details." McAuliffe said in that Times article that "Winnick was looking for a little political action." McAuliffe’s retainer with Winnick ended in 1998. But he was allowed to hold on the stock, which rose steadily. McAuliffe later sold his 176,017 shares when Global Crossing stock jumped above $60 a share.
In the spring of 2013, while Norm Brownstein basked in lavish praise(recorded in the Congressional Record) from senatorial admirers, another financial scandal in high places was again sweeping Denver. Brownstein client and business partner Roger Parker, an oil and gas speculator who - with Brownstein's direct help - had talked Fresno native and billionaire Kirk Kerkorian into plunking down $684 million in late 2007 to buy a one-third share in Parker's Delta Petroleum company. Parker, known in Denver as "Mr. Fast Lane", leaked this inside information to at least two close friends. It was an unleashed secret that would come back to haunt Parker, who ended up in bankruptcy court.
The Securities and Exchange Commission (SEC) said that at the same time Parker and Brownstein were setting the hook in Kerkorian's wallet, Parker was also bragging to Michael Van Gilder, fourth generation head of the Van Gilder insurance company, and Scott Reiman, presumed heir to his aging father's estimated fortune of $700 million. Van Gilder insured Parker's business ventures and Parker had office space in Van Gilder's building. They were connected socially, in civic affairs, and in business.
Despite landing the $684 million investment from Kerkorian, things started to go badly for Parker and Delta Petroleum, with the world wide economic recession beginning in 2008. According to the Denver Post, critics said Parker refused to hedge his risks by guaranteeing future oil/gas supplies at a set price, believing falling prices would quickly rebound. They didn't.
Kerkorian's lieutenants moved in and took over operating control of Delta but they could not stop the bleeding either, and Delta stock plunged from a high of $22.82 per share on January 4, 2008, to an almost worthless low of 5 cents a share in January of 2013. Kerkorian ended up taking the company into bankruptcy in December of 2011 and, after reorganization, it was later renamed Par Petroleum.
Despite these setbacks, Parker, by 2010, was presumably unworried about the tip he had given Van Gilder and Reiman three years earlier at the time of the Kerkorian buy-in. Although SEC attorneys have never revealed who tipped them about the insider trading by Parker, Van Gilder and Reiman, some Denver bloggers suggested the leaker was Norman Brownstein's youngest son, Drew K. "Bo" Brownstein, who himself was ensnared in an insider trading scandal which occurred in 2010. Conspiracy theorists claimed Bo Brownstein may have tipped prosecutors about Parker in order to get a lighter prison sentence. Bo Brownstein, who was subject to up to 20 years in prison and a $5 million fine, instead served a year in a low security level federal prison. Others said Bo may have learned of the Parker insider trading from his own father, Norman Brownstein, who was a participant in the Kerkorian merger talks. According to the SEC, Bo made over $5 million for himself, his friends, and his hedge fund. Parker says in his SEC filings that the investigation of him began during the Bo Brownstein insider trading case.
SEC officials said Bo Brownstein, in his own insider trading case, had been given inside information by close friend Drew Peterson, whose father was H. Clayton Peterson, head of the Arthur Anderson Accounting Denver office and well known in the Denver business community. Both Petersons pled guilty to insider trading. They escaped prison time and were instead fined and ordered to pay back illegal profits.
According to the SEC, in April 2010, Clayton Peterson, learned through confidential board meetings that an oil company, Mariner Energy Inc., was about to be acquired by Apache Corporation, another oil company. Peterson tipped his son, Drew, about the acquisition and instructed him to also purchase Mariner securities for Clayton Peterson’s daughter. Drew Peterson used the material nonpublic information he received from his father to trade Mariner securities for his own accounts, for his family members, his investment club and investment clients, and to tip certain friends, including Bo Brownstein. Drew Peterson’s trading and the trading of his tippees, excluding Brownstein, resulted in illegal profits of $205,416. SEC officials said Brownstein used the material nonpublic information he received from Drew Peterson to trade shares for his father's account which he managed, for his family members and for hedge funds managed by Big 5, Brownstein’s registered investment advisory firm. Brownstein reaped approximately $4.6 million for Big 5 hedge funds, $305,050 for his family members and $130,671 for himself.
The New York Times, without reference to any source, reported that Bo Brownstein "bought stock for his family, including his father, without their knowledge." The Times never explained how it knew that Norman Brownstein did not know his son was using the father's account to engage in insider trading. News accounts suggested Norman Brownstein had given his son discretionary authority to buy and sell from the father’s account. However, there was no mention that attorney Jeffrey M. Knetsch, a shareholder in Norman Brownstein’s law firm, had assisted Drew “Bo” Brownstein with his business model and had delivered the Articles of Organization for Big 5 Asset Management LLC - Bo's hedge fund company - to the Colorado Secretary of State via an e-file, according to state records.
The SEC civil complaint Final Judgment entered against Bo, Norman Brownstein's son: (1) permanently enjoined him from violations of Section 10(b) of the Exchange Act, and Rule 10b-5 thereunder; (2) ordered him to pay disgorgement of $435,722, representing illicit profits that he gained in his personal accounts and his relatives’ accounts, plus prejudgment interest in the amount of $23,427, for a total of $459,150; and (3) ordered him to pay, on a joint and several basis with Big 5, disgorgement of $4,148,262, representing illicit profits gained by Big 5 hedge funds, plus prejudgment interest in the amount of $274,709, for a total of $4,422,971. In addition, on June 27, 2012, the SEC issued an order on consent in a related administrative proceeding pursuant to Section 203(f) the Advisers Act barring Brownstein from association with any investment adviser, broker, dealer, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization.
While Bo Brownstein quietly served time in prison on criminal charges of insider trading, the SEC and U.S. Justice Department turned their attention to new Denver targets.
On October 24, 2012, the U.S. Justice Department filed five counts of criminal securities fraud (insider trading) against Michael Van Gilder, with a potential penalty of 20 years and a $5 million fine. Van Gilder reacted by sending a letter to the New York Times website, which printed the letter in full, proclaiming his innocence. Van Gilder, in that letter, compared himself to Nelson Mandela and Steve Jobs, leaders who overcame considerable hardship and difficulty. Van Gilder's bravado didn't last long.
Two days later, on October 26, 2012, the first civil complaint by the Securities and Exchange Commission (SEC), named Van Gilder as an inside trader in the Kerkorian buy-in at Delta Petroleum, subjecting him to further civil penalties.
On November 27, 2012, Roger Parker was added to the SEC civil complaint as a co-defendant with Van Gilder. Significantly, the Justice Department did not file criminal charges against Parker, who is the son of New Mexico federal judge James A. Parker. Then on April 15, 2013, the Securities and Exchange Commission charged Scott Reiman with insider trading based on confidential information he obtained from Roger Parker in the Delta Petroleum stock transaction.
Parker, Van Gilder and Reiman were not only linked socially in philanthropic circles in Denver, they were also intimately involved in the business world, sometimes serving on the same board of directors. The way Parker, Van Gilder and Reiman responded to their insider trading charges, and the reaction of friends and relatives and the Denver media and business community, speak volumes. We consider the situation of the three amigos as follows:
Michael Van Gilder
Michael Van Gilder, 46, is an heir to a Denver insurance empire launched by his great-grandfather in 1905. He was serving as CEO of Van Gilder Insurance on October 24, 2012 when the U.S. Justice Department indicted, arrested, and booked him on five felony counts following federal grand jury proceedings. The criminal complaint alleged that in late 2007 Van Gilder was "a close personal friend" of a Delta Petroleum executive, who turned out to be Roger Parker, and that Parker had tipped Van Gilder of the pending buy-in of Delta Petroleum by Las Vegas billionaire Kirk Kerkorian. Van Gilder was accused of buying Delta stock call options in late December 2007 and selling them on January 9, 2008, following a jump in Delta's stock, reaping a profit of $86,000.
Despite his bravado, he immediately resigned as CEO of Van Gilder Insurance. His name has been completely purged from Van Gilder Insurance Company website. Indeed, as noted below, the Van Gilder name will vanish from the Denver insurance industry because of a buyout by a bigger insurance company.
Van Gilder claimed in his letter to the New York Times "No great man, woman, or company has achieved greatness without going through massive adversity." He added, "You might think I’m going to stay home and hide, stay invisible? Wrong, I plan to be as visible as ever, I won’t let this beat me down." Van Gilder's email expressed confidence that he would be exonerated in a jury trial.
Van Gilder's "greatness" however, was short-lived. Two days after the criminal charges were filed, the SEC filed a civil complaint against Van Gilder in a civil action, again alleging insider trading. His legal team then began extensive negotiations with Justice Department lawyers and SEC lawyers. About a month after the SEC civil complaint, the SEC filed an amended complaint naming Parker as a co-defendant as well as an unnamed co-conspirator identified by the SEC as "Friend A" and widely believed to be Reiman, who reaped a profit of over $730,000 by acting on a tip from Parker about the Kerkorian buy-in.
On May 1, 2013, Van Gilder pled guilty to one felony count. What about his claims of innocence? When asked in court why he used insider information to make a quick $86,000, Van Gilder simply said, "I was naive and ignorant and made a mistake." Few believed that. A more pertinent question is why a man worth many millions of dollars would risk his freedom and good name for a mere $86,000. Is it a character flaw? Is it simple greed in order to make a quick killing? What does he tell his family and friends? What do his children tell their friends? Is insider trading common in certain business circles?
Van Gilder's replacement as president of Van Gilder Insurance, Donald Woods, also drew raised eyebrows by insiders. Woods' former job was CEO of the failed Community Banks of Colorado, a banking chain he co-founded, which included among its board of directors Van Gilder and Parker. Another member of the Community Banks of Colorado board of directors, Jeff L. Johnson, purchased assets from Parker before Parker filed his Chapter 11 bankruptcy, according to Parker's bankruptcy pleadings. Johnson, a University of Colorado grad, is chairman and co-founder of MBH Enterprises LLC, a diversified holding company based in Denver. It is not clear if Van Gilder or his insurance company borrowed money from Community Banks. Presumably, he would have (should have) recused himself from voting on a loan to himself or his insurance company.
Parker and his father, federal Judge James A. Parker of Albuquerque, had loans out with Community Banks before the banking firm crashed. It is not known if Van Gilder, as a close friend of Parker, nevertheless approved these loans in his capacity as a bank director. Federal banking regulators said the Community Banks failure would cost American taxpayers $224.9 million. No word if Van Gilder, as a close friend of Parker, recused himself on bank board votes on loans to Parker.
In his criminal case, Van Gilder was sentenced on August 14, 2013. He got five years probation plus six months of home detention on an ankle monitor as well as a $5,000 fine. He was also ordered to repay $86,100 of his "ill-gotten" gains as a result of the insider trading incident. U.S. District Judge Wiley Daniel rejected a Justice Department request that Van Gilder do time in prison as a message to other insider traders.
It didn't hurt Van Gilder that his attorney at the sentencing, Bob Miller, was a former U.S. Attorney. Miller objected repeatedly when prosecutors tried to offer details of Van Gilder's crime. Miller said the prosecutors' tactics were "only an effort to tarnish Michael in the eyes of the public to things he had not done. It's only done to prejudice him." Had he been found guilty of all five counts he faced a maximum potential prison sentence of 100 years and $25 million in fines. But, of course, maximum punishment is rarely imposed on white collar criminals.
Also a factor in Judge Daniel's imposition of a light sentence, was that Van Gilder told the judge he might be getting a new job. Van Gilder has two teenage children who live with his ex-wife, Lisa, and he said he had paid $9,500 a month in spousal support for a year and a half after he was no longer legally obligated to do so.
Van Gilder has also resigned from a board position in the Boy Scouts of Denver Council, where his father, Dell, still sits as a director. Michael Van Gilder's name is no longer found on the Denver Boy Scouts website. Roger Parker was also involved with the Denver Boy Scouts prior to the SEC complaint. He too stepped down.
In the wake of the criminal and civil complaints, Parker complained in a written response to the SEC complaint, that although he did tell Van Gilder about the pending buy-in of Delta stock by Kerkorian, Parker said it was understood that Van Gilder would not act on the information for his benefit.
"Based on their history, pattern and practice of sharing confidences, they [Parker and Van Gilder] knew . . . that the other expected any such confidences to be maintained in confidence and not to be used for the purpose of trading in Delta's stock," Parker wrote in his answer to the SEC civil complaint.
Parker and Van Gilder, both alumni of the University of Colorado, are among the founding members of the "Buff Club Cabinet", a university sports boosters' club, which requires members to provide $25,000 a year for three years. Also, Van Gilder handled Delta Petroleum's insurance business and provided Parker office space.
On Nov. 13 , The Denver Post reported Van Gilder "appears to have reached a settlement with federal securities officials in an insider-trading lawsuit. Although neither side would provide details, court records show a deal is being finalized and will probably bring an end to the year-old litigation regarding Van Gilder's illegally profiting from information he got from bankrupt oilman Roger Parker, his longtime buddy who at the time headed Delta Petroleum." U.S. District Court Judge John Kane gave Van Gilder until late January 2014 to formally answer the U.S. Securities and Exchange Commission civil complaint against him, noting that the parties "have reached a settlement in (principle)." Van Gilder may lose his insurance broker's license as part of the deal he makes with the SEC.
In early December of this year, business newspapers reported USI Insurance Services LLC had entered into a purchase agreement to acquire The Van Gilder Insurance Co. Of course, Van Gilder officials denied the sale of the 108-year-old company had anything to do with Michael Van Gilder's legal problems. The Van Gilder firm will change its name to USI Colorado, and the company's office and employees will remain in Denver. Van Gilder President Donald Woods, who presided over the Community Banks failure, and Chief Financial Officer Edward M. Harrington Jr. will remain in their leadership roles.
“Selling Van Gilder to USI is a positive decision for our company, our people and customers,” Dell Van Gilder Jr., (Michael Van Gilder's father) current chairman of Van Gilder's board, said in the statement. Presumably, Dell Van Gilder is deeply ashamed of his son's criminality.
One wonders what the discussion must have been between father Dell Van Gilder and his son. One wonders what Michael Van Gilder said to his teenage children about his greedy act that brought disgrace upon his multi-generational company. Dell Van Gilder said his own father almost lost the insurance company to bankruptcy decades ago. Dell, still active in the community, must have wondered at the irony that two generations later, his son also damaged the company, leading to its buy-out and name change.
Some see the sale of the business as be part of a settlement with the SEC. Presumably, if the SEC agrees to a settlement with Michael Van Gilder on the securities fraud case, they will impose certain sanctions, which will order Van Gilder to cease and desist in activities which led to the SEC charges. It is not uncommon for the SEC to require a defendant to agree to other sanctions, which could include surrendering any license. In this case, sanctions against Van Gilder's license to act as a insurance broker or agent, sit on any board of directors, or manage such a business, may be part of the settlement.
Scott Reiman
If all three men - Parker, Van Gilder and Reiman - were indeed born with silver spoons in their mouths, Reiman's spoon was also gold-plated and encrusted with diamonds and rubies. His father, Roy Reiman, is a near billionaire.
Roy Reiman, born during the depression, grew up on a farm near Auburn, Iowa and worked in a creamery to pay for his college education at Iowa State University, graduating with a degree in agricultural journalism. His first publishing job was at the farming journal Capper’s Farmer, where, at the age of 23, he became managing editor. He worked for two magazines but both went under. He published his own magazine, Pepperette, targeting teenage cheerleaders but it too went out of business after two issues.
Then Roy Reiman started Reiman Publications in 1965 in the basement of his Hales Corners, Wisconsin home. Over the next four decades he built a farm magazine publishing empire, many of his magazines aimed at rural life in America. He successfully published several cookbooks.
In 1998, Roy Reiman sold his controlling interest in Reiman Publications to Madison Dearborn Partners, a Chicago investment firm, for roughly $630 million. Madison Dearborn then sold the Reiman company to the Reader's Digest Association in 2002 for $760 million. Reader's Digest, with an aging readership, filed for bankruptcy in 2002. Roy Reiman continued with Reiman Media Group until November 2005. In June 2007, Reiman Publications officially lost its name under a bankruptcy reorganization of Reader's Digest.
In 2003, Roy Reiman and his wife Bobbi were given the Impact Award from Iowa State University for their activities within the school, including the creation of the Reiman Gardens and the Christina Reiman Butterfly Wing.
Roy Reiman is also a past president of the Iowa State University (ISU) Alumni Association Board of Directors, an ISU Foundation Governor, an Order of The Knoll Campanile Award recipient, and an ISU Foundation Philanthropy Award recipient. Bobbi Reiman is an Order of The Knoll Campanile Award recipient, ISU Foundation Philanthropy Award recipient, and a member of the University Museums Curators Associates. The Reimans are life members of the ISU Alumni Association. An entrepreneurial scholars and lectures program in the ISI College of Business also bears the name of Roy and Bobbi Reiman.
Roy and Bobbi's son Scott, had a much more comfortable upbringing than did his parents.
Scott Reiman, now 49, graduated from Denver University in 1987 with a Bachelor of Science degree in Business Administration with a concentration in Finance. He is the founder of Hexagon Investments of Denver (with some considerable help from his parents) serving as president of the investment firm since 1992. He has been a member of the Board of Trustees at the University of Denver since 1999 and until the insider trading scandal chaired its Investment Committee.
He additionally serves on the boards of Graland Country Day School, the Denver Scholarship Foundation, and the Denver Art Museum.
A native of Milwaukee, Wisconsin, Scott Reiman now lives in Denver with his wife Virginia and two young sons. In his free time, he enjoys reading, traveling, hiking, and playing golf and tennis, according to the Crunchbase website.
He also has served on many other civic boards including the Denver Mayor’s Financial Management Task Force/Investment Council (whose board also included Gary Reiff, co-chair of the corporate and securities group at the Norman Brownstein law firm). Scott Reiman has (or had) a large interest in Roger Parker’s Delta Petroleum Company. Scott Reiman also has a financial interest in many other Denver companies such as Labyrinth Energy LLC, Labyrinth Enterprises LLC (it can get confusing!), Very Hungry LLC, Prospect Global Resources, Inc. and another company associated with Roger Parker called Recovery Energy, Inc.
Scott Reiman was a board member of Prospect Global Resources, Inc. the company (a potash investment firm) that was co-founded by Norman Brownstein’s son Chad Brownstein. Reiman owns a substantial interest in that company, as do Norman and Chad Brownstein.
Scott Reiman was the recipient of the Josef Korbel Humanitarian Award at the University of Denver in 2006. This year that award was given to former President George W. Bush, over campus protests. Josef Korbel’s daughter, Madeleine Albright, was secretary of state under Bill Clinton.
In 1964, Josef Korbel founded the Graduate School of International Studies (GSIS) at Denver University and became its first Dean. The Korbel Dinner is the main fundraising event of the Josef Korbel School. Eleven years ago, the Josef Korbel School established the Josef Korbel Humanitarian Award to recognize individuals who have given concrete expression to the values underlying the Universal Declaration of Human Rights through unusually generous philanthropic work within the Denver community.
Conway J. Schatz , a University of Denver business school graduate is a Hexagon Investments board member where he serves as Vice President of Real Estate/Energy. He is also a board member of Prospect Global Resources, Inc., probably to watch Reiman’s interests, as Reiman resigned as a board member of Prospect Global after his insider trading problem.
Denver University has a consultant, Monticello and Associates, that does the investing of endowment dollars. You would think Scott Reiman as a trustee and former chair of the Investment Committee, would have influence on how DU’s money is invested. One wonders if Scott Reiman urged the university Investment Committee to buy Delta stock, or Global Resources or Recovery Energy stock.
Denver area blogger Rob Prince had this to say about the pickle Reiman's insider trading debacle has had on Denver University's fund-raising and the ethical dilemma it poses.
Prince wrote:
"In a settlement with the SEC, Reiman, himself a former (2006) Korbel Dinner Humanitarian award winner, `admitted no wrong doing’ but paid the penalty as a result of the SEC’s investigation of illegal insider trading of Delta Petroleum stock in 2007, just before billionaire investor Kirk Kerkorian was on the verge of buying into the company. Delta’s board of directors includes Hank Brown, former U.S. Senator from Colorado, current president of University of Northern Colorado, who comes out of the Monfort meat packing industry . . .
Not only did Reiman escape indictment over the Delta Petroleum insider trading incident – several others involved didn’t – but the blow of the fine was somewhat softened by the DU Board of Trustees. The board did its own internal inquiry into the SEC allegations, defining the charges against Reiman as “circumstantial” – whatever that means. If the SEC found enough grounds to fine Reiman, the Board of Trustees considers Reiman almost blameless. In what comes off as more of a statement of class solidarity than the conclusion of an impartial investigation, the Board’s investigation concluded:
“We (The Board of Trustees) recognize that it is inappropriate to conclude, from an SEC settlement of this nature, that Mr. Reiman has violated a law or even been guilty of unethical conduct.”
Let us leave aside for the moment the validity of the Board of Trustees investigating itself, and move to the results. Reiman resigned as chairman of the board’s investment committee, but remains an active member of the Board of Trustee.
It turns out that one of Reiman’s closest friends and associates is Roger Parker, former C.E.O of Delta Petroleum. Dubbed `Mr. Fast Lane’ by some who know him well, Parker is the son of a New Mexico federal judge. As one friend put it “but for Roger, Scott (Reiman) would be little more than a middle level manager at an Iowa tool company.”
Reiman’s case is especially interesting and deserves a little more elaboration as he has been a key person in D.U.’s fundraising efforts. As chair of the Board of Trustee’s Investment Committee he was, of course, heavily involved in finding donors. As will be discussed, his contacts tend to be on the ultra-conservative side. It is not clear how his SEC fine will impact his fund-raising for the university, but it can’t help. The impression that Reiman is yet another Horatio Alger success story, a shrewd investor, is off the mark. He got by with a little help – or maybe more than a little help – from `dad’."
It certainly appears that Reiman and Parker are close friends. According to the Denver Post, Reiman loaned Parker $24.7 million to start up Recovery Energy Inc. after Parker was ousted from Delta Petroleum by Kerkorian's lieutenants. This past April 15, Reiman, undoubtedly on the advice of counsel, made a deal with the SEC regarding his insider trading on the Delta Petroleum deal.
On June 10 of this year, The Denver Post reported:
Denver University has a Code of Business Conduct that applies to trustees, faculty and staff alike. Its first section deals with complying with laws and regulations. The third addresses stands of ethics and integrity and says, "Even the appearance of misconduct or impropriety can be damaging to the University."
For that reason, the board chose to review the matter, "to ensure we operated on the highest level, beyond scrutiny," said trustee Patrick Hamill, founder, president and CEO of Oakwood Homes.
The board conducted its probe quietly and "behind the scenes" over six weeks, Board of Trustees chairman Trygve Myhren wrote.
"We recognize that it is inappropriate to conclude, from an SEC settlement of this nature, that Mr. Reiman has violated a law or even been guilty of unethical conduct," Myhren wrote in his first letter to faculty and students.
Hamill and a school official confirmed the content and circulation of Myhren's letters. Myhren was not reachable for comment Monday.
"Because Scott is very much aware of how this matter may appear to some who have not had the advantage of the (board) committee's in-depth probes, he is concerned about the potential impact on the reputation of the University of Denver," Myhren wrote. "He will remain an active member of the board . . . in other capacities."
Myhren and Hamill glossed over the fact that although Reiman did not admit the SEC charges he also did not, indeed could not, deny them. What they overlooked in their desire to hang on to Reiman's riches, is that Reiman did not dispute he used information from Parker to make a quick killing in the stock market, facts that any civil jury would conclude constituted inside trading. Even if not an SEC violation, it clearly was a breach of ethics. Reiman agreed in the SEC settlement that “during the weeks leading up to the [Kerkorian buy-in of Delta stock], he received material nonpublic information from Delta Petroleum’s chief executive officer, Roger Parker (Parker), and then traded on the basis of that information reaping ill-gotten profits." (italics added.)
Apparently the DU trustees do not have a problem with ill-gotten profitswhen they are reaped by a very wealthy man who loves playing the big shot at his Alma Mater.
Reiman is one of 28 trustees at DU. Although he remains on the board of trustees he submitted in resignation in early June from his position on the Trustees' Investment Committee.
The Institute of Enterprise Ethics at the Daniels College of Business at Denver University, published a letter endorsing the findings of the trustees that Reiman's actions did not deserve any sanctions.
The Institute letter, noting that Reiman was a "major benefactor" of the DU school of business, stated:
Given the information uncovered by the Trustee Affairs Committee of the Board and the nature of the agreement Mr. Reiman signed, the Board determined that Mr. Reiman “has violated no standards of legal or ethical conduct to which the Trustees hold themselves.” Consequently, the Committee and the Board determined that Mr. Reiman would likely be invited to continue to serve as a trustee of the University and the University would continue to display the Reiman name on the institutions he has supported for many years.
The Institute for Enterprise Ethics has great respect for the process of due diligence the Board exercised as well as for the decisions they came to as a result. We are especially impressed with the way in which the board dealt with the fundamental and difficult ethical challenges inherent in this situation.
Those are some enterprising ethics alright. I'm sure the Institute for Enterprise Ethics is going to hold a public forum on insider trading by folks high up in the Denver food chain.
Scott Reiman is also a former board member and stockholder of Prospect Global Resources, Inc., providing a $5 million loan to the company, receiving stock as collateral. Reiman also provided $1.5 million from his Hexagon investment firm and $12.5 million from Very Hungry LLC (another one of his companies) to Prospect Global Resources, Inc. Also, some money came from the Scott Reiman 1991 trust. Scott Reiman was a board member of Prospect Global Resources, Inc. from 2011-2012.
According to bankruptcy court records, Roger Parker sold for $1.3 million “several unknown interests” to Labyrinth Energy LLC, which show their principal office street address as 730 17th St. Suite 800, Denver. Colorado Secretary of State records show Scott Reiman is the registered agent for Labyrinth Energy, LLC and the listed address for Reiman’s Hexagon Investments Inc. is the same address as Labyrinth Energy LLC.
Roger Parker
Nearly a decade ago Denver oilman Roger Parker was sitting on top of the world. He was the Chief Executive Officer of Delta Petroleum, was living in a $9.2 million home in the toney Cherry Hills neighborhood of Denver, and was actively involved in community affairs. An avid golfer, he was a golf buddy of National Football League Hall of Famer John Elway, a financial supporter of University of Colorado athletics, a trustee of the Denver Art Museum and even served as a trustee of the Denver Area Council of the Boy Scouts of America. He was well on his way to his stated goal of becoming worth $100 million.
Then, in the biggest moment of his career in late 2007, Parker could not keep his mouth shut, as he was required by law to do. His fall from power was faster than his rise. Parker, who had joined Delta Petroleum in 1987 not long out of college, had risen to CEO of the oil exploration company by 2004. Eager to expand, Parker, along with his attorney and business partner Norman Brownstein, and Las Vegas businessman Michael "Tiger" Davis, talked former Fresnan and billionaire nonagenarian Kirk Kerkorian into buying into Delta with an infusion of $684 million. Brownstein was being paid over $320,000 a year in lobbying fees and it was he and Davis who talked Kerkorian into the investment.
However, the honeymoon with Kerkorian's Tracinda company did not last long. Along with the 2008 worldwide energy market crash, Parker made some questionable decisions that helped propel Delta stock downward. Promising oil wells did not pan out. Kerkorian's aides serving on the Delta board forced Parker out of the CEO position in May 2009. Tracinda took Delta Petroleum into bankruptcy in December of 2011. Kerkorian's two-thirds of a billion dollars vanished.
It was during the buy-in negotiations with Kerkorian in November 2007 that Parker told two of his closest friends - Van Gilder and Reiman - that he had reached an agreement with Kerkorian and a huge influx of cash was going to be coming into Delta, which would cause an increase in the value of Delta stock. The deal was announced on December 31, 2007, after Reiman and Van Gilder had made their buys, and the stock immediately jumped upward. Both Van Gilder and Reiman, acting on Parker's tips, made several hundred thousand dollars on the Delta stock surge, selling their shares before the long, slow slide into bankruptcy which commenced in 2008.
Later, Kerkorian would allege in a now settled lawsuit that Parker had “secretly arranged" a $5 million compensation package for "Tiger" Davis - who had been friends with Kerkorian - for Davis's role in securing the Kerkorian buy-in. Creditors, including Kerkorian's Tracinda, would later allege that Parker took sensitive data from Delta and then used that information for his own purposes.
For well over three years, Parker, Van Gilder and Reiman shared the secret that Parker had tipped Van Gilder and Reiman about the Kerkorian buy-in, allowing them to make a quick killing on the insider trade.
According to a December 15, 2012 article in the Denver Post, Delta Petroleum and Parker had encountered the Securities and Exchange Commission before. In 2006 and 2007, prior to the Kerkorian/Tracinda deal, the SEC investigated alleged backdating of stock options that were awarded to Parker and other Delta executives. The SEC later dropped its inquiry, and a pair of shareholder suits alleging the fraudulent practices were settled.
Six months after Parker's resignation in May of 2009 from Delta Petroleum, he joined Recovery Energy Inc., another oil exploration company. He would become Chief Executive Officer (CEO) of Recovery in May 2010. But Parker - with SEC charges imminent - would leave Recovery Energy in Mid-November 2012, resigning as both CEO and a board member, according to a Denver Business Journal article. The Business Journal noted than in a Recovery Energy website press release, the company "gave little mention of Parker" - not even using his first name - simply announcing "The Board of Directors wishes to thank Mr. Parker for his service to the Company and wishes him well."
By this time, Parker was aware he was under investigation by the SEC and he presumably told Recovery Energy directors of this dilemma, leading to his resignation. Parker's name had been mentioned in a Denver Post article earlier that month about the criminal charges against Michael Van Guilder were lodged. On November 28, 2011, the U.S. Securities and Exchange Commission added Parker, 51, to a civil complaint that the agency had filed on Oct. 26 against Van Gilder. Parker's income from Recovery Energy in 2011 was $670,606, according to bankruptcy records.
Things were unraveling in other areas too.
On October 21, 2011, federal regulators took over Community Banks of Colorado. Parker was a former director of the bank chain and he disclosed this information on his personal bankruptcy documents filed on January 23, 2013. Listed as directors of Community Bank of Colorado were Michael Van Gilder, Donald Woods, co-founder and CEO (who later took over the Van Gilder insurance company), Jeff Johnson and others.
The bankruptcy records show Roger Parker and JPFP Family LLC - a company owned by Parker's father, New Mexico federal Judge James A. Parker - both borrowed money from Community Banks of Colorado. JPFP Family LLC, according to Judge Parker’s annual financial disclosure reports, borrowed between $500,000 and $1 million from Community Banks in 2009 and paid back the loan in full in 2010. Roger Parker still owes the bank money. There is also a claim still outstanding from NBH Bank, N.A. Kansas City, which is the company that took over from Community Banks of Colorado, when that banking company failed. Roger Parker lists an outstanding balance due NBH Bank of over $5.9 million. Parker's bankruptcy filings show he also owes Prins Bank over $2.5 million, and Select Portfolio Servicing over $6 million.
Another former director of Community Banks, Michael Potts, now serves on the board of Van Gilder Insurance Company. Potts is a former Chief Executive Officer of the Rocky Mountain Institute.
In his bankruptcy pleadings, Parker said he held a management position at IEXCO, a Canadian company providing seismic data and other services to the oil industry.
In the year prior to his filing personal bankruptcy, court records show, Parker attempted to shed assets. He sold a business he owned, the popular Mile High Flea Market in Denver, to MBH Investments for $348,000. Remember, the founder of MBH Enterprises is Jeff L. Johnson, a former director (along with Parker) of Community Banks of Colorado. According to his 2011 financial disclosure form, Parker's father, federal judge James Parker, had stock valued at $250,000 to $500,000 with MBH Enterprises LLC.
In February of 2012, Parker's wife, Delia "Dee Dee" filed for divorce. It later came out in the bankruptcy proceedings that Parker was having an affair with Erin Wallace, the wife of John Wallace, Parker's partner at Delta, who served as chief financial officer. Despite the presumed acrimony over infidelity, Parker transferred assets to his ex-wife totaling $66,555, according to a claim by the bankruptcy trustee.
In May of 2012, Parker sold his working interest in the Church oil field to JPFP Family LLC for $265,000. The JPFP Family LLC is co-managed by Roger Parker’s father, Judge Parker. JPFP uses the mailing address of Roger Parker's sister, Pamela Parker Jones. That same month, court records show, Parker sold a Cadillac to Erin Wallace, 49, for $20,000. He also sold Northern Flights Ranch, LLC to Ruxece, LLC for $280,000, and sold a partial interest in Apex Operating Company LLC to Ruxece LLC for $500,000. He also was attempting to sell a $35,000 membership in the Castle Pines Golf Club and had sold a $100,000 membership in the Whisper Rock Golf Club in Scottsdale, AZ to Ruxece LLC. Ruxece LLC was incorporated in October of 2012.
Parker told the bankruptcy court last summer that a "close personal friend" was behind Ruxece LLC. Parker's attorneys told the Bankruptcy court that Parker and Erin Wallace had been married in mid-summer of 2013 and that Erin Wallace was the "close friend." Creditors howled that Parker was trying to hide assets in the year leading up to his bankruptcy filing. They said Erin Wallace had been living at Parker's $9.2 million mansion - which he stopped paying for - months before their marriage.
On December 12, 2012, the Denver Post reported that earlier in 2012 Parker had pledged 100,000 shares in Prospect Global Resources, Inc., the potash mining company in Arizona, as collateral to Norman Brownstein's law firm for personal legal help. At the time of Parker’s bankruptcy filing, he listed the value of the 100,000 shares of common stock at $146,000. By mid-November of 2013, the stock had risen to $226,000 in value.
Roger Parker’s bankruptcy filing lists a claim of $775,000 by the Brownstein Law firm and a second lien on Project Global Resources shares by Westfield Development Partners and a $409,000 claim by Labyrinth Enterprises LLC with a first lien on Project Global Resources shares. These claims were made prior to Parker’s Jan. 23, 2013 bankruptcy filing. Labyrinth Enterprises LLC shows the registered agent is Scott Reiman of Hexagon Investments.
In his bankruptcy form, Parker said that in May of 2012 he sold a "working interest" in the Church Oil Field to JPFP, LLC, for $265,000, a company co-managed by his father. In addition, Parker disclosed that in December of 2012 he made a "redemption agreement" with JPFP for $188,546. Judge Parker's financial disclosure form for 2012 is not yet available to the public. In addition, Roger Parker disclosed he has accounts receivable from JPFP valued at $23,546.
Roger Parker's troubles with his ex-wife were not over.
On October 15, 2013, she filed a claim against Parker's estate for $10 million in connection with the couple's 2012 divorce. She claimed Parker misrepresented ownership of property or its rights, or otherwise has failed to comply or perform under a separation agreement reached between the pair, which has devastated her financially. She claimed Parker promised to pay about $8.9 million in support for herself and the couple’s four children from funds she wants secured from any creditors to the bankruptcy.
Parker claimed in SEC court documents that the SEC investigation into him began during the 2010 Mariner Energy/Apache insider trading scandal involving Bo Brownstein. Has Parker confronted "Bo" Brownstein, or his father, for that matter, to see if Bo was the snitch?
Does Parker still talk to Van Gilder or Reiman? How do the affluent residents of Denver treat the three men at civic events? Does Dell Van Gilder explain to young Boy Scouts what Michael Van Gilder did was wrong? Or is the attitude more like "too bad they got caught."
Judge Parker
Judge Parker, in his 2007 annual financial disclosure form required of all federal judges, stated he owned between $500,000 and $1 million in Delta Petroleum stock in 2007, the year his son talked billionaire Kerkorian into investing $684 million in Delta. Puzzlingly, the following year, in his 2008 financial disclosure form, Judge Parker listed his Delta stock's value between $15,000 and $50,000, but did not indicate he had sold or traded any Delta stock. A clerk at the SEC told this writer that if Parker bought, traded, or sold any of his Delta stock he should have stated so on the form. Judges are free to file corrections and amendments months after they have filed a report. Willfully falsifying the forms constitutes a crime and can also result in civil penalties. Did Judge Parker watch his Delta stock slide into bankruptcy before he sold it? Did his son try to warn him?
In Judge Parker's 2011 financial disclosure report he noted that in July of 2011 he sold a "fractional share" of his Delta Petroleum stock for $2.60 a share, a few months before Delta Petroleum filed for bankruptcy on December 16, 2011. The Financial Disclosure form does not reveal exactly how much Delta stock Judge Parker sold or when, but only that it was a "fractional share" a meaningless phrase without context and hard numbers. Parker's 2012 financial disclosure form was not available as of Dec. 22, 2013.
Judge Parker's wealth is between $5 and $15 million, according to his disclosure forms. His extensive oil holdings caused him a problem in the mid-1990s. In 1996, the Albuquerque Journal reported Judge Parker was presiding over a lawsuit alleging Amoco Oil Company and Meridian Oil Company (later called Burlington Resources) had polluted groundwater in the San Juan Basin of New Mexico, harming plaintiffs' water wells. Two attorneys for the plaintiffs said Judge Parker owned Amoco Oil Stock and that his son, Roger Parker, was an employee of Delta Petroleum which also had an interest in the area that overlapped the land in the groundwater pollution lawsuit.
The plaintiffs' attorneys said Judge Parker showed bias by several negative rulings against them, including an order preventing the plaintiffs' expert witness from testifying.
In "an angry and sometimes emotional statement," the Journal said Judge Parker, while his wife Florence watched from a back row of the courtroom, denied any wrongdoing on his part or his son's part, stating:
"I simply can never again trust the word of those lawyers and it would be enormously unfair to a client of theirs to handle a case in which they are the attorneys. I reiterate, I have not recused myself because of my conduct in the case prior to publication of plaintiffs' counsel's motions. I believe throughout all of my rulings I was impartial."
Parker's voice broke as he noted that his reaction was probably a normal one for "any parent who loves and admires his child." He noted that a judge has a duty not to withdraw from a case because of mere criticism. Parker said he was so angry at the attorneys he could not give their clients a fair hearing.
Although he acknowledged receiving royalties from Amoco, he said he and his wife had never owned any royalty or working interests in San Juan Basin gas.
Although Judge Parker recused himself, he didn't rule on the motion seeking his disqualification.
Margaret Branch, one of the plaintiff attorneys who filed the recusal motion, said "It's still my position he's in violation of the [disqualification] statute and the canons [of judicial ethics]."
The federal judge who replaced Judge Parker in hearing the water pollution case, Lucius Bunton, reversed Parker's ruling blocking testimony by the plaintiffs' expert, geohydrologist Tim Kelly, and said the expert could testify, based upon a 10th Circuit ruling which came out after Judge Parker took himself out of the case.
In late February, 1997, the federal jury awarded a total of $500,000 in damages to six San Juan County families who claimed Amoco Production and Meridian Oil had polluted their water supply by improperly drilling natural gas wells. The jury found all damages were caused by Amoco.
The jury found Amoco was negligent in its drilling, maintenance or operation of its wells and its conduct constituted an invasion of the plaintiffs’ interests in the use and enjoyment of their property.
Judge Parker continues to invest heavily in the oil industry, according to his annual judicial financial disclosure forms. According to his 2011 financial disclosure form he has oil and gas working interests or royalties in New Mexico, Colorado, Texas, and Louisiana. He also has between $100,001 and $250,000 interest in Prospect Global Resources. Norman Brownstein and his law firm own nearly 1.7 million shares of Prospect Global stock. I wonder if Judge Parker and Norman Brownstein dine together occasionally?
In his 2011 financial disclosure form, Judge Parker disclosed he had $250,000 to $500,000 stock in MHB Enterprises (launched by Jeffrey Johnson, who, along with Roger Parker and Michael Van Gilder, was a board member of the failed Community Banks of Colorado.
In a written explanation, Judge Parker said he included income from Mile High Flea Market (owned by his son Roger) with the MHB Enterprises income. I was unable to determine from the form how much stock he had in Mile High Flea Market, which Roger sold in January of 2012 to MBH for $348,000. MBH was founded by Jeffrey L. Johnson, who also served on the Community Bank board of directors.
In his 2006 financial disclosure form, Judge Parker reported that he was now Co-Manager of JPFP Family, LLC, a company utilizing his initials and those of his late wife, and also involves their daughter, Roger's sister, Pamela Parker Jones. He did not identify the co-manager or co-managers. Before that, going back to 2002, Judge Parker always listed himself as the manager of JPFP Family LLC.
Also, in his 2011 disclosure report, Judge Parker disclosed he had $100, 001 to $250,000 worth of Prospect Global Resources Inc. stock. As noted before, Prospect Global was created by Chad Brownstein, Norman Brownstein's older son, and major stockholders include Scott Reiman. What seems clear from a review of Judge Parker's financial disclosure forms from 2002 to 2011, is that he often invests in companies that his son, Reiman, Norm Brownstein or Van Gilder also invest in. A nice, cozy arrangement, don't you think? Or maybe just coincidence?
Judge Parker's 2009 disclosure form lists a loan for between $500,000 and $1 million with Community Banks of Colorado, which he states in his 2010 report, was paid off in 2010. So he and his son borrowed money from this same bank in which his son, Roger Parker, Michael Van Gilder, Jeff Johnson of MBH Enterprises LLC, Michael Potts (now a board member of Van Gilder Insurance), and Donald Woods (CEO of Community Bank of Colorado and now President of Van Gilder Insurance) were all involved.
CONCLUSION
Six children of divorce are among the victims of this insider trading scandal as well as other family members, ex-wives, friends, and business associates. One wonders if Judge Parker and Roger Parker have sat down and discussed the ethics of the SEC complaint. Are Parker, Van Gilder, and Reiman still the best of friends? Does Roger Parker still golf with John Elway? Was this the first time any of the three wealthy men took advantage of an insider trader tip? How has Norman Brownstein handled not only the situation with his two errant sons but with his client Roger Parker? Do Norman Brownstein - America's 101st Senator - and Roger Parker even talk? Did Parker get thrown under the bus because Norm Brownstein told his son Bo about the Kerkorian deal and Bo told SEC investigators? Is Norman Brownstein going to get paid when the bankruptcy case is finally settled?
Is Norman Brownstein facing yet another ethical dilemma by representing both the San Diego Water Authority and the Westlands Water District at the same time?
When Parker, Van Gilder or Reiman attend future philanthropic events in Denver will they be whispered about, or offered condolences? Was this the very first time Parker, Van Gilder or Scott Reiman acted on an insider tip?
Is Denver University going to hold a seminar about the ethics of this scandal in the Denver business community? (Don't hold your breath on that one.) Will Parker and Van Gilder rejoin the Denver Boy Scouts organization? Scout's Honor, next time?
Parker's battle over the SEC civil complaint may be settled in January 2014 and his bankruptcy sometime thereafter. Fortunately, for him, he was not charged criminally, as was Van Gilder. The scandal will fade with time but human greed will not. Something like this will happen again in Denver or in any American city. Count on it.