1

MARK ARAX: THERE'S PROBABLY
NO LANDSCAPE IN THE WORLD THA HAS BEEN MORE MANIPULATED
THAN CALIFORNIA.
[EXPLOSION]
FROM THE VERY BEGINNING I WAS ABOUT CAPTURING WATER.
AND MOVING IT FROM WHERE
IT WAS TO WHERE IT WASN'T.
BECAUSE OF THA MANIPULATION OF WATER,
A GREAT CIVILIZATION
HAS RISEN.
WE'VE CREATED TWO
WORLD-CLASS CITIES:
LOS ANGELES AND
SAN FRANCISCO.
AND IN THE MIDDLE WE CREATED
THE MOST FERTILE FARM BEL THE WORLD'S EVER KNOWN.
BUT THE GROWTH OF SUBURBIA,
THE GROWTH OF AGRICULTURE,
AND THE DEMANDS OF
THE ENVIRONMENT.
ALL THOSE THINGS ARE
PUTTING IMMENSE PRESSURE
ON THIS SYSTEM.
AND THE SYSTEM HAS
STARTED TO CRACK.
THEY'VE BEEN PUMPING
AND PUMPING AND PUMPING,
FROM THESE AQUIFERS THA HAVE TAKEN HUNDREDS IF NO THOUSANDS OF
YEARS TO BUILD UP.
WATER HAS BECOME GOLD.
TO BE TRADED AND SOLD
AND WE'RE EXTRACTING I IN THE SAME WAY.
BUT IT'S NOT ENOUGH.
THE MORE WATER WE NEED,
THE MORE WATER
WE WILL ALWAYS NEED.
[THEME MUSIC PLAYS]




NEWSCASTER: CALIFORNIA
OFFICIALS ARE PUTTING
MANDATORY RESTRICTIONS
ON WATER USE IN PLACE.
REPORTER: CALIFORNIA IS
NOW IN ITS WORST DROUGH SINCE THE 1970S.
NEWSCASTER: THE HARDES HIT AREA IN THE ENTIRE STATE,
TULARE COUNTY.
NEWSCASTER: THIS IS
THE TOWN WITHOUT WATER,
EAST PORTERVILLE
IS GROUND ZERO IN THE
CALIFORNIA DROUGHT.
A 21ST CENTURY DUST BOWL.
RUBEN: OK, RIGHT THERE.
THAT'S GOOD.
DONNA JOHNSON: THANK YOU.

WHERE WE'RE GOING ON
THIS STREET IS CLOSE TO THE
MAIN RIVER, WHICH
IS CALLED TULE RIVER.
AND, IF YOU GO DOWN THE
STREETS AND YOU SEE TANKS OR
BOXED WATER TO THE HOUSE
THEY'RE OUT OF WATER.
AND I THOUGHT I'D BE DOING
THIS FOR THREE MONTHS.
BUT UM, IT'S BEEN ALMOS THREE YEARS NOW AND RUBEN'S
BEEN HELPING ME FOR THE
LAST YEAR AND A HALF.
RUBEN'S ALSO OUT OF WATER.

DONNA: HELLO!
RUBEN: HOLA, COMO ESTA?
GUILLERMINA: BIEN, BIEN.
[SPEAKING SPANISH].
DONNA: SHE HAS BEEN WITHOU WATER EVER SINCE I'VE BEEN
DOING THIS, FOR THREE
AND A HALF YEARS.
THIS IS WHAT THEY HAD.
AND THEY HAVE TO HAUL THEIR
WATER FROM THE FIRE STATION
OVER HERE, AND OTHER PLACES
WHERE THEY CAN GET THE WATER.
[SIGHS].
GUILLERMINA:
THANK YOU SO MUCH.
DONNA IS AN ANGEL.
IF SHE HADN'T STARTED
BRINGING US WATER
I DON'T KNOW WHA WE WOULD HAVE DONE.
MICHAEL LUNSFORD: ANY KIND
OF WATER YOU WANT TO DRINK
AROUND HERE IS GONNA BE
BOTTLED WATER.
I MEAN IT'S A
BATTLE EVERY DAY,
HOW YOU'RE GOING
TO WASH YOUR HANDS.
HOW ARE YOU GOING
TO WASH YOUR FACE?
HOW YOU GONNA TAKE A SHOWER?
HOW YOU GONNA COOK?
HOW YOU GONNA DRINK?
HOW YOU GONNA DO DISHES?
THAT'S ANOTHER BIG THING TOO.
YOU'D HAVE TO LOAD UP TUBS
TO TAKE THEM OVER AROUND THE
CORNER TO WASH THEM AND
THEN BRING THEM BACK,
AND THEN THEY GET DIRTY, AND
BACTERIA JUST BUILDS UP SO,
PAPER PLATES, THAT'S
THE BOTTOM LINE.
YEAH.
GUILLERMINA: WE CAME FROM
A POOR COUNTRY, MEXICO.
WHERE THERE ISN' ENOUGH TO LIVE.
THERE'S A LOT OF VIOLENCE
AND A LOT OF MURDERS.
WE CAME HERE FOR
THE AMERICAN DREAM.
BUT REALLY IT'S A NIGHTMARE
TO LIVE LIKE THIS.
AND IN A SUPPOSEDLY
RICH COUNTRY?
BUT HONESTLY, IT'S NOT.
IT'S WORSE THAN MEXICO.
THERE'S PLENTY
OF WATER IN MEXICO.
BUT HERE?
NONE.
MICHAEL LUNSFORD: THIS IS
WHERE WE CATCH OUR WATER,
SO WE CAN FLUSH TOILETS.
GET UP IN THE MORNING, TAKE
TWO BOTTLES OF RAINWATER,
PUT IT IN THE COFFEE POT.
MY FIANCE WILL COME IN.
SHE'LL HELP ME WASH MY HANDS.
THEN WE'LL TAKE THIS
WATER, RECYCLE IT,
PUT IT IN A BUCKET OUT THERE,
UNTIL IT GETS ENOUGH 'TIL WE
CAN FLUSH THE TOILET.
MARINA ZENOVICH:
WHAT ABOUT SHOWERING?
MICHAEL LUNSFORD:
WELL, USUALLY,
WE HAVE TO GO INTO TOWN, UH,
TO ONE OF MY FRIEND'S HOUSE,
AND IF I CAN'T GO TO
MY FRIEND'S HOUSE,
YOU'LL SEE SOME GUYS,
THAT, THERE'S ADS,
EVEN ON CRAIGSLIST, TO
BE ABLE TO TAKE A SHOWER,
FIVE BUCKS TO TAKE A
SHOWER, THAT KIND OF STUFF.
THAT'S WHAT KIND OF
PLACE IT IS AROUND HERE.
SARAH ERVIN: IT'S
BEEN REALLY ROUGH.
UM, WHEN YOU HAVE TO GO
PLACES TO TAKE SHOWERS OR,
WASH YOUR HANDS
WITH BOTTLED WATER.
IT GETS, IT'S DRAINING.
[CHUCKLE].
MICHAEL LUNSFORD: PEOPLE ARE
OBLIVIOUS TO THE WAY WE HAVE
TO LIVE OUT HERE.
AND MY FIANCE AND I, WE
HAVEN'T EVEN THOUGHT ABOU STARTING A FAMILY,
BECAUSE OF NO WATER.
I MEAN IF YOU CAN'T BARELY
TAKE CARE OF YOUR HOME,
HOW CAN YOU TAKE
CARE OF A FAMILY?
THE STRUGGLE IS REAL.
WE ALL CAN RELATE.
AND YOU MIGHT NOT HAVE KNOWN
YOUR NEIGHBOR'S NAME BEFORE.
NOW YOU DO BECAUSE YOU
HAVE TO GO BORROW A CUP OF
WATER INSTEAD
OF A CUP OF SUGAR.
I DON'T REALLY KNOW
IF THERE IS A BAD GUY.
MOTHER NATURE'S DRY,
BUT THERE'S SO MUCH
AGRICULTURE GOING ON.
I MEAN, WHEN YOUR NEXT-DOOR
NEIGHBOR HAS ORANGE GROVES
FOR MILES, HOW MUCH WATER
DO YOU THINK HE'S USING TO
GROW HIS ORANGES?
THAT'S IT, REALLY.

MARK ARAX: FOR THE
LAST FOUR YEARS,
EVERYBODY HAS
BEEN VERY DESPERATE IN
CALIFORNIA FOR WATER.
MARK ARAX: AND, THE IMAGE
THAT HAS BEEN PROJECTED TO THE
WORLD IS THAT CALIFORNIA
HAS BECOME DRY.
THAT THE LAND HAS
TURNED TO SAND.
THAT WE'RE PARCHED.
BUT THIS IS NOT TRUE.
BECAUSE, FOR THE PAST FOUR
YEARS IN THE MIDST OF THIS
DROUGHT, AGRICULTURE HAS
RECORDED RECORD CROPS EACH AND
EVERY YEAR.
[OVERLAPPING REPORTERS]
MARK ARAX: SO THE QUESTION
BECOMES HOW THEY MANAGE
TO DO THAT.

MAN: THE GREAT VALLEY OF
CENTRAL CALIFORNIA LIES ALMOS IN THE CENTER OF THE STATE.
A LONG TIME AGO THIS WHOLE
AREA WAS A GREAT GULF.
THIS SOIL IS RICH.
GIVEN ENOUGH WATER IT COULD
PRODUCE BOUNTIFUL HARVESTS.
MILLIONS OF ACRES WOULD HAVE
REMAINED A BARREN WASTE IF THE
MEN WHO SETTLED THIS PART OF
THE GREAT VALLEY HAD NOT USED
THEIR KNOWLEDGE AND STRENGTH
TO IRRIGATE THE LAND.
[EXPLOSION]
JONAS MINTON: IN CALIFORNIA,
DIRTY WATER DEALS HAVE BEEN
PART OF ITS HISTORY SINCE
BEFORE ITS STATEHOOD.
WOODY WODRASKA: IN THE
1860'S THE UNITED STATES SEN JOHN WESLEY POWELL A FAMOUS
SURVEYOR, TO SURVEY THE WEST.
AND HE UTTERED THE WORDS,
"WHOEVER CONTROLS WATER WILL
CONTROL THE WEST."
JONAS MINTON: AND THERE'S
AN ICONIC MOVIE, CHINATOWN,
ABOUT LOS ANGELES'S
APPROPRIATION OF WATER
FOR ITS USES.
AND THE NEFARIOUS THINGS
IT DID TO OBTAIN IT.
JJ GITTES: GONNA BE A LOT OF
IRATE CITIZENS WHEN THEY FIND
OUT THAT THEY'RE PAYING FOR
WATER THEY'RE NOT GONNA GET.
NOAH CROSS: OH THAT'S
ALL TAKEN CARE OF.
LOIS HENRY: WATER IS POWER.
WATER IS POWER AND
WATER IS MONEY.
YOU DON'T HAVE AN INDUSTRY,
YOU DON'T HAVE A TOWN,
YOU DON'T HAVE AGRICULTURE
UNLESS YOU HAVE WATER.
MARK ARAX: THAT'S WHY WE'RE
HAVING THESE WATER WARS.
BETWEEN URBAN, AGRICULTURE,
AND ENVIRONMENTALISTS.
I CALL THEM THE
TRIBES OF CALIFORNIA,
THE TRIBES OF THE NORTH,
THE TRIBES OF THE MIDDLE,
THE TRIBES OF THE SOUTH.
MAN: WHAT DO WE WANT?
AUDIENCE: WATER!
MAN: WHAT DO WE WANT?
AUDIENCE: WATER!
JERRY MERAL: SOUTHERN
CALIFORNIANS HAVE ALWAYS FEL THAT THEY ARE PAR OF OVERALL STATE.
JUST THE STATE OF CALIFORNIA
WE'RE ALL WORKING TOGETHER AS
ONE STATE AS PAT BROWN
SAID MANY TIMES.
NORTHERN CALIFORNIANS FEEL
LIKE THOSE IN THE SOUTH ARE
JUST TRYING TO TAKE THEIR
WATER, DAMAGE THEIR ECONOMY,
AND RUIN THEIR ENVIRONMENT.
MARK ARAX: WE HAVE THIS
FUNDAMENTAL DISPARITY,
BECAUSE MORE THAN TWO THIRDS
OF THE RAIN FALLS IN THE NORTH
AND ALMOST TWO THIRDS
OF THE POPULATION RESIDES
SOUTH OF THE RAIN.
AND SO WE HAVE THIS GREA MIDDLE OF CALIFORNIA,
THE GREAT FERTILE MIDDLE,
EXCEPT FOR IT DOES NOT HAVE
CONSISTENT WATER.
HOW DO WE GET THE
WATER ON A CONSISTENT BASIS
TO THE MIDDLE?
GOV PAT BROWN: HOW DO WE
MOVE CALIFORNIA AHEAD?
HOW DO WE MAKE THE CHALLENGES,
SEIZE THE OPPORTUNITIES OF
CALIFORNIA'S GROWTH?
GOV JERRY BROWN: THE STATE
WATER PROJECT WAS AN IDEA THA HAD BEEN KICKING AROUND
FOR QUITE SOME TIME.
AND THE DEMOCRATS HELD OFF
FROM DOING ANYTHING UNTIL MY
FATHER BECAME GOVERNOR.
JERRY MERAL: THE
STATE WATER PROJECT WAS
PAT BROWN'S PET PROJECT.
MAYBE EVEN MORE THAN THE
UNIVERSITY OR THE HIGHWAY
SYSTEM AND THOSE
WERE BIG DEALS.
PAT BROWN WANTED TO TIE
THE STATE TOGETHER WITH AN
AQUEDUCT, MAKING THE WHOLE
STATE INTERDEPENDENT.
PRESIDENT KENNED: IT IS A
PLEASURE FOR ME TO COME OU HERE AND HELP BLOW
UP THIS VALLEY IN THE
CAUSE OF PROGRESS.
[EXPLOSION AND APPLAUSE].
GOV PAT BROWN: TODAY
THE DIRT IS FLYING,
A RIVER SEVEN
HUNDRED MILES LONG;
THE LARGEST PROJEC EVER UNDERTAKEN BY
AN AMERICAN STATE.
I DON'T THINK YOU HAVE
ANY IDEA OF HOW PROUD I AM
OF THIS GREAT DAM.
MARK ARAX: WE ENDED UP
BUILDING MAJOR DAMS ON THE
SACRAMENTO RIVER AND
TAKING THAT FLOW,
PART OF THE FLOW OF
THE SACRAMENTO RIVER,
AND MOVING IT TO THE INTERIOR
OF CALIFORNIA SO THAT LAND
COULD BLOSSOM INTO GARDEN.
MAN: THE VALLEY SUPPLIES
25% OF ALL THE FOOD EATEN
IN THE UNITED STATES.
IT'S THE RICHEST AGRICULTURAL
VALLEY IN THE WORLD.
MARK ARAX: THIS IS A LAND
OF AGRICULTURAL GIANTS,
THAT DEPENDS ON WATER,
A PUBLIC COMMODITY,
TO GROW THEIR CROPS.
50% OF THE STATE WATER FLOW
BASICALLY GOES TO LOS ANGELES.
25% GOES TO THE WES SIDE OF KERN COUNTY.
JERRY MERAL: THOSE ARE THE TWO
BIG CONTRACTORS FOR THE STATE
WATER PROJECT SO THEY HAD
HAD A LONG HISTORY OF WORKING
TOGETHER AND FIGHTING!
THEY WERE ALWAYS FIGHTING.
BECAUSE, WHO'S GOING TO PAY
WHAT AND WHEN AND WHAT THEIR
RIGHTS ARE AND SO ON.
MARK ARAX: THA STATE WATER PROJECT,
AS THOSE WATERS FLOWED
IN THE 60S AND 70S.
YOU SAW BASIC DESERT LAND,
SCRUB LAND ON THE WEST SIDE OF
KERN COUNTY TURN INTO
PRIME AGRICULTURE LAND.
BUT THAT FARMLAND WAS ALL
IN WESTERN KERN WHERE THERE
WAS NO GROUNDWATER.
SO THEN THAT LAND BECOMES
WHOLLY DEPENDENT ON THE
STATE WATER SYSTEM.
ROGER MOORE: WE HAD A PRETTY
WET PERIOD THROUGH THE 1980S,
BUT THEN WE HAD SEVERAL
YEARS OF DROUGHT,
TAKING US INTO THE EARLY 90S,
THAT INCREASED THE TENSION
BETWEEN AGRICULTURAL AND
URBAN STATE WATER CONTRACTORS,
OVER THE SHORTAGES THA INEVITABLY DEVELOPED.
MAN: IN CALIFORNIA, THE SNOW
PACK IS WAY BELOW NORMAL.
RUN OFF DOWN DRASTICALLY.
MANY RESERVOIRS ARE HALF FULL.
CONNIE CHUNG: THIS IS THE
SECOND YEAR OF LOW RAINFALL.
NEWSCASTER: CALIFORNIA
IS IN THE FIFTH YEAR.
TOM BROKAW: THE WORS DROUGHT IN 50 YEARS.
MAN: IT'S DEFINITELY
A CRISIS MODE.
IT'S AN EMERGENCY MODE.
MARK COWIN: WE WERE
FACING A CRISIS WITHIN THE
STATE WATER PROJECT.
WATER SUPPLIES HAD BEEN
REDUCED TO ALL STATE WATER
PROJECT CONTRACTORS.
AND THE ORIGINAL CONTRACTS
REQUIRED US TO CUT DELIVERIES
TO AGRICULTURAL WATER
CONTRACTORS FIRST.
JERRY MERAL: FARMERS DID
NOT LIKE THAT BECAUSE WHEN A
DROUGHT YEAR CAME
ALONG THEY GOT A CUT,
AND THE CITIES CONTINUED
ON WITH THEIR WATER SUPPLY.
MAN: WATER IS POWER
IN THE AMERICAN WEST.
AND ARGUMENTS ABOUT SHARING
IT ARE NOT EASILY SETTLED.
TOM CLARK: THE FIGHT OVER
WATER IN THIS COUNTY STARTED
MORE THAN A HUNDRED YEARS
AGO, THAT'S FOR SURE.
JONAS MINTON: TOM CLARK
WAS A LEGENDARY RAM ROD IN
CALIFORNIA WATER POLITICS.
THE TERM ACTUALLY COMES FROM
THE TOOL USED TO PACK POWDER
INTO MUZZLE LOADERS.
IT'S CALLED THE RAM ROD.
AND HE WOULD USE
EVERY TECHNIQUE TO
ADVANCE KERN'S INTERESTS.
TOM CLARK: IN 1991 OUR
ALLOCATION FOR THE STATE
PROJECT WAS ZERO.
THE IMPACTS LOCALLY WERE
MORE THAN $250 MILLION,
12,000 JOBS LOST.
JONAS MINTON: KERN
COUNTY WATER AGENCY,
THREATENED TO SUE THE STATE OF
CALIFORNIA TO RECOVER MILLIONS
AND MILLIONS OF DOLLARS,
UNLESS THERE WERE SOME CHANGES
IN THE CONTRACTS.
SO THEY, UH, PRESSURED, SOME
MIGHT ALMOST SAY EXTORTED,
THE STATE FOR THESE CHANGES.
TONY ROSSMANN: THE MONTEREY
AGREEMENTS WERE CONDUCTED WITH
MOST PEOPLE NOT EVEN REALIZING
THAT THEY WERE GOING ON.
IN A SENSE THAT WAS THE
FUNDAMENTAL, IN MY VIEW,
FLAW OF THE PROCESS,
IT WAS DONE IN SECRET.
THOSE WHO PARTICIPATED
CAN BE, I THINK, DIVIDED INTO
TWO CATEGORIES, THOSE
WHO SINCERELY FELT THEY WERE
SERVING THE PEOPLE
OF CALIFORNIA,
AND THOSE WHO WERE
SERVING, THEMSELVES.
MARK ARAX: THE GROUP WAS SPLI BETWEEN REPRESENTATIVES OF BIG
AGRICULTURE, LED BY TOM
CLARK, AND URBAN WATER USERS
REPRESENTED BY TIM QUINN
AND WOODY WODRASKA.
THE DEPARTMEN OF WATER RESOURCES
REPRESENTED THE STATE.
TIM QUINN: FOR ALL OF MY
METROPOLITAN WATER DISTRIC YEARS AND MY YEARS A ACWA, I'VE TOLD MY STAFF,
WAR IS EASY,
COLLABORATION IS HELL.
WOODY WODRASKSA: EVERY ONE
OF THESE MEETINGS, FELT LIKE,
MAYBE WE'D TAKE TWO STEPS
FORWARD AT ONE OF THESE
MEETINGS AND THEN WE
GO BACK TO SQUARE ONE.
FINALLY I WAS, SAID LOOK, I
KNOW I'M THE NEW GUY HERE,
WHY DON'T WE LOOK A BRINGING IN A THIRD PARTY,
MEDIATOR, FACILITATOR?
LET SOMEBODY ELSE SEE IF
THEY CAN GET US OFF OF THE
SQUARE WE
SEEM TO BE STUCK ON.
[MUFFLED ARGUING].
JIM WALDO: THE FIRST MEETING,
EVERYONE TOOK TURNS INSULTING
EACH OTHER, I'D LIKE TO TALK
TO YOU ABOUT YOUR MOTHER AND
HER BEHAVIOR, OR,
YOU KNOW, YOUR DAD WAS A LOSER.
YOU'RE A SON OF A
BITCH BUT YA KNOW,
I DO WANNA HEAR WHA YOU HAVE TO SAY.
AND SO AT THE SECOND MEETING
TOM CLARK WHO WAS THE GENERAL
MANAGER FROM KERN COUNTY
WATER AGENCY HAD BEEN TO
A RUMMAGE SALE AND HE SAID
"HERE, I THINK YOU'RE
GONNA NEED THESE."
[CLANGS CYMBALS].
TIM QUINN: AND IT WAS AMAZING,
WE WERE LIKE PAVLOVIAN DOGS,
WE IMMEDIATELY
CHANGED OUR BEHAVIOR.
JIM WALDO: THAT MEETING I HAD
TO USE THE CYMBALS 15 TIMES.
TIM QUINN: HE KNEW
WE COULD NEVER AGREE.
BECAUSE THE PROJECT ONLY HAS
SO MUCH WATER TO ALLOCATE.
AND IF KERN WANTED MORE
IN DRY PERIODS, UH,
THAT WOULD MEAN
SOMEONE ELSE GOT LESS.
AND BY THE WAY WE DIDN'T KNOW
WE WERE ABOUT TO REWRITE THE
ENTIRE STATE WATER CONTRACT.
WE THOUGHT WE WERE TRYING TO
SOLVE AN ALLOCATION PROBLEM.
MARINA ZENOVICH: WAS THE
KERN WATER BANK PART OF THA MEETING IN DECEMBER OF 1994?
JIM WALDO: IT HAD BEEN,
IT HAD BEEN DISCUSSED
LEADING UP TO THAT.
MARINA ZENOVICH: HOW
DID IT FIRST COME UP?
JIM WALDO: UH.
JONAS MINTON: DURING
THE MONTEREY AMENDMENTS,
KERN HAD ONE OTHER
LEVERAGE POINT IN THE DEAL.
IN THE 1980'S, THE STATE OF
CALIFORNIA STARTED LOOKING FOR
OPPORTUNITIES FOR PLACES WHERE
WATER COULD BE PUT IN THE WE PERIODS TO BE DRAWN
OUT IN THE DRY PERIODS.
JERRY MERAL: THE CONCEPT WAS
THAT WHEN YOU HAD HIGH FLOWS
IN THE DELTA YOU WOULD PUMP
THEM DOWN TO KERN COUNTY
BECAUSE THERE'S HUGE EMPTY
GROUNDWATER RESERVOIRS THERE
BECAUSE THE WATER HAS BEEN
PULLED OUT OF THERE FOR
DECADES AND IT LEFT A HOLE,
BASICALLY, UNDERGROUND.
SO WE SAID LET'S STORE I UNDERGROUND AND THEN WHEN A
DROUGHT COMES, PUMP IT BACK
OUT, JUST LIKE A PIGGY BANK.
JONAS MINTON: FAMERS IN KERN
COUNTY SAID, WAIT A MINUTE.
THIS COULD BE A
REALLY GOOD THING.
IT'S CALLED A
GROUNDWATER BANK.
WELL, IT'S GOOD TO OWN BANKS.
BANKS MAKE MONEY FOR PEOPLE.
UNDER A PARTICULAR STATE LAW,
IN ORDER TO OPERATE THAT KIND
OF RESERVOIR, A GROUND
WATER RESERVOIR,
IT REQUIRES APPROVAL
OF THE LOCALS.
AND KERN COUNTY SAID,
"WE'RE NOT GOING
TO EVER APPROVE YOU
OPERATING THAT PROJECT."
SO EVEN AFTER THE DEPARTMEN OF WATER RESOURCES
HAD SPENT OVER
$70 MILLION TO DEVELOP IT,
KERN COUNTY WATER AGENCY
HELD THE PROJECT HOSTAGE.
ROGER MOORE: THE ORIGINAL
VISION OF WATER BANKING THA THE STATE HAD DEVELOPED WAS
CAST ASIDE IN FAVOR OF GIVING
THIS MAJOR STATE ASSET TO THE
LOCAL WATER CONTRACTOR WHO
THEN TURNED IT OVER TO A
NOMINALLY PUBLIC BUT PRIVATELY
DOMINATED JOIN POWERS AUTHORITY.
TIM QUINN: SO THIS WAS TRULY
HISTORIC AND WE KNEW IT.
WE KNEW ALL OF US
HAD A BETTER FUTURE.
JIM WALDO: TOM CLARK SAID,
WELL MY MOMMA
DIDN'T RAISE A FOOL.
[LAUGHTER].
TAKE IT.
MAN: ALRIGHT PEOPLE,
TO CALIFORNIA!
[PRINTER PRINTING]
JOHN GIBLER: SOME PEOPLE
GAVE A TIP TO PUBLIC CITIZEN,
A WASHINGTON DC BASED
NON-PROFIT ORGANIZATION ABOU WHAT APPEARED TO BE SOME
SHADY WATER DEALS GOING ON IN,
IN CENTRAL VALLEY
OF CALIFORNIA.
YOU KNOW THE FIRST THING
I DID WAS I LOOKED UP THE
KERN WATER BANK ONLINE.
GOOGLE WAS IN ITS EARLY
YEARS MORE OR LESS 2003.
WELL IT TURNS OUT IT'S
LARGELY CONTROLLED BY SOMETHING
CALLED ROLL INTERNATIONAL.
AND WHEN I CALLED THEIR
HEADQUARTERS AND ASKED TO
SPEAK TO A PUBLIC
RELATIONS PERSON THEY SAID
THEY DIDN'T HAVE ONE.
AND I SAID, WELL TO
WHOM SHOULD I ADDRESS
ANY RESEARCH QUESTIONS?
THEY SAID WE DON'T GIVE
INFORMATION TO THE PUBLIC,
WE SUGGEST YOU DON' RESEARCH US, AND HUNG UP.
SO I DRIVE DOWN TO BAKERSFIELD
AND THEN FOLLOW THE DIRECTIONS
OUT TO THE ADDRESS.
AND I'M A LITTLE BIT CONFUSED
BECAUSE THE SIGN OUTSIDE SAYS
PARAMOUNT FARMING COMPANY,
NOT KERN WATER BANK AUTHORITY.
WALK IN THE FRONT DOOR AND
ASK THE RECEPTIONIST, "UM IS,
THE KERN WATER BANK, DO YOU
KNOW WHERE THAT OFFICE IS?"
"OH YEAH, THEY'RE JUS DOWN THE HALL," THEY SAID.
IT'S LIKE, "OK."
THE KERN WATER BANK IS A
SUPPOSEDLY PUBLIC ENTITY.
AND THE MEMBERS ARE A NUMBER
OF DIFFERENT WATER DISTRICTS,
WATER AGENCIES, WATER
STORAGE DISTRICTS,
AND ALSO A PRIVATE COMPANY
CALLED WESTSIDE MUTUAL
WATER COMPANY LLC.
AND I REMEMBER
ASKING, WHO ARE THEY?
WELL, THEY'RE LANDOWNERS.
WELL, WHAT LAND DO THEY OWN?
WELL THEY REPRESEN THEIR OWN LAND.
THEY DIDN'T WANT TO MENTION
THE NAME PARAMOUNT FARMING,
WHICH WAS NOTABLE CONSIDERING
WHERE WE WERE SITTING,
WHICH WAS INSIDE
PARAMOUNT'S OFFICE BUILDING.
IT SEEMED AS IF THIS WAS A
CASE OF EXTREMELY VALUABLE
PUBLIC PROPERTY, UM,
AN ESSENTIAL ELEMENT OF THE
STATE PUBLIC WATER SYSTEM,
WHICH HAD ESSENTIALLY BEEN
GIVEN TO A VERY WEALTHY
PRIVATE, UH, COMPANY.
BUT REALLY
JUST ONE LANDOWNER,
ONE CORPORATE FARMER.
MARK ARAX: RAFAELA,
THIS IS MARK ARAX.
HOW YOU DOING?
RAFAELA: FINE, THANK YOU.
MARK ARAX: UH, SO I'M HEADED
TO LOST HILLS AND I'M HOPING
YOU CAN JOIN US TO
START TRYING TO FIGURE OUT A
LITTLE BIT ABOUT THE TOWN.
RAFAELA: FINE.
MARK ARAX: OH, WONDERFUL.
OK, WELL WE'LL BE A GABBY'S I WOULD THINK IN
ABOUT 45 MINUTES.
RAFAELA: 45 MORE MINUTES?
OK.
MARK ARAX: OK, BYE-BYE.
SHE'S AN ACTIVIST IN TOWN.
REALLY A GOOD,
GOOD, GOOD SOURCE.
SHE'S IN LOST HILLS.
AND THAT'S THE COMPANY
TOWN OF STEWART RESNICK AND
PARAMOUNT FARMS.
IT'S A LATINO TOWN,
VERY IMPOVERISHED.
IT'S AN EXAMPLE OF THE
HAVES AND HAVE-NOTS OF, OF,
OF CALIFORNIA.
THAT'S THE CALIFORNIA
AQUEDUCT RIGHT THERE.
AND THESE ARE THE FIELDS
OF RESNICKS RIGHT HERE.
ALMONDS, REAL
PRETTY RIGHT NOW.
ALL THE PETALS HAVE DROPPED.
IT LOOKS LIKE SNOW HAS FALLEN.
IN THE EARLY 2000'S
I WAS WORKING FOR THE
"LOS ANGELES TIMES"
AND KERN COUNTY
WAS PART OF MY BEAT.
AND AS JOHN GIBLER
WAS FINISHING HIS STUDY FOR
PUBLIC CITIZEN, I STARTED
PURSUING MY OWN STORY
ABOUT THE KERN WATER
BANK AND HOW WATER,
A PUBLIC COMMODITY,
HAD BEEN PRIVATIZED.
STEWART RESNICK, THE
OWNER OF PARAMOUNT FARMS,
WAS AT THAT TIME, THE
BIGGEST GROWER IN THE VALLEY,
BUT NO ONE REALLY
KNEW WHO HE WAS.
AND IN A SERIES OF
INTERVIEWS WITH ME SIX,
SEVEN YEARS BACK HE DESCRIBED
HIMSELF AS A CARPETBAGGER.
STEWART RESNICK: I, LOOK,
YOU'RE THE ONLY PERSON I'VE
EVER GIVEN AN INTERVIEW TO.
MARK ARAX: YEAH.
STEWART RESNICK: AND I'VE
GOTTEN PLENTY OF CALLS,
I MEAN YOU KNOW, "FORBES" AND
"BUSINESS WEEK" AND "FORTUNE."
I SAY, "NO, I'M NOT,
I DON'T GIVE INTERVIEWS."
MARK ARAX: YEAH.
STEWART RESNICK: OKAY,
WHAT HAPPENED WAS,
I THINK IT WAS ABOUT 78,
79 AND I WAS LOOKING FOR AN
INVESTMENT AS A HEDGE
AGAINST INFLATION,
AND SO I WAS STARTING
TO LOOK AT REAL ESTATE.
MARK ARAX: HAD YOU EVER BEEN
TO THE SAN JOAQUIN VALLEY
BEFORE THAT?
STEWART RESNICK:
I HADN'T EVEN, NO.
TO ME AT THAT POINT IT WAS
SIMPLY A PLACE TO PARK SOME
MONEY, AND HAVE
ANOTHER OPPORTUNITY.
MARK ARAX: OKAY.
THE WAY HE HAD DONE IT WAS
LEVERAGING PROFITS FROM THE
FRANKLIN MINT, WHICH HE OWNED.
COMMERCIAL: NO ONE
CAPTURES PRINCESS DIANA
LIKE THE FRANKLIN MINT.
MINT THE MOMENT.
MARK ARAX: AND HE STARTED
PURCHASING THESE LARGE SWATHS
OF LAND IN WEST KERN
IN THE LATE 1970S.
AND REMEMBER, WESTERN
KERN HAS NO GROUNDWATER,
SO IT SHOULD HAVE NEVER
BEEN DEVELOPED AS FARMLAND.
BUT RESNICK'S A GAMBLER,
AND HE HAD A VISION TO MOVE
CALIFORNIA'S WATER FROM WHERE
IT WAS TO WHERE IT WASN'T.
RESNICK WASN'T IN THE ROOM
AT THE MONTEREY AGREEMENTS,
BUT RESNICK'S MAIN WATER
MAN BILL PHILLIMORE HAD
A MAJOR, MAJOR ROLE.
AND THE WATER BANK WAS
IDENTIFIED, AND SMARTLY SO,
BY THE RESNICK PEOPLE, AS
SOMETHING THAT THEY WANTED.
THIS WAS ONE OF THE PRIZES
OF THAT NEGOTIATION.
TONY ROSSMANN: PARAMOUN FARMS GOT A 58% CONTROL OF
THE KERN WATER BANK.
ONE OF THE WORLD'S
LARGEST GROUNDWATER BANKS,
THAT THE STATE OF CALIFORNIA
COULD OPERATE AT ITS
DISCRETION TO RELIEVE DROUGHT.
SO IT WAS REALLY A GIFT FROM
THE PEOPLE OF CALIFORNIA TO
STEWART RESNICK.
JOHN VIDOVICH: THE PEOPLE
WHO WERE INVOLVED IN THE BANK
THEY SHOULDN'T HAVE ALLOWED
IT TO CONCENTRATE SO MUCH
WITH ONE PERSON.
THIS WAS A GOVERNMEN OWNED ASSET AND THEY WERE
PRIVATIZING IT.
BUT I DO NOT BLAME STEWAR FOR BEING ABLE TO GRAB A
BIG PART OF THE WATER BANK.
I DON'T BLAME HIM.
THE ISSUE IS PROPER
DISTRIBUTION OF THE WATER THA BENEFITS THE STATE AS A WHOLE.
THAT'S THE ISSUE.
JOHN GIBLER: SINCE THE
MONTEREY AMENDMENTS,
THE RESNICKS DOUBLED THEIR
ACREAGE IN PRODUCTION.
MARK ARAX: NOW, THEY'RE THE
BIGGEST GROWER OF ALMONDS,
PISTACHIOS, AND
POMEGRANATES IN THE COUNTRY.
LYNDA RESNICK: PEOPLE DIDN' KNOW WHAT A POMEGRANATE WAS,
BUT ONCE THEY FOUND OUT,
THEY SURE WANTED IT.
MARTHA STEWART: CHEERS!
LYNDA RESNICK: CHEERS DARLING.
JOHN GIBLER: TODAY STEWAR AND LYNDA RESNICK ARE NUMBER
129 ON THE FORBES LIST, WITH
A NET WORTH OF $4.2 BILLION.
AND POLITICIANS LOVE THE
RESNICKS, WHO HAND OU $50,000 CHECKS.
DEMOCRATS, REPUBLICANS,
GRAY DAVIS,
ARNOLD SCHWARZENEGGER.
LIKE, YOU KNOW, THEY
GAVE TO EVERYBODY.
MARK ARAX: RESNICK HAS
NOW EMERGED AS THE NEW
KING OF CALIFORNIA.
COMMERCIAL: POM WONDERFUL,
PURE POMEGRANATE JUICE IS.
MARK ARAX: THE MARKETING IS
UNIQUE HE'S NOT A FARMER,
HE'S A CAPITALIST.
COMMERCIAL: ON COMMAND.
MARK ARAX: IN A WAY RESNICK
ALSO OWNS THE WORD WONDERFUL,
NOT TO MENTION FIJI WATER
AND SOME OTHER CONCERNS.
THE TAXPAYERS HAD PUT A LO OF MONEY INTO THIS AND WITHOU THAT WATER BANK THA LAND WOULD CONTINUE TO
BE SCRUB LAND, DESERT.
SO, RESNICK HAS BEEN ABLE TO
EXTRACT MILLIONS AND MILLIONS
OF POUNDS AND TENS OF
MILLIONS OF DOLLARS OFF THE
FIELDS OF UH, LOST HILLS.
AND YOU WONDER HOW MUCH
OF THAT IS GOING BACK
TO THE WORKERS.
WHAT I'M TRYING TO DO IS
GET ALL THESE BIG GUYS AND
LIFT THE VEIL ON WHA THEY'RE DOING.
BECAUSE TO ME THIS IS REALLY
GROUND ZERO OF THE DROUGHT.
AND WHEN I FIRST WROTE ABOU PARAMOUNT AND THE RESNICKS,
THEY GOT SOME BAD PUBLICITY
FOR THIS BEING LIKE A THIRD
WORLD COMPANY TOWN,
AND THAT AFFECTED THEM AND
LYNDA RESNICK DECIDED
THAT SHE WAS GOING TO DO
SOMETHING ABOUT IT.
LYNDA RESNICK: I HAD NO
IDEA WHAT I WANTED TO DO.
BUT I HAD REACHED A
MOMENT IN MY LIFE,
WHERE I HAD TO GIVE BACK
IN A MEANINGFUL WAY.
MAN: WELCOME EVERYBODY
TO YOUR NEW PARK.
STEWART RESNICK: WE HAVE
A LOT OF THINGS HERE
TO CELEBRATE TODAY.
BUT I THINK WE'RE GOING
TO GET OFF OF HERE AND
LET YOU HAVE A LITTLE FUN.
WOMAN: COMPANIES DON' DO THINGS LIKE THIS.
WHY WOULD A COMPANY WAN TO INVEST SO MUCH MONEY
IN A TOWN?
IT'S A HUGE DEAL.
MARK ARAX: RAFAELA, I KNOW YOU
FEEL GRATEFUL TO THE WONDERFUL
COMPANY AND THEY HAVE DONE
THINGS THAT NO FARMER WILL DO.
RAFAELA: YES.
MARK ARAX: THERE'S A PARK NOW.
RAFAELA: YES, I KNOW.
MARK ARAX: THE ROADS ARE
BETTER, THERE ARE SOME HOUSES.
BUT THE WAGES ARE
STILL MINIMUM,
AND THE WATER IS
STILL A PROBLEM.
RAFAELA: WE DON'T DRINK
THE WATER FROM HERE.
WE DON'T EVEN LIKE
IT FOR THE DISHES.
SOMETIMES IT COMES
WITH ARSENIC.
MAN: ARSENIC.
RAFAELA: ARSENIC, YES.
MARK ARAX: SO THE FARM WORKERS
DON'T HAVE WATER TO DRINK,
BUT THE TREES HAVE
PLENTY OF WATER TO DRINK.
RAFAELA: OH, I KNOW
WHERE YOU'RE GOING.
MARK ARAX: YEAH, SO THE
WATER YOU DO GET TO SHOWER.
HOW MUCH DOES THE
IRRI, IS IT, IS IT,
HOW MUCH DOES THE WATER
DISTRICT CHARGE YOU A MONTH
FOR THE WATER THAT'S
NO GOOD TO DRINK?
RAFAELA: $69, IT COSTS $69.
MARK ARAX: A MONTH?
RAFAELA: YEAH.
MARK ARAX: WOW.
ROSANNA ESPARZA:
HOLA, COMO ESTAN?
MARK ARAX: HELLO.
[ROSANNA SPEAKS IN SPANISH].
MARK ARAX: TELL ME ARE YOU
DRINKING THE WATER HERE?
DO YOU DRINK THE WATER?
[ROSANNA TRANSLATES
IN SPANISH].
[FATHER SPEAKS IN SPANISH].
[ROSANNA TRANSLATES
IN SPANISH].
ROSANNA ESPARZA: UHUH,
THEY TAKE THEIR FIVE-GALLON
DOWN TO THE STORE.
MARK ARAX: HOW COME YOU
DON'T DRINK THE WATER FROM
THE TAP HERE?
[MOTHER SPEAKS IN SPANISH].
ROSANNA ESPARZA:
UM, IT'S CHLORINE.
MARK ARAX: A LOT OF CHLORINE?
ROSANNA ESPARZA: AND, AND THEY
PUT SOME KIND OF BLEACH, UH,
CLOROX INTO THE WATER.
[MOTHER SPEAKS IN SPANISH].
ROSANNA ESPARZA: AND
WHEN YOU SHOWER IT,
YOU CAN SMELL THE CHLORINE.
JOHN GIBLER: THE MYTH IS THA AS THE AGRIBUSINESS BENEFIT,
THE COMMUNITIES BENEFIT.
MARK ARAX: HOW'S THE WATER
AT THE SCHOOL DO YOU GUYS
DRINK THE
WATER AT THE SCHOOL?
GIRLS: NOOOOO, IT'S NASTY!
MARK ARAX: IT TASTES LIKE MUD?
GIRLS: IT TASTES NASTY,
NASTY, IT TASTES LIKE...
JOHN GIBLER: BUT IN THE CASE
OF THE RESNICKS EVEN WITH
THEIR SLIDE-SHOW-READY
CHARITY, NO,
YOU SEE THAT THE RESNICKS
JUMP UP THE FORBES LIST OF
BILLIONAIRES AND THE
WORKERS CAN'T EVEN DRINK
THEIR TAP WATER.
AND THE IRONIES COULDN'T BE
SHARPER BECAUSE THE CALIFORNIA
AQUEDUCT LITERALLY
FLOWS THROUGH TOWN,
DELIVERING HIGH QUALITY,
DIRT CHEAP, SUBSIDIZED,
NORTHERN CALIFORNIA
RAIN WATER,
TO THE FIELDS OF
PARAMOUNT FARMING.
BUT IT'S NOT AN
ABERRATION IN THE SYSTEM,
IT'S THE WHOLE MODEL.
IT'S NOT DESIGNED OR GEARED
TO BUILD COMMUNITIES AND
TO TREAT PEOPLE WELL,
IT'S DESIGNED AND
GEARED TO MAKE MONEY.
GARY PATTON: IT WAS NEAR
THE END OF THE YEAR IN 1995,
AND I GET A PHONE CALL.
IT'S A WOMAN, I'VE
NEVER MET HER BEFORE,
SAYS SHE WORKS FOR THE
DEPARTMENT OF WATER RESOURCES.
SHE SAYS, ARE YOU
AWARE THAT THIS TERRIBLE
THING IS HAPPENING?
AND SO SHE WAS A FEW BLOCKS
AWAY, SHE WALKED RIGHT OVER.
AND WE FOUND OUT ABOU WHAT WAS GOING ON.

THE WOMAN FROM DWR FEL THAT THE STATE HAD BETRAYED
A SACRED
TRUST TO THE PEOPLE.
SHE SAID LOOK,
THIS ISN'T RIGHT.
SHOULDN'T SOMEBODY
CHALLENGE THIS?
THE KEY VIOLATION THAT I
IMMEDIATELY SAW WAS THE
CALIFORNIA ENVIRONMENTAL
QUALITY ACT, SEQUA,
IT REQUIRES ENVIRONMENTAL
ANALYSIS FOR ANYTHING IF I EVEN 'MIGHT' HAVE AN
IMPACT ON THE ENVIRONMENT.
TONY ROSSMANN: UNDER
CALIFORNIA LAW,
THE ENVIRONMENTAL IMPAC REPORT SHOULD HAVE BEEN
WRITTEN BY THE DEPARTMENT OF
WATER RESOURCES SINCE THEY
WERE THE ONES WHO FOR
THE PREVIOUS 35 YEARS HAD BEEN
RUNNING THE STATE
WATER PROJECT.
BUT IN FACT, IT WAS PARCELED
OUT TO A PAROCHIAL WATER
DISTRICT ON THE COAS NEAR SANTA BARBARA.
AND AS IT LATER TURNED OUT,
DONE SO BECAUSE THE WATER
CONTRACTORS DID NOT TRUST THE
STAFF OF THE DEPARTMENT OF
WATER RESOURCES TO GO
ALONG WITH THE SHELL GAME.
IT TOOK US FOUR YEARS BECAUSE
THERE WAS WHAT I'LL CALL SOME
BIG TOBACCO LITIGATION
TECHNIQUES CARRIED OUT BY THE
STATE AND BY THE CONTRACTORS.
ROGER MOORE: IT DOUBLED OUR
RESOLVE TO MAKE SURE THAT THE
PUBLIC WOULD NEVER, EVER BE
LEFT IN THE DARK THE WAY THEY
WERE WHEN THE MONTEREY
AMENDMENTS WERE ORIGINALLY
EXECUTED AND IMPLEMENTED.
ADAM KEATS: UNFORTUNATELY
IT'S MORE OF THE SAME, RIGHT?
THEY CHECKED THE BOXES AND
THEY'RE MOVING ON WITH THEIR
DECISION THEY MADE
TWENTY YEARS AGO.
BUT WHAT DO YOU EXPECT?
GREAT, YEAH, WE'LL SEE
YOU THERE, THANKS, BYE.
I LOVE THE UNDERDOG,
I LOVE THE FIGHT.
FIGHTING CORPORATE POWER,
FIGHTING BIG MONEY.
BUT WATER LAW,
ESPECIALLY IN CALIFORNIA,
IS AN ABSOLUTE NIGHTMARE.
AND ONLY THE SICKEST AND
MOST DEPRAVED LAWYER WOULD
WANT TO DO THIS.
I REALLY BELIEVE THAT.
BECAUSE IT'S LIKE
A PRIESTHOOD.
THIS IS LIKE
THE, YOU KNOW,
MIDDLE AGES IN
THE CATHOLIC CHURCH.
THEY HAVE MADE THIS AS
COMPLICATED AS THEY POSSIBLY
CAN IN ORDER TO KEEP PEOPLE
LIKE ME FROM MESSING WITH
THEIR GOLDEN GOOSE.

I WATCHED THE MOVIE
CHINATOWN A LONG TIME AGO.
AND IN CHINATOWN I MEAN
THERE'S THE WHOLE FILM NOIR
PLOT THAT GOES ALONG
WITH THE THEFT OF WATER UP
IN THE OWENS VALLEY.
IT'S ABOUT DESTROYING
THE FARMING ECONOMY,
DESTROYING THE ENVIRONMENT.
JUST TO FUEL SPECULATIVE
REAL ESTATE GROWTH DOWN
IN LOS ANGELES.
AND I REALIZE, IT'S THE SAME
FIGHT THAT'S BEEN GOING ON
SINCE THE TWENTIES.
WHAT WE'RE TALKING ABOU IS: PEOPLE WITH POWER,
PEOPLE WITH MONEY, GETTING
WHAT THEY WANT IN TERMS OF
PUBLIC RESOURCES.
WHILE PEOPLE WITHOUT POWER ARE
CUT OUT OF THE CONVERSATION.
THE FOLKS WHO RUN THIS,
THE BIG POWER BROKERS
AND THE STATE, THEY REGARD
THE MONTEREY AMENDMENTS
AS BEING THIS
CROWNING ACHIEVEMENT.
THIS GREAT, WONDERFUL,
NEGOTIATED TRUCE BETWEEN THESE
CONFLICTING INTERESTS.
BUT WHAT IT REALLY IS, IS
TAKING WATER FOR PRIVATE USE.
BUT ONE OF THE CARDINAL
SINS COMMITTED BY THIS GANG,
WAS THEY TRIED TO SQUEAK
THROUGH THIS ENVIRONMENTAL
REVIEW BY THIS, NOT EVEN,
I WOULDN'T EVEN SAY OBSCURE,
LIKE AN UNKNOWN WATER AGENCY.
AND FOR A PROJECT THIS BIG.
IT'S INCONCEIVABLE TO
ME THAT THEY DID THAT.
I MEAN THIS IS A
MASSIVE PROJECT.
IT AFFECTED HOW MUCH
WATER IS IN THE DELTA.
HOW MUCH WATER GOES
TO ALMOND TREES?
HOW MUCH WATER GOES
TO SUBDIVISIONS?
I MEAN I GUESS THE STATE
WAS HOPING THERE WAS GOING
TO BE NO SUCKER THA WAS GOING TO FILE A LAWSUI TO TRY TO FIGURE THAT OUT.
BECAUSE DOING A FAKE SHAM
ENVIRONMENTAL REVIEW IS
BREAKING THE LAW.
SO THIS IS WHERE
THEIR WEAKNESS IS.
THIS IS THE BREADCRUMB.
MONTEREY PLUS IS A LAWSUI THAT I'VE BEEN LITIGATING NOW
FOR THE LAST PAS FIVE PLUS YEARS.
AND THE ONLY THING STOPPING US
FROM BEING ABLE TO REVERSE THE
TRANSFER OF THE KERN
WATER BANK AND REVERSE THE
MONTEREY AMENDMENTS
IS JUST GETTING JUDGES TO
RECOGNIZE THEIR ROLE.
BECAUSE THE LAW WAS BROKEN.
AND WE'RE NOT TALKING
ABOUT FAMILY FARMS.
WE'RE TALKING ABOUT MASSIVE
SCALE INDUSTRIAL AGRICULTURE.
2% OF THE ECONOMY IN THE
STATE, 80% OF THE WATER.
UM, THERE'S A REASON FOR THAT.
CONSOLIDATION OF
POWER, BIG MONEY,
HOW DO I CONVER WATER INTO MONEY?
LOIS HENRY: WATER IS A
VERY COMPLICATED ISSUE.
THE RIGHTS, AND THE
DEALS THAT PEOPLE MAKE.
PEOPLE CALL ME UP AND THEY
JUST HAVE THIS SENSE THAT,
SOMEBODY'S GETTING RICH OFF
OF OUR WATER AND IT AIN'T US.
IN 2001 I STARTED SEEING SALES
OF EXCESS WATER FROM THIS
AGENCY OR THAT AGENCY, OR
TO THIS THING, YOU KNOW,
ENVIRONMENTAL WATER
ACCOUNT, NEVER HEARD OF IT.
DOUG OBEGI: IN THE
EARLY 2000'S THE GOVERNMEN CAME UP WITH THE
ENVIRONMENTAL WATER ACCOUNT,
WHERE THEY WOULD
PAY WATER DISTRICTS NO TO DIVERT WATER.
LOIS HENRY: SO, THEY PUT OU A CALL TO VARIOUS AGENCIES DO
YOU HAVE ANY EXCESS TO SELL?
SO, THE KERN COUNTY WATER
AGENCY SAID "SURE WE DO.
HOW ABOUT IF YOU PAY US
$200 AN ACRE FOOT FOR THAT."
THE KERN COUNTY WATER
AGENCY WAS ONE OF THE BIG
BENEFICIARIES OF THIS
BASICALLY SCAM TO GET PAID TO
SELL WATER BACK TO THE
GOVERNMENT AT THREE OR FOUR
TIMES THE PRICE THA THEY BOUGHT IT FOR.
MAN: STATE TAXPAYERS PAID
NEARLY TWO HUNDRED DOLLARS PER
ACRE FOOT FOR WATER FROM KERN
COUNTY THAT WAS PURCHASED FOR
THE ENVIRONMENTAL ACCOUNT.
MAN: THE SAME WATER LOCAL
WATER AGENCIES INITIALLY PAID
$86 FOR, FROM THE
STATE WATER PROJECT.
LOIS HENRY: THEY WERE TRYING
TO SAY, WELL PUMPING COSTS,
PUMPING COSTS.
AND I'M LIKE, WELL THERE
WOULDN'T BE ANY PUMPING COSTS!
JONAS MINTON: NONE
OF IT ACTUALLY MOVED,
IT JUST STAYED
RIGHT WHERE IT WAS.
BUT THEY GOT THE MONEY.
MAN: ACCORDING TO THE TIMES,
NO ONE BENEFITTED MORE THAN
THE COMPANIES OWNED AND
CONTROLLED BY BEVERLY HILLS
BILLIONAIRE STEWART RESNICK,
WHO OWNS PARAMOUNT FARMS.
SOME FIFTY MILLION
DOLLARS ALL TOLD.
JONAS MINTON: BUT THERE
WAS NOTHING ILLEGAL ABOU WHAT THEY DID.
BECAUSE MOST OF WHA THEY DO IS LEGAL.
BECAUSE THEY WRITE THE RULES.
REPORTER: THIS MORNING THE
STARKEST WATER RESTRICTIONS IN
THE HISTORY OF THE STATE
ARE BEING IMPLEMENTED.
REPORTER 2: CALIFORNIANS
NOW ORDERED TO REDUCE WATER
CONSUMPTION BY 25% OR
FACE HEFTY FINES BUT CRITICS
POINT OUT THE
AGRICULTURAL INDUSTRY,
RESPONSIBLE FOR 80% OF
CALIFORNIA'S WATER CONSUMPTION,
LEFT MOSTLY SPARED BY
THE NEW RESTRICTIONS.
NEWSCASTER: GOVERNOR, ONE
OF THE CRITICISMS OF THIS
EXECUTIVE ORDER HAS BEEN THA YOU DID NOT MAKE THE SAME
DEMANDS ON THE
AGRICULTURAL INDUSTRY,
WHICH CERTAINLY HAS
ENORMOUS POLITICAL CLOUT.
80% OF THE WATER USED BY
AGRICULTURE BUT ACCOUNTS FOR
LESS THAN TWO PERCEN OF THE ECONOMY.
IS THAT TRUE?
JERRY BROWN: UH, YEAH,
YOU BET IT'S TRUE.
BUT BY THE WAY THEY'RE
NOT WATERING THEIR LAWN,
OR TAKING LONG SHOWERS.
THEY'RE PROVIDING
MOST OF THE FRUITS AND
VEGETABLES OF AMERICA.
NOW, IF YOU DON'T WAN TO PRODUCE ANY FOOD,
AND IMPORT IT FROM
SOME OTHER PLACE, UH,
THEORETICALLY YOU
COULD DO THAT.
BUT THAT WOULD DISPLACE
HUNDREDS OF THOUSANDS OF
PEOPLE AND I DON' THINK IT'S NEEDED.
JAY FAMIGLIETTI:
WE USE MOST OF OUR WATER FOR
AGRICULTURE, ABSOLUTELY;
80% AROUND THE WORLD.
AND IF YOU'RE A FARMER AND
YOU HAVE A FREE RESOURCE, WATER,
YOU'RE GOING TO PLANT THE
CROP THAT'S GOING TO BRING
YOU THE MOST MONEY,
EVEN IF IT'S INCREDIBLY
WATER INTENSIVE,
IT DOESN'T MATTER BECAUSE
YOU'RE BASICALLY GETTING THE
WATER FOR-FOR FREE.
MAN: SCIENTISTS AGREE,
IT TAKES ABOUT ONE GALLON OF
WATER TO MAKE JUST ONE
ALMOND AND LAST YEAR CENTRAL
CALIFORNIA ALMOND GROWERS,
PRODUCED 1.8 BILLION
POUNDS OF ALMONDS.
THAT'S MORE THAN THREE TIMES
THE AMOUNT OF WATER USED
IN LOS ANGELES EVERY YEAR.
ADAM KEATS: WE'VE HEARD A LO ABOUT ALMONDS IN CALIFORNIA.
AN ALMOND IS ADMITTEDLY
A CONVENIENT BOOGEY MAN.
BECAUSE IT'S A REMARKABLY
INEFFICIENT USE OF OUR SCARCE
WATER SUPPLIES.
WHY IS SAN JOAQUIN FARMING
GROWING A BUNCH OF STUFF THA WE DON'T NEED TO GROW?
WE DON'T NEED TO GROW ALMONDS.
THEY'RE ALL FOR EXPORT,
A VAST MAJORITY OF THEM ARE.
THEY'RE NOT ESSENTIAL.
THEY SHOULDN'T BE GROWN
HERE IN CALIFORNIA,
AND YET THEY ARE BECAUSE
THESE GUYS CONTROL THE WATER,
AND THEY'RE SEEKING THE MOS PROFIT THEY POSSIBLY CAN OU OF THE RESOURCE
THAT THEY CONTROL.
JERRY BROWN: WE HAVE A WHOLE
SOCIETY THAT IS DRENCHED IN
UNSUSTAINABLE ACTIVITY.
BECAUSE MODERN CAPITALISM
OPERATES ON MORE, ON GROWTH,
ON NEVER-ENDING ABUNDANCE.
BUT WITH WATER, WE
DON'T MANUFACTURE IT.
SO IT'S GONNA HAVE TO BE
USED UH, CAREFULLY, WISELY.
JOHN VIDOVICH: WE
ARE OVERPLANTED.
WE'RE DEFINITELY OVERPLANTED.
AND THAT INCLUDES
STEWART RESNICK.
HE'S PROBABLY GONE DOWN TO
FORTY PERCENT OF WHAT HE HAD
IN A WATER SUPPLY.
AND THAT'S WHY ANYWHERE
WHERE I HAVE GROUNDWATER,
I PUMP GROUNDWATER.
GROUNDWATER IS A HUGE RESOURCE
FOR FARMERS IN CALIFORNIA.
IN CALIFORNIA, GROUNDWATER
RIGHTS ARE BASED ON WHETHER
YOU OWN THE PROPERTY.
IF YOU OWN THE PROPERTY,
AT LEAST FOR NOW, UH,
YOU CAN DRILL A WELL AND
PUMP AS MUCH AS YOU WANT,
EVEN IF IT MEANS YOU'RE
DRAWING IN WATER FROM BENEATH
YOUR NEIGHBOR'S PROPERTY.
REMEMBER RIGHT NOW,
GROUNDWATER IS
STILL NOT REGULATED.
AND SO, EVERYBODY
IS PUMPING AS MUCH AS THE
GROUND WILL YIELD.
ONE OF THE CONSEQUENCES OF
LARGE AMOUNTS OF GROUNDWATER
PUMPING IS, WE
CALL IT SUBSIDENCE.
THE GROUND LITERALLY SINKS.
AND THE REASON IT SINKS IS
BECAUSE THE WATER THAT'S IN
THE AQUIFER ACTUALLY PROVIDES
SUPPORT AT THE SURFACE,
KEEPING THE STRUCTURE
OF THE AQUIFER INTACT.
AND WHEN YOU PULL
THE WATER OUT,
THE ACTUAL ROCK
LAYER COMPRESSES.
AND AT THE SURFACE THEN WHA YOU SEE IS THE GROUND SINKING.
IN MANY PLACES IN THE CENTRAL
VALLEY WE SEE THAT THE GROUND
ACTUALLY SINKS AS MUCH
AS A FOOT AND A HALF TO
TWO FEET PER YEAR.
THINK ABOUT THE INFRASTRUCTURE
THAT'S SITTING ON TOP OF THAT.
ROADS, BRIDGES, HOMES,
THEY'RE ALL AT RISK.
AND THAT'S WHAT'S HAPPENING
IN MANY PARTS OF THE WORLD.
OVER HALF OF OUR MAJOR
AQUIFERS ARE BEING DEPLETED.
IT'S CRAZY, AND NO ONE
IS TALKING ABOUT THAT.
CAROL ROWLAND: OH MY GOD,
LOOK AT HOW FAR
UP THAT THING IS.
HAROLD ROWLAND: YEAH, THE
HIGHER IT IS THE LESS WATER
YOU HAVE IN THE TANK.
I MEAN IF IT EVER
GOES UP TO HALF WAY.
WE DON'T USE ANY WATER AT ALL.
NO WATER.
YOU CAN USUALLY TELL HOW
MUCH WATER IS IN HERE.
BY RUNNING YOUR HAND UP.
THAT'S HOT RIGHT THERE.
THAT MEANS THERE'S
NO WATER IN THERE.
IT COOLS OFF RIGHT IN HERE.
SOMEHOW WE USED A
LOT OF WATER TODAY.
ANYWAY, THAT'S ALL I CAN DO.

CAROL ROWLAND: MY NAME IS
CAROL ROWLAND AND MY HUSBAND
AND I, WE'VE BEEN
HERE SINCE 1974.
WE'VE GONE THROUGH
ALL THE DROUGHTS THA HAVE BEEN AROUND.
AND, WE HAD NEVER HAD TROUBLE
WITH ANY OF THE OTHER DROUGHTS
THAT WE LIVED THROUGH.
IN MAY OF 2013, MY HUSBAND
CAME UP FROM OUR WATER TANKS.
AND HE SAID, WE'RE IN TROUBLE.
IT WAS OBVIOUS THERE
WASN'T WATER IN THERE AND I SEEMED TO BE THAT I WAS SLOWLY SEEPING IN.
THIS WAS AT THE STAR OF THE DRY SEASON.
SO, WE THOUGHT,
WELL LET'S JUST SEE.
LET'S JUST TRY AND GE THROUGH THE SUMMER AND SEE
WHERE WE'RE AT.
SO WE IMMEDIATELY CUT BACK
ON A LOT OF OUR WATER USE.
WE LOST OUR LAWNS,
WE LOST OUR GARDEN.
I TOOK MUCH SHORTER
BATHS, NOT EVERY DAY.
WE EXTENDED OUR PERIOD
FOR WASHING OUR CLOTHES,
WE WORE THEM A LOT LONGER.
AND, WE WERE IN A REAL BIND.
WE COULDN'T AFFORD
TO DRILL A NEW WELL.
I THINK, AT THE TIME IT WAS
LIKE, WOULD HAVE MAYBE BEEN,
THIRTY THOUSAND DOLLARS.
MY HUSBAND AND I WE'RE
RETIRED, THIS IS, THIS IS IT.
WE DON'T HAVE STOCKS AND BONDS
AND THOUSANDS OF DOLLARS,
YOU KNOW, WE'RE JUST PEOPLE.
AND THEN WE THOUGHT WELL
MAYBE WE'LL JUST MOVE.
BUT THEN HOW DO YOU
SELL YOUR PROPERTY IF YOUR
WELL'S GONE DRY?
IT'S REALLY UPSETTING
BECAUSE THESE BIG COMPANIES,
THEY'RE NOT CONNECTED
TO THE LAND.
IT'S AN INVESTMENT FOR THEM.
THEY'RE LOOKING A WATER AS A COMMODITY.
AND YOU KNOW IT'S NOT A
COMMODITY, IT'S A HUMAN RIGHT.
IT SHOULD BE A, HUMANS
SHOULD HAVE A HUMAN RIGH TO SAFE WATER.
REPORTER: PASO ROBLES
SITS ATOP A HUGE
UNDERGROUND AQUIFER,
RESIDENTS THOUGHT WOULD KEEP
WELLS FLOWING FOREVER.
BUT GROWING GRAPES
AND GROWING POPULATION ARE
STRESSING THE AQUIFER.
WOMAN: THEY'RE HAVING
TO DRILL A LOT MORE WELLS
TO DEEPER DEPTHS IN ORDER
TO GET THE WATER THEY NEED TO
IRRIGATE THE CROPS.
REPORTER: YOUR
WELL HAS RUN DRY?
MAN: YES IT'S COMPLETELY DRY.
REPORTER: HE SAYS IT STARTED
WHEN A BIG VINEYARD WAS
PLANTED AT THE END OF
HIS STREET A YEAR AGO.
MAN: WHEN THEY STARTED
DRILLING WE COULD
SEE THE CHANGES.
THE WATER PUMP
WOULD JUST SHUT OFF.
WE ALL DRAW WATER
FROM THE SAME BASIN.
LOIS HENRY: REGIONALLY,
I MEAN WE'RE ALL ONE AQUIFER.
SO THOSE STRAWS ARE
ALL SUCKING OUT OF
THE SAME MILKSHAKE.
ADAM KEATS: I'VE BEEN
WATCHING THE BATTLE HERE IN
PASO ROBLES DEVELOP,
BUT NOT HAVING ANY
ACTUAL CONNECTION TO IT.
AND OUT OF THE BLUE
I GOT A PHONE CALL FROM AN
ACTIVIST DOWN HERE,
WHO SAID HEY,
YOU KNOW WE SAW YOUR
NAME ON A LAWSUIT,
THAT'S ASSOCIATED
WITH, YOU KNOW,
THIS GUY STEWART RESNICK,
WHO'S BUYING LAND OUT HERE AND
WE WANT TO KNOW
WHAT'S GOING ON.
CAN YOU TELL US
WHAT'S HAPPENING?
WHAT I'VE BEEN HEARING IS THA THE WATER BANKING COMMUNITY
SEEMS TO HAVE A VERY BIG
INTEREST IN PASO ROBLES.
AND BASED ON OUR EXPERIENCE
WITH THE KERN WATER BANK,
I MEAN YOU GOTTA
UNDERSTAND, 1995, 96, 97,
KERN WATER BANK IS ACTIVELY
BEING DEVELOPED AND PRIVATIZED
WITH NO ONE HAVING ANY
IDEA THAT IT WAS HAPPENING.
NO ONE ADMITTING IT, NO
ONE TALKING ABOUT IT.
ALL CLOSED DOORS.
AND SO, WE'RE NOT GOING TO
GET BURNED A SECOND TIME.
GPS VOICE: RIGHT TURN
AT THE END OF THE ROAD.
YOU HAVE ARRIVED
AT YOUR DESTINATION.
GREG MCMILLAN: WELCOME!
ADAM KEATS: HOW'S
IT GOING GREG?
GREG MCMILLAN: ALRIGHT,
GOOD TO MEET YA.
ADAM KEATS: GOOD TO MEET YOU.
I'M LOOKING FORWARD
TO THIS TOUR.
THIS IS ALL NEW FOR ME
SO I'M LOOKING FOR YOU TO
SHOW ME AROUND AND
SHOW ME WHAT'S UP.
GREG MCMILLAN: I CAN
PROBABLY DO THAT.
ADAM KEATS: ALRIGHT.
GREG MCMILLAN: MY MOTHER
CAME HERE IN 1928.
SHE CAME ACROSS THE SAN
JOAQUIN VALLEY FROM ARKANSAS
WITH HER FAMILY.
AND WHEN THEY GOT TO SHANDON
THEY THOUGHT THAT THEY HAD
GONE TO HEAVEN.
BECAUSE EVERYWHERE YOU
LOOKED IT WAS A PIPE COMING
OUT OF THE GROUND WITH
WATER FLOWING OUT OF IT.
AND SHE, YOU KNOW, THEY HAD
JUST COME UP ACROSS THE DESER AND TO SEE THAT WAS
JUST MIND BOGGLING.
GREG MCMILLAN: SO THIS IS THE
FIRST EVIDENCE YOU'LL SEE OF
THE CALIFORNIA AQUEDUCT.
THIS CONCRETE THING STICKING
OUT OF THE GROUND DOWN HERE.
ADAM KEATS: ALRIGHT.
GREG MCMILLAN: THAT'S A VENT.
AND THEN IT FOLLOWS THE
ROAD AND GOES RIGHT UP HERE.
ADAM KEATS: SO THIS
IS ALL STATE WATER,
THIS IS ALL THE SPUR-LINE
PROPERTY RIGHT OVER HERE.
GREG MCMILLAN: THIS-THIS-THIS
PROPERTY NOW IS HARVARD LAND.
ADAM KEATS: OH, THEY BOUGH THE LAND ON TOP OF THIS THING?
GREG MCMILLAN: YEAH,
HARVARD OFFERED MILLIONS
FOR THIS PROPERTY.
ADAM KEATS: NO KIDDING.
GREG MCMILLAN: THEY
TRIED TO BUY EVERYTHING.
ADAM KEATS: HA, BUT, HOW DO WE
KNOW THAT HARVARD'S NOT JUS IN IT FOR THE GRAPES?
GREG MCMILLAN: WELL WE DON'T.
BUT I DON'T SEE THE MONEY
TO BE MADE ON WINE ITSELF
THAT WILL PAY FOR
THE INFRASTRUCTURE
THEY'RE PUTTING IN.
ADAM KEATS: YEAH.
GREG MCMILLAN: THEY'RE
IN IT FOR THE WINE NOW,
AND THEY'RE USING THE WINE AS
AN EXCUSE TO DRILL ALL THESE
WELLS AND DO ALL THIS STUFF.
AND, THAT'S WHAT WE'RE RUNNING
INTO NOW ALL OVER THE WORLD,
IS YA KNOW, BIG CORPORATIONS
ARE BUYING THE RIGHTS TO
ALL THESE QUOTE,
QUOTE COMMODITIES.
AND, THE FACT REMAINS
THAT LEGALLY,
WHAT'S IRRIGATING THOSE PLANTS
AND WHAT IS UNDERGROUND,
BELONGS TO ALL THE PEOPLE.
ADAM KEATS: YEAH, YEAH.
GREG MCMILLAN: BECAUSE
EVERYONE DEPENDS UPON IT.
ADAM KEATS: RIGHT.
GREG MCMILLAN: AND MARK TWAIN
HIT IT YEARS AND YEARS AGO.
YOU KNOW, HE SAID,
WHISKEY'S FOR DRINKING AND
WATER'S FOR FIGHTIN'.
ADAM KEATS: YEAH.
GREG MCMILLAN: AND IT'S JUST,
I MEAN, THERE'S JUST NOT,
NOT ENOUGH WATER LEFT.
ADAM KEATS: YEAH.

GREG MCMILLAN: THIS IS JUS THE EASIEST PLACE TO SEE THE
QUANTITY OF WATER THAT THEY
NEED TO MAKE ALL THIS THING
HAPPEN FOR THEM.
FOR A PERIOD OF TIME THEY'LL
GET ALL THE WATER THEY WANT.
ADAM KEATS: RIGHT.
GREG MCMILLAN: SUCKING
IT OUT AT THAT LEVEL IT'S
GOING TO DEPLETE
SOONER OR LATER.
ADAM KEATS: RIGHT, WOW,
IT'S AS CLEAR AS DAY COMING
OUT HERE LOOKING AT IT.
GREG MCMILLAN: YEAH.
ADAM KEATS: WHAT I FIND SO
FASCINATING ABOUT PASO ROBLES,
IS THIS IS NOT JUST ABOU THE USE OF THE WATER ITSELF.
MY THEORY IS, IS THAT THIS
IS BEING ENGINEERED AS THE
BACKBONE OF A SECURITIES
INDUSTRY, BASED ON WATER.
AND WHAT WE SEE
HAPPENING RIGHT NOW.
WE SEE WALL STREE INVESTMENT GROUPS GOING IN,
WE SEE HEDGE FUNDS GOING IN.
WE SEE THE BIG PLAYERS,
THE RESNICKS, ROLL
INTERNATIONAL, HARVARD.
WE SEE THEM ALL GOING IN
AND ACQUIRING MOM AND POP,
AND FAMILY WINERIES, THA ARE STRATEGICALLY LOCATED A SPECIFIC SPOTS,
OVER THE AQUIFER.
BECAUSE THEY'RE IN THE
DEEPEST PART OF THE AQUIFER SO
THEY GET THE LONGEST STRAW,
THEY GET THE MOST WATER,
AND THEN THEY CAN TAKE
IT OUT AND THEY CAN SELL
IT ON THE MARKETPLACE.
JUST LIKE ENRON WAS
DOING WITH ENERGY.
THAT'S WHAT THE GAME IS.
AND I HEARD IT SAID THAT ONE
OF THE MAJOR BUYERS OF LAND IN
THE PASO AREA, WHEN ASKED WHY
HE BOUGHT ONE OF THE WINERIES,
SAID, YOU KNOW WE'RE NO IN THE WINE INDUSTRY.
THE WINE'S THE COVER CROP.
THE WATER'S THE
VALUABLE THING IN PASO.
AND PEOPLE WHO LIVE THERE
NOW I THINK ARE STARTING TO
REALIZE, THEY MIGHT HAVE
A CHANCE OF STOPPING
IT FROM HAPPENING.
CAROL ROWLAND: I HOPE
PEOPLE WAKE UP IN TIME.
BECAUSE ALL OVER THE
WORLD THIS IS HAPPENING.
WE NEED TO REALIZE, YOU KNOW,
WE CAN'T KEEP DOING THIS.
BECAUSE THERE'S CONSEQUENCES.
AND THIS IS JUST OUR
VERSION OF IT IN ONE LITTLE
CORNER OF THE WORLD, SO.
SCOTT SLATER:
IS WATER THE NEW OIL?
IT IS AS IMPORTANT, OR
MORE IMPORTANT, THAN OIL.
AND THERE IS UNBOUNDED
ENTHUSIASM FROM WALL STREET TO
BE INVESTED IN FINDING THE
SOLUTIONS TO THE NATION'S
WATER PROBLEMS, IN FAC THE WORLD'S WATER PROBLEMS.
MCKENZIE FUNK: WHA HAPPENS WHEN YOU PUT THE
FREE MARKET ON SOMETHING?
IT FLOWS TO THE
HIGHEST BIDDER.
AND, AND IN A
MARKET LIKE THAT.
THE POOR NEVER ARE
THE HIGHEST BIDDER.
THE LITTLE GUY IS NEVER
THE ONE WHO CAN BUY THE WATER.
BUT THE BIGGEST BANKS,
HAVEN'T FIGURE OUT HOW TO
DIRECTLY INVES IN WATER RIGHTS.
SO THEY INVESTED IN
FARMLAND, ALL OVER THE WORLD.
BECAUSE WATER IS HEAVY AND IF
YOU CAN JUST BUY THE LAND AND
GROW THE FOOD THERE AND THEN
SHIP THE FOOD AROUND THE WORLD,
YOU'VE SOLVED THE
PROBLEM IN ANOTHER WAY.
SCOTT SLATER: THERE
ARE PEOPLE WHO ARE SUSPICIOUS
OF THAT CONDUCT.
WONDERING WHETHER THA AGRICULTURAL INVESTMENT IS
REALLY A BEARD TO TRYING
TO TAKE WATER FOR AN URBAN USE
AT A LATER DATE.
THE VIEW IS THAT A PRIVATE
COMPANY CANNOT BE A STEWARD OF
A PUBLIC RESOURCE.
I BELIEVE THIS IS FALSE.
I WENT TO AUSTRALIA IN 1997
AND AUSTRALIA AS A NATION HAD
DECIDED THAT THEY
NEEDED TO REVAMP THEIR
COUNTRY'S WATER LAWS.
THEY WANTED TO PU TOGETHER MARKETS.
THEY WANTED TO BE
MORE EFFICIENT.
MCKENZIE FUNK: AFTER
AUSTRALIA COPIED THE CALIFORNIAN
WATER SYSTEM,
THEY TOOK IT FURTHER.
AND THEY MADE WHAT IS
PROBABLY THE FREEST MARKE FOR WATER RIGHTS
ANYWHERE IN THE WORLD.
I VISITED THIS STOCK MARKE ROOM WHERE THERE WERE BANK OF
COMPUTERS AND TRADERS
LOOKING AT SATELLITE IMAGES
ON GOOGLE MAPS.
AND DOING THESE SPO TRADES OF ONE RANCHER'S WATER
TO ANOTHER VERY QUICKLY.
JUST LIKE YOU COULD IMAGINE
WALL STREET WANTING TO HAVE
HAPPEN IN CALIFORNIA.
SCOTT SLATER: WHAT A MARKE DOES IS I CAN FIND SOMEBODY
WHO'S USING WATER FOR A LESS
ECONOMIC USE WHO IS WILLING TO
SELL THAT WATER TO ME,
OR THAT RIGHT TO ME,
SO I CAN CONTINUE MY BUSINESS.
MCKENZIE FUNK: IT WORKED.
ON ONE LEVEL.
AND WHAT HAPPENED IN
AUSTRALIA'S DROUGHT?
WATER TRADING MADE IT SO THA THOSE WHO COULD PAY THE MOST,
WERE ABLE TO BUY WATER
FROM THE POOR PEOPLE
WHO WERE SELLING IT.
AND IT WAS THE LITTLE
FARMERS, THE SMALL TOWNS,
THAT SUFFERED.
YOU COULD SEE "FOR SALE"
SIGNS AT EVERY HOUSE.
IT WAS UNBELIEVABLE.
SUICIDE RATES WERE VERY HIGH.
THERE WERE PSYCHOLOGISTS SEN OUT TO TREAT WHAT THEY CALLED
'SOLASTALGIA', WHICH IS
MISSING A SENSE OF PLACE.
IT'S THE SHRINKAGE OF
THESE, THESE TOWNS.
SCOTT SLATER: YOU HAVE
THE HAVES AND HAVE NOTS.
AND THAT'S THE STORY OF
THE THREE LITTLE PIGS.
THE PARTY WHO MADE THE
INVESTMENT IN THE BRICK HOUSE,
WANTS THE BENEFIT OF
LIVING IN THE BRICK HOUSE.
AND THE HOUSE MADE OF STRAW
WHICH DEVELOPED ON WATER
RIGHTS AND DIDN'T PAY FOR EM,
UM, HAS TO TAKE WHAT THEY GET.
AND THAT IS WHAT WE
CALL THE MISERY INDEX.
WHO WILL BEAR THE
RISK OF THE SHORTAGE?

NEWSCASTER: FROM
DROUGHT TO FLOODS,
OUR PLANET IS CHANGING.
AND THE FORECAST CALLS
FOR ANOTHER HOT YEAR.
NEWSCASTER: GOVERNOR BROWN HAS
SAID THE STATE WATER SYSTEM
WON'T BE PROVIDING WATER
TO FARMS THIS YEAR.
NEWSCASTER: FARMERS IN THE SAN
JOAQUIN VALLEY ARE WORRIED.
MAN: THERE WILL BE A LOT OF
GUYS THAT GO BROKE THIS YEAR.
NEWSCASTER: AND A LO OF FARM WORKERS WHO WILL
BE OUT OF WORK.

MARK ARAX: SO WE'RE
JUST SOUTH OF LOST HILLS,
AND WE'RE IN THE MIDDLE
OF AN ALMOND ORCHARD
OWNED BY THE
WONDERFUL COMPANY.
AND THEY'VE DECIDED THA THEY NEED TO GET RID OF
SOME OF THEIR ALMOND ORCHARDS.
AND SO THEY'RE GOING
TO BE PULLING OU 10,000 ACRES OF ALMONDS.
AND FALLOW THE LAND BECAUSE
AS MUCH WATER AS THEY HAVE,
THEY DON'T HAVE ENOUGH TO
SUSTAIN ALL THE AGRICULTURE
THEY'RE DOING.
HEY, SORRY TO BOTHER
YOU, HOW'S IT GOING?
SO WHAT ARE YOU DOING,
ARE YOU STACKING THESE UP
FOR THE SHREDDER?
WORKER: YES.
MARK ARAX: SO THIS,
IS THIS THE BIGGEST JOB
YOU'VE EVER BEEN ON?
WORKER: ALMOND TREE DROPPING?
YES.
I MEAN, I THOUGHT THEY
WERE GOING TO BE DRY TREES,
BUT THEY'RE NOT.
MARK ARAX: SO THIS IS THE
FIRST TIME YOU'VE TAKEN OU LIVE HEALTHY, GREEN TREES.
WORKER: YEAH, FIRST TIME.
AND I'M LIKE, WHA ARE THEY DOING,
ARE THEY NOT GOING TO
HARVEST THE NEXT TIME OR?
MARK ARAX: DOESN'T SEEM
TO MAKE SENSE, HUH?
WORKER: THEY HAVE TO,
WELL YOU KNOW, IT JUST,
PARAMOUNT IS THE OWNER
THEY HAVE THE MONEY,
TO DO WHATEVER THEY WANT.
AND YOU KNOW.
THAT IT'S SAD.
IT'S MAKING I HARD FOR EVERYBODY.
AROUND HERE TOO BECAUSE
IT'S A FARM TOWN.
YOU KNOW?
MARK ARAX: YEAH.
WHAT'S REMARKABLE IS, UP
UNTIL JUST A FEW WEEKS AGO,
THE RESNICKS, THEY
WERE ABLE TO ESSENTIALLY
DEFY THE DROUGHT.
HOOK, CROOK, BORROWING
FROM THE WATER BANK,
SQUEEZING OUT ALL THEY COULD,
PUSHING THIS SYSTEM
TO ITS ULTIMATE LIMITS.
AND KEEPING THIS
AGRICULTURAL MACHINE UNLIKE
ANY IN THE WORLD GOING.
BUT THERE'S A TRANSFORMATION
GOING ON AND IT'S STARTING
SMALL, TAKING OUT TEN
THOUSAND ACRES OF ALMONDS.
FARMERS IN OTHER PARTS OF
THE VALLEY HAVE GONE TO THE
GROUNDWATER, AND SUCKED
UP MASSIVE AMOUNTS,
BUT THEY'RE NOT IN A
SUSTAINABLE SITUATION.
THEY'RE FARMING
PROBABLY TRIPLE THE LAND
THAT THEY SHOULD.
OVER-DRAFTING THE WATER.
AND AT SOME POINT BIG
AGRICULTURE HAS TO ASK ITSELF,
HOW BIG CAN IT GET?
[BACKGROUND VOICES].
[INAUDIBLE CHATTER]

TIM QUINN: SO LET ME STAR WITH THE FACT THAT SGMA REALLY
IS JUST A BIG DEAL.
IT'S BEEN ARGUED THAT IT'S
THE MOST IMPORTANT LEGISLATION
RELATED TO WATER IN A CENTURY.
WITH THE POWER TO MEASURE,
THE POWER TO REGULATE,
THE POWER TO TELL YOU
TO REDUCE PUMPING,
THE POWER TO PUT A
FEE ON YOUR PUMP.
UH, THESE ARE SCARY THINGS
TO A LOT OF WATER USERS,
BUT OUR INTENTION WAS
TO CHANGE THE DYNAMIC.
MARK COWIN: LANDOWNERS
KNEW THAT THE GAME WAS UP.
WE CAN'T KEEP ON
THE TRACK WE'RE ON.
AND IT REALLY DID TAKE I THINK
THIS FOUR YEARS OF HISTORIC
DROUGHT TO SORT OF
CHANGE THE MENTALITY.
ADAM KEATS: IT'S GREAT THAT WE
HAVE GROUNDWATER LEGISLATION
IN CALIFORNIA FINALLY.
UM, THERE'S A LOT OF GOOD I
THINK IN, IN, IN THE STATUTE.
BUT THE GREAT TRAGEDY, THE
ABSOLUTE GREAT TRAGEDY WITH
SGMA, IS ITS INCREDIBLY
LONG LEAD IN.
UH, THE FACT THAT IT DOESN' REALLY GET IMPLEMENTED FOR
TWENTY YEARS.
DOUG OBEGI: THERE
IS CERTAINLY A FEAR THA WE'RE CLOSING THE BARN DOOR
AFTER THE HORSES LEFT THE BARN.
20 YEARS IS VERY
DIFFICULT TO SWALLOW.
WE'RE GONNA HAVE
FAR WORSE PROBLEMS.
AND WE'RE SEEING, EVEN
TODAY DURING THE DROUGHT,
WE'RE SEEING NEW
BUSINESSES COME IN.
HEDGE FUNDS,
INSURANCE COMPANIES,
LARGE AGRIBUSINESSES, BUYING
LAND THAT'S NEVER BEEN
IRRIGATED, PLANTING NEW
CROPS, ENTIRELY DEPENDENT ON
GROUNDWATER, KNOWING THAT THEY
HAVE A TWENTY-YEAR WINDOW TO
GET A RETURN ON INVESTMENT.
JAY FAMIGLIETTI: LOOK, IN SOME
PLACES IT'S LITERALLY A RACE
TO THE BOTTOM BECAUSE THERE
ARE MANY FARMERS THAT ARE
TRYING TO DO
THINGS NOW, RIGHT?
BEFORE THE
MANAGEMENT KICKS IN.
TONY ROSSMANN: ON MORE THAN
ONCE IN MY CAREER I'VE BEEN
ADVISED THAT YOU SIMPLY
UNDERESTIMATE THE MOTIVATING
POWER OF GREED.
AND UH, YOU KNOW, WE LIKE
TO THINK OF YOU KNOW,
CHINATOWN AS PART OF
THE HISTORIC PAST.
THAT WE'VE SOMEHOW GROWN UP
AND WE LOOK ON OUR RESOURCES
MORE RESPONSIBLY.
BUT THE POWER OF GREED AND
THE FACT THAT CONTROL OF WATER
REPRESENTS POLITICAL CONTROL
AND FINANCIAL CONTROL,
ALMOST REQUIRE THEIR
PROPONENTS TO FIND A WAY TO
FUDGE THE TRUTH OR
CONCEAL THE TRUTH.
[GUNFIRE].

MARK ARAX: A WEEK AGO A
SOURCE TOLD ME ABOUT A SECRE TRANSFER OF WATER
GOING ON OUT HERE.
SOMEBODY MOVING WATER MILES
AND MILES ACROSS COUNTY LINES.
THE PIPELINE APPARENTLY
EXTENDS UNDERNEATH
THE COUNTY ROAD.
AND MOVES FROM KINGS
COUNTY TO KERN COUNTY,
FROM THE DUDLEY RIDGE
IRRIGATION DISTRICT TO THE
LAND OF RESNICK.
AND IN A SENSE
THIS IS THE FURTHER
PRIVATIZATION OF WATER.
AND IT'S CONTROVERSIAL BECAUSE
CALIFORNIA IS GONNA STAR REGULATING GROUNDWATER.
SO, NOT SURE IT'S LEGAL YET,
BUT I GOTTA FIND IT TO MAKE
SURE THAT IT'S THERE.
SON OF A BITCH,
THAT'S IT RIGHT THERE.
THIS IS CLASSIC, MAN.
THIS IS CALLED "LAKE PIPE,"
FROM "RAIN FOR RENT."
GOTTA LOVE THE IRONY.
[HITTING PIPE].
I DON'T HEAR ANYTHING
IN THERE RIGHT NOW.
BUT THIS IS HERE, EXTENDING
ALL THE WAY FROM DUDLEY RIDGE,
THROUGH RESNICK POMEGRANATES.
YOU GOTTA GIVE 'EM CREDIT.
HOW DO YOU PROP UP
A HUNDRED AND FIFTY,
TWO HUNDRED THOUSAND
ACRES OF FARMLAND,
YOU GOTTA FIND INVENTIVE
WAYS TO MOVE THE RAIN.
THIS IS A METHOD TO PUMP MORE
GROUNDWATER AND MOVE IT ACROSS
COUNTY LINES INTO HERE.
AND IT'S FOLLOWING THE MEANDER
OF THE CALIFORNIA AQUEDUCT.
MY SOURCE HAD TOLD ME THIS
WAS MOVING WATER THIS WINTER
FROM MR. VIDOVICH'S FARM
TO MR. RESNICK'S FARMS.
AND I THINK THIS IS ALL SE UP TO CONTINUE TO MOVE WATER,
THROUGH THIS NEXT YEAR
AND PROBABLY BEYOND.
SO HE'S SELLING THE WATER.
AND IT'S DESPERATE.
THIS IS A DESPERATE MEASURE.
IT'S QUITE SOMETHING.
VIDOVICH HAS A LOT OF
FARMLAND HERE IN THE VALLEY,
HE'S PURCHASED A LOT.
BUT HE REALLY ISN'T A FARMER.
HE'S A WATER BROKER.
A WATER DEVELOPER.
AND HE'S BUYING ALL THESE
PARCELS TO REALLY PUMP THA WATER OUT OF THE GROUND.
WHICH HAS A REAL EFFEC ON THE FARMERS IN EACH
OF THOSE AREAS.
OH, THAT'S A LOT OF WATER.
CHARLES: YEAH, RIGHT ABOVE IT.
MARK ARAX: OK!
THAT'S HOW THESE TREES
ARE STAYING ALIVE.
RIGHT THERE.
JUST THE WATER COMING
OUT OF THAT PIPE.
IS IT GREED?
YEAH IT'S GREED.
ALL IN THE NAME OF MOVING
THAT WATER FOR AGRICULTURE.
WHERE IT'S COMING FROM IT'S
PROBABLY 15, 20 MILES FURTHER.
NOW WE'VE GOTTA FIND OUT IF
IT'S JUST CRAZILY AUDACIOUS OR
IF IT'S ILLEGAL.
JOHN VIDOVICH: I AM MOVING
WATER, WELL WATER, UH,
TO DUDLEY RIDGE.
NOW, I KNOW ONE OF THE
RECIPIENTS OF THAT WATER
IS PARAMOUNT.
UH, WHERE IT GOES FROM THERE?
I DON'T KNOW.
IF YOU MIX WATER YOU
CAN'T SAY THAT MIXED WATER
CAN'T GO SOMEWHERE ELSE.
BUT THAT IS A TEMPORARY PIPE
AND I BELIEVE RESNICK PUT THA OUT OF DESPERATION TO KEEP
SOME OF THE TREES ALIVE.
THESE ARE DOING PRETTY GOOD.
IT'S PAINFUL TO WATCH
SOMEBODY WHO'S WORKED HARD AND
BUILT A VERY GREA EMPIRE, DECREASE IT.
HE WAS SOMEBODY THAT WAS
RIDING ON THE TOP BUT NOW
IT'S, IT'S TOUGH FOR HIM.
HE DEPENDED ON THE STATE
SYSTEM HAVING SURPLUSES.
HE INVESTED IN THE
KERN WATER BANK SO HE COULD
PUT THE SURPLUSES IN THERE.
BUT THE REAL PROBLEM NOW IS
THERE'S NO WATER TO PUT IN IT.
THAT'S A TOUGH DEAL.
MY BUSINESS APPROACH RIGH NOW IS TO ACQUIRE AS MUCH
WATER AS I CAN TO BE
DIVERSIFIED IN WATER.
AND YOU KNOW AT SOME POIN IN TIME THAT WATER IS IN
RISK OF GOING TO AN URBAN
AREA BECAUSE THE URBAN PLACES
WOULD PAY A HELL
OF A LOT OF MONEY FOR IT.
SO IF I CAN'T MAKE THAT MONEY
FROM THAT WATER FARMING,
I WILL SELL IT EVENTUALLY
TO AN URBAN AREA.
AND THAT'S A RIGHT I HAVE.
IF THEY PASS A LAW
SAYING I CAN'T SELL IT,
THEN I CAN'T SELL IT.
BUT THAT'S, THAT'S THE WAY
IT IS, THAT'S BUSINESS.
ADAM KEATS: ABOUT A MONTH AGO,
THE DRAFT ENVIRONMENTAL REVIEW
FOR THE KERN WATER
BANK CAME OUT.
THAT'S THE ENVIRONMENTAL
REVIEW THAT WE FOUGHT SO HARD
TO GET WITH OUR LAWSUIT.
AND WE'RE CURRENTLY IN
THE 45 DAY COMMENT PERIOD.
AND AT THE END OF THA PROCESS DWR WILL BE SUPPOSEDLY
REVIEWING THE COMMENTS
AND CONSIDERING THE
TESTIMONY OF PEOPLE.
THANK YOU FOR
HAVING THE HEARING.
I APPRECIATE, THE FOLKS
HERE WHO ARE HERE TO WITNESS
DEMOCRACY IN ACTION.
WE BELIEVE THAT THE
KERN WATER BANK WAS THE...
THEY ARE TRYING DESPERATELY
TO DODGE RESPONSIBILITY FOR THE,
I MEAN REALLY, SIGNIFICAN ENVIRONMENTAL IMPACTS.
BUT THEY CAN' AVOID THE FACTS.
THAT THE TRANSFER OF THE
KERN WATER BANK IS RELATED
TO THE OBSCENE GROWTH
OF NUT FARMS AND ALMONDS,
PISTACHIOS IN CALIFORNIA.
WE DON'T KNOW HOW DWR IS GOING
TO REACT TO THIS DOCUMENT,
BUT WE'RE GOING TO
BE FIGHTING THIS THING.



MICHAEL LUNSFORD: WE ARE
GETTING RUNNING WATER TODAY.
YEAH, WE ARE FINALLY
GETTING RUNNING WATER TODAY.
MAN: THIS IS A
TANK ONE INDICATOR,
IT'LL LET YOU KNOW HOW
MUCH WATER IS IN YOUR TANK.
MICHAEL LUNSFORD: OK.
MAN: AND SO IF A PIPE
OR ANYTHING BUSTED,
YOU NOTICE ANY
WATER OR SOMETHING,
YOU SHUT YOUR MAIN LINE RIGH HERE, SHUT THESE GUYS OFF.
MICHAEL LUNSFORD: OK,
HOW LONG TILL WE CAN FLUSH?
MAN: WE CAN GO
CHECK RIGHT NOW.
MICHAEL LUNSFORD: WE CAN
GO CHECK IT RIGHT NOW?
LET'S DO IT!
[TOILET FLUSH]
I'M SURPRISED
THE GUTS STILL WORK,
IT'S BEEN SO LONG
SINCE THEY WORKED.
AS YOU CAN TELL, THE LINES
ARE SO CLOGGED UP THA I HAVE TWO MISTS
COMING OUT OF HERE.
I GOTTA GET A WHOLE
NEW SHOWER HEAD.
YEAH, WE HAVE WATER!
I'M GONNA WASH MY
HANDS, HOW ABOUT THAT?
THIS IS AMAZING.
IT REALLY IS, AND I GOT LUCKY,
BUT YOU GOT A LOT OF PEOPLE
HERE THAT DON' HAVE WATER STILL,
SO THE ONLY THING I COULD
SAY TO EVERYBODY OUT THERE:
DON'T TAKE IT FOR GRANTED.
IT WILL BE GONE AND
WON'T BE HERE FOREVER.
YOU'RE GOING TO BE
NEXT, JUST WATCH,
YOU'RE GOING TO BE NEXT.

["YOU DON'T MISS YOUR WATER"
BY OTIS REDDING]
OTIS REDDING:
IN THE BEGINNING,
YOU REALLY
LOVED ME, OH.
I WAS TOO BLIND,
I COULD NOT SEE, NOW.
BUT NOW THAT YOU LEFT ME,
OH, HOW I CRIED,
I KEEP CRYING.
YOU DON' MISS YOUR WATER...
'TILL YOUR WELL RUNS DRY.
I KEPT YOU CRYING,
SAD AND BLUE, OH MY, OH