Water & Power: A California Heist (2017) - full transcript

¶ ¶

MARK ARAX: THERE'S PROBABLY
NO LANDSCAPE IN THE WORLD THAT

HAS BEEN MORE MANIPULATED
THAN CALIFORNIA.

[EXPLOSION]

FROM THE VERY BEGINNING IT
WAS ABOUT CAPTURING WATER.

AND MOVING IT FROM WHERE
IT WAS TO WHERE IT WASN'T.

BECAUSE OF THAT
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 BELT



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 THAT
HAVE TAKEN HUNDREDS IF NOT

THOUSANDS OF
YEARS TO BUILD UP.

WATER HAS BECOME GOLD.

TO BE TRADED AND SOLD
AND WE'RE EXTRACTING IT

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 DROUGHT

SINCE THE 1970S.

NEWSCASTER: THE HARDEST
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 ALMOST
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 WITHOUT
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 WHAT
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'T
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 FIANCÉE 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 FIANCÉE AND I, WE
HAVEN'T EVEN THOUGHT ABOUT

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 ALMOST

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 SENT

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 FELT

THAT THEY ARE PART
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 GREAT
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 THAT

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 OUT

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 PROJECT
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 WEST
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: THAT
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 THAT
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 WORST
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 SPLIT
BETWEEN REPRESENTATIVES OF BIG

AGRICULTURE, LED BY TOM
CLARK, AND URBAN WATER USERS

REPRESENTED BY TIM QUINN
AND WOODY WODRASKA.

THE DEPARTMENT
OF WATER RESOURCES

REPRESENTED THE STATE.

TIM QUINN: FOR ALL OF MY
METROPOLITAN WATER DISTRICT

YEARS AND MY YEARS AT
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 AT
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 WHAT
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 THAT

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 WET

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 IT
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 DEPARTMENT
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 THAT

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 JOINT
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 ABOUT

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'T
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 JUST
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 REPRESENT
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 AT
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: PARAMOUNT
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 GOVERNMENT
OWNED ASSET AND THEY WERE

PRIVATIZING IT.

BUT I DO NOT BLAME STEWART
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 THAT

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'T
KNOW WHAT A POMEGRANATE WAS,

BUT ONCE THEY FOUND OUT,
THEY SURE WANTED IT.

MARTHA STEWART: CHEERS!

LYNDA RESNICK: CHEERS DARLING.

JOHN GIBLER: TODAY STEWART
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 OUT

$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 LOT
OF MONEY INTO THIS AND WITHOUT

THAT WATER BANK THAT
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 WHAT
THEY'RE DOING.

BECAUSE TO ME THIS IS REALLY
GROUND ZERO OF THE DROUGHT.

AND WHEN I FIRST WROTE ABOUT
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'T
DO THINGS LIKE THIS.

WHY WOULD A COMPANY WANT
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 THAT
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 ABOUT
WHAT WAS GOING ON.

¶ ¶

THE WOMAN FROM DWR FELT
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 IT

EVEN 'MIGHT' HAVE AN
IMPACT ON THE ENVIRONMENT.

TONY ROSSMANN: UNDER
CALIFORNIA LAW,

THE ENVIRONMENTAL IMPACT
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 COAST
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 ABOUT
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 THAT
WAS GOING TO FILE A LAWSUIT

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 LAWSUIT
THAT I'VE BEEN LITIGATING NOW

FOR THE LAST PAST
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 CONVERT
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 GOVERNMENT

CAME UP WITH THE
ENVIRONMENTAL WATER ACCOUNT,

WHERE THEY WOULD
PAY WATER DISTRICTS NOT

TO DIVERT WATER.

LOIS HENRY: SO, THEY PUT OUT
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 THAT
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 ABOUT

WHAT THEY DID.

BECAUSE MOST OF WHAT
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 THAT
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 PERCENT
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 WANT
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'T
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 LOT
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 THAT

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 MOST
PROFIT THEY POSSIBLY CAN OUT

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 WHAT
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 THAT

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 IT

SEEMED TO BE THAT IT
WAS SLOWLY SEEPING IN.

THIS WAS AT THE START
OF THE DRY SEASON.

SO, WE THOUGHT,
WELL LET'S JUST SEE.

LET'S JUST TRY AND GET
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 AT
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 RIGHT

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 THAT
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 DESERT

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 BOUGHT
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 JUST

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 JUST
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 ABOUT
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 STREET
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, THAT
ARE STRATEGICALLY LOCATED AT

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 NOT
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 FACT
THE WORLD'S WATER PROBLEMS.

MCKENZIE FUNK: WHAT
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 INVEST
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 THAT
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 PUT
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 MARKET

FOR WATER RIGHTS
ANYWHERE IN THE WORLD.

I VISITED THIS STOCK MARKET
ROOM WHERE THERE WERE BANK OF

COMPUTERS AND TRADERS
LOOKING AT SATELLITE IMAGES

ON GOOGLE MAPS.

AND DOING THESE SPOT
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 MARKET
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 THAT
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 SENT
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 LOT
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 THAT
THEY NEED TO GET RID OF

SOME OF THEIR ALMOND ORCHARDS.

AND SO THEY'RE GOING
TO BE PULLING OUT

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 OUT

LIVE HEALTHY, GREEN TREES.

WORKER: YEAH, FIRST TIME.

AND I'M LIKE, WHAT
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 IT
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 START
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'T
REALLY GET IMPLEMENTED FOR

TWENTY YEARS.

DOUG OBEGI: THERE
IS CERTAINLY A FEAR THAT

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 SECRET

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 START

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 SET
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 THAT

WATER OUT OF THE GROUND.

WHICH HAS A REAL EFFECT
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 THAT

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 GREAT
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 RIGHT
NOW IS TO ACQUIRE AS MUCH

WATER AS I CAN TO BE
DIVERSIFIED IN WATER.

AND YOU KNOW AT SOME POINT
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 THAT
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, SIGNIFICANT
ENVIRONMENTAL IMPACTS.

BUT THEY CAN'T
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 RIGHT
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 THAT

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'T
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'T
MISS YOUR WATER... ¶

¶ 'TILL YOUR WELL RUNS DRY. ¶

¶ I KEPT YOU CRYING, ¶

¶ SAD AND BLUE, OH MY, OH ¶¶