The Privatization of Water

Who says wealth doesn’t trickle down? As the nation’s redundant masses tremble, Oliver-Twist-style, before the spectacle of a Democratic-run Congress deciding whether merely to reward quarter-millionaires or the full-scale kind with lavish tax cuts, they might do well to consult the sobering tale of billionaire enclosure of central California’s water supply. It’s hard to see just how the nation’s owning classes will produce additional helpings of gruel (or at least low-wage service-sector jobs) if they’re so deeply averse to spreading around something as essential to agriculture, health and sanitation as water.

This saga, retailed in dogged and gruesome detail by Alternet’s John Gibler, concerns the enterprising private takeover of the Kern Valley water bank — a crucial source of irrigation for the region’s large-scale agribusiness outfits.

Technically, the water is also an indispensable public good for all the central valley’s residents, especially given the generally parched condition of an agricultural empire plonked down in a near-desert climate averaging five inches of rainfall a year. But Stewart and Lynda Resnick, the Beverly Hills billionaires who preside over the inland agricultural conglomerate of Roll International — America’s leading purveyors of almonds, pistachios and, most famously, the celebrity-branded POM Wonderful elixir of youth — understood back when they began amassing land in the western and southern end of the San Joaquin Valley in the late 1980s that the existing, New Deal-era network of dams and irrigation couldn’t be counted on to supply irrigation for their own particularly water-starved holdings. So they — or rather, the executive and legal team at their subsidiary, Paramount — quietly set about snapping up area water reserves for themselves.

When the dust had settled — or moistened, as the case may be — Paramount had…

engineered the takeover of nearly 20,000 acres of state property where the California Department of Water Resources had invested $74 million to turn a depleted aquifer alongside the Kern River into an underground reservoir, or water bank, capable of storing one million acre-feet of water. After a series of backroom negotiations, the state signed over the Kern Water Bank to five water districts and a private company. The private company, the Westside Mutual Water Co., is a paper company owned by the Resnicks, and the water districts are controlled by agribusinesses, including Paramount.

Smaller growers and public officials are suing to loosen the Resnicks’ stranglehold on the region’s supply, alleging that the vast reservoir is drawing water away from neighboring wells, and harming the region’s already overstrained environmental carrying capacity. In a recent BusinessWeek dispatch on the water fight, Adam Keats, an attorney for the Center for Biological Diversity, the lead plaintiff in one such suit, laid out the Paramount business model thusly: “They’ve divided up the spoils. They have their own philosophy and theory about how the world should work, which involves them getting very rich on our resources.”

To judge by Stewart Resnick’s rhetorical counterblasts, it’s hard to see where that rather bald analysis misses the mark. “The ones who are complaining are saying, ‘You have the water and we want the water.’ Well, that’s great. There are guys in Beverly Hills who have land and I want that land. Maybe they bought it for $10,000 and now it’s worth a million and I’d like some, give it to me.” Yes, because so many state residents need Beverly Hills real estate to drink, shower and clean their dishes in. But as Alternet’s Gibler notes, the analogy fails to hold in another way — the fruits (and nuts!) of the Paramount agricultural combine have appreciated handsomely, even as the California real estate market that Resnick tacitly endorses as a model for food cultivation has flatlined:

With the takeover of the Kern Water Bank, a public asset that could have been used to supply clean water to nearby farmworkers’ towns — and as a drought-relief water bank for both small towns and farmers — was instead used to safeguard the water supply of almond and pistachio trees in the desert for a Beverly Hills billionaire couple. Since taking over the Kern Water Bank, Paramount has more than doubled its production of almonds and pistachios, becoming the largest grower and processor of the nuts in the world. And the Resnicks made the Forbes list of billionaires.

California’s vast inland farming industry has bulked into its present immense scale based on the upward consolidation of land holdings and scarce water resources — a process that also entailed no small amount of payoffs to lawmakers and appropriation of state-financed public facilities, as noted in magisterial detail by journalists Mark Arax and Rick Wartzman’s indispensable history, The King of California.

But the Resnicks — who have cultivated a distinctly Versailles-inflected profile as liberal philanthropists, art collectors, and all around bon-vivants — have clearly reveled in the refinements they’ve introduced to the water-and-dirt foundation of their holdings. Lynda had previously been best known for a late-90s legal run-in with the estate of Lady Diana, which took issue with the unlicensed marketing of People’s Princess memorabilia from the Franklin Mint, which the Resnicks then owned, as the handiwork of so many “vultures feeding on the dead” — a jibe that had to hurt, given that Resnick had paid $135,000 at auction for Diana’s beloved high-collared “Elvis dress” just prior to the Princess’s demise. But Lynda — who had also paid out a cool $211,000 for a string of Jackie O’s fake pearls at a 1996 auction, and proceeded to adopt them as a model for another Franklin Mint line of mournographic tchotchkes — has clearly built up a more expansive self-image as all the pistachio and pomegranate pelf has kept rolling in. As Amy Wilentz has reported, Lynda has composed a vanity essay extolling the Resnick’s art-stuffed domestic compound in Beverly, noting that the home’s exterior is “topped off on all four sides with rows of balustrades through which a queen might peek out and utter, ‘Let them eat cake.’”

And indeed, the workforce that harvests all that excellent Paramount produce might fairly be described as feudal in station — at least in comparison with their Beverly Hills overlords. The immigrant community of Lost Hills, which boasts one of the largest concentrations of Paramount farmworkers, was officially pegged at around 2,000 souls in the latest census, but tell Gibler that the population is at least double that — not surprising since many of them are in the country illegally, and hence none too eager to give their name to a federal head counter. More than 96 percent of the population is Hispanic, according to census figures, with 70 percent hailing directly from Latin America.

The town is unincorporated, without a local government, a bank — or, fittingly enough, potable tap water for the migrant workers who live there. “The crops they tend drink better, and cheaper, water than they do…. The groundwater basins have been depleted and contaminated by pesticides and nitrates from the very agribusinesses that employ them,” Gibler writes. “Little to no state funding makes it to their local water systems, leaving them to buy bottled water at the store or from a vending machine.”

Fortunately, though, the Resnicks are also bottled water barons. They own the luxe Fiji Water brand, which they’ve acquired in exactly the same fashion that they’ve privatized the Central Valley’s water market: purchasing the exclusive rights to one of the island nation’s main aquifirs from Fiji’s brutal and corrupt military dictatorship, and denying local residents access to the formerly public good. When Fijian government, starved for revenues in the grip of the global recession, sought to raise taxes on the Fiji Water operation, from a paltry $140,000 to $6 million per year, the company threatened to close up shop, shuttering planned plant expansions and leaving the company’s 400-member workforce to shift for itself in said recession (the company’s stateside corps of greenwashing spinmeisters would probably have little trouble finding work elsewhere). Not surprisingly, the threat came packaged with some trademark Resnickian hysterics about the base inequities of tax hikes: Fiji’s announcement, said Fiji Water CEO John Cochran, sends “a clear and unmistakable message to businesses operating in Fiji or looking to invest there: The country is increasingly unstable, and is becoming a very risky place in which to invest.”

Of course, even a thuggish military dictatorship knows a more practiced pair of bullies when it sees them, and so the Fijian government promptly caved in the face of the Resnicks’ threat. That just leaves a handful of stateside immigration and resource wonks to ponder the grim spectacle of the billionaire couple that’s hollowed out and privatized the foundation of inland agricultural production in California denouncing another autocratic regime for making the environment it does business in “increasingly unstable” and “a very risky place.” One supposes, after all, that the best thing to wash down a mouthful of royally sanctioned cake with is a bracing swig of Fiji Water or POM Wonderful.

Chris Lehmann loves all your things, rich people.

Photo by Jason Hickey from Flickr.