(2022-12-28) How This Billionaire Couple Stole Californias Water Supply

How This Billionaire Couple Stole California's Water Supply.

At 19 she founded her own advertising agency, and in her early 20s Lynda actually did something pretty cool: she assisted in the leak of The Pentagon Papers, the Department of Defense documents that showed just how cravenly evil the United States’ actions in Vietnam were.

Stewart Resnick was born to a middle class New Jersey family and started his first business, a janitorial service, in grad school.

He eventually acquired American Protection Services, a burglar alarm and security company. Lynda approached him about marketing services for the company, and they hit it off, not knowing that one day they’d work together to take over most of California’s water.

As the Resnicks were building their empire, the state of California was building new water infrastructure with taxpayer money.

California’s natural water supply is very inconsistent: vastly differing amounts of rainfall means the state can go from surplus to drought and back very easily. So they build water banks to store water during surpluses to have during droughts.

One important storage facility is the Kern Water Bank, started in 1988. The facility was built with hundreds of millions of taxpayer dollars, which could’ve been a good thing: the people of California would’ve owned the water.

In 1994 state water officials, water infrastructure contractors, and agricultural landowners with water rights arranged a secretive meeting at a resort in Monterey Bay California.
These groups, a mix of private companies and public agencies, rewrote California’s water laws without any input from voters, taxpayers, or legislators. The new laws, called The Monterey Agreement or The Monterey Amendments were devastating for working Californians and great for agriculture billionaires.

The original law had “urban preference” a long-standing rule that in times of drought the state water board would give urban areas–where people live–access to state water supplies before agricultural interests. Monterey axed that. That means that in times of drought the water systems for normal Californians would have to buy water from the private companies, because they weren’t getting it from the state.

The new agreement also loosened regulations on “paper water.” That’s water that doesn’t necessarily actually exist anywhere but on paper: the full quantities of water that providers could have, but don’t actually need to have. Today 5x as much water has been promised and sold as actually exists.

And importantly, the meeting changed ownership of the Kern Water Bank. What once belonged to the state was transferred to a few private water contractors. One of which was Westside Mutual, a wholly owned subsidiary of Wonderful Foods. The Wonderful employee who runs Westside, Bill Phillimore, is the chairman of the ‘public’ organization that manages the Kern Water Bank.

And that’s just one waterbank, the Resnicks also have control of other water boards and have been sued for directing more water towards their properties.

The Resnicks donate millions of dollars to politicians and research institutions, which help them secure control over water systems, and even get more water and more taxpayer funding.

One important project is the proposed California Delta Tunnel, a taxpayer funded project which would send water from Northern California to Central, where the Resnicks’ farms are. They’ve spent hundreds of thousands of dollars on California and federal legislation and politicians who support the tunnel project.

But their favorite politician is Senator Diane Feinstein, chair of the Energy and Water subcommittee. She’s a close personal friend of the Resnicks, attending their holiday parties in Aspen and maintaining their financial interests.
A quick look through bills she’s sponsored show several which would direct money to Kern-adjacent water projects.

They are among the top donors to the University of California system, with their donations focusing on agricultural and ecological studies. The Resnicks have basically bought entire departments who put out studies on how water systems should be managed, and where funding should go. That leads to even more federal and state taxpayer dollars being used to fix up what the Resnicks profit off of.

This is all bad for California even in a capitalistic sense: agriculture uses 80% of California’s water, but only represents 2% of its GDP.