How Beverly Hills Billionaires Built A Water Empire In California With Taxpayer Money

Tyler Durden's picture

Beverly Hills Billionaires Stewart and Lynda Resnick control an agricultural empire in the Central Valley of California which Forbes values at $4.2BN.  According to an article recently published by Mother Jones, the Beverly Hills based couple bought their first acres of ag land in 1978 as an inflation hedge.  Within 20 years the Resnicks had grown to be the largest producer/packager of almonds and pistachios in the world with 130,000 acres of land in the Central Valley and nearly $5BN in annual sales.  You're all probably familiar with some of their brands:

Wonderful

 

But 130,000 acres of permanent crops requires a lot of water...about 120 billion gallons a year, in fact.  At that level of consumption, Mother Jones points out that the Resnicks consume more water than all the homes in Los Angeles combined. 

So in a state plagued by constant drought one might ask how the Resnicks built such a "thirsty" empire?  Well, at lease according to Mother Jones, they got a lot of help from taxpayers.

Resnick Water Use

 

The Resnicks received their first taxpayer-funded water windfall in 1995 when they were effectively "gifted" the Kern Water Bank by the State of California (i.e. taxpayers).  Ironically, the State had just purchased the Kern Water Bank 7 years prior for $148mm (in current terms) to serve as an emergency water supply for Los Angeles.  We guess the threats that had led the State to seek out an emergency supply of water disappeared over the course of those 7 years.

As you might suspect, California taxpayers have always been a little suspect of the massive wealth transfer inherent in the Kern Water Bank deal.  As pointed out by the Los Angeles Times,
the Kern Water Bank transfer has been the subject of decades of litigation with local water agencies and environmental groups that say "the Kern Water Bank transaction was essentially a gift of public property to private interests and therefore violates the state constitution."

"By giving this resource away, not only have we lost money on the deal, but we've lost a mechanism to use this water for the most beneficial purposes," Adam Keats of the Tucson-based Center for Biological Diversity, the lead attorney on the lawsuit, told me recently.

 

The storage facility is the Kern Water Bank, a complex of wells, pumps and pipelines on a 20,000-acre parcel of abandoned farmland southwest of Bakersfield. The water bank was initially part of the $1.75-billion bond-funded State Water Project, which provides water for 25 million Californians and irrigates 750,000 acres.

To be fair, the Resnicks did have to make "concessions" before being gifted the water bank...fortunately for them they gave up a whole lot of nothing.  According to the Los Angeles Times, the Resnicks gave up "junior water rights" associated with the State Water Project which the Times pointed out were "from a portion of the State Water Project that will never be built and therefore has no value."  In fact, according to lawsuit documents, the Resnicks likely saved money by forfeiting their State Water Project allocation because it saved them from paying annual dues to the project.   

To add insult to injury, Mother Jones points out that the story doesn't end there.  The land that came along with the Kern Water Bank gave the Resnick's access to water from California's State and Federal Water Projects which could be purchased at attractive rates.  According to an analysis by the Contra Costa Times, between 2000-2007, the Resnicks were able to pocket $30mm by buying State and Federal Water allocations at $28 per acre foot and then selling to the State of California (taxpayers) for as much as $196 per acre foot.  So if we understand correctly, the Resnicks were gifted a $150mm project courtesy of taxpayers and then made an incremental $30mm selling the water they were gifted by taxpayers back to those very same taxpayers.  Genius.

Lest you thought there was something "fishy" going on, Lynda Resnick confirmed to Mother Jones that they have no political influence on water issues in California, saying:

"We have no influence politically—I swear to you.  Nobody has political influence in this. Nor would we use it."

But as bad as that all sounds, at least from the perspective of California taxpayers, the current Resnick-supported, taxpayer-funded water grab by the Beverly Hills Billionaires puts the Kern Water Bank deal to shame.  Of course we're talking about the "Delta Tunnels" project which is estimated to cost taxpayers up to $65 billion (this is a topic we recently wrote about in a post called "FishLivesMatter: California To Decide If Saving 'Delta Smelt' Is Worth $65 Billion Of Taxpayer Money"). 

We'll spare you all the gory details behind the project, but, in summary, when environmentalists effectively shut down water shipments flowing through the California Delta and into State and Federal Water Project canals in the northern part of the state the Resnicks, along with Governor Jerry Brown, floated the idea of building the "Delta Tunnels."  The project contemplates building 30 miles of massive underground pipes to connect existing water canals to the Sacramento river in an effort to bypass the California Delta and all the environmental issues that come along with it.  The pipes could carry 67,000 gallons of water per second transporting the water to canals that would then flow to the Resnick's farms in the southern part of the Central Valley.

But the original launch of the "Delta Tunnels" got push-back as taxpayers saw it as just another taxpayer-funded case of corporate welfare benefiting wealthy Central Valley corporate farming interests, like the Resnicks.  So what do you do if you're a billionaire with limitless influence and taxpayers balk at giving you $65 billion for a pet project?  Well you put together coalitions like the "Californians for Water Security" and you poll 100s of "focus groups" to figure which buzz words work best to sway the hearts and minds of taxpayers.  Turns out, buzz words like "water security" and "fragile water infrastructure" combined with fear tactics incorporating risks from earthquakes is way more convincing to taxpayers than "massive taxpayer-funded wealth redistribution to Beverly Hills Billionaire farmers"...that just doesn't have as good a ring to it.

Per Restore the Delta:

Public Records Act documents received from the Santa Clara Valley Water District show how Stewart Resnick’s Paramount Farms led the charge to create Californians for Water Security. They spent piles of money on focus groups with people from urban water districts, led by ratepayer-funded water district officials, to discover public fears and create messaging to sell the tunnels. This week, they are continuing by running from business chamber to business chamber to scare them into supporting the tunnels, falsely making the earthquake threat in the Delta somehow greater than the threat to the water system in Los Angeles. They forget, however, that time and time again in California, the majority of people do not see issues in the same way that dated, out-of-touch business chambers do.

So, with polling data in hand and an arsenal of buzz words from the focus groups, a new ad campaign was launched to convince Californians that they were going to die of thirst after the next earthquake wipes out California's water infrastructure...that is, unless, the Resnicks get their $65BN.

 

 

And wouldn't you know it, shortly thereafter, Governor Jerry Brown also coincidentally re-branded the project the California Water Fix and the fight goes on.

But we certainly don't want to imply that the Resnicks have received all of these "perks" for nothing.  They have spent handsomely on political contributions over the years with funds flowing to Republicans and Democrats.  As Mother Jones points out, the Resnicks have contributed money to every Californian Governor since Pete Wilson (who just happens to have been the Governor during that "questionable" transfer of the Kern Water Bank that we discussed above...but contributions to him were "small" at only ~$240,000 according the Center for Investigative Reporting):

They've given six-figure sums to every California governor since Republican Pete Wilson. They donated $734,000 to Gray Davis, including $91,000 to oppose his recall. Then they gave $221,000 to his replacement, Arnold Schwarzenegger, who has called them "some of my dearest, dearest friends." The $150,000 they've sprinkled on Jerry Brown since 2010 might not seem like a lot by comparison, but no other individual donor has given more. The Resnicks also have chipped in another $250,000 to support Brown's pet ballot measure to fund education.

Data from the Center for Investigative Reporting on the Resnick's political contributions over the years seems to support the Mother Jones data.  While California Governors seem to have benefited the most from the Resnick's generosity, the DNC/RNC, state senators, congressmen and mayors all collected their fair share of the pie. 

Resnick

 

Meanwhile, contributions have been spread out across the political parties.

Resnick

 

While it is unclear whether the Delta Tunnels will ever be built we're quite certain that the best interests of taxpayers will not get in the way of whatever decision is ultimately made. 

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J S Bach's picture

"Put out thy staff, Moses, and let the waters run forth!"

This charade's been done before... and by the same people.

smartmil's picture

Agriculture makes up 80% of CA's water usage, so having people move away is not really going to have much of an effect. The Resnick's holdings alone use more water than every household in CA (almost 40 million people) combined. Ok! Cool kidkraft dollhouse dolls find by using this link...

jeff montanye's picture

i thought i saw this before when it was called chinatown.

gargoylian's picture

No different than how his fellow Jews stole the West. http://wp.me/p4OZ4v-2mp

JRobby's picture

More crony capitalism. As always, administrations and legislators have been well paid to give away taxpayer assets.

https://www.indybay.org/newsitems/2014/09/28/18762178.php

 

 

TruthHunter's picture

Stupid story. Why shouldn't growing food come before flush toilets and showers for people who want to ruin paradise.?  Most

of these crops don't grow well elsewhere.

sportofkings's picture

Not when they're getting subsidies and gifts from taxpayers.

Reality Creator's picture

Y'all want to eat? then shut the fuck up.

Y'all couldn't survive a week without your food and water coming to you -- none of you could provide for that yourselves.

Y'all are totally reliant on the farmers and corporations for all the goods and services in your life, none of which you can provide for your self from the earth, air and water.

I have never seen such a bunch of suburban-urban babes who need everything fed to them on a spoon -- you all lack any self-reliance -- you think you are self-reliant because you have an opinion, you have a job pushing a red button all day, because you can choose to shop at your choice of store?

Fucking cretins have no idea how weak and fragile your life is, how you lack all the skills our forebearers had just a few generations ago to live on this earth -- you are all goats penned up and used for your milking and meat -- they toss you hay, build your sheds and water you -- you are fucking goats.

As Logicalman once said, and I paraphrase: "Borders between nations are just the fences between the stock pens."

knukles's picture

You did.
Out here, whiskey's for drinkin' an water's fer dyin'

Citxmech's picture

It takes almost 1 million gallons of water to irrigate one acre for a year?

WTF?

db51's picture

Volume and weight. One inch of rain falling on 1 acre of ground is equal to about  27,154 gallons and weighs about 113 tons. An inch of snow falling evenly on 1 acre of ground is equivalent to about 2,715 gallons of water.Jul 5, 2016  That my friend is a shitload of water.

 


The Navigator's picture

It's called 'acre foot of water', and that is 326,000 gallons.

And depending on the crop, it takes 3-7 acre foot of water to irrigate.*

Depending on flood irrigation or drip.

I think flood irrigation has mostly been resigned to history.

*It's been 35 years since I was in that industry, so mileage may vary, depending on brain cells.

michelp's picture

"And depending on the crop, it takes 3-7 acre foot of water to irrigate.*"

But that is for one application.

Not being from those parts, in an average summer, how often to they need to do this - in a week say, to satisfy growth?

And so in total, how much water not coming from the sky is actually used for irrigation of California crops per month on average?

Anyone knows?

m.

Fisherman Blue's picture

No rain = a whole lot of H2O to sustain growth.

JayQuePublic's picture

The 3 - 7 acre-feet (af) per acre application rate is for a year, not for an individual irrigation. Rice is on the higher end, at 7 +/- af/season, while almonds & pistachios can use 3.5 to 4.5 af per year, depending on precip and application methods (flood vs drip vs micro).  Row crops typically take less per season than permanent crops.

The Navigator's picture

In the 1920's/30's, the Jameson family bought and planted citrus by the thouands of acres in Corona & Riverside - it fueled a good industry in fresh fruit and juice contcentrate until the 1970's/80's. Now there's only a 'memorial' citrus tree on Victoria Ave that's a hundred years old.

By the 70's & 80's, that part of the Inland Empire in CA became the bedroom communities/commuters that feed the OC and LA working areas - affordable homes with OC/LA incomes.

No one foresaw the dual demand of increasing water demand for homeowners and ag. The early water system designers only planned on ag. And now the remaining ag business is in the water war. SoCal, except for the Imperial Valley, is mom/pops farming, same for most of Riverside county. Small parts of Orange County still produce strawberries, a high-money-producing crop.

Water wars = money wars, as always.

It was a great childhood, riding mini-bikes and dirt bikes on the citrus roads that lead to the foothills and Skyline Drive, the 'make out' point, and the road over to Orange County.

 

shovelhead's picture

I remember riding a motorcycle through miles of citrus groves in Irvine and beyond in the 70's where you got covered in so much orange oil from the air that you smelled like a gallon of GOJO hand cleaner. One of the favorite runs was the bar on the lookout over Lake Elsinore on the weekend where the parking lot looked like a bike show and there always were a few knuckleheads (not Harleys) getting bit by rattlesnakes because they would try and catch them to cut off their rattles.

I was impressed by the plastics molding guy who made removable insulated liners for his E-glides hardshell bags that held over a case of ice cold beer.

Son of Captain Nemo's picture

i thought i saw this before when it was called chinatown.

You really nailed it!

Just like the movie "The Siege" before the real thing 3 years later!... Hollywood and the Federal Government... The best of friends since WWII !!!

DUGTRUX's picture

Great movie!!!! I guess someone got theyre inspration somewhere... which one was first?

3Wishes's picture

Just send them the backdated bill for 1$ per litre x 150 Billions litres, All GOOD.

Chandos's picture

First of all, do we haveany proofthat the Resnicksteinblatts are Jews?

J S Bach's picture

Who else?

From Ancestry.com:

Reznik is a Jewish surname that means a "ritual slaughterer, from Yiddish reznik, [of Slavic origin]." Resnick is a "Germanized or American" spelling of Reznik.

Ritual Slaughterer... how befitting.

Bendromeda Strain's picture

You bet - the Khazars were the only ones who could strike fear in the Muslim horde.

Mustafa Kemal's picture

They did the same with the Christians. Evidently they chose Judaism because of the Christian/Muslim pressure to find a ground

that was on neither side but which both sides could understand -Abrahamn.

mountain99889's picture

Wikipedia - "Resnick was born in 1936, and raised in a middle-class Jewish family in New Jersey and later moved to California with his family in the 1950s" - https://en.wikipedia.org/wiki/Stewart_Resnick

JRobby's picture

People of all faiths and races make pacts with Satan. Then they are not members of any faith or race any more. They are just Satanists. These two could have easily been cast as the old fuckers in "Rosemary's Baby"

 

https://www.indybay.org/newsitems/2014/09/28/18762178.php

http://www.washingtonpost.com/wp-dyn/content/article/2009/04/20/AR200904...

http://www.forbes.com/sites/chloesorvino/2015/11/04/americas-nuttiest-bi...

http://www.motherjones.com/environment/2016/04/lynda-stewart-resnick-cal...

Bendromeda Strain's picture

Point taken, but Ira Levin specifically wrote that couple as elderly Jews. Like Kubrick with Eyes Wide Shut, sometimes they just gotta spill some beans. I don't mean that as an indictment of all Jewish people, but remember when a young Oprah had on a victim of Satanic Ritual Abuse (SRA) and she described her family as a typical Jewish family? There was an evil network that sprung into action forcing Oprah to apologize and she would never cover the topic again. If she wanted to keep her show that is...

junction's picture

The Resnicks had to be the driving force behind the "almond rule", which requires pasteurization of California almonds, many almonds being pasteurized with highly carcinogenic propylene oxide gas (PPO).  PPO is so toxic it cannot be used as an additive to drag racing fuel.  I just bought a container of unsalted Kirkland mixed nuts, including mostly almonds, from Costco.  Never again will I buy nuts from Costco, whose new managers filled the jar with almonds that had a taste I never found with almonds before.  No doubt oversteamed  PPO almonds that Kirkland got on the cheap.  Governor Gerry Brown belongs in prison along with those NWO thieves, the Resnicks.  And Costco's new bosses for selling poisoned PPO almonds.

---

[Thanks to the corrupt and criminal bureaucrats at the FDA], the “almond rule,” in force since  2007,  requires that almost all almonds grown in California’s 400-mile-long Central Valley area must be “pasteurized” – that is, either steam treated or gassed with the toxic fumigant propylene oxide (PPO) before sale to U.S. consumers. Growers can ask for an exemption for almonds that receive further processing such as roasting, blanching, or other heat treatments.

Since nearly all domestic almonds come from this fertile area in California (said to provide one quarter of America’s food supply), that means that any “raw” almonds you buy, unless they were imported from abroad, have been pasteurized via one of these methods. Which method was used depends on the brand and the preference of the grower (except for organic almonds, which are always steam treated). Farmers can also sell small quantities of truly raw, untreated almonds in quantities of 100 pounds or less at farmers markets and farm stands in California.

Giant almond processing and marketing company Blue Diamond Almonds, told Food Identity Theft that while its sliced and slivered almonds are steam “pasteurized,” its whole-nut “natural” line is treated with the toxic PPO gas. Other Blue Diamond Almonds products such as Almond Breeze, Nut Chips and Nut Thins use steam-treated almonds, with any whole “naturals” going to Canada being steamed rather than fumigated. Although the ruling caused California almond farmers to lose a lucrative market in raw almond sales and raw foodists to lose easy access to a diet staple, the average supermarket almond consumer also has something to be concerned about — the chemical “pasteurization” treatment itself.

That’s because propylene oxide, also used in making polyurethane foams, antifreeze and hydraulic fluid, has been classified as a probable human carcinogen. And while the U.S. Environmental Protection Agency (EPA) currently allows PPO treatment of almonds, it has also made moves to ban the fumigant twice, and in 1996 seemed on the verge of revoking its “food additive regulation” status.

Changing its tune after protests from the manufacturer of the gas, the EPA permitted the chemical’s status to remain on the books and set an allowable residue level of 150 parts per million. But sometime between then and now, that residue allowance doubled to 300 ppm. And despite the fact that the state of California considers PPO to be a “known carcinogen” growers in that state can release almonds for sale once the PPO levels are down to 300 ppm.

http://foodidentitytheft.com/does-fumigating-almonds-with-a-toxic-gas-ma...

CorneliuCodreanu's picture

This is the price all Americans pay for Jew snoozing. 

new game's picture

just buy raw at coop. pay the price-cheap healthcare and tasty.

death to cheap fucks that eat crap. slow death of a billion cell deformations leading to cancer, the predisposition inherant to each cell...

greatbeard's picture

Thanks.  Interesting read.  Cool old guy, like me, who works in the bulk food section of a wonderful market I use, told me a bit about the almonds being "pasturized".  Apparently the "raw" almonds I buy aren't raw.  I didn't pay it much heed but I did seem to pickup distain in his voice.  Now I see what he was getting at.  He did let me know the ones I buy are steamed.  I'm luck to have a store like this in my vicinity.  It's about 18 miles away but I hit it once a month.  A lot of organic, specialize in local harvest, local grass fed beef, some superb imported foods I've become quite fond of (a particular pesto I'm addicted to).

otschelnik's picture

Propylene oxide is produced by plants themselves in small quantities to initiate ripening.  Today fruit is picked in 'green' then shipped to distant locations where its 'gassed' with propylene oxide, then distributed to the supermarkets.  Its not only almonds.

Infocat's picture

Indeed, there is far too much corruption going on. http://www.truthjustice.net/

navy62802's picture

Fuck California.

cognitive dissident's picture

I dream about "the big one" at least two nights a week, and Arizona Bay, obviously.

chosen's picture

I live in California right on a major fault line.  I am on the second floor of a two floor building.  I hope I am here when the Big One hits.  I'll just ride it down, probably on my bed, pancaking the occupant below me.   Also I want to see all the fucking landlords losing all their rents for months, maybe years, and all the fucking homeowners in bubble-priced houses try to rebuild their demolished houses.  Most homeowners here do not have earthquake insurance as it is too expensive.

beemasters's picture

'Dream' as in your sleep or hoping? If the former, let's hope it's not precognitive one. Though, California is probably due for another major one.

greatbeard's picture

"Fuck California"

How about fuck you instead?  Ennough blind hatred out there, one less won't be missed.

Kirk2NCC1701's picture

Kern = Core in Yiddish

Kirk2NCC1701's picture

What!?  You have have a problem with me translating it, to show what their thinking was behind the name? Get a grip.

Ms No's picture

People get thenthitive.  And never point out anybody who changed their name... like John Stewart, George Soros and countless others.  Obviously John's rich and famous lifestyle had him under siege and dealing with the constant torment of being an American Jew.  It had nothing to do with his meddling with our political system and backing socialist policies.  His life was seriously rough.  People were trying to stone him... and stuff.