Firm That Seeks Water Deal Gives Heavily to Villaraigosa

By JEFFREY L. RABIN

May 30, 2001 12 AM PT

TIMES STAFF WRITER

A Santa Monica company pushing a controversial project to store Colorado River water underground in the eastern Mojave Desert for use in drought years has been making large campaign contributions to Los Angeles mayoral candidate Antonio Villaraigosa.

If elected mayor, Villaraigosa would appoint five commissioners to the Los Angeles Department of Water and Power, which relies primarily on water from the Owens Valley but buys Colorado River water as well. In addition, the next mayor--Villaraigosa or City Atty. James K. Hahn--will appoint four members of the Metropolitan Water District board, the entity that controls Southern California’s share of Colorado River water. Those four members constitute 20% of the board’s votes.

Cadiz Inc., its chief executive Keith Brackpool, some of its senior executives and directors have given almost $36,000 to Villaraigosa’s campaign since the former lawmaker entered the mayor’s race. Brackpool, a major backer of Gov. Gray Davis, also has hosted fund-raisers for Villaraigosa.

In addition, the politically well-connected company gave $50,000 to the state Democratic Party two weeks before the April 10 city election and has pledged another $50,000 to the party before the Tuesday runoff, according to a confidential document obtained by The Times. The state party is mounting a massive phone and mail program to elect Villaraigosa to the city’s highest office.

While speaker of the Assembly, Villaraigosa received $65,000 in campaign contributions from Cadiz, a publicly traded company that describes itself as a “water resource management and agricultural firm.”

After lengthy negotiations, the company and the massive Metropolitan Water District agreed last month on the economic terms for the $150-million project to store Colorado River water in a desert aquifer beneath the Cadiz and Fenner valleys, 60 miles southwest of Needles. Some of the river water and the water stored naturally beneath the valleys would be pumped out of the aquifer in dry years for delivery to the water district, which serves 17 million residents of Southern California.

But before the underground water storage project can proceed, the district board of directors must certify as adequate a final document analyzing the project’s impact on the desert environment and approve a long-term contract.

If the project goes forward, Cadiz could be paid hundreds of millions of dollars to store, extract and provide water during the 50-year life of the project.

Supporters of the project, including Cadiz and water district, hail it as a model for storage and use of surplus Colorado River water that Arizona and Nevada are entitled to take but currently don’t use.

But opponents, including some environmental groups such as the Sierra Club, fear the plan could lead to destruction of a fragile desert ecosystem by removing not just stored water but draining the existing aquifer as well.

The Sierra Club is strongly backing Villaraigosa for mayor. So is Cadiz. The opposing positions set the stage for a potential collision over the water project this summer and fall if Villaraigosa wins.

Parke Skelton, Villaraigosa’s campaign consultant, said that if the former speaker wins, he is likely to appoint MWD board members that have “substantial environmental sensibilities.”

He said Villaraigosa has talked to Brackpool but said they have never discussed the Cadiz project.

Brackpool said in an interview that he strongly favors Villaraigosa’s election. “We’ve been supportive of Antonio for a long time. He’d make a wonderful mayor,” Brackpool said. “I’ve certainly been with him in this race from the day he entered it.”

The British-born Brackpool has become a key player in California water politics. He is a leading advisor and campaign contributor to Davis. He was appointed by Davis to serve on a commission assessing the state’s future needs.

“We’ve played a lot of roles in a lot of campaigns,” he said. “I’m not shying away from saying that we’ve been active politically.”

He said he knows Villaraigosa “fairly well” and has “held some events for him.” Villaraigosa has flown on the company’s plane, although he reimbursed Cadiz for a flight to Fresno. Other state officials, including Davis, have regularly flown on Cadiz’s aircraft.

Cadiz and its agricultural subsidiary, Sun World International, began giving to Villaraigosa when he became Assembly speaker. The company donated $40,000 in 1998 and $25,000 in 1999.

When Villaraigosa launched his mayoral bid in 1999, Cadiz, Brackpool, his wife, Patrice, and company geologist Mark A. Liggett each gave $1,000 to support the campaign.

It was only the beginning.

In June 2000, Cadiz covered the costs of a reception for Villaraigosa at the Manhattan Beach Country Club.

When the campaign contribution limits in the mayor’s race were raised to $7,000 before last month’s election, money from Cadiz started gushing to Villaraigosa’s campaign.

Mitt Parker, a member of the company’s board of directors, gave $7,000. Brackpool sent a check for $6,000. So did Director Murray Hutchinson. The company donated $5,700. Liggett provided another $1,000. Board members Tim Shaheen and Tony Coelho, a former California congressman and onetime chairman of Al Gore’s presidential campaign, each made $1,000 contributions.

At the end of March, Cadiz sent $50,000 to the state Democratic Party. A confidential document obtained by The Times shows that Brackpool has pledged another $50,000 to the state party before the election.

Asked about this commitment, Brackpool replied: “I haven’t decided what we’re going to do yet. I’ve had requests, but I get requests all the time.”

After Villaraigosa captured the top spot in the April election, Brackpool, his wife and geologist Liggett gave another $1,000 apiece to back Villaraigosa in the runoff.

Brackpool and Villaraigosa’s paths crossed in last year’s state primary campaign. Brackpool was chairman of a committee backing Proposition 12, a $1.97-billion water bond issue on the March 2000 ballot. Although the Proposition 12 campaign raised its own money, including funds from Cadiz, its efforts were eventually joined with backers of another measure, Proposition 13, a $2.1-billion bond issue for parks.

Villaraigosa was featured in some of the television ads for the park bonds, and the measure figures prominently in his record as he runs for mayor. He was “a very effective spokesman for both measures,” Brackpool said.

Before the water bonds reached the ballot, a provision was added allowing use of up to $50 million on water projects such as the one proposed by Cadiz.

But Adan Ortega, the Metropolitan Water District’s vice president for external affairs, said the water agency does not have “any plans to use any bond money from the state to pay for this project.”

Brackpool said talk of tapping the bond funds is “just ridiculous speculation” because “Metropolitan hasn’t even applied for public funding of the project.”

An eight-member MWD committee, which negotiated the economic terms of the project with Brackpool, included directors William Luddy, a Carpenters Union official and strong supporter of Hahn for mayor, and Jorge Castro.

Brackpool said the negotiations were “very tough.”

The U.S. Geological Survey has raised questions about the project. Agency scientists say Cadiz has significantly overstated the amount of rainfall that naturally recharges the desert aquifer each year.

In particular, the agency is concerned about Cadiz’s plans to withdraw native ground water in addition to the stored Colorado River water. Withdrawing too much native ground water could dry up desert plants and threaten animals. The issue is being assessed in a final environmental impact statement, slated for completion this fall.

To keep tabs on water levels in the aquifer, Cadiz has agreed to operate a system of monitoring wells.

“The project stands on its own merits. It is an excellent project for Southern California,” Brackpool said. “I would hope the new board would be as supportive.”

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Banking Water From the Desert

A Santa Monica firm is pushing a controversial project to store Colorado River water underground in the Mojave Desert. Cadiz Inc. and the Metropolitan Water District have agreed on terms of a $150- million project to bring water from the Colorado River Aqueduct to the Cadiz Valley. Final approval depends on completion of an environmental impact statement and agreement on a 50-year contract.

A Political Partnership

Cadiz Inc. and many of its senior executives and board members have played major roles in supporting Antonio Villaraigosa as speaker of the Assembly and candidate for mayor of Los Angeles. The company also has contributed to the California Democratic Party, which is engaged in an intensive mail and phone program to help elect Villaraigosa. Donations from Cadiz and its officials are listed below:

Villaraigosa for Mayor Campaign

Dec. 1999-May 2001

$35,950

California Democratic Party

March 2001

$50,000

Assembly Victory Fund

April 1998-May 1999

$65,000

Total

$150,950

Source: Campaign contribution reports