This deal was all wet the last time


People who say that nothing’s harder to get rid of than a bad penny must never have met Keith Brackpool.

The British-born promoter, who has spent the last dozen years pushing a scheme to pump water to Southern California from beneath 35,000 acres his Cadiz Inc. owns in the Mojave Desert, just won’t go away.

On the contrary, he continues to attract political sycophants happy to attest to his wisdom in the ways of water policy -- while they accept campaign contributions and consulting fees from him and his company.


In the past his posse has included ex-Gov. Gray Davis and Los Angeles Mayor Antonio Villaraigosa. Now he has added Gov. Arnold Schwarzenegger, who last week publicly endorsed the scheme as “a path-breaking, new, sustainable groundwater conservation and storage project.”

The endorsement was embedded in an announcement Cadiz issued Friday, saying it executed letters of intent with four Southern California municipal water agencies to jointly investigate reviving the water scheme, which was rejected by the Metropolitan Water District seven years ago.

Curiously, the release didn’t identify the four public agencies. Schwarzenegger’s office and a Cadiz spokesman both turned down my request for their names.

So we’re left with a company headed by a man with political juice making a deal with four unidentified public water agencies to revive a $200-million project that was already shelved once.

As taxpayers, do you smell something? Me too.

One might feel better about such maneuvering if Cadiz Inc. were a strong company, but it hasn’t had a profitable year since at least 1999. Last year’s loss was nearly $16 million. The Los Angeles-based company has been kept on life support by its lenders, who have repeatedly extended their loans, presumably on a bet that Brackpool’s project will someday take flight.

At the end of March the company disclosed that its working capital was down to $4.3 million, enough to last another year.


Failure to get the water project moving or to line up new investments by then could force it to cut back in a way that might affect its “viability as a company.”

As for Brackpool, 51, Cadiz’s chairman and chief executive, The Times has pointed out that in 1983 he pleaded guilty in London to criminal charges that included dealing in securities without a license.

Cadiz has shown a sure feel for publicity under Brackpool, who according to a company disclosure in April owned or controlled more than 132,000 shares at that time.

The release featuring Schwarzenegger’s name helped send Cadiz shares rocketing by more than 45% in Nasdaq trading Friday. It closed Wednesday at $12.46, up 56 cents.

It’s worth detouring a moment here for another look at that “path-breaking” water project.

As it was presented to the Metropolitan Water District in 2002, the idea was to pump surplus Colorado River water into the aquifer underlying the firm’s desert acreage. During droughts, the stored water (along with some indigenous groundwater) would be pumped out for delivery via the aqueduct to a parched Southern California.

If you don’t look too closely, the plan has a sort of shimmering authenticity, like a desert mirage. Yes, the state faces a long-term water shortage. And yes, in the midst of drought, sometimes the rain comes down in torrents.

Yet as the MWD realized, reality isn’t so simple.

First, there isn’t any surplus water in the Colorado. Rather, the basin is in a long-term drought. For the foreseeable future California will be lucky to get its full statutory apportionment of river water. A single extra drop? Forget it.

Second, there’s considerable disagreement over how much groundwater really underlies the Cadiz parcels, not to mention how much the company is legally permitted to pump out and how much could be pumped before neighboring aquifers become contaminated with carcinogenic minerals.

Then there’s the 35 miles of desert separating the Cadiz property from the aqueduct. Cadiz’s proposal to connect them with a pipeline drew vehement opposition from environmentalists. That was a major factor in MWD’s rejection, as was its fear that Cadiz might not be able to afford its half of the costs.

When I met this week with Cadiz’s spokesman and general counsel, they argued that the water project was a worthy idea that got short shrift from the MWD and was needed now more than ever, given the state’s growing water shortage. (Brackpool didn’t reply to my request for comment late Wednesday.)

The general counsel, an experienced water lawyer named Scott Slater who joined the company late last year, says he’s reworking the project to scale down its reliance on stored water and orient it more toward conservation -- preferably by capturing rainfall that runs off the desert ranges and evaporates from dry lake beds in the Cadiz area.

The new plan would run the pipeline along an existing railroad right of way, reducing its environmental footprint.

Slater acknowledges that numerous environmental approvals still would be needed, though he contends that the process could be completed in a year after the project is formally proposed. Considering the opposition the last version generated from local activists and environmentalists, that sounds a teensy bit ambitious.

Arguably, the best thing the project has going for it is Brackpool’s ability to attract political friends, as a flame attracts moths. Some say the secret is his British charm, but the record points more to money.

From 1999 through 2005, Brackpool and others associated with Cadiz donated $43,650 to Villaraigosa, who also worked for Cadiz as a “consultant” before becoming mayor. Over the years, Cadiz donated $345,000 to Davis’ campaigns.

San Bernardino County Supervisor Brad Mitzelfelt, who is quoted in the Cadiz release predicting “an immediate infusion of economic stimulus” thanks to the water project, got a total of $10,000 in campaign contributions from Cadiz in 2007 and 2008. Also quoted admiringly in the release is Rep. Jim Costa (R-Fresno), who has been active on water issues and has received more than $12,000 in campaign contributions from Brackpool and Cadiz associates.

Neither Brackpool nor Cadiz appears to have contributed money to Schwarzenegger.

But the governor’s chief of staff, Susan Kennedy, used to work for Cadiz: In 2005, while she was serving on the state Public Utilities Commission, the firm paid her $120,000 in consulting fees.

When I asked the governor’s office if Kennedy helped secure Schwarzenegger’s testimonial for Cadiz, the reply was, “We’re not going to elaborate . . . on our internal process.”

There may be a lesson in all this about how to mix politics and water: For a catalyst, try liberal amounts of cash.


Michael Hiltzik’s column appears Mondays and Thursdays. Reach him at, read his previous columns at, and follow @latimeshiltzik on Twitter.