All language subtitles for Water.And.Power.A.California.Heist.2017.WEBRip.x264-ION10

♪♪

♪♪

There's probably
no landscape in the world that

has been more manipulated
than California.

From the very beginning,
it was about capturing water

and moving it from where
it was to where it wasn't.

♪♪

Because of that
manipulation of water,

a great civilization
has risen.

We've created two
world-class cities --

Los Angeles and
San Francisco.

And in the middle, we created
the most fertile farm belt

the world's ever known.

♪♪

But with the growth of suburbia,
the growth of agriculture,

and the demands of
the environment,

all those things are
putting immense pressure

on this system.

And the system has
started to crack.

♪♪

♪♪

They've been pumping
and pumping and pumping

from these aquifers that
have taken hundreds

if not thousands of
years to build up.

Water has become gold.

To be traded and sold
and we're extracting it

in the same way.

But it's not enough.

The more water we need,

the more water
we will always need.

♪♪

♪♪

♪♪

♪♪

♪♪

♪♪

♪♪

♪♪

♪♪

♪♪

♪♪

♪♪

♪♪

California
officials are putting

mandatory restrictions
on water use in place.

California is
now in its worst drought

since the 1970s.

The hardest-hit area in
the entire state, Tulare county.

This is
the town without water,

East Porterville
is ground zero in the

California drought.

A 21st century dust bowl.

♪♪

Okay, right there.

♪♪

♪♪

That's good.

Thank you.

♪♪

♪♪

♪♪

Where we're going on
this street is close to the

main river, which
is called Tule River.

And if you go down the
streets and you see tanks or

boxed water to the house
they're out of water.

And I thought I'd be doing
this for three months.

But, um, it's been almost
three years now,

and Ruben's been helping me
for the last year and a half.

Ruben's also out of water.

♪♪

♪♪

♪♪

Hello!

Hola, Como esta?

Bien, bien.

She has been without
water ever since I've been

doing this, for three
and a half years.

This is what they had.

And they have to haul their
water from the fire station

over here, and other places
where they can get the water.

Thank you so much.

Donna is an angel.

If she hadn't started
bringing us water

I don't know what we would
have done.

♪♪

♪♪

Any kind
of water you want to drink

around here is gonna be
bottled water.

I mean it's a
battle every day,

how you're going
to wash your hands.

How are you going
to wash your face?

How you gonna take a shower?
How you gonna cook?

How you gonna drink?

How you gonna do dishes?

That's another big thing too.

You'd have to load up tubs
to take them over around the

corner to wash them and
then bring them back,

and then they get dirty,

and bacteria just builds up,

so paper plates,
that's the bottom line.

Yeah.

We came from a
poor country, Mexico.

Where there isn't enough
to live.

There's a lot of violence

and a lot of murders.

We came here for the
American Dream.

But really, it's a nightmare
to live like this.

And in a supposedly
rich country?

But, honestly, it's not.

It's worse than Mexico.

There's plenty of water
in Mexico.

But here? None.

This is
where we catch our water,

so we can flush toilets.

Get up in the morning, take
two bottles of rainwater,

put it in the coffee pot.

My fiancée will come in.

She'll help me wash my hands.

Then we'll take this
water, recycle it,

put it in a bucket out there,
until it gets enough 'til we

can flush the toilet.

What about showering?

Well, usually,

we have to go into town, uh,
to one of my friend's house,

and if I can't go to
my friend's house,

you'll see some guys,
that, there's ads,

even on Craigslist, to
be able to take a shower,

five bucks to take a shower,
that kind of stuff.

That's what kind of
place it is around here.

It's been really rough.

Um, when you have to go
places to take showers

or wash your hands
with bottled water.

It gets -- it's draining.

People are
oblivious to the way we have

to live out here.

And my fiancée and I, we
haven't even thought about

starting a family,
because of no water.

I mean if you can't barely
take care of your home,

how can you take
care of a family?

The struggle is real.

We all can relate.

And you might not have known
your neighbor's name before.

Now you do because you have to

go borrow a cup of water
instead of a cup of sugar.

I don't really know
if there is a bad guy.

Mother Nature's dry,
but there's so much

agriculture going on.

I mean, when your next-door
neighbor has orange groves

for miles, how much water
do you think he's using to

grow his oranges?

That's it, really.

♪♪

♪♪

♪♪

For the last four years,
everybody has been

very desperate
in California for water.

And the image
that has been projected

to the world is that California
has become dry.

That the land has
turned to sand.

That we're parched.

But this is not true,

because for the past four years
in the midst of this drought,

agriculture has recorded
record crops

each and every year.

So the question becomes
how they manage to do that.

♪♪

♪♪

The great valley of
central California lies almost

in the center of the state.

A long time ago, this whole
area was a great gulf.

This soil is rich.

Given enough water, it could
produce bountiful harvests.

Millions of acres would have
remained a barren waste

if the men who settled
this part of the great valley

had not used their knowledge and
strength to irrigate the land.

♪♪

♪♪

In California,
dirty water deals have been

part of its history since
before its statehood.

In the
1860s, the United States sent

John Wesley Powell a famous
surveyor, to survey the West.

And he uttered the words,
"whoever controls water will

control the West."

And there's
an iconic movie, "Chinatown,"

about Los Angeles's
appropriation of water

for its uses.

And the nefarious things
it did to obtain it.

Gonna be a lot of
irate citizens when they find

out that they're paying for
water they're not gonna get.

Oh, that's
all taken care of.

Water is power.

Water is power and
water is money.

You don't have an industry,
you don't have a town,

you don't have agriculture
unless you have water.

That's why we're
having these water wars

between urban, agriculture,
and environmentalists.

I call them the
tribes of California,

the tribes of the north,
the tribes of the middle,

the tribes of the south.

What do we want?

Water!

What do we want?

Water!

Southern
Californians have always felt

that they are part
of overall state.

Just the state of California
we're all working together as

one state, as Pat Brown
said many times.

Northern Californians feel
like those in the south are

just trying to take their
water, damage their economy,

and ruin their environment.

We have this
fundamental disparity,

because more than two-thirds
of the rain falls in the north

and almost two-thirds
of the population resides

south of the rain.

And so we have this great
middle of California,

the great fertile middle,
except for it does not have

consistent water.

How do we get the
water on a consistent basis

to the middle?

How do we
move California ahead?

How do we make the challenges,
seize the opportunities of

California's growth?

The State
Water Project was an idea that

had been kicking around
for quite some time.

And the Democrats held off
from doing anything until my

father became governor.

The
State Water Project was

Pat Brown's pet project.

Maybe even more than the
university or the highway

system, and those
were big deals.

Pat Brown wanted to tie the
state together with an aqueduct,

making the whole
state interdependent.

It is a
pleasure for me to come out here

and help blow up this valley
in the cause of progress.

♪♪

Today the dirt is flying,

a river 700 miles long --

the largest project
ever undertaken by

an American state.

I don't think you have
any idea of how proud I am

of this great dam.

We ended up
building major dams on the

Sacramento River

and taking that flow,
part of the flow

of the Sacramento River
and moving it

to the interior of California

so that land
could blossom into garden.

The valley supplies
25 % of all the food eaten

in the United States.

It's the richest agricultural
valley in the world.

This is a land
of agricultural giants

that depends on water,
a public commodity,

to grow their crops.

50 % of the state water flow
basically goes to Los Angeles.

25 % goes to the west side
of Kern County.

Those are
the two big contractors

for the State Water Project,

so they had
had a long history of working

together and fighting!

They were always fighting

because who's going to pay
what and when

and what their rates are
and so on.

That
State Water Project,

as those waters flowed
in the '60s and '70s,

you saw basic desert land,
scrub land on the west side of

Kern County turn into
prime agriculture land.

But that farmland was all
in western Kern,

where there
was no groundwater.

So then that land becomes
wholly dependent on the

State Water System.

We had a pretty
wet period through the 1980s,

but then we had several
years of drought,

taking us into the early '90s,
that increased the tension

between agricultural and
urban state water contractors,

over the shortages that
inevitably developed.

In California, the snow
pack is way below normal.

Runoff down drastically.

Many reservoirs are half full.

This is the
second year of low rainfall.

California
is in the fifth year.

The worst
drought in 50 years.

It's definitely
a crisis mode.

It's an emergency mode.

We were facing a crisis within
the State Water Project.

Water supplies had been reduced

to all State Water Project
contractors.

And the original contracts
required us to cut deliveries

to agricultural water
contractors first.

Farmers did
not like that because when a

drought year came
along they got a cut,

and the cities continued
on with their water supply.

Water is power
in the American West.

And arguments about sharing
it are not easily settled.

The fight over
water in this county started

more than 100 years ago,
that's for sure.

Tom Clark
was a legendary ram rod in

California water politics.

The term actually comes from
the tool used

to pack powder
into muzzle loaders.

It's called the ram rod.

And he would use every technique

to advance Kern's interests.

In 1991, our allocation
for the State Project was zero.

The impacts locally were
more than $250 million,

12,000 jobs lost.

Kern County Water Agency

threatened to sue
the State of California

to recover millions
and millions of dollars

unless there were some changes
in the contracts.

So they, uh, pressured, some
might almost say extorted,

the state for these changes.

The Monterey
Agreements were conducted with

most people not even realizing
that they were going on.

In a sense that was the
fundamental, in my view,

flaw of the process --
it was done in secret.

Those who participated
can be, I think, divided into

two categories, those
who sincerely felt they were

serving the people
of California,

and those who were
serving for themselves.

The group was split
between representatives

of big agriculture,
led by Tom Clark,

and urban water users

represented by Tim Quinn
and Woody Wodraska.

The Department
of Water resources

represented the state.

For all of my metropolitan
water district years

and my years at ACWA,
I've told my staff,

war is easy,
collaboration is hell.

Every one
of these meetings felt like

maybe we'd take two steps
forward at one of these meetings

and then we go back
to square one.

Finally I was -- said, "Look,
I know I'm the new guy here,

why don't we look at
bringing in a third party,

mediator, facilitator?

Let somebody else see if
they can get us off of the

square we
seem to be stuck on."

The first meeting,
everyone took turns insulting

each other, I'd like to talk
to you about your mother

and her behavior, or,
you know, your dad was a loser.

You're a son of a bitch,
but, ya know,

I do wanna hear what
you have to say.

And so at the second meeting,
Tom Clark,

who was the general manager
from Kern County Water Agency,

had been to a rummage sale,

and he said "Here, I think
you're gonna need these."

And it was amazing,
we were like pavlovian dogs,

we immediately
changed our behavior.

That meeting I had
to use the cymbals 15 times.

He knew
we could never agree,

because the project only has

so much water to allocate.

And if Kern wanted more
in dry periods, uh,

that would mean
someone else got less.

And, by the way, we didn't know
we were about to rewrite

the entire state water contract.

We thought we were trying to
solve an allocation problem.

Was the
Kern Water Bank part of that

meeting in December of 1994?

It had been --
it had been discussed

leading up to that.

How
did it first come up?

Uh...

During
the Monterey Amendments,

Kern had one other
leverage point in the deal.

In the 1980s, the State of
California started looking for

opportunities, places,
where water could be put

in the wet periods to be drawn
out in the dry periods.

The concept was that when you
had high flows in the delta,

you would pump them down
to Kern County

because there's huge empty
groundwater reservoirs there

because the water has been
pulled out of there for decades

and it left a hole,
basically, underground.

So we said, "Let's store it
underground, and then when a

drought comes, pump it back
out, just like a piggy bank."

Farmers in Kern
County said, "Wait a minute.

This could be a
really good thing.

It's called a groundwater bank.

Well, it's good to own banks.

Banks make money for people."

Under a particular state law,
in order to operate that kind

of reservoir,
a groundwater reservoir,

it requires approval
of the locals.

And Kern County said,

"We're not going
to ever approve you

operating that project."

So even after the Department
of Water resources

had spent over
$70 million to develop it,

Kern County Water Agency
held the project hostage.

The original
vision of water banking that

the state had developed was
cast aside in favor of giving

this major state asset to the
local water contractor

who then turned it over to a
nominally public but privately

dominated joint
powers authority.

So this was truly
historic and we knew it.

We knew all of us
had a better future.

Tom Clark said,

"Well, my mama
didn't raise a fool."

Take it.

All right people,
to California!

♪♪

♪♪

Some people
gave a tip to Public Citizen,

a Washington DC-based
non-profit organization about

what appeared to be some
shady water deals going on in --

in central valley
of California.

You know, the first thing
I did was I looked up the

Kern Water Bank online.

Google was in its early
years more or less -- 2003.

Well, it turns out
it's largely controlled

by something called
Roll International.

And when I called their
headquarters

and asked to speak
to a public relations person,

they said
they didn't have one.

And I said, "Well,
to whom should I address

any research questions?

They said, "We don't give
information to the public,

we suggest you don't
research us," and hung up.

So I drive down to Bakersfield

and then follow the directions
out to the address.

And I'm a little bit confused
because the sign outside says

Paramount Farming Company,

not Kern Water Bank Authority.

Walk in the front door
and ask the receptionist, "Um,

is the Kern water bank -- do you
know where that office is?"

"Oh, yeah, they're just
down the hall," they said.

It's like, "Okay."

The Kern Water Bank is a
supposedly public entity.

And the members are a number
of different water districts,

water agencies,
water storage districts,

and also a private company

called Westside Mutual
Water Company, LLC.

And I remember asking,
"Who are they?"

"Well, they're landowners."

"Well, what land do they own?"

"Well, they represent
their own land."

They didn't want to mention
the name Paramount Farming,

which was notable considering
where we were sitting,

which was inside
Paramount's office building.

It seemed as if this was a
case of extremely valuable

public property, um,
an essential element of the

State Public Water System,
which had essentially been

given to a very wealthy
private, uh, company.

But really
just one landowner,

one corporate farmer.

♪♪

♪♪

Rafaela,
this is Mark Arax.

How you doing?

Fine, thank you.

Uh, so I'm headed
to Lost Hills,

and I'm hoping you can join us
to start trying to figure out

a little bit about the town.
- Fine.

Oh, wonderful.

Okay, well we'll be at
Gabby's I would think in

about 45 minutes.

45 more minutes? Okay.

Okay, bye-bye.

She's an activist in town.

Really a good,
good, good source.

She's in Lost Hills.

And that's the company town

of Stewart Resnick
and Paramount Farms.

It's a Latino town,
very impoverished.

It's an example of the
haves and have-nots of -- of --

of California.

That's the California
Aqueduct right there.

And these are the fields
of Resnick's right here.

Almonds, real pretty right now.

All the petals have dropped.

It looks like snow has fallen.

♪♪

In the early 2000s,

I was working for
the Los Angeles Times

and Kern County
was part of my beat.

And as John Gibler
was finishing his study for

Public Citizen, I started
pursuing my own story

about the Kern Water Bank
and how water,

a public commodity,
had been privatized.

Stewart Resnick, the
owner of Paramount Farms,

was at that time the
biggest grower in the valley,

but no one really
knew who he was.

And in a series of interviews
with me six, seven years back,

he described himself
as a carpetbagger.

Look,
you're the only person I've

ever given an interview to.
- Yeah.

And I've
gotten plenty of calls

from Forbes and
Business Week and Fortune.

I say, "No,
I don't give interviews."

Yeah.

The way he had done it was
leveraging profits from the

Franklin Mint, which he owned.

No one captures Princess Diana
like the Franklin Mint.

Mint the moment.

And he started
purchasing these large swaths

of land in West Kern
in the late 1970s.

And remember, Western
Kern has no groundwater,

so it should have never
been developed as farmland.

But Resnick's a gambler,
and he had a vision to move

California's water from where
it was to where it wasn't.

Resnick wasn't in the room
at the Monterey Agreements,

but Resnick's main water man,
Bill Phillimore,

had a major, major role.

And the Water Bank was
identified, and smartly so,

by the Resnick people as
something that they wanted.

This was one of the prizes
of that negotiation.

Paramount
Farms got a 58 % control

of the Kern Water Bank --

one of the world's
largest groundwater banks,

that the state of California

could operate at its discretion

to relieve drought.

So it was really a gift from
the people of California to

Stewart Resnick.

The people
who were involved in the Bank,

they shouldn't have allowed
it to concentrate so much

with one person.

This was
a government-owned asset,

and they were privatizing it.

But I do not blame Stewart
for being able to grab

a big part of the water bank.

I don't blame him.

The issue is proper
distribution of the water

that benefits the state
as a whole.

That's the issue.

Since
the Monterey Amendments,

the Resnicks doubled their
acreage in production.

Now they're the
biggest grower of almonds,

pistachios, and
pomegranates in the country.

People didn't
know what a pomegranate was,

but once they found out,
they sure wanted it.

- Cheers!
- Cheers, darling.

Today, Stewart
and Lynda Resnick are number 129

on the Forbes list, with
a net worth of $4.2 billion.

And politicians
love the Resnicks,

who hand out $50,000 checks.

Democrats, Republicans,
Gray Davis,

Arnold Schwarzenegger.

Like, you know, they
gave to everybody.

Resnick has
now emerged as

the new King of California.

Pom Wonderful,
pure pomegranate juice is.

The marketing is unique.

He's not a farmer.

He's a capitalist.

On command.

In a way Resnick
also owns the word wonderful,

not to mention Fiji Water
and some other concerns.

♪♪

The taxpayers had put a lot
of money into this,

and without that water bank,

that land would continue to
be scrub land, desert.

So, Resnick has been able to
extract

millions and millions of pounds

and tens of millions of dollars

off the fields of,
uh, Lost Hills.

And you wonder how much
of that is going back

to the workers.

♪♪

What I'm trying to do is
get all these big guys

and lift the veil on what
they're doing.

Because to me this is really
ground zero of the drought.

And when I first wrote about
Paramount and the Resnicks,

they got some bad publicity
for this being like

a third world company town,

and that affected them

and Lynda Resnick decided
that she was going to do

something about it.

I had no
idea what I wanted to do.

But I had reached a
moment in my life

where I had to give back
in a meaningful way.

Welcome, everybody,
to your new park.

We have a lot of things here
to celebrate today.

But I think we're going
to get off of here

and let you have a little fun.

Companies don't
do things like this.

Why would a company want to
invest so much money in a town?

It's a huge deal.

Rafaela,
I know you feel grateful

to the Wonderful Company

and they have done
things that no farmer will do.

- Yes.
- There's a park now.

- Yes, I know.
- The roads are better,

there are some houses.

But the wages are
still minimum,

and the water is
still a problem.

We don't drink the water
from here.

We don't even like it
for the dishes.

Sometimes it comes with arsenic.

- Arsenic.
- Arsenic, si.

So the farm workers
don't have water to drink,

but the trees have
plenty of water to drink.

- Oh, I know where you're going.
- Yeah.

So the water you do get
to shower.

How much does the irri--
is it -- is it --

how much does the water
district charge you a month

for the water that's
no good to drink?

$69, it cost $69.

A month?
- Yeah.

Wow.

Hola, Como estan?

Hello.

Tell me are you
drinking the water here?

Do you drink the water?

Uh-uh,
they take their five-gallon

down to the store.

How come you
don't drink the water from

the tap here?

Um, it's chlorine.

- A lot of chlorine?
- And and they

put some kind of bleach, uh,
Clorox into the water.

And when you shower it,

you can smell the chlorine.

♪♪

The myth is that
as the agribusiness benefit,

the communities benefit.

How's the water
at the school?

Do you guys drink
the water at the school?

- Nooooo, it's nasty!
- It tastes like mud?

It tastes nasty,
nasty, it tastes like...

But in the case
of the Resnicks even with

their slide-show-ready charity,
no,

you see that the Resnicks
jump up the Forbes list of

billionaires and the
workers can't even drink

their tap water.

♪♪

And the ironies
couldn't be sharper because

the California Aqueduct
literally flows through town,

delivering high quality,
dirt-cheap, subsidized,

Northern California
rain water

to the fields of
Paramount Farming.

♪♪

♪♪

But it's not an
aberration in the system,

it's the whole model.

It's not designed or geared
to build communities

and to treat people well,

it's designed and
geared to make money.

♪♪

♪♪

It was near
the end of the year in 1995,

and I get a phone call.

It's a woman, I've
never met her before,

says she works for the
Department of Water Resources.

She says, "Are you
aware that this terrible

thing is happening?"

And so she was a few blocks
away, she walked right over.

And we found out about
what was going on.

♪♪

♪♪

♪♪

The woman from DWR felt
that the state

had betrayed a sacred
trust to the people.

She said,
"Look, this isn't right.

Shouldn't somebody
challenge this?"

The key violation that I
immediately saw

was the California Environmental
Quality CCT, CEQUA,

it requires environmental
analysis for anything if it

even "might" have an
impact on the environment.

Under California law,

the environmental impact
report should have been

written by the Department of
Water Resources since they

were the ones who for
the previous 35 years

had been running
the State Water Project.

But in fact, it was parceled
out to a parochial water

district on the coast
near Santa Barbara.

And as it later turned out,
done so because the water

contractors did not trust the
staff of the Department of

Water Resources to go
along with the shell game.

It took us four years because
there was what I'll call some

"big tobacco litigation
techniques" carried out

by the state

and by the contractors.

It doubled our
resolve to make sure that the

public would never,
ever be left in the dark

the way they were
when the Monterey Amendments

were originally executed
and implemented.

♪♪

♪♪

♪♪

Unfortunately
it's more of the same, right?

They checked the boxes and
they're moving on with their

decision they made 20 years ago.

But what do you expect?

Great, yeah, we'll see
you there, thanks, bye.

I love the underdog,
I love the fight.

Fighting corporate power,
fighting big money.

But water law,
especially in California,

is an absolute nightmare.

And only the sickest
and most depraved lawyer

would want to do this.
I really believe that.

Because it's like a priesthood.

This is like the, you know,

middle ages in
the Catholic church.

They have made this as
complicated as they possibly can

in order to keep people like me

from messing with
their golden goose.

♪♪

♪♪

♪♪

I watched the movie
"Chinatown" a long time ago.

And in "Chinatown," I mean.
There's the whole film noir plot

that goes along with the theft
of water up in the Owens Valley.

It's about destroying
the farming economy,

destroying the environment.

Just to fuel speculative
real estate growth down

in Los Angeles.

And I realize, it's the same
fight that's been going on

since the '20s.

What we're talking about
is -- people with power,

people with money, getting
what they want

in terms of public resources,

while people without power are
cut out of the conversation.

The folks who run this,
the big power brokers

and the state, they regard
the Monterey Amendments

as being this
crowning achievement --

this great, wonderful,
negotiated truce between

these conflicting interests.

But what it really is
is taking water for private use.

But one of the cardinal
sins committed by this gang,

was they tried to squeak through
this environmental review

by this, not even,
I wouldn't even say obscure,

like an unknown water agency.

And for a project this big,

it's inconceivable to
me that they did that.

I mean this is a massive
project.

It affected how much
water is in the delta,

how much water goes
to almond trees,

how much water goes
to subdivisions.

I mean, I guess the state
was hoping there was going

to be no sucker that
was going to file a lawsuit

to try to figure that out.

Because doing a fake sham
environmental review

is breaking the law.

So this is where
their weakness is.

This is the bread crumb.

♪♪

Monterey Plus is a lawsuit
that I've been litigating now

for the last past
five-plus years.

And the only thing stopping us
from being able to reverse the

transfer of the Kern Water Bank

and reverse
the Monterey Amendments

is just getting judges
to recognize their role.

Because the law was broken.

And we're not talking
about family farms.

We're talking about massive
scale industrial agriculture.

2 % of the economy in the
state, 80 % of the water.

Um, there's a reason for that.

Consolidation of
power, big money,

how do I convert
water into money?

♪♪

Water is a
very complicated issue --

The rights and the
deals that people make.

People call me up and they
just have this sense that,

somebody's getting rich off
of our water and it ain't us.

♪♪

In 2001, I started seeing sales
of excess water from this

agency or that agency, or
to this thing, you know,

environmental water
account, never heard of it.

♪♪

♪♪

In the early 2000s,
the government

came up with the
Environmental Water Account,

where they would pay water
districts not to divert water.

So, they put out
a call to various agencies --

"Do you have any excess to
sell?"

So, the Kern County Water
Agency said, "Sure we do.

How about if you pay us
$200 an acre foot for that."

The Kern County Water
Agency was one of the big

beneficiaries of this
basically scam to get paid

to sell water
back to the government

at three or four times the price
that they bought it for.

State taxpayers paid
nearly $200 per acre foot

for water from Kern County
that was purchased

for the environmental account,

the same water local water
agencies initially paid $86 for

from the state water project.

They were trying to say,

"well, pumping costs,
pumping costs."

And I'm like, well, there
wouldn't be any pumping costs!

None of it actually moved,

it just stayed
right where it was.

But they got the money.

According to the Times,
no one benefited more than

the companies owned and
controlled by Beverly Hills

billionaire Stewart Resnick,
who owns Paramount Farms.

Some $50 million, all told.

But there was nothing illegal
about what they did.

Because most of what
they do is legal

because they write the rules.

♪♪

This morning the
starkest water restrictions

in the history of the state
are being implemented.

REPORTER

consumption by 25 % or
face hefty fines,

but critics point out the
agricultural industry,

responsible for 80 % of
California's water consumption,

left mostly spared by
the new restrictions.

Governor, one
of the criticisms of this

executive order has been that
you did not make the same

demands on the
agricultural industry,

which certainly has
enormous political clout.

80 % of the water used by
agriculture, but accounts for

less than 2 % of the economy.
Is that true?

Uh, yeah,
you bet it's true.

But by the way, they're
not watering their lawn,

or taking long showers.

They're providing
most of the fruits

and vegetables of America.

Now, if you don't want
to produce any food,

and import it from
some other place, uh,

theoretically you
could do that.

But that would displace
hundreds of thousands of people,

and I don't think it's needed.

♪♪

We use most of our water for
agriculture, absolutely --

80 % around the world.

And if you're a farmer and
you have a free resource, water,

you're going to plant the
crop that's going to bring you

the most money, even if it's
incredibly water intensive,

it doesn't matter because
you're basically getting the

water for -- for free.

Scientists agree, it takes
about one gallon of water

to make just one almond.

And last year central
California almond growers

produced 1.8 billion
pounds of almonds.

That's more than three times
the amount of water used

in Los Angeles every year.

We've heard a lot
about almonds in California.

An almond is admittedly
a convenient boogeyman,

because it's a remarkably
inefficient use

of our scarce water supplies.

Why is San Joaquin farming
growing a bunch of stuff that

we don't need to grow?

We don't need to grow almonds.

They're all for export --

a vast majority of them are.
They're not essential.

They shouldn't be grown
here in California,

and yet they are because
these guys control the water,

and they're seeking the most
profit they possibly can

out of the resource
that they control.

♪♪

♪♪

We have a whole
society that is drenched in

unsustainable activity.

Because modern capitalism
operates on more, on growth,

on never-ending abundance.

But with water, we
don't manufacture it.

So it's gonna have to be
used, uh, carefully, wisely.

We are over-planted.

We're definitely over-planted.

And that includes
Stewart Resnick.

He's probably gone down to
40 % of what he had

in a water supply.

And that's why anywhere
where I have groundwater,

I pump groundwater.

Groundwater is a huge resource

for farmers in California.

♪♪

♪♪

In California, groundwater
rights are based on whether

you own the property.

If you own the property,
at least for now, uh,

you can drill a well and
pump as much as you want,

even if it means you're
drawing in water from beneath

your neighbor's property.

Remember right now,

groundwater is
still not regulated.

And so everybody is pumping as
much as the ground will yield.

♪♪

One of the consequences

of large amounts
of groundwater pumping

is we call it subsidence.

The ground literally sinks.

And the reason it sinks is
because the water that's in

the aquifer actually provides
support at the surface,

keeping the structure
of the aquifer intact.

And when you pull
the water out,

the actual rock
layer compresses.

And at the surface then what
you see is the ground sinking.

In many places
in the central valley,

we see that the ground
actually sinks

as much as a foot and a half
to two feet per year.

Think about the infrastructure
that's sitting on top of that.

Roads, bridges, homes,
they're all at risk.

And that's what's happening
in many parts of the world.

Over half of our major
aquifers are being depleted.

It's crazy, and no one
is talking about that.

♪♪

♪♪

♪♪

Oh, my God.

Look at how far
up that thing is.

Yeah, the
higher it is the less water

you have in the tank.

I mean, if it ever
goes up to half way.

We don't use any water at all.
No water.

You can usually tell how
much water is in here...

by running your hand up.

That's hot right there.

That means there's
no water in there.

It cools off right in here.

Somehow, we used a
lot of water today.

Anyway...

that's all I can do.

♪♪

♪♪

♪♪

My name is Carol Rowland,

and my husband and I,
we've been here since 1974.

We've gone through all the
droughts that have been around.

And we had never had trouble
with any of the other droughts

that we lived through.

In May of 2013, my husband
came up from our water tanks,

and he said, "We're in trouble."

It was obvious there
wasn't water in there,

and it seemed to be that it
was slowly seeping in.

This was at the start
of the dry season.

So, we thought,
well, let's just see.

Let's just try
and get through the summer

and see where we're at.

So we immediately cut back
on a lot of our water use.

We lost our lawns,
we lost our garden.

I took much shorter
baths, not every day.

We extended our period
for washing our clothes,

we wore them a lot longer.

And we were in a real bind.

We couldn't afford
to drill a new well.

I think, at the time it was
like, would have maybe been,

$30,000.

My husband and I, we're
retired. This is -- this is it.

We don't have stocks and bonds
and thousands of dollars,

you know, we're just people.

And then we thought, well,
maybe we'll just move.

But then how do you sell
your property

if your well's gone dry?

It's really upsetting
because these big companies,

they're not connected
to the land.

It's an investment for them.

They're looking at
water as a commodity.

And, you know, it's not a
commodity, it's a human right.

It should be a --

humans should have a human right
to safe water.

Paso Robles sits atop
a huge underground aquifer

residents thought would keep
wells flowing forever.

But growing grapes
and growing population

are stressing the aquifer.

They're having
to drill a lot more wells

to deeper depths in order
to get the water they need to

irrigate the crops.

- Your well has run dry?
- Yes, it's completely dry.

He says it started
when a big vineyard was

planted at the end of
his street a year ago.

When they started drilling,
we could see the changes.

The water pump
would just shut off.

We all draw water
from the same basin.

Regionally,
I mean, we're all one aquifer.

So those straws are all sucking
out of the same milkshake.

♪♪

I've been
watching the battle here

in Paso Robles develop,

but not having any
actual connection to it.

And out of the blue,
I got a phone call

from an activist down here,
who said, "Hey,

you know, we saw your
name on a lawsuit,

that's associated
with, you know,

this guy Stewart Resnick,
who's buying land out here

and we want to know
what's going on.

Can you tell us
what's happening?"

What I've been hearing is that
the water banking community

seems to have a very big
interest in Paso Robles.

And based on our experience
with the Kern Water Bank,

I mean, you gotta
understand,

1995, '96, '97...

Kern Water Bank is actively
being developed and privatized

with no one having any
idea that it was happening.

No one admitting it, no
one talking about it.

All closed doors.

And so we're not going to
get burned a second time.

Right turn
at the end of the road.

You have arrived
at your destination.

Welcome!

How's it going, Greg?

All right,
good to meet ya.

Good to meet you.

I'm looking forward
to this tour.

This is all new for me,
so I'm looking for you to

show me around and
show me what's up.

I can
probably do that.

All right.

My mother
came here in 1928.

She came across the
San Joaquin Valley

from Arkansas with her family.

And when they got to Shandon,

they thought that
they had gone to heaven.

Because everywhere you
looked it was a pipe coming

out of the ground with
water flowing out of it.

And she, you know, they had
just come up across the desert

and to see that was
just mind boggling.

So this is the first evidence
you'll see

of the California aqueduct.

This concrete thing sticking
out of the ground down here.

- All right.
- That's a vent.

And then it follows the
road and goes right up here.

So this
is all state water,

this is all the spur-line
property right over here.

This-this-this
property now is Harvard land.

Oh, they bought
the land on top of this thing?

Yeah,
Harvard offered millions

for this property.
- No kidding.

They
tried to buy everything.

But how do we
know that Harvard's not just

in it for the grapes?

Well, we don't.

But I don't see the money
to be made on wine itself

that will pay for the
infrastructure

they're putting in.
- Yeah.

They're
in it for the wine now,

and they're using the wine as
an excuse to drill all these

wells and do all this stuff.

And that's what we're running
into now all over the world,

is, ya know, big corporations
are buying the rights to

all these quote,
quote commodities.

And the fact remains
that legally,

what's irrigating those plants
and what is underground,

belongs to all the people.
- Yeah, yeah.

Because
everyone depends upon it.

Right.

And Mark Twain
hit it years and years ago.

You know, he said,
whiskey's for drinking

and water's for fightin'.
- Yeah.

And it's just,
I mean, there's just not,

not enough water left.
- Yeah.

♪♪

♪♪

♪♪

This is just
the easiest place to see the

quantity of water
that they need

to make all this thing
happen for them.

For a period of time, they'll
get all the water they want.

Sucking it out at that level,

it's going to deplete
sooner or later.

Right, wow,
it's as clear as day coming

out here looking at it.
- Yeah.

♪♪

What I find so
fascinating about Paso Robles

is this is not just about
the use of the water itself.

My theory is is that this
is being engineered as the

backbone of a securities
industry, based on water.

And what we see
happening right now,

we see Wall Street
investment groups going in,

we see hedge funds going in.

We see the big players,
the Resnicks,

Roll International,
Harvard.

We see them all going in
and acquiring mom and pop,

and family wineries, that
are strategically located

at specific spots,
over the aquifer.

Because they're in the
deepest part of the aquifer

so they get the longest straw,
they get the most water,

and then they can take
it out and they can sell

it on the marketplace.

Just like Enron was
doing with energy.

That's what the game is.

And I heard it said that one
of the major buyers of land

in the Paso area, when asked why
he bought one of the wineries,

said, "You know, we're not
in the wine industry.

The wine's the cover crop.

The water's the
valuable thing in Paso."

And people who live there
now I think are starting to

realize, they might have
a chance of stopping

it from happening.

I hope
people wake up in time,

because all over the
world this is happening.

We need to realize, you know,
we can't keep doing this

because there's consequences.

And this is just our
version of it in one little

corner of the world, so.

♪♪

Is water the new oil?

It is as important or
more important than oil.

And there is unbounded
enthusiasm from Wall Street

to be invested in finding the
solutions to the nation's

water problems, in fact
the world's water problems.

What
happens when you put the

free market on something?

It flows to the
highest bidder.

And and in a
market like that,

the poor never are
the highest bidder.

The little guy is never
the one who can buy the water.

But the biggest banks,
haven't figure out how to

directly invest
in water rights.

So they invested in farmland
all over the world.

Because water is heavy and if
you can just buy the land

and grow the food there and then
ship the food around the world,

you've solved the
problem in another way.

There are people who are
suspicious of that conduct,

wondering whether that
agricultural investment is

really a beard to trying
to take water for an urban use

at a later date.

The view is that a private
company cannot be a steward of

a public resource.

I believe this is false.

I went to Australia in 1997,
and Australia as a nation

had decided that they needed to

revamp their country's
water laws.

They wanted to put
together markets.

They wanted to be
more efficient.

After Australia copied the
Californian water system,

they took it further,

and they made what is
probably the freest market

for water rights
anywhere in the world.

I visited this stock market
room where there were bank of

computers and traders looking

at satellite images
on Google Maps

and doing these spot
trades of one rancher's water

to another very quickly,

just like you could imagine
Wall Street wanting to have

happen in California.

What a market
does is I can find somebody

who's using water for a less
economic use who is willing to

sell that water to me,
or that right to me,

so I can continue my business.

It worked.
On one level.

And what happened in
Australia's drought?

Water trading made it so that
those who could pay the most

were able to buy water
from the poor people

who were selling it.

And it was the little farmers,
the small towns, that suffered.

You could see "for sale"
signs at every house.

It was unbelievable.

Suicide rates were very high.

There were psychologists sent
out to treat what they called

"solastalgia," which is
missing a sense of place.

It's the shrinkage of
these -- these towns.

You have
the haves and have nots.

And that's the story of
the three little pigs.

The party who made the
investment in the brick house

wants the benefit of
living in the brick house.

And the house made of straw
which developed on water rights

and didn't pay for 'em,
um, has to take what they get.

And that is what we
call the misery index.

Who will bear the
risk of the shortage?

♪♪

♪♪

♪♪

From drought to floods,

our planet is changing.

And the forecast calls
for another hot year.

Governor Brown has
said the State Water System

won't be providing water
to farms this year.

Farmers in the
San Joaquin valley are worried.

There will be a lot of
guys that go broke this year.

And a lot of farm
workers who will be out of work.

♪♪

♪♪

♪♪

So we're
just south of Lost Hills,

and we're in the middle
of an almond orchard

owned by the Wonderful Company.

And they've decided that
they need to get rid of

some of their almond orchards.

And so they're
going to be pulling out

10,000 acres of almonds

and fallow the land because
as much water as they have,

they don't have enough

to sustain all the agriculture
they're doing.

♪♪

♪♪

Hey, sorry to bother you.
How's it going?

So what are you doing?

Are you stacking these all up
for the shredder?

Yes.

So this,
is this the biggest job

you've ever been on?

So this is the
first time you've taken out

live healthy, green trees.

Doesn't seem
to make sense, huh?

Yeah.

♪♪

♪♪

What's remarkable is, up
until just a few weeks ago,

the Resnicks, they were able to
essentially defy the drought.

Hook, crook, borrowing
from the water bank,

squeezing out all they could,

pushing this system
to its ultimate limits

and keeping this
agricultural machine unlike

any in the world going.

But there's
a transformation going on,

and it's starting small,

taking out 10,000 acres
of almonds.

Farmers in other parts of
the valley have gone to the

groundwater and sucked
up massive amounts...

...but they're not in a
sustainable situation.

They're farming probably triple
the land that they should.

Over-drafting the water.

And at some point big
agriculture has to ask itself,

how big can it get?

♪♪

♪♪

♪♪

♪♪

♪♪

♪♪

So let me start
with the fact that

SGMA really is just a big deal.

It's been argued that it's
the most important legislation

related to water in a century.

With the power to measure,
the power to regulate,

the power to tell you
to reduce pumping,

the power to put a
fee on your pump,

uh, these are scary things
to a lot of water users,

but our intention was
to change the dynamic.

♪♪

Landowners
knew that the game was up.

We can't keep on
the track we're on.

And it really did take I think
this four years of historic

drought to sort of
change the mentality.

It's great that we
have groundwater legislation

in California finally.

Um, there's a lot of good
I think in --

in -- in the statute.

But the great tragedy,

the absolute great tragedy
with SGMA,

is its incredibly
long lead in.

Uh, the fact that it doesn't
really get implemented for

20 years.

There
is certainly a fear that

we're closing the barn door
after the horses left the farm.

20 years is very
difficult to swallow.

We're gonna have
far worse problems.

And we're seeing, even
today during the drought,

we're seeing new
businesses come in.

Hedge funds,
insurance companies,

large agribusinesses,

buying land that's
never been irrigated,

planting new crops entirely
dependent on groundwater,

knowing that they
have a 20-year window to

get a return on investment.

Look, in some
places it's literally a race

to the bottom because

there are many farmers that are
trying to do things now, right,

before the management kicks in.

♪♪

♪♪

On more than
once in my career

I've been advised that you
simply are underestimating

the motivating power of greed.

And, uh, you know, we like
to think of, you know,

"Chinatown" as part of
the historic past,

that we've somehow grown up
and we look on our resources

more responsibly.

But the power of greed and
the fact that control of water

represents political control
and financial control

almost require their
proponents to find a way to

fudge the truth or
conceal the truth.

♪♪

♪♪

♪♪

♪♪

♪♪

A week ago, a
source told me about a secret

transfer of water
going on out here.

Somebody moving water miles
and miles across county lines.

The pipeline apparently extends
underneath the county road

and moves from Kings County
to Kern County,

from the Dudley Ridge
irrigation district

to the land of Resnick.

And, in a sense, this is the
further privatization of water.

And it's controversial because
California is gonna start

regulating groundwater.

So, not sure it's legal yet,
but I gotta find it

to make sure that it's there.

Son of a,

that's it right there.

♪♪

♪♪

This is classic, man.

This is called "Lake Pipe,"
from "Rain for Rent."

Gotta love the irony.

I don't hear anything
in there right now,

but this is here, extending
all the way from Dudley Ridge

through Resnick pomegranates.

You gotta give 'em credit.

How do you prop up a 150,000,
200,000 acres of farmland?

You gotta find inventive
ways to move the rain.

This is a method
to pump more groundwater

and move it across
county lines into here.

And it's following the meander
of the California Aqueduct.

My source had told me this
was moving water this winter

from Mr. Vidovich's farm
to Mr. Resnick's farms.

And I think this is all set
up to continue to move water

through this next year
and probably beyond.

So he's selling the water.

And it's desperate.
This is a desperate measure.

It's quite something.

♪♪

Vidovich has a lot of
farmland here in the valley.

He's purchased a lot,
but he really isn't a farmer.

He's a water broker.
A water developer.

And he's buying all these
parcels to really pump that

water out of the ground,

which has a real effect

on the farmers in each
of those areas.

♪♪

Oh, that's a lot of water.

Yeah, right above it.

Okay!

That's how these trees
are staying alive.

Right there.

Just the water coming
out of that pipe.

Is it greed?

Yeah, it's greed.

All in the name of moving
that water for agriculture.

Where it's coming from it's
probably 15, 20 miles further.

Now we've gotta find out if
it's just crazily audacious

or if it's illegal.

♪♪

I am moving
well water to Dudley Ridge.

Now, I know one of the
recipients of that water

is Paramount.

Uh, where it goes from there?

I don't know.

If you mix water, you
can't say that mixed water

can't go somewhere else.

But that is a temporary pipe,
and I believe Resnick put that

out of desperation to keep
some of the trees alive.

These are doing pretty good.

It's painful to watch
somebody who's worked hard

and built a very great empire
decrease it.

He was somebody that was
riding on the top,

but now it's --
it's tough for him.

He depended on the state
system having surpluses.

He invested in the
Kern Water Bank

so he could
put the surpluses in there.

But the real problem now is
there's no water to put in it.

That's a tough deal.

♪♪

♪♪

My business approach right
now is to...

acquire as much water as I can

to be diversified in water.

And, you know, at some point,
in time that water is in risk

of going to an urban area

because the urban places

would pay a hell
of a lot of money for it.

So if I can't make that money
on that water farming,

I will sell it eventually
to an urban area.

And that's a right I have.

If they pass a law
saying I can't sell it,

then I can't sell it.

But that's,
that's the way it is.

That's business.

♪♪

♪♪

♪♪

♪♪

About a month ago,
the draft environmental review

for the Kern Water Bank
came out.

That's the environmental
review that we fought

so hard to get with our lawsuit.

And we're currently in
the 45-day comment period.

And at the end of that
process, DWR will be supposedly

reviewing the comments

and considering the
testimony of people.

Thank you for
having the hearing.

I appreciate, the folks
here who are here to witness

democracy in action.

We believe that the
Kern Water Bank was the...

They are trying desperately
to dodge responsibility for the,

I mean, really significant
environmental impacts.

But they can't avoid
the facts --

that the transfer
of the Kern Water Bank

is related to the obscene growth
of nut farms and almonds,

pistachios in California.

We don't know how DWR is going
to react to this document,

but we're going to
be fighting this thing.

♪♪

♪♪

♪♪

♪♪

♪♪

♪♪

♪♪

♪♪

♪♪

We are
getting running water today.

Yeah, we are finally
getting running water today.

♪♪

♪♪

This is a
tank one indicator.

It'll let you know how
much water is in your tank.

- Okay.
- And so if a pipe

or anything busted, you notice
any water or something,

you shut your main line right
here, shut these guys off.

Okay,
how long till we can flush?

You can go check right now.

Go check it right now?

Let's do it!

I'm surprised
the guts still work.

It's been so long
since they worked.

As you can tell, the lines
are so clogged up that

I have two mists
coming out of here.

I gotta get a whole
new shower head.

Yeah, we have water!

I'm gonna wash my hands,
how about that?

This is amazing.

It really is, and I got lucky,

but you got a lot of people here
that don't have water still,

so the only thing I could
say to everybody out there --

Don't take it for granted.

It will be gone

and won't be here forever.

You're going to be next,
just watch,

you're going to be next.

♪♪

♪♪

♪♪

♪♪

♪♪

♪ In the beginning ♪

♪ You really loved me, oh ♪

♪ I was too blind ♪

♪ I could not see, now ♪

♪ But now that you left me ♪

♪ Oh, how I cried,
I keep crying ♪

♪ You don't
miss your water... ♪

♪ 'Till your well runs dry ♪

♪ I kept you crying ♪

♪ Sad and blue, oh, my, oh ♪

-- Captions by VITAC --