The Modesto Bee
March 20, 2016
By: the Editorial Board
For years now, Gov. Jerry Brown has been telling us that he will save the Sacramento-San Joaquin Delta – the greatest fresh-water estuary on this side of the continent – by taking water out of it.
Environmental scientists have hustled out to make his case. Wildlife experts have joined the “Oyez” chorus. And state water managers insist it is our only option.
Among the biggest and most enthusiastic backers is the largest irrigation district in the world, Westlands Water District, and the largest urban water supplier in the world, Metropolitan Water District. Met has even bought four islands to facilitate the tunnels. They keep a public relations firms on call to answer any negativity (like this).
Yet, to many of us poor, unlearned Valley dwellers it just doesn’t make sense. How can you save a water system by diverting major portions of its water before it ever gets to the Delta?
Thank goodness Westlands is here to clear up any confusion. We just need to apply a “little Enron accounting,” in the words of an unnamed Westlands employee quoted in a recent Securities and Exchange Commission fraud charge. That’s right, fraud charge; we’ll get back to that in a moment.
First, recall Enron. That was the Texas energy company that convinced California’s gullible legislators to deregulate electricity in 1996. Within a few months, the company began “gaming” the market by artificially limiting supply during heat waves. The company made hundreds of millions in dishonest profits as prices skyrocketed and blackouts rolled across California.
One trader sang “Burn, baby burn” as prices spiked. Another spoke admiringly of a co-worker, saying “He steals money from California to the tune of about a million.” And who can forget the Enron employee who laughed at the thought that “Grandma Millie” would want her “(expletive) money back.”
Those employees could mock our misery because they thought no one would hold them accountable for their “Enron accounting.” But that wasn’t true. Enron folded and some of the crooks at the top went to jail.
Westlands didn’t do anything comparable to the Enron scandal, but the nation’s largest water district did get caught lying to investors. Using what an unnamed Westlands executive called “a little Enron accounting,” the district maximized returns for water customers while misleading those who bought its bonds in 2012.
The Securities and Exchange Commission fined Westlands $125,000 to settle the charges last week. It also fined Westlands general manager Thomas Birmingham $50,000.
“Issuers must be truthful with investors,” said Andrew J. Ceresney, Director of the SEC Enforcement Division.
Because Westlands wasn’t truthful, the fines were appropriate if somewhat low (they were the highest ever for a public agency).
And that brings us back to the tunnels. How can we trust anything untruthful Westlands says? How do we keep faith in Westlands’ partners – Metropolitan and Gov. Jerry Brown?
Read more here.