Beverly Hills Billionaires Stewart and Lynda Resnick control an agricultural empire in the Central Valley of California which Forbes<\/a> values at $4.2BN.<\/strong>\u00a0 According to an article recently published by Mother Jones<\/a>, the Beverly Hills based couple bought their first acres of ag land in 1978 as an inflation hedge.\u00a0 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.<\/strong>\u00a0 You’re all probably familiar with some of their brands:<\/p>\n <\/p>\n But 130,000 acres of permanent crops requires a lot of water…about 120 billion gallons a year, in fact.\u00a0 At that level of consumption, Mother Jones<\/a> points out that the Resnicks consume more water than all the homes in Los Angeles combined.<\/strong><\/p>\n So in a state plagued by constant drought one might ask how the Resnicks built such a “thirsty” empire?\u00a0 Well, at lease according to Mother Jones, they got a lot of help from taxpayers.<\/strong><\/p>\n <\/p>\n 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).<\/strong>\u00a0 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.\u00a0 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.<\/p>\n As you might suspect, California taxpayers have always been a little suspect of the massive wealth transfer inherent in the Kern Water Bank deal.<\/strong>\u00a0 As pointed out by the Los Angeles Times<\/a>, “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,<\/strong>” Adam Keats of the Tucson-based Center for Biological Diversity, the lead attorney on the lawsuit, told me recently.<\/p>\n <\/p>\n 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.<\/p><\/blockquote>\n 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.\u00a0<\/strong> According to the Los Angeles Times<\/a>, the Resnicks gave up “junior water rights”<\/strong> 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.”<\/strong>\u00a0 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.<\/p>\n To add insult to injury, Mother Jones points out that the story doesn’t end there.\u00a0 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.\u00a0 According to an analysis by the Contra Costa Times<\/a>, 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.\u00a0 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.\u00a0 Genius. <\/strong><\/p>\n 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:<\/p>\n “We have no influence politically\u2014I swear to you.\u00a0 Nobody has political influence in this. Nor would we use it.<\/strong>“<\/p><\/blockquote>\n 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.\u00a0 <\/strong>Of course we’re talking about the “Delta Tunnels”<\/strong> 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<\/a>“).<\/p>\n 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.”<\/strong>\u00a0 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<\/strong> and all the environmental issues that come along with it.\u00a0 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.<\/strong><\/p>\n 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.<\/strong>\u00a0 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?\u00a0 Well you put together coalitions like the “Californians for Water Security<\/a>” and you poll 100s of “focus groups” to figure which buzz words work best to sway the hearts and minds of taxpayers<\/strong>.\u00a0 Turns out, buzz words like “water security”<\/strong> and “fragile water infrastructure<\/strong>” combined with fear tactics incorporating risks from earthquakes<\/strong> is way more convincing to taxpayers than “massive taxpayer-funded wealth redistribution to Beverly Hills Billionaire farmers<\/strong>“…that just doesn’t have as good a ring to it.<\/p>\n![\"Wonderful\"](\"http:\/\/www.zerohedge.com\/sites\/default\/files\/images\/user230519\/imageroot\/2016\/08\/18\/Wonderful_0.png\")
<\/p>\n![\"Resnick](\"http:\/\/www.zerohedge.com\/sites\/default\/files\/images\/user230519\/imageroot\/2016\/08\/18\/Resnick%20Water%20Use_0.png\")
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\nthe 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.<\/strong>”<\/p>\n\n
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