CA: Water Firm Awash in Political Influence ($120K worth of Susan Kennedy)

Let us today hoist a glass — preferably of cool, clean Colorado River water — to Keith Brackpool, a walking illustration of how the generous bestowal of campaign donations and other largess can keep a man cozy with California politicians, even in the face of evidence that what he's selling may not be worth buying.

Brackpool is the chairman and chief executive of Cadiz Inc. For years, Cadiz tried to entice the Metropolitan Water District into a $150-million scheme to store surplus water from the Colorado in the Mojave Desert. The skeptical MWD, which serves most of Southern California, finally nixed the project in 2002.

The latest moth caught circling his flame is Susan Kennedy, Gov. Schwarzenegger's chief of staff. As my colleague Robert Salladay reported last week, Kennedy, a Democrat, received $120,000 from Cadiz as a "consultant" in 2005 while serving on the state Public Utilities Commission.

First, the desert water scheme. When proposed by Cadiz in 1997, it had a charming 25-words-or-less simplicity: The MWD would store surplus water under Cadiz's 35,000 acres in wet years and retrieve it during droughts, paying Cadiz a fee at both ends.

Brackpool did, however, collect Democratic politicians like a navel collects lint. Tony Coelho, a former California congressman and chairman of the party's congressional campaign committee, served on the Cadiz board from 1999 to 2003. Former Arizona governor and Interior Secretary Bruce Babbitt joined to work on international deals. (Nothing came of his efforts.) Villaraigosa signed on as a consultant for two years before becoming mayor;

The chief beneficiary of the Cadiz dole was Gray Davis, whose 1998 and 2002 gubernatorial campaigns collected $235,000 in donations. ...

Look for Kennedy to spring into action soon.

The feds are soon to approve a Colorado River water sharing agreement between western states that will allow California to tap water the agreement will allow California to store in Lake Mead. Nobody has outlined how California may use this water. Cadiz has a plan. Their plan. Store the water underground in one of their ventures.

One of the public-private partnerships that the gang is now advocating as an economical way to spend the new infrastructure bond money. California taxpayers will pay for the development of Cadiz's project by being required to purchase the water from Cadiz when the project is completed and operating. Kennedy collects her commissions from Cadiz. Brackpool's syndicate gets rich off the taxpayers and reciprocates to the gang through campaign support. San Diego area legislators, with the help of the gang, will idle farmland in the San Joaquin and Sacramento Valleys to meet the requirements of the federal compact and everyone is happy.

A win-win for everyone but the taxpayer who was gullible enough to believe the Austrian when he promised the scheme wasn't a boldly fascist move.

Then there was Brackpool himself, a smooth-talking Brit with a curious past. In 1983 he had pleaded guilty to criminal charges in London, including dealing in securities without a license, and paid a $3,200 fine. He hadn't disclosed this to American regulators, he said, because he regarded the charges as equivalent to misdemeanors. In 1991, he had lost his job as an executive for a highflying British food company after some financial dealings with a direct competitor came to light. He told me in 2002 that the transaction was legitimate but had acquired a bad odor when the competitor ended up at the center of a sensational business scandal.

Ms. Kennedy sure surrounds herself with scoundrels.

Lord Brackpool has a long history of bankrupting companies while being paid quite handsomely. His bio as of 1995: Cadiz Inc. SEC Filing (DEF-14A)

Keith Brackpool is a founder of the Company, and has served as a member of the Company's Board of Directors since September 1986, and served as Chairman of the Board from 1989 through December 1991. From October 1989 until May 1991, Mr. Brackpool was employed as the President of Albert Fisher, Inc., a wholly-owned subsidiary of The Albert Fisher Group PLC, a U.K. corporation and was a director of The Albert Fisher Group PLC until May 31, 1991, when Mr. Brackpool resigned these positions in order to resolve certain personal financial positions unrelated to Albert Fisher or the Company. In this regard, Mr. Brackpool has served as an officer and principal of the general partner of 1334 Partners, Ltd., a California limited partnership which holds commercial real estate in Southern California and which underwent a bankruptcy reorganization under Chapter 11 in 1991 in order to restructure the payment terms of acquisition debt with the partnership's primary secured lender. Such restructuring was successfully completed, and the partnership emerged from Chapter 11 in December 1992. Following Mr. Brackpool's resignation from Albert Fisher, he was reappointed in December 1991 as Chief Executive Officer of the Company. In addition, from 1986 until March 1991, Mr. Brackpool was an executive officer and/or director of Corporate Data Sciences, Inc. (CDS), which was then registered under Section 12(g) of the Securities Exchange Act of 1934, and from 1987 until April 1991 Mr. Brackpool was a director of Consolidated Packaging Corporation (CPC), a publicly traded majority owned subsidiary of CDS. In April 1991, a bankruptcy petition was filed against CPC in the U.S. Bankruptcy Court, which was subsequently converted into a Chapter 11 filing by CPC.

And, from the Los Angeles Business Journal, August 2, 2004

IT'S been nearly two years since the Metropolitan Water District of Southern California rejected a controversial $1 billion plan that would have given Cadiz Inc., a Los Angeles water and land company, vast control over water assets in California--and a place in history.
Alas, history was not on the company's side.
Since then, Cadiz has struggled to get back on track with a 1-for-25 reverse stock split in December and a financial restructuring of its debt.
(snip)
In December, with its stock trading at just 20 cents a share, Cadiz announced a 1-for-25 reverse stock split and a major refinancing with its key lender, ING Capital LLC. The move helped stabilize its shaky financial condition.
Cadiz had borrowed millions based on revenues it expected to receive from the MWD. When the plan was scrapped, projected revenues of $10 million to $20 million per year vanished.
Cadiz restructured its $35 million debt and divested its bankrupt agriculture subsidiary, SunWorld International Inc. Under an agreement with the U.S. Bankruptcy Court in Riverside, Cadiz turned over its equity stake in SunWorld to a trust controlled by SunWorld's bondholders.

Financial Times. London (UK): Nov 2, 1999. pg. 06

Californian politics took on an unusually international flavour last week as governor Gray Davis wrapped up his first overseas trade mission with a roundelay in the Middle East.

Having passed barely detected through portions of Europe, he was to cut a more imposing figure in Israel and Egypt as he became the first Californian governor to be snapped holding hands with Yassir Arafat, Palestinian leader.

Although he arrived forewarned with reminders from Washington to steer clear of any discussions which could smack of interference in the region's peace negotiations, Davis had some quasi-diplomatic duties to perform as a change from selling California and himself.

The state department had actively encouraged him to meet Arafat to stress the economic advantages of peace. Accordingly, in wretched Gaza City, focal community of the cramped Gaza strip, he dutifully regaled the Palestinian Authority president with promises of high-tech help with sewage and irrigation systems.

Next day he became the first governor of the state to pow-wow with an Egyptian president when he sat down with Hosni Mubarak to discuss their common interests in deserts and water.

Cadiz Inc, one of California's biggest farm groups, is heavily involved in Egypt's ambitious Tuksha irrigation and desert reclamation project, so it was only fitting that Keith Brackpool, the company's president should share the audience and the limelight with Davis.

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