In the previous week’s article, Rusty Jordan wrote about the pressure on the Imperial Irrigation District to make the QSA possible. Jordan said the IID gave up water storage in Lake Mead of intentionally created surplus for later withdrawal. In addition, Metropolitan Water District extended their 1990 conservation agreement with the IID for 55 years. According to Jordan, the market value of the 110,000 feet above conservation would have grossed the IID $40,000,000.
Allen Matkins was the major Imperial Irrigation District lawyer during the Quantitative Settlement Agreement (QSA). John Carter was IID counsel. They negotiated for IID with Metropolitan Water District (MWD), Coachella, San Diego, and the State of California. Matkins was the largest real estate law practice in Southern California. His firm had clients in San Diego and Coachella who literally made billions of dollars in increased land values and profits by getting water to their lands. To me, this is the incentive to make the above poor deals at a great cost to the Valley.
In each case above, it is likely that had IID litigated the obstruction of MWD and Coachella, the concessions given up by IID would not have been lost. The pressure to complete the QSA was justified in order to get the Bureau of Interior’s Interim Service Guidelines. The Department of Interior was going to take a few years to bring California down to the allocated 4.4 million acre/feet (m a/f) allowed under the Law of the River. MWD had been taking 1.3 m a/f, but upon signing the QSA they immediately reduced their take to 550,000 a/f. This indicates to me the feds could have reduced California’s take to 4.4 without the IID entering into the QSA. The need to make the deal was a red herring, pushed to bamboozle the IID out of its water. The IID lawyers went along with their firms, and the firm’s clients got rich.
To finalize the deal, the State of California agreed to be the financial back stop of the potential environmental disaster to the Salton Sea.
Local farmers formed the ‘Imperial Group’ and fought the QSA. They viewed the contract as corrupt and a bad deal. At the trial, Judge Candee ruled the agreement did not bind California to pay for the Salton Sea. With a multi-billion-dollar price tag, there was no one on the hook for the Sea. While on appeal, the IID changed its position knowing they would have no protection from the State for the Salton Sea, despite the State publicly saying otherwise.
Judge Robie, of the appellate court, ruled for the IID. Judge Robie wrote a ruling in 1986 in Decision 1600 that created the reason for IID to make the MWD conservation transfer in 1989 and set in motion the drive to force IID to sign the QSA. This was a clear conflict as the case did not have fresh eyes, but there is no provision for calling conflict in California’s Appeals Court system.
One must wonder again why the lawyers of Matkin’s firm had the District change its claim of the State’s protection for the Salton Sea. They were clearly conflicted with its clients’ interest in San Diego and Coachella. Whether the IID Board fully understood that the change of position let the State out of the Salton Sea liability is hard to determine. My guess is the State Democrats said, “Trust me. We see very little action on air quality from the State and after 17 years there is still no real plan to stop emissions from the Sea.”
In reading Decision 1600, both the IID and Coachella Valley Water District claimed that in 1934 part of the settlement gave CVWD a first option on conserved water from IID. I have not yet found the part of that agreement that states this. The grant of CVWD for IID to generate and distribute electricity from falling water for CVWD's portion of the water going through the All-American Canal has been interpreted by many to mean that CVWD licensed IID to distribute electricity in Riverside County.
In a 1992 letter to IID, Washington D.C. attorneys pointed out that CVWD in 1934 as a Water District was not enabled by the State to generate or distribute electricity. IID acquired the right to generate electricity from falling water, but IID had acquired its right to distribute electricity in Riverside County, not from CVWD, but from the purchase of electric companies in 1919. The expiring of the 100-year settlement agreement in 2034 will not mean that IID must give up its electrical distribution in Riverside. These two things if true, mean a rethinking of IID's actions in the QSA is needed. I sat in many meetings and never heard this from IID.
Decision 1600 found that IID could conserve 438,000 a/f but couldn't afford to. By the MWD, All-American Canal, and QSA deals, IID agreed to conserve 110,000 a/f; MWD would conserve 87,000 a/f; the All-American, 100,000 a/f; CVWD, 200,000; and San Diego, 497,000 a/f. Most at cost.