water water everywhere..and not a drop to drink..unless you pay, and pay..and pay

[Guest guest]

Stop the Corporate Takeover of our Water

Jim Hightower, Hightower Lowdown

July 24, 2002

 

They hang the man and flog the woman

That steal the goose from off the common,

But let the greater villain loose

That steals the common from the goose.

 

 

The law demands that we atone

When we take things we do not own,

But leaves the lords and ladies fine

Who take things that are yours and mine.

--English Nursery Rhyme c. 1764

 

 

The greater villains are loose in our world today, literally thirsting to take

things that are yours and mine -- and this time they might make off with the

greatest plunder of all: our water.

 

 

Yes, the ideologues and greedheads who brought us the fairy tale of energy

deregulation and the Ponzi scheme of Enron are aggressively pushing for

deregulation and privatization of the world's water supplies and systems. They

are determined to turn this essential public resource into another commodity for

traders and speculators -- a private plaything for personal profiteering.

 

 

In just the past few years, trans-national conglomerates already have privatized

all or parts of the water systems of Atlanta, Berlin, Buenos Aires, Bolivia,

Casablanca, Charleston, Chattanooga, Ghana, Houston, Jacksonville, Jersey City,

Lexington, New Orleans, Peoria, Ontario, San Francisco, and many other places.

 

 

It amounts to a corporate " water rush. " In our country, private control has

rapidly become global control: The largest U.S. firm, American Water Works, was

recently swallowed up by RWE of Germany (which also got Azurix in Enron's fire

sale); Suez Lyonnaise of France took our second biggest company, United Water

Resources; and Vivendi of France grabbed U.S. Filter.

 

 

Water gets hot

 

 

Two years ago, Fortune magazine exulted that water " will be to the 21st century

what oil was to the 20th. " And the magazine was thrilled that " the liquid

everybody needs . . . is going private, creating one of the world's great

business opportunities. " Four factors are powering this rush to privatization:

scarcity, greed, ideology, and political weaseliness.

 

 

The World Bank predicts that two-thirds of the world's population will run short

of adequate water in the next 20 years. You might think that the sheer scariness

of this scarcity would prompt policy makers to focus on such goals as protecting

the purity of the aqua we have, pushing rational conservation, and promoting the

long-term public interest in this irreplaceable resource.

 

 

Whoa there, Pollyanna! You forget greed. Speculators look at the looming

scarcity of a substance that no one can do without and think: " Wow, if I could

control that, I could make a killing. " Suddenly, the unsexy task of piping in

water and piping out sewage became a hot prospect.

 

 

This coincided nicely with the corporate right wing's ideological zealotry for

the mumbo-jumbo of deregulation and privatization. Not only can conglomerates do

everything better than a democratic government can, goes their religious mantra,

but they firmly believe that today's global corporations are magical kingdoms

run by new-economy wunderkinds.

 

 

In Fortune's paean to the corporatization of water, Suez Lyonnaise was lionized

as being " more than a water company. It's a fresh invention. " This is the same

gibberish that, until only a year ago, was being heaped on Enron, Global

Crossing, World Com, and other hucksters whose only invention was a new way to

package the age-old shell game.

 

 

There's nothing fresh or inventive about global corporate greed thrusting its

way throughout both the industrial and developing worlds to establish empire.

Suez Lyonnaise knows a lot about that. It is the descendant of the corporation

that built the Suez Canal in 1858 under the patronage of Emperor Napoleon III.

Suez marches on, expanding its multibillion-dollar water empire by 10 percent a

year.

 

 

As for picky concerns that cities, states, and entire nations ought not

surrender control of their water supply to the whims of corporate empire

builders, the CEO of Suez retorts: " We must rise above national egotism! "

 

 

This is where the political weasels come in. From the mid-seventies to the

present, just about every politician from mayoral to presidential candidates of

both major parties have caved in to the privatization ideologues, campaigning

and governing as tight-fisted, no-more-taxes, business-minded conservatives.

 

 

So local pols have frittered away public funds on building flashy sports palaces

for privately owned teams, and national pols have cooked up trillion-dollar tax

giveaways to the richest people in the country -- and all of the pols have let

America's crucial water systems fall apart. To fix decades-old leaking pipes,

sputtering pumps, and the other faltering parts of the water infrastructure will

require an estimated $11 billion a year more than governments now are spending.

 

 

Faced with this unpleasantness, weaseling politicians have simply escalated

their weaseling. Rather than being straight with people by saying, " Look, we've

got to get our public house in order, " the pols at all levels have thrown open

the doors of our house to any corporate flimflammer with a medicine wagon, a

talking pony, and a bottle of that old magic elixir: Privatization!

 

 

Promises, promises

 

 

As Bob Dylan sang, " The pump don't work 'cause the vandals took the handle. " In

case after case where corporate water vandals have taken the handle to the

public pump, folks have found themselves left with skyrocketing bills, foul

water, lousy service, non-functioning fire hydrants -- and no control over the

culprits.

 

 

Anyone thinking that a dose of good old corporate efficiency is just what their

cranky, antiquated utility needs should check out the excellent reports that

Public Citizen has written on the broken promises of water privatization.

 

 

Take the case of United Water Resources, which had humble origins as the

Hackensack Water Co. In the mid-nineties, however, the company got ambition,

dressing up in the sleeker corporate name of UWR Inc. and going on an

expansionist binge that quickly made it the second-largest corporate water

fiefdom in the U.S., before UWR itself was swallowed by Suez Lyonnaise last

year.

 

 

The company and its executives have hauled in millions in profits and personal

gains from its privatization adventures, but its customers have been soaked. In

Atlanta, UWR promised dramatic cost savings, which it proceeded to get by

whacking the city's water staff from 731 employees to only 327. Among the

" savings " this produced:

 

 

-- Debris and rust started turning up in residents' water. At first, UWR honchos

denied there was a problem. But, hey -- the tap water was brown! Even then, it

was four months before the company did anything.

 

 

-- Fire hydrants started coming up dry or inoperative. Again, executives tried

to deny that there was a problem. Then, when it was pointed out that this was

life-and-death stuff, UWR tried to shift the blame (and the cost), saying that

after the company repaired or replaced a hydrant, it was the city's

responsibility to test it to see if it actually worked.

 

 

-- Complaints piled up about impossibly slow service on everything from

repairing leaks to installing water meters.

 

 

Likewise, Jersey City has been hosed by UWR. The company is paid millions in

annual fees to bring its corporate efficiency to this municipal water system,

but instead it has produced a chorus of complaints about billing errors. It

turns out that, as in Atlanta, UWR's " efficiency " is based on cutting staff --

in this case, it subcontracts meter reading to a low-wage firm. No problem,

though, for when the complaints about misread and broken meters roll in, UWR

service representatives have simply been directing irate citizens to municipal

employees.

 

 

What a deal -- UWR privatizes the water revenue, but socializes the problems!

Worse, the company is not required by its contract to open its books or justify

its fees. It simply sends a bill, which is not subject to public review.

 

 

In Jacksonville, Florida, UWR's ownership and operation of the water system was

so outlandish that citizens have taken it back in a $219 million buyout. In its

brief, five-year stewardship, the corporation's chief efficiency was in getting

rate increases from the Florida utility commission. Monthly bills shot up by an

average of $9.44 in 1997; then the company went back to the trough a year later

for another 12.5% rate hike. By instituting public control, residents of the

Jacksonville area are expected to enjoy an average cut of 25 percent in their

water and sewer bills.

 

 

Deprivatization

 

 

While most media have gushed about the boundless promise of privatization, they

have been practically mute about one of the most sweeping developments taking

place in water management: deprivatization. As in Jacksonville, officials in

many cities that have sipped the tainted waters of corporate control have been

struggling mightily to regain public control. But it's not easy, for

monopolization of a water market turns out to be a cash cow for corporations,

and once they get it, they cling to it.

 

 

-- Chattanooga, Tennessee. American Water Works (now RWE) has owned

Chattanooga's water for a long time, but Mayor Jim Kinsley led a 1998 move to

buy the system, noting that public ownership could cut rates by 25 percent and

save $100 million. There was also the matter of AWW gouging the city on

fire-hydrant fees and a secret effort by corporate executives to export

Chattanooga water to Atlanta. AWW refused to negotiate a sale, instead rushing

to court, launching a massive multimillion-dollar PR campaign, and resorting to

dirty tricks like hiring an agency to snoop on the mayor. Outspent, the city

finally settled, allowing AWW to keep its ownership. But the corporation did

agree to cut fire-hydrant fees from $300 a year per meter to $50, and to submit

any water-exporting scheme to voters for approval.

 

 

-- Huber Heights, Ohio. In 1993, a Florida-based company decided to sell its

water holdings, including the water system it owned in this suburb of Dayton.

The city tried to buy it, but couldn't match the deep pockets of American Water

Works. Local folks feared the worst -- and got it. As soon as AWW took control,

it raised rates by a third. It also contracted to deliver two million gallons a

day of Huber Heights' water to an industrial park outside the city. City

officials initiated eminent-domain proceedings to buy back the system.

 

 

Once again, AWW ran to court and launched a massive PR campaign, but in a

referendum voters overwhelmingly supported the effort to reclaim their water.

Even after the 1995 buyback, however, AWW has kept the city tied up in legal

knots, requiring that Huber Heights still keep piping its water to the

industrial park.

 

 

-- Pekin, Illinois. When Citizens For Locally Owned Water (FLOW) began a buyout

campaign here two years ago, our friends at American Water Works launched their

usual PR blitz, spending a million bucks to assert that city officials don't

have the expertise to run a water system. This was a bit ironic, since AWW had

run the system into the ground, failing to keep up infrastructure, failing to

maintain fire hydrants in working order, and providing slow service -- all while

averaging rate hikes of more than 10 percent a year.

 

 

However, AWW's big-money PR hustle won in a narrow victory in a non-binding

referendum, so the buyback is on hold. But FLOW is not going away, and it points

out that at AWW's current rate of infrastructure upgrades, it'll take the

company 268 years to replace Pekin's deteriorating water mains.

 

 

Water privatization doesn't work because its fundamental promises are lies. Far

from bringing " market forces " to bear, these corporations are handed a monopoly

and face no competition. Wielding monopoly power, they slash staff, lower wages,

compromise service, cut corners on quality, skimp on long-term investment, raise

rates -- and call this " efficiency. " Any savings derived from these tactics are

routed into extravagant executive-pay packages, luxurious corporate

headquarters, bureaucracy for the parent conglomerate, lavish advertising and

lobbying budgets, and profits. All of this is done behind closed doors, for

these private empires are not subject to the open-access and disclosure rules of

public agencies. Then, when the peasants rebel, the faraway CEO dispatches an

army of PR flacks and lawyers, overwhelming the financial resources available to

local citizens and governments.

 

 

Buying in bulk

 

 

Not content to control our water systems, corporate powers are now selling the

water itself. Through court actions, lobbying, trade deals, and bribery

(campaign contributions), the law is being perverted to turn public bodies of

water into a tradable commodity, like pork bellies. Speculators and corporate

hustlers are claiming a right to buy, sell, extract, and move massive amounts of

fresh water:

 

 

-- Texas oilman and corporate raider T. Boone Pickens has just forced a state

water district to authorize him to pump and sell up to 65 billion gallons of

water a year from the Ogallala aquifer, sending it by pipeline to San Antonio,

Dallas, or other water-short cities. The Ogallala, which underlies the Texas

Panhandle and is the water source for the whole area, already is severely

depleted and can't be replenished, but Pickens plans to poke holes into it, mine

the water, and reap colossal profits by selling it to the highest bidder.

 

 

-- Keith Brackpool (I don't make up these names), a California corporate farmer

and fat-cat contributor to Governor Gray Davis, also is trying to become a water

baron. With the governor's backing, his Cadiz Inc. proposes to suck water out of

the aquifer underlying federal land in the ecologically fragile Mojave Desert,

then sell some 20 billion gallons of this public groundwater each year to

Southern California cities, reaping up to a billion bucks for Cadiz.

 

 

-- Ric Davidge, an Alaskan water-preneur who previously was an aide to the

infamous James Watt, has a deal for San Diego, which imports almost 100 percent

of its water. Davidge wants to siphon some 65 billion gallons of fresh water a

year out of two Northern California rivers, pipe it into inflatable bags bigger

than three football fields, then tow these " bladders " by tugboat to thirsty San

Diego. He says this will save fresh water that otherwise would " disappear " into

the Pacific Ocean. (Hello, Ric -- river water running into the sea is an

essential part of the ecological cycle.) Davidge admits that there are many

questions he can't answer, but, he says, " We need new ideas. " New, yes. Loopy,

no.

 

 

I suppose it will not surprise you to learn that this global corporate rush for

the " blue gold " of our public water resources is being ably aided and abetted by

our own government.

 

 

Deep inside NAFTA, for example, is tucked a little nasty called Chapter 11,

which water corporations already are using to force local governments to break

the dam and turn loose their water for private exploitation. Also, with our

government's blessing, the World Bank and IMF routinely pressure Third World

nations to privatize their water systems.

 

 

Now, the White House and Congress are ratcheting up their privatization push

here at home with a sneak attack called the Water Investment Act of 2002.

Despite its boring title, S.1961 contains a stick of dynamite in Section

103(J)(1)(b). This proviso says that a local water project in your city cannot

get federal financing unless the local government " has considered " privatizing

your water system. Upgrading and expanding water systems is hugely expensive,

and cities must have federal support to do the job -- but S.1961 would make this

funding conditional on whether cities consider turning over their water to

private corporations.

 

 

This boondoggle is pushed by a powerhouse lobbying outfit called the National

Association of Water Companies, and it means that your local water board will

have to spend your tax dollars offering your public water supply for sale --

knowing that Big Water corporations will sue the hell out of them if they don't

get their way.

 

 

Substituting private interest for public interest has not exactly been

serendipitous in the energy sector -- so why in hell should we give corporations

(foreign-based ones, at that) our water? At least government entities are

supposed to be legally and politically responsible to We the People. But

corporations maintain (and the law agrees) that they are responsible solely to

their big stockholders -- an elite group that invariably includes the CEO. In

water, the stockholders' interests inevitably will conflict with the public's.

 

 

Plus, corporations are anti-democratic, used to making decisions in secret --

and, as Enron has taught us, hiding their financial shenanigans in a labyrinth

of offshore accounts. Take the case of Azurix, a high-flying water privatizer

that was not really a company but a convoluted consortium of more than 50

limited partnerships and interlocking subsidiaries created in the secretive tax

haven of the Cayman Islands. Its creator was none other than Enron. Now it's

owned by RWE.

 

 

Water is one of life's necessities, which is why we must treat it as part of our

commons -- the wealth that we hold in trust so it will be there for all of us,

not only for today, but for all of our tomorrows as well.

 

S.1961 " Water Investment Act of 2002 "

 

S.1961 was introduced in the U.S. Senate in February 2002 to reauthorize federal

funding for the water and wastewater state revolving fund programs that help

communities to finance systems upgrades. The bill's original language contained

a provision that made eligibility for this funding conditional on the

community's consideration of privatization. Public Citizen was successful in

having the pro-privatization language removed from the bill. However, its

companion bill was reported out of the House Transportation and Infrastructure

Committee with similar pro-privatization limit intact. Public Citizen is working

to ensure that the final legislation merging these bills in the House-Senate

conference does not include pro-privatization provision.

[Guest guest]

Even more scarey!

 

Jo

water water everywhere..and not a drop to

drink..unless you pay, and pay..and pay

 

 

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