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Shadow government or business as usual? We dig into allegations against the MWD.

March 15, 2012 1:10 p.m.

GUEST

Dennis Cushman, Assistant General Manager, San Diego County Water Authority

Related Story: High-Stakes Vote Nears In California Water Wars

Transcript:

This is a rush transcript created by a contractor for KPBS to improve accessibility for the deaf and hard-of-hearing. Please refer to the media file as the formal record of this interview. Opinions expressed by guests during interviews reflect the guest’s individual views and do not necessarily represent those of KPBS staff, members or its sponsors.

CAVANAUGH: I'm Maureen Cavanaugh, it's Thursday March 15th. Our top story on KPBS Midday Edition. , the ongoing war between the San Diego County water authority, and the metropolitan water district spilled into the headline this is week. The county water authority released hundreds of documents which it says show members of the MWD board have been making policy in private meetings. That so called shadow government is accused of deliberately putting San Diego water customers at a financial disadvantage. Here to explain is my guest, Dennis Cushman, assistant general manager of the San Diego water authority. Welcome to the show.

CUSHMAN: Good afternoon.

CAVANAUGH: And we contacted the metropolitan water district, they told us no one was available to speak to us today. They directed people to read the statement about this issue on their website.

The county water authority as I say has released documents it obtained under the California public recordings act. What kinds of do you wants are they?

CUSHMAN: They are e-mails and other documents between and among Metropolitan member agencies, there are 26 agencies that compromise Metropolitan, and between 16 and 20 of them have been meeting in secret to strategize, develop rates and revenue policy decisions that they through their voting power on the board, which is enough to prove any issue that comes before the met board to push them through and get them approved.

CAVANAUGH: How is it that you can actually make that conclusion from these documents? What do they say, show?

CUSHMAN: The documents are for explicit in most circumstances. It doesn't take a lot of interpretation. That's one of the reasons why on sunshine week, we're making these documents available for everyone to look at. And we've just posted them today on a website we established to shine the light of the public scrutiny and the media scrutiny on how business is actually done at the Metropolitan water district in Los Angeles. And that website is MWDfacts.com. And that's where anyone can go look at these documents and see for him or herself how obvious it is what they're doing to San Diego.

CAVANAUGH: Is there an example that you could give us? Is there an e-mail that actually says we're meeting without San Diego and trying to set policy here?

CUSHMAN: There are countless e-mails in there in which they acknowledge that San Diego is expressly excluded from their discussions, and why we're excluded from their discussions. But in these documents, which are again up on the website, everyone can read about in their word, in the words of the secret society about the secret society. About their private Gmails that they set up, and security websites where they communicated where they believed the communications would not be seen by anybody, about their membership only, invitation only, pay to play organization they set up. Those words by the way, not the water authority's words. Those are their words, pay to play, secret society, somebody leaked, sanitized agendas, and that Metropolitan's exclusive management from the top level on down are coordinating their activities with this group.

CAVANAUGH: Now, you're referred to this group as a shadow government. What kind of power does it have?

CUSHMAN: It has substantial power. The 20 agencies that have been involved in this organization, their directors on the MWD board control 75% of the voting power on the met board. 75% can pass any and every item that comes before the board. They know what power they have, they poll their directors to insure and assure they have sufficient votes to pass an item, those are in the documents. Those are in the public records documents we're posting online today.

CAVANAUGH: Tell us a little bit more about this pay to play aspect of the group. What does that mean?

CUSHMAN: Well, they are very fully aware of the power and influence they had over MWD board decision making. So you have an instance where a nonmember, in this case the Calleguas municipal water district, understood how powerful this group was, wanted to meet with the group because they had a big legal settlement comes to the met board to settle a big failed project between Calleguas and Metropolitan, and days before it came to the met board as a closed session legal settlement, this secret society got a private briefing by Calleguas on the details of that legal settlement, including the terms of the legal settlement. That sparked eye conversation internally among the secret society members, because at that time Calleguas was not a dues paying member of the organization. A year earlier, they had been excluded from the group's meetings because they refused to pay their dues, which were $7,000. And so you have in this document behind Tab G all of the details about this nefarious conversation that was going on, including the remarks by one of the ring leaders of the group castigating Calleguas a year earlier, "no pay, no pay."

CAVANAUGH: We are talking about a host of documents that the water authority released this week that they claim shows that there's a shadow government that's helping the Metropolitan water district set policy, a shadow government of which San Diego is excluded. Of can you just for sake of conversation remind us how crucial the Metropolitan water district is to our water supply here in San Diego?

CUSHMAN: Absolutely. The Metropolitan water district of Southern California is the nation's largest public water agency. It supplies or all of the water that supplies 19 million Californians here in Southern California. The Metropolitan service area, the six counties that get water from the Metropolitan water district, if those six counties were a nation, they would have an economy of more than a trillion dollars, and rank 15th in the world in terms of economic output just behind the republic of Mexico. So certainly the largest water agency in California, the largest in the country, and a group of public official who is came together in secret to control decisions made by that agency. Of

CAVANAUGH: Is it your claim with all these documents on display that San Diego ratepayers have been hurt by the policies that you say have been promote bide this group?

BENNETT: Yes. There's a reason why San Diego is excluded from this group. And for the record, San Diego would not have joined a secret society or shadow government. We do our business, our public business in public for the public to see. But they came together to do this to San Diego. The reason we're excluded is because they are perpetuating a rate and revenue system, and they're obsessed with perpetuating it, because it overcharges rate payers in San Diego County this year by $40 million. The beneficiaries of those $40 million are the agencies represented by the secret society.

CAVANAUGH: Now, let me just tell you a few things that have been quoted by the general manager of the Metropolitan water district in response to some of these allegations from San Diego County water authority. The general manager, Jeff kitelinger says "there's a fair amount of paranoia in all of these accusations." And I'm just wondering, have you gotten -- is there any evidence, is anyone at Metropolitan admitted to secret planning groups or a secret society?

BENNETT: Well, we're not surprised by the groundswell of denials that are coming forth. And that's why we've got the documents out there for the whole world to see. Let me just read from one of those documents. This document can be found behind Tab L in the documents we posted online. And this is about Jeff kitelinger. ", yes he confirmed that he visited with you and is fully on board with the program we are developing. He understands that our meeting is the eighth is intended to be a working session. He also wants to talk about moving ahead with the plan to communicate our messages as soon as possible. He concurs in the independent economist's review, and agreed to provide his staff as necessary to provide data gathering and analysis." What are they talking about in this economic analysis? This was a secretly procured "independent" economic study that the secret society commissioned the Los Angeles economic development corporation to produce a study that slams the San Diego imperial irrigation district water transfer as being the primary driver of why San Diego's water rates have gone up. They know that's not true. They didn't want the true identities of the public agencies that funded that $50,000 study to be publicly known so they had one of their law firms commission that directly with the LA EDC. Jeff kitelinger as the documents in this, and the documents that we've released shows that he was coordinating closely with them on this against San Diego.

CAVANAUGH: Now, one of the managers of the Metropolitan water district is quoted as saying that they had to form a separate meeting group because the San Diego water authority dominated the meetings, made them last over two hours in length, and kept asking "one dumb question after another." Now, what's your response to that?

CUSHMAN: That, ladies and gentlemen of the jury, is a confession. What he's just you said in the most insulating terms that he could possibly come up with that are printable, admitted they formed this group be and they're meeting to discuss these,s and to get the business done, his words not ours. The meetings he's referring to, and there's another one tomorrow at Metropolitan water district in Los Angeles, those meetings are scheduled for three hours, 9:00 AM to noon. What we found out in these documents is that before the official meetings that we are invited to, with Metropolitan management start at 9:00 AM, this group gets together as early as 7:30 AM, meet for 90 minutes, make the decisions on what they're going to support in that meeting, and then roll into the 9:00 AM meeting where we are present.

CAVANAUGH: The Metropolitan water district has been meeting this week, San Diego water authority dropped this e-mail bomb shell at the start of new rate hearings in LA. So is this the MWA planning to raise rates again?

CUSHMAN: Yes. They are proposing two more years of water rate increases, a rate increase for 2013, that is a 10.6% increase in rates they charged the San Diego County water authority, and that we pass along to all the water districts and cities? San Diego that retail the water to the ultimate customer, and they're proposing another rate increase for 2014, and that's what was being debated this week. These rates are poised to be adopted by the met board on April 10th.

CAVANAUGH: Supporters of those rate increases though say that they're for long term supply project, that the Metropolitan water district has to invest in water sustainability for the region. How do you respond to the idea that water rates have to go up in order to build these things to insure that we will have water in the future?

CUSHMAN: Well, absolutely we're making investments as is Metropolitan in water supply reliability. But when you look at doubling the water rates by Metropolitan since 2006, which is what they're proposing to do here, and the cutbacks that we've made at the water authority, thatture our cities have made, Metropolitan is not cutting its budget. It's increasing the its budget by $28 million next year. There's plenty of opportunity in a $380 million operation budget and an overall budget of $1.8 billion, there's plenty of opportunity for Metropolitan to do what everyone else has had to do, cut their spending.

CAVANAUGH: There is also an accusation that San Diego County water authority actually wants to shift costs of Imperial Valley water transfers to other agencies, and those other agencies are balking at that, and trying to stop that from happening.

CUSHMAN: That is the corner stone of their message strategy, and their talking points. And you can read about that in these public records act documents. That is their strategy for hiring the LA EDC to produce a "independent" report.

CAVANAUGH: Don't just have to acknowledge that we are at the end of the pipeline and that we will have to pay more for imported water?

CUSHMAN: That Metropolitan would suggest that because of our geographical location they're charging us more does not jive with their rate structure and their other messaging. In Metropolitan's rate structure, they charge us an acre foot of water what they charge anyone else throughout the met service area. That's not what's in dispute with our lawsuit with Metropolitan, it's what they charge us to transport water we obtained from independent sources. We broke there'll monopoly hold on San Diego by striking a deal in 2003 with imperial irrigation district. So on one side of their mouth, they say we charge everyone the same, and on the other side, they're saying they're the farthest away, that's why it costs more. It's ridiculous. It's absolutely not the case am

CAVANAUGH: You mentioned the fact that you have an ongoing lawsuit against Metropolitan water district. What role do you see that these new documents, this accusation of shadow government documents -- will they be introduced in a suit? What role will they play in that lawsuit?

CUSHMAN: In fact that's why we submitted them into the record during the public hearing on Monday. They are now a formal part of what's called the administration record of that rate-setting process. Why is it important? Because we need to show the Court, and what these do you wants do show the Court, is that Metropolitan's rates were set in an arbitrary and capricious manner, that they're unreasonable, not based on lawful cost of service rate making principles, and they are discriminatory. When you get through the 500 pains of documents we are releasing today, you will come to the same conclusion. We invite everyone to go to the website. In effect, by putting it up, everybody can go and see for himself or herself.

CAVANAUGH: What does all this mean for San Diego rate payers? You are so embedded in this topic, and you know all the ins and outs. For somebody who just really doesn't want to pay too much for the water that comes out of their faucet, what does this all mean?

CUSHMAN: No. 1, they need to get engined. And the MWD facts.com website gives them a voice. On that website, they can send a comment that will go to the secretary of the board of directors in Metropolitan, letting them know from any rate payer who wants to speak out against higher rates from Metropolitan or speak out against the secret society to have their voice heard at MWD. For the San Diego County water authority's part, we'll make sure that those messages are delivered to Metropolitan, and delivered before they adopt those rates on April 10th.

CAVANAUGH: I've been speaking with Dennis Cushman, assistant general manager of the San Diego water authority. Thank you very much for coming in and speaking with us.

CUSHMAN: Thank you, Maureen.