How the West(lands) was won, Part Two
By Lloyd G. Carter
If there are unwritten charter memberships in the Hydraulic Brotherhood, the Westlands Water District and the Denver, Colorado law firm of Brownstein Hyatt Farber Schreck undoubtedly have honored places. It's not just that Westlands, a public agency, owns a $31 million world class trout fishing resort, which it makes available to its growers at $4,200 to $7,000 a week. It's more the fact that Westlands, the largest (in acres not farmers) and most politically connected federal irrigation district in America, and Brownstein, one of the largest and most politically connected water law/lobbying firms in the nation, are partnering in Westlands' billion dollar lawsuit against the government
And that bodes ill for the American taxpayers and the environment.
In the Brotherhood, who you know and who you pay is more important than what you know. And the lawyers, like undertakers, always get paid, no matter which side they represent. Westlands' 600 growers are hoping the legendary clout of Brownstein will lead them to the promised land of guaranteed water supplies, even if it overturns state water law and senior water rights, allows Westlands to shove its way to the front of the bucket line, and costs California its priceless San Francisco Bay-Delta.
Over the last two presidential administrations, Brownstein has played a pivotal "fixer" role in guiding local, state, and national water policy. George W. Bush's Interior Secretary, Gale Norton, was a partner at Brownstein. Ken Salazar, the current Interior Secretary, owes his political career to Brownstein, which managed his campaigns for Colorado State Attorney General and the U.S. Senate.
While it is ostensibly a Democratic Party-leaning law/lobbying firm (Norman Brownstein and named partner Steve Farber are Democrat activists), Brownstein does not hesitate to hire and promote conservative Republican lawyers/lobbyists, occasionally backs Republican candidates (for example, Republican Sen. Richard Lugar of Indiana), and gladly represents Republican clients.
The firm recently hired long-time Republican lobbyist Marc Lampkin, who was deputy campaign manager for the Bush/Cheney campaign in 2000 and prior to that was general counsel to then-House Republican Conference Chairman (and now Speaker) John Boehner. Lampkin is still a member of "Team Boehner," which advises the Speaker on Republican Party issues. The Hill, the congressional newspaper, has named Lampkin as one of the top 50 lobbyists in America. In making the announcement of Lampkin's hire, Brownstein spokesman said "As a bipartisan firm [emphasis added] we are committed to adding talent to our team across the political spectrum." Lobbyists, you see, do not necessarily have party loyalty.
Another Brownstein partner, David L. Bernhardt, was Interior's top attorney, the Solicitor, during the latter Bush years. What is Bernhardt doing now? He is lobbying in Congress and at Interior for, among other clients, Westlands, which has shelled out $220,000 recently to Brownstein in lobbying fees alone. The legal bills are expected to be astronomical. Bernhardt is also one of the Brownstein attorneys who brought a lawsuit for Westlands in January, 2012, in the U.S. Court of Claims in Washington, D.C., claiming the failure of the U.S. Bureau of Reclamation to provide drainage for Westlands growers has cost the water district $1 billion in damages.
All discussion of the Brownstein law firm begins with Norman Brownstein, who arrived in Denver with his mother as a boy, according to Denver magazine 5280. HIs mother died from breast cancer in 1957, when Norman was 13, and he moved in with a Jewish family named Kamlet. The Kamlets' son, Jay, was born in 1963. Jay Kamlet would later grow up like his big "brother" to become a lawyer and work for the Brownstein firm before launching his own law firm. It was in the fifth grade when Brownstein met Steve Farber. They both attended the University of Colorado law school and graduated in 1968. With another boyhood friend, Jack Hyatt, they then formed the law firm of Brownstein, Hyatt and Farber. The naming order in the firm title was determined by drawing straws.
According to the Brownstein website, the firm merged with Las Vegas-based Schreck Brignone (picking up clients including Hotel magnate Steve Winn and other major casinos) to form Brownstein Hyatt Farber Schreck in 2007. In January 2008 Brownstein also absorbed California-based Hatch and Parent, which specialized in public agency and water law. This merger gave Brownstein new clients such as Nestle Waters North America, the San Diego County Water Authority, and the cities of Fresno and Oxnard. The Brownstein website claims it is now the "premier water law and policy practice in the West." The Brownstein website says in the mid 1990s Brownstein attorneys Steve Amerikaner, Susan Petrovich, and Gary Kvistad joined Stanley Hatch of Hatch and Parent in pushing through major changes in the State Water Project and that Hatch, now retired, "was the lead urban negotiator in a process that resulted in the 'Monterey Amendments' to the State Water contract, which in turn, resulted in a potential reduction in future State Water Project costs to California's urban users of over $1.5 billion." The website did not say California environmentalists think the Monterey settlement privatized public water supplies and allowed "farmers" like Beverly Hills billionaire Stewart Resnick to gain private control of a former public water bank. Regarding the alleged $1.5 billion in savings, the altered State Water Project contracts gave up the urban ratepayer guarantee to water during times of shortage. For years Los Angeles ratepayers paid water rates to guarantee this water during times of shortage benefiting Kern County agricultural interests with cheap water. Now that guarantee is gone, negotiated away without public notification or input.
The Brownstein firm continues to grow. Forty-four years from the firm's founding, which saw it grow nationwide and branch into congressional lobbying, Brownstein now employs 260 lawyers in several states and is ranked fifth by Roll Call in Washington, D.C. lobbying groups, raking in $22 million last year. The firm jumped from 18th to 5th in the Roll Call ranking between 2006 and 2009, during the Bush years, when former firm partner Gale Norton was running the Interior Department.
The National Law Journal named Norman Brownstein, who is chairman of the Brownstein board of directors, one of the “100 Most Influential Lawyers in America” in 1997. Heavily involved in community affairs, Brownstein is involved in many activities on behalf of the University of Colorado and the American Israel Public Affairs Committee (AIPAC), where he is currently vice president. He is a director of National Jewish Health and a trustee of the Simon Wiesenthal Center. Brownstein is a past presidential appointee of the U.S. Holocaust Memorial Council (1996-2006). He serves on the board of directors of several corporations.
The late Sen. Ted Kennedy, who provided an internship for Brownstein's younger son Drew (nicknamed Bo), called Norman Brownstein the Senate's "101st senator." The Brownstein firm now has offices in Denver, Washington DC, New Mexico, Nevada, Arizona, and five California cities. The Denver Post calls Norman Brownstein a "Washington power broker."
Despite the enormous influence of his law firm, the political and courtroom successes over four plus decades, and his considerable wealth, Norman Brownstein has undoubtedly been disheartened recently over scandals involving his two sons.
On January 11, 2012, Brownstein's younger son, Drew K. "Bo" Brownstein, 36, was sentenced in New York City to a sentence of a year and a day in prison for making a $5 million profit off of insider trading information. The 88-year-old federal judge, Robert Patterson, a 1988 Ronald Reagan appointee who went on senior status 14 years ago, chastised the defendant for succumbing to greed but imposed only five percent of the maximum penalty. The defense had asked for probation.
Bo Brownstein entered a guilty plea following a plea bargain last October for making illegal trades on confidential information acquired in April 2010 about a pending purchase of Mariner Energy by Apache Corporation. Brownstein had been tipped by a close friend, Drew Peterson, who learned about the pending Mariner acquisition from his father, H. Clayton Peterson, a prominent Denver accountant and Mariner director. Both Petersons were charged with insider trading and pled out, implicating Brownstein.
The elder Peterson received three months house arrest and probation for his plea and ordered to repay $400,000. The younger Peterson also received probation and was ordered to repay $150,000.
Bo Brownstein also was ordered to serve three years probation following his arrest, including six months' home confinement, and 500 hours of community service. The Securities and Exchange Commission will be seeking restitution of the $5 million in profits Brownstein, operating through his Big 5 Asset Management Firm, a hedge fund, allegedly made on the insider trading. The federal complaint against him said he used accounts in the name of relatives to purchase Mariner stock and options before the stock value jumped when the Apache acquisition became public.
The plea bargain called for no more than 43 months in prison for a crime which carries a maximum penalty of 20 years. Commenters on the article at the New York and Denver newspaper websites said he received the extra day on the one year sentence because it would make him eligible for early release. Had he been sentenced to one year exactly he would have had to serve the full year. The Big 5 hedge fund, which included a Cayman Islands account, since has been dissolved.
The Denver Post, quoting an unnamed source, said Norman Brownstein was unaware his son had made a major purchase of stock in the father's name without his knowledge. The New York Times, without reference to any source, simply reported that Bo Brownstein "bought stock for his family, including his father, without their knowledge." How does the New York Times know this? Why didn't the Denver Post report how its source knew the stock purchases were made "without the knowledge of family members." Was it an official source? Were Norman Brownstein and other family numbers questioned by the FBI and federal prosecutors and then cleared of possible suspicion? How else, then, could the feds know Norman Brownstein was not involved? When a son makes very large purchases in his wealthy father's name isn't he likely to inform his father in advance? Did Bo Brownstein keep secret from his father that he had made a quick five million for himself, family members, and his clients?
But in fairness, under the arrangement with Big 5, Norman Brownstein and other family members gave Bo Brownstein discretionary authority to make stock purchases without their knowledge, and Bo was under no duty to inform them in advance of such purchases. Since he obviously knew he was breaking the law he may very well have kept the deal secret from his father and other family members. It is undetermined how he explained the fat profits to his father.
Norman Brownstein had no comment to the media at the time of his son's plea or sentencing on whether he was aware of his son's Mariner stock purchases or that Bo was operating on illegal insider information in making stock purchases under his father's account. There were press reports that Norman Brownstein wanted his son Bo to do his community service at the Jewish Hospital in Denver. Bo was represented at sentencing by well known Wall Street defense attorney Gary P. Naftalis. It was not reported if Bo or his father paid Naftalis' fee.
There were lots of angry comments at the two newspapers' websites about how a rich boy can steal five million dollars, claim he was remorseful, and get away with a slap on the wrist of probably only a few months prison time.
Then, in late April, Norman Brownstein's other son, Chad, further tarnished the family name. Chad had auctioned off a month-long paid internship in the office of Arkansas U.S. Senator Mark Pryor, a Democrat, as part of a fundraising campaign for a synagogue in Los Angeles. The only problem was that Chad had never received approval from Sen. Pryor for the internship. And the successful bidder in the charity auction was none other than Joe Francis, founder of the Girls Gone Wild mail order videotapes that became part of America's soft porn culture. Francis, thinking he had won the auction, said he would use the Senate internship as a prize on his TV reality show, The Search for the Hottest Girl in America.
When word got back to Sen. Pryor, who thought it was all a hoax or a scam by Joe Francis, Chad Brownstein stepped forward and publicly apologized to the Senator. According to www.TheWashingtonian.com (Where you can read Chad's apology letter to Senator Pryor), the Synagogue returned the money to Joe Francis. The apology letter said Norman Brownstein had nothing to do with his son's stunt.
However, at a Denver community website, www.blogs.westword.com, which ran a jocular article on the Brownstein sons' shenanigans, a commentater named John Balzar stated:
"Brownstein is Pryor's favorite bagman. Pryor received millions from him. Pryor himself visited the charity temple with Brownstein before the
seedy deal was known. There has been nothing but obfuscation, lies and cover-ups from Pryor since the story broke about the pornography
aspect. The smell of guilt is leaking out of Washington and stinking up the country."
Norman Brownstein was involved in another ethical dilemma a decade ago when he served on the board of directors of Global Crossing, a telecommunications company that went bankrupt. Brownstein's older son Chad had become involved as a partner in a company heavily financed by Global Crossing's chairman Gary Winick. In newspaper articles, corporate ethics experts said Global Crossing's board members had several conflicts of interest and board member Norman Brownstein, who had a fiduciary duty to Global Crossing, should not have been involved in business dealings with a company in which his son was a partner.
In stark contrast to Norman Brownstein's misfortunes with his sons, the oldest of Steve Farber's three sons, Gregg, literally saved his father's life when he donated a kidney in 2003 to the older Farber, who was facing certain death from kidney failure.
Blacktie is a national company headquartered in Denver, Colorado, that, according to its website, www.blacktie-colorado.com, provides its members with "proven solutions for raising money, lowering costs and bringing people together."
According to the Blacktie website, Brownstein founding partner and president Steve Farber was co-chair and a member of the executive committee of the Host Committee for the 2008 Democratic National Convention and was key in bringing the convention back to Denver after 100 years. (Denver hosted the 1908 Democratic Convention.) He is active in Denver and Colorado civic affairs and non-profit affairs.
The Blacktie website gushes:
"Voted one of the most influential men in Denver year after year, with plenty of nice guy charm and charisma, Steve Farber has a sense
of fair play and dependability, and he has found his own rhythm that has exalted him in his industry for many successful years. Steve Farber is
a man with the Midas touch who has his finger on the pulse of Denver. What Farber touches, seems to turn to gold. Steve says part of his success
is always staying focused on what needs to be done."
In the interview with the Blacktie website, Farber said Norm Brownstein was the most influential person in his professional life.
Not everyone sees Farber in such glowing terms.
Alison "Sunny" Maynard is a Colorado attorney who ran for the Colorado Attorney General's post in 2002 on the Green Party ticket against current Interior Secretary Ken Salazar. Salazar's campaign for state attorney general and his 2004 campaign for Colorado U.S. Senator were managed by Farber. This is what Maynard says about Salazar and Farber on her website:
"Salazar's willingness to be controlled by the powerful interests, and susceptibility to flattery, led to the law firm Brownstein, Hyatt, Farber, Schreck
adopting him as its favorite son. It ran Ken Salazar's campaigns for Attorney General in 2002, as well as the Senate in 2004. I mean, it ran them.
So its attorneys got their salaries to perform functions in the campaigns which one would think should be filled by volunteers. There was never any
financial disclosure about the value of the services provided by this law firm to these campaigns, however. A partner in this firm, Steve Farber, is
responsible for bringing the Democratic National Convention to Denver in 2008, where Obama received the nomination of his party (anointment, really).
My take is that Obama repaid the favor by letting Farber fill the top slots in Interior, since they are all Coloradans. Naturally, he picked Ken Salazar,
who has spent his life in public office doing favors for this law firm and its developer clients, to be Secretary. Farber picked his former law partner
Tom Strickland (who was, conveniently, U.S. Attorney when the Summitville [Mine] case was in court, more insurance that there would be no prosecutions)
as the Deputy Interior Secretary, and picked the managing partner of Holland & Hart--and formerly Shell Oil's water attorney--Anne Castle as Assistant Secretary
of Interior for Water and Science. And now Alan Gilbert is also, once again, at Salazar's side. Ken did nothing but flack for real estate developers in the official
positions he held in Colorado--and always, always was using his powers to do favors for the Brownstein, Hyatt, Farber law firm and its clients. Steve Farber
even bragged, when Salazar was a Senator, about calling Ken up on his cell phone to discuss stuff. How many people have a U.S. senator's cell phone number?"
Maynard is highly critical of the New York Times, Washington Post, and Denver Post, along with major environmental groups, which she says have given Salazar an environmental patina he does not deserve. She quotes the Post as simplifying Salazar's web of connections and political debts by bare bones reporting that before he became Interior Secretary he spent "several decades of work in government, where he focused on land-use, water, and natural-resources issues." She contends Salazar has never actually litigated a case through trial.
Brownstein attorney Tom Strickland was Salazar's chief of staff until February of 2011 when, according to the Denver Post, he "resigned from Interior in February after presiding over one of the worst environmental disasters in U.S. history after the Deepwater Horizon oil rig exploded April 20, 2010, killing 11 people and spewing about 200 million gallons of crude into the Gulf of Mexico." This was the BP oil spill.
A few months later, Strickland went to work for a law firm defending BP but said he would not participate in the Gulf spill litigation.
Farber's clout with Salazar, and Brownstein's label as the "101st Senator," are exactly the kind of influence peddling that the Westlands Water District is looking for, of course.
In its billion dollar lawsuit against the U.S. Bureau of Reclamation for failure to provide drainage for the selenium-laced soils in western Fresno and Kings County in the San Joaquin Valley where the 617,000 irrigation district is located, Westlands officials are hoping the two "power broker" attorneys will justify the hundreds of thousands of dollars the water district is paying them for lobbying and legal representation.
Despite two decades of attempting to overturn superior water rights held by older California irrigation districts, Westlands has had little luck in Fresno's U.S. District Court in getting to the front of the bucket line.
The litigious water district has also had an off and on relationship with Sen. Dianne Feinstein, a seeming San Francisco liberal with pro-environmental leanings but in fact all too willing to aid Westlands in its insatiable thirst for water. Feinstein, who just coincidentally owns a home in Colorado, purportedly has known Brownstein and Farber for decades.
The Brownstein firm is expected to smooth out the Westlands-Feinstein relationship and make both sides happy. On April 19, the law firm held a breakfast with Sen. Feinstein at the firm's Washington, D.C. office. There was no press coverage of the event. Attendance cost $1,000 with "co-hosts" shelling out $2,500 and "hosts" paying $5,000. Presumably, Feinstein carted off a pile of cash and firm lobbyists got to pitch their causes to her. Earlier that week, Feinstein was feted at two agribusiness fundraisers in Fresno, one hosted by Westlands, generating another pile of cash. At those events, she pledged support for raising Shasta Dam, even though such an action would flood out a world class trout fishery (including the trout club Westlands owns) as well as Native American sacred grounds. She also announced, for the first time in American history, that she supported removing Wild and Scenic protections for the Merced River to allow the raising of the Exchequer Dam and flooding of the river. This is what they call democracy in action in Washington, D.C.
During the same time period she was filling her pockets at the Brownstein firm breakfast fund-raiser, Sen. Feinstein was floating an amendment rider to a Senate appropriations bill which, in theory, would permit Westlands to get more water from the already overdrafted Delta.
But Westlands' real hopes in the billion dollar drainage suit is a repeat of what Brownstein attorneys in the Bush Administration worked out for a small group of individual Westlands farmers a decade ago. Those individual growers, including some of the biggest family names in San Joaquin Valley farming (Russell Giffens' descendants, the Wolfsen family and the family of former California Secretary of State Bill Jones, had sued Westlands, as well as the Bureau of Reclamation, for failure to provide a drainage system for its problematic soils that had accumulated salts and selenium.
Former federal Judge Oliver Wanger, who presided over an October, 24, 2002 pre-trial order for partial summary judgment in the growers’ suit, noted that there was no dispute the growers continued to irrigate their lands knowing “that their lands would be damaged without drainage.”
Wanger noted multiple issues to be addressed at trial, including "the operative ‘cause’ of damage to plaintiffs’ land, whether that damage constitutes a public or private nuisance, whether federal defendants and Westlands are concurrent tortfeasors, apportionment of any comparative fault of plaintiffs, and whether plaintiffs consented to or assumed the risk of a nuisance or trespass by demanding water deliveries to their farmlands, despite the knowledge that no drainage facility existed."
Given the exorbitant amounts of money American taxpayers spent over the decades to deliver water to a handful of growers farming an alkali desert laced with the trace element selenium (two-headed fish deformed by selenium dumping from a fertilizer mine in Idaho comes to mind) the Westlands would have had a very hard time finding a sympathetic jury. In other words, a jury or a judge may have found that Westlands growers knowingly ruined their own lands and might not have awarded them a cent in damages.
But Gale Norton came to the rescue of the Westlands district when she had Assistant Secretary for Water and Science Bennett Raley nix the deal and settle. Raley also gained the support of former Interior Solicitor and Deputy Solicitor (and Brownstein alumni) David Bernhardt who signed off on the $140 million deal in which Westlands acquired some salted up lands and the Interior Department (i.e. the taxpayers) footed most of the bill. And, of course, Bernhard is now lobbying for Westlands. Bernhardt was also a Bush administration point man for oil drilling in the Arctic National Wildlife Refuge. In 2001, he prepared congressional testimony on Arctic drilling that dismissed warnings from the government's own scientists and relied on reports funded by BP. In his work at Brownstein, before he joined Interior, Bernhardt lobbied Congress and federal administrative agencies on behalf of Delta Petroleum Corp., TIMET-Titanium Metals Corp., NL Industries (an international chemical company) and the Shaw Group (maker of piping for oil companies and power plants), according to a Mother Jones report, ''The Ungreening of America.''
During this period, Bernhardt worked with Interior Assistant Secretary for Water and Science Jason Peltier, who now just happens to serve as Deputy General Manager of the Westlands Water District. A March 3, 2006, New York Times article questioned whether Peltier, who had previously served as a lobbyist for California federal water project contractors, had a conflict of interest in delving into matters involving Westlands.
The Times reported:
Mr. Peltier, in an interview, said that when he first came to the Bush administration in 2001, he recused himself from some decisions involving the
landowners he used to represent, but he said he was granted an exemption because of his expertise in California water issues. "I was given dispensation
early on because of my knowledge of these issues," he said. He added, "I have not had the strict bar of separation on certain issues, but I've been very
mindful of the appearance of a conflict and operated accordingly." Interior Department officials said Mr. Peltier, who is the chief policy adviser on California
water issues, had cleared his activities with the ethics office.
Now, Peltier and Bernhardt are openly operating on the same team again.
The judge assigned to the Westlands case in the U.S. Court of Federal Claims, is Chief Judge Emily C. Hewitt, a Harvard graduate appointee of former President Bill Clinton and an openly gay woman. She was appointed Chief Judge by President Obama in 2009. She is also an Episcopalian minister. She might not be as sympathetic to Westlands as the growers and Brownstein lobbyists would like.
Thus, a settlement, like the one engineered in 2002, would be much more preferable to Westlands. The water district, in negotiations with the Bureau of Reclamation over a $2.7 billion "solution" to the Westlands drainage problem, has understandably refused to sign off on the plan, which makes no economic sense at all: $2.7 billion for 600 growers?
At one point Westlands, bolstered by the 2002 settlement and its implications, said that in exchange for taking over resolution of drainage problem, the U.S. should forgive over $450 million the water district still owes the federal taxpayers for construction of the Westlands water delivery system, including San Luis Reservoir. In addition, Westlands' 600 growers would also like a settlement that guarantees them an annual water supply sufficient to meet the needs of a city of 10 million people - 1 million acre-feet.
If Westlands can't solve the drainage problem and just salts up the rest of the irrigible acreage, it could simply sell its water supply to Los Angeles, although it denies any current intention to do so. Westlands' current annual contracts make water available to the district only after the needs of senior water rights holders are met.
It remains to be seen if a settlement will be reached. Congress is probably not going to appropriate $1 billion to pay the Westlands growers the damages they claim they suffered. However, debt forgiveness might be more manageable. These lobbyists are endlessly creative. Brownstein, Farber, Bernhardt and Salazar, along with timely congressional aid from Feinstein and others, could make it happen. Whether President Obama has a clue about what goes on at Interior and Westlands is dependent upon whether Secretary Salazar is more loyal to the president or to Brownstein. It would be nice if Salazar could explain to the president why continued irrigation of a farming district located on alkali soils with no drainage solution is good public policy.