Senators Hurtado and Cortese Send Letter to Department of Justice Raising Concerns of Water Rights Purchasing by Hedge Funds

Today, Senator Melissa Hurtado (D-Sanger) and Senator Dave Cortese (D-Silicon Valley) sent a letter to United States Attorney General Merrick Garland raising their concerns about the increase in water rights being purchased by hedge funds, anti-competitive practices, and the potential impact to water security.

“I am concerned about the increase in water profiteering across California and the Western States,” said Senator Melissa Hurtado. “As the west grapples with drought, farmers, local governments and Californians across the state are struggling without the water they need to support their day to day life. We must be able to determine the impact that anti-competitive practices and the purchase of water rights by hedge-funds occurs and disrupts our day to day life.”

“Private interests have zeroed in on our precious water supplies and are buying up local water rights, the economic and social impacts of which could be disastrous”, says Senator Cortese. “Water scarcity is already worsening, threatened by climate change, pollution, and increased demand. We must stand firm in keeping water a resource for the public.”

He added, "Nowhere is there more urgent demand for the application of the public trust doctrine regarding water rights than these practices which literally steal our most life dependent resource from ourselves and future generations in exchange for a profit.”

Two of the most important water systems in the Western United States are the Colorado River and the Sacramento-San Joaquin Delta, between them they provide water to approximately 70 million people, which is roughly 20 percent of the population of the entire United States, and they irrigate millions of acres of agricultural land across multiple states. Hydropower facilities along the Colorado River alone provide more than 4,200 megawatts of energy, enough to power 840,000 homes on a hot day. Market based control of these systems could have devastating impacts to those that depend on the water for their daily needs, their livelihoods or their lives. Recent reports indicate that private investor interest in water rights purchasing, which was likely propelled by the 2015 water crisis in California, has increased significantly.

California’s drought conditions continue to worsen, and every part of the state will be impacted. The state is seeing an increase in water restrictions—in some districts for the first time ever. Approximately 6 million people will be affected by the Metropolitan Water District of Southern California’s recent decision to declare a water shortage emergency and order outdoor usage restrictions.

In Mendocino County, water theft is leaving rivers and streams dry throughout the Russian River waterways. The problem is so serious in one district, there are concerns about the availability of water to fight fires, and locks have been put on hydrants to prevent further water loss.

In the Central Valley, drought has led to an increase in the price of agricultural products, affecting the food system as a whole. Many towns across California have faced massive water curtailments, and have seen their wells run dry forcing them to jump through hoops and hurdles in order to receive just enough water to live.

Access to safe drinking water and freshwater resources are central to the health of California’s economy and communities.