My name is Et Snell and I am an activist who lives out in the Mojave Desert of San
Bernardino County. I have spent much of my time in the last several years pointing out to my
fellow citizens how we are being poorly served by our politicians and civic leaders.
This matter before us today in which the San Bernardino County board of
supervisors has surrendered to an entity that exists more than 200 miles away the authority to
do an environmental certification of a massive water extraction project in the desert is typical
of the poor leadership we suffer under in San Bernardino County.
My focus today will not be on the environmental and ecological outrage of this
project. Nor am I going to upbraid you for your arrogance and greed in stealing the Mojave
Desert's water. I will allow others to address those issues.
Instead, I want to see if I can get you to focus on something you probably have
not considered, which is that if you vote to approve this arrangement with Cadiz, Inc., you are
going to involve your agency and yourselves personally in the criminal conspiracy involving Cadiz,
Incorporated now being investigated by the FBI and the Securities and Exchange Commission.
You may not have known that such an investigation was ongoing. I do not
think it likely Cadiz, Incorporated's officials informed you of it.
What the Securities and Exchange Commission is focusing on is misrepresentations
made by Cadiz, Incorporated to its investors and stockholders. Cadiz, Inc. longtime lender,
L.C. Capital Master Fund, Ltd, has pumped at least $387 million into the company as it has
purchased or secured options on 45,000 acres in the East Mojave Desert.
At the same time, it has operated a relatively modest organic citrus, grape,
melon, asparagus, pepper and squash growing farm there that never covered more than 500 acres and
which has never utilized more than 5,000 acre-feet of water per year.
Yet Cadiz, Inc. has been representing to its investors that it is securing the
rights to 150,000 acre-feet of water. That is an outright fabrication and a violated of
Securities and Exchange statutes.
About three years ago, investors with L.C. Capital Master Fund became aware of
this misrepresentation and fraud when the company's operating capital had dwindled to $4.3
million. It was at that time that Cadiz, Incorporated first registered on the Securities
and Exchange Commission's radar.
After L.C. Capital abandoned Cadiz, Inc., they began seeking an infusion of
funds from other sources, including Altima Partners, a privately held hedge fund company in
England, and another outfit called Water Asset Management.
Cadiz, Incorporated has made similar fraudulent misrepresentations to those
firms and their investors, claiming they have water rights to 150,000 acre-feet when in reality
their actual water rights stand at 5,000 acre feet.
In July 2011, a significant number of Cadiz, Incorporated's investors retained
the San Diego-based law firm of Robbins Umeda, which specializes in shareholder rights litigation,
to commenced an investigation into possible breaches of fiduciary duty and other violations of
the law by certain officers and directors at Cadiz, Inc.
My advice to the board was before they enter into a arrangement with Cadiz,
Incorporated, they send someone over to the Securities and Exchange Commission and the law firm
of Robbins Umeda - they are located in San Diego, to trade notes.