California Cornerstone

Friday, August 17, 2012

BDCP Press Conference, July 25, 2012

Photographs from Governor Jerry Brown's Joint press conference regarding Bay Delta Conservation Plan. Press Conference/Protest sponsored by Restore the Delta.

Please feel free to print, re-circulate and re-send these stories to your e-mail lists. If you can, credit the author and the Public Water News Service. This is a free service. No charge and no royalties to pay. Use it!

"Analysis paralysis is not why I came back 30 years

later to handle some of the same issues... I want to

get sh*t done."

-- Gov. Jerry Brown

Announcing his revised Delta

Plan at a news conference.

By Burt Wilson

bwilson5404@sbcglobal.net

     The governor looked and talked like a wild man as he announced to the media that he wants "to get sh*t done," but don't be surprised if he ends up knee deep in his own sh*t.
      In rescuing the Bay Delta Conservation Plan (BDCP) from the oblivion it deserves, Gov. Brown adopted the most sh*tty conglomeration of bad science on record. But then, what can you expect from a plan that was conceived by Big Ag and the water agencies, and supported by building contractors and their labor unions and all the political power of the California Chamber of Commerce, the California Business Roundtable and various and assorted corporate Greedheads and legislators on the take.
     And now Brown and his big-money friends want to try to sell this sh*t to the people while at the same time raising their water rates sky high to pay for it. Is it any wonder why people think Jerry Brown is full of sh*t?
     There are a number of good reasons not to buy-in to Jerry Brown's tunnels. You see, Jerry is not going to allow the people of California to vote on this sh*t. His plan is that the beneficiaries, the water contractors, should foot the $23-$54-Billion bill. But do we think they are going to just give away this water to the people? No. Local water rates will go sky high because the water contractors will apply the same principles to drinking water that the oil companies apply to gas stations: soak the end users for all you can get because there's nowhere else to go.
     Once the people get a load of this sh*t, do you think they are going to vote for Jerry's tax increase ballot proposition this year? Do you think they're going to vote for Jerry again in the next election? Do you think they are going to vote for the Water Bill in 2014, a bill that adds billions of dollars in bonded indebtedness to the state's budget? if you think they're going to let Jerry Brown get away with this, you're smokin' some strong sh*t!
     Another reason why the tunnels are a bad idea is that the BDCP's science is so full of sh*t that it is not likely to pass the Environmental Impact Report due out next year.
     And because the Water Bill measure that funds the sainted habitat rehabilitation of the Delta will still be waiting to be voted upon next year, restoration of the Delta's ecosystem will be but a figment of the imagination. Holy sh*t!
     Let's face it, the BDCP Delta Plan is a piece of sh*t.
     And Jerry's in it up to his ankles right now.
     It'll be up to his knees by next year.
     And when the historians come to pen the story about Jerry Brown's second tenure as Governor of California they'll write, "Brown? My, my. Well...sh*t happens."

I was on the media staff of the "No on 9" campaign against the peripheral canal in 1982. We won by a 2/3 vote statewide and stopped the canal. Voters knew then that it was just another watergrab. Today's move to put a conveyance in the Delta is nothing more than another watergrab--only more sophisticated. Today I am on the Bay Delta Conservation Plan's Public Committe and the Delta Stewardship Council's Public Committee and the Forum Sub-Committee of the 2013 State Water Plan. This way, I keep up on things. No, I don't subscribe to what they are doing and I frequently tell them so. This newsletter is an extension of that.

Sincerely,

Burt Wilson, Ex. Dir.
Public Water News Service

August 17, 2012 Delta Water and News Links

Wednesday, August 15, 2012

Re-Post Spot.us Investor's Club: How the UC Regents Spin Public Funds into Private Profit

And now for a re-post from a current article, bringing us up to date regarding our cast of characters and the theater/drama they create.

http://spot.us/pitches/337-investors-club-how-the-uc-regents-spin-public-funds-into-private-profit/story

Story: The Investors’ Club: How the University of California Regents Spin Public Money into Private Profit

University_of_california_seal_larger_featured_image

“As universities become glorified vocational schools for corporations they adopt values and operating techniques of the corporations they serve.” – Chris Hedges (Empire of Illusion, 2009)

This piece has been republished by The Berkeley Daily Planet. A version of it also ran in the Sacramento News & Review, Santa Cruz Weekly, North Bay Bohemian, and the SF Public Press. Analysis from California Watch, The Aggie, Huffington Post, KCSB Radio, SFBG, The Daily Nexus and more. The story has been nominated for a Project Censored Award and has won the SPJ Northern California Chapter's James Madison Freedom of Information Award for Journalism. It was also a finalist for an Investigative Reporters and Editors award.

Part One: The Investor's Club - Published below.

Introduction and overview of the 8-part investigation. The eight parts of this investigation and two appendixes are linked within the introduction. They may be read sequentially or as stand alone stories.

See Part Two: The Smell Test

How to tell the difference between a conflict of interest and a coincidence.

See Part Three: The Regents' Club

Conflicts of interest are nothing new at UC, but they are getting worse.

See Part Four: Seven Private Equity Deals

How Regent Richard C. Blum benefited from $748 million worth of private equity and bond investments by UC.

See Part Five: Four Case Studies in Conflicts of Interest by UC Regents

The nitty gritty of how these deals went down.

See Part Six: Billion Dollar Babies & The Senator's Educational Conflict

The University of California invests $53 million in two diploma mills owned by a regent married to a U.S. Senator.

See Part Seven: Tapping the State Pension Fund

Against all odds, literally, a regent secures billions of dollars in CalPERS investments.

See Part Eight: Blum Capital Partners Gets Lucky

UC owns stocks in all of the public companies in Regent Richard C. Blum's portfolio.

See Appendix One: Research Methodology

See Appendix Two: Financial Dossiers of Regents to Watch

Part One: The Investors’ Club: How the University of California Regents Spin Public Money into Private Profit:

Experts identify multiple conflicts of interest among an elite group that oversees investments for the University of California.

Last fall, amid an unprecedented state budget crisis, the University of California Board of Regents took extraordinary measures to cut costs and generate revenue. Lecturers were laid off, classes eliminated. The board reduced admissions for in-state students, while increasing the admission of out-of-state students, who pay higher fees than state residents. And to the consternation of tens of thousands of students, undergraduate tuition was raised by 32 percent, with more hikes to come.

It now costs about $30,000 per year to attend the University of California (UC) as an undergraduate, including tuition and expenses. Even with student aid, it’s a sum beyond the means of many students and their families.

While education took a beating, the regents authorized $3 million in bonuses to a handful of top administrators, and reduced the salaries of janitorial staff. The regents approved new construction projects, including a sports stadium. They assured Wall Street bond underwriters that periodic tuition increases would help pay off hundreds of millions of dollars in new construction loans.

Objecting to the tuition increases, UC students, employees, and professors staged demonstrations at regents’ meetings and on campuses across the state. Some protestors accused the regents of “privatizing” the university to benefit industrial corporations and Wall Street investors. While it is true that the university’s ties to corporate and banking interests are many and legion, there is a special kind of privatization taking place behind closed doors.

Our eight-month investigation reveals that some members of the regents’ investment committee, who are also Wall Street heavy-hitters, have modified long-standing investment policies in a way that benefited their own financial holdings. The fallout: multiple conflicts of interest.

See Part Two: The Smell Test

The changes can be traced to post-2003, when regents Gerald Parsky, Richard C. Blum, and Paul Wachter—all financiers by trade—took control of UC’s investment strategy. Sitting on the board’s investment committee, the three men steered away from investing in more traditional instruments, such as blue-chip stocks and bonds, toward largely unregulated “alternative” investments, such as private equity and private real estate deals. According to UC internal reports, the dramatic investment change has led to an “overweighting” of investments in private equity. One concerned regent has likened the change to “gambling in Las Vegas.”

The changes did not stop there.

By-passing the university treasurer’s in-house investment specialists, the regents investment committee hired private managers to handle many of these new kinds of less-regulated transactions. This action theoretically placed some distance between the personal financial holdings of regent's and the investments made on behalf of the UC endowment and retirement funds. But it also served to increase management costs, and to limit the transparency around UC's investments, since these “external” managers are not subject to the same public disclosure laws that apply to university operations.

Unfortunately, many of these deals, while potentially lucrative, have lost significant amounts of money for UC’s retirement and endowment funds, which were worth $63 billion at the end of 2009. (These losses ultimately reduce the amount spent on education, since the endowment supports teaching activities.) And the non-transparency of these private deals enabled multiple conflicts of interest to arise without challenge.

Specifically, our investigation shows that, under the new regime on the investment committee, UC placed $2 billion into a series of private deals and publicly held enterprises with significant ties to the business activities of four regents: Wachter, Blum, Sherry Lansing, and Gov. Arnold Schwarzenegger.

State Senator Leland Yee (D-San Francisco) was asked to review the findings of this investigation prior to publication. “These are amazing conflicts of interest,” he concluded. “They happened after the UC Regents’ investment committee drastically changed policy away from investing in fixed income securities and into risky private equity buyout funds—thus enriching several regents with ties to those funds.”

Yee added, “And contracting out the management of corporate investments to firms who make their money by generating management fees was just a terrible idea.”

See Part Three: The Regents' Club

Summary of findings on Mr. Blum

After Mr. Blum was appointed to the Board of UC Regents in 2002, UC invested $748 million in seven private equity deals in which he or his firm, Blum Capital Partners, was a major investor. (Mr. Wachter was involved in one of these deals as an investor). Many of these deals were operated in partnership with TPG Capital, where Mr. Blum is an investor and an executive, according to the economic disclosure statements of his spouse, Sen. Dianne Feinstein (D-California), and other public records.

The Blum-related private equity deals in which UC has invested are: Washington Mutual and First American Corporation (2008); Harrah’s Entertainment (2008); Univision (2007); Freescale Semiconductor (2007); Sungard Data Systems (2005); Kinetic Concepts (2003); Commonfund (2002).

See Part Four: Seven Private Equity Deals

UC has also invested $84 million in real estate and private equity deals, as well as the stock of a public corporation, in which Mr. Blum held significant interests:

• A UC investment of $42 million, beginning in 2006, enabled the buyout of a real estate company, Glenborough Realty Trust, in which Mr. Blum was a member of the board of directors and a stockholder. UC’s investment in the fund that purchased Glenbourough has declined in value by $38.5 million.

• In 2007, UC invested $16.6 million in Colony Capital, a private equity firm to which Mr. Blum has numerous business ties.

• As of late 2007, Mr. Blum’s San Francisco-based firm, Blum Capital Partners, had benefited from a $26 million investment in Janus Capital Group made by UC, as well as from related investments in Janus made by UC’s external managers.

See Part Five: Four Case Studies in Conflicts of Interest by UC Regents

• Starting in 2004, Blum Capital Partners bought substantial ownership stakes in two for-profit vocational schools in which UC concurrently invested $53 million. These same educational corporations are seeing increases to their enrollment and profit due to class cut-backs at state-funded universities and colleges such as UC. And in 2007, Sen. Feinstein initiated federal legislation that benefited these two companies and other for-profit educational corporations.

See Part Six: Billion Dollar Babies & The Senator's Educational Conflict

• Since 2004 the California Public Employees Retirement System (CalPERS) has invested billions of dollars in deals that served the financial interests of Mr. Blum, Mr. Wachter, and Gov. Schwarzenegger, often in tandem with UC’s investments in the same deals. During this period, Blum Capital Partners, was an investment advisor to CalPERS.

See Part Seven: Tapping the State Pension Fund

• At the end of 2009, UC held investments totaling $304 million in all 18 of the public companies in which Blum Capital Partners held a substantial or controlling stake.

See Part Eight: Blum Capital Partners Gets Lucky

Summary of other findings

• Since 2003, the regents have invested $411 million in Dimensional Fund Advisors, a company partly owned by Gov. Schwarzenegger and Mr. Wachter. UC also put $75 million into Apollo Management private equity funds in which Mr. Wachter and Gov. Schwarzenegger are invested. (See Part 4 & Part 7)

• Since September 2006, Regent Lansing (who is not on the investment committee) has been a member of the board of directors of Qualcomm Inc., for which she receives an annual director’s fee of $135,000, plus stock options. According to her economic disclosure statement, Ms. Lansing owns “more than $1 million” in Qualcomm stock options (no upper limit is specified). In 2009, Qualcomm paid her $485,252. Documents released by the UC Treasurer show that, after Ms. Lansing joined the Qualcomm board, UC quadrupled its investment in Qualcomm to $397 million. Ms. Lansing told us that she did not instruct the treasurer or members of the investment committee to buy Qualcomm stock.

Ken Boehm, the chairman of the conservative watchdog group National Legal and Policy Center in Fairfax, Virginia, reviewed the findings of this investigation. “It is hard to imagine more clear-cut examples of conflicts of interest than UC investing in companies and private equity funds in which regents have financial stakes,” Boehm said. “Plus, many of these investments are risky, and the regents have a fiduciary duty to invest more safely. This flat-out looks like wholesale conflicts of interest, of people taking care of their buddies.”

Ethics experts on the other side of the political spectrum agreed. Robert Weissman, president of Public Citizen, the liberal good-government advocacy group based in Washington D.C., was also appraised of the findings of this investigation prior to publication. “A third grader can see that what the regents on the investment committee are doing is unethical,” he said. “It goes far beyond the ‘appearance’ of a conflict of interest. These are core conflicts of interest.”

Neither Mr. Blum nor Gov. Schwarzenegger responded to repeated written requests for comment. UC Treasurer Marie Berggren and UC President Yudof also declined to comment. In an emailed statement, Berggren’s spokesperson, Lynn Tierney, said, “It’s misguided to assume that there’s a conflict of interest simply because there’s an overlap between personal investments by University of California Regents and investments made by the UC Treasurer’s Office. The real issue is whether Regents communicate with the Treasurer’s Office about specific investments.”

Tierney added that the treasurer does not track the regent’s personal investments.

spot.us (http://s.tt/122lO)

Re-post Karen-Lee Bixman's The Great Gold Heist

Once again, this is a re-post from an older article. This article dovetails nicely with the Paradise Lost posting. The point of this is to point out the similarities of what occurred with the Desert Wilderness Protection Act and the Desert Protection Act and the Delta Protection Act and the Historic 2009 Water Legislation created with a 'spot' bill and enabling language specifically calling out some benefiting corporations, you know, 'such as Caterpillar' as quoted from the proposed National Heritage Area enabling legislation.

My I can say these people are creatures of habit, aren't they?? Predictable really, when one knows what to look for!

The ties to CalPERS are just as relevant today as they were when this was originally written.

THE GREAT GOLD HEIST The Desert Wilderness Protection Act
by Karen-lee Bixman
(Author and publisher information)
(Index)
Senator Diane Feinstein: "The Modern Jesse James"

Congress should be convening a criminal investigation. On October 8, 1994, the biggest gold heist in history occurred, but this theft lacked the melodrama of a Jesse James' holdup or the excitement of a Brink's truck robbery. Nary a word was reported by the media even though this thievery was committed in the light of day. The citizens that were being robbed tried to cry out for help but the lawmen wouldn't listen because unbeknownst to them, they were helping the bandits gain their booty.

The 103rd Congress managed to accommodate more than a gang of train robbers could achieve in a lifetime when they approved the Desert Wilderness Protection Act. "Instead of voting on the Desert Wilderness Protection Act, Congress should be convening a criminal investigation," said Donald Fife, spokesman for the National Association of Mining Districts.

Fife was commenting on recent information that indicates tens of billions of dollars in gold deposits and huge real estate swindles may be the motivating factors behind the act.

Sponsored by Senator Diane Feinstein, the Desert Wilderness Protection Act and its companion bill known as the California Desert Protection Act created three new national parks and seventy- four new wilderness areas in the desert of California that total 8 million acres (an area the size of Maryland). This closes acreage to development, forces out private owners within the protected area and closes mines and ranches. It also expands the Death Valley and Joshua Tree national monuments and upgrades them to national parks.

This is the largest wilderness land lock-up since the 1980 Alaska Lands Act; largest ever in the lower 48 states.

Senator Feinstein contends that the fragile ecosystem of the desert must be protected from development, but in reality the areas being placed into park and wilderness closures are not threatened. In 1980, the California Desert Conservation Area Plan was enacted to protect the desert and it has been rigorously enforced by the U.S. Bureau of Land Management (BLM). Furthermore, the designated acreage mentioned in this bill have largely been for sale at bargain prices for over 100 years with no takers because there is absolutely no water or any prospect of water for development.

It seems that the real motivation for passage of this bill lies with the special interest groups that would benefit monetarily.

Through a complex series of land exchanges, Catellus Corporation, a subsidiary of Santa Fe Pacific, will receive land that contains some of the richest gold deposits in the world.

In exchange, the public gets seventy-four widely scattered tracts of desert which have found no economic use in more than a century. These properties will be maintained at public expense; Secretary of Interior Bruce Babbitt claims resources within the National Park Service are available for this to be accomplished. In actuality, Congressional figures show that the National Park Service currently faces a 37-year back-log in construction funding, a 250-year back-log for land acquisition, and a short-fall of $400 million for existing park operation and maintenance. Catellus owns over 400,000 acres of worthless land in the California Mojave Desert.

This land was obtained by Santa Fe Pacific and its predecessor railroad companies as part of the "checkerboard" railroad lands awarded for the building of the transcontinental railroad. Santa Fe transferred these lands which have been for sale for over 100 years, over to its subsidiary, Catellus Corp. In the land swap, Catellus Corp. will receive land from decommissioned military bases. One of the bases will be the Chocolate Mountain gunnery range. Unbeknownst to the public, inside the range is the world's richest gold rift zone. Geologists estimate that the gold contained in this zone is worth between $40 to $100 billion. These are surface gold deposits which are more profitable to mine than the one-mile deep gold deposits in South Africa.

In addition to controlling Catellus, Santa Fe owns and operates the Mesquite gold mine located on the Chocolate Mountain rift zone. The Mesquite gold mine is one of the top ten mines in the United States and has some of the most profitable gold deposits of any mine in the world. To the north is the Chocolate Mountain gunnery range. The Mesquite open pit gold mine literally stops at the fence that borders the gunnery range.

According to mining engineers who work at the Mesquite mine, the main gold ore body is north of the fence inside the gunnery range. Engineers allege that in 1981 and 1982, Consolidated Goldfields, which owned the mine at the time, illegally drilled into the gunnery range area to determine the composition of the ore body. The samples proved to be of high quality. According to these same engineers, beginning in the mid-1980s, military helicopters brought high ranking military officers, Congressmen and Senators to the area to examine these large gold deposits. Congressman Bruce Vento (D-Minn.) was one of several congressmen and senators who participated in these highly secretive trips. These same engineers state that the purpose of these tours was to come up with a way to hand these gold deposits to Consolidated Gold.

No legal mechanism was then available to transfer this land without alerting the public to the existence of the gold. Shortly after these tours began, the Sierra Club received large contributions earmarked toward the desert wilderness campaign. Not long after that, Senator Alan Cranston introduced the California Desert Protection Act into legislation.

In 1993, Santa Fe traded all of it's coal mines for several Consolidated Goldfield mines, including the Mesquite. According to Donald Fife (spokesman for the National Association of Mining Districts), "This transaction effectively concealed a sales price that could have drawn attention to the real value of Mesquite mine and the riches north of the pit wall in the gunnery range.

If Catellus Corp. receives land from the Chocolate Mountain gunnery range, the Santa Fe would control the exclusive rights to mine the gold trend for nearly 50 miles to the north. This would bypass any possibility of any open appraisal of the gold deposits.

Senator Diane Feinstein used language in the original bill that specifically stated that Catellus Corp. should receive preferential treatment in the disbursement of original government properties.

The National Association of Mining Districts voiced suspicions about continued back-room favoritism for Catellus, and as noted by the San Francisco Chronicle, Catellus has given $100,000 in political contributions to Senator Feinstein over the past four years.

Since evidence of the conspiracy emerged, rumors circulating the Beltway said that the Chocolate Mountain gunnery range could not be decommissioned because there was too much live ordnance on the ground. This, however, was not true. Millions of surrounding acres were in similar condition after George Patton and others trained their entire armies there between 1942 and 1945. In 1947 the entire region was made safe for civilian use. Furthermore, the decommissioning of Chocolate Mountain will be quite easy in comparison to the clearing of mine fields in Kuwait.

The original version of the bill, however, raised enough red flags in Congress that a few lawmakers, notably Rep. Michael Huffington (R-Calif.), got the Catellus provisions stricken.

The full House of Representatives then voted to grant the same exchange privileges to anybody whose land might be taken under the Desert Act.

"When that was made known," remarked Rife, "opponents forced Feinstein to take it out of the bill. But Catellus, with all its land, still has more leverage for negotiations and acquiring the land it wants than any other private party in this whole deal."

Additionally, Santa Fe has enormous political clout in California and Washington. In addition to having Senator Diane Feinstein as their champion in Washington, former California Governor George Deukmejian is one of the company's directors. Under these circumstances, the Desert Wilderness Protection Act is the perfect vehicle to achieve this land exchange.

Santa Fe however, could actually obtain the bulk of the gold even before the Chocolate Mountain gunnery range is decommissioned.

A careful reading of the bill suggests that the map of the range was altered in July 1993 to exclude a rectangular parcel along the south end of the range. This land comprises the immediate area north of the Mesquite gold mine and included the bulk of the gold deposits and can only be accessed through the private holdings of the Mesquite mine. Now that the bill has become law, a new map of the gunnery range will allow Mesquite to claim public land adjoining it that could hold a billion to several billion in gold.

A source presently employed at Santa Fe states that everyone at the company expects Santa Fe to be given this land. He further claims that Santa Fe is presently carrying out extensive exploration of these areas inside the gunnery range. This includes the drilling and the mapping of the gold deposits. These activities inside the gunnery range are illegal. Therefore, Santa Fe Pacific must have obtained permission from the Navy and the Bureau of Land Management (BLM) in order to carry out their present activities. It is unknown who granted permission for such activity on the part of the Navy, but it is known that no one in the BLM has the authority to grant such permission. The only individual allowed to grant such authority is Secretary of the Interior Bruce Babbitt.

Therefore, even with the Catellus provision stricken from the bill, the money would still be routed to the same beneficiaries.

The California Public Employees Retirement System, (CALPERS) is a nearly $80 billion pension fund whose investment clout is heavily influenced by California leadership which includes Sen. Diane Feinstein. Several years ago, CALPERS made a $400 million investment in Catellus. Shortly after CALPERS made its investment in Catellus, the value of the stock collapsed 82%. Dehnert Queen, a San Francisco businessman, filed a criminal complaint in regards to this investment to U.S. Attorney Michael J. Yamaguchi and Ms. Sylvia Scott of the U.S. Securities and Exchange Commission.

Queen states, in his complaint, that Sen. Feinstein "misrepresented facts to defraud a public corporation (CALPERS), abused power and conflicts of interest to defraud State and U.S. taxpayers. In early 1993, CALPERS doubled its investment in Catellus to 41 percent...Queen contends "that both former Senator Cranston and Senator Feinstein acted to sponsor the Desert Protection Act in order to preserve and protect the formal agreement that then Mayor Feinstein signed with Catellus to build the Mission Bay Project in 1984, updated in 1986 and shepherded same through the City's (San Francisco) departments and commissions."

The land swap as purposed in The Wilderness Act "will generate the monetary value (approximately $500 million) necessary to execute Catellus' large scale development project located throughout the Bay Area."

According to public records, CALPERS investment in Catellus was through Bay Area Partnership, subsequently changed to Bay Area Real Estate Associates, which is itself comprised of JMB Realty and CALPERS. Efforts to determine all of the participants in the investors' group behind JMB Realty and Bay Area Real Estate Associates so far have been unsuccessful, but at least some appear to have business ties with Senator Feinstein's husband.

None-the-less, allegations continue that Senator Feinstein as well as California Speaker of the House Willie Brown and a wide variety of San Francisco special interest groups would therefore benefit financially.

More directly, does Diane Feinstein, as a former employee of the City of San Francisco, Willie Brown and other California politicians maintain a CALPERS retirement account?

Repeated requests to Senator Feinstein's office for the disclosure or denial of any direct relationship between the senator and her husband and CALPERS, JMB Reality, Bay Area Real Estate Associates and Cattelus Development Corporation have been met with evasions and non-answers.

The land swap will give Catellus Corp. thousands of contiguous acres bordering the Salton Sea which lies west of the gunnery range. Developing the arid hills and cleaning up the polluted Salton Sea would require billions of acre-feet of water. By coincidence, the Coachella Canal runs right between the Salton Sea and the range, which is about 20 miles wide and 60 miles long. Developers with such a prize could readily bid water away from owners of irrigated farms in the Brawley and El Centro areas.

Ed White, who owns a family mining business in the area is one of many whose business will now be destroyed. "The Sierra Club was just used, in my opinion, by Feinstein's bankers friends and the railroad or their land company Catellus, to create the public perception that these lands are fragile and threatened by development," said White.

"The truth appears to be just the opposite. The scattered railroad lands that could never be developed are to be consolidated into a single block of 226,000 acres so they can be developed.

JMB Realty stands to make a huge profit on this development. In the name of "rewilding" millions of acres of desert, grave financial and environmental damage will occur once the land is closed to the public.

Ninety-seven the U.S. rare earth mineral production comes from the California desert. These minerals are used in high technology and are essential to the production of lasers, high-power magnets, super conductivity and pollution free cars. The United States will now be forced to obtain these minerals from foreign mineral cartels.

One hundred percent of the U.S. production of boron is from the California desert and this production which generates $500 million a year to the economy will now be lost.

Several pension and health insurance funds have large holdings in the area that now will be at risk. These include the AFL-CIO, United Steel Workers, and California State Teachers Pension Fund.

The Wilderness Act includes 140,000 acres of National Forest found unsuitable for wilderness by then California Senators Alan Cranston (D) and Pete Wilson (R) in the 1983 California National Forest Wilderness Act, including 12,500 acres of the Bighorn Mountain Wilderness in the San Bernardino National Forest that impact the AFL-CIO trust properties.

The greatest damage to union trust assets is the expansion of the Joshua Tree National Park by 234,000 acres to surround their Eagle Mountain Iron Mine on three sides with National Park Wilderness. This will prevent the mine from ever producing again.

The steel workers health and pension assets are the mines and highly mineralized lands acquired when the Kaiser Steel's Fontana, California steel mill was forced into bankruptcy by overzealous environmental regulations and Japanese dumping of steel in the late 1970's.

The 300,000 acres of Teachers Pension funds are the unsold state school sections that were given by the Federal government to the state more than 100 years ago. They have been for sale for 100 years and because there is no water they are not threatened with development.

Unlike the AFL-CIO pension and health insurance funds, the State Legislature and the State Lands Commission discouraged exploration on those lands for energy and mineral resources. Their mineral value is unknown, but it is not uncommon in that area that a single deposit of gold, silver, boron or other minerals could exceed several billion dollars in value.

The closure of the lands will generate a loss of 20,000 jobs and billions of dollars of economic activity will be lost annually.

Over two hundred homes and private businesses worth millions of dollars that will be taken and destroyed will result in claims, lawsuits and payments of 5th Amendment compensation.

One of the most insidious provisions of the act is the creation of "Reserved Federal Water Rights." The Wilderness Act will reserve federal water rights for 74 desert wilderness acres and three new national parks totaling 8 million acres. This will create a precedent, usurping state supremacy and local control of the Western States precious water rights. This will be the "camel's nose under the tent" because, although the Wilderness Act applies only to the California desert, it gives special standing to the Federal government in the adjudication of any water rights where wilderness is involved. It could affect all neighboring states that share watershed with California: Arizona, Nevada, Oregon, even including all of the states that share the Colorado River.

The California Wildlife Federation and the Society for Bighorn Sheep have headed the opposition to the act because they say that thousands of animals will die now that the bill has been enacted. In this arid, rocky region private individuals developed and maintain water holes for the Bighorn Sheep and other wildlife: now they will be prohibited from doing so.

While the roots of this scandal herald back to the days of Senator Alan Cranston, it is obvious that the special interest groups in collusion with the government have systematically worked toward closing off mass acreage from public as well as private usage.

The September 1993 issue of the Holcomb Balley Argonaut reported that a systematic plan of "manufactured wilderness" has been occurring in areas of California for years.

In August of 1991, a joint force made up of Forest Service and U.S. Military personnel entered a road leading to a historic cabin located in Horse-Thief Flats, California.

Within this hidden valley, where renegade Indians hid horses from pursuing California rancheros during the early 1800's, was located the last historic miner's cabin in the northeast San Bernadino Mountains.

Shortly after government personnel entered the valley, the area reverberated with a half dozen giant explosions. The Big Bear Ranger District personnel alleged that the Horse-Thief Flats area was used by marijuana growers. They claimed the historic cabin and road were blown up in several places by military experts under recent authorization to interdict drug traffic.

The explosives were carelessly handled. They apparently used old style detonating cord, normally not permitted in the forest and their fourth blast in the road sprayed fire out over several acres starting a wildland fire. This portion of the National Forest has been parched from the California drought. In historical times only a few wildland fires ever occurred.

Dave Fisher, who has the grazing lease adjoining Horse-Thief Flats, said, " In my opinion, the real reason for this operation had more to do with 'manufacturing wilderness' for the desert bill than fighting crime."

"They have quietly and systematically bulldozed or burned these structures for years," says Ed White, member of the historic Lone Valley Mining District. "The real reason for use of military was eliminating all evidence of human occupation so the Sierra Club could reclaim the area as wilderness. Blowing up the orad is counter productive, now the marijuana growers have a secure place to farm".

On October 7, 1994 at 2:00 a.m., Representative George Miller (D-Calif.), representing the East San Francisco Bay area, led the charge to ram the wilderness bill through the House where it was passed by a voice vote. The bill was passed despite a huge grass-roots mobilization which sent out a fax alert on the bill. One Congressman who received the alert distributed hundreds of copies on the floor of the house. This Congressman stated that the critical issue was the massive corruption surrounding the theft of the gold in the Chocolate Mountains.

The next day, Senator Malcolm Wallop (R-Wyo.) valiantly filibustered the Senate in an attempt to keep the bill from passing, but his efforts failed. As the Wilderness Bill was actively being filibustered, Secretary Babbitt was lobbying senators for their vote; he was ultimately ejected from the upper chamber.

The Alliance of America, a coalition of property rights groups, says that a criminal investigation should focus on the roles of corrupt politicians and environmental racketeers in the biggest gold heist in history.

If Jesse James were alive today, he'd realize that profit is gained not by robbing banks but by being a politician."