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Regional Oral History Office University of California 

The Bancroft Library Berkeley, California 

California Water Resources Oral History Series 

Thomas J. Graff and 
David R. Yardas 


Interviews Conducted by 

Malca Chall 

in 1994 

Copyright 1996 by The Regents of the University of California 

Since 1954 the Regional Oral History Office has been interviewing leading 
participants in or well-placed witnesses to major events in the development of 
Northern California, the West, and the Nation. Oral history is a modern research 
technique involving an interviewee and an informed interviewer in spontaneous 
conversation. The taped record is transcribed, lightly edited for continuity and 
clarity, and reviewed by the interviewee. The resulting manuscript is typed in 
final form, indexed, bound with photographs and illustrative materials, and 
placed in The Bancroft Library at the University of California, Berkeley, and 
other research collections for scholarly use. Because it is primary material, 
oral history is not intended to present the final, verified, or complete 
narrative of events. It is a spoken account, offered by the interviewee in 
response to questioning, and as such it is reflective, partisan, deeply involved, 
and irreplaceable. 


All uses of this manuscript are covered by a legal agreement 
between The Regents of the University of California and both Thomas 
J. Graff and David R. Yardas dated, respectively, November 28, 1994 
and January 9, 1995. The manuscript is thereby made available for 
research purposes. All literary rights in the manuscript, including 
the right to publish, are reserved to The Bancroft Library of the 
University of California, Berkeley. No part of the manuscript may 
be quoted for publication without the written permission of the 
Director of The Bancroft Library of the University of California, 

Requests for permission to quote for publication should be 
addressed to the Regional Oral History Office, 486 Library, 
University of California, Berkeley 94720, and should include 
identification of the specific passages to be quoted, anticipated 
use of the passages, and identification of the user. The legal 
agreements with Thomas J. Graff and David R. Yardas require that 
they be notified of the request and allowed thirty days in which to 

It is recommended that this oral history be cited as follows: 

Thomas J. Graff and David R. Yardas, "The 
Passage of the Central Valley Project 
Improvement Act, 1991-1992: Environmental 
Defense Fund Perspective," an oral history 
conducted in 1994 by Malca Chall, Regional 
Oral History Office, The Bancroft Library, 
University of California, Berkeley, 1996. 

Copy no. 

Thomas Graff, ca. 1991 

David Yardas, 1994 

Cataloging information 

GRAFF, Thomas (b. 1944) Environmental Defense Fund Attorney 

YARDAS, David (b. 1956) Water resources analyst 

Passage of the Central Valley Project Improvement Act. 1991-1992; 
Environmental Defense Fund Perspective, 1996, iv, 133 pp. 

Joint interview discusses Environmental Defense Fund, national and 
regional; research and policy related to California water issues: Auburn 
and New Melones dams, peripheral canal, Metropolitan Water District- 
Imperial Valley Irrigation District, Mono Lake, water transfers, water 
marketing; relationship of Truckee-Carson-Pyramid Lake Water Rights 
Settlement Act to CVPIA; role of EOF, National Resources Defense Council, 
Share the Water, business interests in passage of CVPIA; writing and 
revising Miller-Bradley and Seymour bills; pressure from farmers, 
environmentalists, business leaders; use of media. 

Interviewed in 1994 by Malca Chall for the California Water Resources Oral 
History Series. Regional Oral History Office, The Bancroft Library, 
University of California, Berkeley. 

TABLE OF CONTENTS --Thomas J. Graff and David R. Yardas 





Thomas Graff: Personal Background and Career Path with the 

Environmental Defense Fund 1 

Education and First Professional Positions 2 

The Founders of EOF 3 

The Early Years of EOF in the San Francisco Bay Area: 

Water-Related Cases 5 

The Split in the Environmental Community Over the 

Peripheral Canal, 1976-1982 8 

The Evolving EOF Advocacy Policy: Innovative Directions 

of the Staff 10 

The Metropolitan Water District and the EOF Concept for 

the Imperial Valley 12 

Working with the State Legislature on Water Legislation 13 
Contacts with the Agriculture /Water Community 15 

Drafting the Coordinated Operation Agreement Legislation, 

1986 17 

Background on the Miller-Bradley Bill 20 

Senator Bill Bradley 's Interest in California Water 

Issues, 1989 20 

Congressman George Miller's Fish and Wildlife Bills, 1989, 1990, 

1991 23 

The Natural Resources Defense Council and California 

Water Issues 24 

The NRDC and EOF Join Forces on Fish and Wildlife 

Protection, Water Transfers, and Contract Renewals 25 
The Contract Renewal Issue: Congressman Miller's Dilemma 

re Transfers 27 

Senator Bradley Takes the Lead on the CVPIA, 1991-1992 28 
David Yardas: Personal Background and Career Path with the 

Environmental Defense Fund 30 

The Pyramid Lake Project: Its Relevance to the CVPIA 

Legislation 33 

Agriculture, Wetlands, Indian Tribal Fisheries 36 

Becoming Involved in California Water Issues: Drafting 

the Yardas-Garrison Letter 38 

Genesis of the Three-Way Water Agreement Process 39 

Leave of Absence, January to October, 1991 40 


SENATE, 1990-1992 43 
Thomas Graff's Offer of Advice on Reform Legislation Coupling 

Water Marketing and Environmental Protection 43 
George Miller Holds Back Final Passage of the Omnibus Water Bill 45 
Senator Bradley Plans to Include the CVPIA in Final Passage of 

the Omnibus Water Bill 46 

Additional Background on the Yardas-Garrison Letter 47 

George Miller's Response to Water Marketing 49 

Share the Water: The Coalition in Support of the CVPIA 53 

Thomas Graff 55 

David Yardas 55 
The Roles of the Urban Water Agencies and the Business Community 56 

Tracking the Drafting of Senator Seymour's Bill, S. 2016, 1991 57 

Senator Bradley 's Staff Revises S. 484 58 

Senator Seymour Introduces S. 2016 59 

Analyzing the Revisions of S. 484 Unacceptable to Agriculture 60 

Water Reallocation Provisions and Transfers in S. 2016 62 
The Metropolitan Water District and Its Shifting Position on 

the Reform Legislation 65 

Senator Bennett Johnston: The Chairman's Mark 66 

Various Reasons for the Mark and Its Provisions on Water 70 
The Senate Energy and Natural Resources Committee Passes the 

Seymour Bill 73 

The Senate Passes the Seymour Bill: Title 34 of H.R. 429 76 



The Debate Moves to the House 78 

Drafting H.R. 5099: The Central Valley Project Improvement Act 78 

George Miller Strikes a Deal with Valley Democrats 79 
The Restoration Trust, the Restoration Fund, and the Advisory 

Committee 80 

The Environmental Community Criticizes Congressman Fazio 82 

Opposition to Auburn Dam Joined to CVPIA Debate 83 

Pondering Senator Seymour's Reluctance to Negotiate 84 

The Somach-Graff Negotiations 85 

Compromise Positions on Each Side 88 

Factoring in the Urban Interests: The Metropolitan Water 

District 88 

Releasing the Draft: The Aftermath 90 

Analyzing Some Specific Provisions in the Draft 92 

H.R. 5099 Passes the House by Voice Vote 95 

The Tiered Pricing Amendment 96 

Further Negotiations on the Somach-Graff Draft 97 

The Influence of the Media 100 
The Conference Committees: Negotiations Involved in Drafting 

Title 34 102 

The Final Hours Preparing the Bill 106 

The Votes in the House and Senate 109 
President Bush Signs H.R. 429, the Reclamation Projects 

Authorization Act of 1992: The Omnibus Water Bill 110 

Analyzing the Viewpoints of the Agricultural Community Toward 

the Environmental Community 112 

An Optimistic View of the Future of the CVPIA 114 



A. Yardas-Garrison letter re. H.R. 3613, Sept. 6, 1990 117 

B. Tom Graff memo to Dan Beard and John Lawrence re. CVP: 

water policy reform, Feb. 10, 1992 123 

C. President George Bush statement re. signing H.R. 429, the 

Omnibus Water Bill, Oct. 30, 1992 128 

INDEX 134 


The Water Resources Center of the University of California, in 1965, 
established a History of California Water Resources Development Oral 
History Series, to be carried out by the oral history offices at the Los 
Angeles and Berkeley campuses. The basic purpose of the program was "to 
document historical developments in California's water resources by means 
of tape recorded interviews with men who have played a prominent role in 
this field." The concern of those who drafted the program was that while 
the published material on California water resources described 
engineering and economic aspects of specific water projects, little dealt 
with concepts, evolution of plans, and relationships between and among 
the various interested federal, state, and local agencies. 

To bridge this information gap, the Water Resources Center, during 
the past quarter century under the successive direction of Professors 
Arthur F. Pillsbury, J. Herbert Snyder, and Henry Vaux, Jr., has provided 
funding in full or in part for interviews with men who have been 
observers and participants in significant aspects of water resources 
development. Early advisors to the project on the Berkeley campus were 
Professors J. W. Johnson and David K. Todd. Gerald Giefer, librarian of 
the Water Resources Center Archives, Berkeley, has maintained an 
important advisory role in the project. 

Interviewees in the Berkeley series have been pioneers in western 
water irrigation, in the planning and development of the Central Valley 
and California State Water Projects, in the administration of the 
Department of Water Resources, and in the pioneering work of the field of 
sanitary engineering. Some have been active in the formation of the San 
Francisco Bay Conservation and Development Commission; others have 
developed seminal theories on soil erosion and soil science. But in all 
cases, these men have been deeply concerned with water resources in 

Their oral histories provide unique background into the history of 
water resources development and are valuable assets to students 
interested in understanding the past and in developing theories for 
future use of this essential, controversial, and threatened commodity- 

Henry J. Vaux, Jr., Director 
Water Resources Center 

January 1989 

University of California, Riverside 



April 1996 

The following Regional Oral History Office interviews of have been funded in 
whole or in part by The Water Resources Center, University of California. 

Banks, Harvey (b. 1910) 

California Water Project. 1955-1961. 1967 82 pp. 

Gianelli, William R. (b. 1919) 

The California State Department of Water Resources. 1967-1973. 
1985, 86 pp. 

Gillespie, Chester G. (1884-1971) 

Origins and Early Years of the Bureau of Sanitary Engineering. 
1971, 39 pp. 

Graff, Thomas J.(b. 1944) and David R. Yardas (b. 1956) 

The Passage of the Central Valley Project Improvement Act. 1991-1992; 
Environmental Defense Fund Perspective. 1996, 136 pp. 

Harding, Sidney T. (1883-1969) 

A Life in Western Water Development. 1967, 524 pp. 

Jenny, Hans (1899-1992) 

Soil Scientist, Teacher, and Scholar. 1989, 364 pp. 

Langelier, Wilfred F. (1886-1981) 

Teaching, Research, and Consultation in Water Purification and Sewage 
Treatment. University of California at Berkeley. 1916-1955. 
1982, 81 pp. 

Leedom, Sam R. (1896-1971) 

California Water Development, 1930-1955. 1967, 83 pp. 

Leopold, Luna B. (b. 1915) 

Hydrology, Geomorphology, and Environmental Policy; U.S. Geological Survey, 
1950-1072. and UC Berkeley. 1972-1987. 1993, 309 pp. 

Lowdermilk, Walter Clay (1888-1974) 

Soil, Forest, and Water Conservation and Reclamation in China, Israel. 
Africa, and The United States. 1969, 704 pp. (Two volumes) 

McGaughey, Percy H. (1904-1975) 

The Sanitary Engineering Research Laboratory: Administration, Research, 
and Consultation. 1950-1972. 1974, 259 pp. 


Nelson, Barry (b. 1959) 

The Passage of the Central Valley Project Improvement Act, 1991-1992; 
Executive Director. Save San Francisco Bay Assocation. 1994, 88 pp. 

Peltier, Jason (b. 1955) 

The Passage of the Central Valley Project Improvement Act, 1991-1992; 
Manager. Central Valley Project Water Association. 1994, 84 pp. 

Robie, Ronald B. (b. 1937) 

The California State Department of Water Resources. 1975-1983. 
1989, 97 pp. 

The San Francisco Bay Conservation and Development Commission. 1964-1973. 

Interviews with Joseph E. Bodovitz, Melvin Lane, and E. Clement Shute. 
1986, 98 pp. 

For other California water-related interviews see California Water Resources 



Momentous shifts in social policy often seem to arrive on the scene 
without a history. On close inspection, one finds that people have 
worked, perhaps for decades, on a concept that now works its way into our 
consciousness. So it was with the Central Valley Project Improvement Act 
(CVPIA) , that significant transition in California water policy history 
which was signed into law by President George Bush in 1992. In 1993, the 
Regional Oral History Office initiated an oral history series, the 
Passage of the Central Valley Project Improvement Act, 1990-1992, to 
document this important legislation. The series began with interviews 
with Jason Peltier and Barry Nelson, and now moves on to Thomas Graff and 
David Yardas. 1 

In this oral history, Thomas Graff and David Yardas, key players in 
the legislative process leading to passage of the CVPIA, bring to life 
the exciting behind-the-scenes activities and personalities involved with 
the pros and cons of the legislation, including some of the intellectual 
and political background which shaped the final Omnibus Water Act. 

Thomas Graff, a senior attorney with the Environmental Defense Fund 
(EOF) in Oakland, California, was hired by the fledgling national EOF 
board in 1971 to help organize the northern California office. Early 
concerns dealt with pesticides, but eventually Mr. Graff focused on such 
environmentally and politically sensitive issues as the Auburn and New 
Melones dams, the San Francisco Bay/Delta Estuary, the Peripheral Canal, 
Mono Lake, and the Imperial Irrigation District. 

From as early as 1981, Tom Graff, along with others on the EOF 
staff, began studying, writing, and speaking on the possibilities of 
using market forces to accomplish environmental goals. Or, as he 
headlined an op-ed piece in the Los Angeles Times, "Water is a Commodity, 
So Let's Treat it as One." 2 Scores of articles and the testing of this 
theory in the Imperial Valley and Mono Lake set the tone for the debates 
during the following decade. 

David Yardas began his career with EOF in 1986 working on the Rural 
Economy and Environment Program (REEF), a new Ford Foundation Program. 
This led him to the Pyramid Lake, Nevada, (water/land) controversy, a 
case possibly falling under the REEP initiative. The result was the 1990 
Truckee-Carson-Pyramid Lake Water Rights Settlement Act. This involved 
water transfers, a water rights acquisition program, and associated 

J The series will continue with Daniel Beard and Richard Golb interviews, 
2 Zach Willey and Thomas Graff, Los Angeles Times. February 5, 1984. 

revisions in the Newlands Projectthe oldest federal reclamation project 
in the West. Mr. Yardas explains that some of the ideas for the complex 
Pyramid Lake decision were an outgrowth of the Metropolitan Water 
District-Imperial Irrigation District approach- -"the idea that the urban 
sector could come in and invest in conservation in an agriculture project 
and reap the benefits of conserved water." This concept had been worked 
out during the 1980s by Tom Graff and Zach Willey, his EOF colleague. 

During David Yardas ' s Nevada period, he met Senator Bill Bradley 
(chair of the Subcommittee on Water and Power of the Senate Committee on 
Energy and Natural Resources) and Tom Jensen, his chief aide for water 
policy, when they became interested in the Pyramid Lake reclamation 
project. Consequently, Jensen and Yardas developed a strong and trusting 
relationship which proved highly valuable when Senator Bradley and Jensen 
turned their attention to the Central Valley Project. 

By mid- 1991 various sectors involved with CVP reform were in place. 
Senator Bradley had focused on California water policy and reform of the 
Central Valley Project, and had introduced a bill entitled the "Central 
Valley Project Improvement Act." Congressman George Miller, now chair of 
the House Committee on Natural Resources, had proposed another of his 
many bills to restore fish and wildlife to the Upper Sacramento River and 
revise time limits for renewing CVP contracts. The environmental 
community, joined by some major business interests, had organized for 
action in favor of the legislation redefining the mission of the CVP 
which required agriculture to share water with fish and wildlife and the 
urban needs of California's growing cities and towns. Finally, Graff and 
Yardas were proposing water marketing as an impetus to conservation and 

At the same time, the Central Valley Project Water Association 
contractors and others in the agriculture /water community were writing 
their own bills to deal with the problems of the Central Valley Project. 
Strongly opposed to Miller's and Bradley 's ideas, they tapped Senator 
John Seymour to carry their legislation. Mr. Seymour had been appointed 
to fill the term of Senator Pete Wilson following his election as 
governor of California. 

Add to this mix the Omnibus Water Act, loaded with some thirty 
special water-related projects intensely sought by congressmen in twelve 
other western states. George Miller had held back this act for a number 
of years until it included a section on Central Valley Project reform. 
The scene was now set for a major water reform struggle in and outside of 
Congress . 

This oral history takes us step by step through the two-year effort 
to reform and restructure the Central Valley Project. We follow in close 
detail the rationale behind revisions in the Miller-Bradley bills, the 
innumerable hearings in California and Washington, D.C., and the attempts 
to meet with Senator Seymour and CVP contractors to work out a 
compromise. We learn of the efforts to influence the media, of the 
emotional lows and highs as the Central Valley Project Improvement Act 


legislation moved through the committees and on to the floors of the 
House and Senate. When a reluctant President Bush signed the Omnibus 
Water Act which included the CVPIA, the environmental community could 
savor victory. 

To prepare for this interview, I met with Mr. Graff on September 13, 
1994 to consider what key aspects of this history he wished to cover in 
two recorded interview sessions. The story of the CVPIA, he claimed, 
would be incomplete without the details and amplification provided by his 
colleague David Yardas who had had an important role in negotiating and 
writing key aspects of the legislation. 

A joint interview, although unusual, had worked well for the oral 
history with three founders of the Save San Francisco Bay Association, so 
it was agreed that David Yardas would join the sessions with Tom Graff. 

At this and subsequent meetings, Tom Graff gave me copies of memos, 
testimonials prepared for committee hearings, letters, drafts of bills, 
and newspaper and journal articles dealing with the history of the CVPIA 
and water marketing. 

The interviews took place in the spacious conference room at EOF 
headquarters in Oakland, for two hours on October 10 and three hours on 
November 16, 1994. Both men were careful to present the facts as 
accurately as possible and the recollections of their own emotions and 
attitudes during these eventful two years. They bantered and bounced 
details, anecdotes, and questions off of each other. Mr. Graff brought 
in old calendars to help ensure accuracy of dates, places, and people. 
He also made notes of topics he wanted to discuss. David Yardas brought 
in binders in which he had organized chronologically the many drafts of 
the Miller-Bradley bills and other pertinent legislation. Their 
friendship and mutual respect were apparent throughout this interview. 

The collaboration continued as each read and checked for accuracy 
the lightly edited transcript. They answered questions and added 
information I thought useful. 

Copies of some of Graff's material have been placed where relevant 
with the interview; others are in the appendices. The entire document 
collection will be deposited in the Water Resources Center Library on the 
Berkeley campus. It supplies a rich resource for those studying the 
background of the CVPIA as well as the EDF's successful ventures in Mono 
Lake and the Imperial Irrigation District. 

Mr. Graff seemed cautiously optimistic about the future of the CVPIA 
now that the Republicans are the majority party in the Congress and both 
Bill Bradley and George Miller have lost their influential committee 
posts. Some of the changes, he claimed, were structural, not mere 
products of personalities. Public attitudes about the environment had 
been important to the passage of the CVPIA and environmental legislation 
during the past decades. "Now," he said, "public attitudes could shift 
back. And maybe they have. Maybe property rights in some sense are more 


important than endangered species in many people's view. One thing I've 
always wondered about: whose property is water? That's a very 
complicated concept. The answer to that is very complicated. But we'll 
need to wait for another interview someday to get into that whole area." 

Funding for these interviews came from the Center for Water and 
Wildland Resources of the University of California at Davis. Professor 
Don Erman, the Center's director, understood the importance of 
documenting the history of the landmark Central Valley Project 
Improvement Act. 

The Regional Oral History Office was established in 1954 to augment 
through tape-recorded memoirs the Library's materials on the history of 
California and the West. Copies of all interviews are available for 
research use in The Bancroft Library and in the UCLA Department of 
Special Collections. The office is under the direction of Willa K. Baum, 
and is an administrative division of The Bancroft Library of the 
University of California, Berkeley. 

Malca Chall 
Interviewer /Editor 

December 1995 

Regional Oral History Office 

The Bancroft Library 

University of California, Berkeley 


Regional Oral History Office 
Room 486 The Bancroft Library 

University of California 
Berkeley, California 94720 

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Your children 

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Present conununity_ 
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Regional Oral History Office 
Room 486 The Bancroft Library 

University of California 
Berkeley, California 94720 

(Please write clearly. Use black ink.) 
Your full name_ EWq E. 

Date of birth 


Father's full name 

Occupation IfeAHteA ( 

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Where did you grow up? K<W\ 
Present comraunity 
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Organizations in which you are active 


[Interview 1: October 10, 1994] ##' 

Thomas Graff; Personal Background and Career Path with the 
Environmental Defense Fund 

Chall: What I wanted to learn from you first is the route by which you 
arrived where you are now. As I understand it, you're counsel 
with the EDF [Environmental Defense Fund] . What is your exact 

Graff: Well, it's fluctuated over the years, but the current title that I 
use is senior attorney. From time to time I've used regional 
counsel, spelled s-e-1. Those are pretty much the two. 
Occasionally, I'm referred to as the director of this office, but 
that's technically not accurate, even though I'm the senior person 
here and have sometimes served in a qua si -management function. 

Chall: Senior person meaning you have-- 
Graff: I have been here the longest. 
Chall: How long has that been? 

Graff: 1971. Two colleagues and I started the California office of EDF 
in the summer of "71. 

Chall: As an attorney with the fund? 

Graff: Well, it was quite a young organization. EDF was formed in 1967 
on Long Island in New York, and three years later opened a D.C. 
office, and only a year after that opened the California office. 

'//# This symbol indicates a tape or tape segment has begun or ended. 
A guide to the tapes follows the transcript. 

They did a sort of unusual thing of interviewing for three 
professional positions separately, and hired each of the three 
people with whom they staffed the office separately. The three of 
us thrown together became essentially partners in creating an EDF 
West Coast presence. 

Education and First Professional Positions 

Chall: What background do you have, and where did you come from to get 

Graff: Well, I don't know exactly what of the background you want to know 
about, but in terms of schooling-- 

Chall: Yes. 

Graff: I graduated from Harvard College in 1964, and from Harvard Law 
School in 1967. I majored in American history as an 
undergraduate. My degrees in both cases were magna cum laude, and 
in the case of the law school, I was an officer, the treasurer, of 
the Harvard Law Review. 

After law school, I was awarded a fellowship called the Frank 
Knox fellowship awarded by Harvard University and spent a year 
acquiring a master of laws at the University of London, London 
School of Economics. It was mostly a fun year rather than a 
particularly rigorous academic year. 

The year following that, 1968-69, I served as a clerk to 
Judge Carl McGowan of the United States Court of Appeals for the 
D.C. circuit. It was a wonderful experience. He was a terrific 
guy who was a great judge and also had an interesting political 
history. He had been administrative assistant to Governor [Adlai] 
Stevenson of Illinois and had a lot of interesting stories to tell 
about Illinois politics over the years. He'd also been campaign 
manager for Stevenson in his unsuccessful first presidential run. 
He also had been a professor of law at Northwestern and a 
practicing lawyer prior to being appointed by President [John F.] 
Kennedy to the court of appeals . 

Then in 1969-70, I served as a lobbyist for the city of New 
York on the staff of then-mayor John Lindsay in D.C. During all 
that time, the Vietnam conflict was underway, and I was in various 
stages of potentially going to be drafted by my local draft board, 
but it never happened. By the time I was halfway through my year 
of lobbying for the city, I turned twenty-six, and that was also 

the year of the first lottery, and I got a good number, a non- 
draf table number. 

So at that point, my then-wife and I decided to abandon the 
East Coast. [Richard M. ] Nixon by then was president, and 
Washington didn't hold a lot of appeal. Other Eastern Seaboard 
cities we excluded for various reasons. So I came out to 
California to interview at law firms , and chose what was then the 
Howard, Prim, Smith, Rice, & Downs firm in San Francisco. It's 
now the Howard, Rice, Nemerovski, et cetera firm. I joined them 
in the summer of '70. 

About a little less than a year later, I got a letter that I 
guess would change my life. I got the letter from a man named 
Bill Butler, who was then a fairly new lawyer for EDF in D.C. 
saying he'd been referred by a mutual acquaintance, a fellow named 
Chuck Fabrikant, who at the time was special assistant to then-EPA 
administrator [William] Ruckelshaus, and who had been a co-clerk 
with me. He had been clerking for Judge [Harold] Leventhal when I 
was clerking for Judge McGowan. Bill asked me whether I knew 
people in the Bay Area who might be interested in starting the EDF 
office, and I volunteered myself. 

I happened to have a business trip to D.C. shortly 
thereafter. I interviewed quickly with him and with the people in 
EDF's headquarters out on Long Island, and about a year after I 
joined the Howard, Prim firm, I left the firm to help start the 
EDF office. 

Chall: Haven't regretted the move at all? 

Graff: No, I haven't. But contrary to what's probably the case today, I 
had essentially no environmental background whatsoever, a little 
bit of public interest background, a couple of cases that I had 
taken on during the year I was at Howard, Prim, but other than 
that it was mostly my academic record or perceived promise or 
something that caused them to hire me. 

The Founders of EDF 

Chall: The people who started EDF, were they environmentalists? 

Graff: Yes, they were. I can give you some interesting histories of EDF. 
The founders were primarily a group of birders out on Long Island 
who had seen the osprey decline precipitously during the previous 
decade or so, and who saw the spraying of DDT as the principal 

culprit, and decided to try to do something about it. They 
realized that simply displaying their scientific knowledge about 
what had transpired was not going to be enough to turn around 
public policy, so they hired a lawyer initially, and then shortly 
thereafter, incorporated. An effort to initially stop spraying of 
DDT on Long Island quickly spread elsewhere in the country, and 
finally--! don't know about finally, but as of today, has 
mushroomed into a more than $20 million a year national operation 
with six or seven offices and a diverse portfolio of activities. 

But when I started, which was only a few years after its 
beginning in 1967, pesticide use and water projects, which were 
two of the major problems for wildlife, and particularly for 
aquatic wildlife, were major priorities. This was the concern 
even before our office began. So even though there was no real 
direction as to what environmental problems we should tackle when 
we started the office out here, the combination of the prior 
interest in water projects which EOF had already been fighting 
elsewhere in the country, and the interest of one of my 
colleagues, Jerry [Gerald] Meral, led us into the water and 
pesticide directions. 

I might point out that Meral fits into this story in various 
ways over the years. He was an active rafter, actually canoeist, 
Whitewater canoeist, and he was already engaged on a personal 
level in fighting the New Melones Dam on the Stanislaus River. So 
that became one of our major early activities, trying to stop the 
construction of New Melones. 

Chall: Were you given sort of carte blanche about what you were going to 
do in California? 

Graff: In nominal terms we were certainly asked to work on pesticides and 
on water. In those days, the executive committee of the board 
played a quite active role in reviewing in detail activities of 
the staff, but most of the initiatives were staff -generated, with 
approval from the then more active--! don't know about more active 
board, but a board more immediately engaged in the substance of 
the organization. And over the years, the board has evolved into 
being more of a conventional board, where they set broad policy 
but don't get involved nearly as much in particular details. 

Chall: Was the first board really located close to the home base? 

Graff: Yes. They were scientists at the State University of Stonybrook, 
at the Brookhaven National Lab. In one case, Art Cooley, who's 
still a board member, was a high school biology teacher, I think 
at Belleport, Long Island. And so that area, that community, 
spawned most of the original board members, or at least the most 

active original board members. Charlie Wurster and Bob Smolker, 
who has since passed away, came from SUNY, Stonybrook, and Dennis 
Puleston and Roger Craig, who eventually moved away, from 
Brookhaven. I guess George Woodwell was then at Stonybrook; he's 
now I think at Woods Hole Lab. Those were among the founding 
trustees, board members. 

Chall: So, now you're here. 

Graff: So jump twenty- five years, almost. [laughter] 

Chall: You had moved into the Bay Area. 

Graff: Yes. I had been in the Bay Area for a year, in fact, lived in San 
Francisco and reverse-commuted for a year or so before moving to 
the East Bay. 

The Early Years of EOF in the San Francisco Bay Area: Water- 
Related Cases 

Chall: Was the office initially set up in the East Bay? Was it in 

Graff: It was set up in Berkeley, quite near campus, on Durant, in a 

converted sorority house that was owned by that time and operated 
by the Wright Institute, which is an alternative psychology 
graduate program. They had extra space up on the top floor, and 
that's where we set up the office. Stayed there for about a half- 
dozen years, maybe, and then we moved to Dwight Way, also in 
Berkeley, in an office building that was rented out by the Baptist 
Seminary of the West, kind of kitty-corner from People's Park. 
That area eventually became not very attractive, as People's Park 
degenerated, and about seven years ago now, we moved here, to 
north Oakland. 

Chall: So what was your early background, then, on water issues, besides 
the New Me lone s? 

Graff: Well, actually within the first year and a half, about a year, 
from the time we opened the office, we filed several lawsuits- 
well, a lawsuit and an administrative proceeding dealing with the 
Stanislaus River and New Melones and a lawsuit against East Bay 
MUD, East Bay Municipal Utility District, the local water purveyor 
and handler of sewage. And in fact, the East Bay MUD case is 
still alive today. It went twice to the California Supreme Court, 
once to the U.S. Supreme Court, and then eventually after many 

years was tried twice over, once by the water board and once by a 
local superior court judge. 

Chall: What's the case? 

Graff: There were really two major claims, one of which kind of fell off 
during the course of all the pre-trial maneuvering, and one of 
which was eventually tried. The part that fell off was that we 
argued that East Bay MUD should reclaim water to a greater degree 
than it did, so as to conserve the water resource eventually. 1 
They've done quite a bit of it, but the state court of appeal on 
the first time up through the system ruled that that claim was 
actually, I guess it was the California Supreme Court that ruled 
that that claim should have been handled as an administrative 
matter by the water boards, and we never again took it up before 
the water boards, so it was dismissed. 

But the part of the case that went on for many years , for two 
decades, was a claim that East Bay MUD should divert a 
supplemental supply, if at all, from the American River downstream 
rather than upstream so that the water could be placed in multiple 
use, for fisheries and aesthetic and recreational values. The 
water board essentially dismissed that claim, said East Bay MUD 
could divert according to its contract with the Bureau of 
Reclamation, but Judge [Richard] Hodge in a decision in the late 
eighties-- '89, '90, I can't remember exactly- -ruled thatkind of 
split the baby in halfsaid that East Bay MUD could divert 
upstream, but only in wet years, or when there was an excess of 
water in the river. 2 And that's still a local controversy. 

So that was one that I got involved in. I handled it pretty 
much exclusively within EOF for the first decade or so, and then 
eventually others have come into it. 

The New Melones case was primarily handled by the other 
lawyer that we started together with, Michael Palmer, and I sort 
of second-chaired that. That involved not only a legal campaign 
in the courts on the adequacy of the original environmental impact 
statement for New Melones, but a water board proceeding trying to 
restrict the amount of water that could be used by the Bureau of 
Reclamation from the Stanislaus, which we hoped would preclude the 
construction of the dam, but didn't. 3 

1 EDF v. EBMUD, 20 Cal. 3d. 327 (1977), vacated by 439 U.S. 811 (1978), 
decided again as 26 Cal. 3d. 183 <1980). 

2 Not reported (case #425955, Superior Court, Alameda County). 
3 D. 1422. 

And then there was a political campaign that Jerry Meral, our 
scientist colleague, was heavily involved in. He was sort of the 
main original promoter of what became Prop., what was it, 17? I 
can't remember, in 1974. ' It was a salient feature of the 
gubernatorial race between Jerry Brown and Houston Fluornoy, in 
fact, one of the few issues that they publicly disagreed about. 

And then the other case that I was heavily involved in was 
the suit we filed against the Auburn Dam in 1972, together with 
NRDC, the Natural Resources Defense Council. We included John 
Leshy of NRDC, who's now solicitor of the Interior, and I, with 
Jerry Meral 's active help, and Dr. Phillip Williams. Williams is 
a hydrology consultant who's gone on to do many good things for 
environmental groups on a variety of water-related issues, 
including Mono Lake and the Owens River and various others- 
American River--for many, many years. We originally persuaded 
Judge [Thomas J.] MacBride in the U.S. District Court for the 
Eastern District in Sacramento that the EIS [environmental impact 
statement] was inadequate, but he declined to enjoin the dam's 
construction. Eventually the feds filed another EIS which was 
held adequate. But then the earthquake happened at Oroville, and 
eventually Auburn for a lot of reasons didn't get built. 

So Auburn, New Melones, East Bay MUD were our three big early 
efforts, and as you've already heard, were largely attacked on a 
litigation basis. 

Now, the one other major activity in the early years which 
Jerry handled, and then I sort of took over starting in 1975, was 
to look at Delta issues. He became a member fairly soon after the 
starting of the officeI'm not sure exactly whenof the Delta 
Environment Advisory Committee, created by the then-Reagan 
administration in Sacramento, to look at what should be done about 
facilities in the Delta and other matters. 

In 1974, November of '74, I took a leave from EOF to join the 
transition staff of Governor-elect [Jerry] Brown, served there for 
a little less than two months, helped him set up the environmental 
and resources sides of his new administration, and then returned 
to EOF. A few months later, Ron Robie was selected as director of 
water resources. There's some good stories I can tell about those 
few months . 

'Proposition 17. To add sections of the Stanislaus River to the state 
wild-rivers system; to prevent construction of the proposed New Melones 
Dam, November, 1974. 

But the upshot of that was immediately after Robie's being 
selectedin fact, I think the next dayhe called Jerry and asked 
Jerry to come up as his deputy, and Jerry left EOF- -in May or June 
of 1975. ' The Delta Environment Advisory Committee was continued, 
and I stepped in to replace him on that committee. 

The Split in the Environmental Community Over the Peripheral 
Canal, 1976-1982 

Graff: A year or so later, in May of 1976, in somewhat of an historic 

meeting of that committee, most, essentially all of my colleagues 
who were there, voted to support the Brown-Robie-Meral Peripheral 
Canal program, and I dissented. There then ensued a quite 
vigorous internal debate within the environmental community over 
what to do about that program, which evolved over the next four 
years into two sets of state legislative battles, both separate 
bills by State Senator [Ruben] Ayala. 

Originally, the Sierra Club and the Planning and Conservation 
League, probably the two most significant local statewide forces 
in the environmental movement, supported the Brown program. By 
the end of that period, they opposed it. Within the Sierra Club, 
there was a national referendum as to what to do about the Sierra 
Club's position on the canal and related matters. I wrote the 
piece in the Sierra Club magazine opposing the support of the club 
for that program. 

I was also on the PCL [Planning and Conservation League] 
board, and we had a big showdown at the PCL board, which 
essentially split the board almost in half, and although the board 
briefly continued to support the program, they essentially within 
a year, had flipped and became opponents. 

And through the late seventies into the early eighties, a lot 
of what was going on here at EDF was opposition to the plan. A 
lot of our opposition beginning in '77 was premised on what was 
emerging at the federal level as a major shift in federal water 
policy. Jimmy Carter had come in to office at the presidential 
level and had, as you might recall, opened his administration in 
the first few months with his infamous hit list of projects, which 
included Auburn Dam among them. 

'Ronald B. Robie, The State Department of Water Resources, 1975-1983, 
Regional Oral History Office, University of California, Berkeley, 1989. 

One of our guiding principles was that, with the federal 
administration leading the way in redefining how water policy 
should be pursued, it was the wrong time to endorse, albeit an 
environmentally dressed up, continuation of the past water 
policies in California. Now, the opposing point of view, of 
course, was that those environmental bells and whistles were 
important enough to support even the construction of the 
Peripheral Canal, and that's why- -obviously there was a lot of 

By the time it got to referendum in '82, 1 the environmental 
movement was almost uniformly opposed, and in the Bay Area, the 
votes, I think the minimum anti vote was 89 percent in Santa Clara 
County, and it went all the way up to something--! think it was 96 
percent in Marin, which are votes reminiscent of the Soviet Union, 

Chall: In southern California there was a break among the growers, wasn't 

Graff: Yes, we split the growers. The Boswell and Salyer firms joined 
us, and even within southern California, we got large numbers of 
votes , largely on economic grounds . 

And one of the parts of the story that I guess I wanted to 
get into with you, a major element in that campaign was that I 
worked pretty closely with unusual kinds of people, at least from 
my perspective, Boswell and Salyer and their representatives, for 
example . I became quite friendly during that campaign with Doug 
Watts, who was a partner in what was then Russo Watts, eventually 
became Russo Watts & Rollins. He was a major conservative 
Republican political consultant. He also eventually ran the last 
month of the [George] Deukmejian for governor campaign in the same 
year, that was '82, which defeated [Tom] Bradley for governor. I 
became pretty good friends with Doug, also ended up spending a lot 
of time with southern California editorial boards, which I 
probably would never have done otherwise: with the Orange County 
Register and the San Diego newspapers and various other quite 
conservative, as well as not-so-conservative, papers down there. 

'Proposition 9, referendum to authorize construction of the Peripheral 
Canal and other water facilities, June, 1982. 


The Evolving EDF Advocacy Policy: 
the Staff 

Innovative Directions of 

Graff: So I don't know what came first, but in terms of the evolution of 
EDF's political thinking, we became much more comfortable with the 
idea of collaborating, when appropriate, and working with 
interests who in many other contexts would be considered 
antagonistic. Just looking at it from a personal point of view, 
the sort of prototype of how to do the job that we were doing at 
EDF when we started in the early seventies was Ralph Nader. His 
modus operandi was always to hold the opposition and the special 
interests at arm's length, to take what seemed from my perspective 
always to be sort of a purist approach. 

And I think the evolution over the course of the twenty years 
that I've been doing this job has been away from that concept to a 
more pragmatic one of finding allies wherever they might reside, 
and always on a personal level essentially keeping lines of 
communication open with all kinds of different interests. When we 
eventually get to our Miller-Bradley story, I think that's 
significant, in that we ended up with alliances in that struggle 
with the big urban water districts, with the California Business 
Roundtable, and had fruitful negotiations with the representatives 
of agribusiness. And I think all that would not have been 
possible if we, and I personally, had stayed in the mode of, "It's 
us against them, and we're doing battle with the bad guys." 

Chall: Well, EDF seems to be in the forefront of this whole idea of 

collaboration. I've wondered whether it's only here, or have you 
moved that into the center of EDF? 

Graff: I think my colleagues, Zach Willey and David Roe and I, were 
instrumental in helping bring EDF around to that set of 

Chall: That's EDF not just here but nationally, the whole EDF? 

Graff: Right. In fact, I brought--! don't know how many of these 

documents you actually want to carry along with you- -but we made a 
set of writings for you both of ours and of others going back to 
1981, which show some of the evolution of this thinking. Some of 
it is ours. There's a piece in here by Fred Krupp, our executive 
director, in 1986, which set the stage for this. 1 That followed, 
in factno, that was followed shortly thereafter by a piece in 

'Frederic D. Krupp, "New Environmental ism Factors in Economic Needs," 
The Wall Street Journal, November 20, 1986. 



the L.A. Times on the so-called third wave of environmental 
advocacy, which I had a major hand in prompting. 1 

So there's an evolution. It looks in retrospect a lot more 
organized than it probably was, as it in fact evolved. Zach and 
David and I got involved in the mid- seventies. I should say, when 
Jerry Meral left, he was replaced by Zach Willey, who is a Ph.D. 
economist. It's really Zach's insights on the value of economic 
approaches to solving environmental problems that have probably 
been intellectually at the heart of the work we've done in water 
in the two decades that followed. David came on board as the 
other lawyer in the office a year later, 1976-- 

His last name was what? 

R-o-e, and he soon inherited from me energy--! was sort of 
carrying two portfolios, water, and electricityand energy, at 
that time. Some of our major successes took place in electricity 
and energy in the period of the late seventies and early eighties. 
In fact, David wrote a book called Dynamos and Virgins, which I 
didn't bring but I can give to you, recounting our battles- 

Graff: --from '75 on, together. Although water marketing was an idea 
that had been promoted by various economists and others for 
several decades prior to when Zach picked it up, it was Zach's 
push that encouraged us to keep working on that. In fact, in 
1983, we published a major report written by a fellow by the name 
of Rob Stavins, who at the time was a young kind of itinerant 
researcher who later went on to get his own Ph.D. in economics at 
Harvard and is now a professor at the Kennedy School at Harvard. 
He later on became the coordinator and principal editor of 
something called Project 88, which was a report commissioned by 
Senators [Timothy] Wirth and [John] Heinz, Democrat and 
Republican, respectively, from Colorado and Pennsylvania, and 
which produced the work that became the grounding of the acid rain 
provisions in the Clean Air Act of 1990. 2 

Project 88 was written with the idea that whoever was elected 
in 1988, November '88, would hopefully take this new set of ideas 
about using economics in the environment seriously. It happened 
to be [George] Bush who was elected, and in fact shortly after the 

'Roberta A. Jones, "'3rd Wave 1 Alters Course of Environmental 
Movement," Los Angeles Times, December 22, 1986. 

2 II 

Project 88: Harnessing Market Forces to Protect Our Environment." 


November election, even before Bush was inaugurated, one of his 
principal aides, Boyden Gray, who became counsel to the president, 
approached EDF and asked for our help in designing an acid rain 
control program for the Bush administration. 

So there is a sort of an intellectual progression here, and a 
number of personalities who started or were active in our office 
moved on to other places, Stavins being a key one of those. 

Chall: That's very interesting evolution here. 

The Metropolitan Water District and the EDF Concept for the 
Imperial Valley 

Graff: And Stavins is- -yes, I should give you that, too. The report he 
wrote promoted the idea that the MWD--the Metropolitan Water 
District of Southern California had been telling people through 
the late seventies into the Peripheral Canal campaign of the early 
eighties that they were about to be cut off from half or more of 
their water supply from the Colorado River--could replace that 
supposed loss or perceived loss with an investment in conservation 
measures in the Imperial Valley. 

Chall: Oh, it came from that? 

Graff: And that did indeed come to pass. In fact, some of these early 
pieces recommend that in various forms. 

During the course of promoting that, we became obviously very 
entangled or entwined with MWD. I still recall when the report 
was nearly complete and we took it, Stavins and I--or maybe it was 
Zach and I, I can't rememberto a meeting at MWD with then- 
assistant general manager Dave Kennedy and then-chief counsel Carl 
Boronkay, and asked them if they wanted to review it before it was 
published. They both kind of blanched and decided that that was 
not in their interest, and declined to review the report before 
its publication. [laughs] 

And of course, they both moved on to bigger and better 
things --Boronkay as general manager of MWD, and Kennedy as 
director of the Department of Water Resources in Sacramento. 

Chall: They finally accepted the Imperial Valley concept? 

Graff: Well, eventually, yes. I didn't get you all the press, but 

Boronkay, in fact, was originally reported by a very enterprising 

Cog Armeies Sfones 


Saturday, April 22, 1989/Part II 

Antidote to Our Doom Affliction 


In the past year the environment 
has returned to prime time. Inter 
national concerns about potential 
global warming, accelerating de 
struction of tropical rain forests 
and a gaping hole in the strato 
sphere above Antarctica gripped 
people and nations around the 
world. The networks and newspa 
pers have been full of stories of 
gloom and doom medical wastes 
closing East Coast beaches, tanker 
spills, and pesticides and poison 
scares causing consumer and 
regulatory panic. The impression 
persists of a planet reeling out of 
control, with potentially terrifying 
consequences just over the horizon. 

We need antidotes to this afflic- 
lion. No doubt fear and anger are 
great mobilizers of public passion 
and an aroused public will be 
necessary to marshal the resourc 
es, financial and political, required 
to address the problems we face. 
But such mobilization of public 
passion is not enough. We also need 
public policies and social compacts 
that will attain environmental ob 
jectives with relatively little con 
flict and at lower cost. 

It is here that a recent report 
issued by two U.S. senators. Timo 
thy Wirth (D-Colo.) and John 
Heinz (R-Pa.), may turn out to 
have a greater positive impact on 
our planet's future than all the 
scare stories that have dominated 
the news. Titled "Project j&Jjari. 
nessing MarRet Forces To Protect 
Otn Environment.*' the 130-page 
study addresses subjects_such_as 
gtobaljanci domestic air pollution, 
energy, water resources and solid 
and lidiai duus wastes" 
~lt dues nut, however, purport to 
be all-conclusive. Instead it applies 
a unifying theme to seven sets of 
major environmental problems: the 
use of economic criteria or market 
forces as a means of accomplishing 
desired environmental goals at the 
least cost. 

A group of more than 50 envi 
ronmentally concerned Americans, 
including environmentalists, in 
dustrialists, bureaucrats and aca 

demics, led by Prof. Robert Stavins 
of Harvard University, Workori im. 
deT the senators direction. What 
they produced was a bipartisan, 
wide-spectrum consensus support 
ing economic incentives as a pre 
ferred means of accomplishing en 
vironmental goals. 

The report acknowledges that 
both public and private spending 
for pollution cleanup and resource 
preservation will be constrained in 
a time of severe budget deficits and 
increasing international competi 
tiveness. But it counters that eco 
nomic or market-based incentives 
will provide more pollution reduc 
tion and more efficient and envi 
ronmentally sensitive resource al 
location than government-imposed 
controls, at any level of public or 
private expenditure. 

Of course, using economics to 
foster environmental improvement 
is not a new idea. Less than a 
decade ago, spurred on by environ 
mentalists and regulators, Califor 
nia's leading public utilities. 
Southern California Edison and 
Pacific Gas and Electric, surprised 
their industry when they aban 
doned the construction of large coal 
and nuclear power plants in favor 
of economically and environmen 
tally superior alternative mea 
sures. Now their approach is com 
mon wisdom around the country, if 
not the world. 

Similarly, earlier this year, two 
of California's leading water utili 
ties, the Metropolitan Water Dis- 
-tricrot southern California and the 
-hnpefial Irrigation District, an- 
TtOTinceaT swap of conservation 
Investment tor water. This water- 
iiiarkeilng arrangement signals 
that the highest levels of the 
Western "water industry" have 
also come to appreciate that sound 
economics should be a key deter 
minant of the future of water 
development in the American 

Such success stories need not be 
limited to domestic energy and 
water issues. A market approach 
limiting the total production and 
use of chlorofluorocarbons holds 
great promise as the most efficient 
means of reducing the threat these 
ozone-depleting chemicals pose to 
the Earth's stratosphere. 

Economic incentives to plant 
trees may go a long way to offset 
the carbon dioxide emissions that 
contribute to the greenhouse ef 
fect. "Debt for conservation" swaps 
are a promising means to protect 
tropical rain forests. And allowing 
polluters to trade strictly limited 
amounts of emission rights for a 
range of widely dispersed air pol 
lutants is a worthwhile strategy to 
address regional air-pollution 
problems. It is also a possible 
avenue to breaking the political 
stalemate that has blocked legisla 
tion to control acid rain. 

On the other hand, one should be 
careful not to claim too much for 
the economic approach. Politics, 
influenced by science and the clash 
of public values, will still decide 
how much pollution is acceptable. 
Spending for environmental pro 
tection will likely have to be 
increased. Existing regulatory pro 
grams should be built upon and 
supplemented by market incen 
tives, not scrapped. 

No doubt the political parties and 
interest groups represented in the 
Project 88 effort will continue to do 
battle on a wide spectrum of envi 
ronmental issues. We will always 
fight over how serious particular 
environmental problems are, how 
much environmental preservation 
we want and what we as a society 
are willing to pay for that preser 
vation. But the key lesson of this 
report is that all of us have a 
common interest in finding meth 
ods for dealing with environmental 
problems that are cost-effective, 
bipartisan and relatively uncon- 
tentious to implement. 

If we learn that lesson well, 
perhaps we can make enough 
progress on the major environmen 
tal problems we confront that 
%vithin a few years, the environ 
ment will again be relegated to the 
back pages and to Saturday morn 
ing television shows. If so, all of us. 
environmentalists especially, will 
have reason to applaud. 

Thomas J. Graff is a senior attor 
ney with the Environmental Defense 


reporter, Cheryl Clark of the San Diego Union, as being critical 
of the report when it first was published, but within a year, had 
switched his position and became a strong advocate as general 
manager of putting that deal together. 

Chall: Was their attitude one of not talking to the so-called enemy? Or 
were they just afraid to consider that idea at all? 

Graff: I think they were still of the mind that if they endorsed a 

program whose merits they probably recognized, they would undercut 
their own support for what they thought was most important, which 
was building a peripheral canal. And I think eventually Boronkay 
more quickly than Kennedy decided it was more important to get the 
supplemental water that would come from such a program than to 
promote a canal whose construction I'm sure they both still 
believe is ultimately going to happen and is necessary, but in the 
meantime, they better do other things that would shore up southern 
California's water supply. 

Chall: Do you think this is Boronkay 's first dip into the idea of the 
economics of water marketing, or whatever you termed it at that 

Graff: Oh, absolutely, I think so. You never know what goes on behind 
closed doors in the camp of other entities. But in public, that 
was for sure his first foray in that direction. And I think it 
took him a while. I think he got out ahead of his board of 
directors from time to time down there, and he sort of brought 
them along slowly. He also brought into the MWD, in part because 
of his economic background, Tim Quinn, who has since become a 
major player in promoting economic approaches at MWD. 

Working with the State Legislature on Water Legislation 

Chall: In your work dealing with the Peripheral Canal and the Ayala 

bills, did you begin to do actual lobbying, which you might not 
have done before? 

Graff: Yes. EDF's tax status is such that, particularly in that period-- 
I can't remember when the tax reform act of some year changed the 
rules slightlywe were restricted to occasional lobbying except 
when invited to testify. Later on, it changed to where there was 
. and is a specific dollar limitation on how much, either on a 
percentage basis or on a dollar basis, EOF could spend on 
lobbying. The fact of the matter is throughout the years, we have 
done very little, if any, of the sort of traditional, what people 


traditionally view as lobbying, which is going door to door among 
assemblymen and senators or congressmen and senators, seeking 

What we have done is we've worked with key legislators and 
their aides in designing bills, sometimes helping to write them 
even, and then in working on sort of an overall strategy in 
promoting legislation or sometimes in opposing it. So it's 
lobbying of a different kind, and it tends not to be a lot of 
actual walking the halls of the Congress or the state legislature. 
And it's been a major part of our activities, very little of it 
done in Sacramento or Washington, actually, but a lot of it done 
on the phone. 

Chall: As we get into the water issues here with Miller-Bradley, so much 
of what you were doing seems to have had to do with transfers or 
water marketing. I just wondered, on the state level, whether you 
had worked along with Richard Katz, who seemed to have had quite a 
number of transfer bills over the years, or with Phil Isenberg, 
and some of the others at the state level on these issues? 

Graff: Yes, it's interesting. This goes back a few years. I don't know 
where the impetus from Katz's original water transfer bill came 
from, but my recollectionand that goes way back, like 1980--that 
we were not involved in it. It just sort of happened, from our 
point of view. But obviously, as the years went on, we worked 
closely with Richard and with Phil Isenberg, and with [William] 
Filante on the Republican side, and others, to design improvements 
in the state water transfer legislation. And we worked 
particularly closely with Isenberg on the Mono Lake legislation of 
1989, worked with Isenberg on the Los Banos Grandes bill I think 
of '86. 

So yes, we did--as our agenda and Katz's sort of became 
obvious to one another, we started to work very closely. And 
during the time of the Miller-Bradley bill, we were trying to pass 
comparable state legislation, unsuccessfully, as it turned out. 
But I was just going through some of my old calendars, trying to 
figure out where I was at various times and dates in the '89- '90- 
'91 period, and there were a lot of meetings having to do with the 
Katz state water transfer legislation. 

Contacts with the Agriculture /Water Community 

Chall: What about your relationship with the growers, let's say the water 
contractors, [Jason] Peltier and David Schuster? Some of these 
folks were writing bills also. 

Graff: Yes. I also found--! remember a couple of meetings, and as I 

looked in my calendar, it confused me a little bit, because they 
seemed to be not quite when and where I remembered them. But I 
recall at least two meetings, and I'm not sure who all was at each 
of them, one with Schuster and [Stuart] Somach, and one involving 
Peltier and I'm not sure who else. I think maybe Schuster as 
well. According to my calendar, one was late in '90 and one was 
early in '91, May of '91, where we discussed what was then their 
legislation to address from their point of view the fish and 
wildlife problem of the CVP [Central Valley Project]. 

Senator [Pete] Wilson had introduced in the '89- '90 Congress 
a bill that was designed essentially to enact into legislation the 
recommendations of a task force that had been put together to look 
at some of the environmental problems, fish and wildlife problems, 
of the Sacramento River. That bill had not gotten very far--it 
didn't get anywhere, I guess. It was opposed by environmentalists 
just on its own merits, in terms of what was going on in the 
Sacramento River, for failing to address the key question of how 
much water was needed for the environmental resources of the 
Sacramento River. It primarily dealt with some of the physical 
and structural problems of Sacramento River fisheries, such as the 
Glenn Colusa diversion dam and the need perceived by the water and 
power users and some fisheries people for a temperature control 
device at Shasta Dam, and so on. 

That Wilson bill, though, was pending in the '89- '90 
Congress. I should know the numbers of those Congresses. But it 
never got significant support from the larger environmental 
organizationsEOF, NRDC, even Sierra Club. It had support from 
some of the local fisheries interests who had been involved in the 
design of the Sacramento program, and whose point of view was that 
the measures in that bill were useful, albeit not complete as a 
package of needed reforms. But since various Republicans, Senator 
Wilson, some of the local congressmen up there, were supporting 
it, they were supporting it as well. So it had some environmental 
support . 

By the May meeting in '91, which is sort of jumping forward a 
bit, that I had with Peltier, I think it wasat least my calendar 
shows me meeting with Peltier in May of '9 Ihe and, I know, 
Schuster and Somach had put together a revised version of the 







prior Wilson bill and were hoping to get broader environmental 
support for the measures in that bill. 

By that time, [John] Seymour had already been appointed to the 
Senate [January 1991]. 

Seymour didn't introduce that bill. The so-called Somach-Schuster 
draft, of which there were many versions, I think, in the first 
eight, nine, ten months of '91, were kicking around, but it was 
never introduced as a formal bill until the very fateful day of 
November 21, 1991. 

Yes. But even now you're talking about sort of a fish bill, then, 
in a sense. 

Yes, the [water] contractor's fish bill. 
Left over from the Wilson- 
Right, and it was mainly Sacramento River. In fact, exclusively 
Sacramento River focused. 

Now we can get into Miller's fish and wildlife bill. 
Okay. Well, let's go backbefore we jump into that-- 
Why don't you go wherever you want to go? 

What I have here are articles starting in 1981, during the 
Peripheral Canal campaign in "82--wait a minute, I guess just 
after. I guess one of these is just after the Peripheral Canal 
referendum was defeated, then a couple dealing with the MWD-IID 
[Metropolitan Water District-Imperial Irrigation District] 
proposal of EOF, some dealing with kind of unusual bedfellows, 
including James Watt, with whom we had a brief apparent 
flirtation, and then moving up into the mid-eighties, moving 
towards our EDF's third wave activities. I guess all this stuff 
gets us to 1988 and Project '88. I guess I'm missing one of the 
Project '88 pieces. Eighty-nine, here we are. Let's get to the 
1990s. 1 

By the way, I don't know if you want this, but these are 
copies of press articles I dug out. 

'All papers obtained from Mr. Graff during the course of this 
interview will be deposited in the Water Resources Center Library archives 
on the Berkeley campus; a few will appear in the appendices of this volume. 


Chall: Oh, this is excellent for my research and for the archives as 

Graff: These are some EOF personal profiles. I didn't know if you wanted 
those, but there they go, and these are some articles that we 
wrote--! wrote or Zach Willey and I together wrote. 

Chall: Oh, that's fine, yes. Now, that's the Columbia Journal, you're 
holding- - 

Graff: This is a piece by Zach and myself on federal water policy reform 
in the Columbia Journal . ' 

Chall: You'll want this back. 

Graff: I actually have it in paper form, if you'd rather have it that 

Chall: I think I'd rather have it in paper. 
Graff: Okay, so I'll get you a copy of that. 

Anyway, yes, so let's go to '89-90, or maybe we should first 
go back to '86. 

Chall: Yes. 

Drafting the Coordinated Operation Agreement Legislation, 

Graff: In '86, we worked withthere was something called the Committee 
for Water Policy Consensus, which was headed by Sunne McPeak in 
northern California. During that time period also, I think it was 
1985, maybe it was early '86, the Reagan and Deukmejian 
administrations, and in particular David Houston, the regional 
director of the bureau [Bureau of Reclamation], and David Kennedy, 
the director of water resources, had negotiated a formal 
Coordinated Operation Agreement between the federal and state 
projects. There was a general recognition that in order for the 
federal government to sign that agreement, it had to be ratified 
by Congress. 

'Zach Willey and Tom Graff. "Federal Water Policy in the United 
StatesAn Agenda for Economic and Environmental Reform," Columbia Journal 
of Environmental Law Vol. 13, No. 2, 1988, pp. 325-356. 


So we spent a good part of 1986, or maybe it was late '85, 
early '86, putting together the so-called COA bill. And it was 
interestingit was the one time, and I saw this stated in a 
recent interview by Governor Wilson, where he, while he was 
senator, and Congressman [George] Miller, had actually worked 
together to put a piece of water legislation together. Wilson had 
introduced a so-called clean bill, which merely said that the 
federal government shall ratify the agreement, period. But Miller 
insisted on protections for the Bay-Delta Estuary as part of the 
package to authorize the COA's signature. I worked sort of 
intensively to help on that, and negotiated with Schuster and 
Somach, among others, particularly those two, representing the 
contractor community. 

Eventually, of course, Dan Beard and John Lawrence and Steve 
Lanich and Charlene Dougherty were all part of Miller's team, and 
we eventually put together a bill that had very broad-based 
support: northern California, southern California, federal, 
state. The only person, I think, who really ended up not liking 
the bill was David Houston, because I think he perceived it, and 
probably rightly, as having taken away some of the benefits to the 
federal project that he saw in the agreement as draftedtaken 
away in order to pass the bill. 

Kennedy, I always thought, although he was nominally not 
active in the negotiations, had seen further ahead than Houston, 
and had given up things in the negotiation that he rightly 
concluded Miller would eventually take back on behalf of the 
environment. What the state really wanted out of that agreement 
was access to federal water, to help expand the use of water 
within the State Water Project. What they gave up was use of the 
state aqueduct for conveyance of federal water. And also, the 
agreement on how much each of the projects would, on a percentage 
basis, give up to meet Bay-Delta standards. And I think he 
thought he'd, and probably rightly, come out with the better of 
the deal, when all was said and done. 

Anyway, the business community became active in that 
struggle, and we, with a united front of environmentalists, 
urbans, agricultural interests, and business people, went back to 
Washington and persuaded what were some skeptical people in the 
Senate that the compromise that had been put together in the House 
and agreed to by Miller and the Valley Democrats- -at that time, 
[Tony] Coelho was still in office as the leader of the Central 
Valley delegation should essentially simply be ratified and 
approved in the Senate. And Wilson and [Alan] Cranston both 
worked on that, although my perception always was that Wilson, 
although he endorsed it, never really appreciated why there had to 
be all this additional assurance of protection for the Bay-Delta 


as part of the deal. He would have been happy, I think, with what 
was essentially the contractors' version of the bill. 

It was only later, in "89, that we worked closely with Otto 
Bos in particular, and John Amodio, who by then was working with 
Wilson's election [gubernatorial] campaign, in getting Wilson to 
take a very strong pro-Mono Lake position on a piece of state 
legislation that Isenberg and Bill Baker had put together, and 
with then-Senator Wilson's active support, managed to get Governor 
Deukmejian to sign this bill, which Kennedy in the back rooms 
actively tried to defeat. 

In fact, as I was going through my calendars in preparation 
for this interview, I saw a meeting I had with Otto Bos in May of 
1991, roughly a week or two before he died. I continue to believe 
that Wilson's general lack of leadership in the water field during 
the last three years, in fact leadership on behalf of one 
interest, Central Valley agribusiness, might not have occurred had 
Bos still been there to give him contrary advice. Bos generally 
was sort of looked upon to build broad coalitions and consensus on 
major matters. I think he would not have counseled Wilson to be 
as intransigent during the course of the Miller-Bradley bill in 
'91- '92 as Wilson turned out to be. 

But in '89 and '90, essentially, Wilson did the same thing in 
that Congress as he had done with the COA bill originally, which 
is to introduce a bill promoted largely by the water interests, 
and to have little or no direct contact with the environmental 
community, which had a very different view of what should be done 
than what was in either of his bills. 

Now, in "86, when Miller and Coelho and others on the inside 
and the interest groups on the outside put together a broad 
coalition for the COA bill, he [Wilson] went along, and in fact 
took credit for having supported a broad-based compromise, and 
continues to take credit to this day. But in '89- '90 he, as far 
as I know, never reached out to the environmental community to see 
what its critiques of his approach were, and yet, he continued in 
the campaign in particular to promote that he had an environmental 
bill that was going nowhere and in part blamed the Democrats for 

Background on the Miller-Bradley Bill 

Senator Bill Bradley 's Interest in California Water Issues, 

Graff: Also in '89-'90, [Bill] Bradleywell, let me go backwards. 

Bradley succeeded to the chair of the Subcommittee on Water and 
Power in the Senate Committee on Energy and Natural Resources in 
'89, and I think quite consciously decided that he was going to 
make an imprint on western water from that vantage point. One of 
his first acts was to remove the person who had been the chief 
aide for water in the Senate, a fellow by the name of Russ Brown, 
and to bring in somebody new who would be an activist on behalf of 
water policy reform in the Senate. He hired Tom Jensen, who came 
to him from the--I can't remember the proper name of it--but the 
Northwest fisheries commission up there, who had been active on 
water policy reform and Indian reform issues in the Northwest. 

Bradley also, I think, made the calculation that he was going 
to use the "89- "90 period to educate himself on California water, 
and that he would promote reform on a limited basis, mainly on the 
acreage limitation issue, the rec [reclamation] reform issues. In 
other states, in particular Nevada, he tackled the northern Nevada 
controversy over Pyramid Lake and the Stillwater National Wildlife 
Refuge, and the water supplies for the Reno-Sparks urban area, and 
the Newlands Project, the oldest of the federal reclamation 
projects in the West, all of which are entwined in a very complex 
struggle involving several different kinds of environmental 
resources as well as two different Indian tribes and urban and 
agricultural interests. This entire complex of problems, from my 
perspective, and I think that of David Yardas, my sidekick, whom 
I'm sure you're going to meet shortly, was in many ways a dry run 
for Bradley. It was sort of an experience gatherer in a much 
smaller scale of what would eventually take place in the 102nd 
Congress in California. 

Chall: Why would he be interested in California or the western water 

issues? He did come into a subcommittee that certainly could have 
used his interest, but he could have just done nothing. 

Graff: Well, there are a couple of questions I don't have the immediate 

answer to. One is, why did he end up with that subcommittee? Did 
he ask for it, or was it given to him? I don't know the answer to 
that. I also don't really know whatno one knows the motivations 
of other peoplewhat is fact, or maybe it's opinion, but it's 
pretty well formed opinion, is that he hired a very strong, 
aggressive, and competent person who had reform tendencies in the 


person of Jensen, and essentially eased out a person who had very 
different tendencies in the person of Russ Brown. Russ Brown had 
had a long history with that committee, had originally been in the 
majority doing the same work for Scoop [Henry] Jackson when 
Jackson was chair of the committee. Then, when the Republicans 
took over the Senate in the early eighties, he comfortably moved 
over to staff the Republican side of the committee, and then 
eventually moved right back to staff the Democratic side. I mean, 
he was basically nonpartisan, pro-water development. 

And Bradley told [Bennett] Johnston, who was the chair of the 
full committee, by 1989, that he wanted his own person. Now, 
Jensen always saw himself as serving two masters: Bradley as 
subcommittee chair and Johnston as committee chair, which is 
sometimes not a particularly easy thing to do, because the two 
were not necessarily of one mind. But at some point, I would like 
to talk about Johnston- - 

Chall: Yes, we need to. 

Graff: Johnston, of course, eventually became a key supporter of our 

point of view. I did look, and I saw in my notes several meetings 
in 1989 in the summer and fall with Bennett Johnston, Jr. He was 
a staff person at the time at TPL, Trust for Public Land, and 
became active with Zach and me in our efforts to put together 
water deals for Mono Lake. I mean, our idea, we had worked with a 
group, sort of a consensus group that had been formed under the 
auspices of UCLA extension, a fellow named Leroy Graymer, which 
included the city of L.A., the Department of Water and Power, the 
Mono Lake Committee and other environmentalists, the Forest 
Service, which had an interest up in the basin, and the-- 

Graff : I was telling you about the Mono Lake group. We were looking at 
the idea of finding replacement water, and our focus was on water 
marketing. We had found some water districts and growers in the 
northern San Joaquin Valley who might be interested in selling 
water to Los Angeles, and the lake, indirectly. EOF had not had 
real acquisition expertise, and so we went looking to the 
environmental groups who had land acquisition expertiseThe 
Nature Conservancy, with whom David Yardas was working closely in 
Nevada, and TPL. Bennett Johnston, Jr., was the staff person from 
TPL who was excited about this prospect and excited about bringing 
TPL into the water acquisition business, sort of comparable to its 
land acquisition business. 

So that personal relationship that had built up with Bennett, 
Jr., eventually probably was helpful in kind of subtle ways in 


having access to the staff of his father, and sort of 
communicating what the environmental perspectives were, as Bennett 
Johnston, Sr., entered the water picture in late '91 and early 

Anyway, Jensen saw himself as serving both Bradley and 
Johnston. Now, Bradley had a major hearing in, I guess it was 
August of "89, in Sacramento, where he invited all the California 
water interests to testify. 

Chall: Are you sure that ' s- -you 're probably right. I have a date of 
September '91, but I could be wrong. He might have been here 

Graff: Yes. It was August 29, '89. 

Chall: Okay. So that was an earlier hearing than I know about. 

Graff: Oh, yes. And this had all the water interests. It was all day. 
Vic Fazio came and sat by Bradley 's side. And it was basically a 
fact-finding hearing, just generally what are the various 
positions of the water interests. I think it was that hearing, I 
can't vouch for this, where he got into kind of an argument with 
Boronkay. Boronkay came in, and I don't know if this was 
conscious or unconscious, but he said, "California is growing by 
the equivalent of a St. Louis every year." I don't know if he 
knew that Bradley was from St. Louis originally, and-- [laughs] 
But Bradley bristled, as I recall, and asked Boronkay whether 
Boronkay- -didn't he have some responsibility to limit that growth, 
if he couldn't see the water supplies necessary to meet that 
growth. And Boronkay in turn bristled back, and their 
relationship always was one that had a fairly high level of 

But I have also in my calendar about a month before that, on 
the 31st of July, Jensen had come out here to California and had a 
meeting with the environmentalists. In fact, it was at a 
restaurant near here, the upstairs room at Yoshi's, where he laid 
out what Bradley 's schedule was going to be, basically that he was 
not going to be ready to address major environmental legislation 
in California in '89- '90, but was going to do it in time in the 
following Congress. 

Chall: What went on at the August 29 meeting? 

Graff: Basically it was a hearing. It was a big, open hearing. It was a 
fact-finding hearing. What are the problems in California water? 
All the major interests were represented by one or more persons. 


Chall: And that was where? 

Graff: It was in Sacramento, it was in the Resources Building auditorium. 

Chall: Department of Water Resources? 

Congressman George Miller's Fish and Wildlife Bills, 1989, 
1990, 1991 

Graff: Well, Resources Agency. The ground floor of the big Resources 

Building. But Miller's staff had been coming out to California on 
a periodic basis from the mid-eighties on, to interview 
environmental groups. I remember having a couple of funny 
encounters with these folks, some of whom are good friends. I was 
always skeptical that Miller could move fish and wildlife 
legislation, because basically the Valley people would be opposed. 
Whereas he was always quite effective in opposing bad things from 
the time even when he was a junior congressman in the mid- 
seventies, '77, when passing affirmative legislation was hard. 

But, given the lineup of the interests, given who were 
senators, given that the agribusiness interests are not shy about 
throwing their money around, the fact that the staff would come 
around on a periodic basis and say, "What is your wish list, your 
dream of fish and wildlife legislation" never struck us as 
particularly a promising approach. And of course, for many years, 
they didn't even introduce legislation. 

Finally in '89, Miller for the first time introduced a 
serious piece of proposed fish and wildlife legislation, which to 
be honest, we at EDF didn't take very seriously, for the reasons I 
just described. And also, because by the summer of '89, it became 
evident to us that Bradley, who was a necessary collaborator in 
making this happen, was not ready and wasn't going to engage in 
California until '91. 

Nevertheless, to our surprise, Miller worked out compromise 
legislation with the Valley Democrats in, I guess it was the 
summer of '90. We had significant problems with that legislation. 

Editor's Note: To my inquiries about how Miller's California Fish and 
Wildlife Bill of 1990 (H.R. 4700), introduced May, 1990, could become H.R. 
3613, the bill introduced by Douglas Bosco November 8, 1989, which 
contained no language on contracts, Mr. Graff sent an explanation and a 
packet of the bills and memos. 


(1) H.R. 3616 (?) (Bosco, 101st Congress, 1st session), the "Upper 
Sacramento River Fishery Resources Restoration Act" (with as TG notation 
indicating that "this is an extra copy of Bosco 's Sacr R. bill" and a hand- 
scribbled "HR 3616" below the sponsor line) ; 

(2) H.R. 4700 (Miller, 101st Congress, 2nd session), the "California 
Fish and Wildlife Protection Act of 1990" (as introduced); 

(3) H.R. 3613, the "California Fish and Wildlife Protection Act of 1990" 
as reported by the Full Interior Committee" on July 25, 1990 (which includes 
as Title I an "Upper Sacramento River Fishery Resources Restoration Program"); 

(4) our 7/24/90 letter supporting what emerged from committee the very 
next day as item (3); and 

(5) my memo of 8/2/90, which looks like a pre-cursor to "Yardas- 
Garrison. " 

In sum, it looks to me like (3) is the melding of (1) and (2), together with 
the new/renewed contracting provisions (sections 406, 409) that combined to 
cause us concern (as reflected in (5)). Item (4) supports this reconstruction 
-- as I recall, a major debate was whether to proceed with (1) alone, or to 
combine (1) with the more comprehensive reforms in (2). Our 7/24 letter 
argues against a "piecemeal" approach in favor of a "comprehensive" approach, 
whatever the final details. 

I hope this helps. 

P.S. See also the "June 26" (must have been July 26) memo from Charlene 
Dougherty (Miller's staff, copy also enclosed), which notes that "we amended a 
major portion of H.R. 4700 into H.R. 3613." 

June 26, 1990 


TO: Supporters of H.R. 4700 
FROM: Charlene Dougherty 
SUBJECT: Markup of legislation 

The Subcommittee on Water, Power and Offshore Energy 
Resources reported H.R. 3613 today as amended. A copy of the 
amendment in the nature of a substitute is attached. 

You will see that we amended a major portion of H.R. 4700 
into H.R. 3613. 

You will also see that portions of H.R. 4700 have been 
changed. The explanation of the amendment highlights a few of 
those changes. Changes have been made in the limitations section 
of the bill as well. 

During the markup, Congressman Miller made a commitment to 
continue to work with Congressman Lehman on the legislation. He 
also invited all other interested parties to work with the 
subcommittee between now and full committee markup on their 
concerns an invitation that obviously includes you. 

It is our goal to put together a bill that can pass the 
House and take that bill to the floor this session. 

All of your work on behalf of California's fish and wildlife 
is making a big difference. We are as far along as we are today 
because of your support and your ability to let Members of 
Congress and the public know how severe fish and wildlife 
problems are. We still have a number of hurdles to cross before 
enactment and we need to keep pushing as hard as we can. 

Call me if you have questions and comments. 
Thanks again for your help and support. 



Was that California Fish and Wildlife Protection Act of 1990? 1 

The Natural Resources Defense Council and California Water 

Graff: Right. And it was interesting. I've sometimes given talks, 

particularly to environmental audiences, where I talk about one of 
the historic water rights settlements of the western world, from 
my point of view, that occurred in September of 1990, when EOF and 
NRDC reached a settlement. [laughs] 

Chall: You otherwise weren't on the same--? 

Graff: That's correct. We had been doing basically different things, not 
necessarily in contradiction to one another, but certainly very 
different. We had been in the water game, as I have described, 
since 1971. They had left water alone from the time they opened 
their offices a few months after we opened ours out here, pretty 
much left it alone--they had been involved in one caseuntil 
maybe the early eighties. I can recall a meeting where they came 
to our office and said they were going to start a water program, 
which struck us as somewhat odd at the time, since we had sort of 
divvied up turf. They were involved in forestry, which we had 
never done, and they were sort of invading our turf, but we 
decided we weren't going to claim an exclusive franchise, which we 
probably couldn't have succeeded in defending anyway. 

And they ended up, we sort of ceded to them an area that we 
had worked on for a number of years and had been quite 
unsuccessful in promoting, which was trying to get the Bureau of 
Reclamation to price its water at something closer to the actual 
value, or marginal cost, or however you want to describe it, 
because they had resisted and we were getting nowhere. So we 
figured if there's a wall you can bat your head against rather 
than us , go ahead and be our guest . 

So they had come in and had done some serious work in the 
early and mid-eighties on the subsidies in the Bureau of 
Reclamation's program, both in California and West-wide, and had 
developed a quite active water presence based largely on that set 
of issues. We also worked with them collaboratively on drainage 

'H.R. 3613, The California Fish and Wildlife Protection Act of 1990, 
as reported by the full Interior Committee, July 25, 1990. 


issues, which is another big federal issue. But that was their 
big issue. They also worked on reclamation reform. Basically the 
financial issues around the bureau program became their major 

They were unhappy with the lack of interest that Miller 
displayed in the summer of "90 in his fish and wildlife bill with 
what had by then emerged as their big set of issues, which were 
contract renewals. They had filed a major lawsuit, which was by 
then before Judge [Larry] Karlton in Sacramento, and they had 
gotten an injunction against the signing of renewal contracts in 
the CVP, or at least a threatened injunction. I don't know 
exactly what the sequence was. But they, for their own reasons, 
were unhappy with this bill. 

They had always been somewhat uncomfortable with our water 
marketing approach, which essentially said, "We'll concede that 
water's being sold too cheap to the growers of the Valley, but to 
make water use in the state more efficient and to avoid 
incremental environmental damage from building new projects, such 
as the Peripheral Canal or Auburn Dam or whatever, we're going to 
encourage water transfers." Their attitude was no, the way to do 
this was to raise the price of water, encourage conservation 
through a more direct sort of antagonistic approach, and had 
worked hard to do that. 

The NRDC and EOF Join Forces on Fish and Wildlife Protection, 
Water Transfers, and Contract Renewals 

Graff: We came together with them both equally unhappy or both unhappy 
with Miller's approach, and wrote a memorandum to Charlene 
Dougherty of Miller's staff, who had been for a while the main 
proponent of the fish and wildlife bill, laying out our proposals 
collectively for how both the pricing issues and the transfer 
issues and the fish and wildlife issues could be rolled into one 
package. I think Jensen has said laterin meetings I've been 
with him recently- -that that joint EDF-NRDC package, written in 
September of '90, essentially became the guts of the Bradley bill 
in early '91. 1 

'For more details on this letter, see pages 38, 47-49. Letter is in 
the Appendix A. 


Then another thing I did shortly after that, which I've 
always been about as proud of as anything I've done in my 
professional career: Miller had been saying for many years he was 
going to have a hearing on water, and he had kind of avoided it, 
for reasons I never quite understood. And then he scheduled a 
hearing for late October of 1990. This was after it was clear 
that the fish and wildlife bill [H.R. 3613] was going nowhere. 
I'm not sure exactly what the sequence was with respect to the rec 
reform controversy, which went right up until the very last day of 
the 1989- '90 Congress, but he scheduled a hearing, asked me to 
testify, and then about a week before the hearing actually was to 
take place, canceled it. 

Chall: Where was it to take place? 

Graff: It was going to be in Washington. What I did, even though I had 
barely begun writing the testimony, is I went ahead and wrote the 
testimony anyway, despite the fact that I knew there was not going 
to be a hearing, although I didn't say that. Then I circulated it 
to everybody, a draft piece of testimony for a hearing that by 
then I already knew was not to take place. So it was kind of a 
nice opportunity to get out our point of view on what should be in 
federal water policy reform legislation, when no one else was 
testifying on anything different or contrary. 

Chall: And yours was mainly- - 

Graff: I basically laid out, what I think became, again, the basis for 
the '91- '92 piece of legislation. 

Chall: Transfers- 
Graff: The basic idea was, the way you bring the urban interests in was 
transfers, which Miller always had been uncomfortable with. His 
philosophy was that you do what NRDC wanted, which is you increase 
the price of water and power, require mandatory conservation 
programs, and bar or limit contract renewals until environmental 
problems had been addressed. But from our point of view, you 
could use price increases to fund necessary environmental 
measuresthat way, you also weren't just going to take the money 
from taxpayers around the country to solve the problems. What you 
give the water users, which made NRDC uncomfortable, but which we 
perceived as absolutely necessary to make water transfers work, 
was the certainty of contract renewal. That you would say to 
them, "Okay, the deal is you get to renew your contracts, but at a 
somewhat higher price, and you have to be willing to allow the 
resale of the water we're going to give to you. This is actually 


a good deal for you." The urban and business interests would buy 
into that. And then, of course, you had to have fish and wildlife 

So I think that was the sort of broad outlines of what 
eventually became Miller-Bradley. 

The Contract Renewal Issue: Congressman Miller's Dilemma re 

Chall: George Miller's bills in 1990 and 1991 do have water contract 

limitations. [reading from Section 406, H.R. 3613, July 25, 1990] 
"Prohibits the Secretary from entering into new water supply 
contracts until one year after the commission submits its report 
to Congress. Prohibits the Secretary from renewing water supply 
contracts longer than three years until the requirements of this 
Act are met and the State Water Resources Control Board has 
established new water quality standards for the San Francisco Bay 
and Delta." 

Graff: Miller was working with NRDC I think more than with us, and his 

basic idea was pursuing the idea in their lawsuit; you can't renew 
your contracts until you've taken care of the environment. I 
mean, that was the basic idea. But see, what happened was Miller 
then cut a deal with the ag interests, where he didn't follow 
through on this pointhe limited contract renewals , but he didn't 
really prevent new contracts. Miller has this tendency--! guess 
somebody's going to eventually hear this, so we might as well lay 
it all out. He, I think, realizing the realities of politics in 
the House and in the nation, would eventually work out 
compromises, deals, with the Central Valley delegation that didn't 
live up to the promise of the bills he introduced. And I'm sure 
from his point of view, that is the only way you get legislation 
moving. In this case, we were not paying major attention because 
it was evident to us throughout that that legislation as a whole 
was not going to pass Congress, because Bradley wasn't ready to 

But he cut the deal I mentioned that both EOF and NRDC were 
quite unhappy with in the summer of '90, which undercut some of 
these good provisions that he had in his original legislation. 
Something not that dissimilar happened in May of 1992, which I'm 
jumping ahead to. 


Chall: Well, I suppose he's trying to be--Miller has to be realistic. 

Graff: Yes, but so were we. My view, and I've never really sat down kind 
of after the fact with Congressman Miller or with John Lawrence, 
Dan Beard, and others then on his staff, but I think some of the 
things that ended up in the Miller-Bradley bill were quite 
unpalatable to Miller, and they were different things than what 
were unpalatable to various environmentalists in prior versions of 
compromises that he put together. And we did our best during the 
course of the two years that Miller-Bradley- -when various 
versions, various authors' bills were prevalentto lay out for 
Miller what we thought was the structure of a bill that would 
work. Most notably, that it had to include a major water 
marketing component that Miller himself I think has never been 
comfortable with. 

Miller's main idea, I think, was that these guys in the 
Central Valley were ripping off the taxpayer and ripping off the 
public, and the crucial part of the water marketing idea was they 
were going to get a second way of doing that. Not only could they 
get cheap water to grow crops, in many cases with big landholdings 
that were beyond the original intent of the acreage limitation, 
but they were going to get to resell that water at a profit. 

Senator Bradley Takes the Lead on the CVPIA, 1991-1992 

Graff: So I wrote some memos, which I'll give you, including one as early 
as February of "92. This is again jumping forward, but what 
really happened in '91 was Bradley introduced his bill [S. 484, 
February 26] early, before Miller did, [H.R. 1306, March 6] and 
then there were three hearings through 1991, all on the Bradley 
bill in the Senate. One in Los Angeles, one in Sacramento, one in 
Washington. And then work began on mark-up, informal mark-up, of 
the Bradley bill in the fall of '91. During all that time, Miller 
was holding back. I think Miller correctly perceived, based on 
his experience in '90 and going all the way back to the rec reform 
bill of '82, that the big problem was the Senategetting a bill 
through the Senate, given the rules of the Senate and the ability 
of one senator often to kill legislation all by himself. I think 
Miller rightly perceived that the key was to get a bill out of the 
Senate. So he encouraged Bradley to take the lead in trying to 
get something through, get something out. 


There were other complications. Johnston's big priority in 
1991- '92 was an energy bill, and eventually Johnston and Miller 
were going to have to negotiate an energy bill, and Johnston's 
major interests in an energy bill were the oil companies and the 
nuclear power industry, which were not exactly Miller's closest 
political allies. [laughs] And I think Miller perceived that 
somewhere along the line, if he was going to get the water bill he 
wanted, he was going to have to give Johnston some of the energy 
things that Johnston wanted. Miller always thought if he had 
Bradley taking the lead on the water bill, maybe he wouldn't have 
to give so much up on the energy side to get what he wanted on the 
water side. 

The forum for discussions among the interest groups and 
really for legislative action for all of "91 and well into '92 was 
the Senate, with the Bradley bill, all the Bradley hearings, with 
Bradley calling negotiations in the late fall of "91, then 
Johnston jumping into the fray in early '92 with his hearing and 
then with his Johnston mark. It really wasn't until April, May, 
after the Senate had acted, that Miller actively entered the fray, 
although obviously they were paying attention. 

But in February of '92, I wrote a memo to Beard and Lawrence, 
after meeting with both of them separately, and realizing that the 
sort of vision that we had, and we thought Bradley had, for 
solving the problem, for getting broad based enough support to 
pass a bill, was not what Miller would naturally gravitate 
towards, because it included water marketing, because it included 
contract renewals, and basically major concessions from his point 
of view to the ag interests who had been his major adversaries for 
his whole congressional career. 

Chall: The ag interests certainly didn't approve of your contract renewal 
proposals, even though you had them in there. You shortened-- 

Graff: Well, we shortened them, yes. They had to give some ground, 
that's true. But basically our view was, you could fashion a 
solution that would accommodate all the interests, and that's in 
fact what I think the bill did. Now, I also thought, and again, 
patting myself on the back, correctly, that ultimately it would be 
very difficult for the ag interests to openly support any bill. I 
can still recall a conversation I had in the hall outside the 
Senate committee room, with Somach, when we went back there for 
our negotiations in November of '91, where I said to him, "You 
know, ultimately, if we get a bill here, it's going to be a bill 
that you're not going to support, but it's going to have a lot 
that you're going to want in it." 


And that's the way it ultimately turned out, although [Vic] 
Fazio, who played a critical role in the late going I think did in 
fact get a lot of what he wanted in the final bill. Lou Cannon, 
who I thought wrote the most perceptive analysis of the whole 
thing at the end concluded- -he had been around a long time and 
he's not exactly a radical- - 

Chall: Did he write it for the Washington Post? 

Graff: Well, he's got a syndicated column. He wrote it as a syndicated 
column. His observation was that the ag interests got a whole 
lot, and didn't realize what they got, or if they did, they were 
clever enough to conceal it. 

Chall: Well, they haven't liked it very well, I guess. 

Graff: I don't know. They've sort of come to live with it, is my theory. 
I view it as a pretty successful enterprise all around. 

Anyway, we've jumped ahead. 

David Yardas; Personal Background and Career Path with the 
Environmental Defense Fund 

Chall: Were we going to have David Yardas here today? 

Graff: Yes. One of the reasons why I think it is particularly useful to 
have him is that he was heavily engaged with Jensen personally and 
with Bradley in the Nevada bill negotiations in '89- '90, and I 
think that background and what I think came to be a very high 
level of confidence that Jensen particularly placed in Yardas made 
it possible for EOF, for Yardas himself, and for EOF and me to 
become, I think, very--I don't know, influential, with 
particularly the Bradley side of the struggle in '91 and '92. So 
I think it's useful to have David's insights on how his 
relationship with Jensen and Bradley 's office developed. 

I don't know what level of detail you're going to want to go 
into in future parts of this discussion, this interview, but David 
was essentially the technical focal point of the environmental 
community for purposes of negotiating all kinds of things, all the 
various versions of the Bradley bill and the Johnston mark. There 
were Senate negotiations that ended up aborting before they passed 
the Seymour bill in March or April of '92. 


Actually Yardas and Barry Nelson were our two people on the 
ground in Washington for the most part in September of '92, when 
the final bill was put together. David was calling me--I was 
sitting here, he was thereand asking what did I think of this 
proposal or that proposal or this compromise or that deal or 

So he was there, even more so than Barry, who I think was 
most responsible for the political element. David was the sort of 
nuts-and-bolts part of it. So I think he could be helpful in 
giving you some of that element . 

Chall: I think it would be useful to get into some of the technical ends, 
the changes. For example, in retracing this processthe Katz 
bills, your and Willey's reports, and so on. It appears that the 
debate on water marketing has been going on for a very, very long 
time. But there are some really serious problems involved in 
water marketing. And problems that make a layman like me wonder 
about them, and also, I'm sure, the rest of you to some extent. 
So the question that I have is in what ways did water marketing 
come into the bills? 

Graff: I think David would be helpful there, too. I can give you sort of 
the grand descriptions. Bradley had a set of water marketing 
provisions in his original bill. And David has a complete file of 
bills from A to Z with all kinds of notations and so on. 

Chall: I think I have Bradley 's original bill. 
Graff: I can't remember the number- -484, wasn't it? 
Chall: Yes. 

[David Yardas joins the interview] 

Chall: I wanted to know something about your background which brought you 
to EOF, and when. 

Yardas: Well, let's see. My undergraduate work was in the area of 

economics from the University of California at Davis, ironically, 
at that time, focusing on international relations issues rather 
than environmental issues. I went back to Washington, D.C., to 
pursue that as a career, and for a variety of reasons, started 
doing environmental work instead- -friends that I had, the 
realities of an eight-hour work day and so on, and feeling like I 


needed to be more stimulated by what I was doing. Environmental 
stuff had always been a passion but not a vocation. 

So I started looking for other work, and obtained a slot as a 
research assistant at a place called Resources for the Future, 
which is a kind of a think tank, a natural resources policy think 
tank back in D.C. Spent a couple of years there, and decided that 
I ought to go back to graduate school to fill out some of the gaps 
on the environmental policy end that I didn't catch as an 
undergrad since I wasn't really focused on them, and came back to 
Berkeley and did graduate work at the Energy and Resources Group 
at Cal. That's an interdisciplinary graduate group, and my 
emphasis was on surface water hydrology. So that was my main area 
of interest. 

Chall: With whom did you work on that? 

Yardas: Somewhat independently. My major professor was John Harte, and 

actuallythis will get to answering the questionbut I guess the 
main person I worked with there was Ed Kahn, who is a scientist up 
at the Lawrence Berkeley Laboratories. He works primarily in the 
area of electric utilities and public utility regulation. I did a 
thesis that looked at some electric utility issues as they 
interfaced with water supply issues. Because of that, I ended up 
going off on a tangent and worked for a private energy, 
alternative energy company for several years after I finished 
graduate work, and in that capacity began to use the ELFIN model, 
standing for Electric Financial. 

ELFIN is a model that was developed and continues to be 
supported by EDF, and it's for looking at kind of production 
costs, simulations of utility systems, alternative expansion 
paths, least-cost planning, things like that. That work, my work 
with ELFIN, which was in kind of the early days of the real public 
work with that model, put me in touch with the author of the 
program here, a fellow by the name of Dan Kirshner. I expressed 
at various points, I think, as time went on, my frustration with 
the private sector and what was going on with the firm I was 
working with-- 

Chall: What was the name of that firm? 


Yardas: At that time, it was called the Independent Power Corporation, 
subsequently split into two firms, and it was partly the 
atmosphere around that split that was frustrating to me. But more 
to the point, the idea of working for private clients was just not 
as compelling to me. 


Anyway, my work with Dan and with that model, and my 
background with the water stuff, ended up being kind of a perfect 
fit when Zach Willey in 1986 received some Ford Foundation support 
for a new initiative that he called the Rural Economy and 
Environment Program, KEEP. Ultimately Dan Kirshner let me know 
that there was a possibility that there would be some support for 
a research analyst or assistant-type position in this program that 
Zach was launching, and he (Dan) was also looking for some part- 
time support on the ELFIN work. So I eventually came to EOF in 
about early '86, split half and half between the energy and KEEP 
or water programs, and actually began work on the Pyramid Lake, 
Nevada, controversy in 1986, as sort of one of the first cases 
that we looked at under that new initiative. 

The Pyramid Lake Project: 

Its Relevance to the CVPIA 

Chall: Do you want to explain that Pyramid Lake project, what it was you 
did and what you learned? 

Yardas: Yes, boy! 

Chall: Because I understand that it carries through-- 

Yardas: Yes. Well, let's see. I guess in a nutshellit ' s hard, because 
I'm still hopelessly enmeshed in that puzzle, it's hard to sort of 
do it in a nutshell. 

Chall: Well, make it a broad nutshell. 

Yardas: Yes. There's a couple of themes that are sort of really relevant, 
I think, to the CVPIA context. One that is in my view extremely 
important and a theme that I think underlies a lot of what 
happened has to do with personal relationships. My work on Nevada 
just, I think, fortuitously happened to come about at a time when 
Senator [Harry] Reid, then a newly elected senator from Nevada, 
wanted to try and do something with the water issues in the Reno- 
Sparks area. Senator Reid, a Democrat of Nevada. I guess he came 
in in 1987; that is when he first became a senator. I think 
that's right. I can check that for you. 

In fact, I'm now involved in a structured, facilitated 
negotiation up there that commenced a couple of weeks ago, and he 
came and gave kind of the opening keynote or whatever, and one of 



the stories he told was how on election night when he was first 
elected to the Senate, he was asked what his top priority was. He 
said, "The water problems in western Nevada," or northern Nevada, 
to him. He went on to clarify this time that that hasn't changed, 
except that now it includes southern Nevada and Las Vegas ' s 
problems as well as northern Nevada. 

But he had that on his screen; the evolution of litigation in 
that controversy. Things had kind of ripened, I guess, and we 
came on the scene with some new ideas about water marketing, about 
the importance of environmental restoration, things of that sort, 
pieces that had been missing from the puzzle. Substantively, I 
think, the main thing I started focusing on was how to get out of 
what was being characterized as a conflict between two 
environmental resources, the Pyramid Lake resource and the 
wetlands of the Lahontan Valley, including the Stillwater National 
Wildlife Refuge and surrounding wetlands. 

Their needs in terms of water were being played off against 
each other by a federal reclamation project community called the 
Newlands Project. We came in and basically started using ideas of 
water marketing and economic incentives and things like that. 

Where were you getting those ideas from? 

It was really an outgrowth, I think originally, of the MWD-IID 
conservation investments work, the idea that the urban sector 
could come in and invest in conservation in an agricultural 
project and reap the benefits of that conserved water. So it was 
that same theory. Reno and Sparks as cities could come in, use 
their money rather than federal money, to go in and buy conserved 
water in the Newlands Project. In fact, Derby Dam- -which diverts 
water out of the Truckee River over to the project through the 
Truckee Canal--is Reclamation contract number one. It's the very 
first contract that the Reclamation Service initiated in 1903. 
It's the first project in that sense. So it's a very old, very 
antiquated project. 

So it was kind of using the MWD-IID project as a model, based 
primarily on Zach's work, because I was still pretty new at this 
point, that kind of pointed us in that direction, and I think 
really got the debate going about another way of looking at things 
out there. 

Fast- forwarding a bit, at near the same time back in 
Washington- -did you talk at all about Bradley and Jensen? 

Graff: Yes. 


Yardas: That's one Tom was kind of shopping around for, for sort of some 
interesting things consistent with their agenda, and the Truckee- 
Carson was known as a reclamation project, was within the 
jurisdiction of the energy committee, and very much on the screen 
as a continuing source of controversy. And when he came out and 
toured he thought that they could actually do a lot in terms of 
the new West theme, or the restoration, and urban sector water 
marketing, and efficiency in agriculture and all that kind of 

So it was really the evolution and timing of that work as it 
coincided with the Bradley- Jensen axis, I guess, and my work in 
particular with Tom during that period that created a real 
relationship. He came to, I guess, trust my work in terms of the 
analysis I could give him, and the background. He would test 
stuff off me, send me stuff for reaction, whatever. Started to 
use me in a way as kind of an adjunct staff person. I don't think 
I'm the only person he used that way. I think he was really good 
and able as a congressional staffer in part because he was very 
good at mobilizing other people to do a lot of work that would 
feed into him and that he could use to advance his interests. 

Chall: This goes back to 1986. 

Yardas: Well, that's when I started. I started in '86 with that project. 
I think things really started moving around '88 or so, and it was 
1990, November of 1990, when Public Law 101-6 18--that ' s the 
Truckee-Carson-Pyramid Lake Water Rights Settlement Actpassed 
Congress. 1 So it was really the '89 and '90 period, two years 
leading up to the passage of that act, where I would say that that 
was the heavy activity. 

Chall: What in the act in terms of water transfers has been successfully 
carried through? It's one thing to get them successfully through 
the Congress, it's another to find that what you had projected is 

Yardas: Yes. Hence the negotiation that I am once again involved in. 
Chall: Is it successful? 

Yardas: Yes, I think it is successful in the same way that the Central 

Valley Project Improvement Act is successful, in that it changed 

'The Fallen Pointe-Shoshone and Truckee-Carson-Pyramid Lake Water 
Rights Settlement Act of 1990, P.L. 101-618, 104 Stat. 3289, November 16, 



Yardas : 

the nature of the debate and it changed the terms of trade. Now, 
whether it brought lasting and permanent protection or restoration 
to the resources that we're most interested in, I can't say that 
yet. But we're no longer headed in this direction, we're headed 
in that direction [points in two directions]. 

The implementation is a huge challenge. I don't think I 
could stand to be involved in another bill in Congress, because I 
couldn't stand to be involved in the implementation effort, at 
least not at the same time. I would have to drop something. But 
that act, and if you want more background on this, I can give you 
some writings and literature, and also we have--a map would help, 
whatever. I didn't really come prepared to do that. 

Did you trade land? 

Did they buy land in order to get water 

Yes, there's an active water rights acquisition program going on 
within the Newlands Project now, which is essentially buying up 
irrigation land and water rights and moving the associated water 
from farm use over as an endowment to the wetlands. The idea is 
to basically shrink the agricultural base. The Newlands Project 
sits, in a sense, in between Pyramid Lake and the wetlands, the 
Lahontan Valley wetlands. There's two rivers, the Truckee and the 
Carson River. Water from the Truckee is diverted over to a 
storage reservoir on the Carson, and that is fed down to the 

So if you try and conserve water in the project in order to 
keep water in the Truckee to benefit Pyramid Lake, which is the 
terminus of that river system, then that has a potential for 
impacting the downstream wetlands, wetlands which are downstream 
of the project and have for many, many years relied on the kind of 
excess or slop of irrigation as their supply. And what the 
acquisition program that was authorized under the act tries to do 
is to shrink the agricultural base and to reallocate a portion of 
that to the wetlands, to give them a permanent endowment that gets 
them out of the alleged trade-off between the health of the lake 
and the health of the wetlands. 

Agriculture, Wetlands, Indian Tribal Fisheries 

Chall: And what happened to what's known as third-party interests? 


Yardas : 




They're alive and well, very much a subject of debate, part of the 
reason for the facilitated negotiations that are currently going 
on. It is not without impact. I mean, there's a whole number of 
things that need to be discussed about third-party impacts, 
including third-party benefits. The benefits of being a 
beneficiary of the federal reclamation trough for the last eighty 
years are significant, and that needs to get taken into account 
somewhere . 

But the other important piece of that whole settlement 
there's a number of them. There are several tribal settlements, 
there's two Indian tribes involved. There are interstate 
allocations, that's between Nevada and California, because both 
the Carson and the Truckee are interstate rivers. But perhaps the 
real linchpin is a water settlement between the Pyramid Lake 
Indian tribe and the water purveyor in the Reno-Sparks area that 
will allow for additional drought support for the Reno-Sparks 
area, and essentially the continued development of that area 
through a water banking program that also provides substantial 
benefits to the Pyramid Lake fishery, to the endangered fish that 
reside in Pyramid Lake. 

Which the Indians use? Are the Indians the fishermen? 

Well, yes. There's two fish, two primary fish. One is called the 
endangered cui-ui, and the threatened Lahontan cutthroat trout. 
The cui-ui are the namesake of the lake and the tribe 
historically. They are not a commercial fish; they're kind of a 
slow-moving, long-lived, prehistoric-looking sucker-type of fish, 
but very much entwined in tribal history and culture. Pyramid 
Lake was called "Cui-ui Lake" by the Pyramid Lake tribe, which was 
known as "kuyuidokado, " or cui-ui eaters. So that's very much a 
focus of their kind of culture and subsistence and history and 

I see. So you had to protect their water rights, too, for 

Well, it's not so much their fishing as the habitat of the lake to 
preserve the fish itself. The fish are not currentthey don't 
fish the cui-ui at this point. 

The Lahontan cutthroat trout are of commercial interest 
potentially, certainly of great recreational interest. The 
original strain of that species that was indigenous to Pyramid 
Lake went extinct in about 1940 due to the drop of lake levels 
resultingsort of like the Mono Lake situationresulting from 


diversions of water upstream, in this case to the Newlands 
Project. So one of the long-term interests of the tribe is to 
sustain what is now a reintroduced population of Lahontan 
cutthroat trout in the lake for angling and commercial purposes, 
There's a real economic potential there. 

Becoming Involved in California Water Issues: Drafting the 
Yardas-Garrison Letter 

Chall: I see. So that's the source of some of the work that you've done. 
And then that brought you into working with Jensen and Bradley on 
the CVPIA, the early bills. When did you start working with the 
Congress on what we now call the CVPIA? 

Yardas: I started to get out of my energy work and moved over into, kind 
of became full-time water back, I forget exactly when, maybe '89 
or so. And as part of that move, I started to pick up some of the 
California work, or get more involved. The San Luis Drain issue, 
I think, was an early piece. And in that capacity, I was starting 
to get involved in some of the discussions that were going on at 
that time pretty much informally, I think, although there was a 
whole separate thing going on with Miller and his fish and 
wildlife bills. I was more kind of just reading those and 
reacting to them than having any dialogue with his staff at that 
point in time. 

But I guess the main thing on the Truckee-Carson is that as a 
consequence of having worked that bill, the relationship with 
Jensen was key in large part because of the role he played in the 
CVPIA. But also my work on Truckee-Carson gave me introductions 
and substantive connection with a lot of people on Capitol Hill, 
with the same people who would ultimately become involved in the 
CVPIA, and so I think again the relationship thing was pretty 
important there. 

So I don't know. But I guess the first real substantivedid 
you talk about the letter with NRDC? 

Graff: Yes. 

Yardas: So I think the first real substantive entry for me in the start of 
the CVPIA from my point of view was this joint letter with NRDC. 

Chall: Who worked out-- Did the two of you work out the joint letter? 


Yardas: It was pretty much all of us, I think. It was signed by myself 

and Karen [Garrison], but I know that on their side, it was Sammy 
Yassa, Hal [Hamilton] Candee, and Karen at least. I know here 
[EDF] that, since it had implications for Kesterson and San Luis 
Drain and all that, John Krautkraemer, Terry Young, myself, and 
Tom I think were probably the main people involved. Am I 
forgetting somebody? 

Graff: No, that's right. Later on, as I guess we'll get to, David took a 
leave of absence in the first half of 1991, and Chelsea Congdon 
played a role in the CVPIA itself. But I think she was not yet 
aboard as of September of '90. My recollection of that, and it's 
a little dim, is that David and Karen really were the ones that 
were talking to each other in terms of the relations between EDF 
and NRDC at the time. I remember reviewing the letter, and I'm 
sure I had some comments, but I view that letter as being 
primarily their work, yours, David's, and Karen's. 

But going back to what I said earlier, I think it did bridge 
considerable differences between the approaches of the two 
organizations, and it reflected a combined perception on our parts 
that Miller had steered in a wrong direction in reaching his 
compromise with Valley Democrats in that year's version of the 
fish bill. 

Chall: All right. 

Yardas: Karen, by the way, also went to the energy and natural resources 
program at Cal. That's where I first met her. 

Genesis of the Three-Way Water Agreement Process 

Graff: John Krautkraemer, which is hard to spell, he played a big role in 
the Three-Way negotiations, which we didn't touch on, but at some 
point we should. 1 It was really our main--I played a role in 
those as well, but he was pretty much EDF's representative to 
Three-Way. Three-Way, one thing I noticed also going through my 
calendar, was that the Hetch Hetchy meeting at which Three-Way was 
born took place on July 28, 1989-- 

Chall: Was the genesis of Three-Way the Hetch Hetchy meeting? 

'John Krautkraemer died in an accident, January 21, 1995. 






No, that's where the meeting was. That's where I got the year- -it 
might have been '90. Yes, it was 1990, July 28, 1990. 

And that's when the Three-Way- 
Three -Way- -MWD and San Francisco- -who by then, north- south-urban 
discussions were underway at some degree of intensityput that 
meeting together. John went as our representative. I in fact had 
a negotiation that day sponsored by Phil Isenberg on the Baker- 
Isenberg Mono bill, which was one of the reasons that I didn't go. 
But as you probably have heard from some of the water interests, 
there has long been a perception by them and maybe even by some of 
the environmentalists who were more active even than EDF in the 
Three-Way, that Three-Way was this great promising possibility 
that was derailed by this horrible set of events in Washington 
that led to legislation. People have been somewhat cynical about 
our involvement in Three-Way. 

Well, they feel you've undercut them. 

And John is the one who takes the rap, at least for having- -he put 
a lot of time and energy into Three-Way, and I think probably was 
thereby a major contributor to the passage of CVPIA. 

How do you explain that connection? 
Three-Way and the passage of CVPIA? 

His time and energy into 

Had EDF not participated in good faith in Three-Way, as John did, 
we could rightfully have been accused of being anti-consensus. 
Three-Way, as it turned out, was useful as a means to communicate 
among the three major sets of interests. But it was destined 
never to reach a definitive settlement. It simply tried to do too 
much too soon. 

Leave of Absence, January to October, 1991 

Yardas: Well, after the Truckee-Carson settlement passed in November of 
'90, I decided--! had actually planned this in advancebut in 
January I left for what was intended to be a six-month and 
ultimately turned into a nine-month leave from EDF. 

Chall: January '91? 

Yardas: Right, until October, beginning of October of '91. 




Yardas : 

Yardas ; 

Where did you go? 

I went to the Natural Resources Law Center at Boulder, University 
of Colorado. 

What was this, to study whatis that a think tank? 

It was mostly just to--yes. I mean, the law center, they are sort 
of very active in western water policy, and I thoughtmy 
intention at that point was to maybe write a book about this 
Truckee-Carson stuff that had happened. I ended up writing an 
article; that's about as far as I got with that. There was a 

relationship involved that didn't work out. 
factors. [laughter] 

Many complicating 

But the one thing that I remember from that time was- -well, 
two things. One was being upset thinking, "Gee, it's great I'm 
taking this leave, but the one thing I'm really disappointed about 
is that I won't get to work with Jensen on this CVP legislation, 
because it will be over and done by the time I come back." 
[laughter] And secondly, one of the first things I got when I got 
there was a fax from him [Jensen], which was a draft of S. 484, 
incorporating many of the items that we had suggested in the NRDC- 
EDF letter, as well as a big piece, I believe, that included 
restoration funding, or a restoration trust, that he had done a 
lot of work on with us and with The Nature Conservancy. I also 
have a whole Nature Conservancy connection in some of my Nevada 

Yes, that's a connection I didn't know anything about. 

Well, without going into too much detail, let me just say that in 
Nevada, the federal Newlands Project like the CVP and virtually 
every other federal reclamation project in the West- -has had very 
severe impacts on environmental resources, in this case the 
Truckee and Carson Rivers, Pyramid Lake, Carson Lake, and the 
Stillwater National Wildlife Refuge, among others. So I've been 
working with the Conservancy for many years in Nevada to put into 
place an environmental water rights acquisition program and other 
related reforms that are finally beginning to "undo" some of the 
damage. I have no doubt that some of what I've learned there has 
influenced my thinking here, and vice versa. 

I see. Now back to Jensen. So you got a fax from him 

Yes on possible CVP reforms and I faxed him some comments back 
on that initial draft, or that early draft, in January of '91, and 


then kind of stepped out completely at that point. I think 
February of '91 was when S. 484 was introduced. Is that right? 

Chall: Yes, Bradley introduced S. 484 on February 26. That's in my 

chronology. So then after that, you didn't have much to do with 
S. 484? 

Yardas: Not until I came back in October, and then things kind of 

Chall: Well, that's when things were getting pretty hot. October of '91. 

Yardas: Yes. November is when the first redraft of that bill took place. 
I don't know if my--I think it's another of those things where 
I've contributed to some movement, and I also just happened to 
come back when things had ripened, and sort of stayed out of a 
summer's worth of Three-Way and hearings and all that sort of 

Chall: What did you gain by having been at the law center at Boulder--for 
your life career or whateverthat you brought back with you? 

Yardas: [Pause] A more secure funding base in my work with The Nature 
Conservancy. [laughs] I mean, I mean that seriously, that I 
solidified a real solid, long-term relationship with them. Up 
until that time, we'd worked closely, but it had been much more 
informal or arm's length. In Boulder, I worked as a consultant 
for them in order to finance my six-month leave, so I got kind of 
an inside view of their organization during that time. I was 
part-time as a consultant with them, and then part-time at the law 
center. I don't know that I- -more than anything else, it was just 
to kind of change scenes and take a step back and think about next 
steps and choices. I almost thought about not coming back. I 
came very close to it. But I ended up coming back, in October, 
and today in the Nevada work, it's EDF and The Nature Conservancy. 
We are very much a team that supersedes the individual 
organizations in a lot of ways. So it's a very interesting kind 
of case in itself. But that would probably be the main thing, was 
kind of getting an inside view of TNC during my time in Boulder, 
and then formalizing our work on a "joint venture" thereafter. 

Chall: Where would you have gone if you didn't come back here? 

Yardas: Oh, I assume I would have stayed there, and either gone with the 
Conservancy or worked something out with EDF's Rocky Mountain 
office in Boulder. 


SENATE, 1990-1992 

[Interview 2: November 16, 1994] 

Thomas Graff's Offer of Advice on Reform Legislation Coupling 
Water Marketing and Environmental Protection 

Chall: I wanted to go back just briefly to the Yardas-Garrison memorandum 
[September 6, 1990]. But first, Mr. Graff, I notice that in your 
memorandum of October 23, 1990, on the Miller bill [H.R. 1316] and 
other memoranda that you wrote later on S. 484, that you usually 
said that you'd be pleased to work with the committee to further 
refine the legislation, to accomplish the objectives that you had 
set out. I wondered to what extent you had been invited to do so 
after making this invitation, setting out this offer. 

Graff: Well, of course, the 1990 testimony, in quotes, was never 

presented, because that particular hearing didn't take place, and 

Chall: What was their response? 

Graff: And then the set of four hearings that followed were all in the 

Senate. The only House hearing that ever took place in the actual 
'91- '92 sequence was very late-- 

Chall: Yes, in May- 
Graff: In May of '92. But I think the direct answer to your question is 
that I personally had a lot of interactions with Congressman 
Miller and his staff, including then-director of the committee 
staff, Dan Beard, and Miller's legislative director, John 
Lawrence, as well as Steve Lanich and Charlene Dougherty. They 
had a big contingent working on this. I have brought along with 
me--and maybe this is as good a time as any to reference themthe 


series of memoranda that I wrote over the course of the CVPIA's 
development specifically to Congressman Miller and his staff, 
probably the most significant of which was one that I sent to Dan 
Beard and John Lawrence on February 10, 1992. L 

What I wasn't privy to but I think was agreed to by 
Congressman Miller and Senator Bradley was a strategy that the 
substantive bill should be developed in the Senate and passed in 
the Senate, and then returned to the House, although procedurally, 
a bill [H.R. 429] passed the House early in the session with no 
CVP reform in it, a small bit of rec reform, which ultimately was 
dropped, and the Trinity River provision. These were the only 
related provisions that were in the House bill, the reclamation 
projects bill, that included central Utah and the rest-- 

Chall: Was that a Miller bill? 

Graff: Yes, I think it was a Miller bill. It's referenced in this 
chronology relatively early. 2 

Chall: I see something about an omnibus bill in October, 1990, H.R. 2567, 
but I don't know what all it entailed. Tom Jensen's draft 
chronology indicates it died in the Senate in the last days of the 
1990 session, due to a filibuster by Senator Wilson. 

Graff: Right, the omnibus bill. The first omnibus package in 1990, 

that's the prior Congress. The bill, H.R. 429, which is the bill 
that ultimately passed, passed the House in June of '91. That is 
the bill we ultimately revised. It included no CVP reform 
provisions nor really fish and wildlife provisions other than the 
Trinity River. 

Chall: Explain to me what RRA is--a term used by Jensen. 

Graff: Reclamation Reform Act. That's actually sort of a sensitive area, 
because that was a set of issues that had been pending in the 
Congress really ever since the prior reform efforts in the early 
eighties, I think '82. The sense that both Miller had, and 
Bradley, I think, and those in the reform community, led by NRDC, 
was that the intent of the reforms of the early eighties had been 
sort of undone by administrative action of the [Ronald] Reagan and 
[George] Bush administrations, and they were trying to tighten the 
rules on abuses of the acreage limitation in particular, and 

'See Appendix B. 

2 Tom Jensen provided a draft chronology of the history of the CVPIA 
legislation as a guide to these interviews. 


residency requirements and so on. I never really got into the 
details of those issues, and a version of reform of those 
provisions was included in the original omnibus bill that went 
from the House to the Senate in June of '91 [H.R. 429]. 

George Miller Holds Back Final Passage of the Omnibus Water Bill 

Chall: Let me ask about that one. Why had the omnibus bill been held up 
for so many years? There is a certain feeling that this had been 
held hostage by the Miller committee. 

Graff: I think Miller in particular, and then joined by Bradley in the 

later period, had bottled up a number of water projects and other 
changes in western water management that were desired particularly 
by western senators until he could accomplish some of his 
objectives. Up until 1990, notably dealing with the RRA in the 
waning days of the 1989- '90 Congress, the 101st, I guess, right?-- 
there had been an effort led by Miller and Bradley and by some of 
the Republican- -well, by various western senators, Republican and 
Democrat, to put together a comprehensive bill. Senator Wilson, 
on behalf of California agribusiness who didn't like the rec 
reform provisions, filibustered that bill in the closing days of 
the '90 session and prevented H.R. 2567 from passing. 

Chall: Oh, that was the problem, the RRA? 

Graff: Right. And among other things, that caused bad blood, 

particularly between Wilson and Miller, and to a lesser degree 
between Wilson and Bradley, that carried over to the '91- '92 
Congress, and I think probably influenced Wilson's decision over 
those two years not to engage. I think he has had and has a deep 
distrust and dislike for Miller. I'm less clear about the Wilson- 
Bradley relationship. I don't think it's close, but I don't think 
it's as antagonistic as the Wilson-Miller relationship. But I'm 
sure political people around Wilson were saying throughout, 
"Bradley longterm is a potential presidential contender, he's 
doing this for political advantage in California," and so on. So 
this colored the governor's role in the '91- '92 sequence. 

Chall: But Miller had always been a sort of thorn in the side of a lot of 

agriculture people- 
Graff: Yes. Senators like [Jake] Garn of Utah, who retired after the '92 
102nd Congress, wanted central Utah reformulation badly, and 
Miller essentially said to those senators, "The price of your 
getting that is my getting what I want in California." The big 


difference, really, is that the price of reform, the price of the 
other western states getting what they wanted, changed from '90, 
when it was broad-based rec reform applicable to the West as a 
whole, to a particular package of reforms limited to California. 

And of course, with Wilson having left the Senate and an 
appointed incumbent, who was running for reelection, [John] 
Seymour, being his replacement, and with [Alan] Cranston having 
essentially given his proxy to Bradley, the dynamics were very 
different in '92 than they were in '90, where Wilson had 
considerably more power, even though he was a lame duck. Seymour 
ultimately had no allies when it came down to the end of the 
session, and although he tried to filibuster and [Alfonse] D'Amato 
I think helped him briefly, others on his side of the aisle, 
notably Garn, were anxious to pass the bill so that they could get 
what they wanted, and they had little patience with Seymour. 

Senator Bradley Plans to Include the CVPIA in Final Passage of the 
Omnibus Water Bill 

Chall: I just was curious about why in June, when 429 passed the House-- 
and as you say it was rather weakin October, when Bradley held 
hearings on it in the Senate he could claim that he was going to 
put the CVPIA into it. 

Graff: His bill had come out in February. 

Chall: That's right. And so the question that I have is why he felt so 

confident at that point that he could say, in effect, "This reform 
legislation is going to be in it [H.R. 429}, and we're going to 
pass it." 

Graff: You know, this is one of the things that I've always found 

intriguing. I mean, there were a lot of times when I was a lot 
less confident than maybe I'll appear speaking here in retrospect, 
but from late 1990 on, from the time that the original Yardas- 
Garrison letter was written, I thought we'd have a pretty darn 
good shot at passing legislation in the 102nd Congress. And I 
think probably an advantage that we at EOF had, which we mentioned 
in the last interview, was real knowledge of the Bradley and 
Jensen operation, which was not as well known to others even in 
the environmental community, much less in the agricultural and 
urban communities. So that I think we got to define many of the 
approaches and sort of formulate overall structure of legislation 
before others started to catch on that this was a train that might 
actually reach the other station. 


But then, of course, during the course of the two years there 
were ups and downs . When the Senate got bolixed up in March and 
April of '92, we weren't sure it was all going to come together, 
and then certainly in the closing moments of the session, much 
less when we were wondering whether the president would or 
wouldn't sign, I wasn't quitewe weren't quite as confident as 
maybe I appear now. 

Chall: Well, let's see, I interrupted you, but you were discussing 429 as 
it related to George Miller, weren't you? 

Graff: Well, I was going to go back. You asked me about the relationship 
with Miller and his committee, and I was mentioning the February 
1992 letter. But maybe in terms of chronology, now that David's 
in the room, we should go back to David, because you were going to 
ask him about the letter to Dougherty. 

Chall: Right. 

Additional Background on the Yardas-Garrison Letter 

Graff: Because I think that essentially all started when we werewell, 

it all started before, but in terms of the fish and wildlife parts 
of the CVPIA, it started with us being unhappy, and NRDC, 
coincidentally, being unhappy with what Miller had done with his 
bill in the summer of "90. So that we and NRDC sat down together 
and jointly drafted our critique in the form of that letter. 
Maybe you wanted to ask David some questions on that. That bears 
on how we related to Miller later. 

Chall: Yes. I did read the letter, and you have already discussed 
something about how you had worked it out. But it was very 
detailed. 1 mean, you even indicated how they should write the 
bill. It was a new approach; you saw it as a new approach. You 
told me, I think, that Jensen was highly favorable, and he said he 
would use the ideas in S. 484. Is that correct? 

Yardas: Well, I don't recall discussing that letter with Jensen at the 
time. I think that it became clear when he started cobbling 
together a draft of 484 that he was using or would use or intended 
to use some of the ideas. 

Chall: You had sent him a copy? 

Yardas: Yes, that we had sent to Miller. I'm sure we did, yes, by virtue 
of the chairmanship. I don't actually remember the precise 


mechanics of how he got it, but I'm sure--I was working with him 
closely at that time on Truckee-Carson, so I'm sure knowing their 
interest in CVP, that we cc'd them and undoubtedly others. 

Chall: What was the reaction of Charlene Dougherty and George Miller? 

Yardas: [laughing] I don't recall any reaction. I think silence, at the 
time. I don't recall that they reacted one way or another. It 
was kind of the end of the session, and this was, in effect, "When 
you start thinking about this again, here are some other ideas you 
might want to think about." 

Graff: I actually have a comment on that. The letter is dated September 
6. I don't remember when they called the hearing for October 22, 
but it must have been after September 6, when we sent the letter. 
They called the hearing and then they canceled the hearing, and it 
was never quite clear either why they called it or why they 
canceled it. Part of my thinking about getting my testimony out 
was that, as you have just pointed out, David and Karen's letter 
was somewhat dense, and in terms of getting the message to a 
broader audience, my view of this draft testimony or testimony for 
a hearing that didn't take place was kind of a popular translation 
of the Yardas-Garrison approach. [laughs] 

Yardas: Density there is--I guess that was informed in part by the process 
I was involved in in Nevada, in which it became very clear to me 
that you could have all the great ideas in the world, but with 
staff having sixty things coming at them at any given time, that 
if you wanted them to incorporate your ideas, you not only had to 
spell out how you thought it worked, but here's the language that 
you should use. Then they might use that or tinker with it, but 
it meant there wasn't this extra barrier for them to get over. So 
to the degree that that's how that reads, it was probably 
premature for that sort of language, but it was probably 
consistent with where my head was at on my relationship with staff 
at that time. 


Yardas i 

And how did you work this out with Karen Garrison? 
concerned with this aspect too? 

Was she 

I think we all recognized that-- As I recall, the guts of the 
problem in terms of the approach that had been taken to move the 
bill out of committee in the House, was to limit contract renewals 
to three years, but to authorize new contracts to move forward. 
And in a nutshell, what we were saying was, "No, we shouldn't have 
any new contracts, and what we ought to do is reallocate under 
existing contracts, and if you limit them to three years, the 
market's not going to work, or whatever." So it was really kind 
of a group recognition that the direction that they were taking, 


particularly with the new contracts, was not acceptable, that we 
had to get out of that bind. 

Over the years, Karen and I had sort of--I wouldn't say 
commiserated, but talked a lot as school colleagues and 
subsequently about our organizations, sort of considering the 
different pieces we were focusing on, and maybe that there was a 
way to bring them together. So we initiated the dialogue, but 
ultimately that dialogue involved Hal Candee and John Krautkraemer 
here; I think Sandy Yassa was involved on the conservation 
aspects; Tom. It ended up being massaged as a group effort. So 
it went under our signatures, but it was really something that was 
negotiated out, if you will, between our two groups. 

George Miller's Response to Water Marketing 

Chall: I was looking at the next bill that came out, Miller, H.R. 1306, 
and I'm not really sure--I thought I was sure but I'm not now-- 
whether any of your ideas were even in it. 1 

Graff: Pretty much none, right, or close to none? 
Yardas: I don't think so. 

Graff: Miller introduced a fish and wildlife protection bill only, and 
didn't deal with the reform elements, as I recall. 

Yardas: My guess is they started pretty much where they left off, in terms 
of the text that they had in their computers, and didn't--! mean, 
I'd have to go back and look at that, but I don't-- 

Graff: I think it's fair to say--and you should confirm this with 

Congressman Millerthat from fairly early on, they decided that 
the problems that they had faced in the past had always been that 
Miller, after some effort, and as I guess Jason Peltier puts it, 
"Millerizing" some of his opposition, had been able to get 
legislation passed through the House, only to find it bottled up 
in the Senate. 2 I think he and Bradley either explicitly or 

'The California Fish and Wildlife Protection Act of 1991, March 6, 

2 Jason Peltier, The Passage of the Central Valley Project Improvement 
Act, 1991-1992, Regional Oral History Office, University of California, 
Berkeley, 1994. 


otherwise came to the conclusion that the real legislative effort 
of putting something on the table should take place in the Senate. 

Now, as it turned out, that didn't really happen. Bradley 
did introduce a major piece of legislation, and Johnston put in 
his mark, but what actually did pass was the Seymour bill. But 
nevertheless, a bill ultimately did pass the Senate, and the ideas 
that were in Bradley 's bill and the Johnston mark were definitely 
still in play, given particularly what Johnston said at the 
committee at the time the bill passed out. But that's jumping 

Chall: Right. 

Yardas: Yes. [looking at H.R. 1306] Significantly, this does notnot 
only does it continue the bar on the longterm renewals, but it 
does not include any water marketing aspect, which I think was the 
key. I mean, we saw this as a combination. If you were going to 
bar new contracts, and you had to accommodate new needs, then you 
had to have a market. If you had a market, you had to have some 
kind of certainty in terms of the asset you wereproperty 
interest in a marketable asset. So at this point in time, I would 
say that Miller and his staff had not embraced marketing, at least 
as reflected in the bill that was introduced. 

And I'm trying to think as we're talking here, I believe that 
actually first was reflected in the House--! should look back 
through my versions here, but I believe that the bill that 
ultimately passed the House in June of '91 contained various 
marketing provisions. 

Graff: It was '92. 

Chall: You mean the Miller bill in '92? 

Yardas: Yes. 

Chall: Yes. That was H.R. 5099? 

Yardas: Right. So at that point, they had picked up on the stuff that had 
gone on in the chairman's mark and so on, and that included 
marketing as a component. So they had done some internal 

Chall: I don't know what --we '11 get to that, but some of that was traded 
off anyway. I don't know whether marketing was, but we'll get to 


Graff: Going back, then, to your question about our relationship to 

Congressman Miller and his principal staff people, marketing in 
particular was a concept that was difficult for them to accept. 
Miller came from a background of wanting to confront particularly 
the large farmer beneficiaries of the CVP who he felt had gotten 
away with not only environmental degradation but financial 
benefits, excessive financial benefits from the U.S. treasury, and 
a notion that said "You can resell your contract right to water at 
a further profit" was not necessarily one that he immediately 
jumped to as compatible with his longstanding interests. 

Chall: But that's understandable, is it not? 

Graff: Yes, it is. So we worked with Bradley particularly and with the 

business community, whose support ultimately was a crucial element 
in passing the bill and ultimately with the urban interests, and 
even with some of the agricultural interests who, although they 
rarely admit it, did in fact benefit from that measure. We slowly 
worked on Miller and his staff to come to the realization that 
both on political grounds, this was a necessary component to 
getting a bill passed, and that it had substantive merit. 

And in particular, this memorandum of February 10, 1992, 
followed meetings--! don't have this from memory exactlyit 
itself says it followed meetings with Dan Beard and John Lawrence, 
in which they both had asked me to set out our rationale for why 
Miller should embrace water marketing in particular, and some of 
the other contract reform approaches, tiered pricing and the like, 
that EDF promoted. So I've brought this memo, it was a 
confidential memo at the time, but now, two and a half years 
later, I think we can safely launch it into the public domain. 

And then a similar, less comprehensive memo follows on April 
16, after the Senate acted. 1 We were trying to make sure that 
Miller took note of our earlier memo. My earlier memo asks for 
response from Beard and Lawrence, which at least I never got in 
writing, or even for that matter necessarily orally, so I followed 
up with the second memo. 

And then the third memo in this little series [May 27] is one 
to the Share the Water Coalition critiquing the House bill, the 
House Democrats' compromise in late May-- 

Chall: Now, we're talking about 1992? 

'The Seymour bill, S. 2016, passed the Senate March 19, 1992. 


Graff: Yes, this is jumping way forward in 1992. But anyway, all this I 
guess is pertinent. 

Chall: Yes, it is. But you're talking now about 5099, is that right? 

Graff: Yes. But basically, though, in terms of your question: George 
Miller is a terrific guy and was absolutely essential to the 
passage of CVPIA from a political point of view for sure and a 
substantive point of view as well. But some of the substance in 
the final bill was different, at least, if not contrary to what I 
think he would have envisioned as being part of the bill at the 
beginning, including particularly the water marketing approaches. 

And some of it was just tactical differences, I think. I 
think Beard and Lawrence, who later berated me something fierce in 
the briefing session that I gave in Washington the day after the 
Somach-Graff compromise was launched, I think had different ideas 
about what was tactically possible than I did, in part because 
they had developed these quite antagonistic relationships, 
particularly with the interest groups. They always had I think 
decent personal relationships with the Central Valley Democrats, 
with [Vic] Fazio and [Calvin] Dooley and [Richard] Lehman, albeit 
adversarial on the merits. They were quite hostile, as you've 
probably picked up, I guess, from Peltier's interview and even 
from Schuster's, although Schuster has a more complicated 
relationship with them. 1 

They, for example, I think never believed that CVP 
agriculture would agree to a six-dollar-an-acre-foot surcharge as 
part of the deal. They didn't think a tiered pricing deal would 
be acceptable, and so on. So there were just differences in both 
tactics, and at some level in ideology. 

But having said all that, there was a tendency on the part of 
all three, of Miller and Beard and Lawrence, who are very 
different personalities, by the way, to not commit themselves. 
Even after a memo like this six-pager in February of 1992, I got 
no response formally. I guess it's a five-pager. But I think it 
penetratedat some level. [laughs] And it all worked out in the 
end. And in fact, when we get to it, David will describe some of 
the end game in September of '92, when he was I think deeply 
involved not only with Jensen on the Senate side but with Miller 
on the House side. 

'David Schuster. An edited, but unreviewed, biographical oral history 
interview conducted August 1991 to February 1992, sponsored by the 
California State Archives, is under seal in the Archives. 


Chall: All right. 

Graff: Here's the set. 

Yardas: Where are you timewise on your calendar here? 

Graff: We're still way back when. 

Yardas: You're still in 1991? [laughter] 

Chall: Yes, I am-- 

Yardas: We're really out of phase here. 

Chall: Yes. I know that you didn't come back until the end of '91-- 

Yardas: October of '91. 

Chall: But I had wanted to get some background, a little more background, 
on the Yardas-Garrison letter, and so now I think I have that. 

Graff: I mean, it's not that surprising. Miller, in fact, kind of hung 
back for a long time, waiting for the Senate to act. I know as 
1991, twelve months passed, and the first few months of "92 passed 
and they were nearing the end of the session, he and his staff got 
very antsy that things weren't moving in the Senate. 

Share the Water; The Coalition in Support of the CVPIA 

Chall: I see. Let me ask you a question before we get beyond 1991. When 
Share the Water was organized some time in the spring of '91, how 
important was Share the Water to the success of the passage of 
CVPIA, and what did either one of you have to do with Share the 

Graff: Well, EOF was always a charter member. It was a charter member 

and an active member in Share the Water from its beginnings. I've 
assumed in the last interview and the beginning of this one that 
you got a lot of the flavor of Share the Water from Barry Nelson's 
interview. ' 

'Barry Nelson, The Passage of the Central Valley Project Improvement 
Act, 1991-1992, Regional Oral History Office, University of California, 


Chall: Yes, I did. 

Graff: So we haven't emphasized it, but the California campaign, which 

was run from Share the Water, was staffed not only by David Behar 
and Barry Nelson in "91- '92 but ably by Patty Schifferle and John 
Boesel. He did a great job on media and hyping things and showing 
up at Seymour's press conferences waving placards and all that 
kind of stuff. They did a great job. 

Chall: But where did the two of you fit into it? 

Graff: We would participate in the strategy sessions, and we would attend 
almost all of the meetings. One or both of us would be there-- 

Yardas: Virtually all. 

Graff: Most of them were here; a few in San Francisco, but most of them 
were here. 

Chall: In this building? 

Graff: Right here where we're sitting [a large conference room in EDF 

offices]. And in terms of the D.C. campaign, when Dave Weiman was 
hired to lobby for the coalition, it's one place where we differed 
from Jensen. Jensen's original recommendations focused on 
lobbyists that. he thought would be influential with the Senate 


Graff: Weiman was someone who was very close to Miller and Miller's 

staff, and not someone who would necessarily be very effective 
with the Senate Republicans. I argued, and Share the Water 
agreed--! don't think I was the only one who argued this, but I 
know I argued strenuously that we should have someone who we could 
use with Miller, and that Weiman would be fine in other places as 
well, and we could supplement him as needed. 

It turned out that the urban agencies over the course of the 
two years shifted ground substantially, I mean West-wide, to 
become supporters of the bill, partly because they wanted CVP 
reformulation, and the Nevada interests started to realize that 
this stuff was going to be important to them long-term and so on. 
So we got a lot of sort of indirect lobbying assistance with the 
Senate Republicans from people like Guy Martin, who became the 
representative of the Western Urban Water Coalition, and I think 
it turned out to be great. Weiman did a great job for us, and 
where he wasn't as strong, other people stepped in. 


Anything this monumental involves huge numbers of people 
doing very different things. Weiman had a very different role 
than Patty Schifferle had out here, and some of the more 
technically-oriented people had, and the legislative staff and 
legislators themselves, and business community and urban--! mean, 
there were a lot of different players, and obviously the campaign 
of Share the Water was a crucial component. 

Thomas Graff 

Yardas: Let me just supplement that a little bit. Early on in my 

involvement, a negotiating committee was formulated. I don't 
remember the precise membership, but Tom was one of the lead 
negotiators. One of the controversies was, "Well, how much water 
do you need?" So we sat down with the growers, after doing some 
homework, and told them how much water we thought we needed, and 
that about ended the negotiations at that point. [laughs] 

Chall: That was when? Early? 

Yardas: Well, it was after I came back in October. I would imagine it was 
either maybe December, January, something like that, of '91-'92. 
But anyway, I think Tom's role in the coalition was crucial, 
particularly because of his longstanding work with the urban 
community and the role that the urban community and MWD and the 
business community played in the CVP effort. 

David Yardas 

Yardas: My own role was more as--I came to call myself the lead technical 
analyst of the coalition. I was working with all of the other 
interests but trying to pull together kind of the technical 
underpinnings, from flow needs to the economic analysis that was 
done, whatever. My impression was that while I had been away on 
leave, the preliminary work in terms of campaign had really taken 
place: hearings and organizing and rallies and things like that. 
And coincidentally, on my return, it moved more intothe campaign 
continued, but it was time to just really start focusing on the 
substance of how things would really pull together. So part of my 
job, as I defined it anyway, was to kind of do that gathering. 

Chall: I see. And to do that, you worked with whom? Mr. Jensen a lot? 


Yardas: Well, I was more informing Tom of those issues and others. I 

worked with federal and state agency people, with the fisheries 
people, fisheries organizations within the coalition who had 
expertise and knowledge about certain things, with the waterfowl 
interests who knew the refuge water supply report well and the 
details and assumptions behind that. Depending on what the issue 
was, there were different people that you'd reach out to, but it 
was really a pretty large network of people that were feeding 
information into the process. The key was to relate that to the 
legislative package that we were trying to create. 

The Roles of the Urban Water Agencies and the Business Community 

Chall: This might be a good time to discuss the roles of those who were 
outside the coalition, and maybe never would have been inside it 
anyway. ACWA [Association of California Water Agencies], the 
California Urban Water Agency [CUWA], and the business groups. 
They--I don't know about ACWA--they probably were terribly 

Graff: ACWA was basically against it. There were urban agencies within 

ACWA who were supportive--MWD most notablybut ACWA still to this 
day has an ag bias, and to the extent it was involved at all, it 
was neutralized by the internal divisions; it was hostile. 

CUWA also was somewhat divided, largely because Santa Clara 
Valley Water District never liked the bill much, although most of 
the rest of CUWA, including MWD, San Diego, and EBMUD, were 

As for the business community, we had developed a 
particularly good relationship with Mike McGill of the Bay Area 
Economic Forum, and less on a political level but on a substantive 
level dealing with the merits of water marketing, with the Bank of 
America, notably Fred Cannon. McGill and Cannon and ultimately 
Jim Harvey, who chaired the Business Roundtable Water Committee 
and who was then CEO of Transamerica, all became extremely 
important allies. McGill, as you may know, is now chief of staff 
to Senator [Dianne] Feinstein. 

McGill, in fact, I give credit ultimately for having come up 
with the key final compromise. When Somach-Graff came out, it was 
an all-money, no-water approach. McGill preferred transfers and a 
money approach. The Johnston mark was an all-water, little-money 
approach. The person who kind of came up with the first memo and 
suggestion to split the difference, half -money, half -water, was 


McGill. And he wrote a key memo which I can eventually probably 
find--I didn't bring it with me todaywhere he pitched that. I 
think he sold Fazio on it, and ultimately that's sort of how the 
thing ultimately came out. [laughter] 

Yardas: One might note, though, that that came after the whole thing had 
sort of collapsed after the "historic compromise for a day," and 
after Somach-Graff revived it by doing the opposite of the 
chairman's mark, which was primarily water. The Somach-Graff 
approach was, "Well, you meet the requirements of existing law and 
you create this $120 million fund." And that, in my view, 
reinvigorated--breathed life back into the process, and then 
allowed for a formula bridging the two to be articulated. 1 

Tracking the Drafting of Senator Seymour's Bill. S. 2016, 1991 

Chall: I have a lot of questions about that. 

In September, October, and November of '91--that's just 
before and maybe after you [Yardas] came backas I understand it, 
the agriculture people were trying to put together some revisions 
in what ultimately became S. 2016. Were either of you at any time 
aware of what they were doing? 

Graff: Well, yes. I could go back to my calendar, and in fact, I once 
did. I think it must have been around May of '91--maybe I 
mentioned this in the last interview, 1 can't rememberbut I met 
with, I think it was Somach and Schuster, in Sacramento to talk 
about their bill. I mean, they had a draft bill, that never got 
introduced as a formal congressional bill, as early as May. Maybe 
even earlier; at least we first got hold of it around May of '91. 
The contractors' draft. 

Chall: There are a lot of them. I note there's one in May already 

revised, and another one in June, and another one in September, 
and then there must have been another one. This is all in "91. 
When the '92 revision was written, I think Schuster was not in the 

Graff: Right. But those were mainly Somach and Schuster working 

together. I remember talking to them about it at a--I think it 
was a restaurant in Sacramento, but my memory could be playing 


'Stuart Somach-Thomas Graff negotiations discussed on pages 85-95; 97- 


07/13^1992 15144 

FROM Bay Rr Council 

TO 13106580630 


July 13, 1992 

To: Tom draff. Environmental Defense Fund 

Barry Nelson, Save San Francisco Bay Association 
Tim Quinn, Metropolitan Water District 

From: Mike McGill. Bay Area Economic Forum 

Subject: Possible Solution to Getting Water/Money Up Front 
from Oic Central Valley Project 

200 Kne Street, Suite 300 
Son Ffcwitisco, C* SH104 

FAX 41 5-941.6408 

Over the past several weeks. 1 have been thinJkmg abrmt how to ob 
tain water and/or money 'up front* in Ip.gtalatinn to reform the Cen 
tral Valley Project Obviously. If an acceptable compromise can 
fee found on this issue, many of the other pieces can fall into place. 
In this memo, f propose what could be a solution to this problem, 
one that could be Incorporated as part of Round Two of the *Qraff- 
Somach* negotiations and given to the House and Senate conferees 
for incmpotatlon in CVP reform legislation. 

I base ray recommendation on the following assumptions: 

A. MWD does not Hke the provision in Round One of the Graf f- 
Suniach negotiations that requires them to pay $50 per capita hi 
order to obtain the right to buy CVP water. 

B. Any lon& terra solution to environmental problems caused by 
water diversions from the Bay/Delta estuary should apply to all 
diverters, not just the CVP, but this is difficult to achieve because 
the federal government does hut have Ui6 authority to unilaterally 

a SAlntlon on all parties involved. 

C. The least desirable method for obtaining water or money is 
through a tax on water sales, because such a tax would tend to 
discourage such sales. 

Given these MssuiUpUoM. I propose the following approach: 

1. Allocate 80U.UUU cere feet of unallocated CVP water for the 
environment. In wet and normal years, if this entire allocation is 
not needed, sell a portion of it on a short term basts and place the 
proceeds in an environmental restoration Fund. 

2. Retiuliiuilu the CVP so that fish and wildlife have the same 
priority as other purposes. In dry years, this would mean that if cut 
backs In deliveries must occut, these would be made in the same 
proportion from waief for agriculture and water for tho 


B7.-13--1092 IS:<1S FROM Bau Hr>oa Council TO 1 3 1 B t 3 8 B t 3 B P.B2 

fussiuie Solutions to Getting Wattar/Moiu:y Up Front 
July 13. 1992 
Page Two 

3. Impose a surcharge of S3 to $5 per acre foot per year on all CVP water that 
panes through the Delia. Have the federal government match this on either an 
equal basis or at a. 2 to 1 ratio. Place these funds in an environmental restoration 
fund, along with any proceeds from #1 above, with no Cap on the amount that 
may be accumulated. These funds would be used to buy water for restoring the 

Bay/Delta esuiarine environment. 

4. Place a sunset provision on the federal match, unless the State Imposes an 
identical fee on all other Delia water diveners, with the funds going into the same 
restoration account for the same purpose. 

5. Additional funding could be obtained from power soles and from some sort of 
more modest buy-in charge and a tax on transactions no larger than proposed in 
Round One of Graff- Somach. 

I believe this approach is appealing for several reasons. 

First, it does not take any allocated water away from existing CVP contractors, 
although ii creates a substantial fund to boy such water on a voluntary basis. 

Second,, it creates an incentive for the State to impose the same charge as (he CVP 
does on water diverted from the Delta. 

Third, it falser money from Delta. dlVeHlIU (both In-Delta and up slM&ffl) that U 
to be used to solve the problems those diversions cause. 

Fourth, if the State buys in. all Delta divertsrs are Involved. 


Fifth, It provides a substantial amount of both water and money up front for the 

it iniiiiiiii/*vt> Lin; utxil lo bugel water sale Inuisacliuus* ur major urban 
water consumers, as the only, or even primary, source of the money up front for 
rhe fund. 

This proposal is consistent with the Forum's position on water policy reform. It is 
inspired in pan by a proposal MWD made in the three-way prncem. Tt in 
economically sound. 



games with me on that. But no, we were well aware that there was 
a contractors' draft, and that it was basically coming from the 
agricultural community, the CVP agricultural community. Although 
at that time, Schuster was vaguely representing both CVP 
contractors and SWP [State Water Project] contractors, so it was 
never quite clear who he was representing. 

But what became confusing was that the bill had not been 
introduced at the time that Bradley called us all back to 
Washington early in November of '91. We had, I guess over a two- 
week period, two sets of negotiations, right? Didn't we get 
called back? 

Yardas : In November? 

Chall: One in November, I have. 

Graff: I think there were two, actually. In early November. I think I 
went to Washington twice in a short period of time. 

Yardas: Basically, my recollection of that is that in early November, 

November 3 was the discussion draft that came out of that process, 
so it had to be very early in November, late October. 

Chall: And November 3 was what? 

Graff: November 3 was the New York Marathon, which I ran. [laughter] 

Yardas: November 3--that's how we remember itbecause he showed up 

Chall: Pretty tuckered out? 

Senator Bradley 's Staff Revises S. 484 

Yardas: November 3 was when Chelsea Congdon, Leslie Friedman of TNC, and I 
worked with Jensen. We took 484, or the weekend leading up to 
November 3, took 484 and attempted to incorporate the structural 
measures screening programs, temperature control devices, 
barriers, whatever was kind of the centerpiece, the cement that 
was at the centerpiece of the growers' draft, and tried to pull 
that into S. 484 as introduced. We also modified some of the 
other provisions of S. 484. The one that's most significant, I 
think, is that S. 484 as introduced had a formula for contract 
renewals that, depending on the length of the renewal, provided a 
certain amount of water to fish and wildlife. The longer the 



Yardas : 




renewal, the more water was reserved for fish and wildlife; the 
shorter, the less. But in effect, that could be viewed as a cap 
on the obligation of the contractors to fish and wildlife 

What this November 3 draft did was it changed that formula to 
say, "You can renew your contracts for the full amount, but 
deliveries of water pursuant to those contracts shall be 
conditioned on meeting the following fish and wildlife restoration 
goals." So it became an unconditioned or unbounded liability of 
the CVP to meet fish and wildlife needs as a priority, even though 
contract renewals could take place. And along with that, the 
draft had this list of technical and structural fixes. 

So, do I understand this correctly, that there was no limit on 
water reallocation to meet fish and wildlife objectives? 

Yes. Under that draft, that's my recollection, 
the date. 

November 4 was 

Yes, November 4. As I recall--! have my calendar here, so it's 
coming back to me- -David and Chelsea got to Washington a day or 
two before I did, helped Jensen do the revised draft. I was in 
Washington on the fourth of November, which was a Monday, kind of 
helping them put the final touches on that. That was the draft 
that was presented to the group of Californians who appeared in 
D.C. on the fourteenth of November. 

Oh, I see. So on the fourth, you were working this out. I 
understood that you had brought in a new draft, but I didn't know 
just when you were all there together. But first, you did the 

Right. So my memory was two trips to Washington, and the first 
one was not a negotiating session. The first one was to complete 
the revised draft of the Bradley bill. In fact, one of the 
excuses that both the minority staff on the Senate side and some 
of the California interests, most notably Somach, used a week 
later or ten days later, was, "How can you expect us to negotiate 
a revised draft that we've just seen afresh? We can't be expected 
to be able to react on such short notice. We need to consult 
further." So they basically stalled the negotiation in mid- 

Senator Seymour Introduces S. 2016 

Chall: It was the end of the session anyway, wasn't it? 


Graff: Yes, but nobody was expecting to complete anything that year. It 
was a week laterwell, it was on the twentieth, Wednesday 
evening, November 20, when I met at the Coronado Hotel in San 
Diego with Boronkay and Somach, and they told me they were still 
working on a deal on transfers. They had told Bradley and the 
rest of us in D.C. a week earlier that they were working on this 
deal. But what they had not told us, and which became evident the 
next day, was that not only were they working on it, but they had 
completed it. Seymour introduced his bill, S. 2016, incorporating 
their agreement and the contractors' draft provisions on so-called 
techno-fixes for fish and wildlife as a bill supported by 
agriculture and MWD on November 21. 

I personally took offense at both Mr. Somach and Mr. Boronkay 
for having told me the night before that they were still working 
on something, and then the next day it was introduced as a bill in 
Washington. They had worked awfully hard overnight, or whatever. 
And even taking greater offense, and more importantly taking 
offense, was Senator Bradley, who saw their agreement with Senator 
Seymour as a betrayal, particularly of his relationship with 
Boronkay. And from that point forward, he never forgave Boronkay 
and gave him a hard time throughout the remainder of the process. 

Analyzing the Revisions of S. 484 Unacceptable to Agriculture 

Chall: What changes, revisions, had you made on the fourth with respect 
towell, you call them techno-f ixes but what about transfers? 
What was in your bill 

Yardas: Meaning the November 4 bill? 

Chall: Yes, the revised Bradley bill. What was it that the growers did 
not accept? 

Yardas: In the November 4 bill? Well, they never engaged on it. 

Chall: Explain, if you will, the difference between S. 484 and the 

revisions you had worked out, that you thought they might accept? 

Yardas: Well, it was an effort to move the process forward. As I recall, 
they did not like the renewal formula that was in 484 as 
introduced, which first arose in the EDF-NRDC letter to Miller. 

Chall: Yes. So you changed that? 


Yardas: So at that point, it was modified, and I found here what it says, 
[reads the draft] It provides for no new contracts, with the 
exception of 100,000 acre-feet that would be available for 
auction, and that was to M and I [municipal and industrial] 
interests, and that was consistent with 484 as introduced. 

Chall: That was the way it was first introduced--? 
Yardas: No new contracts, right. So that was the same. 
Chall: Explain that to me: no new contracts-- 

Yardas: No new contracts. Part of the controversy swirling around this 
began in 1988, when the Bureau of Reclamation sought to market, 
that is, to allocate by contract, an additional 1.5 million acre- 
feet from the Central Valley Project to agriculture, M and I, 

Chall: That means that they had not been using 1.5 million acre-feet of 

Yardas: Good question. We thought that water did not exist, but the 

bureau went through a very elaborate EIS [environmental impact 
statement] process attempting to justify, essentially, commitments 
over and above existing commitments --new contracts for another 
1.5 million acre-feet per year, primarily for consumptive uses, 
for ag, and M and I. It was partly out of the controversy 
surrounding that that the so-called "no new contracts" movement 
arose. It was like, "Wait a minute, we've got a fish and wildlife 
mess on our hands, and you're trying to commit even more water." 

Now, interestingly, what was called the unallocated yield of 
the project began to diminish the closer fish and wildlife got to 
actually grabbing on to some of it. We were also moving into the 
drought, and that kind of changed the psychology about whether 
there was extra water to dole out or not. So we tried first 
through 484, Bradley accepted this formula that we had tried to 
articulate, as a different way to try to do something, and to deal 
with the fish and wildlife problem before any new commitments were 

The one exception to that was a provision that they put in 
authorizing the auction of 100,000 acre-feet of water from the 
unallocated yield, okay, 100,000 out of this illusory 1.5 million. 

Chall: Okay. I didn't understand where that came from. 

Yardas: So anyway, the November 4 revision of 484--it was clear that the 
formula in 484 as introduced was not going to make the growers 


happy, and the renewal provisions that were linked to that. So it 
tried a different tack, which was to say, "Okay, you can have a 
renewal for the entire amount of your contract provided that the 
availability of Central Valley Project water under any contract or 
agreement in effect on the date of enactment or executed" da da da 
da, "shall be subject to the secretary's obligation to perform the 
actions mandated by subsections D through G," which were basically 
fix fish and wildlife problems. 

So the availability of water under a new contract became 
then: you can have a full renewal; that's not the issue. The 
issue is what kind of water supply do you have underneath that. 
And this could be characterized as effectively an unbounded 
condition on the delivery of Central Valley Project water. 

We didn't expect they would like this terribly well either, 
but it was a way to move the debate forward, and as part of that 
package, many of the structural fixes that were part of the 
growers' bill, some version of Somach- Schuster, were incorporated 
into the draft. 

What I don't remember is whether anything different was done 
with the water marketing conditions. 

Chall: While you're looking for that, also you did not change the 

contract length from twenty years? That was in the original S. 

Yardas : The renewal length? 

Chall: Yes. Did you renew them at twenty years? Rather than forty 

Yardas: Yes, it shall not exceed twenty years, right. And why don't you 
go on to another question while I look for the transfer language. 

Water Reallocation Provisions and Transfers in S. 2016 

Chall: All right. Well, then what I was really interested in knowing is 
how did 2016 deal with the water reallocation, the contracts? I 
have a note here that it would allow transfers of water without 
limit in the service area. I don't know what that means, because 
MWD apparently accepted this at that particular time and later 
shifted to Miller-Bradley. What does it mean, transfers without 
limit in the service area? 


Graff: Let me take this at the sort of mega-political level, and then we 
can get down into specifics. I always viewed--! was surprised by 
the negotiating and political posture that CVP agriculture took in 
the course of this two years, most by one key thing, and that is 
they decidedand I don't know whether this was Somach primarily, 
or Peltier, or them and others in combination- -that the big threat 
to them came from the environment and the environmentalists . They 
essentially had a choice of resisting MWD and working with us, or 
working with MWD and trying to resist us, and they chose the 
latter, despite the fact that for many years, I mean ever since 
the 1930s, one of the key tenets of CVP agriculture was not to 
have the CVP serve southern California. They wanted to keep the 
CVP internal to the Valley, to the service area. 

It was a monumental breakthrough, which I think Boronkay well 
recognized, that they agreed with him on anything, that included 
an ability for MWD to have CVP water go over the hill. 

Chall: But how could MWD get water from 2016 if the transfer of water was 
without limit in the service area? 

Graff: I don't know what that means, but I think that one of the key 

provisions, which was essentially meaningless, was that there was 
a right of first refusal for any water that would go out of the 
service area. That was put into that package, and it remains in 
the bill to this day. It remained in the final bill, that anyone 
in the service area could get the water that would go out of the 
service area at the same price, under the same conditions as the 
buyer from outside the service area. It was basically an internal 
preference to anyone within the service area over MWD outside the 
service area. 

Chall: But they would allow the transfer out? 

Graff: Oh, yes. 

Chall: I see. Was that a shift? That was a change? 

Graff: Oh, it was a monumental change. 

Yardas: They essentially characterized five or six different classes of 
transfers, which had increasingly stringent levels of oversight 
and review associated with them. Essentially, what you need to 
know is that water transfers have gone on between farmers forever, 
and so they didn't want to do anything that would jeopardize 
those. So anything that happened within the existing service area 
was basically fair game. 


Then you had transfers which resulted in no net export of 
water, transfers which resulted in a net export that didn't 
involve land fallowing, transfers that involved land fallowing, 
and each of those had more and more kinds of requirements to tie 
them up. 

Chall: I see. 

Yardas: Going back to the November 4 transfer provisions, I think the only 
thing that's significant is that they did not differ markedly from 
the provisions that had been introduced in 484, which basically 
deferred to state law. There were three very brief provisions, 
unlike the final bill, which has all these checks and balances 
associated with it. Our effort was initially to defer to state 
law, but simply to clarify that individuals could allocate the 
water that they would otherwise use anywhere, including within or 
outside the existing service area, the CVP. 

Graff: By the way, the deferral to state law was both a substantive 

position but also a political, tactical position. I still recall 
in the series of three hearings that Bradley held on 484-- 
actually, there were four; I missed one of them, the Sacramento 
one. I was on the Colorado River, rafting. The one in D.C. 
turned into kind of a posturing session between Bradley and 
Seymour over who was more committed to states' rights, Bradley 
saying, "I've got a bill that leaves transfers to state law," and 
Seymour denouncing Bradley 's efforts to federalize the law of 
California water. 

So they were sort of jockeying, and I recall when I testified 
late in that hearing, my first line was something like, "I have 
come here to compete as an advocate of states' rights," or 
something along that line. It was something I said off the top of 
my head, but I flashed to Bradley 's history as a basketball 
player, and it's just always struck me as odd that the word 
"compete" came into my mind at that time. That's just a sort of 
silly aside. 

But it was always an undercurrent , and Governor Wilson was 
obviously involved in this also, with his proposal to transfer the 
CVP to state control, over where should state law govern, where 
should federal law govern. And both Wilson and Seymour harped on 
that, and that's a popular position. Bradley 's deferring to state 
law in his original bill, and as much as possible throughout, I 
think was meant to counter that position. 

Chall: So state law had always permitted transfers? 


Graff: Well, state law theoretically had been permitting transfers for 
over a ten-year period, since Assemblyman [Richard] Katz started 
introducing legislation to that effect in about 1980. 

Chall: I see. 

Graff: But it wasn't very effective. But nominally, transfers have been 
encouraged by state law for fifteen years now. 

The Metropolitan Water District and Its Shifting Position on the 
Reform Legislation ## 

Graff: There's a subject matter area that I had wanted to touch on. 


Maybe this is a good place to launch it. And that's MWD's role. 
Yes, I would like that. 

It had kind of hung back through the first 
I can't recall exactly how this worked, but 

And how it behaved, 
ten months of '91. 
Mike Gage was then the chairman of the board, and he testified at 
the Los Angeles hearing, and Mayor Bradley testified at the Los 
Angeles meeting, indicating an interest in the bill and wanting to 
participate and so on. So they were clearly going to be players, 
but they didn't take substantivethey were careful not to take 
substantive positions. They only really surfaced in a 
substantive, aggressive role with their embracing of the Seymour 
bill in late November of '91, which as I indicated earlier, 
Bradley deeply resented. 

My role in this and there were obviously a lot of other 
people involved- -next had an interesting twist. I went to address 
the MWD board at its January, 1992 regular monthly meeting, not 
knowing that preceding me on the agenda, maybe planned only when 
they heard I was coming, was Senator Seymour. So he came and 
received the plaudits of the board for having embraced the MWD 
position on the compromise with the agricultural interests of 
contractors on transfers, only then to have the board listen to me 
make the case that their management had made a terrible mistake by 
turning their back on the people who could actually pass 
legislation in Washington, namely Senator Bradley and Congressman 
Miller. They were marginalizing themselves and they should 
reconsider their position of support for the Seymour bill, mostly 
in terms of substance as opposed to politics. They should 
reconsider their environmental position, which was to embrace the 
sort of techno-fix approach in the contractors' draft and now in 
Seymour, that that was inadequate from an environmental point of 


view, that there had to be water and there had to be money, and 
there was neither in the Seymour bill, and therefore they should 
change their position. 

I don't remember all the personal dynamics, but I know there 
were board members who were sympathetic to what I had to say, 
partly because the MWD board, being geographically diverse, 
representing everything from San Diego to Ventura, has a lot of 
Democrats on it, many of whom were not all that comfortable with 
embracing Senator Seymour in the middle of a difficult reelection 
campaign. And, I think on the merits, thinking this is kind of a 
dumb move. We can't pass a bill. Senator Seymour does not have 
the capacity to pass a bill, and we have to figure out how to 
recover our political position. 

Senator Bennett Johnston; The Chairman's Mark 

Graff: And shortly thereafter, when the chairman's mark came out in 

whatever it was, late January or early February, within a month or 
so of the time of that session, I can tell you exactly when-- 

Chall: Yes, I wish you would. I have it as February 20, but I don't know 
that that's right. 

Graff: No, I think earlier versions came out much before that, but let me 
see. My attendance- -when did I go to MWD? Yes, I was thereit 
was the Water Problems Committee of MWD on-- 

Chall: Here's a draft I have of the chairman's mark, dated February 20. 
Graff: --on Monday, January 13. That's when I visited them. 

Anyway, Johnston by then had had his hearing. Again, people 
were not aware--did I talk about this last time about Johnston's 
role in all this? Again, I think EOF maybe had a little bit more 
of a jump on this, partly because of my friendship with his son, 
he was coming down a lot-- 

Chall: Yes, you did mention that. Let me, before we go on, get that date 

Graff: I guess it is February 20 that he distributed the mark. I think 
we were aware that the mark was coming, and I assume other 
interest groups were as well. 


Chall: And what was the reason for Johnston getting into this? Let me 
see, it's [William] Kahrl who has a rationale for this. 1 

Graff: Well, there's the old rationale of Johnston favors the Louisiana 

cotton growers over the California cotton growers. And there was 

also the factor that Johnston was working with the ports . The 
ports had a little bit of a role in this. 








Port of Oakland, Port of San Francisco. They were worried that 
restrictions on dredging in San Francisco Bay were going to be 
more onerous, and also into the Ports of Sacramento and Stockton, 
were going to be more onerous because the water projects weren't 
doing their share to protect the fisheries or the bay. So the 
ports became supporters of the legislation, kind of a "Don't 
regulate us, regulate them," approach. 

What about the fact that his son was running for an office in 

Yes, and I think that was obviously a factor as well; I think so. 
One can never tell the motives of any politician, but it also gave 
Johnston the excuse to come out for his hearing. He came to San 
Francisco in January, I guess it was, of '92, right? 

It could have been January. I have it as either January or 
February. I had it as February, when the energy committee came 
out with their staffs, '92. 

Oh, that was different. No, I guess the hearing was in September 
of '91, I got that wrong. But I think Johnston himself came out a 
number of times to help his son. 

The staffs of the committee, they came outwhen was that? 
That was, I guess, January of '92. 

January or February of "92. I'm not sure just when that was. 
Maybe you'll know. 

Yes, they came in--in fact, we met down in the restaurant 

For a week's tour, is that the time? 

'William Kahrl, "The Drowning of Water Reform," California Republic, 
August 1992, pp. 20-21. 


Graff: Right. And we had a briefing with them downstairs at Oliveto's, I 
think it might have beenwell, it's possible it was February 11. 

Chall: Okay. I noticed that in this [Jensen] draft that you sent me it's 
indicated as December '91 or January '92, that the energy 
committee and the committee members' staffs traveled to 
California. But you think actually it was probably in February? 

Graff: Well, I have here Washington meeting, one o'clock at EDF, eleven 
o'clock pre-meetings. I think it was probably February 11. 

Chall: Close enough. 

Graff: In that period anyway. 

Chall: But it was early February I guess when the committee members and 
their staffs came out? 

Graff: I don't think any of the congressmen were along. 

Chall: Oh, I see, just the staffs. 

Graff: Right. 

Chall: To work out a compromise on 484 again. Is that right? 

Graff: Well, it was partly a field tour, to give particularly some of the 
out-of-state people a sense for what was involved. 

Chall: The out-of-state staff? 

Graff: Yes, staff for Senator Garn in particular, and [Malcolm] Wallop. 
And then some of the House Democrats kind of tagged along, or 
their staffs did. 

Chall: That was Ben Cooper on Johnston's staff? 

Graff: Ben Cooper was there, Weidner was a guy from- -I can't remember his 
first namefrom Senator Garn's staff. Gray Staples from 
Congressman Lehman's staff. Tom Jensen and Dana Cooper were both 
there. Was [Steve] Lanich with them? Someone from Miller's staff 
came along, I think. 

Chall: Roger Patterson was there? 

Graff: Did he come along? Did he come to the meeting here at our office? 
That I don't know. 

Chall: These are names that just come up-- 


Graff: Barry Nelson probably had a list of who was there. I don't have 
it handy, anyway. 

Yardas: I might. Did you get from Barry there was a briefing book that 
was put together for that meeting? 

Chall: No. For that meeting? 

Yardas: Yes, a Share the Water briefing book was put together. That's 
something we should definitely get from him. 

Chall: From Share the Water? No, I don't think I have it. 
Yardas: I can go and get it. [leaves the room] 
Graff: I just want to sort of finish the MWD thing. 

One of the key developments was when the Johnston mark came 
out, MWD quickly essentially endorsed it. 

Chall: Why? 

Graff: Well, I'd like to say it was because I was so persuasive at the 

water problems committee meeting of the month before, but I think 
the reality is it finally dawned on them that Seymour was not 
going to get them what they wanted, and they'd better shift gears 
and start to work with the people who actually had the ability to 
pass a bill, and that meant Johnston and Bradley and Miller. But 
in doing so, they deeply offended their friends in agriculture, 
with whom they had just reached a compromise two months earlier. 
This will be interesting if you get Boronkay on the record here as 
to how they made these decisions sort of shifting alliances. 
Whether it was all thought through or they were kind of stumbling 
from position to position. 

I didn't understand initially why they went with Seymour, but 
I'm sure that the agricultural people never believed that, having 
gone with Seymour, two months later they would embrace Johnston. 

Chall: But a couple of months later, they embraced--! think- -Seymour 
again, when Seymour's bill passed. 

Graff: Well, they embraced Seymour's bill when it passed, and then they 
embraced the House Democrats' compromise when it- -I mean, they 
embraced anything that was moving, basically. [laughter] The one 
thing they didn't embrace, however, was Somach-Graf f . 

Chall: No, they did not. [laughter] 


Various Reasons for the Mark and Its Provisions on Water 

Yardas: [returns] You asked where the--I was out; I'm sorry. I tried to 
gather a few pieces of paper. But you asked where the chairman's 
mark came from? 

Chall: Yes. What brought it about? You'd been working now for quite 

some time on S. 484. What brought the mark out? Why did Johnston 
come out with his mark, and why did it allocate more water to 
wildlife, et cetera, et cetera? According to Kahrl, it was a 
"fearsome thing." 1 

Graff: I have a couple of theories about that. One is that Johnston had 
let Bradley, who was his subcommittee chairman, carry the ball for 
over a year, but in whatever conversations they had and Jensen had 
with Ben Cooper and Mike Harvey, of Johnston's committee staff, 
the time had come if this bill was going to pass that the chairman 
himself had to insert himself. And then on top of that was the 
complexity of the other rationales we've talked about, about 
wanting to perhaps help his son. 

I think another factor was he just generally wanted a water 
projects bill, and something had to be done to break the logjam. 
Seymour was still stalling, and the ag contractors were stalling. 

Then one thing that was always unclear to all of us back here 
in California was the relationship between the water projects bill 
and the energy bill, which was pending during the whole two-year 
period also, and the complex politics of the relationship between 
those two bills, because in both cases, there was going to be a 
conference in which Johnston and Miller would be the prominent 
actors, although in the energy bill, [John] Dingell also was a 
prominent actor on the outside. 

There were a number of provisions that Johnston wanted in the 
energy bill which Miller could be expected to resistdealing with 
nuclear power, with oil and gas--and so I think one of theories 
about all this was Johnston wanted to have a water projects bill 
that Miller wanted pending in conference about the same time that 
there was an energy bill that Johnston wanted, so that they could 
do some trading. 

Yardas: Yes, I think that's accurate. 

'Kahrl, "The Drowning of Water Reform." 


Chall: You think so? Then why was the mark different from S. 484? Why 
did it allocate 1.5 million acre-feet to fish and wildlife, among 
other provisions? 

Yardas: There's a couple of answers to that. Basically, the Johnston 

mark, the chairman's mark, was the November 4 discussion draft, 
with a few additional modifications. Okay? So there had been 
this effort to try to do something, get 484 moving, and then that 
ran into the Seymour bill being introduced. There was also this 
unbounded obligation that I've told you about. So the idea of the 
1.5 million acre-feet goes backwell, there's two explanations. 

One is you can just go back to what the bureau was trying to 
allocate in '88, the 1.5 million acre-feet of unallocated yield. 
So that amount would be grabbed onto and given to fish and 
wildlife, but that would represent kind of a ceiling on the 
unbounded condition that was in the November 4 draft. 

The other way to say that is what I told you earlier, that we 
had developed some estimates about what would be needed to restore 
fish and wildlife populations, in terms of the total amount of 
water in Central Valley rivers and streams. One could now 
calculate, starting with that and working backwards in terms of 
the CVP's share of that, something close to 1.5 million acre- feet 
on average, out of about 3+ million acre-feet of total need within 
the Central Valley. So quantitatively, there was a justification 
for that number on two different fronts, and it's an important 
number because it comes into play later in terms of the water- 
money mix. 

But essentially, regarding the chairman's mark, I think Tom's 
comments about getting the process moving and other factors was 
kind of a justification. It was still essentially Tom Jensen 
moving the package forward, but now, for whatever reason, in their 
judgment, with the sponsorship of the chairman. 

Chall: And were you working on this mark, the draft of the mark? 
Graff: Yes. [laughter] 

Chall: Yes! You can't just shake your head, the tape doesn't pick that 

Yardas: There's a piece I'll try to find for you that was put out by the 
National Water Resources Association. Have you seen the 
newsletter piece, the title of which I think is alluded to in the 
chronology here? 

Chall: No, I haven't. 





March 1 

Johnston's CVP Bill 
Stuns the West 

Historically, southern senators have ardently supported their 
western colleagues on water management and development issues. 
The strong bond between west and south on most all natural 
resource issues has resulted in the authorization and funding of 
many important resource projects opposed by environmental ac 
tivists. This alliance was the primary reason that the highly 
controversial Tenncssec-Tombigbee Project (in Mississippi, Ala 
bama and Tennessee) was completed, despite overwhelming en 
vironmental opposition, in the early 1980's. 

Therefore, Western Senators were understandably stunned this 
month when Senator J. Bennett Johnston (D-LA), chairman of the 
Energy and Natural Resources Committee, offered draft legislation, 
referred to as the "Chairman ' s Mark," as a starting point for markup 
and debate of the Central Valley Project (CVP) fish and wildlife 
legislation. The draft legislation was promoted as a compromise 
between legislation (S. 484) introduced by Senator Bill Bradley (D- 
NJ), which imposes strict environmental conditions and restriction 
on ihc operation of the project and contract renewals, and legisla 
tion (S. 2016) introduced by Senator John Seymour (R-CA) which 
is more favorable to Valley farmers. However, the Johnston draft 
is considered by many as a more draconian version of S. 484. 
For several months, meaningful negotiations have been underway 
among the State, Valley farmers, municipalities, and environ 
mentalists in an effort to fashion a compromise. With the an 
nouncement of the Johnston draft, those negotiations have now 
broken down. 

Senator Malcolm Wallop, Ranking Republican Member of the 
Energy Commiiicc, immediately wrote to the Johnston saying, "I 
understand from our earlier conversation that you had intended to 
try to bridge the differences between the legislation introduced by 

Senator Bradley and that introduced by Senator Seymour. Ur 
tunately, this "Mark" incorporates the most onerous provisiot 
both the original Bradley legislation and the staff draft which! 
circulated in November. It will undercut the agreements whicfc 
been achieved in California between the urban and agriculi 
interests. In addition, it frustrates the considerable progress w< 
had been made with the conservation community." ... "I ca 
support punitive legislation which, I believe, would cripple 
Project and have severe repercussions on both the environment 
the economy of California. Frankly, several members of 
Committee do not see your "Mark" as a step forward but rauY 
a severe reversal. They do not see how it forms any basi; 
discussion and hope that you do not propose it." 
California Governor Pete Wilson was also quick to react. Wi 
announced that he vigorously opposes Johnston's proposed It 
lation because it would have a widespread and severe impac 
California. "Our analysis indicates that the state's economy wi i 
unnecessarily and severely affected should your proposal bee i 
law," Wilson said. "The proposal 's prescriptive allocation, apf : 
not only during the sixth year of a devastating drought, bi i 
'normal' years as well' is neither a reasonable nor respond 
means of responding to the Central Valley's fish and wild 
needs," Wilson said. 

Wilson said California cannot and will not be steered lowai 
process that seeks to adopt unworkable "formulae" that pits' 
vironmcntal protection efforts against the needs for food and I ' 
and jobs. Wilson also announced that he will immediately apr ' 
representatives to initiate negotiations with the Bush Admini * 
tion in an effort to negotiate the transfer of the Central Va 1 

Continued on 

inston's legislation would: 

Immediately dedicates 1.5 million 
acre-feet of water a year "prima 
rily" for fish and wildlife purposes. 
In dry years this cannot be reduced 
below the smallest water cutback 
the Secretary announces for any 
other CVP contractor. The cost of 
this water will be added to the 
costs paid by CVP contractors. 

Require additional water(340,000 
acre-feet minimum for Trinity 
River flows, as much as 450,000 
acre-feet for wildlife refuges, and 
operational changes such as in 
creased carryover storage) for fish 
and wildlife purposes. The cost of 
almost all of this water will be 
added to the costs paid by CVP 

Reauthorize the CVP to include 
enhancement of fish and wildlife 
as a Project purpose. 

Prohibit any new CVP water con 
tracts (even those for a si nglc year) 
until the fish and wildlife goals of 
the legislation arc met, the State's 
Bay-Delta proceedings are com 
pleted, and the EPA approves of 
the Bay-Delta standards. 

Despite the prohibition on other 
new water contracts, authorize the 
"auction" of 1 00,000 acre-feet for 
urban uses. Most of the revenue 
from the auction will go to fish 
and wildlife projects, and so the 
capital cost of this water will be 
added to the costs paid by CVP 

Allow (but docs not require) re 
newals of present contracts for no 

more than 20 years, and only after 
full environmental analysis of the 
effects of renewal of each contract. 
The Secretary must also do another 
analysis of the environmental ef 
fects of renewal of all CVP con 

Surcharge CVP water and power 
sales S30 million per year for fish 
and wildlife purposes. 

Upon renewal of contracts, in 
crease the districts' water rates to 
one-half of full cost for 20 percent 
of its water and to full cost for 
another 20 percent of its water. 
Only the first 60 percent of the 
water supply will be at the contract 
rate. Districts will no longer have 
to pay for water they cannot use. 

Starting in the first water year 
after the law is passed, require full 
cost water rates for all water used 
to grow crops for which a USDA 
Acreage Reduction Programs 
(rice, wheat, com, cotton, etc.) 
exists, even if the farmer is not in 
the program; except in districts 
which give 75% of the difference 
between their contract rate and 
full cost to the State. In drought 
years, the amount of water deliv 
ered the prior year to such crops 
will be cut first even if those crops 
will not be grown again in the 
drought year. These provisions 
do not apply to water delivered 
under water rights settlement or 
exchange contracts. 

Only after contracts are renewed 
or amended, allow transfers of 
project water. Individual water 
users can arrange transfers of their 
share of a district's water, without 
the district's review or approval. 
Transfers for irrigation purposes 
will be at full-cost. 25% of the 
water or 25% of its proceeds must 
go to fish and wildlife purposes. 
The only protection for third party 
impacts of transfers is that the 
Secretary may (but is not required) 
to agree to send 1/2 of the 25% 
"tax" on the transfers to the State. 

Upon renewal of water contracts, 
require metering of all wells and 


surface water delivery systems in 
the district, and annual reports of 
groundwater use to the Secretary. 

o Require a study and report to Con 
gress on, among other things, (1) 
the effect of the CVP on commu 
nities, tribes, etc. associated with 
anadromous fishery resources; (2) 
water supplies for an additional 
120,000 acres of waterfowl habi 
tat, outside the existing refuges; 
(3) removal of barriers to upstream 
salmon migration; and, (4) control 
of irrigation return discharges. 
There is no provision for a study 
of the economic effects on CVP 
contractors or their communities 
in the Bill. 

o Without building any facilities, 
authorize the Secretary to acquire 
water to fulfill the goals of the 
Act, including the direct purchase 
of water or land. 

o Impose new review criteria on 
districts' water conservation plans, 
but provides for a Federal cost 
sharing of 70% of conservation 
measures installed before De 
cember 31, 1996. 

Tom Donnelly, NWRA's Executive Vice 
President, told legislators, "Equitable 
resolution of the CVP fish and wildlife 
issue is vitally important to the entire West 
Senate bill, S. 484, is precedent selling 
legislation which could and likely would be 
applied to the resolution of environmental 
concerns on any river or river system with 
a federal impoundment or project. There 
fore, NWRA is prepared to assist the 
Committee in any manner in order to reach 
a meaningful compromise." 

Senator Bradley 's insistence that the CVP 
fish and wildlife bill be pan of the "omni 
bus" reclamation package, represented by 
HR. 429, presents yet another significant 
hurdle for passage of reclamation reform 
legislation and the many important projects 
awaiting authorization. 

Committee markup originally 
scheduled for March 4 has been 
cancelled but could be resched 
uled as early as March 11. 


Yardas: It says, "Johnston's mark stuns the West," and it goes through and 
gives a critique. It's a great piece. I'll find that for you. 

I wanted to give this to you. There's a comparison here that 
was done which shows the Seymour bill, 484 as introduced, and the 
November 4 draft. Here is another one made up shortly thereafter 
that includes the Johnston bill and the Miller [H.R.] 1306, but 
does not include the November 4 draft, since this was now 
superseded by the Johnston bill. 

You had asked about our concerns about the Seymour bill. In 
a nutshell, it had enough water in it to pour the cement that 
would be needed to build all of the structural fixes that the bill 
sponsored, but that's about it. 

Chall: I have thisShare the Water did give me this. [Summary 
Discussion Points on S. 2016. January 14, 1992] 

Yardas: Oh, you do. That gets into some of the justification for why we 
thought we needed what we needed in terms of water, how it came 
into play. Because they wanted us to be specific, and so we said, 
"Okay," and we were. 

Graff: You know, I might say one other thing about Johnston. Although 

looking at it in retrospect it seems like Johnston throughout was 
an ally of the environmentalists in this whole process, by no 
means were we confident of this as we marched through the process. 
His record as a senator before and since can best be described as 
a mixed one, where occasionally he'll side with environmental 
interests, but he on many occasions has been known to side with 
interests hostile to environmentalists. I mentioned nuclear power 
and oil and gas issues, Alaska oil and gas issues are some of 

And even in water over the years, he hadn't been an 
aggressive adversary, but in general, he tended to favor the more 
conservative and agricultural interests on issues. I think he saw 
the way to make his agenda--! don't think he had an affirmative 
agenda that supported California agribusiness, but he traded votes 
with them readily to get things he wanted, I think. 

So I think part of why the headline was "Johnston mark stuns 
the West," is that from the point of view of the NWRA [National 
Water Resources Association] constituency, the Western water 
constituency, Johnston's doing what he did, was very surprising, 
out of character. 

My personal relationship was with Ben Cooper and Mike Harvey, 
his principal staff. I really never dealt directly with the 


senator; I shook his hand at the hearing, and that was about it, 
the one in San Francisco that took place at Fort Mason. I think 
they had a kind of a personal interest, and they were sort of 
intrigued by the whole thing. As near as I can tell, and maybe 
someday you'll get to ask Tom Jensen this directly, the Johnston 
staff gave him a lot of support throughout the whole two-year 
process. Though other senators from other states who had friends 
in California agribusiness circles, notably Senator [Kent] Conrad 
of North Dakota was one that was mentioned from time to time, and 
one or two others-- [Richard] Shelby of Alabamawere ready to 
withhold votes from Bradley and go with Seymour at different times 
because they weren't getting what they wanted. 

And Congressman Fazio, who had a lot of dealings with 
Johnston on the appropriations sideJohnston not only is chairman 
of --well, not is, I guess we're in a new era now- -was chairman of 
the Energy and Natural Resources Committee, which is a policy 
committee, but he was also chairman of the appropriations 
subcommittee dealing with these issues, so he had a kind of a 
double role. Fazio was to some extent not quite his counterpart, 
but the number two person in the House, and had a lot of dealings 
with Johnston. Fazio I think frequently made efforts, sometimes 
more or less successfully, to end-run Bradley by going through 
Johnston. So this was all happening as well. 

Chall: I could never work in that system. [laughter] 

Graff: In fact, Fazio is somebody I want to get to. 
little plans here for the day. 

That ' s one of my 

The Senate Energy and Natural Resources Committee Passes the 
Seymour Bill 

Chall: Yes, we will. I'm going to move us now from the Johnston mark to 
the March and April actions concerning the passage of the Seymour 
bill. There was between March 9 and 11--I maybe got this off of 
the Jensen chronology- -there was a round of negotiations over the 
CVP bill; Seymour was willing to make a few changes. Now, I guess 
this was the negotiation in the Johnston-Bradley [energy] 
committee. Were they negotiating over the mark or over the 
Bradley bill? Do you know? 

Graff: Well, I think David will probably have more to say about this than 
I will, but this varied between being a senators-only discussion, 
as I remember, and one where Senate staff were allowed in, but no 
interest groups were party to this negotiation. This was within-- 


Yardas : 

Yardas ; 


Yardas : 


among the senators only. Basically, we heard rumors of all the 
things that were discussed in those negotiations, but I don't 
think we ever actually saw, at least on an official basis and 
maybe even on an unofficial basis, what they actually put down on 
paper. You can correct me if I'm wrong on that. 

I had some glimpses, but I guess I would characterize--! think in 
general it's an accurate statement that this was one that was 
being donewhile I had had a close interaction with Tom [Jensen] 
in particular on many of the previous drafts, this was one that 
was done pretty much behind closed doors. In fact, I remember 
standing in the hallway talking with Mike Doyle of The Sacramento 
Bee who was- -I'm sorry, he's not with the Bee, but McClatchy, I 
guess--and we were chatting in the hallway outside the energy 
committee library where these discussions were taking place, 
wondering what was going on. I think I made some phone calls or 
whatever. I remember at that point Seymour coming out first and 
then a couple of other senators, and then Jensen coming out, and 
basically saying something like, "Well, we're going to pass the 
Seymour bill." 

That must have been a shock to all of you. 

It was a shock. Exactly how 
meet his concerns or whatever 
an effort that was done with 
reach some kind of negotiated 
you have reflect the ultimate 
pass your bill as introduced, 
happens thereafter." I guess 
can either negotiate here and 
negotiate later and take our 

far they went in terms of trying to 
I don't know, but it was definitely 

the big boys in the room trying to 
agreement. I think the notes that 
agreement, which was, "Fine, we'll 
but no commitment in terms of what 
that was offered to Seymour: "We 
reach some understandings, or 

chances- -your choice." 

So I gather you were all shocked, 
puzzled, unsure that he had won. 

Senator Seymour may have been 

Well, part of what Seymour was trying to do wasn't substantive at 
that point. I think it was to push things far enough that 
basically it would collapse of its own weight at the end of the 
session. If you start playing the calendar game in Congress, when 
you're in March, and you've still got to get through the House, 
and then come back to the Senate, things start to get gobbled up. 
So I think he [Seymour] was banking on the whole thing basically 
gumming up. 

How soon did you get over your shock? 
what they had in mind? 

Was it explained to you 


Graff: I was in California, David was in Washington, and I'm trying to 
remember--! remember talking to Jensen initially, and then to 
Bradley--! can't remember whether it was on the phone or the next 
time I was in Washington- -and both of them trying to reassure me 
and by extension others in the environmental community that this 
was the right outcome; we should have confidence that Senator 
Johnston, whose idea this was, was really ultimately going to be 
on our side when we got back to conference later in the year. 

What made those assurances slightly less persuasive was that 
they were 180 degrees different from what Bradley and Jensen had 
been saying was their strategy a day before. So it's clear that 
this was a Johnston decision that was different from and I think 
argued against by Bradley, but once it was made, Bradley and 
Jensen were left with the job of persuading the environmentalists 
that this was an okay outcome. 

Miller, I know at the time, was furious at Johnston and 
Bradley for giving him the Seymour bill to work with. We were 
probably as puzzled as Seymour was, whether this was going to all 
work out in the end or not. 

Chall: But wasn't it difficult in that committee to get the Bradley bill 
out? Johnston only had the mark. Did they feel because of the 
Republicans or others on the committee that they couldn't pass out 
their own bill? 

Graff: Well, we were always counting votes in that committee, and as I 
said, a couple of the Democrats, notably Conrad and Shelby, were 

Yardas: Former Democrats. 

Graff: One of whom [Shelby] is a former Democrat- -were said to be 

squishy. But you never know in those situations. Garn wanted a 
bill. I'm sure Seymour never was sure whether Garn would back 
him. The same was true to a lesser degree of some of the other 
Republicans on the committee. [Mark] Hatfield, for example, who 
has some sympathy with the fisheries, coming from a coastal state, 
was sort of vaguely a progressive on water issues from time to 
time. So that the makeup of the voting on the committee itself 
was never clear. 

Chall: But I guess you had to feel-- 
Yardas: It was definitely a low point. 


Chall: Yes, it must have been. But you had to feel that perhaps Johnston 
knew that he didn't have the votes and was willing to take this 
chance . 

Graff: Well, that's what we were told. Johnston couldn't pass a good 
bill out, so 

Chall: He took this way out. 

Graff: --so we'll take Seymour's bill and we'll get them later. That's 
what he did. 

Chall: And then on April 10 the Senate passed it. 

The Senate Passes the Seymour Bill; Title 34 of H.R. 429 

Yardas : Yes, no amendments, no changes, the bill as introduced, which had 
some problems. It was clear that that bill as introduced wasn't 
even at that point necessarilyand I don't remember the 
particularsbut the growers had some second thoughts about some 
things. So it was definitely not going to stay as it was, but for 
purposes of getting out of the Senate, it was 

Chall: Now it's moving. Okay, now, in May, Miller came out with H.R. 
5099, which was similar to the Johnston mark 

Yardas: Correct. 

Chall: How similar? I don't know, and maybe it doesn't matter. But that 
was one way, I guess, for him to get something on the table in the 
House that was better than 2016. Is that the reason? 

Graff: Yes. But actually, what passed the Senate was H.R. 429 as amended 
to include the Seymour bill. And meanwhile, of course, it 
included a lot of these other titles. It became title 34 of H.R. 

Chall: That's correct, we have to be accurate about that. 

Graff: And I thinkthis is fuzzy in my memory but as I recall, just 

from a procedural point of view, Miller was trying to figure out, 
"Should I amend new provisions into H.R. 429 as amended, or 
introduce a new bill that we'd eventually couple with H.R. 429?" 

Chall: You don't know how this happened? 


Graff: Well, I think they made the decision--! can't remember all the 
reasoningthat it was better to introduce a clean, new bill. 

Chall: Okay. And he'd use the Johnston mark as his basis? 
Graff: As a starting point, that's right. 



The Debate Moves to the House ## 

Yardas: I started spending time at this point over on the House side of 

the hill, with Miller's staff. We developed a wish list where we 
kind of went through--! mean, remember that Tom had mentioned 
earlier that for a lot of this early work on 484, the House was 
just kind of waiting. They had done their fish and wildlife bills 
the prior years; they were waiting, and in some ways not engaged. 
Like going, "Well, we'll wait and see what the Senate gives us," 
and that's why when they got the Seymour bill it was like, "Oh, 
great, thanks a lot." 

So at that point, they had a learning curve to get up to in 
terms of what was this chairman's mark, and what were you guys 
trying to do? 

Chall: Yes, I guess that's true. 

Yardas: So we spent a lot of time with them working through-- 

Chall: "We." "We" are who? 

Drafting H.R. 5099; The Central Valley Project Improvement Act 

Yardas: Myself in particular, but I'm sure they consulted probably with 
other Share the Water interests as well. But I spent time with 
Steve Lanich in particular and other staff ers--what' s her name? 

Graff: Liz Birnbaum? 


Yardas: Liz Birnbaum, who used to be with the National Wildlife 

Federation, I think. John Lawrence, as well, would come in and 
out. I was brought on to Miller's staff --walking through the 
chairman's mark top to bottom, and Steve asking questions, sitting 
there on his computer modifying things, changing things, basically 
trying to turn that into as ideal a bill as they might like. 

And then what they ended up introducing in H.R. 5099 was a 
modification of that, that incorporated- -included- -a lot of what 
we had talked about, and changed other things. Obviously, there 
had been some subsequent consultation that we weren't party to. 
But I think in significant terms, the 1.5 million acre-feet, for 
the first time water marketing provisions, similar, I believe 
still, to S. 484 at that point. There was now a vehicle, at 
least, that kind of reinvigorated the collapse of the Senate 
process, or at least gave us something to work with. 

Chall: So 1.5 million acre-feet of water? 

Yardas: Well, 1.5 million acre-feet of water, and if I remember right, 
also authorization that the secretary would have whatever 
authority he needed to modify project operations to do whatever. 
So it was basically still kind of the old, unbounded liability, 
plus 1.5 million up front. 

Chall: And transfers? 

Yardas: Water transfers with some additional protections that had to be 

fish and wildlife friendly. I don't remember; I can walk through 
this a little bit and get a couple of salient points, or try and 
find another chart comparison. But momentum- wise, it put the 
chairman's mark back into play. I think most significant is that 
the Bradley construct was now being taken up by Miller and put 
forth as his bill. 

George Miller Strikes a Deal with Valley Democrats 

Chall: Now, then, he made some kind of a deal with Fazio, Dooley, Lehman, 
and weakened it, according to everything that we read. The 
growers were angry with their representatives, and the 
environmental community was not pleased. Can you explain all 

Graff: One of the things I gave you earlier, the third of those Miller 
drafts, lays out at least my personal critique of what David 
refers to as the House Democrats' "historic compromise for a day." 


It got massive publicity throughout California as a wonderful 
thing, and by twenty- four hours later, the Valley Democrats were 
backpedalling furiously. It didn't take much longer before we 
were critiquing it from the opposite perspective as well, and the 
thing just sort of unraveled. 

We maybe should get back to the substantive reasons for that. 
The result of that politically was that you had a bill that had 
been reported out of committee, and Miller, maybe without his 
constituency behind him, might have taken it to the floor and 
passed it just because he had so much credibility and power in the 
House. But the Valley Democrats and the constituencies were 
strongly opposed. Miller had MWD sticking with him. They were 
the only ones who liked it. But it had kind of a, "What do we do 
next?" sense about it. 

I can't remember--it was the last week of May that the bill 
passed out of committee, and within a week, I got a phone call 
from--I can't remember exactly the sequencebut I guess I got the 
call from Somach, who had been called by the Valley Democrats, 
saying, "They want me to sit down with you; will you sit down with 
me?" I said, "I can't do that without talking to Beard." 

I talked to Dan and Dan concurred, and said, "We don't 
promise to support anything you come up with, but go ahead and 
talk to Somach, because right now things are stalled back here in 
Washington, and maybe you guys can come up with something that 
breathes new life into this process." 

The Restoration Trust, the Restoration Fund, and the Advisory 

Chall: Now, before we get into Somach-Graf f , I have a question. Could 

you explain the Restoration Fund? Because this is something that 
seems to move around a bit. What was the Restoration Fund and 
what was the Restoration Trust? 

Yardas: Well, the Restoration Trust was essentially a kind of the corpus, 
the oversight entity, that would utilize the Restoration Fund to 
do good work. So the trust was an independent, nonprofit 
restoration group or whatever that had a certain charter and 
certain things, when originally conceived, that would essentially 
watch over the fund and do good work with it. That, along with 
several other things, got dropped, and exactly where? I think 
that may have been dropped right with the first efforts to modify 








the discussion draft or the chairman's mark. I think that it may 
have been dropped at that point. Not the fund, but the trust. 

And the fund? Did you keep the fund? 

The fund was in every version. The amounts that it supported went 
from $30 million down to $15 million then up to $120 million, and 
it ended up at $50 million, so it bounced around. Over time, it 
came to bounce around in conjunction with the amount of water that 
was dedicated. Once we got into this notion of dedicated yield, 
then it began to be a story told about how you could get back to 
1.5 million acre-feet as the CVP's contribution to fixing Central 
Valley and Bay /Delta problems by using some combination of water 
and money. That's the formula that ultimately was articulated by 
Mike McGill and the [Business] Roundtable which Fazio picked up 
and supported. 

I see. So the fund remained, 

There was also an advisory 

A fish and wildlife advisory committee, yes. 
That was in the early Miller bill, I think. 

Oversight. They all got dropped on a couple of theories. I think 
the Republicans did not have any interest in creating new 
bureaucracies. We had endless struggles over what the memberships 
of those groups should look like. The feeling was that if they 
were equal, ag, urban, environment, then we were in trouble, but 
how could we get something through that didn't have that 
representation? So that was a problem. 

Ultimately, the Federal Advisory Committee Act was presented 
to provide all the authority that was needed. The secretary could 
appoint and name whatever advisory committees he or she wanted to, 
to oversee the fund to do whatever; that wasn't something that had 
to be legislated. 

Well, I just thought I'd better get that straight before we move 

Somach-Graff ; let's go into that, unless you have something 
else you want to say first. 


The Environmental Community Criticizes Congressman Fazio 

Graff: Yes. I thought I would go back in time to late March, a meeting 
with Share the Water coalition here in our office on March 30, 
when we got wind of where Congressman Fazio had just made some 
speeches or been quoted in the press, or both, exulting at his 
role in having helped Senator Seymour defeat the Johnston mark. 
At the same time he was beginning to support attacks on the 
Endangered Species Act, and was actively pursuing the construction 
of Auburn Dam, a flood control dam at Auburn. As I recall this 
meeting at Share the Water, I said, "It's time for us to send the 
good congressman a message." People kind of came together. I 
think Dave Weiman was on the phone with a conference call. We had 
the phone in the middle of the table, and maybe Patty Schifferle 
was there, too. I can't recall all the people there. 

But I do remember saying, "Let's do it," and so while the 
meeting was going on, I did a first draft of a joint letter of 
Share the Water members to Mr. Fazio. Ironically, Hal Candee, who 
has the reputation of being sort of harder-line than I, then 
edited it in a way that toned it down. But even the toned-down 
version that he and I and Barry [Nelson] and David [Behar] and 
Patty McCleary of the Sierra Club then signed, as you will see, 
was a fairly aggressive letter announcing to the congressman that 
we were unhappy with his position on all three issues. 

That letter then appeared in the press a couple of weeks 
later in a front-page story entitled, "Environmentalists Sting 
Fazio with Criticism." 

Chall: Which press did that go into? 

Graff: It was in the Daily Democrat in Woodland, California, in the 
middle of his district. 

Chall: You sent it there? 

Graff: Well, I don't know how it got there. 

Chall: Somebody sent it. 

Graff: It got there. And ironically, it appeared the same day as he met 
with the local environmentalists in his district, which I think 
was just a coincidence. He was very unhappy that this appeared, 
because he was in the middle of a difficult reelection campaign. 


It has been difficult even now [1994], I understand. 



March 30, 1992 

Hon. Vic Fazio 

U.S. House of Representatives 
421 Cannon House Office Building 
Washington, DC 20515 

California Office 
Rockhdge Market Hall 
5655 College Ave. 
Oakland. C A 946 18 
(510) 658-8008 

Dear Congressman Fazio: 

We -are writing to express our deep concern about several 
anti-environmental actions you have taken in the water resources area in 
recent times. 

is your unrelenting pressure on the Bureau of Reclamation to 
increase water deliveries to the subsidized growers of the Central Valley, 
irrespective of the impact of those deliveries on fish and wildlife. 
Newspapers have reported that this has included inquiries regarding 
endangered species which seem to presage an attack by you on the Endangered 
Species Act. 

Two is your continued intransigent crusade to build Auburn Dam, 
damn the environmental consequences, whatever the facts. You are as aware 
as any that the Sacramento Area Flood Control Agency's own consultant has 
totally undermined your rationale for building the dam. 

Three and most significant are your attacks not only in the House, 
bat in the Senate, against Central Valley Project water reform and fish and 
wildlife protection. You took credit in the Bee for stopping the 
Bradley /Johnston legislation in committee. That is an outrage. 

David Behar 

Bay Institute of San Francisco 

Thomas J. Graff 1 
Environmental Defense Fund 

Hamilton Candeo 

Natural Resources Defense Council 

Barry Nelaoyl 

Save San 'Francisco Bay Ass'n 

Patricia Mccieary 
Sierra Club 

National Headquarters 

257 Pule Avenue South 
New York. NY 10010 

1 875 Conneciicui Ave~ N.W. 
Washington. DC 20009 
(202) 387-3500 

1405 AnfMhoe Ave. 
Boulder. CO 80302 

128 East HinrcnSt 
Raleigh. NC 2760 1 


Austin. TX 78701 

100* Foo-CmwiMr (tocroM Pmr 


Graff: He continues to have difficulty up there, 

He's in a tough 

Opposition to Auburn Dam Joined to CVPIA Debate 

Graff: What I think I particularly wanted to bring this up for is that 
one thing EDF I think probably most uniquely among the Share the 
Water coalition focused on during the course of the whole year was 
Auburn, which we had been long-standing opponents of. In fact, 
the day before this article appeared in the Woodland Democrat, 
John Krautkraemer, my colleague, and I did an op-ed in the Bee 
blasting Auburn, and Fazio and [Robert] Matsui's plan for Auburn. 
And not long thereafter, got the L.A. Times to editorialize 
against Auburn as well. 

Meanwhile, Bill Kahrl, as you know, had Auburn and the Fazio- 
Matsui-Corps [Army Corps of Engineers] plan as his favorite 

Chall: No, I didn't know that. 

Graff: And he got quite upset with us. 

And what I think most significant was that, during the course 
of the year, we came to fear that a trade might take place, where 
Fazio might agree to some version of CVP reform if in turn Bradley 
and Miller would agree to Auburn. A part of my thinking in 
writing this letter and in the op-eds, and in getting the L.A. 
Times to weigh in on its own, was to make sure that the price of 
CVP reform was not another dam on another California river. So 
this is the Fazio package. 

Chall: Thank you. 

Graff: And this is a series of letters that I wrote in August-- jumping 
aheadbecause we've got Auburn on the table now. I met with 
Senator Bradley, I met with Senator Seymour, I met with Dan Beard, 
and I met with Fazio. I always sort of do things against the 
grain. Most people said, "It's recess time, everybody's waiting, 
the real action's going to take place in September, why are you 
wasting your time going to Washington in August?" But it turned 
out to be a great visit, because I actually got in to see all 
those people, which is hard to do when things are really hopping. 

And on the plane home I wrote these four letters to Senator 
Bradley 's staff, to Dan Beard, to Congressman Fazio, and to 


Senator Seymour, following meetings that I'd had with them. 
Probably the key messages were, "Auburn's not up for trade." The 
message to Bradley and Miller was, "You can't do that." And the 
message to Fazio was, "We're willing to work with you on American 
River flood protection but not on a dam." 

Pondering Senator Seymour's Reluctance to Negotiate 

Graff: The message to Seymour was, "You told me--" This goes back to 
something you asked at the first interview, and Rich Golb and 
Barry Nelson I know have sort of been at odds over this over the 
years: Did Seymour meet with environmentalists or not? He did 
meet with me that visit, and told me that he wanted to negotiate, 
he wanted to deal, and that he would be contacting Senators 
Johnston and Bradley to work on a deal. So I thought I would 
memorialize that in a letter to him, and I did so, saying, in 
effect, "I was glad to hear you wanted to deal, look forward to 
hearing that you've contacted the senators you've said you would, 
and I hope you contact Congressman Miller as well." To my 
knowledge, that never occurred thereafter. 

Chall: And why do you think it didn't? 

Graff: I don't know. I mean, I'm sure there's sort of deniability on 

Senator Seymour's partformer Senator Seymour's partthat he had 
conversations of some kind with Bradley and Johnston. I don't 
think he ever did with Miller, although he didn't tell me he 
would. But I don't know. I was always puzzled because, mainly 
through my conversations with Somach, and other ways, maybe 
Fazio's staff, Roger Gwinn, and others, I would get the impression 
that Seymour really did want to deal. I'd be curious someday to 
read Rich Golb ' s interview to see whether that ' s true from his 
point of view. I did have the impression that Seymour had a 
different point of view than the governor, who by that point I 
think it was clear didn't want a deal, although as you'll see in 
this chronology, at least it was Tom Jensen's view that early on, 
he and Bradley talked and he told Bradley he was interested in 
Bradley proceeding. 

Chall: That was Wilson? 

Graff: That was way back. That was mid- '91, so that was considerably 
earlier. But the fact is that Seymour, after the attempts at 
negotiation in the spring of '92, never really got serious about 
negotiating something that at least the environmental community 
and Miller and Bradley could buy into. 



California Office 

Rockridge Market Hall 
5655 College Ave. 
Oakland, C A 946 18 
August 14, 1992 (510)658-8008 


Hon. John Seymour 

United States Senate 

367 Dirksen Office Building 

Washington, DC 20510 

Dear Senator Seymour: 

I just wanted to thank you for taking the time out of your busy 
schedule Wednesday to talk with me about CVP reform legislation. 

As you and I both know, passing legislation which addresses the 
interests of all the major stakeholders is a complex and difficult matter. 
However, EDF and I personally have been and remain committed to this 
effort. While we oppose the legislation you have introduced primarily 
because we do not believe that it adequately addresses the environmental 
problems caused by the CVP, I was pleased to hear personally from you of 
your commitment to work with your colleagues in Congress to find a 
legislative outcome which does address our concerns, as well as the 
concerns of other interested groups. I hope that by now you will have 
expressed this interest directly to Senators Bradley and Johnston and that 
soon you will communicate it as well to Congressman Miller and others. 

Sincerely yours, 

Thomas J. Graff 
Senior Attorney 


National Headquarters 

257 Park Avenue South 1875 Connecticut Ave.. N.W. 1405 Arapahoe Ave. 128 East HargenSt. ISOOGuadalupe 

New York. NY 10010 Washington, DC 20009 Boulder. CO 80302 Raleigh. NC 27601 Austin, TX 78701 

(212)505-2100 (202)387-3500 (303)440-4901 . (919)821-7793 (512)478-5161 

100% PM-Coiwmr ftecycM Plpw 


So I never quite understood where he really was at. And 
maybe part of it was that he was new to Washington, he was in his 
first term, two-year term, he was running for reelection. That 
was tremendously demanding. So maybe he just didn't know how to 
do it, or didn't have the time, or whatever. But this was his big 
issue. I mean, he, after all, chose to go on this subcommittee, 
he raised substantial amounts of money from agribusiness interests 
as part of his campaign. His opponent, [Dianne] Feinstein, 
nominally supported Miller-Bradley. But it always seemed to me 
that his best chance of getting reelected would have been to be 
part of an historic bill rather than in opposition. 

Anyway, these letters, I think, are probably interesting- - 
Chall: Thank you. 
Graff: --for being part of the record. 

The Somach-Graff Negotiations 

Graff: So you wanted me to turn to Somach-Graff? 

Chall: Right. Now, you said that you had been called by Somach- 
Graff: No, in fact, I think I was called by Joe Raeder, who was Dooley's 
aide, first, saying, "Dooley really--" He was a freshman at the 
time. He had been embarrassed by the House Democrats' compromise 
for a day, was getting a lot of heat from his constituents, in 
Friant and the Westside both, and sort of anything was better 
than- -partly you could say, "Hey, better to deflect the heat on 
Somach and Graff than to have it coming down on Dooley." 

In fact, I just heard recentlythis is, what, two and a half 
years later, after the '94 campaign- -Dooley is still being 
attacked in his election campaigns down there for having voted for 
Miller-Bradley. Well, he never voted for Miller-Bradley, he voted 
for the House Democrats' compromise for a day, and is therefore 
viewed by some in the Valley as having contributed to the ultimate 
bill, even though he voted against it. And he voted against it on 
the floor of the House also. 

Chall: It always is interesting to me that if the compromise would have 

been in the favor of the agriculturalists to some extent, why they 
didn't accept even that much of a compromise. 



Yardas : 






Why people in the Valley didn't? You'd have to ask them. My view 
is that there was so much uncertainty in that formulation that 
both sides read into it sort of the worst case, because it 
essentially left decisions about operations and water allocations 
to the discretion of the secretary. So a secretary of the 
Interior or a commissioner of reclamation who favored 
environmentalists, from the ag point of view, could wreak havoc, 
and one who was like James Watt or others would have been pro-ag, 
would have been able to do in environmental values . 

There was no specific allocation of water to the environment, 
as there had been in the Johnston mark, the 1.5 million, and there 
was--I can't remember whether there was still a Restoration Fund, 
but it was minimal. 

It was $15 million. 

And from our point of view, that was no money, no water, 
all discretion, and we just couldn't live with that. 

It was 

But looking here [at old calendars], I guess I met with 
Somach essentially every day of the week of June 8. The eighth, 
the ninth, the tenth, the eleventh. 

Every day? 

Well, at least those four days. I don't always mark things in my 
calendar, but at least those four days, we met. 

My recollection was it was a two-week period, that you started and 
went over a weekend, and then finished up, or something like that. 

So the two of you met by yourselves? Where? 

Yes. David snuck in a time or two when the meetings were here. 
Dennis DeCuir, Stuart's partner, who also represents public power 
interests, he joined us briefly for part of one of the meetings up 
in Stuart's office. But basically, it was the two of us. I was 
consulting with David when Somach wasn't in the room, but it was 
pretty much the two of us. 

And how did you work? How did all this come about? I know what 
came about, but how did whatever we have here, this draft come 

The June 15 draft? 

Yes. You really gave a lot, I guess; he gave a lot. 


Graff: Well, in terms of the personal dynamics, we had been co-counsel on 
the same side of the case of EOF against East Bay MUD, where 
Somach represented the County of Sacramento, and we were both 
resisting the efforts of East Bay MUD to divert a supplemental 
water supply from the American River. During the course of that 
case, which lasted a long timethere were lengthy proceedings 
both before the State Water Resources Control Board and before a 
superior court judge here in Alameda County, although I didn't 
participate actively in the latter one; I was involved 
tangentially. During the course of this litigation I got to know 
Stuart well and in the collegial situation where we were on the 
same side, as opposed to opposing sides. I always liked him, and 
was comfortable being as honest as one can be in terms of what's 
really essential from my point of view, and to the extent I could 
identify, from the point of view of others on our side of the 
fence. And I think he had the same approach, coming at it from 
the point of view of representing the CVP growers. 

I think ultimately, both of us had fractious coalitions, but 
his was more fractious than ours. So he had more difficulty, 
because there were very different interests between the Friant 
people and the Westside people and the Sac Valley people, not to 
speak of other agricultural interests not part of the CVP, whereas 
the difference between duck people and fish people and rec reform 
and water transfersthere were tensions within our community as 
well, not to speak of hard-line or soft, and compromisers, on both 
sides. But we tried to do our best, I think, to acknowledge all 
those conflicting currents on both sides and come up with a 
package that tried to bridge gaps. 

For example, on the San Joaquin River, the NRDC litigation 
was very active around that time on the question of contract 
renewal for Friant contractors, and would it include water for the 
San Joaquin River or not? Finding a middle ground on that was 
very difficult. NRDC was looking over my shoulder, and the Friant 
contractors were looking over his shoulder, and they were in 

Chall: So you didn't 

Graff: So we came up with the idea of a study instead of a decision, and 
a surcharge, the four-dollar-an-acre-foot surcharge for Friant 
contractors, above the six and twelve that all the other 
contractors would pay, and they would pay as well, as a compromise 
position. And neither the Friant contractors nor NRDC liked what 
we came up with. 

Compromise Positions on Each Side 

Chall: Was there a central outcome, central concepts that by now you all 
had on your side that you wouldn't- -in the words of Newt Gingrich 
--you would cooperate but not compromise on? 

Graff: Yes, I think from our point of view, there were two crucial 

elements to that discussion, from our point of view, and maybe 
from Somach's. From our point of view, we needed to have water or 
money, or some combination of both, that that was what was missing 
from the House Democrats' compromise. From Somach's point of 
view, he needed to have more certainty of outcome, limitation of 
liability from their point of view, than the House Democrats' 
compromise had, in the sense that all their water could be taken 
away by a secretary of the Interior who thought, I have to give it 
to the environment, or none. So those wereyou know--our 
specific concerns. 

More specificity in water and money terms for us meant, from 
my point of view, I could afford to give more certainty and 
limited liability to him. Then we had to craft language to fit 
those competing perspectives. 

Factoring in the Urban Interests: The Metropolitan Water 

Graff: We had the advantage, which in retrospect, as I look back on it, 
was also mentioned in my original memo to Beard and Lawrence in 
February, that it was really the first time that the environmental 
and agricultural negotiators, or constituencies, were together 
with the urban constituency not there. That had also never been 
true in the Three-Way Process. The urbans had generally always 
played the fulcrum role, the intermediary between the agricultural 
and environmental communities. And one of the outcomes of that 
was that the urbans didn't come out as well in Somach-Graf f . 

Chall: That's why MWD opposed it? 

Graff: Yes. And I looked over this in preparation for our little 

interview here, and probably the biggest single mistake I made, or 
we made, but I made--"we" being Somach and I--was overstepping how 
much we were going to take, how much financing we were going to 
extract from the urban sector as part of the compromise. I 
finally figured out, I've always thought I was just stupid, which 


I was, in overreaching, but I finally remembered, which I had 
forgotten, what little rationale I had for this. 

The concept was, fifty dollars per resident, as an access 
charge for any new area that wanted to buy into the CVP. So there 
was a sort of one-time charge. You haven't been in the CVP, you 
now, in order to be part of the CVP, you have to pay fifty dollars 
a resident. And MWD, having whatever they have down there, 14 
million people, thought that was a little excessive. 

Chall: Oh, I see. That was part of the draft? 

Graff: Yes. And now it sort of came to me that--I had been struggling 
all year, as is evident from reading the memo to Beard and 
Lawrence, and then the later memo in April, with a formula that 
would somehow get more resources from the urban sector, because it 
always seemed to me that taxpayers only had so much money, and the 
ag people didn't have that much money, so that something 
substantial was going to have to come from the urban folks. 

And yet, what I also realized wasone of the other goalsa 
hidden goal- -was breaking up the MWD. One of the problems with 
the water market in California is that there's one buyer. I mean, 
that's an exaggeration, but in terms of the urban sector, there's 
one monolith that dominates the water purchasing side of the 
equation. And it seemed to me that the f ifty-dollar-per-resident, 
if that had stuck, would have caused individual sectors in MWD, 
who wanted to expand, to go off on their own and buy the water for 
themselves as a smaller entity, rather than buying it for all of 
southern California and having the wholesaler dominate the whole 

Looking backwards, Zach Willey and I had tried to get the 
city of Los Angeles interested in water marketing as part of the 
solution to the Mono Lake controversy. Generally I'd always 
argued with Boronkay and others at MWD that this wasn't a good 
market, because there was only one buyer- -they were too big. And 
anyway, they had too much power. So as a post-hoc 
rationalization, but I think probably somewhat related to what was 
in my mind at the time, this fifty-dollar-a-resident access fee 
could be justified as a point of pressure to get them to have 
their individual areas compete in a market rather than have MWD be 
the sole buyer. 

Having said all that, it was still a stupid idea, even if 
that was what the idea was. I can't vouch exactly that it was the 
idea. I think it was. Because it wasn't going to stick. And I 
just didn't give enough thought to how large a number that would 


Somach didn't care. He was paying a lot less attention to 
that than he was to other things that were more crucial to his 
constituents. So we ended up with an immediate set of critics. 


Graff: Bill Kahrl attacked it on behalf of poor old MWD, which is ironic, 
because in most of his other editorials over the years, he's 
railed against the evil monsters from the south. 

But anyway, so that was part of the package, and I regret 
that, not just because it was overreaching and too large a number, 
but because it was a missed opportunity. If I had been more 
thoughtful about it and had come up with a better formula, I think 
we could have perhaps ended up with a larger financial 
contribution from MWD as part of the deal. They got a good deal; 
they got access to this project of 7 million acre-feet. They 
still haven't got much out of it, actually, but eventually they 
will, and that was worth a whole lot to them, and somehow, we 
should have figured out a way to make them pay for that. 

Yardas: We will. 

Releasing the Draft: The Aftermath 

Chall: Do you think that it fell down because of MWD's opposition? 
Graff: Oh, no, it didn't fall down. The good side of it is-- 
Chall: A lot of it is in the final bill. 

Graff: Yes, that's right. Well, the story, I'm sure you know, is we 

arranged this as part of our negotiationin addition to hammering 
out a negotiated draft, we also tried to figure out how were we 
going to spring it on the world; what we were going to do. We had 
agreed with each other that we were not going to circulate drafts. 
It was just going to be the two of us, and then other people could 
react. We would take responsibility, but we weren 1 t--Share the 
Water was not committed to supporting what I did, nor was the 
CVPWA committed to what Somach was doing. 

And the way we decided was to release it on Monday, the 
fifteenth of June, as we both got on airplanes to fly to 
Washington to present it the next day [Tuesday] to people in 
Washington. Basically the House staff was going to sponsor a 
joint presentation. David went back with me, and I guess it was, 


what, early in the morning, right? Like at six-thirty a.m. I 
said, "We ought to call Somach and see what's up." 

So I called him in his hotel room, and he was very chagrined, 
and informed us what had occurred when he had arrived in 
Washington late the night before, having flown in from Sacramento. 
He had called a group of CVPWA representatives who had convened I 
guess in Los Banos, I think, to review the draft. After a long 
call to that group on Monday night, he was instructed not to 
appear at the briefing the next day. The main reason for that was 
that one of the big growers in the group, Mark Borba, who has a 
big ranch in Westlands, had called Governor Wilson that dayand 
then this gets fuzzy exactly who said what to whom, but it was 
reported that Governor Wilson said to Borba, who said to the 
group, "The governor instructed me to tell you not to let Somach 
go into that briefing the next day." And that's the way it was 
reported in the press within the next few days. 

I've always thought it was probably a little more complicated 
than that, because Diane Rathman, who was the lawyer principally 
representing the Westside interests, left that meeting in Los 
Banos as it was going on, and presumably after Borba had made his 
statement, or maybe not, I don't know, actually drove to San 
Francisco Airport and got on an airplane to come back to attend 
the briefing. 

Chall: Did she attend it? 

Graff: No. Well, no, she didn't come to the briefing. She didn't know 
that they were going to pull Somach from the briefing at the time 
she left the meeting in Los Banos to catch the red-eye flight. 
And one of the silver linings of all this was that Diane Rathman 
wasted a trip to Washington. [laughing] 

Chall: Well, you were there. So you went into-- 
Graff: Well, then I ended up having to debrief -- 
Chall: Who were you briefing? 

Graff: It was Beard and Lawrence, from Miller's office, both attended, as 
did representatives from Fazio and Dooley and Lehman's offices, 
and perhaps others, but I know all four of those offices were 

Chall: But no senators? 

Graff: No senators, no Senate staff. Although I went over to see Jensen 
and talked to him later in the day. 



Yardas : 


And Beard and Lawrence took the occasion toparticularly 
Lawrence, but bothto berate me for all the compromises that I 
had made. I mean, part of it was fair game, with my having 
berated them over the years for all the compromises they had made, 
they finally could turn the tables on Congressman Graff here doing 
his thing. 

Well, they were smarting from the-- 
Were you there too? 

Yes. They were, I think, smarting, and it played out in a couple 
of ways. The historic compromise that they negotiated with the 
Valley Democrats they did more or less behind closed doors. I 
remember having a conference call with Share the Water people 
here, and them briefing us on the deal they had gotten. We were 
pretty merciless on some of the decisions they had made, so I 
think this was in a way payback time. 

Chall: I see. [laughs] 

Analyzing Some Specific Provisions in the Draft 

Graff: And they were skeptical, as I think I mentioned earlier, about 
some of the specific provisions. They were incredulous that 
Somach had agreed to the six-dollar-an-acre-foot charge for CVPWA 
ag contractors. Seymour at some point had conceded to a one- 
dollar-a-foot charge, and that was viewed as a huge increase, far 
beyond what I think they ever thought they could get . And in 
fact, it stuck, and it ended up in the final bill. They also 
didn't believe the one and a half times O&M [operation and 
maintenance] charge, surcharge, as a means to get contractors to 
start paying immediately rather than waiting for contract renewal, 
would be effective. I in fact don't know when that- -I guess that 
didn't make it in the final draft. 

Yardas: What? 

Graff: The one and a half times surcharge? It's in the final bill? I 
guess it is. 

Yardas: That's my recollection. 


Graff: So those were specific provisions that they critiqued that day, as 
well as the tiered pricing provision. 

Chall: But the tiered pricing provisions had been throughout all of your 
bills, hadn't they? What did you do, change the--? 

Yardas: They showed up for the first time in the discussion draft, the 

November 4 [S. 484] discussion draft. I'm pretty sure they arose 
--I remember Tom [Graff] at one time saying, with all the 
deference that he's given to the Yardas-Garrison letter, saying 
something like, "Well, that was a stupid formula anyway. It 
wouldn't work. We should do something with tiered pricing," and I 
think at that point we ginned up some ideas about how would you do 
tiered pricing. That first appeared, I was looking back here, in 
the November 4 draft. 

What Somach-Graff did was to articulate a different kind of 
formula that was essentially revenue-neutral. It would, rather 
than having everything increase over the current ratesthe more 
water you use, the more you pay--it lowered the initial costs and 
increased the tail costs such that if you used the same amount of 
total water, you would end up paying the same amount. That's my 
recollection of that formula. 

They didn't care for that formula very much, but Somach did 
agree to it. 

Graff: Another aspect of Somach-Graff that I'm proud of, and I think 
Stuart probably was at the time, anywayit wasn't all just 
compromising. It was trying to dream up more creative ways of 
getting to results that would be acceptable or even positive for 
both constituencies, was the idea of a comprehensive EIS. There 
had been EIS provisions previously in both the environmentalist 
versions, to make sure the contract renewals were subject to an 
EIS, and Somach came up with the idea of, "Well, we need to have 
an EIS on the environmental part, and the anadromous fish doubling 
plan and the refuge water provisions." 

And we both- -I can't remember whose, whether the light bulb 
first went on in his head or mine, but I think we both sort of 
realized neither of us is a big EIS enthusiast, but if we're 
going to do one, let's do a programmatic, comprehensive EIS that 
covers the whole waterfront. I remember we had a discussion where 
we were brainstorming rather than fighting with each other over 
should it be three years or five years or one year or whatever, 
and we came up with three years . 

[door opens] 

There is Mr. Jensen. [tape interruption] [Brief 
conversation ensues among Yardas, Graff, and Chall with Tom 
Jensen. Jensen leaves and interview continues.] 

Graff: Well, just to continue then with Somach-Graf f , I think we were 
talking about the comprehensive EIS-- 

Chall: Yes. 

Graff: And some of the items on which Beard and Lawrence were originally 
critical but ended up in the bill. One of the areas I gave ground 
on was length of renewals, and basically mandatory renewals of 
twenty- five years. That was an area where EDF's views may have 
diverged some from the environmental constituencies generally, 
because our view was marketing was going to be most effective if 
there was certainty in the contracts. So we were, and I think I 
personally and EOF, were willing to give more ground on contract 
renewal and certainty of water, what water was tradeable, as part 
of what we saw as ultimately being a transfer scheme. 

The ideas of limiting how much water could be reallocated 
through congressional or regulatory action, or action of the 
secretary, and trying to minimize the amount of impacts on 
contractors, which were supposedly concessions on our part, I 
thought were more than offset by the size of the Restoration Fund 
being set at $120 million. 

Chall: What was your change on contract renewal? 

Graff: Twenty-five years, with an option for successive twenty-five year 
renewals, although Congress could intervene after the first one, 
or presumably thereafter, if it wanted to, but it had to 
affirmatively act. 

Chall: And change it to something like forever? 

Graff: Well, or it could stop, it could terminate some. 

Chall: I think Kahrl feels that you gave it to them forever, or some such 

Graff: Yes. As far as I was concerned, that's inaccurate from a legal 
perspective, but the idea was to give them longterm assurance of 
water supply. Because Somach was called off by his constituency, 
we never really had to see what environmentalists as a whole 
thought of Somach-Graf f. There were sort of embarrassing 
meetings. I wasn't really embarrassed, but I think Barry and 
maybe some of the others in the environmental coalition were. 
When I came back from Washington a few days later. Share the Water 


met, but we never really tackled the question of what did Share 
the Water think of Somach-Graff . 

Chall: Barry said that he was preparing a critique, but they didn't 
finish it because they didn't need to. 

Graff: Yes. I guess the next Share the Water meeting was Monday, July 6, 
What happened actually was after Somach-Graff was aborted-- 

H.R. 5099 Passes the House by Voice Vote 

Yardas: Well, the House passed its bill. 

Graff: Yes, that's right. Somach-Graff was on--I flew on Monday, we met 
in the briefing on Tuesday, an EDF staff retreat began on 
Thursday, and that Thursday morning, the eighteenth, was when the 
House debate took place on the bill. Miller decided to move the 
bill, and anyone who's listening to this oral history tape later 
or reading the transcript, whatever they do, should go read the 
Congressional Record for that day. Because it was a fascinating 
debate, which we got to listen to because we were getting ready to 
go to the EDF staff retreat, which was in Maryland, near D.C. 

Yardas: You got to listen to it. 

Graff: Or I got to listen to it. Where were you? 

Yardas: [Sam] Gejdenson's office. 

Graff: Oh, you were still working on the tiered pricing provision as the 
debate was going on. 

Chall: I have in my chronology that on June 18 5099 passed the House on a 
voice vote. That's what you're talking about? 

Graff: Right, that was the debate. 

The funny thing about it was, this was about the time that we 
were most antagonistic to Fazio because of his Auburn stuff. He's 
on the floor of the House praising me and Somach for our efforts, 
and denouncing the governor for having intervened and making 
further negotiations difficult, and having to acquiesce in 
Miller's moving the bill, because his side had prevented something 
better, from his point of view, from taking place. So he and 
Dooley and Lehman all spoke, and all said, "Isn't it too bad 
negotiations have broken off, it would have been much better to go 


that way, but given that they haven't, what can we do, Congressman 
Miller is moving his bill." 

Chall: So they voted-- 

Graff: They didn't vote; it was a voice vote. But they expressed 

opposition, but they said, "What could we do, because it's the 
governor's fault," basically was the way they portrayed it. 

Chall: Did it pass as it had originally been written, without the 
compromises in there that he had made? 

Graff: No, no, the House Democrats' compromise is what passed, with two 
sets of additions. One being some merchant marine committee 
amendments. It was a joint referral to the merchant marine 
committee, and they added some provisions. Then David was back as 
well with me, and he was working with Congressman Gejdenson, who 
is famous currently for his four-vote victory in the 1994 
election, the closest House vote-- 

Chall: Oh, is that right? 

Graff: In fact, it was in the paper this morning, and there will probably 
be a big, continuing battle over it. 

The Tiered Pricing Amendment 

Graff: He did the tiered pricing amendment, with David's help. 

Chall: You were saying something about the tiered pricing provision 
having first come up in November? 

Yardas: Well, it first appeared then, but it got stripped out of the 

historic compromise for a day. Then, when the Valley Dems backed 
away from that, Miller decided to- -and Somach-Graff collapsed, it 
was like, "Let's go to the floor and get this done." 

Chall: What about Jensen? 

Yardas: I'm not quite sure how it happened, but I was back there, we had 
the staff retreat coming up, and I don't remember--! think I must 
have been over on the Senate side, but I got a phone call saying, 
"Come over to the House side." I sat down at John Lawrence's 
request, and these guys were huddled trying to get things ready to 
move. They said, "Gejdenson wants to help, go to his office," 
which I did. He was intrigued with this tiered pricing stuff, and 


he grilled me for about twenty minutes about what this would do, 
and could he what implications and impacts would it have. He's a 
smart guy, and really put me on the spot, saying things like, 
"Okay, and I'm coming back to you personally if this isn't--" 

So I worked with his aides for a couple of hours getting some 
stuff together, doing some analysis to answer some of his 
questions, whatever, and then he ended up going to the floor with 
it, and it passed as an amendment to the bill. 

Chall: I didn't know quite why he had gotten into it, but I knew that he 

Yardas: Yes. I just think he wanted to help, and this was a place where 
some fiscal integrity could be brought into play, and we could 
make good arguments about it in terms of water conservation and 
helping fund the program, and recouping some of the historic 
subsidies, and whatever. There's a lot to speak for it. So it 
was great; it was a lot of fun. But as a consequence, I missed 
much of the floor debate Tom just talked about. [laughs] 

Graff: It was funny, when Fazio came up to me, I was sitting up in the 
gallery. He came up, up to the higher floor, came up to me and 
shook my hand and said, "I appreciate what you've tried to do, and 
we ' 11 try and keep working on it . " That was a personal element of 
that particular effort. And you know, you're sitting there in the 
halls of Congress, with the majesty of the Capitol and all that. 
It was pretty exciting. 

Further Negotiations on the Somach-Graff Draft 

Graff: Well, just to finish the Somach-Graff sequence: the governor got 
all this bad press about having undermined the compromise. His 
own environmental people were telling him he'd made a big mistake. 
I believe Senator Seymour told him he'd made a mistake. I don't 
know that, but I think so. A lot of people started having second 

So he changed his mind, about ten days later. The word came 
down that, "Well, Somach and Graff really ought to start working 
together again." 

Chall: Oh, really? 


Graff: It had sort of a face-saving element to it being, "Now, you have 
to incorporate the other constituencies who weren't present." So 
we then had a series of meetings with the urban interests, 
including not just MWD, Boronkay came, but Contra Costa and Santa 
Clara, and I can't remember, the city of Sacramento I think were 
also there. We had a meeting with [Dave] Schuster, we had a 
meeting--! can't remember- -with the power interests, public power 
interests. We had a series of meetings where people asked us 
questions and we discussed the draft. 

There were some who thought we should revise Somach-Graff 
based on these meetings, come up with a new version, and neither 
of us had stomach for that. We put out another memo in July. I 
can't remember exactly what it said, but it was sort of a status 
report saying that we had met with so-and-so and so-and-so and so- 
and-so, and wasn't that nice? 

Chall: Was there cooperation among all the others who came in to work 
with you on this? 

Graff: Yes. See, the Somach-Graff draft was not a complete bill. There 
were several places where we said others had more competence or 
more involvement or more at stake than either of us did, that 
really needed work. Refuge provisions was one of those areas; 
water conservation provisions was another. I can't remember them 
all; there were three or four of them. We didn't really agree on 
the length of time for the [anadromous fish] doubling period, the 
period of time over which you'd measure what had to be doubled, 
and things like that . 

I can't remember the exact sequence, but those discussions 
started to take place. So there were parallel negotiations going 
on over that next month or so, among refuge people and among water 
conservation people. Ironically, the Friant people and the NRDC, 
no, I guess it was Ed Osann of the National Wildlife Federation, 
who now works for Beard, were the water conservation negotiators. 

So there were a lot of parallel discussions going on, and I 
think to our credit, Somach's and mine, without patting ourselves 
on the back too much, we created at least an atmosphere where 
people were talking to each other again, and there were a lot of 
more or less fruitful discussions about various elements of the 
overall situation. 

And it was in that time that [Mike] McGill came forward with 
his proposal, and as it turned out, mainly I think working with 
Somach behind the scenes, Fazio came up with his alternative, 
which surfaced early in August. Do you have a date on that? 




It surfaced in August, according to Jensen's draft, 

No specific 




Yardas ; 

Yes. But it must have been before the fourteenth--! don't know if 
his written one surfaced before the fourteenth, but you'll see-- 

I met with Fazio a day or two before that, or it might have 
been a few days before that. I was back in Washington-- [looks 
through calendar] "D.C., tenth to the thirteenth," and I wrote the 
letters on the Friday. I actually wrote the letters on the plane, 
but they got typed up and mailed on the Friday. By then, Fazio 
either had--I didn't have stuff in writing, but he had a concept 
of what his proposal was going to be. That then sort of launched 
Miller and Bradley and others who were gathering for the [House- 
Senate] conference to respond to what Fazio had put on the table. 

Yes, that's right. I have that somewhere between June and August 
--maybe that's from Jensen's list that the conference committees 
of the House and the Senate were appointed. I have the Senate 
committee, but I don't know what the House committee was made up 
of. Do you have that? 

Yes. The delegation to the conference in the House was massive. 
The reason being that for different provisions of the bill, there 
were different conferees. This was true both because it was the 
omnibus bill, but also just for the California provisions, the 
House Agriculture Committee, the House Merchant Marine and 
Fisheries Committee, as well as the House Natural Resources 
Committee, and maybe others--! can't remember if it was just the 
three all had conferees. So the House conferees were this 
enormous group of about eighty people- - 

Oh , my . 

And they're listed somewhere in the conference report, I think. 
I'm not sure of that. 

Yes, they're listed. 

I can find out. When you start talking, or David starts talking 
about what all the bills were in the last month, I'll go looking 
for that. 

Let me just say one other general area that I want to talk 
about, because I think that where we're going to end is with the 
final bill. 

The Influence of the Media 

Graff: One area we haven't talked about at all but that was very 

significant throughout these two years, and I think arguably over 
the many years before that, was the media. We've done a lot of 
talking about Bill Kahrl. Bill Kahrl, I think, essentially stood 
alone. I can tick them off: The L.A. Times, the New York rimes, 
the Washington Post, the Wall Street Journal, the San Francisco 
Chronicle and Examiner, the San Jose Mercury, the San Diego Union, 
all either editorially or on the op-ed pages or in their news 
columns or some combination of all those, columnists, in one way 
or another contributed to passing the bill. The press coverage 
was overwhelmingly favorable to our point of view. Among the more 
conservative commentators, the focus tended to be on the water 
marketing provisions; among some of the regional papers up here, 
on the fish and wildlife protection, Bay/Delta protection, and the 
like. And then among sort of the mainstream, that it was time for 
general reformthis was a reform effort. 

So whether it was Jack Burby on the editorial page of the 
L.A. Times, or Peter Milius at the Washington Post, or Peter 
Passell, a columnist at the New York Times, Lou Cannon, a 
columnist at the Washington Post, Charlie McCoy, a local writer 
here for the Wall Street Journal, there was broad-based support. 
And the Wall Street Journal, although they didn't really 
editorialize on Miller-Bradley, over the years they had been 
supportive of water marketing certainly, and had run pieces 
favorable to EDF's approach. The Chronicle and Examiner, Eliot 
Diringer was a reporter here, Jim Mayer and Mike Doyle at the Bee 
are reporters in D.C., Scott Thurm and [Bert] Robinson of the Aferc 
[San Jose Mercury] . A guy named Gogek at the San Diego Union. 
And there were many others. Even the Orange County Register, 
although they opposed the bill at the very end because it wasn't 
free market enough, I think. 

We did a lot of work with the media, and I think that helped 
directly and indirectly. 

Chall: Did you send op-ed pieces or call a press conference? 

Graff: Yes. Share the Water did most of the press conference kind of 
stuff, and most of that was focused around impacts on the 
environment and on the fishermen, both sport and mainly 
commercial. We tended to work more on a one-to-one basis with 
individuals in the media. I personally had put a lot of time over 
many years into cultivating and establishing, cultivating 
relationships with all the different ones I could. 


Chall: Did you call a reporter that you knew was working in this field? 

Graff: Yes, all of them. I worked with the media a lot of the time. I 
put probably- -while David was working some of the 

Chall: Technical 

Graff: --technical stuff, I tended to personally put a lot of time into 
the media side of it. 

Chall: I know that when it came to starting my research, it was mostly 
just a pile of news clippings that I had. 

Graff: Yes. Well, that was a majorit helped. I think it helped with 
the out-of- state people. They had some assurance. The New York 
Times and the Post and the Journal were saying this is good L. A. 
rimes. It's not just George Miller saying it's good, or Bill 
Bradley saying it's good. So that was just another element that 
we hadn't talked about. 

Chall: Yes. I'm glad you brought it up. 

Graff: That's one thing I've not had time to do, but there is- -I just 

have immense clipping files. In fact, I need to organize them at 
some point. 

Chall: I'm just so impressed with David's organization over here. 

Yardas: It's the only thing I've done to organize everything, is to put 
the different versions [of the bills] in a binder. 

Chall: It's terribly impressive. 

Yardas: The rest of it is in two big piles on my office shelf which some 
day will get attention. 

Chall: Very impressive. 

Graff: So that's just the end of my story, so go ahead and 

Chall: Now let's get to the end here 

Graff: September, the end game. 


The Conference Committees: 
Title 34 

Negotiations Involved in Drafting 

Chall: The exciting end. The conference committees were appointed, and 
as far as you know, was there much jostling for positions on the 
Senate side? 

Yardas: I don't really know much about the membership issues there and how 
that came into play. The one thing that was clear is that Miller 
and Johnston controlled the conference. They controlled the 
agenda, and when it would meet. In fact, it only met once, the 
original convening- - 

Chall: Yes, so I realized. 

Yardas: So exactly what kind of jostling and jockeying went on in terms of 
who would be on, I just don't know. 

Chall: Now, they did get organized, and then sometime in August, Fazio 
came in with his draft. Gave it to whom? 

Yardas: Well, sometime in August, Fazio wrote a long letter to Barry 

Nelson, responding to Share the Water criticisms and more or less 
outlining what he (Fazio) could support. Then I have here a 
legislative draft dated September 9, 1992, and a note on it that 
says it was distributed 9/14/92. Now, that doesn't mean there 
were not discussions going on at staff level, but in terms of an 
actual draft that was put out for consideration by others, I don't 
think that officially appeared until shortly before the conference 

Chall: And that was his own draft that he--was it under his name? 

Yardas: Well, here's what it looks like. It doesn't have any name or 
title on it at all. 

Chall: Just a typewritten- - 

Yardas: But that's in fact where it came from. 

Chall: I see. And he gave it to whom? 

Yardas: I don't know how broadly it was distributed. Obviously I think it 
went to key players, and certainly to the various staff-- 

Chall: On both sides? 


Yardas: Yes. But this was before the conference was convened, and upon 
the convening of the conference, Miller put a bill into play. 


Yardas: When did the conference convene, on the fifteenth, I believe? 
Chall: I have the fifteenth. 

Yardas: So my sense from my notes here is that there was a scramble to get 
something out before, pseudo-officially before the conference 
convened, but in fact, what Miller put into play was Miller's work 
with some consultations with the Senate side and background work. 
I was involved to some degree on creating an offer to the 

Chall: So that would have been something other than 5099? Totally new? 

Yardas: Well, it was sort of--I think it was a mixture of a lot of 
different things. Basically, they created a new bill which 
attempted to address some of the deficiencies and criticisms that 
they had gotten in the House conferees version, picked up some of 
the stuff that had been done in Somach-Graff that they liked. For 
example, the House-passed billnot the compromise bill, but the 
one that was finally passedincluded a couple of significant 
amendments, as Tom mentioned, from the merchant marine committee. 

One of those said something like, "Upon enactment of this 
act, and after implementing certain operational changes, the 
secretary may make available project water for the primary purpose 
of implementing its fish, wildlife, and habitat restoration 
purposes and measures, except that such water shall be in addition 
to water that's provided for refuges and for the Trinity River. 
This water may be assigned immediately to supplement in-stream 
flows, and the Fish and Wildlife Service shall conduct studies and 
monitoring necessary to determine how it will work." 

So there was a new section, that was not something that was 
agreed to by the Valley Democrats that was put into the conference 
offer at the request of merchant marine, which once again 
introduced an unbounded liability, in a sense. 

Miller's offer to the conference also used the chairman's 
mark formula, but went to a million acre-feet, down from 1.5 
million. Fazio's draft 

Chall: Was 800,000 acre-feet. 


Yardas : 




Yardas : 

Well, the original draft that I have here actually said, 
"Unallocated yield," with a certain definition, "plus up to 
700,000 acre- feet of other water." So there was sort of a lot of 
movement going on-- 

Yes, a lot of trading-off opportunities. 

Yes, a huge amount. And the farther we go into the process, the 
less and less I was involved directly, with one exception, in what 
was actually going on. Things got sort of more secretive, higher 
level negotiations. But I think it's important to note that the 
Miller offer to the conference was a million acre-foot bill and a 
$50 million Restoration Fund. And I believe that Fazio's offer 
was, as I said, essentially 700,000 acre-feet plus any unallocated 
yield, if any, that existed. And I think it was a $30 million 
Restoration Fund. 

By the way, one thing that I gave you but that I didn't mention 
explicitly, I think on the record anyway, was that along the way, 
we got a couple of Dave Schuster's memos, one of them being a 
critique of Somach-Graf f . The other one was a critique of Fazio's 
proposal. Supposedly his friend. And in both, he uses quite 
intemperate language to criticize efforts to reach common ground. 
Which in a way is too bad. Schuster has come around again 
somewhat since. I think he was distressed, is my personal view, 
at having been a central player in the contractors' original 
draft, and then kind of fading as a key player from then on, until 
he became an outside critic. And for those who are trying to make 
sense of it in the future, some of his criticisms, I suppose, are 
valid. But they're interesting to read, anyway. Those are 
private memoranda that somehow came to our hands, so they were 
kind of interesting. 

It's all part of the story. 

Since his stuff is going to be sealed for a while, we're going to 
have to go on what he put to paper. 

So anyway, Miller's offer to the conference set in motion a flurry 
of kind of activity over the next several weeks. 

The House and Senate conference committee met once? 
September 15? 

That was 

It was the Conference Committee, yes, and upon convening the 
conference, Chairman Miller put into play a document which was 
effectively a chairman's mark, a chairman's offer. I don't quite 
understand the rules, but for whatever reason, it was Miller's 


move to make the first move, maybe because H.R. 429 originated in 
the House, but all legislation originates in the House and then-- 

Graff: No, not all. Only appropriations bills always do. 
Chall: Unless it was just a courtesy. 

Yardas: That's right. In any case, he had the gavel, and he made the 

first move and set the tone of the debate. Everything after that 
was really horsetrading. If you ever get a chance to talk with 
Tom Jensen at length about this, I know that he was getting a 
large number of what he described as "Gwinn-grams." Roger Gwinn, 
who was Vic Fazio's chief staffer on this issue, was in constant 
contact with Jensen over the ensuing several weeks, because 
basically the Senate had to respond to the House offer in the 
conference. The Senate had to respond with a counter-offer. 
Either accept what the House had offered or push back. 

So there was this behind-the-scenes work with Fazio's staff 
basically talking to the Senate and saying, "If you can give us 
this, that will help a lot. And well, just one more thing. Oh, 
yes, well there's just one more thing," and this went on for quite 
some time. 

Chall: As Peltier says, it was a sausage-making enterprise. 

Yardas: Well, all legislation has been characterized that way. I suppose 
it's a matter of degree. 

Chall: Except there was never anything whole in any bill that was really 
being discussed here. There was Miller's draft, the mark or 
whatever it was that came in. I always assumed that conferences 
worked together, sat at a table and worked on the changes. But I 
understand from Barry Nelson that that didn't happen with this 
one. Maybe it doesn't, ever. 


Yardas : 

I think generally speaking, these things, with maybe a couple of 
exceptions, get hammered out by staff. Maybe there's one or two 
big issues where the conferees clash and they work it out. But I 
actually think that, although it's kind of a herky- jerky process, 
taking it over the course of two years, a lot of the concepts got 
hashed out pretty heavily by a lot of different people from a lot 
of different perspectives, and what came out is a compilation of a 

lot of different people's points of view, 
sausage if it's sausage at all. 

So it's pretty good 

It isn't something that just was never there? 
No. There's nothing-- 


Chall: Everything had already been considered. 

Yardas: Well, there were, as ever, many questions: how much "up front" 

water and how did that relate to this sort of unbounded liability, 
and was one constrained by the other? What size of fund? Was 
there an oversight mechanism or a trust or not? Was there an 
appropriations mechanism, the triggering mechanism for collection 
of charges? Whether or not escalation rates were part of the 
charges or not- -those sorts of deals were part of the end game 
negotiations. But I don't think at that point there were new 
ideas coming into play. It was really kind of a packaging 

And, I don't know. Jason will probably say he wasn't 
involved and didn't know what was going on, but I don't believe 
that that's true. At least indirectly, I know that there were 
intense negotiations that went on right at the very end. For 
example, over the San Joaquin River provisions and what those 
would look like. We were called in by Miller in part because of 
what had gone on with the historic compromise- - 

Chall: What compromise? 

Yardas: The historic compromise. 

Graff: We use that term because that's what the newspapers called it. 

Chall: Right, I know what you mean. Before we get into final passage 

could you tell me if groundwater management was ever considered in 
any of the reform bills and what became of the provision? 

Graff: No real groundwater management proposal ever was part of any of 
the bills. It was just one reform too many, I guess. Also, it 
really is a state matter. It's not a problem by any means limited 
to the CVP service area. 

The Final Hours Preparing the Bill 

Yardas: Back to the final bill. In part because of what had gone on with 
the so-called historic compromise, I think that when it got down 
to the eleventh hour- -one of the things that the environmental 
community was extremely upset about was the way that the San 
Joaquin River had essentially been written off or sacrificed as 
part of the compromise, at least in our reading of it. Somach- 
Graff articulated the idea of a study and additional charges 
imposed upon Friant division contractors until such time as water 


was put back into the river. The final negotiations really were 
over some of the details of that provision. For example, that's 
when the words "reasonable, prudent, and feasible" showed up. 

Those negotiations were formally between Beard and Jensen. 
Well, that's not really accurate. They were conducting 
negotiations by telephone at this point. I was over in a room 
next to the House committee staff offices, along with Barry Nelson 
of Share the Water and David Behar, who had been the early, I 
guess, convener of Share the Water with the Bay Institute. The 
three of us were kind of the sounding board. Beard would come 
out, and Lawrence was there, and Miller was there from time to 
time. This was like two in the morning or something on the final 
day, asking us, "What do you think of this?" And then Beard would 
call Jensen back. 

Jensen, meanwhile, was negotiating--! thinkwith Wallop's 
staff, and they were probably talking with Somach, who was 
probably talking with Peltier. So this thing-- Meanwhile, we're 
making calls back East late at night, checking in with people, so 
I don't know how-- 

Graff: Back West. 

Yardas: Yes, back West, --how far the net went, but there was involvement 
and consultation by a lot of different people. You hear that now, 
because everyone in these public meetings says, "Well, I was 
involved in writing that provision, and I know." [laughter] So 
there's a lot of authors, or none, depending on where you are. 

Chall: Well, there were a lot of conference calls in those days. 
Yardas: Absolutely. 

Chall: Where in all these last negotiations were Senator Johnston and/or 
his staff? 

Yardas: I don't know about Senator Johnston, I personally was over on the 
House side, but I do know that Jensen was on point as Senate 
Energy Committee counsel, and in close contact with Senator 
Bradley throughout . 

Chall: Peltier has discussed conference calls, whether they were at that 
final stage or not I don't recall. I think he did feel that Fazio 
and Wallop were essential. Wallop I guess was coming to them and 
saying, "You've got to give up a certain amount of water." Which 
I guess they had to do. They felt that they were being squeezed 




Yardas : 

Well, they always wanted to solve 
before, enough water to pour the 
one, they knew that that was not 
this debate was trying to come up 
would actually provide some, what 
fish and wildlife. The idea was, 
trouble we were having, you first 
And even if you thought that the 
all and end-all, those were going 

this problem with, as I said 
cement but no more. From day 
going to fly with us. A lot of 
with some kind of formula that 
we called "upfront" water to 
if you wanted to get beyond the 
had to stop the hemorrhaging . 
structural measures were the be- 
to take years to put into place. 

So the only thing you could do right off the top was to 
improve the in-stream habitat conditions, and that would mean some 
water when it was needed. The CVP is overcommitted, so there was 
really only one way to get thereone substantive way, and a lot 
of different formulas about how to try and make that happen. 

Anyway, those negotiations is where the million that Miller 
put into play ended up being reduced to 800,000. We were not able 
to increase the money above the $50 million that was originally 
put in, although that $50 million was better than anything that 
we'd achieved until that date, with the exception of the Somach- 
Graff proposal. 

So I'm not quite sure what else to say about the final 
product . I remember one other event that was a Share the Water 
event, where we were allwe met at EDF in D.C., and you [Tom] 
were on a conference call that we had. I'm trying to remember 
whether we were discussing the Miller proposal at that time, or a 
pending conference offer, I don't remember what the-- 

Yes. I don't remember details. I remember getting calls from you 
about, "Should we give ground on this little bit of language or 
thatwhat about the cutback to 600,000 acre-feet in dry years?" 
Those kinds of questions. Mostly I think I said, "You're there, 
you make the judgments." I remember feeling somewhat detached 
because I was here, and I'd had my day in the sun in June and in 
July. I was sort of happy not to be back there, and letting you 
work on the final bill. 

This was a period when I went back for a four- or five-day trip; 
we've done a lot of those. I think I had actually scheduled two 
trips back or something during that last month, but ended up 
staying for a little more than three weeks solid, just luckily had 
friends who I could stay with back there, because our travel 
budget was gone by then. 

Chall: So this was all going on between September and October? 


Yardas: Between September 15 and October 3. I believe October 3 was the 

final--! don't know when the final vote was. I actually then came 
back here before they had finished all of the parliamentary stuff, 
and a few other modest changes, as I recall, did take place 
thereafter. But the essential deal was cut late in the evening on 
October 3. That's when things got wound up. 

The Votes in the House and Senate 

Chall: Were you generally satisfied with what came out? 

Yardas: I was exhausted. [laughter] And I was in the worst mood. I was 
tired and cantankerous- - 

Chall: I don't know how people stand this, actually. 
Yardas: Satisfied? Yes. It was-- 
Chall: Quite an achievement. 

Yardas: We still had to get throughwe weren't really satisfied until we 
had a signature. And there's more to that story as well. But no, 
of course. And we still had, even when we'd reached this 
agreement in the conference, then we still had to go back and vote 
in the respective houses. And there was Seymour's filibuster and 
whatnot . 

Graff: And there was sort of this mini-House filibuster, too, where the 
various California Democrats, including, among others, [Leon] 
Panetta and [Norman] Mineta, delayed a vote over the weekend. 

Chall: I didn't know about that. 

Graff: They were trying to stall, and make the bill die before the end of 
the session. Miller was putting the heat on to get the floor time 
and the vote. I'm sure there were lots of shenanigans, or not 
shenanigans but conversations between Miller and the House 
leadership about when the bill could be given the floor time. The 
longer it took in the Housethis came up in the end of the 
session, just as in '94, when the Republicans managed to stymie 
almost everything using these kinds of delays, including House 

But the Seymour filibuster, as it turned out, was 
unsuccessful, and it was mainly I think because his Republican 
colleagues were not going to support him. They were going to 


embarrass him even more by probably getting a cloture petition 
signed in twenty minutes. 

Chall: They wanted a bill. 

Graff: Well, A, they wanted the bill, but B, they wanted to get out of 

there and campaign. Jake Garn, as you know, had more chits among 
his colleagues to call in than Seymour did. And Wallop was 
helping Garn. He was trying to help the growers, but he was also 
helping Garn get a bill. And Wallop had some of his own 
provisions in there too. 

Chall: That's right. 

Graff: These are the conferees [shows Chall list of House conferees on 

the bill]. As you can see, there were many of them, for different 
titles, different conferees. They go on for a page and a half 

Chall: Okay. 

President Bush Signs H.R. 429. the Reclamation Projects 
Authorization Act of 1992: The Omnibus Water Bill 

Graff: One other thing: I don't know if we need more on the September 

period, but in the efforts to get the president to sign the bill, 
aside from the other western states wanting the bill passed, my 
view is that the key lobbying support came from the business 
community. There was apparently a board meeting of Transamerica 
that included such notables as Peter Ueberroth and Condoleeza Rice 
and I'm not sure who else, but they broke from the board meeting, 
or interrupted the board meeting, and all got on telephones and 
called Jim Baker and Richard Darman and Bob Grady in OMB [Office 
of Management and Budget], and said, "This is a bill that the 
president should sign." That's not ever been reported, to my 
knowledge . 

Chall: No. 

Graff: But it was not just that the president thought, "Yeah, this will 
help me in the other western states, and I've lost California," 
which is the common explanation. I think it was also that. 

On the other hand, Governor Wilson did his very utmost to get 
the president to veto, including, the story goes, twice flying 


East to meet with him to persuade him to veto it, and not getting 
a meeting. Once to Washington, once to Tennessee. 

Chall: And he didn't get a meeting? 

Graff: That's the scuttlebutt. Whether that's true or not, I don't know. 
He eventually got a phone call. 

Yardas: I have to go. I had scheduled a one o'clock meeting. 

Chall: Oh, it's already after one. Well, we'll just get the last here 
with the filibuster. Where were you? 

Yardas: We were all back here at that point. I basically punched out. We 
did letter-writing, and there were a lot of questions from OMB 
that came over during that period, trying to put together the 
internal analyses that would make the case for the bill. We 
actually had a lot of sympathy from within the administration. 

Graff: Yes, including OMB most particularly. 
Chall: Really? That's Darman? 

Graff: It was really Grady. Bob Grady was the deputy at OMB, and he's 
now an EOF board member. 

Yardas: A lot of people thought that the formula we basically articulated 
was right. There was a lot of pressure on the president. But 
these were people who now were being asked to probably provide 
one- or two-page summary memos and give their advice or counsel on 
various aspects of the bill that they'd never looked at before, 
and there were two years of history behind all of it. So we spent 
a lot of time in that last month trying to explain our positions 
and why, and how this had come about, or respond to particular 
questions. I don't even remember all of that, other than that it 
went on. It seemed to go on for an endless period of time. 

Graff: And the actual signing statement that Bush signed has caveats in 
it. I don't know if you know that. 1 

Chall: No, I haven't seen it. 

Graff: That's worth having as part of the record. In fact, I can make a 
copy for you after we're done. I can't remember what they all 
were, but as part of the concession to the other side, the 
president tried to put his spin on what the bill meant. 

'See Appendix C. 


Chall: [To Yardas] Thank you very much for your help. 

Yardas: Oh, sure, my pleasurethank you. I wish that I could have 

actually been a little more substantive in filling in the details, 
[Yardas leaves] 

Chall: [tape interruption] I think we know what happened to get the 
president's signature. But you said you have his caveat? 

Graff: Yes, the signing statement. 

Chall: Have you any idea who were the eight people, aside from Seymour, 
who voted nay. It passed eighty-three to eight, and I've never 
been able to find out who the eight were. You might know. 

Graff: Yes, I think it's just in the record here. 

Chall: I'm sure it is. I just haven't gone through the record. 

Graff: Does it say which day they voted? 

Chall: It's October 8, I think. 

Graff: Eighth is the Senate? 

Chall: Yes. 

Graff: Well, I'll look for it. 1 

Analyzing the Viewpoints of the Agricultural Community Toward the 
Environmental Community 

Chall: Now, it's been claimed that this was a violently, virulently anti- 
agricultural measure. Peltier feels that you all felt that 
agriculture was the enemy, and that your side was abusive. How do 
you respond to that? 

Graff: I don't agree. On the substance of the bill I don't agree, and I 
don't even agree on the psychology. On the substance, I think, 
the right to transfer and the contract renewal provisions were 
major pluses from agriculture's point of view. This is a public 
resource, and over the course of the, what, fifty, sixty years 

'Hank Brown, William Cohen, Larry Craig, Nancy Kassebaum, Warren 
Rudman, John Seymour, Robert Smith, Strom Thurmond. 


that the CVP has been either authorized or in existence, public 
attitudes towards how water should be managed and what the various 
purposes are that it should go to have changed. If one were 
starting totally new, I doubt if you would say 90-plus percent of 
the water in the CVP should go to agriculture, some of the uses of 
which are quite marginal economically, and only a fraction to 
urban and environment. And yet, major concessions were made to 
agriculture in this new, essential reauthorization of the CVP, 
where they still get most of the water at highly subsidized 
prices. They get the right to sell it, and they get it for a long 
period of time. 

Now, true, they had to give upsome of it's going to 
eventually move out of agriculture into urban use or non-CVP 
service area use, and some of it was in different ways transferred 
to the environment, and it's going to cost more. But I think 
those were fair compromises, and agriculture came out well, when 
all is said and done. 

In terms of the way the different interests perceive one 
another, as you'll see in some of the letters that I wrote, I 
tried, particularly in that last set of letters in August in 
communication with Miller in particular and others, to say, "We've 
got to live with these guys afterwards, as well as get the best 
possible bill while we're doing it. So there's some value in 
including them and not making it a roll- 'em strategy," as the 
terminology in use at the time was. That's less Miller's style 
than it is my style, so he had to get the bill passed, and there 
was major opposition. People get angry at each other when that 

But we had a meeting herethis is late 1994 of what we now 
call the CVP Restoration Fund Roundtable. It includes 
agricultural interest, urban interests, power interests, business 
interests, environmental interests of various kinds, all of whom 
are trying to make the Restoration Fund and the monies work to the 
benefit of all. And Jason was there, and all the representatives 
of MWD were there, and representatives of various other 
constituencies were there, like the Sacramento Municipal Utilities 
District and the Bank of America. And we're all working together. 
Now, we're still fighting with each other on other fronts. The 
800,000 acre-foot fishery allocation is a contentious issue, and 
so on. 

But I guess--! don't know. I think that agriculture felt at 
the time quite beleaguered, and maybe still feels somewhat 
beleaguered. Maybe if you check in with me in two years, after 
the Gingrich revolution has taken its course, I'll feel 
beleaguered, I don't know. But on the whole, I would take issue 


with Jason's characterization, although it's not totally wrong. A 
lot of harsh words were said and hard battles were fought. That's 
I guess the way this public policy world is--at least in America 
we don't kill each other over it. Mostly. 

Chall: There is a perception, too, that you care--you, Graff, care more 
about marketing than about the environment. 

Graff: I don't know. On a personal level, I've always thought marketing 
was a way to bridge gaps among these constituencies, both 
substantively and politically, and I've put a lot of energy and 
time into it, so I suppose I have sort of a personal affinity for 
the concept that goes beyond just kind of a rational approach. 
But both practically and morally, my job is to protect the 
environment. That's what the organization says I'm supposed to 
do, and marketing ultimately is a mechanism to help do that, not a 

What my real motives are, who knows? I don't even know. 

An Optimistic View of the Future of the CVPIA 

Chall: If the ESA is amended, and it could be amended this year or even 
wiped out, couldn't it? Endangered Species Act. What will that 
do to the CVPIA, or portions of it? 

Graff: Well, I don't know. I don't think it would do much directly to 
the CVPIA. It might change somewhat practically how allocations 
get made in the project. One of the things we really haven't 
talked about that has transpired since the CVPIA passed are 
lawsuits to undo one or more of its provisions, and there are 
lawsuits now that are attacking both parts of the CVPIA and of the 
Endangered Species Act. How those will turn out is unclear. But 
I'm pretty much an optimist. One of the key elements of the CVPIA 
was to make the environment a CVP contractor in effect. I think 
grudgingly maybe, but increasingly, the more sensible 
representatives of CVP agriculture, of the other contractors, are 
accepting the environment as a part of doing business. 

So even if Clinton and Dan Beard and others , who are 
perceived as sort of tilting to the environment, pass from the 
scene, as they will sooner or later, some of the change is 
structural, it's not just personalities. It isn't just that 
George Miller and Bill Bradley were in the right place at the 
right time, it's that public attitudes have changed. 


Now, public attitudes could shift back. And maybe they have. 
Maybe property rights in some sense are more important than 
endangered species in many people's view. One thing I've always 
wondered about: whose property is water? That's a very 
complicated concept. The answer to that is very complicated. But 
maybe we'll need to wait for another interview some day to get 
into that whole area. 

Transcribed and Final Typed by Shannon Page 


TAPE GUIDE- -Graff and Yardas 

Interview 1: October 10, 1994 

Tape 1, Side A 

Tape 1, Side B 

Tape 2, Side A 

Tape 2, Side B 

Interview 2: November 16, 1994 

Tape 3, 
Tape 3, 
Tape 4, 
Tape 4, 
Tape 5, 
Tape 5, 

Side A 
Side B 
Side A 
Side B 
Side A 
Side B 





APPENDICESThomas J. Graff and David R. Yardas 

A. Yardas-Garrison letter re. H.R. 3613, Sept. 6, 1990 117 

B. Tom Graff memo to Dan Beard and John Lawrence re. CVP: 

water policy reform, Feb. 10, 1992 123 

C. President George Bush statement re. signing H.R. 429, the 

Omnibus Water Bill, Oct. 30, 1992 128 


Appendix A 

Yardas-Garrison letter re HR361 


Rockridcc Market Hall 
5655 College Avenue 
Oakland. CA 94618 
(415) 658-S008 
(415) 65S-0630 FAX 

September 6, 1990 

National Headquarters 
257 Park Avenue South 
New York, NY 10010 
(212) 505-2100 
1616 P Street, N\V 
Washington. DC 20036 
(202) 387-3500 
1405 Arapahoe Avenue 
Boulder, CO 80302 
(303) 440-4901 
1103 East Main Street 
Richmond, VA 23219 
(804) 780-1297 

128 East Hargctt Street 
Raleigh, NC 27601 
(919) 821-7793 

Charlene Dougherty 
Subcommittee on Water, Power, 
. and Offshore Energy Resources 

House Committee on Interior and Insular Affairs 
1522 Longworth Building 
Washington, D.C. 20515 

Re: Contract Renewal Limitations, H.R. 3613 
Dear Charlene: 

This letter raises for discussion a set of possible 
alternatives to the Central Valley Project (CVP) contract 
renewal limitations currently set forth in H.R. 3613, the 
California Fish and Wildlife Protection Act of 1990. (See 
Interior Committee version dated July 25, 1990.) We offer 
this discussion for two principal reasons: 

(1) The Act, as presently amended, may allow for 
increased CVP commitments (new contracts for allegedly 
unallocated yield) within three years of the date of 
enactment. Yet additional commitments would impact both 
existing water users and, to a much greater extent, the 
Central Valley's already-overburdened fish and wildlife 
resources. In our view, both common sense and sound 
public policy demand that (a) additional CVP commitments 
be avoided until the Act's goals and objectives have been 
met, and (b) future consumptive-use demands be satisfied 
through the reallocation of waters currently in use under 
both appropriative and contractual entitlements. 

(2) Opponents of H.R. 3613 have expressed primary 
concern over the contract renewal limitation section. 
They claim, for example, that the current limitations 
might affect the ability of existing CVP contractors to 
secure long-term funding (loans) for needed infrastructure 
improvements. While such claims have yet to be 
substantiated, we are willing to explore alternative 
approaches as discussed below in order to broaden support 
for the Act and ensure its enactment for the protection 
and enhancement of fish and wildlife resources. 

Taking these points into account, it is our belief 
that the Act can be strengthened, and the interests of 
fish, wildlife, and both existing and prospective CVP 
water users reconciled, if two major concepts are 

Rrotkd Pjp, 


Charlene Dougherty 
September 6, 1990 
Page 2 

implemented. First, no new contracts for as-yet unallocated CVP supplies 
even contracts limited to a single year in length should be permitted until 
the Act's fish and wildlife objectives have been achieved. Second, future 
consumptive "needs" should be satisfied through voluntary reallocations under 
existing rights and contracts, with reallocation opportunities, ongoing 
renewal limitations, and associated concerns addressed at the time of contract 

The following paragraphs provide a number of specific suggestions and 
amendments that would begin to implement the conceptual approach outlined 
above. We would emphasize that these suggestions should be read as a package 
of interlocking commitments: firm prohibitions against new CVP contracts are 
the foundation upon which all of these contract renewal alternatives depend. 
Absent such assurances, we would recommend a return to the Act's previous one- 
year limit on both new and renewed contracts until its substantive fish and 
wildlife objectives have been met. 

NEW CONTRACTS In its present form, the language of subsection 406(a)(l) 
is somewhat ambiguous. At odds are (1) a one-year limitation on new 
contracts pending attainment of the Act's goals and objectives, and (2) the 
apparent release of that limitation only a year after the Commission on 
Central Valley Fish and Wildlife Restoration (section 301) has submitted its 
recommendations to the Congress (section 302). Because what ultimately 
matters is fulfillment of the Act's substantive requirements, and because of 
our concerns over increased CVP commitments, we recommend that section 
406(a)(l) be re-written substantially as follows: 

Section 406(a)(l) NEW CONTRACTS. The Secretary may not enter into any 
new repayment or water supply contract for the delivery of water from the 
Central Valley Project, nor enter into any new [Warren Act] contract for 
the use of Central Valley Project facilities, until the requirements of 
subsection 406(b) have been met; provided, that such restrictions shall 
not apply to new contracts which, in the opinion of the U.S. Fish and 
Wildlife Service, result in a significant increase in net fish and 
wildlife benefits in furtherance of the goals and objectives of this 
Act; and provided further that nothing in this Act is intended or shall 
be construed to preclude the Secretary from entering into new contracts 
for the marketing of unallocated water supplies of the Central Valley 
Project after the goals and objectives of this Act have been met. 

(Note that this section also incorporates the provisions of section 409.) 

RENEWED CONTRACTS If firm assurances prohibiting the marketing of 
unallocated CVP supplies were provided, a number of contract renewal 
limitation alternatives could be considered. These alternatives would be 
structured in such a way as to ensure attainment of the Act's fish and 
wildlife objectives, address the concerns of existing CVP water users, and 


Charlene Dougherty 
September 6, 1990 
Page 3 

facilitate voluntary reallocations to prospective CVP contractors. The 
following potential amendments, together with those offered for section 
406(a)(l) above, would begin to meet these diverse objectives: 

Section 406(a)(2) RENEWED CONTRACTS. The Secretary may not renew any 
existing repayment or water supply contract for the delivery of water 
from the Central Valley Project, nor renew any existing [Warren Act] 
contract for the use of Central Valley Project facilities, for any period 
over one year in duration until the requirements of subsection 406 (b) 
have been met; provided, however, that the Secretary may enter into such 
renewal contracts for periods not to exceed ten years in length if the 
following terms and conditions have been met: 

(A) At least ten percent of the water under the subject contract on 
the date of enactment of this Act, plus an additional one percent 
for each year or portion thereof that the renewal contract is 
extended beyond one year in length, is dedicated for use by the 
Secretary for fish and wildlife purposes in furtherance of the Act's 
goals and objectives; 

(B) The renewal contract authorizes the subsequent transfer of 
contract water, whether by sale, lease, exchange, donation, or other 
means, to other CVP contractors, to fish and wildlife interests, and 
to other persons or entities who are or may be authorized to use CVP 
water for existing Project purposes or for the [amended] purposes 
authorized in Section 405 of this Act; provided, that the renewal 
contract further provides that no transfers shall be made in excess 
of the average annual quantity of CVP water actually delivered to 
the contracting district or agency between 1981 and the date of 
enactment of this Act; 

(C) The renewal contract authorizes individual sub-contractors or 
water users within the contracting district or agency to act as 
their own agents in effecting transfers to entities outside district 
or agency boundaries, and further provides that a proposed transfer 
by such subcontractor or water user shall be viewed as "mutually 
satisfactory" in accordance with the provisions of California Water 
Code Section 383 (c), if: 

(i) costs to the district or agency, or to other subcontractors 
or water users within the boundaries of the district or agency, 
do not increase as a consequence of the transfer; and 

(ii) the sub-contractor or water user agrees to forgo an 
equivalent amount of Project water deliveries, including 
conveyance losses, to which it would otherwise have been 
entitled throughout the term of the transfer; 


Charlene Dougherty 
September 6, 1990 
Page 4 

(D) The contracting district or agency commits to the installation 
of volumetric water meters on all existing irrigation groundwater 
pumps within its boundaries within five years of the date of 
contract renewal, and on any new irrigation groundwater pump 
installed within its boundaries on or after the date of contract 
renewal ; and 

(E) The contracting district or agency: 

(i) has demonstrated its authority, or has joined an 
appropriate regional entity which has the authority, to 
undertake such actions as may be needed to ensure that surface 
and subsurface agricultural drainage discharges generated 
within its boundaries meet all applicable state and federal 
water quality objectives and standards; and 

(ii) commits to a program, on its own or as a member of an 
appropriate regional entity, through which surface and 
subsurface agricultural drainage discharges generated within 
its boundaries will meet all applicable state and federal water 
quality objectives and standards. 

The renewal contract shall also specify that if the district, 
agency, or appropriate regional entity fails to meet all of the 
commitments specified under subsection (ii) of this section at 
anytime during the contract renewal period, the renewal contract 
shall terminate at the end of that year and shall not again be 
renewed for periods of more than one year in duration until the 
district, agency, or appropriate regional entity can demonstrate 
that such commitments have been, are being, and will continue to be 
met. The provisions of this subsection shall be in addition to any 
and all requirements, remedies, and sanctions which are otherwise 
provided under state and federal law. 

In exercising his discretion under Section 202 (d) (3), the Secretary shall 
take into account the extent to which the provisions of subsections (A) 
through (E) of this section have been met. 

OTHER PROVISIONS In order to increase the effectiveness of the above 
suggestions, and to further ensure attainment of its fish and wildlife 
objectives, we also recommend that the Act be amended to: 

o require water conservation and water management improvements 

substantially in accordance with amendments to Section 401 as suggested by the 
National Wildlife Federation by letter of July 17, 1990 and as summarized by 
attachment to this letter; 


Charlene Dougherty 
September 6, 1990 
Page 5 

(Note: the preceding conservation requirements should take into account 
the renewal limitation alternatives outlined above, and should be designed to 
assist renewal contractors in efforts to meet both required and voluntary 
reallocations under this Act. ) 

o prohibit transfers of CVP water that would result in increased net 
diversions or depletions from the Sacramento/San Joaquin Delta, unless it can 
be shown that such transfers will result in significant increases in net 
benefits to fish and wildlife resources which utilize or otherwise depend upon 
the Delta in furtherance of the goals and objectives of this Act; 

o ensure that no transfer of CVP water will frustrate, and that all 
transfers of CVP water shall be consistent with, attainment of the Act's fish 
and wildlife objectives; 

o authorize the use of CVP facilities for the transport and storage of 
conserved and transferred water for fish and wildlife purposes in furtherance 
of the Act's fish and wildlife objectives; 

o establish a Central Valley Project Restoration Bank to provide 
carryover storage of conserved, transferred, and "surplus" [unallocated and 
interim] Project water, together with provisions which authorize the 
Secretary, in consultation with the State, the Commission, and other 
interested parties, to establish rules and regulations and to enter into 
agreements to operate the Restoration Bank in furtherance of the goals and 
objectives of this Act (and for other authorized purposes which are consistent 
therewith); and 

o authorize the delivery of transferred CVP water to entities outside 
existing CVP service area boundaries, provided that such deliveries and 
transfers meet all of the criteria and limitations outlined above; and- 

By design and intent, the above suggestions offer existing CVP water 
users and contractors the certainty they seek regarding future water supplies 
under renewed CVP contracts. Also featured are the components of a system of 
locally-controlled, incentive-driven water transfers which seek to minimize 
regulatory interference and maximize local reallocation benefits while 
nonetheless ensuring that needed reallocations can and will occur. These 
alternatives are made possible by the inclusion of certain minimum assurances 
regarding the protection and enhancement of Central Valley fish and wildlife 
resources at the time of contract renewal, and the fundamental avoidance of 
increased CVP commitments prior to attainment of the Act's goals and 

We hope, in sum, that the above suggestions will help to strengthen the 
California Fish and wildlife Protection Act as presently amended. We look 
forward to working with Congressman Miller and with other members of the 
Congress in the weeks ahead to realize the California Fish and Wildlife 
Protection Act's considerable promise. 


Charlene Dougherty 
September 6, 1990 
Page 6 

Sincerely yours, 

David Yardas Karen Garrison 

Environmental Defense Fund Natural Resources Defense Council 


Tom Graff Memo to Dan Beai'd an< 
John Lawrence re CVP: water po! 


Rockridge Market Hall 
5655 College Avenue 
Oakland, CA 94618 
(510) 658-8008 
(510) 658-0630 FAX 

February 10, 1992 

TO: Dan Beard and John Lawrence 
FROM: Tom Graff 

RE: CVP: water policy reform 

National Headquarters 
257 Park Avenue South 
New York, NY 10010 
(212) 505-2100 

1616 P Street, NW 
Washington, DC 20036 
(202) 387-3500 

1405 A rap a hoe Avenue 
Boulder, CO 80302 
(303) 440-4901 

1108 East Main Street 
Richmond, VA 23219 
(804) 780-1297 

128 East Hargett Street 
Raleigh, NC 27601 
(919) 821-7793 

1800 Guadalupe 
Austin, TX 78701 
(512) 478-5161 

Both of you last: week asked me to write a 
memorandum setting out some of EDF's views on CVP water 
policy reform, with a particular focus on how water 
marketing might fit in to a progressive piece of federal 
legislation. This memorandum is an attempt to respond 
to these requests. I hope you both, as well as 
Congressman Miller, will consider it the beginning of a 
dialogue. I expect that you will have questions. I 
hope that you will respond critically and that you will 
entertain the idea of some back-and-forth critique that 
might sharpen options to meet a range of important 

I begin with the assumption that you share three 
principal goals in formulating federal water policy. 
Certainly, Congressman Miller's record in Congress 
reflects these goals. One is the protection of the 
natural environment. Two is a concern for equity, 
including assurance that project beneficiaries are 
paying something approaching the cost of serving them 
water. Three is a notion that 'current water needs, both 
consumptive and non-consumptive, throughout the state 
should be addressed by a modern federal water policy 
(existing plumbing permitting) and that the expiration 
of old CVP contracts provides an opportunity for 
Congress to prompt some reallocation both of the CVP's 
water supply and of the responsibilities to meet 
increasingly ambitious environmental objectives. 

I believe water marketing can potentially be an 
important tool to help meet all three of these 
objectives. Properly applied (and limited) it also can 
meet a number of secondary objectives, including a key 
objective of all water users, namely the long-term 
certainty of their water supply. 

I00* Recycled Pipft 


Dan Beard and John Lawrence 
February 10, 1992 
Page 2 

Protecting the Environment. Allowing the free exchange of long-term 
water rights, including federal water contract rights, has the obvious 
environmental benefit of reducing the demand for new environmentally 
destructive conventional water projects. As long as the price of purchased 
water remains below the cost of building a new project, which is likely to 
be for many years, a commitment to water marketing protects the environment 
from incremental damage. A more complex issue is whether a water marketing 
policy can be developed that restores or enhances environmental values 
which are degraded by current water management policies. It may be that 
these mitigation/restoration/enhancement objectives can be achieved through 
more direct means, by legislation, regulation and/or court action mandating 
their implementation. Certainly, environmentalists will continue to pursue 
all these avenues aggressively, including in the pending legislation. For 
various reasons, however, we may not be able to get all we want by such 
mandatory (and probably uncompensated) real location. To some extent, 
therefore, we may need to rely on environmental water purchases to fill out 
our projected future environmental water portfolio. I- will return to this 
point later. 

Taxpayer Equity. If there is one cause with which Congressman George 
Miller has been most closely identified over the last 18 years it is the 
cause of fighting taxpayer rip-off s in federal water programs, particularly 
by large corporate agribusiness concerns. As you know, there have been a 
number of modest successes in the long campaign to bring some fairness and 
economic rationality to BuRec policy. Full and current recovery of 
operation and maintenance costs is now mandated by law. Larger farms than 
960 acres are by law required to pay full cost for their water. On the 
whole, however, federal water project beneficiaries still get a great deal. 
Agricultural users legally still pay no interest and have long amortization 
periods in their repayment of project capital costs. And abuses persist 
among large farms who have claimed to comply with the 960-acre limitation. 

Giving the beneficiaries of these historic . ( legal and illegal ) 
subsidies an additional windfall rankles. 

I would nevertheless argue that the environmental and economic 
benefits of the free transfer of federal water contract rights is worth the 
resulting (inequitable) benefit contract right holders would thereby 

Fortunately, however, there are policies available to Congress that 
capture most of the benefits of water marketing, yet which also reduce (but 
do not eliminate) the windfall to existing contract right holders. I see 
three major options. One is to reduce the subsidies received by the 
existing beneficiaries by reducing the amount of water for which they may 
contract upon expiration of their existing contracts. Two is to reduce 
those subsidies by increasing the price of the water they buy upon contract 
expiration. Three is to recapture some of the gains implied in a transfer 
of a federal water contract right by means of a transfer tax. 


Dan Beard and John Lawrence 
February 10, 1992 
Page 3 

The last of these policies, of course, contains a built-in 
disincentive to transfers. The higher the transfer tax imposed, the fewer 
transfers will take place, and also likely the higher the price of 
transferred water. (This may not be a major problem for prospective urban 
buyers, it could be a major problem for prospective agricultural or 
environmental buyers, unless they were exempted from the tax.) With the 
number, sale and location of transfers uncertain, the level of 
environmental benefit from a transfer tax would also be uncertain. I would 
argue therefore that, to the extent it is politically feasible to do so, 
protection of the taxpayers' interest be accomplished at the time of 
contract renewal, not when contract water is later transferred. 

From a strictly environmental perspective, the ideal policy is 
probably a water take-back at the time of contract expiration. This 
reduces the subsidy received by the project beneficiaries, although it does 
not directly enhance the U.S. Treasury. But it may provide additional water 
for the environment. Alternatively, some or all of the recaptured water 
may be sold to those willing to pay more for the water than the existing 
beneficiaries. In essence, under this latter scenario, the taxpayers 
capture the economic "rents" in the reallocation of water from lower to 
higher valued uses. Conceptually, this is what was attempted in the realm 
of power contracts at the time of the Hoover bill and the "Boxer Rebellion" 
in 1984. It appears to me to be legal, despite the "taking" argument 
others may raise against it. Congress seems to me to have retained the 
power to change contracts upon their expiration; hence, no 
Constitutionally-protected property right is infringed by a "take-back." 
But the political feasibility of this approach is questionable (I know it's 
been eight years since Hoover and the times and circumstances are 
different, so I may not be right about this) and the equitable expectations 
of the existing beneficiaries may deserve some weight. 

This leaves the third and from my point -of -view the most desirable 
option: don't "take back* the water, at least in an obvious way; rather, 
increase its price. This reduces the subsidy to the beneficiaries. This 
also increases the return to the taxpayer, and, Budget Reconciliation Act 
permitting, it potentially creates a revenue stream that can be used for 
environmental water purchases or other environmental improvements. 
Moreover, once these equitable and environmental objectives have been 
achieved, the contractor is then free to sell his (her) water at a profit, 
albeit a lesser profit. Mo transfer tax need be required under these 
circumstances; hence no disincentive to transfers. In fact, the higher 
price of water to the existing beneficiary may even impel him to consider a 
transfer more actively. 

A variation on this option is to increase the price of contract water 
on an increasing block basis. Thus the historic large subsidies might be 
maintained for some of a particular contractor's water, but as the contract 
approached the historic contract amount the price would rise, perhaps to a 


Dan Beard and John Lawrence 
February 10, 1992 
Page 4 

full cost rate, perhaps to some kind of State Water Project equivalent 
rate, and ultimately perhaps to some other rate that discourages use on any 
field crop like rice, cotton, or alfalfa. Under an increasing block tiered 
pricing scenario, upon contract renewal a contractor might choose either to 
pay or not to pay for some or all of the water in its tail block. To the 
extent a choice was made not to pay and therefore to forego purchase of 
some water, the effects would be similar to the "take-back" option 
described above. To the extent the contractor agreed to pay the higher 
prices, the effects would not differ from the general higher price scenario 
just described. 

From the contractor's point-of-view the fact of having a choice 
whether to pay or not is likely to be at least somewhat preferable to 
having no choice at all under the take-back option. Whether this renders 
the proposal politically feasible, I don't know, but I hope so. I do think 
it is preferable overall to the proposal in S. 484 to vary the amount of 
the "take-back" inversely to the length of the renewal contract term. 

Serving the Whole State. There are many reasons to open the CVP to 
all those parties of the state which can be reached by its existing water 
plumbing system. The environmental benefits of displacing new project 
demand have already been noted. Another benefit which is not necessarily 
sufficiently appreciated by those who would be beneficiaries of such a 
change in federal policy is that they have resources, principally 
financial, which creative legislation might employ to help solve some of 
the environmental problems caused by the CVP (and by others) and which are 
beyond the capability and/or willingness of the CVP's existing contractors 
to remedy. The creation of a market in federal water would not only be a 
windfall to the existing beneficiaries. In a sense, it also is a windfall 
to potential future beneficiaries whose access to the project has 
previously be limited. Arguably if the whole (or at least most of the) 
state is going to acquire a new interest in the CVP's riches then it also 
should acquire an interest in the CVP's liabilities. 

One way to cause some of those liabilities to be met is a transfer 
tax. However, as noted above, transfer taxes are a disincentive to 
transfers and promoting fewer transfers is likely not in the environment's 
interest . 

An alternative way to meet some of these liabilities is to promote a 
general water use tax (perhaps statewide, perhaps better limited to areas 
potentially served by the CVP unless the state chooses voluntarily to 
expand its reach) which raises revenue to meet environmental objectives and 
which recaptures for public purposes some of the enhanced value given to 
those areas of the state not previously served by the project. 

Requiring such a broad-based use tax in federal law may be difficult. 
On the other hand, it is also the case that the CVP is not alone among 
water projects in California in having caused unmitigated environmental 


Dan Beard and John Lawrence 
February 10, 1992 
Page 5 

impacts. Expecting the CVP alone to solve the environmental problems of 
the Sacramento/San Joaquin/Bay /Delta system is unrealistic. Moreover, 
while the CVP, in at least a relative sense, is water-rich, the SWP is 
water-poor and cash-rich. It is the SWP's urban customers who are among 
the most anxious potential water buyers in the state. They should be able 
to afford significant financial contributions to the solution of the 
state's aquatic environmental problems, In exchange for the right of access 
not only to the CVP but to water locally appropriated and developed by 
others in the state. 

Conclusion. Exactly how we best access in particular the MWD's 
financial resources is unclear to me. One of the problems with the way in 
which the water negotiations of the last year (including both the 3-way and 
the more recent CVP-reform- inspired talks) have gone is that the 
environmental and the agricultural negotiators have only fleetingly had the 
chance to develop joint proposals in the absence of the urban negotiators. 
The opportunity may still exist in the House of Representatives, however, 
for Congressman Miller to collaborate with Congressmen Dooley, Lehman and 
Fazio to find a way to assure that urban interests, particularly southern 
California urban interests, make their fair contribution to the solution of 
the state's water woes. 

Loose Ends. There are still many. Not only do we have to brainstorm 
regarding a means to bring the resources of the state's urban water users 
to bear on the solution to the state's aquatic environmental problems, but 
major details in the rest of the program outlined in this memo need to be 
fleshed out. What is the best tiered pricing scheme? Should growers be 
allowed to sell water even if their district boards object? (I say yes.) 
How long should the renewed contracts be allowed to run? What happens at 
the end of the next renewal term? (I suggest both the contractors and any 
potential water transferees can negotiate whatever future deals they like, 
but Congress should specify that, at the end of the renewal term, however 
long it is, it will decide what to do with the CVP's water.) What 
mechanisms, if any, should be included to deal with the third-party 
impacts, including the environmental impacts, of proposed transfers? What 
is the best mechanism for reserving environmental water that will not be 
subject to contract at all? Is a different pricing scheme needed for the 
Friant system than for the "integrated" part of the CVP? Should special 
rules be set up for the west side drainage- impacted lands? Where, if 
anywhere, does mandatory conservation fit in? The list could go on, but I 
am going to stop here and send you this memo. If you tell me I'm way off 
base, all these questions become moot. If, however, you think this whole 
scheme is worth developing further, let me know, and I'll try to help with 

I do appreciate your solicitation of my views. I hope this has 
helped . 


Appendix C 

President George Bush statement 
128 re si gning H.R. 429 (Omnibus) 

Office of the Press Secretary 

For Immediate Release: October 30, 1992 

Statement by the Press Secretary 

Tile President today signed E.R. 429, the Reclamation 
Projects Authorization and Adjustment Act of 19S2. The bill 
passed both, houses of Congress by overwhelming nargins winning 
approval in the Senate by 83 to 8 and in the House by voice vote. 

The President noted that the final legislation approved by 
the House-senate conference committee differed in several 
important respects fros original Killer-Bradley bill (H.R. 5099) 
to which the President had previously stated his opposition. * The 
title of the final bill dealing with the Central Valley Project 
(CVP) in California was amended to reduce adverse iapacts on 
California agriculture that the original Miller-Bradley bill 
would have had. For example, the bill reduced the aiaount of 
water set aside for fish and wildlife froc 1.5 million acre-feet 
per year to 800,000 acre-feet per year, .eliminated a proposed 15 
percent capital gains tax en water sales by famers, included a 
provision vhich reduced the fish and wildlife set-aside by up to 
25 percent, in a dry year, and renoved provisions which would have 
allowed virtually unlimited citizen suits against faraers. 

The President stated that he nevertheless recains concerned 
about the potential effect of CVP provisions cf the bill on 
California agriculture. Tht President stated his intention "to 
seoic legislation in the next Congress that would help rectify any 
adverse impacts by adopting tha positive provisions of the 
legislation sponsored by Senator John SeyEour. 

On balance, the President stated that he is pleased to sign 
legislation which provides significant economic and environmental 
benefits throughout the western United States. The bill includes 
authorization of or provisions related to several projects which 
the Administration has long favored, including the Buffalo Bill 
Das in Wyoming, the Central Utah Project, the Lead villa Tunnel 
treatment plant in Colorado, the Cedar Bluff Project in Kansas, 
and projects in other states. The bill also provides for the 
establishment of a voluntary system cf water transfers of CVP 
water on a voluntary basis that represents an important 
innovation in the development of narhet-orientod water policy. 


Office" of the Press Secretary 

?or Immediate Release October 30 , 19 S 2 


Today I am signing into law 'E.R. 429, the "Reclamation 
Projects Authorization and Adjustment Act of 1392." 

- The Act vill make a major contribution to the development 
and reform cf water resources in states throughout the West. 
It is the product of years of debate and compromise in the 
Congress. This bill will provide" substantial economic 
and environmental benefits throughout the West. 

K,R. 42S authorizes numerous water projects in the western 
States that the Administration has supported.' Included among 
the projects in the bill are the Buffalo Bill Dam and Reservoir 
in Wyoming; the Cantral Utah Project; South- Dakota water 
planning studies; the Cedar Bluff 'Unit in Kansas; the Verne jo 
and Elephant Butte Projects in New Mexico; the Glen Canyon Dam 
. affecting the Grand canyon in Arizona; the Sunnyside Valley 
Irrigation District in Washington; tha Platcro Dam. and Reservoir 
and the Leadville. Mine Drainage Tunnel in Colorado; the Mountain 
Park Project in Oklahoma; and the central Valley Project "in 

Several of the provisions that substantially reform the 
operation of the Central Valley Project in California, are less 
flexible and more intrusive on\the rights of the State 
of California and current project beneficiaries than I would 
have preferred. Nevertheless, the final bill include* several 
substantial modifications to the original Eouse-paosed version. 
These modifications will ensure that the fish and wildlife 
objectives of the legislation can be met in a manner that 
maintains the viability of othar important uses to which CVP 
water is now devoted. Moreover, by establishing a voluntary 
system of water transfers on a willing seller basis 
H.R. 429 presents an important opportunity to increase the 
availability of water for use* vhlch will best accommodate 
California's growth. A market-oriented water policy will create 
new jobs in the California economy. 

I as concerned, however, that a number of provisions, if 
broadly construed, could violato the basic principle of Federal 
Western water policy State primacy. A fundamental principle 
of my Western water policy is that tha Federal Government must 
respect the primary rol that individual States have in shaping 
and controlling their, own policies regarding water use and 
allocation. An individual State is best positioned to assecs 
its needs and to accommodate competing interests'. Except in 

1U--31 92 


Q-202 2uS 5939 


--*-* MP DIANE 

<^se instances where an oTerraxxing 
interstate conflict is preset. 

fashioning thair Policiw 
directing the Sscret^ry of 
legislation, to ensure that its 
due deference to state prinacy. 

section 3411C*). I ??4^ 
consult vith the Californi 
reallocating water to iapl 

retain primacy in 
dingl y f x 

inplMWsn ting this 
conducted with 



Deallocation *ight be allowable unaer ene 

existing pemits or licenses. 

r of 35 Interior to 
control Board bafore 
even if such 

conditions in 

no re 


legislation in the coaing Concrass which is substantially 
consistent vith that introduced by Senator Seymour (S. 2016) in 
the 102nd Congress. This legislation has as its primary 
objectives the mitigation and enhancement of fish and vildlif e 
resources in the Cantral Valley of California and the orderly 
allocation of available water supplies while maintaining the 
productivity of the Bureau of Reclamation's Central Valley 

K.R. 429 also contains certain provisions that warrant 
careful construction to avoid constitutional concerns. First, 
section 301 establishes a Utah Sclaaation Hitigation and 
Conservation Commission that would formulate the policies and 
objectives for the implementation of certain projects authorized 
by the Act and administer expenditures of substantial Federal 
funds. The Commission members are to be appointed by the 
President from lists submitted by members of the 
Congress,, the Central Utah Water Conservancy District, and 
the Governor of Utah. In order to avoid any conflict vith the 
Appointments clause of the Constitution, I will interpret _ the 
Act to provide for the appointment cf nembers of the Commission 
after due consideration of the recommendations of these 
submitting lists, and not to inhibit ay discretion to request 
from those croups and individuals the nanec or additional 
potential nominees. 

Second, section 301(h.) (3) permits the Ccnnission 
to Ir ccura directly fron a.nv cecartsient or agency of th* 
United States" information necessaory to enable it to carry out 
the Act, and requires the heads of all agencies and departments 
to comply with request for information ~froa th* Ccnnission. 
I will construe this section consistent with my authority to 
supervise and guide executive branch officials, and to control 
access to information the disclosure of which might signifi 
cantly impair the conduct of foreign relations, the national 
security, or the deliberative processes of the executive brand: 
or the perfcmance of its constitutional duties. 

Third, section 3201 establishes the conditions undar which 
a. South DaXota Preservation and Restoration Trust nay receive 
and disburse Federal funds. Under the Act, such a 'trust cust b 
governed by a five-aeaber Board of Trustees, three of whom woulc 
be appointed by the members of the South DaJcota congressional 
delegation, and one each of whoa would be appointed by the 
South Dakota Academy of Sciences and the Governor of 
South Dakota. Under the supresa Court's decision in Washington 
Metropolitan Airports Authority v. C^izsng for- the Abatement vi 

Aircraft Noise. Tne. . such a board exercises sufficient Federal 
power to subject it to separation of powers scrutiny. The 
Board, noreover, performs" functions that ara executive in 
nature, and therefore agents of the Congress nay not manage 
its affaJLrs. In addition, all members of the Board appear 
to exercise significant governmental authority/ . yet are not 
appointed in a manner consistent with "the Appointments Clause. 

10/31-'92 13:40 202 208 5939 CONGR. AFFAIRS --- MP DIANE 

For all these reasons, I direct the Secretary of the Interior 

J^i 08 Vith ^ e Aticmay General, to prcpcsa 
iT 021 to rsnft dy tixcca constitutional defects. Such 

^i n -~ USt b6 6fe ctiv prior to the expenditure or 
appropriated funds. 

contracting -<--- ' T_r_ 340S ^^M '' vhich purports to give 

ar> D - ve - - 3 r agencies the authority to raviev and 

hv ^h^ ' ^~ , " rar>sf ers of va ^er under standards established 

uw Acc f could be construed to pernit the exercise of Federal 
ecu^.ve power by the districts or agencies, which are not 


10/31.92 13:41 

"&202 20-S 5939 





202 208 4551 :fl| 

conpcsad of individuals -appointed pursuant to the Appointments 
Clause of the Constitution. To avoid constitutional quest ions 
that night otherwises arise, this section oust be interpreted 
so as not to vest such power in those districts or agencies . 
Accordingly, I will interpret the role of these bodia* under 
this section to be an advisory one. 

Notwithstanding the concerns I continue to have with 
certain provisions of the bill, I an signing E,R. 429 so that 
the establishment of water markets in California, and th bill's 
numerous beneficial water projects, can neve forward without 
further dalay. On balance, those projects will better enable 
the citizens in our western States to canage one of their n 
pracicus resources . 



October 30, 1952. 



INDEX--Thomas J. Graff and David R. Yardas 


Auburn Dam, 7, 9, 82-84 

acid rain, 11-12 

Amodio, John, 18 

Ayala, Ruben, 8 

agriculture /water community, 29, 52, 

58, 59, 60-62, 63, 70, 79-80, 92, 

Association of California Water 

Agencies (ACWA), 56 

Bay/Delta Estuary. See Delta 
Borba, Mark, 91 

Boronkay, Carl, 12-13, 22, 60, 63, 98 
Beard, Daniel (Dan), 18, 43-44, 51, 

52, 80, 83, 91-92, 107 
Bos, Otto, 18, 19 
Baker, Bill, 18 
Bradley, Bill/Bradley bills, 19-22, 

23, 28-29, 30, 41, 44, 45, 46, 58- 

62, 64, 65, 75, 79, 83, 84, 99, 


Brown, Russell (Russ), 19, 20 
Bureau of Reclamation. See United 


Bush, George, 44, 110-111 
Boesel, John, 54 
Behar, David, 54, 82, 107 
Bay Area Economic Forum, 56 
Bank of America, 56 
business interests and the Central 

Valley Project Improvement Act, 

10, 56, 57, 110 

Clean Air Act (1990), 11 
Coordinated Operation Agreement (COA) , 

California State Water Project (SWP) , 

California Business Roundtable, 10, 


Conrad, Kent, 73, 75 
Coelho, Tony, 19 
Cannon, Lou, 29 
Central Valley Project /Central Valley 

Project Improvement Act: 

contract renewals, 24, 28, 48- 
49, 59, 61-62, 87, 94 

proposed transfer to state, 65 

reclamation reform, 24, 44, 45 

restoration fund, 80-81, 94, 104, 

tiered pricing, 93, 95-97 

water marketing /transfers, 13, 14, 
21, 25-28, 30, 49-53, 63-65, 
79, 114 

Candee, Hamilton (Hal), 38, 82 
Cooper, Ben, 69, 73 
California Urban Water Agency (CUWA) , 


Congdon, Chelsea, 38, 58 
Cannon, Fred, 56 

Dougherty, Charlene, 18, 25, 43, 48 
Deukmejian, George, 18-19 
D'Amato, Alfonse, 46 
Dooley, Calvin, 52, 79, 85, 91 
Delta (San Francisco Bay /Sacramento- 
San Joaquin Delta Estuary) , 17-18,81 

Environmental Defense Fund (EOF) , 

Endangered Species Act (ESA) , 82, 


Filante, William, 14 
Fazio, Vic, 22, 29, 52, 57, 73, 79, 
81, 82-84, 91, 97-99, 102, 103-105 
Feinstein, Dianne, 85 
Friant Division, 106-107 

Garrison, Karen, 38, 48-49. See also 

Yardas-Garrison letter 
Garn, E.J.(Jake), 45-46, 68, 76, 110 
Gage, Michael, 65 
Golb, Richard, 84 
Gwinn, Roger, 84, 105 
Gejdenson, Samuel, 95-97 
Grady, Robert (Bob), 110-111 

Hodge, Richard, 6 
Houston, David, 17, 18 
Harvey, James (Jim), 56 
Harvey, Michael (Mike), 73 
Hatfield, Mark, 76 

Isenberg, Phillip, 14, 18 

Jensen, Tom, 20, 22, 25, 30, 34, 40, 

41, 44, 47, 54, 56, 58, 69, 71, 74, 

75, 84, 91, 94, 105, 107 
Johnston, J. Bennett /Johnston mark, 

20-22, 28, 50, 56, 66-74, 75-79, 

102-103, 107 
Johnston, J. Bennett, Jr., 21 


Krupp, Fred, 10 

Kennedy, David, 12-13, 17, 18, 19 

Katz, Richard, 14 

Kirshner, Dan, 32 

Krautkraemer, John, 38, 39, 83 

Karhl, William, 67, 70, 83, 90 

Leshy, John, 7 

Lawrence, John, 18, 43-44, 51, 52, 

79, 91-92, 96, 107 
Lehman, Richard, 53, 69, 79, 91 
Lanich, Steve, 18, 43, 78, 79 

Meral, Gerald, 4, 7, 8 
Metropolitan Water District (MWD), 
12-13, 56, 63, 65-66, 69-70, 80, 
88-90, 98 

Metropolitan Water District-Imperial 
Valley Water District Project 
(MWD-IID), 12-13, 33-34 
Mineta, Norman, 109 
Martin, Guy, 54 

McGill, Michael (Mike), 56-57, 81, 98 
Matsui, Robert, 83 
media, influence of, 72, 82-83, 100- 


Mono Lake, 18, 21, 89 
McCleary, Patricia, 82 
Miller, George: 

Coordinated Operation Agreement, 

17, 18, 19 
Fish and Wildlife Protection 

bills, 22-23, 24, 25-28 
Miller-Bradley bills, 27, 28, 44, 

45, 48, 49-53, 54, 71, 75, 
76-80, 84, 85-86, 95-97, 99, 
102-109, 113. See also Yardas- 
Garrison letter 

New Melones Dam, 4,6,7 

Natural Resources Defense Council 

(NRDC), 7, 23-26, 28, 37-38, 87 
Nature Conservancy, The, 21, 40, 41, 

Nelson, Barry, 30, 53, 82, 84, 102, 


Omnibus Water Bill (H.R.429), 44-47, 

76-77, 99, 102-112 
Osann, Ed., 98 

Proposition 17, 1974 (Wild river 

system; New Melones Dam) , 7 
Proposition 9, 1982 (Peripheral 

Canal), 9 

Peripheral Canal, 8-9, 13 
Planning and Conservation League 

(PCL), 8 
Peltier, Jason, 14-15, 49, 52, 63, 

106, 107, 112 
Panetta, Leon, 109 
Pyramid Lake Project, 20, 32-37, 40 

Quinn, Tim, 13 

Roe, David, 10, 11 
Reagan, Ronald, 44 
Rice, Condoleeza, 110 

Sierra Club, 8 

Stavins, Rob, 11-12 

Schuster, David, 14-15, 18, 52, 57- 

58, 98, 104 

Somach, Stuart, 15, 18, 29, 57-58, 

59, 60, 63, 84, 98, 107 

State Water Project (SWP). See 

California State 
Seymour, John/ Seymour bill, 46, 51, 

57-60, 63-65, 66, 70, 72, 74-77, 83, 

84-85, 92, 97, 109, 110 
Share the Water, 53-56, 82, 92, 94- 

95, 100, 102, 107, 108 
Schifferle, Patricia, 54-55 
Somach/Graff negotiations, 56, 57, 

62, 80, 85-95, 97-98, 103, 104, 106- 

Shelby, Richard, 73, 75 

Trust for Public Land (TPL), 21 
Three-Way Water Agreement Process, 
39, 88 

United States Bureau of Reclamation, 

United States Office of Management 

and Budget (OMB), 110-111 
Ueberroth, Peter, 110 

Weiman, David, 54, 55, 82 
Williams, Phillip, 7 
Watts, Douglas, 9 

Willey, Zach, 10, 11, 16, 21, 32, 34, 


water marketing/transfers. See 
Central Valley Project/CVPIA 
Wallop, Malcolm, 68, 107, 110 
Wilson, Pete: 

as governor, 19, 45, 65, 91, 97, 


as senator, 15, 17, 18, 19, 44, 
45, 46 

Yardas-Garrison letter, 37-38, 43, 

46, 47-49 
Yassa, Sam, 38 
Young, Terry, 38 

Malca Chall 

Graduated from Reed College in 1942 with a B.A. degree, 
and from the State University of Iowa in 1943 with an 
M.A. degree in Political Science. 

Wage Rate Analyst with the Twelfth Regional War Labor 
Board, 1943-1945, specializing in agriculture and 
services. Research and writing in the New York public 
relations firm of Edward L. Bernays, 1946-1947, and 
research and statistics for the Oakland Area Community 
Chest and Council of Social Agencies, 1948-1951. 

Active in community affairs as director and past 
president of the League of Women Voters of the Hayward 
area specializing in state and local government; on 
county-wide committees in the field of mental health; on 
election campaign committees for school tax and bond 
measures, and candidates for school board and state 

Employed in 1967 by the Regional Oral History Office 
interviewing in fields of agriculture and water 
resources. Also director, Suffragists Project, 
California Women Political Leaders Project, Land-Use 
Planning Project, and the Kaiser Permanente Medical Care 
Program Project.