The passage of the Central Valley Project Improvement Act, 1991-1992 : Environmental Defense Fund perspective

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

THE PASSAGE OF THE CENTRAL VALLEY PROJECT IMPROVEMENT ACT, 1991-1992:
ENVIRONMENTAL DEFENSE FUND PERSPECTIVE

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,
Berkeley.

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
respond.

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

PREFACE i

INTERVIEW HISTORY iv

BIOGRAPHICAL INFORMATION viii

I OVERVIEW OF THE BEGINNING EFFORTS TO DRAFT THE CENTRAL VALLEY
PROJECT IMPROVEMENT ACT: THE INVOLVEMENT OF THOMAS GRAFF,
DAVID YARDAS, AND THE ENVIRONMENTAL DEFENSE FUND 1

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

II MOVING THE CENTRAL VALLEY PROJECT IMPROVEMENT ACT THROUGH THE

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

III NEGOTIATIONS AND FINAL PASSAGE OF THE CENTRAL VALLEY PROJECT

IMPROVMENT ACT: THE OMNIBUS WATER BILL 78

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

TAPE GUIDE 116

APPENDICES

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

PREFACE

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
California.

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-
water.

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

January 1989

University of California, Riverside

ii

SERIES LIST

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.

ill

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
list.

iv

INTERVIEW HISTORY- -by Malca Chall

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

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

revisions in the Newlands Project—the 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
reform.

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

vi

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

vii

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

viii

Regional Oral History Office
Room 486 The Bancroft Library

University of California
Berkeley, California 94720

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Regional Oral History Office
Room 486 The Bancroft Library

University of California
Berkeley, California 94720

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Date of birth

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Father's full name

Occupation IfeAHteA (

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I OVERVIEW OF THE BEGINNING EFFORTS TO DRAFT THE CENTRAL VALLEY
PROJECT IMPROVEMENT ACT: THE INVOLVEMENT OF THOMAS GRAFF,
DAVID YARDAS, AND THE ENVIRONMENTAL DEFENSE FUND

[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
title?

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
here?

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
Berkeley?

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 that—kind of
split the baby in half—said 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

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

2Not reported (case #425955, Superior Court, Alameda County).
3D. 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 office—I'm not sure exactly when—of 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
selected—in fact, I think the next day—he 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
difference.

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,
[laughter]

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

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.

10

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
approaches.

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 fact—no, 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.

11

Chall:
Graff:

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 electricity—and 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 Wave1 Alters Course of Environmental
Movement," Los Angeles Times, December 22, 1986.

2 II

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

12

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 remember—to 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

12A

Saturday, April 22, 1989/Part II

Antidote to Our Doom Affliction

By THOMAS J.GRAFF

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
West.

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
Fund.

13

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
time?

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 slightly—we 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

14

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

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 recollection—and 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.

15
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
organizations—EOF, 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 was—at least my calendar
shows me meeting with Peltier in May of '9 I—he and, I know,
Schuster and Somach had put together a revised version of the

16

Chall:

Graff;

Chall;

Graff;
Chall;
Graff;

Chall;
Graff:
Chall;
Graff;

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 back—before 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.

17

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

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
way.

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,
1986

Graff: In '86, we worked with—there 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
States—An Agenda for Economic and Environmental Reform," Columbia Journal
of Environmental Law Vol. 13, No. 2, 1988, pp. 325-356.

18

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
interesting—it 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 drafted—taken
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

19

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
that.

20
Background on the Miller-Bradley Bill

Senator Bill Bradley 's Interest in California Water Issues,
1989

Graff: Also in '89-'90, [Bill] Bradley—well, 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 what—no one knows the motivations
of other people—what 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

21

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 expertise—The
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

22

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
'92.

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
earlier.

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
tension.

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.

23

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.

23A

(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."

23B
June 26, 1990

MEMORANDUM

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.

24

Chall:

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

The Natural Resources Defense Council and California Water
Issues

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 case—until
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.

25

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
concern.

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 later—in 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.

26

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
measures—that 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

27

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
protection.

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
Transfers

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 point—he 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
engage.

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.

28

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 prevalent—to 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 Senate—getting 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.

29

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."

30

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.

31

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 there—and asking what did I think of this
proposal or that proposal or this compromise or that deal or
whatever.

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 process—the 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.

fl
[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

32

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

actually—this will get to answering the question—but 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?

It

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.

33

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:
Legislation

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 nutshell—it ' 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

34

Chall:
Yardas:

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.

35

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
stuff.

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 Act—passed
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
feasible.

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,
1990.

36

Chall:

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?
rights?

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
project.

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?

37

Yardas :

Chall:
Yardas:

Chall:

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
whatever.

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

Well, it's not so much their fishing as the habitat of the lake to
preserve the fish itself. The fish are not current—they 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
resulting—sort of like the Mono Lake situation—resulting from

38

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 substantive—did
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?

39

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.

40

Graff:

Chall:
Graff:

Chall:
Graff:

Chall:
Graff:

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 intensity—put 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 advance—but 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.

41

Chall:
Yardas;

Chall:
Yardas:

Chall:
Yardas :

Chall:
Yardas ;

Where did you go?

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

What was this, to study what—is 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 thought—my
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
work.

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

42

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
exploded.

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
stuff.

Chall: What did you gain by having been at the law center at Boulder--for
your life career or whatever—that 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.

43

II MOVING THE CENTRAL VALLEY PROJECT IMPROVEMENT ACT THROUGH THE
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
then--

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 them—the

44

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.

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

45

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

46

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 weak—in 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.

47

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 quite—we 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 were—well,

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

48

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.

Chall:

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,

49

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 Miller—that 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,
1991.

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

50

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
ahead.

Chall: Right.

Yardas: Yes. [looking at H.R. 1306] Significantly, this does not—not
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 were—property
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
adjusting.

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
that.

51

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 exactly—it
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.

52

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
penetrated—at 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.

53

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
Water?

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,
1994.

54

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
Republicans.

II

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.

55

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 into—the 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?

56

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
divided.

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

ACWA who were supportive--MWD most notably—but 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
supportive.

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

57

McGill. And he wrote a key memo which I can eventually probably
find--I didn't bring it with me today—where 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 back—as 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 remember—but 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
loop.

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

98.

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

57A

07/13^1992 15144

FROM Bay Rr»» Council

TO 13106580630

BAY AREA
ECONOMIC
FORUM

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
environment.

57B

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. dlVeHl«IU (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.

I

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

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.

TOTBL P.B2

58

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 it—because he showed up
afterward—

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

59

Chall:

Yardas :

Graff:

Chall:

Graff:

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
resources.

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
revision?

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-
November.

Senator Seymour Introduces S. 2016

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

60

Graff: Yes, but nobody was expecting to complete anything that year. It
was a week later—well, 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
to—well, 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?

61

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,
whatever.

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

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
made.

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

62

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.
484?

Yardas : The renewal length?

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

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?

63

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 decided—and 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.

64

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?

65

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.

Chall:
Graff:

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 substantive—they 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

66

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 there—it
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
settled.

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.

67

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.

Chall:
Graff:

Chall:

Graff:

Chall:

Graff:

Chall;
Graff:
Chall:

Ports?

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
California?

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 out—when 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
downstairs.

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

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

68

Graff: Right. And we had a briefing with them downstairs at Oliveto's, I
think it might have been—well, 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 name—from 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--

69

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]

70

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 resist—dealing 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."

71

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 back—well, 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
up.

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.

71A

NATIONAL WATER RESOURCES ASSOCIATION

3800 NORTH FAIRFAX DRIVE, SUITE 4, ARLINGTON. VIRGINIA 22203 (703)524-1544

NATIONAL WATER LINE

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
contractors.

Reauthorize the CVP to include
enhancement of fish and wildlife
(noljustmiugalionofpastactions)
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
contractors.

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
tracts.

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

-3-

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.

72

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 this—Share 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
many.

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

73

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 Alabama—were 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 side—Johnston 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--

74

Yardas :

Chall:
Yardas ;

Chall:

Yardas :

Chall:

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 done—while 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

75

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
always--

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.

76

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 necessarily—and I don't remember the
particulars—but 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.
429.

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

Graff: And I think—this 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?

77

Graff: Well, I think they made the decision--! can't remember all the
reasoning—that 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.

78

III NEGOTIATIONS AND FINAL PASSAGE OF THE CENTRAL VALLEY PROJECT
IMPROVEMENT ACT: THE OMNIBUS WATER BILL

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?

79

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
that?

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."

80

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 sequence—but 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
Committee

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

81

Chall:
Yardas:

Chall:

Yardas;

Chall:

Yardas;

Chall:

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,
committee.

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
on.

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

82

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.

Chall:

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

82A

ENVIRONMENTAL
DEFENSE FUND

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
Fax:510458-0630

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. Graff1
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
(212)505-2100

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

1405 AnfMhoe Ave.
Boulder. CO 80302
(303)440-4901

128 East HinrcnSt
Raleigh. NC 2760 1
(919)821-7793

ISOOGuadalupe

Austin. TX 78701
(512)478-5161

100* Foo-CmwiMr (tocroM Pmr

83

Graff: He continues to have difficulty up there,
district.

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
project.

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
ahead—because 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

84

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 part—former Senator Seymour's part—that 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.

84A

ENVIRONMENTAL
DEFENSE FUND

California Office

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

Fax:510-658-0630

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

TJOtmjg

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

85

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 recently—this 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.

86

Graff:

Yardas :
Graff:

Chall:
Graff:

Yardas:

Chall:
Graff:

Chall:

Graff:
Chall:

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
about?

The June 15 draft?

Yes. You really gave a lot, I guess; he gave a lot.

87

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 time—there 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 transfers—there 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
court.

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.

88
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 were—you 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
District

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

89

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 was—one of the other goals—a
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
deal.

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
be.

90

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.

ft

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 negotiation—in 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 weren1 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,

91

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 day—and
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
represented.

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.

92

Chall:
Graff:

Yardas:
Chall:
Yardas :

And?

And Beard and Lawrence took the occasion to—particularly
Lawrence, but both—to 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.

93

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 rates—the 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, anyway—it 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
thing.

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

95

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

96

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

97

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--"
[laughter]

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
had.

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
thoughts.

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?

98

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?

99

Chall:

Graff:

It surfaced in August, according to Jensen's draft,
date.

No specific

Chall:

Graff:

Chall:
Graff:

Yardas ;
Graff:

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.

100
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 reform—this 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.

101

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 major—it 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.

102

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
convened.

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?

103

Yardas: Yes. But this was before the conference was convened, and upon
the convening of the conference, Miller put a bill into play.

it

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
conference.

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 bill—not the compromise bill, but the
one that was finally passed—included 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.

104

Yardas :

Chall:
Yardas;

Graff:

Chall:
Graff:

Yardas:
Chall:
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

105

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.

Graff:

Chall:
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--

106

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
question.

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

107

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--! think—with 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
out.

108

Yardas:

Graff:

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 there—one 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 all—we 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
that—what 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?

109

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 through—we 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 House—this 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
delays.

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

110

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
here.

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

Ill

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.

112

Chall: [To Yardas] Thank you very much for your help.

Yardas: Oh, sure, my pleasure—thank 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.

113

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 up—some 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
happens.

But we had a meeting here—this 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

114

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
goal.

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.

115

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

116

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

1

11
21
31

43
54
65
78
90
103

116A

APPENDICES—Thomas 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

117

Appendix A

Yardas-Garrison letter re HR361

ENVIRONMENTAL DEFENSE FUND

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»,

118

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
renewal.

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

119

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;

120

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;

121

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
objectives.

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.

122

Charlene Dougherty
September 6, 1990
Page 6

Sincerely yours,

David Yardas Karen Garrison

Environmental Defense Fund Natural Resources Defense Council

123

Tom Graff Memo to Dan Beai'd an<
John Lawrence re CVP: water po!

ENVIRONMENTAL DEFENSE FUND

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
objectives.

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

124

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
receive.

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.

125

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

126

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

127

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
details.

I do appreciate your solicitation of my views. I hope this has
helped .

TJG:mjg

Appendix C

President George Bush statement
128 re signing H.R. 429 (Omnibus)

THE WHITE HOUSE '
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.

129

THE WHITE HOUSE
Office" of the Press Secretary

?or Immediate Release October 30 , 19 S 2

STATEMENT BY THE PRESIDENT

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
California.

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

1.3:39

Q-202 2uS 5939

130
CONGR. AFFAIRS

--*-* 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
dinglyf x »

inplMWsnting this
conducted with

o

reaocang

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

131

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
Project.

K.R. 429 also contains certain provisions that warrant
careful construction to avoid constitutional concerns. First,
section 301 establishes a Utah S«claaation 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 carts.in 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 Irc«cura 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.

132
10/31-'92 13:40 ®202 208 5939 CONGR. AFFAIRS -»-- » MP DIANE

For all these reasons, I direct the Secretary of the Interior

J^i08 Vith ^e Aticmay General, to prcpcsa
iT021 to rsnftdy tixcca constitutional defects. Such

«^i°n-~USt b6 6f£ectiv« prior to the expenditure or
appropriated funds.

contracting -»<--- ' T_r_340S^^M '' vhich purports to give

ar>D-0ve - -3 °r agencies the authority to raviev and

hv ^h^ ' ^~ , "rar>sf ers of va^er under standards established

uw Accf could be construed to pernit the exercise of Federal
ecu^.ve power by the districts or agencies, which are not

nore

10/31.92 13:41

"&202 20-S 5939

133
CONGR. AFFAIRS

MP DIANE

39572S2-

Qooi

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 .

GEORGE BUSH

THE WHITE HOUSE,

October 30, 1952.

iff

134

INDEX--Thomas J. Graff and David R. Yardas

r

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,

112-113
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,

107

Brown, Russell (Russ), 19, 20
Bureau of Reclamation. See United

States

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) ,

17-19
California State Water Project (SWP) ,

18
California Business Roundtable, 10,

81

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,
113

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) ,

56

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) ,

passim
Endangered Species Act (ESA) , 82,

114-115

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

135

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-

101

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,

58
Nelson, Barry, 30, 53, 82, 84, 102,

107

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-

107
Shelby, Richard, 73, 75

Trust for Public Land (TPL), 21
Three-Way Water Agreement Process,
39, 88

United States Bureau of Reclamation,

24
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,
89

136

water marketing/transfers. See
Central Valley Project/CVPIA
Wallop, Malcolm, 68, 107, 110
Wilson, Pete:

as governor, 19, 45, 65, 91, 97,

111

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
legislature.

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.

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