Forensic Investigation Urged on Water Deals

Mesquite, NV.  Jason King, the Nevada State Water Engineer, and Steve Wolfson, Clark County District Attorney need to immediately open a forensic investigation into how and why the Virgin Valley Water Board (VVWB) acquired river water shares from the Mesquite Irrigation Company (MIC) and the Bunkerville Irrigation Company (BIC).

Various members of the water board have intentionally or unintentionally misrepresented the amount of ground water potentially available to the community. Doing so, makes it appear that a need for river water exists.  The board claims (without MIC and BIC) totals of:

  • Groundwater is equal to 12,349.29 (58% of total) Acre Feet Annually (AFA).
  • Spring water equal to 2,500 AFA (12% of total) and
  • Stream (river) water equal to 6,580.00 (31% of total)

Total = 21,429.29 AFA

However, the district has applications on file with the state water engineer equal to 211,747.49 Acre Feet Annually (AFA) of water. The applications break down as follows:

  • Groundwater applications equal to 208,866.53 AFA. That is 98.64% of the total. Groundwater further breaks down as 23,658.60 (11.33%) AFA that is ready for action (RFA) 62,896.44 (77.99%) AFA is ready for action (RFP) and 22,311.49 (10.68%) is permitted or certified.
  • Spring water applications equal to 296.33 AFA which is 0.14% of the total, and
  • Stream (river) water equal to 2,584.63 AfA or 1.27% of the total.

To move groundwater categorized as RFA to beneficial use requires the water board to “prove” that the district has the financial ability (NRS 534.080) to put the amount desired to beneficial use within five years. Protests are harder to argue. They come from individuals, other government agencies and from the state engineer. The state engineer often protests to protect the perennial yield from the basin.

Between 1993 and 2010 board members spent $12,153,670.86 for 3,155.70 AFA of river water held by shareholders of the MIC and 1,484.44 AFA of river water from shareholders of BIC. Ostensibly this total of 4,640.14 AFA of river water was for irrigation use.

It is not uncommon to use cleaner groundwater for irrigation. In Nevada, about 55 % of the total groundwater is used for irrigation. One ground water well can produce about 3,193 AFA of water at the cost of between $1.5 and $2 million. Two ground water wells would produce about 6,392 AFA or 3,236.3 AFA more than the river water purchased. Further two wells would have saved ratepayers between $ 8,153,670.86 and $9,153670.86. These excess expenditures account, in part, for the increased rates for water users and increased fees for developers. There is no legitimate excuse for not acting to obtain 6,392 AFA from the 23,658.60 AFA of groundwater ready for use.

The water board has consistently rejected efforts to study the basin. When former hydrologist Mike Johnson was asked why the board consistently rejects a basin study, he said: “because if the public knew how much water was in the basin, there would be no need to purchase water from shareholders of BIC and MIC.

A forensic investigation is needed to look into the need to purchase river water when it appears enough ground water exists at a lower cost. The investigation must also examine the familial relationships and affinities held between virtually all of the buyers and sellers of MIC and BIC shares for potential legal violations. Also, the investigation should confirm that shares purchased were not the same shares leased to the SNWA by the same shareholders.

The current board still deals with water acquired from MIC and BIC in the past. If that water was improperly acquired, then they must stop dealing with it and see that it is forfeited and returned to the public domain.


End Notes:

  1. An Acre Feet Annually (AFA) is one foot of water covering one acre of land in one year. Or, one AFA is approximately enough to service two homes each with 4 members.
  2. The state records the interpretations of paper records and disavows any errors, omissions, or accuracy of the information. Instead, they ask users to their date to refer to the records. As near as possible, the records associated with these water applications were reviewed.
  3. Well estimates come from expected pumping rate for VVWD new well 27a




Pardon Urged in Water Case

Mesquite NV., Nevada Governor Brian Sandoval should pardon former Virgin Valley Water Board (VVWB) Hydrologist Mike Johnson and his business partner Robert Coache who were selectively prosecuted in a water deal sanctioned by members of the Virgin Valley Water Board (VVWB).

The January 2017 felony convictions of Johnson and Coache resulted from a March 18, 2008, water deal involving Clark County (NV) rancher John Lonetti, the Southern Nevada Water Authority (SNWA) and the Virgin Valley Water District (VVWD) of Mesquite, NV. In the transaction, Lonetti received $3.1 million dollars from the SNWA for two river water permits. Johnson received a consulting fee of $1.3 million.

The deal benefited the water district community by increasing the volume of water available.  The water board traded 896 Acre Feet Annually (AFA) (priority date 1929) of water for 1,200 AFA (priority date 1990) from the SNWA., A 5,000 AFA cap was removed from the surface water, and the district acquired all senior groundwater held by the SNWA.

Former Board member and former City Councilman Kraig Hafen  told the board: The agreement was “probably a good deal.” Former Board Member, Ted Miller, who voted for the deal, said that the actual monetary value of the water being exchanged was not important to the VVWD Board. Rather, he said the VVWD “was getting more water from SNWA that it could lease to its customers.” John Paul, Board President at the time, stated that “his primary purpose was to own the water and not a return on money from leasing. “After the deal, Miller argued that given the amount of money Johnson earned in the transaction the board should consider cutting his contract.

Johnson’s legal jeopardy, and by extension Coache’s,  did not begin with the 2008  deal. It was April 1999 when former district manager Mike Winters and board attorney George Benesch approached Johnson, then employed by the SNWA, with a deal.  The board needed Johnson’s expertise in hydrology and geology to build a sustainable infrastructure to serve the growing communities of Mesquite and Bunkerville.

Winters and Benesch on behalf of a board asked Johnson to leave his $90,000 per year job with the SNWA. He was offered $65,000 per year and the ability to contract on water issues “off-the-clock” to make up the salary difference.  The board also paid into his state retirement account. The VVWD is a subdivision of the state thus Johnson technically became a state employee. As a state employee, Johnson was prohibited from any outside work in hydrology. Further, such work rendered Johnson and all associated with such outside work liable for prosecution for any number of statutory reasons. That contract continued to be approved by various VVWB members until his resignation on August 17, 2010.

Benesch testified for hours at the Johnson-Coach trial.  He said among other things that:

“Some Board Members had a bias against Michael Johnson,”

“In my opinion, about 2008 the VVWD Board became more and more dysfunctional and were “all over the place.”

“New Board Members came in with a specific agenda,”                                                                                                                                                 

“The VVWD Board became the most dysfunctional Board he has ever dealt with in his decades of working with dozens of such organizations,” and                                                                                       

“In a general sense, [referring to the prosecution] they were “paying somebody back.”

Several people were involved in the 2008 deal, but only Johnson and Coache were selectively prosecuted. Clark County Deputy Prosecuting Attorney Marc DiGiacomo bragged about the selective prosecution of Johnson and Coache.  He told board member and Mesquite Local News (MLN) reporter, Barbara Ellestad that he relied on Water Board attorney Bo Bingham in creating the case against Johnson and Coache. DiGiacomo claimed that: “we likely would not have heard about this crime.”

DiGiacomo told Ellestad that “his (Bingham’s) lawyers know all of the discovery in the case. Anytime we needed to know something he (Bingham) and his lawyers were fantastic about helping us.”

DiGiacomo did not take the time to fully research the case. He told Ellestad,  “Our office just didn’t have the time to read hundreds of thousands of pages of documents.”

Allowing the water board attorney to narrow the case to Johnson and Coache is a selective prosecution at its worse and DiGiacomo erred in not recognizing that. Selective prosecution is not a defense. It is an assertion that the prosecutor (essentially Bingham) brought the charges for reasons forbidden by the Constitution. That document expects that everyone must be treated equally under the law without privilege, discrimination, or bias.

At sentencing, District Judge Richard Scotti awarded the VVWD the $1.3 million received by Johnson in the case. However, when one adds the legal fees paid to Bingham and his attorneys it is likely to come out something close to a wash.