Hon. Al Muratsuchi and Dante Acosta
Acting Chair and Vice Chair,
Assembly Committee on Natural Resources Legislative Office Building
1020 N. Street, Room 164
Sacramento, CA 95814
Re:
Opposition to SB120
Subj: Potential Conflicts of Interest and Securities Violations
Hon. Chair and Vice Chair:
I write to you with serious concern over the present reckless effort to “gut and amend” legislation in the
last week of the session to adopt a bill that targets one and only one project and one company that
happens to be publicly traded on the NASDAQ. There is a known history of suspected collusion
between members of government, project opponents and short sellers in this company’s securities. In
October of 2015 the United States Bureau of Land Management issued negative advice regarding the
Cadiz Project’s proposed use of a railroad road right-of-way. The content and anticipated action were
leaked by federal bureaucrats directly to short-sellers in the securities. The stock fell precipitously on
the formal announcement of this position. The news of the anticipated action reached newspaper
outlets before it was distributed to the Company. This action was chronicled by the Wall Street Journal.
Curiously, massive short positions similar to October of 2015 accumulated against the Company prior
to the sudden “gut and amend” of AB1000 over the Fourth of July weekend in 2017. As the enclosed
chart shows, it is happening again now in anticipation of a new bill being amended in the Assembly,
which we believe will be named Senate Bill (SB) 120.
The investment community’s concern over SB 120 and the Legislature’s handling of this process is
further heightened by the disclosure that the California State Lands Commission, at the urging of the
project opponents, issued two letters to the Company in October of 2017 indicating the it was intending
to initiate review of the Project without regard to the failure of AB 1000 to pass. We are informed that
information from Public Records Act responses demonstrates that drafts of these letters were issued to
news outlets and shopped for weeks before they were actually delivered to the Company. Even the fact
that the State Lands Commission was planning undertaking this review was inexplicably not mentioned
to the legislature or the public until after the legislative session ended.
We ask that members of the Assembly and Senate that hold positions in Cadiz or competitor companies
recuse themselves from any vote on SB 120. We ask that communications from staffs of the legislators
promoting AB 1000 and SB 120 be evaluated as to whether they have tipped members of the
investment community about a bill that would be amended as a vehicle to carry the substance of AB
1000 outside of Senate custom and protocols.
Moreover, Senator Feinstein is often cited as the chief supporter of this legislation among others in
stopping the Cadiz Water Project. We think it is also reasonable for Senator Feinstein and her husband
Richard Blum as well as his affiliated entities to disclose any potential interests in Cadiz or its
11455 El Camino Real, Suite 140 San Diego, CA 92130
Ph: 858.345.1470 Fax 858.345.1479 www.aacaadvisers.com

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 competitors as a predicate to heeding her call to overturn a certified EIR, San Bernardino County and 6
Court of Appeal opinions.
Never has a single company – a publicly-traded one – been specifically targeted by legislation for
destruction in California. Indeed, this is not an industry-wide regulation. SB 120 was amended from
AB 1000 language to make it clear only one Project and one company were targeted and impacted.
Owens Valley, the rest of the Mojave Desert, the Central Valley are not impacted. Yet these areas have
none of the oversight provided by San Bernardino County over the Cadiz Project.
The particularly nefarious potential of this breach of legislative custom and protocol is that the
supporters of AB 1000 and now SB 120 is that they had every opportunity to seek an open review of
their claims through regular session, but they did not and will not do so. They introduced AB 1000 as a
“gut and amend” of a water meter bill, avoiding open public scrutiny of regular order. They waited an
entire year – lying in wait - to introduce a new bill. Now, once again, SB120 is introduced as a “gut
and amend” of a non-germane budget bill and will have less than 5 days for consideration.
Belying the claimed urgency, opponents of the Project curiously omit that San Bernardino County is
already managing and controlling the groundwater extracted by this Project and has managed
groundwater extraction from this site for over 20 years. Opponents do not explain why San Bernardino
County is not capable of continuing to perform this function when local management is the preferred
standard widely embraced by the Legislature and the Governor. They fail to explain why the trial court
and appellate review of the County’s approval and groundwater management plan is not sufficient to
avoid any potential harm to the environment. They do not address why the State’s involvement in the
CEQA process as a responsible agency was insufficient to reflect the State’s interest.
For the time being, any action on SB 120 should be tabled. It is a horrible bill symptomatic of a
banana republic process. No person has identified a credible reason for urgency for its passage. The
people and businesses that faithfully trade in public securities and invest in California demand some
semblance of fundamental fairness.
We have copied the Governor, Senate Pro Tem and the Speaker and forward this correspondence to the
United States Securities and Exchange Commission and NASDAQ for the evaluation of potential
unethical and illegal activity. We believe our views are widely shared among members of the broader
investment community and are important to protecting public confidence of the general public that
deserve to rely on transparency in government.
Sincerely,

Burland East, CFA, Chief Executive Officer
Enclosed: “Attachment to investment community letter 8-26-18”
11455 El Camino Real, Suite 140 San Diego, CA 92130
Ph: 858.345.1470 Fax 858.345.1479 www.aacaadvisers.com

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