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[by John Earl, cross-posted from Surf City Voice, earlier today.]
Incumbent Sheldon and challenger Daigle
Stephen Sheldon, the Orange County Water District’s elected representative from Irvine, continues to use his government position to benefit Poseidon Resources, Inc., the corporation that wants to build an ocean desalination plant in Huntington Beach.
By doing this, he may be risking the consequences of violating conflict of interest laws.
The OCWD manages the county’s groundwater basin and provides drinking water for 2.4 million residents by selling it to 19 municipalities and special water districts in the county.
The OCWD staff and board of directors are currently leaning heavily toward making ocean desalination part of its “water portfolio” through a business relationship with Poseidon.
Sheldon, a candidate for reelection in November, spoke in favor of Poseidon’s proposed project at a joint planning committee meeting of OCWD and the Municipal Water District of Orange County (MWDOC), held on July 23.
The Poseidon plant would cost about $1 billion and produce 50,000 acre feet of desalinated water a year.
In a plan conceived by OCWD and Poseidon, that desalinated water would replace the same amount of untreated imported water that the district currently buys from the Metropolitan Water District of Southern California (through its retailer MWDOC) for $593 per acre foot. That water is pumped into the groundwater basin.
Poseidon’s desalinated water would cost over three times as much, about $2,000 per acre foot, according to OCWD’s chief engineer, John Kennedy.
Until at least last December, according to Sheldon’s most recent Statement of Economic Interests (SEI), he worked as a consultant for Faubel Public Affairs, a partner of Communications Lab which lists Poseidon as a current client on its website.
Public officials who use their position to influence a government decision that affects them financially have an illegal conflict of interest under California’s Political Reform Act (CPRA) and California Govt. Code 1090.
But during the joint meeting, Sheldon tried to argue that Poseidon’s project would add to the county’s groundwater supply. In fact, as other water officials from OCWD and MWDOC pointed out repeatedly at the meeting, Poseidon’s water would not increase the county’s water supply—above or below ground—by a single drop.
“We’re just really replacing the amount of imported water we need to bring into the region,” OCWD’s Executive Engineer, John Kennedy, explained to Sheldon.
The Surf City Voice previously reported that during a May 21 OCWD board meeting Sheldon advocated for Poseidon and voted to send out Requests for Proposals to several consulting firms to analyze financing options for its desalination project, including direct OCWD funding and ownership.
After that meeting, when I asked Sheldon why he participated in the Poseidon vote, he replied “No comment.” Then he chased after me as I left, only to demand that I tell him if I had electronically recorded his answer.
During a subsequent board meeting, however, Sheldon accused me of misrepresenting the facts about his relationship to Poseidon.
There was no conflict of interest, he said, because public officials are relieved of any potential charges related to a source of income that was discontinued a year or more in the past.
That’s true, but Sheldon’s SEI indicates that relief from potential conflict of interest charges won’t come until this December at the earliest. That’s because his SEI doesn’t indicate a termination date for his business relationship with Faubel; nor has Sheldon submitted an amendment to it since it was filed last April.
Theoretically, Sheldon could argue that Faubel Public Affairs and Communications Lab are separate businesses, despite public comments by CEO Roger Faubel and Lab founder Brian Lochrie (right) confirming their close business partnership.
Lochrie, a former Faubel employee, started Communications Lab a year ago last April after leaving Faubel’s office with most of his staff and marketing clients, including Poseidon, according to a story at the time in the OC Register.
Lochrie took his new entourage to another office in the same building, just down the hall.
Since Sheldon has not clarified his relationship to Poseidon (he did not accept an offer to meet or speak with this reporter at greater length), and any clarifying legal action against him is unlikely before election day, the voters must decide if the wall separating Faubel and Communications Lab is invisible and if Sheldon is being honest about being free of conflict.
But Sheldon’s election opponent, Newport Beach City Councilperson Leslie Daigle, may not be so shy about Sheldon’s Poseidon connection as well as his numerous other ethical and legal dilemmas.
Apparently, her campaign has been using a Facebook account called Steve Sheldon Watch to post links to documents detailing Sheldon’s numerous personal trials and tribulations, including hundreds of thousands of dollars of state and federal tax liens, contract violation lawsuits, and a divorce claim by his wife that he is stealing from his child’s $1 million “off-shore” trust account.
Two of the Facebook posts relate directly to Sheldon’s job as an OCWD director.
One of those posts questions Sheldon’s relationship to Poseidon based on in his 2012 SEI filing—in which he states he directly consulted for Poseidon, asking, “Is that legal since OCWD is studying if they want to buy Poseidon’s desalinated water?”
The other OCWD related post, “nothing but the best for Sheldon,” links to his OCWD expense reports and questions his $1,048 stay at the Ritz Carlton hotel in Los Angeles.
Daigle told the Daily Pilot that she was running against Sheldon because of the OCWD board’s involvement in frivolous lawsuits and its attempt to build a power plant.
Sheldon was one of three OCWD directors, including Denis Bilodeau and Roger Yoh, who as members of the district’s Water Issues Committee (WIC), met secretly with several members of the Anaheim Chamber of Commerce in October, 2013, to smooth the way for building the power plant on 20 acres of OCWD property in the so-called Ball Road Basin in the city of Anaheim.
Many Anaheim residents are opposed to the proposed power plant and want to use the lands for parks and recreation purposes.
The WIC meeting arguably violated California’s open meetings law, known as the Brown Act, so the Anaheim Chamber of Commerce protested. To prevent a lawsuit, the OCWD Board of Directors voted to promise to “cease and desist from prior challenged conduct.”
But the agenda for one of many secretly held OCWD Executive Committee meetings exposed by the Voice through a public records inquiry, reveals that the directors may have broken their legally binding promise.
The Executive Committee agenda for June 10, 2014, contains a discussion item about how to gain leverage for rezoning the Ball Road Basin—if a proposed deal with Competitive Powers Ventures to develop the power plant fell through—by supporting grant requests by Anaheim for developing pocket-parks.
“I believe we could leverage cooperation on these types of soft issues in return for the City helping us kill SB 26 and helping us rezone Ball Road Basin to commercial usage if the CPV deal falls through”, OCWD General Manager Mike Marcus wrote.
The OCWD seems to have backed off its efforts to build a power plant in Anaheim for now, but this month its board of directors voted to study building one in Fountain Valley instead as part of its Long Term Facilities Plan.
See more at: http://www.surfcityvoice.org/2014/09/steve-sheldon-watch-ocwd-director-shills-for-poseidon-again/
OH — as a humorous aside, one of the firms Poseidon uses for “public outreach” is Southwest Strategies of San Diego (SWSPR).
SWSPR is no stranger to Orange County. Great Park contractor Gafcon, who ran the Great Park Design Studio and came out looking pretty bad in the audits, also hired SWSPR for “crisis management.”
That link is pretty thin, but I wonder if there are any other commonalities between Poseidon and the smashing success that is the Great Park?
Gafcon. Hmm.
Tyler, here’s another interesting connection; get a load of who is leading Gafcon’s Public-Private Partnership (P3 – hahaha) business:
http://gafcon.com/Services/Pages/PublicPrivatePartnerships.aspx
Good ol’ Charlie Black, Anaheim’s “negotiator” with Arte Moreno and the guy who gave every indication of giving away the store. Heckuva job, Blackie!
So Mr. Business of Baseball isn’t even in the baseball business. He’s in the Public-Private Prostitu…Partnership business. His job with the Padres was to divvy up the Petco real estate.
I’m no fan of the local political consultants. It’s good to question the relationships of local electeds and consultant class. Having said that, the arguments against desalination as an alternative are ringing hollow as our drought worsens. We can’t create water out of thin air. Please tell me your solutions to secure a stable safe water supply for OC.
It’s cheaper to do everything else.
I’m not kidding. When we’ve exhausted every other cheaper option (it’s a long list), then we can talk about manufacturing water from salt.
I hope these local water bureaucracies are exploring all these cheaper alternatives. It seems like we are starting to get behind the 8 ball now as this drought tightens its grip.
Of course they aren’t. And every dollar they spend trying to defy physics to make desal cheaper is a dollar that could have gone to improve recycling, enhance basin recharge, grow storm water capture, replace turf, repair leaks, clean up contamination . . . Or even desal brackish water inland at 1/3 the cost of ocean water.
This isn’t the middle east. It isn’t even Santa Barbara. Desal will never, ever, make sense for the LA basin and Orange County.
You might want to wander over to Riparian Way and see what Peer Swan and his buddies have been up to.
Beyond large scale engineering projects, There are lots of ways to improve out water situation — starting with rational pricing schemes. Even better are water markets. That’s how Australia got through a ferocious drought in the Murray Basin, for example. (however getting water markets set up that citizens feel are “fair” can tricky, involved process).
Of course, you, Alan, should be the last person I need to explain “Markets tend to work better than bureaucracies” 😉
that’d be “Riparian View”
*Peer is on several boards….as you know. He knows how to price things right just at the right time…………
*Thank goodness Leslie is not still running the track at CDM…..calling all the workers “those people”. Somehow, Leslie fell off the wagon during her 10 years at NB City Council. In our opinion Sheldon is right and what is the worst that can happen? They offer $2000 dollar an acre foot for water……and nobody buys it! Desal is the future and whether it is a Poseidon project or Virgin Atlantic…….it is going to happen.
Oh my God.
Ron, I can’t believe that you have not understood this until now — at least I hope you will understand it now — but THEY WANT US TO BUY THE WATER RIGHT NOW, UP FRONT.
If this were just a matter of them wanting to risk their own money, I’d still oppose the project on environmental grounds — but not on what are for me the MORE important consumer/ratepayer grounds. Under their proposal, WE DON’T GET TO NOT BUY IT. WE AGREE, NOW, TO BUY IT FROM THEM..
This understanding should shake you down to your shoes, Ron. They don’t have to do a really good job. They don’t have to use state-of-the-art equipment. Once they have the signed contracts, THEY ARE NO LONGER COMPETING IN THE MARKET. They have their guaranteed profit. “Nobody buys it” IS NO LONGER AN OPTION.
THAT’S WHY THEY’RE FIGHTING SO HARD FOR THIS, RON.
I’m sorry that you haven’t understood this fundamental problem with Poseidon before now, Ron. Now that you have, I hope that you will oppose it. This is not, as you seem to think, necessarily about opposing all desal, everywhere, forever. Ryan has that opinion, but I don’t have to do so. It’s about opposing THIS desal, with THIS contract, RIGHT NOW.
And you’ve been on the wrong side, given everything I know about your views of guaranteeing many millions in public funds to those who haven’t earned it, just because they were able to convince a small number of people to go ahead.
I do not have that opinion.
Desal may make sense in areas of the world without alternative water solutions.
The LA basin and Orange County have viable alternative to manufacturing water from salt.
Sure, sure — 😉
I like how you make it sound. Alchemy. Gold from lead. The ultimate dream in the dark ages, until right about when SCIENCE kicked in.
I take exception to your use of the term “dark ages.”
However, alchemy was seen as a going concern through out the Middle Ages and Renaissance.
More background on the mysterious substance that everybody was looking for:
http://en.wikipedia.org/wiki/Philosopher%27s_stone
Perhaps Steve Sheldon and the Winships know something about a magical element that makes everything seem okay. Like ether.
You know, scientists did at one point transmute one atom of lead to one of gold (which involves knocking three protons and hoping that it doesn’t decay too quickly), just to be able to say that they did it.
*This is typical “swap meet” sales techniques. If you take the 1st price you don’t know how to haggle. If you take the 2nd price ….you are a putz. If you take the 5th price…..you are on the Rialto Bridge and have made out.
*By the way……who is negotiating this contract? What great minds are sitting down and talking it out before pen goes to paper? Sounds a lot one sided ….eh? So…as they say: “Come on down……”
Greg is telling you the truth, Ron. You should read his longer comment above a few times until you get it. “Who is negotiating?” A lot of politicians who SHOULD be working for you and me, but are paid off by Poseidon. Don’t be a fool, Ron. This is a SWINDLE.
Vern, please explain the Poseidon contracts to Ron (or ask John Earl to come to so.) I’m not having much luck.
*OK guys…..we get the fact that people like the TCA who want to extend the 241 don’t listen to anyone and continue on – just like it was yesterday. The Poseidon deal has been in the making since Debbie Cook was a small child. Look – the issue is: Who should fund the project? Bonded Indebtedness again? How bad can it be? Heck, right here in Newport Beach we are only $142 mill down with 50 years to pay. Modern finance….ya know? OK, Municipal Water Bonds? State Water Bonds? Federal Water Bonds? Native American Water Bonds? This all doesn’t matter much. This is called: “Let’s play flub-a-dub and hope everything works out OK. The contingency is the price of the water over the next 10 years. Poseidon or Atlantic Virgin or SD PG & E all have ways of structuring the pricing in their favor. But then so does every Water District in the state. We may never really know – who is on what side in this mess. Who are you going to trust? Peer Swan? You trust who you want, but we want a transparent Development Structure and a Transparent Pricing Structure over the next 10 years. There should absolutely be REQUIREMENT to buy Desal or any water, unless of course both the Water Districts and Poseidon rely on Private Funding for the completed project. We agree, these folks want to rip off the system. The same goes for any public entity that thinks is has leverage. The answer of course ….is to not let them do it now, when the people sign off or years afterwards when they want to change the rules.
*One last thing: All Desal should be covered by the PUC and governored under its auspices.