Mayes, lawmakers slam Saudi water deal

Mayes, lawmakers slam Saudi water deal

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Officials on both sides of the aisle want to do something about the deal that’s letting a Saudi-based company pump Arizona groundwater for nothing more than the price of a cheap land lease in La Paz County. (Photo by Deposit Photos)

Officials on both sides of the aisle want to do something about the deal that’s letting a Saudi-based company pump Arizona groundwater for nothing more than the price of a cheap land lease in La Paz County.

Attorney General Kris Mayes, a Democrat, criticized the deal during her campaign, and in a TV interview on Feb. 19 said she’s planning to take action.

“I can do something about it,” Mayes said.

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In this file photo, Democrat Kris Mayes speaks with the media after a televised debate against Republican Abraham Hamadeh ahead of the race for attorney general on Sept. 28, 2022. Mayes, who is now state attorney general, criticized a deal that’s allowing a Saudi-based company to pump Arizona groundwater in exchange for the price of a cheap land lease in La Paz County. (Photo by Ross D. Franklin/Associated Press)

“This is one of the most egregious, outrageous examples of inaction by state government that I have ever seen,” she continued, indicating her office would announce action in coming weeks.

At the Legislature, too, officials are talking about doing something about the Saudi deal.

In the Arizona House of Representatives, Rep. Leo Biasiucci, R-Lake Havasu City, is sponsoring a bill that would target land deals with foreign entities. The bill got approval from the House on Feb. 22, and will now move to the Senate.

“A lot of times these deals are approved through the state Land Department, and they don’t have the oversight that they really need,” Biasiucci said at a committee hearing last week. “We all know in this room that that does equal many times, access to our water and other important infrastructure.”

At issue is a deal that allows Fondomonte Arizona, which is a subsidiary of a Saudi agriculture firm, to pump massive amounts of groundwater to farm alfalfa. A story in The Arizona Republic last year revealed details of the arrangement, prompting outrage from a number of officials.

The company leases several thousand acres of state land for a cheap price, including more than 3,000 acres in La Paz County at a rate of $25 per acre per year.

The land is outside of the state’s six Active Management Areas and the company doesn’t need to ask permission to pump groundwater – it’s not even reporting how much it’s pumping out of local aquifers.

But there’s every reason to believe it’s taking a lot – alfalfa farming is banned in Saudi Arabia precisely because it’s so water intensive.

But beyond outrage, what can actually be done?

Mayes offered some hints over the weekend.

“It’s my view that the lease itself is being violated. I also think it violates the gift clause,” she said. That’s a reference to Article 9, Section 7 of the Arizona State Constitution, which prohibits “any donation or grant, by subsidy or otherwise” of public funds to private interests.

Rhett Larson, a professor of water law at Arizona State University, said there’s at least a couple of different ways one could argue that the Fondomonte lease violates the gift clause.

“To both say: We are not getting enough money in return for the lease agreement; and also, this lease agreement isn’t contemplating either the value of the groundwater, or the overall damage of groundwater mining to the region and to surrounding property owners,” he explained. “I think both could be possible claims for why it’s a violation of Article 9.”

As for any violation of the lease terms, Larson said it’s tough to speculate without seeing the contract. The State Land Department, which handles leases of state property, didn’t respond to messages seeking comment this week.

In the Legislature, Biasiucci’s House Bill 2376 would take another approach by barring foreign governments or “state-controlled enterprises” from buying or leasing Arizona land. For a smaller subset of countries, it goes further: private companies and even regular citizens from the list would be banned from buying or leasing Arizona land.

The blacklisted countries are China, Cuba, Iran, North Korea, Russia, Saudi Arabia, Syria and Venezuela. In a hearing last week, Biasiucci indicated that the original list sought to target communist nations and those on a U.S. list of state sponsors of terrorism.

The bill passed the House by a vote of 43-17 on Feb. 22.

“The water is under the land and so we both want to make sure that the land is not getting in the wrong hands of somebody to exploit, as well as the water that is underneath it,” Biasiucci said in the hearing. “The Saudi thing is a perfect example.”

Previously, the list of prohibited countries didn’t include Saudi Arabia, but the country was added to the list in an amendment this week. That means the bill presumably would apply to Fondomonte, a private company that’s controlled by a Saudi firm.

Any company that’s majority-held by citizens of a country on the blacklist would be barred from leasing or buying Arizona land, per the bill.

It’s not clear whether Fondomonte’s owners easily might avoid the prohibition by selling the business to another owner who could continue to farm alfalfa as before and simply sell the product to Saudi Arabia.

The ‘No’ votes on Feb. 22 mainly came from Democrats.

Rep. Stephanie Stahl Hamilton, D-Tucson, said she agrees with the idea of choosing who the state does business with, but not with the particular approach of Biasiucci’s bill.

“To single out specific countries… I think is very much an overreach and can appear to smack of xenophobia,” she said.

Rep. Mariana Sandoval, D-Goodyear, said at the committee hearing last week that she supports the “spirit” of the bill but didn’t see it focusing specifically on water. On Feb. 22, she voted against the proposal.

Biasiucci replied that land and water go hand in hand. “If we stop them from getting the land, they can’t pump the water,” he said.