US: Water Industry's Cash to Political Campaigns Helps Fuel Effort to Privatize

Over the last four years, the water utility industry has pumped more than $1.5 million into U.S. political campaigns, according to a
published report.

The Charleston Gazette said lawmakers are considering legislation that would
make it easier for private companies to gobble up publicly owned water
providers, according to a yearlong investigation by a coalition of
journalists and public interest groups.

The reports were produced by the International Center for Investigative
Journalism, a project of the Center for Public Integrity; which began
publishing the reports on the Internet last week, the newspaper said.
The report said that private water interests have become a major political
force in the debate about the country's water infrastructure, said the
Gazette.

The report said that since 1996, when the US Environmental Protection Agency
(EPA) first warned of a looming water infrastructure crisis, private water
companies and their associations have increased spending in the political
arena, allocating millions to influence and support lawmakers, according to
the article.

The center found that since 1990, the world's three largest private water
utility companies have expanded into every region of the world, raising
concerns that a handful of private companies could soon control a large
chunk of the world's most vital resource.

The Gazette said 51 million people got their drinking water from private
companies in 1990, but by 2002 that figure had grown to more than 300
million people. From 1990 to 2002, private water companies went from being
active in about a dozen countries to operating in at least 56 countries and
two territories.

The report said three companies have cornered the global drinking water
market: France's Suez and Vivendi Environnement, as well as Thames Water,
owned by Germany's RWE AG.

The newspaper said the three are joined to a lesser extent by Saur of France
and United Utilities of England, working with Bechtel of the United States.
The three European water giants have gone on a buying spree of America's
largest private water companies, including American Water Works by RWE AG.
The center found from 1995 through 1998, the water utility industry, its
employees and political action committees, spent less than $500,000 on
campaign contributions, which the center called that "a blip on the national
campaign finance radar," according to the Gazette.

But in the last two election cycles 9 from 1999 to 2002 9 the industry's
campaign spending roughly tripled to about $1.5 million, the center's report
said, according to the newspaper.

Most of that came from a core group of seven of the nation's largest water
companies and the industry association that represents them, said the
article.

By contrast, according to the newspaper, groups that have generally opposed
privatization, such as the Association of Metropolitan Water Agencies, an
industry group for public water utilities, spent just more than $200,600
between 1996 and the first half of 2002 to make their case with lawmakers.
The center said that the industry's campaign spending, and a lobbying blitz,
appear aimed at a tax law favorable to privatization, and a funding bill
that encourages privatization.

"The water giants not only will raise rates to cover costs, critics say, but
will use monopolies over water systems and rights to manipulate the system,
much the way electricity companies were accused of doing in California in
the summer of 2001," the report said. "Critics fear that these companies
will not be held accountable, so jobs will be lost, quality will wane and
the poor will lose service."

• 106 Money & Politics
• 187 Privatization
• 190 Natural Resources