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

February 12th, 2003

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."

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