February 19, 2016 by Sonoma Valley Sun
A Sun exclusive by By Will Parrish
For at least two decades, Sonoma County officials have sided with the wine industry in nearly every major political dispute. The reason? The industry dominates the county’s economy – and financially dominates county election campaigns.
Last spring, Sonoma County supervisors Efren Carrillo, James Gore, and Susan Gorin traveled to Sacramento to meet with some of California’s highest-ranking regulatory officials: California Secretary of Food and Agriculture Karen Ross, Secretary of Fish and Wildlife Charles Bonham, senior staff members at the State Water Resources Control Board, and State Water Resources Control Board member Dee Dee D’Adamo.
The subject of the closed-door session was a pending drought-related emergency order governing water use in four sections of the Russian River watershed, which the state and federal governments had deemed crucial to the survival of the endangered coho salmon and threatened steelhead trout. According to Supervisor Gore, in an interview with me last year, the specific focus of the conversation was to determine “what we could do to achieve the goal of water in the creeks for coho.”
Soon after, the Water Board announced the terms of the regulatory order, which spans 270 days – and remains in effect as of this writing. It applies to an estimated 13,000 Sonoma County residents. It forbids watering of lawns. It places limits on car washing and watering residential gardens. It does not, however, place mandatory limits on water used by irrigated vineyards, which are arguably the main recent cause of the iconic fish species’ perilous decline in the four areas in question.
The failure to regulate the wine industry outraged hundreds of local residents, who vented their opinions in public comment sessions at a series of public meetings held by the Water Board last year. Ironically, based on statements by the Water Board’s D’Adamo, the three elected Sonoma County representatives may have had a role in preventing exactly the restrictions for which these residents advocated.
In a 2015 public meeting, a Mark West Creek resident asked D’Adamo why the wine industry was exempt from the order. D’Adamo noted that “the county” had requested that the regulations not cause “an economic impact.” In a later interview with me, D’Adamo echoed this statement. “Our target is not irrigation [for wine-grapes] that provides an economic benefit,” she said.
Eventually, a slight majority of vineyard operators in the four watersheds (71 out of roughly 130 at last count) voluntarily committed to reducing their water use by 25 percent, relative to 2013 levels. Many onlookers question the efficacy of this voluntary effort, which they note lacks oversight. Meanwhile, one of Sonoma County’s largest wine corporations, Jackson Family Wines, agreed to pump 2.3 million gallons of water from a reservoir serving a pinot noir vineyard into Green Valley Creek. To many residents and environmentalists, though, this episode involving the Water Board reflects an elementary truth of Sonoma County’s modern power structure: The wine industry receives constant support from Sonoma County policymakers in every major political battle, even as it invades neighborhoods and pollutes the environment.
The Wine Juggernaut
Nobody in Sonoma County is more devoted to touting the wine industry’s economic might than the wine industry itself. A 2014 report commissioned by the Sonoma County Vintners and Sonoma County Winegrowers, for example, estimates that the industry accounted for an unbelievable $13.4 billion in economic activity in 2012.
That equates to about two-thirds of the county’s roughly $20 billion in economic activity that year. The study factors in the industry’s direct and indirect impacts, including its effect on the real estate market and tourism, spending by the industry’s workforce, and the like. Meanwhile, the California wine industry annually reaps more than $35 billion in direct sales, much of it through exports to Europe, Canada, and Asia.
The industry has become so profitable that most North Coast and Central Coast officials, from county supervisors to members of Congress, have internalized the notion that their role is to do virtually everything they can to facilitate the industry’s continued growth. US Rep. Mike Thompson (D-St. Helena), for instance, is a co-founder of the Congressional Wine Caucus and has largely based his career on advocacy for the industry’s positions on water, zoning, labor laws, subsidies, and more.
Yet, according to UC Santa Cruz Emeritus Professor of Sociology Bill Domhoff, a world-renowned power structure researcher, the wine industry’s political power is based on its position within a particular kind of “growth coalition” that also involves alliances with other sectors. In California’s North Bay and Central Coast regions, the premium wine industry is strongly integrated with the all-important real estate and tourism sectors.
In Sonoma County, for example, vineyards have helped to “preserve” the pastoral countryside while simultaneously increasing land values, and have helped create a market for both luxury estates and tract housing. The wine industry’s importance to local real estate, as a 2011 Santa Rosa Press Democrat article put it, is that it “attracts [wealthy] outsiders who want second homes nestled near vineyards or close to town squares with trendy restaurants.”
Bolstered by this sort of broader economic impact, as well as the unmatched social stature of its product (premium bottles of wine), the wine industry continually endeavors to expand. In recent years, that growth has been concentrated within Sonoma County on construction of new wineries, tasting rooms, and tourist-oriented event centers, as well as new vineyards in remote areas that were previously considered un-plantable.
In 2005, Sonoma County was home to roughly 200 wineries, according to data from the county. A little more than a decade later, there are roughly 450 – with more than 60 applications for new or expanded wineries in the pipeline.
The Wine Industry’s Political Donations
Even with its symbiotic relationship to the multi-trillion dollar real estate boom, as well as an assumed place within the culture of the ruling class, the wine industry has also achieved and maintained power through crassly material means: limit-bursting campaign contributions, a slew of political action committees staffed with well-connected executives, and an army of top-flight Sacramento and Washington, DC lobbyists.
Because potential reforms to environmental regulations and labor laws that could cut into their profit margins are most likely to emerge at the state level in the State Legislature, many of the industry’s activities have been geared toward Sacramento politicians. But seats on the Board of Supervisors are also coveted political posts, particular given the county’s influence on land use and environmental regulations. For example, county general plans are the linchpins of California’s land use and development laws.
The most recent Sonoma County supervisors race, a 2014 content pitting James Gore against Deb Fudge in the 4th district, provides a revealing window. It was the most expensive local race in the county’s history, marking the first time a county election generated more than $1 million in donations. The majority of that funding, more than $700,000, was spent to elect Gore. More than $150,000 of that was spent by outside political action committees (PACs), $480,000 by Gore’s campaign committee, and about $80,000 spent by Gore himself.
Wine industry money was, by far, Gore’s largest source of support, based on a review of campaign filings I conducted for this story. The fourth district supervisor, who was a political unknown prior to entering the race, received an astounding $144,975.10 from grape growers, winery owners, vineyard consultants, and their employees, according to filings with the Sonoma County Elections Division.
Factoring in the $22,259.14 he received from other agriculture industries, including equipment suppliers and cattle ranchers (some of whom also grow grapes), the total rises to $166,849.24 and 35.4 percent. But, recalling sociologist Bill Domhoff’s analysis, Gore’s fundraising success is really a triumph of growth coalition politics, with wine at the center of that coalition. The rest of his donor base consists of industries that dovetail strongly with the wine industry in his north county district, including the real estate industry, the construction industry, law firms, and the banking/investment industries.
Even among retirees and unemployed people, who donated a robust $25,227.28 to Gore’s campaign, the wine industry is strongly represented. Four digit donations in this sector came from the likes of retired former Sonoma County Winegrowers director Nick Frey ($1,615.00) and Diane Horn ($1,000), who is married to multi-billion dollar wine corporation Constellation Brands’ Sonoma County vineyard manager, Keith Horn.
In addition to the importance of wine to the district he represents, Gore has distinct personal ties to the wine industry, as Dave Ransom has reported in the New Press. Gore’s uncle Doug oversees the extensive Washington and California wine operations of Altria Group, once known as Phillip Morris. His brother, Tom, is an executive of Constellation Brands’ Sonoma and Mendocino vineyard operations.
Gore is also a former employee of Wine America, a wine industry lobbying outfit based in Washington, DC in which Kendall-Jackson plays a prominent role. The 39-year-old Gore also spent four years at one of Wine America’s contract lobbying firms, JBC, as the “primary representative of the California Wine/Winegrape industry on international affairs and trade.”
Whereas the fabled average donation to Bernies Sanders’ campaign is $27, the average wine industry donor to Gore cut him a check with a comma in it: $1,302. But Gore is not alone. My review of campaign donation data for this story also shows that wine donations have been a major funding source for several other supervisors, most notably Efren Carrillo and David Rabbitt.
Holding “All the Political Cards”
The combination of factors that have made the wine industry so powerful in county politics have clearly paid dividends. In its modern form, the Sonoma County wine industry’s struggle to ward off regulations probably began in the 1990s, during the most intensive period of vineyard expansion in its history. From 1977 to 1998, vineyard acreage in the county doubled from 24,687 in 1977 to 48,969. Several thousand of the new acres came from woodland conversion, causing significant changes in landscape and enormous volumes of soil erosion to wash into streams, greatly contributing to the decline of fisheries.
In response, environmentalists sought a rural heritage initiative (RHI) that would freeze land conversions for 30 years and require a vote by county residents before rezoning was permitted. Sonoma County’s growers rapidly condemned the initiative. They favored a hillside erosion control ordinance that would restrict only the most spectacular fringe of vineyard planting schemes. And, in 1999, that’s exactly what they got in the form of the Vineyard Erosion and Sediment Control Ordinance (VESCO). Many environmentalists that had been on an advisory panel to guide the ordinance’s development had resigned.
The situation was inflamed when one winery owner characterized the outcome as a “shellacking” for the environmentalists, who were “forced to accept less than they wanted because our side held the big political cards.”
Among those who took part in the task force, but later quit in protest, was Forestville attorney Kimberly Burr. “I was fresh out of law school, and it was an eye-opening experience to see the kind of political games the growers could play,” Burr recalled in an interview last year “They were a united front.”
As in the case of VESCO, Sonoma County planning officials have named high-powered winery executives, leading environmentalists and several rural residents to a 21-member panel formed to give input on the issue of winery development in the county, an issue that has inflamed local residents who strongly oppose the traffic and noise that wineries, event centers, and tasting rooms have created on rural roads. Most people on the panel are wine industry executives or have significant ties to the industry.
The industry is still taking nothing for granted, though. This past November, Karissa Kruse, president of the Sonoma County Winegrape Commission, sent a letter to her organization’s members and to several local chapters of the Chamber of Commerce. She urged them to write the Board of Supervisors to oppose restrictions on wine industry facilities, framing the issue in terms of protecting the rights of small business owners.
“Clearly, some rural residents are frustrated with the winery events issue and have sought to bully people into opposing the local wine industry by making wild allegations or outright lying about us,” Kruse wrote. “This has got to stop before the community over-reacts and adopts new restrictions which could force small family-owned farms and wineries out of business.”
She continued, “Me and my fellow grape growers are following a very stringent, time-consuming and costly effort to become certified sustainable by following some of the most respected and recognized programs in the world. But, our opponents never let these facts get in the way of their selfish effort to kill small businesses.”
According to UC Santa Cruz Pofessor Emeritus of Sociology G. William Domhoff, these sorts of rationales are common among local power structures that he calls “growth coalitions.”
“A local power structure is, at its core, an aggregate of land-based interests that profit from increasingly intensive use of land,” says Domhoff, who has studied land-use conflicts in regions throughout the US. “The growth coalitions inevitably have a well-crafted set of rationales to justify their actions to the general public, and this ideology is based most of all on the idea that growth is about jobs, not about profits.”
The wine industry is also currently engaged in a battle pertaining to the county’s update to the local coastal plan (LCP). Whereas environmental and neighborhood groups are attempting to preserve and extend environmental protections, the wine industry is attempting to create a plan more favorable for winery and other infrastructure development.
Many Sonoma County residents have also noted the county’s long history of approving proposed wineries without asking for environmental impact reports, which the California Environmental Quality Act (CEQA) mandates if a so-called lead agency—in this case, Sonoma County—decides the project could harm the environment.
Of the nearly 450 wineries in Sonoma County, the County has required only two to produce EIRs before building (a handful of others, such as the proposed Dairyman Winery near Sebastopol, have voluntarily pursued EIRs). One was the enormous, 4.9 million-case Gallo of Sonoma Winery project in Dry Creek Valley; the other, Kendall-Jackson’s La Crema Winery in Windsor. Both received considerable opposition from project neighbors but were eventually constructed.
Although the County rejected the controversial Dairyman Winery and Distillery project last year, critics say that is except that proves the rule, with some pointing to another instance where a winery developer voluntary conducted an EIR to counter widespread criticism. In that case, former long-time Goldman Sachs bank executive Henry Cornell (who now runs his own global hedge fund, which has made considerable investments in oil pipeline technology) opted to produce the environmental document regarding his proposed 10,000-case-per-year production facility, near the headwaters of Mark West Creek, after more than a decade of opposition by local residents.
According to local residents, the incident was particularly telling. In December 2012, the Supervisors voted 5-0 to support the winery EIR. One of the most vigorous proponents was Fifth District Supervisor Shirlee Zane. In advocating for the winery, Zane claimed to have spoken with Department of Water Resources staff person Christopher Bonds, whom she said had endorsed the winery.
”We had a lengthy conversation with Mr. Bonds, who’s the senior engineer at the California Department of Water Resources,” Zane claimed to the other supervisors. She claimed that Mr. Bonds “was hired at one point by an appellant earlier on,” in reference to the project’s opponents, and that even so, he had taken a stand in favor of the project.“
But there was just one problem: Ms. Zane’s statements were untrue. As part of a lawsuit against the Cornell Winery, project opponents deposed Mr. Bonds in an effort to bring the truth of Zane’s statements out in court. The County Counsel’s office responded by filing an injunction in an effort to block the deposition, in an apparent effort to protect Ms. Zane’s reputation and bolster the winery’s defense in court. More than one year later, following a court order rejecting the county’s effort to block Bonds’ deposition, Bonds finally gave a sworn statement and confirmed that he had never spoken to Ms. Zane.
Rather, Bonds had spoken to an assistant to the Supervisor. He had never read the EIR, let alone endorsed it, nor had he ever worked for the appellant. On the basis of Ms. Zane’s faulty statements, a Sonoma County superior court judge even ruled that a re-hearing by the Supervisors must take place (they again voted 5-0 in favor of the project). Ms. Zane has not responded to a request for comment on this story as of press time. Ms. Zane has not responded to a request for comment on this story as of press time.
Turning Water Into Wine
As in the case of the Cornell Winery, and the regulations on drought-diminished streams critical to coho salmon last year, the wine industry’s enormous appetite for water is one of its most regular sources of contention with local residents.
The Board of Supervisors also doubles as the Sonoma County Water Agency’s five-member board of directors. Relative to supervisors in most other counties, this role gives them considerable influence regarding where water flows and who receives it. For instance, the Water Agency owns a legal right to 88.7 percent of the water in the Lake Mendocino reservoir near Ukiah, which stores the main water supply of numerous vineyards from Ukiah to Healdsburg, as well as tens of thousands of people in Sonoma and Marin counties.
During a 2007 survey, the State’s Water Resources Control Board counted at least several hundred non-permitted ponds and lakes on the county’s private lands, most of which are agricultural reservoirs created via unauthorized diversions from nearby waterways. In some cases, streams had actually been dammed. Such actions that adversely affect coho salmon and steelhead are violations of the federal Endangered Species Act, which the National Oceanic and Atmospheric Administration’s (NOAA) local investigators are charged with enforcing.
As Friends of the Eel River Bay Area Director David Keller, a former Petaluma city council member, points out, the county has made little or no effort to assess the impact of so many non-permitted withdrawals of their water supply, let alone attempt to remedy the problem. “Why aren’t they working with the State Board to cut off those withdrawals that are mandated under federal law to be in the Russian River?” Keller asked rhetorically in an interview last year.
Meanwhile, in spite of the well-known problem of illegal diversions, the county does not require, when reviewing a project, that developers demonstrate they have a legal water right.
The county has sometimes even collaborated with growers occasionally to ward off regulations on water use. For example, in 2008 and 2009, investigators from the National Marine Fisheries Service identified vineyards in Sonoma and Mendocino counties as the culprits in fish kills of Russian River steelhead and — in the Mill Creek watershed near Healdsburg – of coho salmon.
The State Water Board responded by proposing new regulations on pumping of water for spring-time “frost protection” of grapes. In an attempt to undercut political will for these state regulations, a number of grape growers and allies formed a private, mutual benefit corporation called the Russian River Water Conservation Council (RRWCC) in April 2010, with the aim of secretly developing policies, regulations, permits and best management policies for adoption by Sonoma County, aided by former Supervisor Paul Kelley.
Eventually, the county-driven efforts to craft an industry-cozy legislation collapsed, largely due to opposition by the National Marine Fisheries Service. The modest state regulation took effect in 2015.
One common complaint among environmentalists is that the county fails to review well construction, instead approving all such construction on a “ministerial” basis. In my interview with him last year, Supervisor Gore noted that the county’s “ministerial” well-permitting will remain in place and cited a new ordinance requiring that wells be installed at least 30 feet from streams as an example of progress toward a stricter groundwater policy.
Celebrating with State Officials
On October 2nd, 2015, the individuals who crafted the current emergency regulation on water use in four Russian River tributaries staged an invite-only event at Kendall-Jackson Wine Estate and Gardens in Santa Rosa, celebrating what they described as improved conditions for the thousands of juvenile salmon and steelhead trout trapped in four drought-diminished creeks that were subject to the Water Board’s emergency regulatory order.
Karen Ross, secretary of the California Department of Food and Agriculture, was among those on hand. Prior to her current post, Ross served as director of the California Association of Winegrape Growers for 13 years. She touted the leadership of grape growers in conserving water, saying the state’s efforts to cope with climate change are “going to build on what you’ve started here.”
According to the Santa Rosa Press Democrat, her remarks “came as a counterpoint to widespread resentment from the belief that vineyard expansion is largely to blame for creeks going nearly dry.” In public remarks, Supervisor Gore hailed the voluntary conservation commitments of rural residents and the wine industry alike, telling the crowd that the “biggest challenge is not to buy into villainization,” in reference to criticisms of the wine industry’s water use.
Roughly a year earlier, Gore had conducted a campaign fundraiser at the same venue; a winery owned by a company the interests of which he used to lobby on behalf of in Washington, DC.