Billionaire farmers Lynda and Stewart Resnick profit from the Iran sanctions they lobbied for.

[Jan Klimkowski]

The American Dream made flesh.

All it needs is Robert Evans producing a Roman Polanski film of a Robert Towne script featuring John Huston, Al Pacino and Faye Dunaway.

I stumbled onto Stewart and Lynda Resnick almost as soon as I startedinvestigating California's billionaire-dominated public water system. The Oligarch Valley family that had made an easy $74 million selling water to the desert subprime suburb of Victorville was closely connected to the Resnicks.
Both families owned shares of the Kern County Water Bank, a natural aquifer at the southernmost edge of the Central Valley that had been converted into a privatized water-storage facility.
The water bank was designed by California's Department of Water Resources to function as an emergency reservoir. In wet years, it would collect excess water shipped down the California Aqueduct from Northern California and hold enough water to keep Los Angeles hydrated nearly two years in case of prolonged drought. The water bank was supposed to serve as a last-line defense to protect urban users. But in 1995 California water bureaucrats tweaked a couple of arcane water regulations and handed the water bank over to a small clique of Oligarch Valley landlords.
Once water entered the water bank, it stopped being a public resource. From that point, the owner could sell it to the highest bidder. "This means they become middlemen making profits on state-supplied water," reported Redding's paper Record Searchlight. "If they choose to, they can dry up vast areas of productive agriculture and ship the water to municipalities south of the Tehachapi range."
Stewart Resnick masterminded the scheme, and emerged with a majority stake in the new Kern County Water Bank. In fact, the Resnicks dominated and controlled the water bank so thoroughly that it's become a de facto extension of their private agribusiness.
Resnick's scheme did more than privatize a single piece of public infrastructure. It created a novel legal framework that gave Oligarch Valley famers the power tocreate non-existent water out of thin air. Resnick created "paper water."
Paper water was the envy of every finance conman in the country. It was so brilliant and innovative, in fact, that the snake-oil experts at Enron couldn't help trying to get in on the racket.
In the early 2000s, Enron bought a chunk of land in Oligarch Valley atop a natural underground reservoir and started working on a water bank of its own. Enron promised to herald the brave new future of paper water commodities with an Internet-based operation called Azurix that was going to become the etrade.com of H2O. Water day traders would log in from around the world, buying and selling water, hedging bets, trading water-backed securities.
Here's how Chris Wasden, the mastermind behind Azurix, explained it:
"...the way that water trading works is that you're really not trading the actual molecule of water that you own with someone else's water molecule. So I have this amount of water, and now let's swap it in such a way that I get access to water when I need it but it's not the actual water that's going there, it's an allocation of water."
Enron's water speculation utopia crashed and burned, in large part because the owners of Oligarch Valley didn't like outsiders crowding their territory. Mr. Wasden landed on his feet, though. He's now at PriceWaterhouseCoopers, managing director of "healthcare strategy and innovation."
So it didn't quite work out for Enron, but paper water boosted Lynda and Stewart Resnick to a whole new level of wealth and power. With access to cheap, abundant water, they opened up thousands of acres of new farmland in Oligarch Valley, nearly doubling their cultivated land holdings just in the three years after hammering out California's historic paper water agreement. They've been so successful that jealous Oligarch Valley neighborsincluding the Vidovich familyhave called on the state to intervene and distribute the Resnicks' water wealth.

Very early on, the company scored a lucrative contract to handle security at the international terminal at the Los Angeles airport: API employees ran the security screening gateswhat the TSA does nowand guarded incoming international airplanes until they could be inspected by U.S. Customs.
In the mid1970s, Resnick's security company got tangled up in a federal drug-smuggling and organized-crime investigation after three of its airport guards were busted handing over two pounds of pure "China White" heroin to undercover officers. At the time Stewart blamed the whole thing on a few bad apples, saying that they had already been fired for misconduct. He also alleged that this was an attempted shakedown by a former disgruntled employee. But according to the Los Angeles Times, the revelations of the drug bust were serious enough to trigger a broader investigation by the federal Organized Crime and Racketeering Strike Force into "possible infiltration of airport security by organized crime." Here's how the paper reported it in 1976:
"The investigation grows out of a narcotics smuggling case involving three former employees of American Protection Industries, which has the security contract for the international terminal at the airport."Court records in the case and other sources indicate that a potentially massive fraud against airline companies is being investigated by federal, state and local agencies.
"In addition, sources close to the investigation say extremely solid documentation' of organized crime ties to API employes has been unearthed.
"Five persons, three of them identified by authorities as former API employees, were arrested earlier this week on charges they sold almost two pounds of virtually pure China White' heroin to undercover narcotics agents.
"During the five-month investigation that led to the arrests, several of the suspects told undercover agents they had access to a large supply, as much as 100 pounds at a time, of the Oriental heroin, which they said was being shipped into this country on commercial airliners."