CENTER FOR BIOLOGICAL DIVERSITY
BECAUSE LIFE IS GOOD

Protecting endangered species and wild places through
science, policy, education, and environmental law.

NEWS RELEASE: For Immediate Release April 5, 2005

Fort Huachuca area lenders challenged for San Pedro River harm

VA, FHA, and SBA fail to reveal full extent of their support for deadly groundwater-dependent growth.

The Center for Biological Diversity (CBD) has filed a lawsuit today in U.S. District Court in Tucson to remedy failure by the Veterans Administration (VA), the Federal Housing Administration (FHA) and the Small Business Administration (SBA) to disclose the full extent of the damage caused by their lending, loan guarantee, and underwriting programs in the Fort Huachuca area. EarthJustice represents CBD in these efforts to protect the San Pedro River.

Failure by the VA, FHA and SBA to examine the environmental impact of their actions and failure to explore alternative agency actions are illegal under the National Environmental Policy Act (NEPA).[1] NEPA requires that agencies evaluate their actions’ environmental impact and explore alternatives prior to the initiation of agency activities.[2] FHA officials admit that they are violating the law.[3] VA and SBA officials continue endeavoring to cover-up their illegal activities.[4]

The San Pedro River is the last surviving river in the desert Southwest.[5] Excessive, local groundwater-dependent growth threatens the River.[6] An adequate supply of water does not exist in the Fort Huachuca area to provide for San Pedro River survival, Federal reserved water rights and the area’s excessive, increasing groundwater-dependent growth.[7] Water in the Fort Huachuca area is already over allocated.[8] Federal reserved water rights account for between 103% and 130% of the area’s entire annual natural recharge.[9] The San Pedro River, representing Bureau of Land Management’s (BLM’s) Federal reserved water rights, has not received its share of water for 69% (122/178) of all months on record (November 1988 through September 2003) at the Charleston gage as of December 2, 2004.[10] This shortfall represents an accumulating deficit to date of 34,819 acre-feet based on USGS stream flow data.[11]

From October 1, 1992 (start FY 1993) through September 30, 2004 (end FY 2004), the VA has guaranteed and insured 5,179 home loans for $177,053,463 in Cochise County.[12] Since September 30, 2001, the FHA has guaranteed or insured 459 loans for $43.8 million in the Fort Huachuca area.[13] The SBA has loaned $8.5 million creating 272 jobs,[14] and the VA has guaranteed 548 loans totaling $81.1 million during this same period.[15]

FHA proposes to guarantee or insure another 800 new loans for approximately $69.9 million.[16] The SBA and the VA refuse to disclose the number of their proposed loans.[17] Peril to the San Pedro River continues increasing.[18] The groundwater deficit has increased by between 63.3% (from -5,144 to -8,400 acre-feet/year) according to Arizona Department of Water Resources (ADWR) 2002 data,[19] to 134.3% (from -5,144 to -12,050 acre-feet/year), according to USGS 2003 data.[20] Not surprisingly, San Pedro River base flow, or the water in the stream during the driest times of the year, continues decreasing dramatically.[21] The Palominas/Hereford groundwater-pumping center, near the Mexican border, has been acknowledged to be negatively affecting San Pedro River base flows since 1987.[22] The Fort Huachuca/Sierra Vista groundwater-pumping center is now also negatively affecting the flow gradient near the San Pedro.[23]

In the past, the FHA and VA recognized that the Fort Huachuca area’s inadequate water supply would ultimately reflect negatively upon property values.[24] In 1984, when ADWR accurately and honestly recognized that an adequate 100-year supply of water does not exist in the area, the FHA and VA instituted a moratorium on their loans and underwriting.[25] On July 13, 1984, the Arizona Daily Star reported:

“ADWR refuses to certify 100 year water ‘adequacy’ for areas largest developer Tenneco Realty, a subsidiary of the Houston-based, multinational oil-gas-shipbuilding-chemical company Tenneco Inc., is the fountainhead of this area’s future. [Castle and Cooke are now developing Tenneco’s property.] This and countless other signs promote its Sierra Vista Project, which in 30 years could almost double the metropolitan area’s current population of 42,000.

But the future of the project, and perhaps of Sierra Vista itself, could be hung up by this city’s intricate - and hotly disputed - link to the San Pedro River, about 10 miles to the east.

The State Department of Water Resources [ADWR] says ground water pumping for the project would dry up parts of the river in the next 100 years...The state concluded Tenneco’s pumping – even though many miles from the river – will reduce the ground water level there by about 50 feet in 100 years. In areas where the river’s flow is sustained by high ground water recharge…the pumping will cause the river to dry much sooner than 100 years…As a result, the state water agency has refused to certify that Tenneco has an adequate water supply...

This, by itself, will not stop the project. Cochise County, unlike Pima County, is not in a state water Active Management Area [AMA] where developers must prove an assured 100-year water supply to build. Here, the state only requires that developments with inadequate water supplies let customers know in sales contracts.

But it will keep the U.S. Department of Housing and Urban Development and Veteran Administration from insuring Federal Housing Administration and VA mortgage loans for housing customers, for Tenneco or for any other project.

‘We certainly don’t want anyone buying homes without adequate water,’ said Adele Kauth, manager of HUD’s Tucson office. ‘If they could be subjected to cutting off of water someday, it (the development) could be a wasteland.’

Veterans Administration official Loring Myer said that his Phoenix-based office also will turn down loans if made aware of an inadequate water situation...”[26]

The VA and FHA moratorium did not last owing to a “hailstorm of developer protests.”[27] No paper trail concerning the moratorium apparently survives.[28] Undoubtedly, the moratorium was reversed following a scenario consistent with Senator Dennis DeConcini’s “Keating Five” treatment of Federal Savings and Loan regulators.[29]

In spite of the suspect moratorium reversal, ADWR remained undeterred and factually steadfast until September 29, 1993.[30] ADWR under then Governor Bruce Babbitt and his successors, Governor Evan Mecham and Governor Rose Mofford, continued to recognize the inadequacy of water in the Fort Huachuca area. [31]

Governors Babbitt, Mecham and Mofford were not developers. They were not inappropriately influenced by the “hailstorm of developer protests.”[32] Their successor Governor Fife Symington was a developer. His antipathy towards consumer safeguards and protection of environmental treasures like the San Pedro River was unabashed.[33]

On September 29, 1993, Governor Symington and his ADWR abruptly reversed the recognition of the inadequacy of water in the Fort Huachuca area.[34] Governor Symington and his ADWR chose to deny (1) the existence of the connection between the San Pedro River and the regional aquifer supplying its base flow, (2) chose to deny the existence of Bureau of Land Management’s Federal reserved water rights represented by San Pedro River surface flow, and (3) and chose to deny the fact that Federal law, unlike Arizona law, recognizes the reality of the connectivity between surface water and groundwater.[35]

Governor Symington’s reversal violates the Arizona Consumer Fraud Act by falsely representing the adequacy of future water supply to the real estate consumers and lenders in the Fort Huachuca area.[36] ADWR continues this practice today.[37] In fact, on March 9, 2005, ADWR refused to create an AMA in the Fort Huachuca area based on the exact same logic utilized by Governor Symington on September 29, 1993.[38]

The VA, FHA and SBA cannot be party to ADWR’s fraudulent practices.[39] Federal agencies are unequivocally obligated to Federal water laws, Federal environmental laws, and Federal fiduciary oversight laws.[40] The lawsuit filed today by CBD against the VA, FHA, and SBA will help assure that Fort Huachuca area consumers and investors and the San Pedro River are better protected.[41]

FOR INFO: Dr. Robin Silver, Center for Biological Diversity Board Chair, 602.246.4170

[1] 24 C.F.R. 50.1; 24 C.F.R. 50.2; 38 C.F.R. 26.1; 24 C.F.R. 50.1(c); 40 C.F.R. 1501; 40 C.F.R. 1502; 40 C.F.R. 1506; 40 C.F.R. 1507: 40 C.F.R. 1508; 42 U.S.C. 4321; 42 U.S.C. 4322(2)(C)
[2] 42 U.S.C. 4332(2)(C); 40 C.F.R. 1501.2; 40 C.F.R. 1501.4; 40 C.F.R.
1502.5; 40 C.F.R. 1508.7; 40 C.F.R. 1508.8
[3] CBD 2004g, 2004i; FHA 2004
[4] CBD 2004e, 2004f, 2004h; SBA 2005; VA 2004a, 2004b
[5] AGFD 1993; American Birding Association 1995; Arizona Highways 1989; CBD v. DoD 1999; CEC 1999a; CEQ 1981; National Geographic 2000; New York Times 1999
[6] ACOE 2003; BLM 1987; CEC 1999b; CBD v. DoD 1999, SWCBD v. DoD 1994; USFWS 1999e, 2002; USGS 1999a
[7] ACOE 1970, 1974, 2002, 2003; ADWR 1984, 1988, 1989, 1990, 1991, 1992a, 1992b, 1993a, 1993b, 1994a, 1994b, 1996b, 2003a, 2003b, 2003c, 2004a, 2004b, 2004c; AGFD 1993, 2005; American Birding Association 1995; Arizona Center for Law in the Public Interest 2004; Arizona Center for Law in the Public Interest v. Hassell, 172 Ariz. 356, 837 P. 2d 158 (App. 1991); Arizona Commission on the Environment 1990; Arizona Corporation Commission 1999, 2001, 2002, 2003, 2004; Arizona Daily Star 2002, 2003a, 2004b; Arizona Daily Sun 2004; Arizona Highways 1989, 1996, 1998; Arizona Republic 2002, 2003a, 2003b, 2003c, 2003d, 2004a, 2004b, 2004c, 2004d, 2004e; Arizona Supreme Court 1988, 1992, 1999; Arizona v. California [1963]; ASL 1994; BLM 1987, 1991; Cappaert v. United States 426 U.S. 128 [1976]; CBD 2001a, 2001b, 2002, 2003a, 2003b, 2003c, 2003d, 2004c, 2004e; CBD v. ADWR 2002, 2003; CBD v. DoD 1999, 2003; CEC 1999a, 1999b; CEQ 1981; CNN 2004, 2005; Cook et al. 2004; Department of Defense 2005; Department of Interior 1994, 2004; EEC 2001, 2005a, 2005b; Endangered Species Act; Fort Huachuca 2002a; GGBP 1994; Glennon 2002; Glennon and Maddock 1994,1997; Greer v. Connecticut, 161 U.S. 519 (1896); Haas and Frye 1997; High Country News 2004, 2005; Illinois Central Railroad v. Illinois, 146 U.S. 387 (1892); Kansas v. Colorado, 115 S. Ct. 1995; Lacher 1994; Life Magazine 1993; Martin v. Waddell, 41 U.S. (16 Pet.) 367 (1842); National Geographic 2000, 2004; Nebraska v. Wyoming, 115 S. Ct. 1033, 1937 (1995); New York Times 1999; NOAA 2005; Observer/UK 2004; Pollard v. Hagen, 44 U.S. (3 How) 212 (1845); Sierra Vista Herald 2000b, 2003a, 2003e, 2004f; State of Arizona 1991; State v. Fertterer, 841 P.2d 467 (Mont. 1992); State v. New Jersey Central Power & Light, 125 N.J. 103, 308 A.2d 671 (1973), aff’d. 336 A.2d 750 (N.J. Super. Ct. Div. 1975), rev’d., 351 A.2d 337 (N.J. 1976); Steinitz, et al. 2000; SWCBD 1991, 1996, 1999a, 1999b; SWRAG 2000; <http://a257.g.akamaitech.net/7/257/2422/23apr20021030/www.supremecourtus.gov/opinions/01pdf/00-1167.pdf> Tahoe Sierra Preservation Council v. Tahoe Regional Planning Agency, 122 S.Ct. 1465 U.S. (2002); TNC 2002; Tucson Citizen 2004; U.S. Army 2003b, 2003d, 2003e; U.S. Congress 1988; U.S. Constitution Articles I, IV; U.S. Senate 1988; USFWS 1978, 1986a, 1986b, 1990, 1991, 1992, 1993, 1994, 1995, 1997a, 1997b, 1998a, 1998b, 1998c, 1998d, 1999b, 1999c, 1999d, 1999f, 2000, 2001b, 2002, 2003; USGS 1982, 1999a, USGS 1999b, 2004a, 2004b; Vionnet and Maddock 1992; W.J.F. Realty Corp. v. Town of Southampton, 240 A.D.2d 657, 659 N.Y.S.2d 81 (1997); W.J.F. Realty Corp. v. State of New York, 1998 WL 249100 (N.Y.Sup. April 22, 1998); Ward v. Race Horse, 163 U.S. 504 [1896]; Washington Post 2005; Winters v. United States [1908]
[8] ADWR 1992a; BLM 1991; Department of the Interior 2004: ADWR 2004:
Appendix C – Sierra Vista Subwatershed Ground-Water Budget, Table C2. Summarization of development ground-water budgets for the Sierra Vista Subwatershed; and Appendix D – ADWR Ground-Water Budget for the Sierra Vista Subwatershed for 2002; Department of Defense 2005; Fort Huachuca 2002a; U.S. Congress 1988; USGS 2004a, 2004b
[9] Ibid.
[10] ADWR 1992a; U.S. Congress 1988; USGS 2004b
[11] Ibid.
[12] VA 2004b
[13] FHA 2004
[14] SBA 2005
[15] VA 2004b
[16] FHA 2004
[17] CBD 2004e, 2004f, 2004h; SBA 2005; VA 2005a, 2005b
[18] 16 U.S.C. 1536(a)(2); 50 C.F.R. 402.2; ACOE 2003; ADWR 1994b, 1996b, 2004a, 2005a, 2005b; AGFD 2005; Arizona Corporation Commission 2002, 2003, 2004; Arizona Daily Star 2004a, 2005a; Arizona Daily Sun 2004; Arizona Republic 2003c, 2003d, 2004a, 2004b, 2004c, 2004d, 2004e; Border Patrol 2003, 2004a, 2004b, 2004c; CBD v. DoD 1999, pp. 2,5; CEC 1999b; CNN 2004, 2005; Cook, et al. 2004; Department of Interior 2004; EEC 2001, 2005a, 2005b; FHA 2004; Fort Huachuca 2002c, p, 88, Appendix K, 2004a, 2004b, 2004c, 2004d, 2005; Haas and Frye 1999; High Country News 2005; National Geographic 2004; NOAA 2005; Observer/UK 2004; SBA 2005; Sierra Vista Herald 2003a, 2003c, 2003d, 2004a, 2004c, 2004d; 2004e, 2004g, 2004h, 2004i, 2004k, 2004l, 2005a, 2005b, 2005c, 2005d; SWRAG 2000; Tucson Citizen 2004; USFWS 1990, 1998a, 1998b, 1998c, 1998d, 1999b, 1999c, 2002, 2003, 2004; USGS 1999a, 1999b, 2004a; VA 2004a, 2004b; Washington Post 2005
[19] Department of the Interior 2004, Appendix C – Sierra Vista Subwatershed Ground-Water Budget, Table C1. Summarization of predevelopment ground-water budgets for the Sierra Vista Subwatershed, ADWR 2002 data; and Appendix D – ADWR Ground-Water Budget for the Sierra Vista Subwatershed for 2002; Fort Huachuca 2002c, p, 88, Appendix K; USFWS 2002, p. 90
[20] Department of the Interior 2004, Appendix C – Sierra Vista Subwatershed Ground-Water Budget, Table C1. Summarization of predevelopment ground-water budgets for the Sierra Vista Subwatershed, USGS 2003 data; Fort Huachuca 2002c, p, 88, Appendix K; USFWS 2002, p. 90
[21] ADWR 1996b; CEC 1999b; USGS 1999a, 2004a
[22] BLM 1987; USFWS 1999e, 2002, p. 92; USGS 1999a
[23] ACOE 2003
[24] Arizona Daily Star 1984
[25] Arizona Daily Star 1984; High Country News 2004
[26] Arizona Daily Star 1984
[27] High Country News 2004
[28] CBD 2004f, 2004h, 2004g, 2004h; FHA 2004; HUD 2004; VA 2004a, 2004b;
[29] Arizona Republic 1999
[30] ADWR 1984, 1989, 1990, 1992b, 1993a, 1993b, 1993c, 1994a
[31] Ibid.
[32] High Country News 2004
[33] ADWR 1994a; Arizona Republic 1996; Maricopa Audubon 1993, 1994; Phoenix Gazette 1993; Phoenix NewTimes 1996, 1997a, 1997b, 2001
[34] ADWR 1992b, 1993b, 1993c
[35] ADWR 1992b, 1993b, 1993c, 1994a; Maricopa Audubon 1993, 1994;
[36] A.R.S. 44-1521, 44-1522; ACOE 2002, 2003; ADWR 1988, 1991, 1992a, 1992b, 1994a, 1994b, 1996b; Arizona Center for Law in the Public Interest 2004; Arizona Center for Law in the Public Interest v. Hassell, 172 Ariz. 356, 837 P. 2d 158 (App. 1991); Arizona Commission on the Environment 1990; Arizona Corporation Commission 1999, 2003; Arizona v. California [1963]; Arizona Supreme Court 1988, 1992,1999; BLM 1987, 1991; Cappaert v. United States 426 U.S. 128 [1976]; CBD 2001, 2003a, 2003b, 2004c, 2004d; CBD v. ADWR 2002, 2003; CBD v. DoD 1999; CEC 1999b, CEQ 1981, Department of Interior 1994; Endangered Species Act; GGBP 1994; Glennon 2002; Glennon and Maddock 1994,1997; Greer v. Connecticut, 161 U.S. 519 (1896).; Illinois Central Railroad v. Illinois, 146 U.S. 387 (1892); Kansas v. Colorado, 115 S. Ct. 1995; Lacher 1994; Martin v. Waddell, 41 U.S. (16 Pet.) 367 (1842).; Nebraska v. Wyoming, 115 S. Ct. 1033, 1937 [1995}; Pollard v. Hagen, 44 U.S. (3 How) 212 (1845); State of Arizona 1991; State v. Fertterer, 841 P.2d 467 (Mont. 1992); State v. New Jersey Central Power & Light, 125 N.J. 103, 308 A.2d 671 (1973), aff’d. 336 A.2d 750 (N.J. Super. Ct. Div. 1975), rev’d., 351 A.2d 337 (N.J. 1976); Steinitz, et al. 2000; SWCBD 1991; <http://a257.g.akamaitech.net/7/257/2422/23apr20021030/www.supremecourtus.gov/opinions/01pdf/00-1167.pdf>Tahoe Sierra Preservation Council v. Tahoe Regional Planning Agency, 122 S.Ct. 1465 U.S. (2002). ; U.S. Army 2003b; U.S. Congress 1988; U.S. Constitution; U.S. Senate 1988; USFWS 1986a, 1986b, 1991, 1992, 1993, 1994, 1995, 1997a, 1997c, 1999b, 1999c, 1999d, 1999f, 2000, 2001b, 2002; USGS 1982, 1999a, 2004a; Vionnet and Maddock 1992; W.J.F. Realty Corp. v. Town of Southampton, 240 A.D.2d 657, 659 N.Y.S.2d 81 (1997); WJF Realty Corp. v. State of New York, 1998 WL 249100 (N.Y.Sup. April 22, 1998); Ward v. Race Horse, 163 U.S. 504 [1896]; Winters v. United States [1908]
[37] ADWR 2003a, 2003b, 2003c, 2004c; CBD 2002, 2003c, 2003d, 2004c
[38] ADWR 2005a, 2005b; Arizona Daily Star 2005a
[39] 18 U.S.C. 371; 18 U.S.C. 1001; 18 U.S.C. 1014; 24 C.F.R. 50.1; 24 C.F.R. 50.2; 38 C.F.R. 26.1; 24 C.F.R. 50.1(c); 40 C.F.R. 1501; 40 C.F.R. 1502; 40 C.F.R. 1506; 40 C.F.R. 1507: 40 C.F.R. 1508; 42 U.S.C. 4321; 42 U.S.C. 4322(2)(C); Arizona v. California [1963]; BLM 1987, 1991; Cappaert v. United States 426 U.S. 128 [1976]; CBD 2001, 2003a, 2003b, 2004c, 2004d; CBD v. DoD 1999; CEC 1999b, CEQ 1981, Department of Interior 1994; Endangered Species Act; GGBP 1994; Glennon 2002; Glennon and Maddock 1994,1997; Greer v. Connecticut, 161 U.S. 519 (1896).; Illinois Central Railroad v. Illinois, 146 U.S. 387 (1892); Kansas v. Colorado, 115 S. Ct. 1995; Martin v. Waddell, 41 U.S. (16 Pet.) 367 (1842).; Nebraska v. Wyoming, 115 S. Ct. 1033, 1937 [1995}; Pollard v. Hagen, 44 U.S. (3 How) 212 (1845); Sarbanes-Oxley Act of 2002; SWCBD 1991; <http://a257.g.akamaitech.net/7/257/2422/23apr20021030/www.supremecourtus.gov/opinions/01pdf/00-1167.pdf>Tahoe Sierra Preservation Council v. Tahoe Regional Planning Agency, 122 S.Ct. 1465 U.S. (2002). ; U.S. Army 2003b; U.S. Congress 1988; U.S. Constitution; U.S. Senate 1988; USFWS 1986a, 1986b, 1991, 1992, 1993, 1994, 1995, 1997a, 1997c, 1999b, 1999c, 1999d, 1999f, 2000, 2001b, 2002; USGS 1982, 1999a, 2004a; Vionnet and Maddock 1992; Winters v. United States [1908]
[40] Ibid.
[41] 24 C.F.R. 50.1; 24 C.F.R. 50.2; 38 C.F.R. 26.1; 24 C.F.R. 50.1(c); 40 C.F.R. 1501; 40 C.F.R. 1502; 40 C.F.R. 1506; 40 C.F.R. 1507: 40 C.F.R. 1508; 42 U.S.C. 4321; 42 U.S.C. 4322(2)(C)

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