2 Cadiz Execs Cut Stake in Firm

Two top executives of Cadiz Inc., which is negotiating with local water officials to build a controversial $150-million water storage project in the Mojave Desert, have sold millions of dollars’ worth of shares in the Santa Monica company over the last several weeks.

The executives are Dwight Makins, a board member and former chairman, and Cadiz Chairman and CEO Keith Brackpool. Makins had earlier disclosed his sales of 252,800 Cadiz shares, more than half his stake, to the Securities and Exchange Commission, while Brackpool told analysts about the sale during a conference call Thursday.

Brackpool said that 500,000 of his Cadiz shares held as collateral for a bank loan had been sold by the bank in July without his prior knowledge or approval. He did not identify the bank or disclose its reasons beyond noting that some of the shares had been set aside as a marital settlement.

During the same call Brackpool also expressed confidence that a critical and long-awaited approval of the Mojave project would come shortly from the Interior Department, and he sharply criticized Sen. Dianne Feinstein (D-Calif.) for introducing legislation that could delay or block that approval. The department’s Bureau of Land Management must approve permits for the project because it will have environmental impacts on federal land.

Brackpool said that “all indications are [Interior] believes they’ve done everything necessary [to protect the environment] and will go ahead here and issue the permit.”

But an Interior Department spokesman said Friday that the project was still under review. Cadiz “can say anything they want, but the decision will be made back here in Washington, and we have not yet made that decision,” spokesman John Wright said.

The Mojave project, which Cadiz is planning to build in partnership with the Metropolitan Water District of Southern California, has come under criticism by environmentalists. Opponents say the project, which would store surplus Colorado River water for use during dry years, would extract more water from the local water table than would be replaced by natural means, causing possible environmental damage.

Other critics question whether the debt-laden Cadiz, which owns the land on which the project would be built, has the financial strength to meet its obligations. Cadiz has said that a water-monitoring system it has proposed should address the environmental concerns, and that it can call on financing adequate to meet its obligations on the deal.

Cadiz shares closed Friday at $5.05, up 28 cents, on Nasdaq.