A shocking water theft scandal has recently come to light in the Panoche Water District, a public agency responsible for supplying irrigation to thousands of acres of farmland in Fresno and Merced counties in California’s San Joaquin Valley. The alleged theft, described as one of the most audacious and long-running water heists in California history, involved the siphoning of over 130,000 acre feet of water from a federal canal over a span of two decades.
The scandal unfolded when FBI agents arrived at the home of Robert Zavala, a former employee of the water district, in 2016. Zavala, who had kept silent about the water theft, eventually testified against his former boss, Dennis Falaschi, the former general manager of the Panoche Water District. Falaschi, along with a small group of co-conspirators, is accused of masterminding the theft and selling the stolen water to farmers and other local water districts.
The allegations against Falaschi and the water district are staggering. Testimony in a civil case, court filings in a state criminal case, and a related state audit reveal that public funds were allegedly misused to provide employees with lavish benefits, including free housing, new trucks, slot machines, concert tickets, and even court-ordered restitution payments. The estimated value of the stolen water exceeds $25 million.
The federal indictment against Falaschi, who initially maintained his innocence, has caused a deep divide within the community. Some farmers who relied on the water district see Falaschi as a modern-day Robin Hood, stealing water to ensure that desperate farmers had access to the vital resource. However, others are outraged, as stricter irrigation limits are already being imposed to protect wildlife and address sinking groundwater levels in the San Joaquin Valley.
The allegations have raised troubling questions about who else may have been involved in the scheme and why state and federal water officials took so long to detect the theft. The U.S. attorney’s office, FBI, California Department of Justice, state Department of Toxic Substances Control, and the federal Bureau of Reclamation have all declined to comment on the ongoing investigation.
Water has always been a precious commodity in the arid San Joaquin Valley, where it is often said that “water is for fighting over.” The alleged theft of such a significant amount of water has further exacerbated tensions in an already contentious issue. The case highlights the immense value placed on water in this region, where it is considered “liquid gold” and a means to substantial profits.
The Panoche Water District scandal serves as a stark reminder of the complex and troubled history of water management in California. From the infamous water grabs of Los Angeles and San Francisco to the environmental catastrophe caused by the mismanagement of irrigation drainage, the pursuit of water has shaped the destiny of this fertile but arid region.
