Editors Note 2: In Nevada, the average purchase of off-Farm Surface Water for 2008 was $7.20 per AFA. By 2013 it has raised to $13.60 per AFA.
March 18, 2018
On or about June 2000, Kraig Hafen, Mesquite Irrigation Company (MIC) Water Master, was appointed to the Virgin Valley Water Board. In 2003 he was reelected to a term expiring at the end of 2006. He replaced Samuel Raber and joined Harold Wittwer, Kathryn Leavitt, Charlene Hughes, and Cecil Leavitt.
The Hafen family holds approximately 710 shares in MIC earning the family in excess of $50 million. They have 110 BIC shares returning them $8.8 million. [[i]] In 2014, the Hafen family leased 560 shares (4,021 AFA) to the Southern Nevada Water Authority (SNWA) for $1,395,189.60 per year. In 2008 the Hafen's leased 109 shares to SNWA for $294,300. In 2014 they earned $196,200 for those BIC shares. [[ii]] The family also owns water rights in Panaca and Alamo, Nevada. In 2014, the Hafen's had interest in 20 or more Limited Liability Companies (LLC’s), many of which require water. In order to make money Hafen’s leased water from the VVWB at $250 per share. They then lease an equivalent or greater amount of water to SNWA for more than 7.5 times what they pay the VVWB. [[iii]] Kraig Hafen served on the VVWB between 2003. During that time he did not always recuse himself from the Board when he had an interest in a transaction. When asked in a deposition why he replied “it might have been because I was told I should probably abstain. That probably would have been the reason. I will tell you that previous board members who owned shares in MIC did the same thing. They voted on them. But it didn’t seem to become and issue until I was on the board.”[iv]Â
In late 2003, Hafen learned that the trustee for Mesquite’s Paradise Canyon, LLC, (d/b/a Wolf Creek Golf Course) were attempting to sell 61 shares (441.64 AFY) of MIC (also called “Wolf Creek Water”) water.
On Oct 1,2003, Board attorney George N. Benesch sent a letter to Hafen reminding him of the district’s interest in acquiring 61 shares of MIC river water held by Paradise Canyon, LLC. Benesch reminded Hafen that under NRS 281.421 it is Nevada policy that a public office is a public trust and that he (Hafen) had a fiduciary duty to put his personal interests aside and act in the best interest of the district. Benesch asked Hafen to assign his interest in the purchase to the district or step aside in his efforts to purchase the shares. If not, Benesch said he intends to raise the issue with the Court and actively oppose the approval of the sale.
Benesch reminded Hafen that he (Hafen) had said he would not personally move to purchase those shares. According to Benesch, Hafen, without notice to the board Hafen did enter into an agreement to purchase the shares for $6,600 per share totaling $402,600 or about $600.50 per AFA).
Note: Benesch was eventually fired from the VVWB and replaced by attorney Jedidiah (Bo) Bingham who had served as Hafen's attorney in water deals.
During the VVWB term held by Hafen, Cecil and Kenyon Leavitt, Dave Bennett, and Charlene Hughes they spent $763458.79 on 106 shares (670.44 AFA) MIC and BIC shares. That raised the average price paid to $709.27
In 2005 Theron Jensen replaced Charlene Hughes.
Jensen joined with Hafen, Cecil and Kenyon Leavitt and Dave Bennett. Together they purchased 104.19 AFA for $315,024 raising the average to $2,543.31 per AFA.
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Endnotes:
[i]Â John Lonetti’s opposition to VVWD’s Montion in Limine Re: The Golf Course water, Biasi Water, and Mr. Hafen’s and his family’s personal matters and private business dealings, April 4, 2014, District Court, Clark County Nevada, Case No. A-11-636082-C, Dept XXXII
[ii] Ibid. pg. 4 of 27.
[iii] Ibid. pg. 5 of 27.
[iv] Ibid. pg. 6, of 27.
