Arizona AG Kris Mayes calls for groundwater regulation after Saudi farm lease terminated

PHOENIX — Arizona Attorney General Kris Mayes said in an interview on KTAR News 92.3 FM’s The Mike Broomhead Show that Arizona needs statewide groundwater regulation a day after Gov. Katie Hobbs announced the termination of Fondomonte Arizona’s lease on farmland in La Paz County.

The company, a subsidiary of dairy company Almarai Co., had been drilling groundwater for its alfalfa farms in the Butler Valley to ship to Saudi Arabia to feed livestock.

Fondomonte Arizona, a subsidiary of Saudi Arabia-owned dairy company, Almarai Co., said it plans to appeal the termination of a lease by the Arizona State Land Department.

Mayes briefly mentioned what the alfalfa farmers would have to go through to get the process going.

“Well, there’s a regular appeal process through the State Land Department. I mean that’s the State Land Department that leases state land,” she said.

“This involved the governor making that decision. I think it was the right decision to terminate some leases and Butler Valley and to decide not to renew other releases in Butler Valley, Arizona; La Paz County that had been given to the Saudis back in the 2014-2015 time frame, you know, Mike, you know my view I never I don’t think those leases ever should have been put out to the Saudis.”

She said she thought the arrangement was wrong from the beginning and after inspections, they found there had been a breach in several of the leases.

How did Fondomonte Arizona breach leases?

In November 2016, Fondomonte had been given notice and opportunity to correct the breaches. The company failed to include secondary containment structures on its fuel and diesel exhaust fluid storage units. In a 2023 inspection, the land department found Fondomante had not corrected the default after nearly seven years.

“Well, you know it involved in unsecured fuel some unsecured fuel containers. I mean that was the the specific breach at issue,” Mayes said. “And then of course, you know Mike I think the arrangements of violation of the gift clause of the Arizona Constitution.”

The Gift Clause prohibits state and local governments from giving or donating public funds to private companies.

“I believe there was a gift clause violation and I believe there was a breach of the lease and it doesn’t matter necessarily matter which count which country was involved or the fact that it was an out of out of country company,” Mayes said.

“I think most people find that outrageous just sort of on the face of it. But you know, we weren’t charging the entity a dime for the water. So that’s fact number one. In fact number two is, there was a breach of the lease.”

Arizona has no statewide groundwater regulation

There are still Saudi leases in parts of Arizona, Mayes said.

“They still have leases in a place called Vicksburg in La Paz County so they’re not gone yet. And so they’re this is still I believe a situation that we that we will have to be dealing with in that at least last all the way to 2030,” she said.

Situations like companies drawing Arizona groundwater are due to there being no statewide regulation.

“We have AMAs in certain parts of the state where it’s regulated and in places like La Paz County. It’s not regulated. So, you know corporations can come in and this is happening by the way in Cochise County. We’re a dairy owned by a Minnesota-owned Dairy is dewatering wells all around the dairy because they can just stick a straw on the ground.”

“And essentially it’s the company or the entity with the most money wins and the company or the entity that can drill a well the deepest wins and private property owners all around these big mega dairies or these big mega agricultural operations are losing out in their livelihoods are being destroyed.

“We need a statewide approach to groundwater regulation people of Arizona deserve that the people of Arizona know that, and it’s why this kind of situation can happen in La Paz County.”