CENTRAL VALLEY – Senator Melissa Hurtado said she believes the problems facing the Central Valley and California, while myriad and complex, have a common denominator: data manipulation. And that is restricting Valley residents from living the American dream.
In a recent interview with the Times, Hurtado (D-Bakersfield) touched on multiple topics, including the state budget deficit, homelessness, the high cost of living, water shortages, Proposition 47 and the skyrocketing cost of energy.
During the interview, Hurtado consistently circled back to her main focus, which is the idea that ordinary people have become victims of data manipulation and digital sleight of hand that have corrupted the stock market as well as behemoth companies like PG&E.
When asked how California’s budget deficit – now sitting at $68 billion, according to the Legislative Analyst’s Office – affects how she goes about her job as a legislator, Hurtado said when she was elected in 2018, the state enjoyed a financial surplus. She said she became concerned about the state’s economy in 2020. This is when she became aware of foreign actors buying up California ag land.
“I wrote a letter in 2021 to the U.S. Department of Justice (DOJ) about potential water rights abuses,” she said. “But I couldn’t necessarily fine tune what the actual issue was behind it all. Fast forward to today – what I have learned is that technology is advancing very quickly. There is a lot of positive that comes out of technology but a lot of it is opaque. That’s hurting our pocketbooks. And, in ways, limiting our freedom.”
WATER
In May 2022, Hurtado wrote a letter to the U.S. Attorney General, Merrick Garland. In her letter, Hurtado expressed concern that non-ag entities, including hedge funds, have engaged in anti-competitive prices with respect to purchasing water rights. She said these same entities potentially profit from the drought affecting Western states.
In August 2022, Hurtado again wrote Garland. In this letter, she asked him to take urgent action “to address potential fraud and market manipulation practices that result in less water availability in the Western states.”
She also wrote, “Given the importance data reliability is playing in the management of our resources, we think it is important to investigate the various consulting firms that focus on environmental, biological, legal, or engineering consulting work, and to the extent we can, the accuracy of that data they collect.”
In the interview with the Times, Hurtado said, “Data is the new gold rush. Data is becoming increasingly powerful and is being used to put into algorithms.” Hurtado believes algorithms are integral to price fixing. So much so she introduced a bill to the California Senate earlier this year that dealt precisely with that issue.
Hurtado said she was in Washington, D.C. recently, where she met with members of the Federal Trade Commission (FTC). During the meeting, she said they discussed the use of data and algorithms in schemes that are being used to create unfair markets.
“There’s all these different pricing mechanisms that are technology driven that are being used against consumers – against Californians,” said Hurtado. Even though her office drafted 18 pieces of legislation this year, with 10 working their way through the legislature, Hurtado said she wanted to focus more on letter writing; specifically, reaching out to the DOJ and the FTC and asking for their help with the bad actors who manipulate data to the detriment of the public.
For Hurtado, the issue is pervasive and affects multiple facets of society.
PG&E
PG&E faced bankruptcy after its outdated equipment caused multiple wildfires in the state. Because the company was, essentially, too big to fail, the state had to bail it out. The utility has paid billions to wildfire victims. And it has spent billions updating equipment, including an estimated $6 billion to bury power lines – the cost of which the company passed onto its customers. Something Hurtado finds outrageous. She also said she does not believe that PG&E should have been bailed out.
PG&E posted a profit of over $2 billion for 2023, another fact that adds to Hurtado’s incredulity regarding the company’s financial woes.
“How is it that you get bailed out? You’re significantly increasing the cost of energy. That doesn’t make sense to me,” she said. “On top of that, you’re bringing in record profits.”
From January through September, Hurtado said she spends Monday through Thursday in Sacramento. She returns home to Bakersfield on Thursday evenings. She does not have a family; no one stays in her home while she is away.
“My energy costs are significantly rising even when I’m not home,” she said. She added when she is home, her habits are the same; meaning, she has not changed how she consumes energy.
“How does my bill go from $200 a month to $500 a month when the amount of energy I am using is the same? It just does not make sense,” she said.
Hurtado returned to the theme that price fixing mechanisms may be at work. She mentioned surveillance pricing.
“It’s basically using data to customize the cost of a product,” she said. She said the FTC has been studying the impact surveillance pricing has on the cost of water, food and energy. She admits it is a complicated subject.
“I think a lot more (investigating) needs to be done on the energy side,” she said. She added she did not know if PG&E had engaged in nefarious schemes to raise prices. She said she plans on writing to the FTC to look into it. She will also send a letter to the California Public Utilities Commission.
PROPOSITION 36
Hurtado wholly supports Proposition 36 – the measure to roll back many of the provisions of Proposition 47. She said she was one of a handful of state Democrats who supported Proposition 47 reform efforts in 2020.
“Proposition 36 is needed; it’s going to start putting us on the right path, the right direction,” said Hurtado. “But more has to be done.”
The proposition addresses smash and grab robberies. Authorities say these types of crimes can be tied directly to drug use, particularly the use of fentanyl and other hardcore narcotics. Hurtado said that increasing penalties and fines for crimes is only part of the solution.
“The reality is that fentanyl continues to thrive is (because) we’re not stopping the source at its core,” she said. “What I mean by that is it continues to thrive and exist in our communities because money is being laundered. It’s being laundered using technology. Now cryptocurrency is being used to launder money.
“So long as we don’t tackle that, we’re going to have these challenges like fentanyl plaguing our communities.”
AG COMMUNITIES
District 16 includes two large cities – Visalia and Bakersfield – and three smaller cities – Hanford, Porterville and Delano. But mostly it includes smaller, agricultural communities. So, why is Hurtado so concerned with data, technology, and cryptocurrency when the majority of her constituents earn their livelihoods from working the land?
“It’s a new world,” she replied. “It’s been a challenge for me to grasp this data stuff.” Hurtado mentioned the Sustainable Groundwater Management Act (SGMA) and how the state determined how much water to allot to each region.
“All of it goes back to data,” she said. “Back to digital platforms.”
Water allotment has been a hot topic in the Central Valley since the California State Water Resources Control Board made its determinations earlier in the year. Hurtado said she believes Valley farmers are the victims of insufficient, incorrect or, possibly, corrupt data.
“Absolutely, I do,” she said. “But I can’t pinpoint it and that’s the challenge with all of this new technology. It’s so opaque; so obscure.” She admitted that when she first delved into the possibility that Valley farmers had been victimized by data manipulation, she said it sounded like a conspiracy. Until an audit was released last year that focused on how the state manages its water and how it manages the amount of water released from dams.
“I think the auditor said they couldn’t conclude anything because the required information was not provided,” said Hurtado. “I sent a letter to the DOJ and when the audit came out, I followed up and sent it (letter) again. Because it is data driven. There are different contractors. Different digital platforms are being used to manage our water. And if the auditor couldn’t conclude the main issue? Someone has to figure it out.”
When asked who the bad actors behind this are, Hurtado said she did not know.
The Times asked Hurtado what the state is doing right and what it is doing wrong. She circled back to data and the FTC.
“I don’t think the legislators are all onboard with what is happening with our economy,” she said. “We are hearing from our constituents how hard it is to pay our bills to survive. But we don’t have a clear understanding of what the exact issue is. That’s what we need to get to the bottom of. We need knowledge and information from government agencies like the FTC. They’re a little ahead in terms of trying to understand what is going on in our market.”
She also believes the state can do more in addressing financial hardships Californians are facing.
“I am hoping the antitrust division under the department of justice here in California can do a little bit more in taking on more cases,” Hurtado said. “They say they have greater ability and flexibility in the law to take on cases. Back in March, we heard the deputy attorney general in the antitrust division area was going to do a lot more but I haven’t seen it. Business actors that are not acting friendly in the market. We must hold them accountable.”
