Shortly after the Arizona Globe reported on Arizona Senator Anthony Kern’s (R-LD27) bill precluding the sale, lease, or sublease of state lands to foreign entities, Governor Katie Hobbs canceled the existing lease of Saudi Arabian firm Fodomonte. Although Sen. Kern’s bill included a cut-out protecting existing leases, the Governor used the AZ Land Department to cancel the lease due to Fodomonte’s alleged failure to correct a safety violation related to onsite fuel storage.

Like other water-challenged nations, Saudi Arabia relies on imported feed crops – in Saudi’s case, growing water-intensive crops domestically is illegal. However, Arizona’s water shortage issues put exporting crops into the political crosshairs. Despite ongoing concerns from citizens over depleting groundwater for cattle feed to be shipped overseas, Gov. Hobbs’ press aide, Christian Slater, denied any connection.

“It was clear that we found significant default on their lease,” he told Capitol Media Services.

However, Fodomonte takes a more pessimistic view of the State’s actions. In a prepared statement, the company intimated concerns over potential bias.

“Fondomonte will explore all avenues to ensure there is no discrimination or unfair treatment,” it stated.

In the end, it appears that, as in the movie “Chinatown,” it’s all about the water.

“It’s unacceptable that Fondomonte has continued to pump unchecked amounts of groundwater out of our state while in clear default of their lease,” the governor wrote in a prepared statement. “I’m proud my administration has taken swift action to hold defaulting high volume water users accountable and bring an end to these leases.”

She continued, “I will continue to do everything in my power to protect Arizona’s water so we can continue to sustainably grow for generations to come.”

She also used the statement to swipe at former Republican Governor Doug Ducey. “I’m not afraid to do what my predecessors refused to do: hold people accountable, maximize value for the state land trust, and protect Arizona’s water future.”

Fodomonte is not taking the decision lightly. Its statement makes clear the intent to fight the decision. “We believe the state is mistaken that the company is in breach of its lease,” the company stated, claiming that the Governor’s office based its decision on “factual errors.”

“Fondomonte is adhering to all the conditions of the lease, and thus we have done everything required of us under these conditions,” the statement continues.

The company also was critical of the decision not to renew its other leases. “This would set a dangerous precedent for all farmers on state land leases, including being extremely costly to the state and Arizona taxpayers,” Fondomonte stated.

Despite the use of the alleged fuel storage violations to cancel Fodomonte’s existing leases, it brings up an issue of determining which leases are acceptable. Fodomonte is just one of many farms requiring extensive water use, highlighting concerns over the State’s involvement in picking “winners and losers.”

The Land Department’s decision comes on the heels of the Arizona State Retirement System divesting ownership of lands leased to Al Dahra Farms, which also grows alfalfa for export to the Saudi Kingdom. In an earlier statement quoted in the Arizona Globe article, Democrat Attorney General Kris Mayes stated that allowing the ASRS to invest in such a groundwater-depleting operation is “as outrageous as it is stupid given the current state of our water crisis.”