Robert Towne based the plot of his script on the 1904 Owens River Valley ”Land Grab,” which took place in the early 1900s. William Mulholland, the head of the newly formed Los Angeles Water Department, and Fred Eaton, then mayor of Los Angeles, believed the city would need more water to continue growing and began to look longingly at the distant Owens River as a viable source. The farmers and ranchers who lived in the valley, however, had their own plans for the river, waiting until the Reclamation Service completed its irrigation project there before they could use the water. Knowing they would need to put a stop to the project if they wanted access to the water, Mulholland and Eaton bribed a local Reclamation Service agent into showing them the necessary plans and then began buying up all the pertinent land and water rights in the Owens Valley area.
Mulholland also manipulated Los Angeles residents by portraying acquisition of the river as being vitally important to the city, when in reality he was using much of the water to irrigate the nearby San Fernando Valley and increase the return on the land investments made there by several of Eaton and Mulholland’s friends. All in all, the scandal is an almost perfect portrait of corrupt authority figures manipulating the public under the pretense of the common good. Eaton and Mulholland believed that their power placed them and their personal interests above the law.