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June 16, 2005

Rogue Company

-- by Dave Johnson

This is about the few remaining old-growth redwoods, absolute corporate corruption and the Republicans who encourage it.

Pacific Lumber was a family company that went through a hostile takeover in the mid-80's by Maxxam Corp., a Texas firm controlled by S&L looter Charles Hurwitz. The money to buy Pacific Lumber came from illegally looting (with "Junk Bond King" Michael Milken and Ivan Boesky) United Savings Association of Texas, "the largest S&L failure in Texas and the fifth largest in the country." Maxxam immediately looted Pacific Lumber's pension fund, and to this day continues to loot the company. (For even more about the kind of people I'm talking about, see MAXXAM's Kaiser Aluminum cancels pensions & benefits.)

The Bush administration let Maxxam off the hook for that, in a deal allowing Hurwitz to then sue the government for millions.

In October 2002, after seven years of litigation brought by two arms of the U.S. Treasury Dept, Hurwitz settled separate lawsuits alleging misconduct and fraudulent activities. The Office of Thrift Supervision and the Federal Deposit Insurance Corporation initially filed $820 million in claims against Hurwitz, Maxxam, and other corporate executives, over the 1988 collapse and subsequent $1.6 billion taxpayer bail out of United Savings Assoc. of Texas. Maxxam acquired the Texas S&L through junk bond financing. The agencies charged Hurwitz and Maxxam with reckless disregard for the law, self-enrichment, making false and misleading statements, and making unsafe investments. In a major travesty of justice (aka, rip off of the American taxpayers) Hurwitz was fined a mere $206,000 in restitution.
Of course Tom Delay is involved in this.

After taking over Pacific Lumber Maxxam massively accelerated the cutting of old-growth redwoods. For example:

From 1974 to 1987, the company logged an average of seventy-two acres per year of the 14,000-acre North Fork Elk River watershed, located a few miles southeast of the town of Eureka, the seat of Humboldt County. Over the next ten years, from 1987 to 1997, the rate of logging jumped sevenfold—to 504 acres per year.
Some more background on Pacific Lumber's activities since the takeover is available here.

In an effort to save some of the few remaining old-growth redwoods the government negotiated a $400 million purchase of the Headwaters grove. (Slide show here.) But, having collected the money, the company immediately began to violate the terms of the deal, logging the redwoods anyway and doing it in a way that caused landslides.

When a local prosecutor charged the company with fraud Maxxam financed a campaign to recall him. The most recent news in that case came yesterday, Suit Against Pacific Lumber Is Dismissed:

The ruling is the latest chapter in a dispute that has lasted for more than a decade over how much logging Pacific Lumber is entitled to do on its own land, thousands of acres of north coast forest that hold many of the last ancient redwood trees still in private hands.

[. . .] The lawsuit accused the company of lying to state regulators during the historic 1999 deal that created the Headwaters Forest Preserve. As part of the more than $400-million transaction, Pacific Lumber transferred 7,000 acres of virgin timber to the federal and state governments and agreed to logging restrictions on its remaining 200,000 acres to protect wildlife habitat.

The suit contended that Pacific gave state agencies false information and data understating the landslide risks of its future logging plans — then delayed the submission of correct information. The alleged fraud, the lawsuit said, resulted in extensive logging of many thousands of trees on unstable slopes, with damage to streams and watersheds.

[. . .] Freeborn [the judge] sided with its contention that, even if it had made misrepresentations to get logging plan approvals, the firm was protected from civil liability.

The judge ... declared that the company's lobbying of state regulators [the lies] to be free speech protected by the 1st Amendment. [emphasis added]

Adding insult to injury,
Freeborn invited the company to submit a judgment for him to sign and said the county would be compelled to pay the company's legal costs. [. . .] The company has threatened to lay off employees and file for bankruptcy if it does not get permission to log the watersheds, which residents say have filled with silt from logging operations.
I usually issue a call-to-action, offering something to do about things like this. But today I am in despair, and all I can say is watch your backs.

Posted by Dave Johnson at June 16, 2005 10:33 AM

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Comments

...even speaking as a guy who doesn't view with horror the cutting down of big old trees, I find this to be a truly tragic story (one that has been going on for a few years. Pacific Lumber was always one of those 'good-guy' stories in the wildland management world, because they were truly committed to sustainable forestry while still being responsive to the ecological needs of their land. Once they were bought out, all that went out the window, regardless of what their pretty web site might tell you....

Posted by: Jack K. at June 16, 2005 2:32 PM

No wonder you are in despair Dave! I actually saw some of those magnificent redwood forests (near Sausalito) in March 2003.
Even darker times ahead ..

Posted by: Helga Fremlin at June 17, 2005 2:18 PM

great post, Dave: it's very hard for people outside the Redwood curtain to follow this story

some things you can do:

1) support the groups waging this fight: EPIC; Humboldt Watersheds Council; the Sierra Club... (partial disclosure - I work for one of these; hint: wildcalifornia.org).

2) support the State Water Board in its enforcement of the Clean Water Act, preventing some of the most egregious logging by Pacific Lumber.

Posted by: pi at June 17, 2005 4:23 PM

I am outraged at the lack of local and national press coverage given to the Downing Street Memos.
We have talk shows that are covering the leaked memos, Thom Hartmann, Stephanie Miller and Ed Schultz. The Eureka Reporter this sunday was calling for the resignation of Senator Richard Durbin for his comments comparing our treatment of prisioners to that of Nazi Germany, but nothing about the Downing Street Memos. The Times Standard also brushed aside coverage of the memos. Are we alone in covering this?
Tom Sebourn, Program Director KGOE 1480 am Eureka.

Posted by: Tom Sebourn at June 20, 2005 2:34 PM

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