Headwaters Forest Fact Sheet

Compiled August 1998 by Environmentally Sound Promotions
PO Box 2254, Redway, CA 95560

1. Before the arrival of the Europeans, 2 million acres of unentered redwoods
blanketed the north coast of California and Southern Oregon. Today,
80,000 acres (4%) of the original old growth are in parks. Much of that,
such as Avenue of the Giants, is in a severely fragmented condition and
does not constitute a viable ecosystem.

2. Pacific Lumber (PL) holds the largest portion of unprotected ancient
redwood forest, including the famed 3,000-acre Headwaters Grove. These
forests represent important biological, genetic linkages between Humboldt
State Redwoods and Redwood National Park. Other ancient stands of between
250 and 450 acres within the 60,000 acre Headwaters Forest include Owl
Creek, Allen Creek, Shaw Creek, All Species Grove and Elk Head Springs.

3. Pacific Lumber holds a total of 200,000 acres of redwood and Douglas fir
forests in Humboldt County and is its largest employer. It has been in
business for 130 years and holds more ancient redwoods than all other
timber companies combined.

4. PL was taken over in October 1985 by Charles Hurwitz's MAXXAM. Members
of the PL Board of Directors were given huge financial rewards (golden
parachutes) totaling hundreds of thousands of dollars for voting to give
Hurwitz the company.

5. Pacific Lumber has applied for and insisted on receiving a Habitat
Conservation Plan (HCP) from the federal government as part of the 1996
Sen. Diane Feinstein-brokered Headwaters Agreement U.S. Fish and Wildlife
"General Permit Procedures" state that upon receipt of a properly completed
application "the Director shall issue the appropriate permit [HCP and
Incidental Take Permit] unless....the applicant has been assessed a civil
penalty or convicted of any criminal provision of any statute or regulation
relating to the activity for which the application is filed, if such
assessment or conviction evidences a lack of responsibility." 50CFR
13.21(b)(1). An Incidental Take Permit is a license to kill endangered

6. Pacific Lumber, under MAXXAM, has committed over 250 violations of the
forest practices act in the last three years. It has been found guilty of
misdemeanor violations and lost over seven lawsuits over violations of
Endangered Species Act, Calif. Forest Practices Act and other statutes.
Many more civil actions are pending.

7. Several Wall Street insiders went to jail for crimes including the
MAXXAM/PL takeover. Ivan Boesky, who made $3 million from illegal insider
trading in Pacific Lumber stock, served 2 years in federal prison. Michael
Milken pleaded guilty to mail fraud and other illegalities in takeovers
such as Pacific Lumber's and also served two years in federal prison. Boyd
Jeffries, another broker in the Pacific Lumber takeover, pleaded guilty and
was sentenced to prison for parking stock for Boesky and Milken.

8. MAXXAM looted $55 million from the PL worker pension fund. With the
remaining $35 million left in the fund, it purchased a new fund with
Executive Life Insurance, which went bankrupt in 1991. PL workers and the
US Dept. of Labor successfully sued MAXXAM over this, ensuring that
retirees would get their full pension. Executive Life, controlled by
Milken, had traded favors with MAXXAM in the past, including purchasing
$300 million worth of PL junk bonds at the time of the takeover.

9. After MAXXAM took over the original 179,000 acres of PL for $900
million, it sold off many PL assets, including Victor Welding ($300
million), the PL building in San Francisco ($35 million), and most of the
pension fund. It has also logged over 100,000 acres of forestland at a
rate double to triple that of the old PL, greatly reducing PL's current
value. In 1985, MAXXAM paid $3000/acre for PL's lush forests, mills, and
company town. The Headwaters Agreement offers $55,000/acre to MAXXAM.

10. MAXXAM has refinanced its debt for PL several times, including 1998.
The debt it currently owes is $860 million--$110 million larger than the
amount it owed at the time of the takeover! Despite all the logging and
the selling off of assets, the 13 year-old debt is essentially unpaid and

11. Prior to the takeover, Pacific Lumber never used herbicides in its
forest management practices, essentially because they never clearcut.
Today, PL is the county's largest user of herbicides.

12. The Elk River, bordered by and included in PL holdings, contained one
of California's largest native Coho Salmon populations, until recently. In
1995, 500 Coho spawned in the Elk. In 1998, after intensive logging, the
number dwindled to under 30. Most of the forested buffer adjacent to the
north side of Headwaters Grove could soon be clearcut by Red Emmerson's Elk
River Timber. Emmerson is the largest land owner in California and has
filed its Timber Harvest Plan 1-97-520 which would cut 705 acres and
install 107 stream crossings in an area literally surrounded by the 7,500
acre public acquisition area.

13. On Dec. 31, 1995 a mudslide originating on a steep PL clearcut
destroyed seven homes in Stafford, CA and damaged dozens of others. PL
immediately filed to clearcut the adjacent steep hillside and offered
devastated victims only $1250/acre for their lost homes, many of which were
on small lots. They are suing Pacific Lumber. It is in that second
logging area that Julia Butterfly has been sitting 180' above the ground
in an ancient redwood for over eight months without coming down.

14. PL acquired the Headwaters Forest Grove from UC Berkeley in the
1930's. Much of PL's holdings were acquired through misuse of the
Homestead Timber and Stone Acts of the late 1800's. Native peoples, who
were massacred in a campaign of genocide, lived in balance with the redwood
ecosystem for thousands of years. Survivors were removed from their
ancestral homelands and placed in reservations.

15. Charles Hurwitz was the Chief Executive Officer of United Financial
Group, holding company for United Savings Association of Texas. During his
reign (1982-1988), he oversaw the Saving and Loan's loss of $1.6 billion of
depositor's money, for which it was bailed out by the Federal Deposit
Insurance Corporation (FDIC). The FDIC and its sister banking regulatory
agency, the Office of Thrift Supervision (OTS), have filed separate legal
actions to reclaim taxpayers' money. It was alleged in an earlier lawsuit
(FDIC vs. Milken, 1991), that funds from the S&L were diverted to acquire
PL, with Drexel Burnham Lambert as the brokerage house.

16. PL holds over-4000 acres of old growth Douglas fir in the Mattole and
Bear River Watersheds constituting one of the last large remnants of
coastal lowland ancient Doug fir. It is currently the target of PL logging
operations and is slated for severe, fatal fragmentation under the HCP.
The National Marine Fisheries Service has sent letters to the California
Department of Forestry requesting additional surveys in these highly
unstable, steeply-sloped forestlands.

17. MAXXAM also owns Kaiser Aluminum, making it one of the 200 largest
industrial firms in the world and one of the top 10 polluters in the U.S.

18. MAXXAM has one of the top 10 WORST Board of Directors of all
corporations in the United States according to Business Week Magazine and
other esteemed business periodicals.


Return to Home