Published Aug. 26, 1998
Sacramento Bee

High-wire Headwaters: Legislature must pass something or deal dies

The Headwaters deal once symbolized a valiant and rare effort by government
and industry to preserve the largest stand of private ancient redwoods left
in the world and to craft a model plan of sustainable logging for
surrounding acreage. Sadly, the Headwaters has degenerated into a game of
political chicken. Key Democratic legislators in Sacramento insist on
placing conditions on the $130 million in state funds needed to purchase
the grove. Maxxam Corp., which owns the Pacific Lumber Co. and the
Headwaters, objects. Neither side wishes to blink first. Yet blink they
must, and fast, before everybody loses.

A series of colossally bad political assumptions has brought the Headwaters
deal to the brink of collapse. Things looked far more promising in the
spring, when government biologists and the lumber company seemed in general
agreement on the stickiest part of the transaction -- the crafting of the
sustainable 50-year logging strategy, known as a habitat conservation plan,
for 200,000 acres surrounding the Headwaters. Then Maxxam, noted for its
hardball negotiating style, began to fight too hard for logging near
streams and in wet conditions, to the point that all the biologists
couldn't endorse what Maxxam ultimately drafted.

This left Maxxam alone in Sacramento, where its high-priced Washington
lobbyist and public relations crew apparently had no clue about how to sell
the controversial logging plan in this foreign political environment.
Precisely which consultant thought that the answer was to put Maxxam's
Charles Hurwitz (Mr. Wall Street) and the state Senate's John Burton (Mr.
Bombast) in the same room for a negotiating session? The meeting, shall we
say, went badly. Communications have been dysfunctional ever since.

Democratic legislators made their own blunder by assuming they could defer
to environmental groups to write the conditions on how to protect redwoods
near streams and ancient stands outside the Headwaters, known as the
"lesser cathedrals," in exchange for the $130 million. The Headwaters deal,
because it is an appropriation, will require a two-thirds vote. While
Hurwitz may have few friends in town, the California forest industry
(concerned about conditions on logging near streams) does. The result can
too easily become a political stalemate.

The last nail on the proverbial coffin would be for the Legislature to
decide to do nothing this month and revisit the Headwaters in January,
after the lumber company and state and federal agencies have finished work
on the 50-year logging plan. By then, there likely will be no deal to

It is too much to ask government agencies and Maxxam to spend thousands
more hours crafting hundreds of pages of complex environmental documents on
the outside chance that the next Legislature may do something. This
Legislature must pass a Headwaters bill. If lawmakers can't resist crafting
new protections for streams and ancient redwoods, the measures should at
least be based on science and not constituency politics. Leave it up to
Gov. Pete Wilson and Hurwitz to say no. Let the Headwaters deal live.

Jeff Shellito found the following on the SacBee webpage. --KB

Logging protester killed by falling tree, activist group says

FORTUNA, Calif. (AP) -- An activist was struck in the head and killed
by a falling tree Thursday afternoon while trying to block the
logging of ancient redwoods on Pacific Lumber Co. land, Earth First!

The radical environmental group said David Chain, who uses the
nom-de-guerre "Gypsy," was standing among redwoods marked for logging
and trying to dissuade tree fellers when he was killed.

A fellow protester who fled the scene reported that the impact
cracked open Chain's skull, said Earth First! co-founder Daryl
Cherney, who said sheriff's deputies told the group he died at the

"It's easy to get hit by a tree out there," said Cherney. "Even
experienced activists or seasoned people -- it doesn't matter. One
time I found myself in a hole and had to scramble out before the tree

Pacific Lumber did not return telephone messages seeking comment. The
Humboldt County Sheriff's department and the California Department of
Forestry confirmed only that they were responding to a logging

Earth First! had staged a 12-day protest against the logging of an
ancient redwood stand along Grizzly Creek, in a ravine near the mill
town of Fortuna, about 300 miles up the coast from San Francisco.

Eight of the group's activists had been arrested Wednesday on
trespassing charges. Thursday was the first day the group engaged in
the more aggressive tactic they call "cat and mouse," putting their
bodies in harm's way.

The protesters say the logging, on land adjacent to a "lesser
cathedral" of centuries-old redwoods purchased under the $495 million
Headwaters Agreement, is destroying the protected habitat of the
Marbled Murrelet, an endangered seabird that nests in the tops of the
majestic trees.

c The Associated
Copyright c The Sacramento


Plan to log near old redwoods opposed

By Patrick Hoge
Bee Staff Writer
(Published Oct. 30, 1998)

Charging that salmon and seabirds would be badly hurt,
environmentalists on Thursday assailed the Pacific Lumber Co.'s plan
to log around ancient Humboldt County redwood trees that state and
federal officials plan to buy for nearly $500 million.

An array of environmental advocates at a Sacramento hearing called
the plans a bad deal for taxpayers.

"As far as I'm concerned, HCP stands for the Headwaters Clear-cut
Plan," said Michael Passoff of Bay Area Coalition for Headwaters. He
was one of more than 80 people who commented on Pacific Lumber's
Habitat Conservation Plan (HCP) at the Sacramento Convention Center.

Hearings on the plan will continue next Thursday in Oakland and Nov.
11 in Eureka; another was held Tuesday in Culver City. Written
comments will be taken until Nov. 16.

Pacific Lumber President John Campbell said from his office in Scotia
he was not surprised by the criticism.

"We anticipated there'd be a crescendo at the end," he said. "They do
not want the confrontation to be over."

Pacific Lumber's plan must be approved by March 1 so that federal
authorization won't expire for $250 million allocated to buy the
7,500-acre Headwaters grove -- about half of which is a virgin stand
of redwood trees as much as 2,000 years old.

Gov. Pete Wilson last month signed a bill that appropriated $245
million in state money to purchase Headwaters as well as the 904-acre
Owl Creek grove.

Environmentalists say neither the timber purchase nor Pacific
Lumber's harvest plan would benefit wildlife enough to justify giving
the company a permit to kill protected species.

Both the imperiled marbled murrelet and coho salmon depend on old
growth forests, and Pacific Lumber has the largest remaining
scattered stands of old growth redwood trees on private land.

Critics also say the company should not get a permit because it has
often violated forest practice laws. It almost lost its license last
year, and has since received even more citations from the state.

In addition to the forests the public may buy, Pacific Lumber's
harvest plan calls for setting aside 8,500 more acres for 50 years
for murrelets. In return, the company would get the right to log 500
acres of its virgin old-growth forest, and about 8,000 acres of
previously logged land that has stands of old-growth trees.

The plan was developed jointly by officials from the Fish and
Wildlife Service and the National Marine Fisheries Service, but
neither agency has yet approved it.

Phil Detrich, a biologist for the Fish and Wildlife Service, said it
is a good plan for the murrelets.

"Our goal in this whole negotiation was to preserve the best
habitat," Detrich said. "I am pretty much satisfied with the way this
plan has been developed so far."

Vicki Campbell, the chief negotiator for the National Marine
Fisheries Service, said her agency will soon issue a biological
opinion on the harvest plan's adequacy.

But Campbell she wants to see stricter erosion controls and more
monitoring of stream conditions. "The deal isn't done yet," she said.

Environmentalists charge that the no-cut, 100-foot buffer zones along
streams won't be wide enough, and steep areas would be left unstable
by clear-cutting.

Some at the hearing called the process window dressing, and they
don't expect the plan to be significantly changed.

About 15 members of the Earth First movement stood with their backs
to the panel taking testimony. Most wore white T-shirts saying "No
Deal" and "No HCP."

Copyright c 1998 The Sacramento Bee

Subject: D.Wheeler in SacBee today

Sacramento Bee
Letters to the Editor
August 18, 1998


(EDITOR'S NOTE: Charles Levendosky, editorial page editor of the Casper
(Wyo.) Star-Tribune, has a national reputation for First Amendment



c. 1997 Casper (Wyo.) Star-Tribune

The use of pepper spray against non-violent demonstrators in Humboldt
County has almost eclipsed the reason for their protest --- the logging of
old-growth redwoods in California's Headwaters Redwood Forest, near Eureka.

Currently there are six groves of ancient redwoods remaining in the
60,000-acre Headwaters Forest. Only two will be protected under the
state-federal agreement with the corporation that owns the groves.

The Headwaters Deal, as the agreement is called, fragments this rare,
ancient forest habitat and allows Pacific Lumber to log more than 50,000
acres of the virgin forest.

The company wants to cut all the old-growth redwoods in the other four
groves within 15 years. Some of these trees are estimated to be from 1,000
to 3,000 years old. And that's what the demonstrators are protesting.

How do you replace a healthy 3,000 year old tree? How do you replace stands
of ancient redwoods that have fallen to chainsaws? There aren't many left
in the world.

Cutting down thousand-year-old redwoods provoked the protest. The lack of a
long-term, ecologically responsible forest plan provoked it.

Swabbing pepper spray in the eyes of passive demonstrators pricked the
conscience of the nation. Television news aired segments of the law
enforcement videotape that shows a Humboldt sheriff deputy soak a cotton
swab in pepper spray and wipe it across the eyelids of four women sitting
on a floor in a circle.

Viewers saw the effects of the burning pain --- the cries, the coughing,
the shaking. Viewers didn't see the felled redwoods.

Twenty-year-old Noel Tendick did see the redwoods. He is another one of the
Headwaters protesters who had both his eyes bathed in pepper spray.

"I became aware of what a crucial fight it was to save these last beautiful
trees. And felt really compelled to be involved," he said in a Nov. 20

On Oct. 3, Tendick and a friend, Mike McCurdy, took their protest to the
Bear Creek watershed of the Headwaters Forest. They linked their arms
together with metal sleeves through the treads of an unoccupied bulldozer
parked by a logging road.

At first, Tendick spoke about the incident in a flat, unemotional tone:
"The police arrived, dragged Q-tips of pepper spray across our eyes, and
when we refused to unlock, gave us full sprays within inches of our faces.
And then when we still refused to unlock had to cut us out with grinders."

Then he focused on the blast of the pepper spray, "It was a steady stream
across both eyes. I could feel them standing very close to me, and the
intensity of the spray. I could feel it was coming from a very short

"There was immediate burning --- agonizing, sheer pain that I've never
experienced anything like before. I cried out."

Tendick's voice gathered passion when he reflected on his experience with
the Humboldt County sheriff deputies: "When they sprayed us, they gave us
this rage and we're sharing that with people. And people who don't even
know us are feeling outrage when they see what happens to us. But I just
really want them to feel outraged that this forest is being plundered and

"The greatest hope I can have from this is that our suffering will
galvanize people and bring them into this fight --- not only against police
brutality, but also against clearcutting one of our last ancient

Tendick is one of the nine protesters who have filed a civil rights lawsuit
against the Humboldt County Sheriff's Department and the Eureka Police
Department. There were three separate incidents in which peaceful
demonstrators felt the lash of chemical spray. All the protesters in the
lawsuit have felt the lacerating sting of pepper spray as it burned their
eyes and stifled their breathing.

On Nov. 14, the attorneys for the protesters asked U.S. District Court
Judge Vaughn Walker to grant a temporary ban on the use of pepper spray
against non-violent demonstrators. The judge refused. He said the ban would
only be justified if the case were sharply tipped in favor of the
protesters. Walker doesn't think it is. He will wait until he hears all the
evidence in a full trial.

The protesters' lawsuit claims the use of pepper spray was unnecessary and
unlawful. And its application constitutes unreasonable use of force with
the intent to inflict injury and punishment.

On Nov. 1, the FBI began a preliminary investigation into whether the civil
rights of the protesters was violated.

On Nov. 4, Amnesty International issued a press release calling the use of
pepper spray against the peaceful demonstrators "degrading" and "tantamount
to torture."

California State Attorney General Dan Lungren, in a four-page letter to a
state senator dated Nov. 17, wrote an analysis of Humboldt County's unusual
use of pepper spray describing it by its active ingredient Oleoresin
Capsicum: "The direct swabbing of OC in the eyes of an individual is
neither supported nor directly addressed by training. ... both swabbing of
OC onto the eyes and the close spraying of OC ... are not accepted police
community practices."

Humboldt County law enforcement officials have responded to the lawsuit and
the national attention by filing an additional charge against the four
women demonstrators who had their eyes doused with pepper spray while
seated in Rep. Frank Riggs' office in Eureka.

This new charge adds to the trespass, interfering with a lawful business,
and obstruction of a police officer charges. It specifies that the
anti-logging protesters did "maliciously deface, damage, or destroy"
property, meaning the rug in Riggs' office.

One of the women, when hit with the pain of the pepper spray, involuntarily
urinated. And that, according to the district attorney, constitutes a
malicious defacing of the rug.

And if the police had struck the protesters with their batons and the women
bled on the floor, would that too be considered malicious defacement?

In the defense of brutality, one becomes absurd.

Too bad the public can see that, but Humboldt law enforcement officials
cannot. But only a roused public will halt this outrage.

Fight over redwoods splinters Humboldt County
Published Tuesday, December 2, 1997, in the San Jose Mercury News

Fight over redwoods splinters Humboldt County
Mercury News Staff Writer

EUREKA -- The escalating fight over the redwoods has turned this
isolated corner of California inside out.

Times are tough. The local economy stinks. Commercial fishing has
sunk. And the logging industry, once the proud vessel of local
heritage, has been whittled down by dwindling supplies and
government rules, fueled in part by an in-your-face save-the-trees

That cracking noise rippling through Humboldt County these days is
not just falling timber. It's the sound of a community under strain,
wrestling over its own splintered soul, breaking apart with the dull
distant snap of a Sequoia spine.

Even before a nationally publicized pepper-spray face-off between
cops and protesters, the tension in Humboldt County could have been
cut with a chain saw. Old-timers hate the young interlopers hanging
around the Earth First! office on Third Street. Cops hate the press
for making them look like big-lumber goons. Loggers hate the federal
policy-pushers who make it harder than ever to lay a vertical tree

``There's a feeling among residents that for years the federal
government has been out to get Humboldt County,'' says Wes Reed, the
soft-spoken head of the Eureka Chamber of Commerce. ``And there's
just as high a level of frustration with the environmentalists. They
say they want to save the redwoods, but they won't be satisfied
until they have everything we own.

``People see this as our community and logging as our livelihood,''
he says, ``and it's like, `You're coming in and you're trying to
take our livelihood away.' ''

Last month, the world got a glimpse into Humboldt's angst, through
the peephole of the nightly news: a video of Humboldt sheriff's
deputies swabbing pepper spray into the eyes of four young logging
protesters. To neutral observers, the clip's equation was clear:

Tree-lovers good. Cops bad.

What the world did not see were 100 other pieces of the puzzle this
Northern California county has become. The incident, taped during
the Oct. 16 takeover of the Eureka office of Republican Rep. Frank
Riggs, was a flashy excerpt from a subplot far more knotty that the
TV image would suggest.

``The world sees a 10-second video, but we've been living with
harassment from environmentalists for 10 years, violating our rights
to live a peaceful existence,'' says Mary Bullwinkel, spokeswoman
for the Pacific Lumber Co. in Scotia. ``Our employees have shown
incredible tolerance, but we've had them in our face for years, and
they've been getting increasingly aggressive.''

Myriad battle lines

Battle lines cover Humboldt like blackberry vines. From the small
shops of Arcata to the sawmills of Fortuna, and in the letters to
the editor of the Times-Standard, everyone's got their own take on
the troubles. Many residents agonize over the loss of their
birthright to cut down trees. They're overwhelmed by the loss of
their past, but unsure of who their enemy really is. So they settle
upon the most visible suspect.

``These environmentalists are out of control,'' says Charles
Hansen, who since 1946 has been selling the wire rope loggers use to
yank severed redwoods from the forest. ``We get these kids coming in
here raising hell, saying they wanna save the last redwood tree. But
people don't understand: Redwoods grow like weeds. You cut 'em down,
they grow right back. You can't kill the damn stuff.''

Ragtag romantics

Many of the protesters are ragtag romantics, middle-class
expatriates out to rescue the giant redwoods. They think of the
groves as cathedrals. They ``tree-sit'' to thwart chain-saw crews,
camping out on platforms they've built 80 feet in the air. They lie
down in front of logging trucks, then lock themselves to the drive
shaft for hours. They espouse non-violent civil disobedience, but do
it with the fervor of a jihad. And having God on your side of the
holy war, of course, makes for some grand obstinacy.

``We have to put our bodies on the line,'' says Vernell ``Spring''
Lundberg, a 17-year-old protester pepper-sprayed by police during a
Sept. 25 sit-in at Pacific Lumber's headquarters. For environmental
activists, including those who march under the banner of Earth
First!, the firm's owner and Texas financier Charles Hurwitz is
public enemy No. 1. ``We're resisting the beast of America's
greed,'' says Lundberg. ``There is violence going on to the forests
behind the Redwood Curtain. We're here to draw that violence to

Those are the extremes. In between, tangled up in this polemic net,
are working folks who find some logic in both arguments. Stranded in
the middle ground, they watch helplessly as the logging industry
slowly fades away. Of the 11,000 logging jobs in the mid-1950s, only
about 4,000 remain.

Those lost jobs aren't just statistics. They are fathers and aunts,
bowling partners and the hairdresser's brother-in-law. Steve Morris
in Arcata, son of a logger, has spent half his 50 years building up
his log-trucking business, only to see it threatened by an uncertain
marketplace. He can't plan for the future because nobody knows what
future is left in logging.

Like others, Morris has come to realize the only way he'll stay in
business is if logging interests and the environmental lobby can
find common ground and moderation in harvesting techniques.

``Old-time loggers are the best environmentalists of all,'' says
Morris, ``because our livelihood has always depended on treating the
resource with respect. But now practicality is gone. You have
radical factions on each side, and the moderates like us suffer in
the middle.''

Another subculture suspended in Humboldt's limbo are the
back-to-earthers like Richard Gienger who fled big cities in the
'60s for Utopia. Now in their 50s, they, too, see compromise as
their last chance to salvage the wooded wonderland that brought them
to Humboldt in the first place. They are calling for a new way of
cutting trees at a rate that would ensure survival of both forests
and logging jobs for decades to come.

Gienger and others see Humboldt's dilemma as far more complicated
than Earth First! vs. loggers. ``This economy was dead by the end of
the '60s, so to blame it on the protesters is simply incorrect. The
problem here,'' he says, ``is a shortage of resources, not an
overabundance of environmentalists.''

Police officers fed up

Finally, there are the cops. Cast into high profile by the
pepper-spray video, they've become lightning rods for all kinds of
community emotion: from rabid support to begrudged sympathy to
outrage by those who feel swabbing chemicals into the eyes of
teenage girls was going overboard.

``My officers are fed up with what's happened to us in the media,''
says Eureka Police Chief Arnie Millsap. Although his officers
weren't involved in the incident at Riggs' office, Millsap says he
has received death threats and his staff has been bombarded by
harassing and obscene phone calls and e-mail.

``I've worked hard for years to stop the polarizing effects of
protests up here,'' says Millsap, who cites Martin Luther King Jr.
as a hero. ``So to have me portrayed in the media as some kind of
knuckle-dragging Neanderthal hurts a lot. I have three college
degrees and damn it to hell, I am not a redneck and I am not a

Reed, from the chamber of commerce, sees some faint signs of hope,
regardless of what happens with logging. Young entrepreneurs,
especially telecommuters, are moving into town. And Reed has noticed
an increase in citizen participation at county meetings. But for the
moment, as Humboldt smarts from the nasty national publicity, things
seem as dim as the shadows of ancient forests. There is a standoff
that won't go away; although President Clinton this month signed
legislation that helps set aside part of the Headwaters Forest,
large swaths of old-growth redwoods remain vulnerable.

Some forest activists advocate teaming up with loggers to fight a
common enemy -- outside corporate interests that activists say are
dividing the community in their greedy quest for more timber

``The real myth is that there are two opposing factions,'' says
Kevin Bundy of Environmental Protection Information Center in
Garberville. ``Most loggers know their jobs are endangered
ultimately by their bosses. The fear is that they'll either be cut
or regulated out of a job. It's just a question of when.''

But it's hard to find a logger who buys that. ``If they feel an
affinity with me it's an illusion,'' says John Lima, a 51-year-old
independent logger from Arcata. ``They may think they've got this
big coalition going, that they're friends with us, but we're sure
not friends with them.''

So the stalemate continues. Protests keep coming, lawsuits slide
like mud through the courts. The cops stand by their use of pepper
spray. And a poor county shoulders the costs of keeping things under
control. Last week, the Sierra Club jumped into the act and started
running anti-Riggs ads on local TV.

Gradually, painfully, all sides have been forced to face the facts
of Humboldt County:

It was always the trees that defined and dignified this place.

Now they divide it.

San Jose Mercury News, Wednesday, February 4, 1998

Logger, son plead not guilty in timberland drug case

By Paul Rogers

One of the largest timberland owners in Santa Clara and Santa Cruz
counties Tuesday pleaded not guilty to drug charges that business
partners say could end his controversial logging career.

Greg Koppala, 49, of Corralitos, pleaded not guilty to the manufacture of
methamphetamine, at a hearing in Santa Cruz County Superior Court. His
son, Van Slagle, 19, pleaded not guilty to the same charge, a felony that
carries 17 years in prison upon conviction. Two other men, from East
Palo Alto and San Jose, who allegedly ran the operation, pleaded guilty
to the same charges on Monday.

Meanwhile, police released several reports Tuesday indicating that
Koppala told Santa Cruz County sheriff's deputies - the day of his arrest
- that despite the fact that he "handles millions of dollars of timber a
year," he recently ran into financial trouble and agreed to allow a
methamphetamine lab on his property for three days in exchange for $8,000

"I asked Koppala why he would risk his home, freedom and property for
$8,000," said the report, filed by Deputy Steve Christensen. "Koppala
said he didn't know why but just said he acted foolishly."

After the court hearing, Koppala declined comment. He remains free on
bail. Superior Court Judge Robert Attack set his next court appearance
for Feb. 11.

The drug bust has drawn wide interest throughout the Santa Cruz
Mountains. Over the past two years a jump in redwood prices, combined
with wood shortages in Humboldt and Mendocino counties, has driven
loggers from California's north coast into the lush redwood forests of
San Mateo, Santa Cruz and Santa Clara counties. The new arrivals have
more than doubled the rate of cutting, sending logs 250 miles back over
the Golden Gate bridge to mills in Mendocino and Humboldt counties. They
have also run into a buzz saw of protest from environmentalists and rural
homeowners, many of them recent arrivals from Silicon Valley.

Among the more prominent timber operators has been Koppala. A native of
Eureka, Koppala moved to Santa Cruz County from Sonoma County several
years ago and began buying timberland.

He now owns roughly 1,300 acres of property grown thick with redwood and
Douglas fir, as well as a $600,000 house in the hills above Aptos he
purchased in 1996. Koppala's logging projects have ranged from Redwood
Estates to Boulder Creek.

The Santa Cruz County Board of Supervisors passed an emergency ordinance
in September limiting helicopter logging in response to a Koppala plan.

In that plan, he won state approval to log steep slopes at Malosky Creek,
near Brookdale and to fly the logs out near homes.

"I considered it a really reckless application," Said Santa Cruz County
Supervisor Mardi Wormhoudt. "It said to me that his interest was taking
the money and getting out. This wasn't somebody looking at sustainable

If he is convicted on the drug charges, Koppala's days as a logger may be

Officials at Eel Rivers Sawmills in Fortuna, near Eureka, said they have
bought land and timber partnerships with Koppala for 20 years but now
were wary.

"If he was convicted we would not do business with him again," said
Dennis Scott, an Eel River vice president. "He'd be out of the business.
There aren't many companies that would want to deal with him."

Prosecutors said that in the criminal case, Judge Attack indicated Monday
he might be willing to forgo jail time and instead issue probation to two
other men implicated in the case.

Leonel Velex, 34, of East Palo Alto and Demetrio Torrez, 35, of San Jose,
ran from Koppala's rural wooded property on Rider Road, five miles north
of Aptos, on Jan. 20 when sheriff's deputies acting on an anonymous tip
raided a working methamphetamine lab there. They later were arrested and
pleaded guilty to manufacturing methamphetamine. They remain in Santa
Cruz County Jail on $50,000 bail. Sentencing is set for March 4.

On Monday, authorities also issued an arrest warrant for Koppala's wife,
Sally Slagle, 43, of Corralitos. She remains at large.

Police found more than 50 gallons of liquid methamphetamine, valued at $1
million, on Koppala's property, according to Siddhartha Sundaram,
assistant Santa Cruz County district attorney.

"It's a pretty serious case," said Sundaram. "There are a lot of drugs
involved. The quantity would make it consistent with the kind of case in
which we'd recommend prison."
Published Monday, March 23, 1998, in the San Jose Mercury News


The answer depends on what
comes with the 7,500 acres of
trees in Headwaters forest

Is this worth $380 million?

LIKE Pauline, the Headwaters redwood forest has been first imperiled
by approaching saws, then seemingly saved, then back in danger, while
the public has held its breath.

The latest turn in the plot promises a happy ending in which ancient
redwoods tower in the forest while fish get to swim and birds get to
fly, instead of flirting with extinction.

Riding to the rescue are tax dollars, 380 million of them. Now the
paying public has to ask: Will we get $380 million worth of happiness?

The Pacific Lumber Co. owns the Headwaters forest in Humboldt County,
and it owns the saws. After arduous negotiations with the company,
federal and state representatives reached a deal early in March.

The federal government will put up $250 million to buy 7,500 acres of
forest, if California puts up $130 million. Also part of the deal is
a habitat conservation plan that prescribes how Pacific Lumber may
log for the next 50 years on 200,000 additional acres of its land.

Pacific Lumber would be able to cut only one of 13 so-called ``lesser
cathedral'' old-growth groves on the property, and it would have to
maintain certain no-cut buffers along streams.

The deal is supported by the Clinton
administration and the Department of the Interior; by the Wilson
administration and the state Resources Agency; and by Sen. Dianne
Feinstein, D-Calif., who was pivotal in bringing it about.

Critics have attacked on two fronts: The deal is unnecessary and it
isn't good enough.

The Headwaters forest contains thousands of acres of ancient,
majestic trees. Many would consider it a travesty to cut them down,
but Pacific Lumber and the law do not. The law, however, does shelter
endangered species. Headwaters is home to at least two, a bird called
the marbled murrelet, which nests in old-growth trees; and coho
salmon, in the streams.

The Endangered Species Act impedes Pacific Lumber from cutting in
old-groves. Whether it prohibits cutting is the $380 million
question. If it does, why pay Pacific Lumber anything?

Tempting as it is to rely on the Endangered Species Act to save the
trees, it's ultimately too risky. Pacific Lumber has filed suit
contending that the act's restrictions amount to an illegal seizure
of its property. The suit probably does not have a good chance, but
it has a chance. If the deal goes through, Pacific Lumber drops the

More important, if for whatever reason,
murrelets no longer inhabit the groves, the legal basis for saving
most of the trees would disappear.

So it seems to us that the way to save the trees is to buy the trees,
in the way the deal proposes. But there are two different
interpretations of what the deal means. Nailing down the right one is

Pacific Lumber and the Clinton and Wilson administrations interpret
the deal as paying only for the 7,500 acres, with an acceptable
habitat conservation plan attached. But this trio apparently sees the
habitat conservation plan as being like any other in the standard
process for regulating activity on environmentally sensitive land --
that is, it would be subject to changes later.

Speaking of the lesser groves, Pacific Lumber President and CEO John
Campbell told a legislative panel: ``We agreed to be restricted in
our management of these groves until and unless scientific studies
indicate that logging will not endanger or jeopardize the continued
existence of the marbled murrelet.''

Another point of contention is stream buffers, in which cutting is
prohibited, to protect streams from erosion and to keep them shaded.
A federal study established the safe buffer width at 300 feet, almost
twice the 170 in the plan. State resources officials described the
narrower buffer as adequate.

State Sen. Byron Sher, D-Palo Alto, co-chair of a legislative
committee studying the deal, argues that the state should insist it
is buying not just 7,500 acres, but also a habitat conservation plan
more certain and stringent than usual.

The deal should guarantee no cutting in the 12 lesser groves,
murrelets or not, and the wide stream buffers. Otherwise, the ending
to this melodrama won't be happy enough.


Published Tuesday, July 14, 1998, in the San Jose Mercury News

Pacific releases logging outline
Some activists say Headwaters plan inadequate

Associated Press

SACRAMENTO -- Pacific Lumber Co. on Monday spelled out its plan to log
200,000 acres of forest, clearing the way for the $380 million purchase of
the world's largest privately held stand of ancient redwoods.

Environmentalists immediately denounced the plan, saying it does not go far
enough to protect wildlife in the Headwaters Forest. Pacific Lumber and
federal and state officials, including U.S. Sen. Diane Feinstein, praised
it as a major step forward.

The long-awaited Habitat Conservation Plan, written by Pacific Lumber in
consultation with government scientists, is a key step in the Headwaters
purchase pact.

The agreement, brokered by Feinstein in February, calls for the purchase of
7,500 acres of Pacific Lumber timber, including 3,000 acres of old-growth
redwoods. In exchange, the company, which is owned by Texas financier
Charles Hurwitz's Maxxam Corp., agreed to draft a plan that would manage
logging and help restore the endangered coho salmon.

``Pacific Lumber, which has been in business for 129 years, is a very
significant contributor to the economic well-being of the North Coast and
needs to be able to maintain viable, profitable operations,'' company
President John Campbell said in a news release.

Congress has approved its $250 million share of the deal, but state
lawmakers have held up California's $130 million share, saying the deal
leaves the coho salmon at risk.

The draft of the agreement would permit limited logging within 30 feet of
streams where the endangered coho salmon live. Critics, including state
Sen. Byron Sher, D-Palo Alto, want a buffer zone five times as wide.

The logging plan is based on ``sound science'' and would protect the coho
salmon, Assistant Commerce Secretary Terry Garcia said.

The plan, which is more than 1,000 pages long, will be released today for
90 days of public comment. A permit probably will be issued to Pacific
Lumber in 1999, Garcia said. The entire Headwaters agreement faces a March
1 deadline.

Environmentalists have mounted a vigorous campaign against the deal, led by
Julia ``Butterfly'' Hill, who has lived for six months in a Humboldt County
redwood tree.

``This plan is designed to allow immediate destruction of some incredibly
important habitat,'' said Kevin Bundy, a spokesman for the Environmental
Protection Information Center.

The full text of the report can be viewed at .

Published Saturday, July 18, 1998, in the San Jose Mercury News

Headwaters Forest plan has politicians at loggerheads
Saying it's not enough, Sher holds up agreement

Mercury News Staff Writer

For the past 12 years, environmental activists have chained themselves to
trees and hung off the Golden Gate Bridge trying to save the ancient
redwoods of Northern California's Headwaters Forest from logging.

Yet in perhaps the most important showdown yet, the struggle has moved away
>from the TV cameras and the police in riot gear to a new arena: Gov. Pete
Wilson's office.

And now it's crunch time.

A $380 million deal to buy 7,500 acres of the forest from Pacific Lumber
Co. of Humboldt County is
tangled up in negotiations this weekend among ``The Big Five'' -- Wilson
and the top Sacramento lawmakers haggling over the state's budget.

One person more than any other is responsible for holding up the redwood
deal: state Sen. Byron Sher, D-Redwood City. And environmentalists couldn't
be happier.

Congress already has approved $250 million for the deal. The remaining $130
million must come from Sacramento.

But the deal shortchanges taxpayers and doesn't go far enough to protect
salmon streams or old-growth trees, Sher says. So, the 70-year-old Stanford
University law professor, widely viewed as the environmental dean of the
Legislature, earlier this year succeeded in pulling the state's $130
million share out of the budget, where Wilson wanted it. Instead, Sher
wrote a separate bill demanding tougher logging rules across all of Pacific
Lumber's remaining 200,000 acres as a condition of receiving the money.

But he has found himself caught in a powerful bipartisan squeeze from
Wilson -- California's most powerful Republican -- and U.S. Sen. Dianne
Feinstein -- the state's most powerful Democrat -- both of whom
painstakingly negotiated the deal with Pacific Lumber owner Charles Hurwitz
and now want to see it survive.

``It's high noon for this deal,'' said Carl Pope, national executive
director of the Sierra Club. ``Byron Sher is under a tremendous amount of
pressure. I'm delighted he has been firm.''

The question now is who will blink. The answer could come any day now.
Wilson and the Republicans could go along with Sher and require the tougher
standards. That could happen under a scenario where Wilson compromises on
Headwaters to win from Democrats his top goal, a cut in the state's car
licensing fees. But one risk is that Hurwitz will walk away from the table.
Or top Democratic negotiators -- Senate President Pro Tem John Burton,
D-San Francisco, and Assembly Speaker Antonio Villaraigosa, D-Los Angeles
-- could abandon Sher, cutting a deal with Wilson that gives them what they
want on issues such as education funding.

Environmental and timber lobbyists have spent weeks frenetically trying to
sway lawmakers.

``Of course I'm nervous,'' said John Campbell, president of Pacific Lumber,
based in Scotia, near Eureka. ``We've spent over 10 years at this. And now
at the 11th hour people are saying it's not enough.''

Sher's bill, said Campbell ``is too restrictive. The company could not
remain economically viable.''

Feinstein also says Sher is driving too hard a bargain.

``There have been at least 10 separate efforts to save Headwaters over the
last 12 years,'' she said, describing herself as ``incredulous.'' ``Every
one of them has failed. This saves virtually more redwood than any other
effort I know of.''

If Sher keeps pushing for a stricter deal, she said, that could endanger
$250 million in federal money already approved by Congress and signed by
President Clinton.

Funds coveted

``There are murmurs back here from other senators about what they would
like to do with the money instead,'' said Feinstein. ``I can say 100
percent that if this doesn't go through, then the federal money is gone. I
feel I've done everything I could over a long period of time to get the
best I could. At some point people have to trust that and recognize that.''

Headwaters Forest, 15 miles south of Eureka, is the world's largest
privately owned old-growth redwood forest. It has been a flash point of
national controversy since 1985, when Hurwitz, chairman of Houston-based
Maxxam Inc., acquired Pacific Lumber in a hostile takeover, doubled the
rate of logging and threatened to clear-cut Headwaters Grove.

After huge protests, Feinstein and other officials reached an agreement
with Hurwitz in 1996 to buy 7,500 acres -- about half of it old growth --
for parkland.

The deal also requires Pacific Lumber to prepare a ``habitat conservation
plan'' for managing its remaining 200,000 acres of forest during the next
50 years.

This week, details emerged in a 2,000-page document from the U.S. Fish and
Wildlife Service, negotiated with Pacific Lumber.

The plan calls for banning logging within 30 feet of endangered salmon
streams. By contrast, Sher's bill calls for 170-foot buffer zones.

And although the plan would preserve 11 smaller old-growth groves, Sher
wants another, Owl Creek.

He said he's not scuttling any deal, just representing the taxpayers of

``I know that Senator Feinstein has invested a lot in this,'' Sher said.
``She deserves credit for getting the agreement. And she was instrumental
in getting the appropriation.

``But I don't believe I was elected by my constituents to rubber-stamp a
deal that was made behind closed doors in Washington. The Legislature had
no influence over it, and then they say OK, give us $130 million.''

If he were almost any other Senate member, Sher probably would have been
steamrollered by now.

But on environmental topics, he carries considerable influence.

As an assemblyman in 1988, Sher wrote the state's Clean Air Act. In 1989 he
wrote the law that required California cities and counties to reduce by 50
percent their trash, through recycling, by 2000. He also has written laws
to toughen drinking water standards, monitor acid rain and put scenic
rivers off limits to dams.

``We have a responsibility to see if this is a good deal for the state of
California,'' said Sher. ``And frankly it has serious flaws in it,
particularly in protecting coho salmon.''

So far, Sher appears to be winning.

In a key test on Thursday, Republican Cathie Wright of Simi Valley
attempted to put the $130 million in Headwaters money back in the budget
bill. She was rebuffed by budget conference committee Chairman Mike
Thompson, D-Napa.

Deal is possible

Thompson, who is running for Congress this November to represent the North
Coast district that includes Headwaters Forest, signed on two weeks ago as
a co-sponsor to Sher's bill.

``Senator Thompson thinks the Sher bill makes the agreement stronger,''
said Ed Matovcik, chief of staff for Thompson.

Meanwhile, Wilson's staff hinted on Friday that he may be willing to wheel
and deal on Headwaters.

``It has been the administration's preference to pay for the Headwaters
agreement out of the general fund,'' said Ron Low, a spokesman for the
governor. ``That's the governor's preference. But as to any deals,
negotiations are ongoing.''

To approve the funding in any form will require a two-thirds vote of the

If the entire deal collapses, environmentalists will be in court fighting
Hurwitz on each timber cutting plan. They say that would be better than the
precedent-setting deal.

But the company says having the deal fall through would be a disaster.

``I just hope the issue is put to bed,'' said Campbell. ``It's crucial to
our 1,500 employees. It will finish a very divisive period on the North
Coast. Otherwise, we're back to square one.''

1997 - 1998 Mercury Center.

Published Thursday, July 23, 1998, in the San Jose Mercury News


The strange case of Headwaters

The struggle to save the Headwaters Forest has come to a strange pass. The
timber company that owns it -- with the idea of logging it -- favors making
it a public forest. The environmentalists most vocal about saving redwoods
don't like the deal.

The decision lies with the California Legislature, which must decide
whether to put up $130 million in state money to match $250 million in
federal money to meet the asking price of $380 million.

Pacific Lumber, which owns the forest in Humboldt County, will sell 7,500
acres, about half untouched ancient redwood forest and half a buffer of
more recent growth. The deal also includes approval of a habitat
conservation plan that details how Pacific Lumber will manage 200,000
adjacent acres that it owns.

The habitat plan is the hangup, and the hanger-upper in the Legislature is
Sen. Byron Sher, D-Palo Alto, backed by many environmentalists.

So far, Sher has persuaded the Senate not to put the $130 million in the
overall budget, where it would be swept along with the tide of eventual
budget approval, but to create a separate bill, SB 533.

The bill stiffens the habitat conservation plan by widening the no-cutting
buffers beside streams and by making absolute, instead of contingent, the
preservation of 11 smaller old-growth groves for 50 years.

Pacific Lumber says Sher is asking too much. The company is backed by
Democratic U.S. Sen. Dianne Feinstein and Republican Gov. Pete Wilson, who
were instrumental in negotiating the deal.

Sher is not asking too much. For $380 million, the public should get more
than 7,500 acres of trees; it should get a model management plan, or at
least a closer approximation of one.

The main fear of environmentalists is that the habitat conservation plan
now attached to the agreement will set a weak precedent for management of
other timber lands. It won't do so officially. But as the first habitat
conservation plan for this region, and a highly scrutinized one, the
Headwaters plan will be looked to by both government agencies and private
landowners in the drafting of future plans.

Letting the deal fall through instead is rolling the dice on the fate of
the forest. With no deal, the trees remain in the hands of Pacific Lumber.
But the dice are loaded.

Even if the core Headwaters grove is not purchased by the public, it won't
be cut down. The Endangered Species Act almost certainly will prevent the
cutting of live trees because of the presence of an endangered species, a
bird called the marbled murrelet. In the rest of the forest, logging will
be limited near streams, in which live another endangered species, coho

A failed deal will not reflect badly on Wilson and Feinstein. They worked
hard in a good cause. But Sher's objections are telling.

The best outcome is the purchase of the forest, with the stipulations
proposed by Sher. Short of that, California should save the money and
pursue other ways to save the forest.

1997 - 1998 Mercury Center.

Subject: T/S Editorial 9/23/98

"Lessons must be learned after death"

David Chain was a person.

Some people have already lost sight of that fact. Chain had parents who
loved him and friends who enjoyed his company. He was a young idealist
who wanted to make the world, in his mind, a better place to live.
Certainly nobody can fault him for that.

But some have faulted him for dying. He was trespassing on Pacific
Lumber Co, land with about eight other Earth First activists when a tree
fell on him and killed him. Yes, he shouldn't have been there, but Chain
didn't deserve to die, as some callous people who have grown weary of
protesters have said. We realize those heartless souls are in the
minority and [we] prefer to believe that despite where people stand on
the timber issue, everybody thinks like Joe Rogers, a 32-year PL
employee, who said: "We need people to pursue causes. But you don't want
to hear of anyone losing their life, even if it is for the wrong war or
the right war."

Rogers brought up another salient point: "No matter where you stand, the
loss of someone's life is tragic. But I'm also surprised it already
hasn't happened. The guys who work out there lose their lives from time
to time."

Logging is one of the most dangerous professions in the United States.
The limbs from a fallen tree that get hung up in another standing tree
are called widow makers for a reason. A 300-pound limb dropping 180 feet
with no warning is a recipe for disaster.

There are other hazards that loggers face as well - sharp equipment,
heavy logs and giant machinery. People who work in the woods - like
commercial fishermen and coal miners - face enormous risks and should be
thankful every evening when they make it home from work.

There's a lesson there for environmental activists. Loggers are trained,
skilled and have the benefit of the best equipment - yet loggers are
still injured or killed. A logging operation is no place for

Activists know this, yet trespass anyway and take the risk. They think
their battle is important enough. The Humboldt County Sheriff's
Department says it doesn't have enough staff to go track down
trespassers in the forest. So what we're stuck with is a problem with no
solution - unless Earth First puts an end to the predicament.

The activists in the area near Grizzly Creek Redwoods State Park the day
of the accident were trying to persuade the loggers to quit cutting
trees. The method is called "cat and mouse," which Earth First spokesman
Josh Brown described as "engaging [the loggers] in dialogue and asking
them not to cut trees."

We can't see many loggers laying down their saws and refusing to cut the
trees. They have jobs to do. they have families to feed. Judging from
the video that Earth First said was taken at the site about 90 minutes
before the accident, all the "dialogue" managed to do was upset a logger
and cause him to spew a bunch of four-letter words.

If earth First must protest, there have to be better methods. There have
to be methods that won't get anybody else killed.

Published Friday, October 30, 1998, in the San Jose Mercury News

Scientists fear logging could wipe out coho

SACRAMENTO (AP) -- The coho salmon, a bellwether of environmental
health, could become extinct in California unless aggressive steps
are taken to protect streams from logging in the North Coast,
scientists said Thursday.

The fish is protected under the Endangered Species Act, but a
controversial provision of the $500 million Headwaters Agreement
creates an exemption for Pacific Lumber Co.

Under the deal, which set aside as a public preserve 7,500 acres of
ancient redwoods owned by Pacific Lumber, the company has to apply
for an ``incidental take'' permit in order to log on its remaining
200,000 acres. The permit would allow logging even if it resulted in
the destruction of some of the 36 federally protected species on the

Scientists held a news conference to criticize Pacific Lumber's
permit application, called the Habitat Conservation Plan. They said
the plan includes some sound scientific information, but arrives at
faulty conclusions aimed at increasing profits for the Scotia-based

``The embarrassment is not in the science. The embarrassment is in
the inability to cope with a company who has no regard for the
environment,'' said Dr. Michael Fry, a wildlife biologist at the
University of California-Davis.


Published Sunday, November 1, 1998, in the San Jose Mercury News

Evolution of a movement

Environmental terrorism contrasts with maturing radicals

Mercury News Staff Writer

Climbing to the top of a redwood in the far reaches of Northern California
last year, Julia ``Butterfly'' Hill defied the lumber company intent upon
sawing the tree down. Today, nearly 11 months later, she still hasn't
touched ground.

The tranquil 24-year-old woman and the 200-foot tree she named ``Luna''
have become symbols of a new generation of Earth First!, the radical
environmental group once best known for pounding railroad spikes into trees
to break logging saws and pouring sand into bulldozer gas tanks, also known
as ``monkeywrenching.''

And while Earth First! has claimed in recent years to be shifting its
tactics away from sabotage to civil disobedience such as tree-sitting --
perhaps as a move toward the mainstream -- there are obviously people on
the fringes of environmental activism who have been unwilling to change
their methods.

Two weeks ago arsonists billing themselves as the Earth Liberation Front
ignited seven fires at the renowned Vail ski resort in Colorado. The
daring, middle-of-the-night fires, set along the 11,220-foot mountaintop,
caused $12 million in damage, including the destruction of the landmark Two
Elk Lodge.

As tactics go, it stands to reason that the move from sabotage to arson is
not that distant. But the evolution of the radical environmental movement
-- and whether or not the fringes are linked to a moving center -- is
shrouded, as if by North Coast fog. With the Vail culprits still on the
loose, Colorado Gov. Roy Romer quickly branded the fires environmental

Maybe so, said Earth First!, but it wasn't them.

However, Ron Arnold, director of the Center for the Defense of Free
Enterprise, a property rights activist group in Bellevue, Wash., claims
Earth First! and the Earth Liberation Front are one and the same.

``The `innocent' mainstreamers very likely are the same people going out
and doing the crime,'' Arnold said in an interview.

Earth First! dismissed Arnold's view as ``delusional.''

Over the past two decades, Earth First! has transformed itself, said Lacey
Phillabaum, a 23-year-old editor of the Earth First! Journal in Eugene,

``In the '80s, a lot of Earth Firsters were engaged in sabotage as a sort
of last resort,'' she said. ``In the 1990s, the trend has been much more .
. . to engage in non-violent civil disobedience. Monkeywrenching was the
tactic that people thought worked then, and this is the tactic that people
see as working now.''

Past incidents

Even so, the current decade has witnessed plenty of destruction in the name
of the environment, including some spectacular examples in this region.

On Earth Day, 1990, an organization calling itself the Earth Night Action
Group toppled high-voltage transmission lines coming from the Pacific Gas &
Electric plant at Moss Landing and knocked out power to most of Santa Cruz
County for two days.

Two years ago, a hotel under construction that blocked ocean views near
Half Moon Bay was torched. Neighbors cheered, sipped champagne and watched
it burn.

Neither attack was blamed on Earth First!.

But since the earliest days of Earth First!, the group has been divided
over the value of sabotage, Phillabaum said. And while monkeywrenching got
the most publicity, Earth First! has always been engaged in theatrical acts
of civil disobedience.

Peg Millett, who at age 44 is one of the oldest Earth Firsters still
involved in the movement, has done both. It was her act of sabotage on a
summer night in 1989 that caused the first major rift in Earth First! and
brought a forced re-examination by the group.

Her activism started rather mildly in 1987 when she dressed up in a raccoon
suit and blocked a roadway into the north rim of the Grand Canyon. At age
35, she was a disciple of Earth First! founder Dave Foreman, who wrote
``Ecodefense: A Field Guide to Monkeywrenching.''

Once she got out of the raccoon suit, Millett said in an interview last
week, ``We wanted to do something that went bump in the night.''

New recruit

By 1989, she was cutting bolts on ski-lift pylons in northern Arizona and
power lines that led to a uranium mine. A new recruit joined her ranks -- a
tall, handsome cowboy named Mike Davis who wore boots and an endearing
Arizona feed cap.

Millett had a thing for cowboys. He took her two-stepping. She took him

And on June 1, 1989, Millett, Davis and two cohorts put on their black knit
caps and drove west of Phoenix to Alamo Lake to cut a power line to a pump

As Millett played lookout, an FBI flare illuminated the night sky.

``Oh my God, there's someone else here,'' she said. She ran 16 miles
through the night and turned herself in the next day.

Mike Davis was no cowboy. He was an undercover FBI agent.

The sting also netted Foreman, who had given Millett's group $200 for gas
and supplies for the Alamo operation. Millett served two years in prison.
Foreman pleaded guilty to one felony count of conspiracy and received a
delayed sentence. But it was a turning point for Earth First!

``It became foolhardy to be identified as an Earth Firster,'' said Susan
Zakin, who wrote ``Coyotes and Town Dogs: Earth First! and the
Environmental Movement.''

Under pressure from the FBI, ``Earth First! has splintered into different
grandchildren, different pieces,'' Zakin said. ``Some of them have become
much more radical, some have become much more practical.''

Still protesting

On the practical side, Foreman founded a wilderness conservation group. And
another early member, Peter Galvin, co-founded a public policy group in
Tucson that uses lawsuits to try to stop environmental degradation. And in
the tradition of civil disobedience, Earth Firsters are still linking arms
to block roadways. But these days, they bind themselves together with metal
sleeves or bike locks to make it more difficult for authorities to pull
them apart and haul them away.

However, protesters who were chained together at a protest at Pacific
Lumber Co. headquarters in Scotia last fall were swabbed in the eyes with
pepper spray, and one 24-year-old forest activist was killed in September
when a logger felled a tree that struck him in the head, also in Humboldt

At the extreme is Earth Liberation Front, which took responsibility for
five earlier arsons against federal buildings in Washington State and
Oregon, as well as the Vail fires. Its members have not identified
themselves, but the group has apparently aligned itself with the Animal
Liberation Front, best known for throwing paint on fur coats and freeing
animals from research laboratories.

According to an Animal Liberation Front newsletter, Earth Liberation Front
(ELF) got its start after a 1992 Earth First! meeting in England.
Frustrated that Earth First! was going too mainstream, more radical
activists proposed an underground wing to keep up the sabotage.

``Sadly, this never really happened, as some sections of the movement were
trying to link up with the mainstream and saw the elves (ELF) as an
embarrassment,'' the undated newsletter said. Undeterred, the more radical
group broke off to form Earth Liberation Front as a separate entity, the
newsletter version goes.

Anonymous members

Craig Rosebraugh, who is a member of a group called Liberation Collective
in Portland, Ore., said that he doesn't knows a single member of the Earth
Liberation Front. But he is their spokesmen, nonetheless.

He only hears from them through ``anonymous communiques,'' he said. ``They
trust us to put the message out and we do.''

The saboteurs set fire to the lodge, the ski patrol headquarters and four
ski lifts at Vail -- one of the country's premier ski resorts -- after a
federal judge threw out a lawsuit seeking to block Vail's expansion into
885-acres of national forest land that was also seen as potential habitat
for the reintroduction of the lynx.

``What else was there to do?'' Rosebraugh asked. ``People who engage in
these actions feel they're taking up where the law left off. If the law is
not protecting something you believe is important, very near and dear,
there is disillusionment that happens and you find these kinds of things
going on.''

Millett no longer holds that view. ``My monkeywrenching days are over,''
she said. Now living in a yurt, Millett said her voice is her latest
weapon. ``I sing environmental songs.''

And from a platform in the top of a redwood, Julia ``Butterfly'' Hill
continues her vigil. She said she'll come down when the lumber company
agrees to spare the tree. In the meantime, she spends her days talking by
cellular phone to reporters, writing poetry and -- when the weather permits
-- climbing around on Luna.


Published Tuesday, November 3, 1998, in the San Jose Mercury News

Hearings critical to logging plan

Headwaters Forest: New environmental safeguards draw conflicting scientific
opinions about tree-harvesting's effects on wildlife habitat and fisheries.

SCOTIA (AP) -- Federal officials this week begin a final round of hearings
on plans for management of Pacific Lumber Co. timberlands critical to a
$500 million agreement to buy the Headwaters Forest.

National Marine Fisheries Services officials will be in Oakland today to
discuss new regulatory requirements that state and federal officials say
would be the most stringent imposed on a California timber company. The
Scotia company's plans are expected to serve as models for other timber
companies facing dwindling log supplies and increased regulatory pressure
to protect wildlife habitat and help restore declining fisheries.

"The proposed standards go far beyond current requirements and will
continue to make the California timber industry by far the most regulated
in the nation," said Chris Nance of the California Forestry Association.

The Habitat Conservation Plan, which is more than 1,000 pages long,
describes expected timber growth and harvest as well as plans to manage
recreation, wildlife, fisheries and other resources. The report is one of
several required as part of a government agreement to buy the Headwaters
Forest and several other old-growth redwood groves.

Environmentalists are concerned about the fate of wildlife on Pacific
Lumber's 200,000 acres of timber, home to several species included in the
Endangered Species Act. In particular, environmentalists say logging on
steep slopes prone to landslides could have disastrous consequences for
aquatic life in streams below.

And the new environmental safeguards proposed for those acres are being
dogged by conflicting scientific opinions over the effects of logging on
north coast fisheries.

State Resources Secretary Doug Wheeler and the Clinton administration have
said the standards would provide "dramatic improvements" for fish and
wildlife. But a coalition of environmental groups contends the proposed
regulations don't go far enough to protect the last 1 percent of wild coho
salmon populations.

Legislation tripled the width of stream-side protection zones on Pacific
Lumber land. But critics say government scientists reacted to pressure by
Pacific Lumber and politicians by agreeing to "no cut" buffer zones that
are weaker than other scientists say are necessary.

Peter Moyle, a coho salmon expert at the University of California-Davis,
and Terry Roelofs, a Humboldt State University fisheries expert, said
widths of proposed stream-side protection zones along north coast streams
need to be at least tripled to offer any chance for coho salmon recovery.

Roelofs said even with such drastic steps, it would take decades to improve
north coast fisheries.

"That's the price we're going to have pay after decades of intensive
logging," Moyle said.

But government scientists say what those experts propose is unrealistic and
potentially devastating to the region's timber industry and communities.

"What they propose is not a fair test of the requirements that state and
federal agencies must take into account. They're offering a pristine idea
of what conditions could be like, but we don't have that luxury," said Jim
Gaither, an ecology expert and special assistant to Wheeler.

Pacific Lumber standards "far exceed anyone's expectations of what
government could accomplish to protect wildlife and fisheries on private
lands," Gaither said.

Pacific Lumber President John Campbell said environmentalists "don't seem
to understand that what they are demanding will put us and every other
timber company out of business. Maybe that's what they are really after."

The hearings move to Eureka on Nov. 10. The entire Headwaters agreement
faces a March 1 deadline.
published Tuesday, November 10, 1998, in the San Jose Mercury News

Tree deal is tricky

Agencies endeavor to meet deadline for Headwaters buy

SACRAMENTO (AP) -- A host of state and federal agencies are struggling to
find the right way to spend $380 million set aside for the purchase of the
Headwaters Forest, witnesses said Monday at a legislative hearing.

With a March 1 deadline looming, there is no consensus on how to acquire
>from Pacific Lumber Co. the 7,500-acre Headwaters Forest, the world's
largest privately held stand of ancient redwoods.

The land is to be set aside as a public preserve.

"This can't wait until the last minute," said state Sen. Byron Sher,
D-Redwood City. "This deal's got to be wrapped up."

It remained unclear Monday whether the land 280 miles up the coast from San
Francisco will be owned and administered by the state, the federal
government or both.

The Bureau of Land Management has been designated to handle administration
of the Headwaters Forest for the federal government, said David Nawi, a
U.S. Interior Department attorney.

The California Wildlife Conservation Board, part of the state Resources
Agency, is handling California's end of the purchase.

The Headwaters agreement is by far the largest and most complex purchase
the board has handled, said Assistant Executive Director Jim Sarro.

"It's a very short deadline, but we can meet it," Sarro said.

The board is considering four purchase options and will present the
Legislature with an agreement in February. The simplest of the four -- a
direct purchase of the deed -- isn't feasible because there isn't enough
time for the board to complete an appraisal required by law, he said.

Other options include a grant of state money to the federal government and
a court settlement that involves land-for-cash and a dismissal of Pacific
Lumber's lawsuits against the state and federal government.

Sher, a legislative leader on Headwaters, said he was worried that state
lawmakers were being left out of the process as he claimed they were when
the Headwaters agreement was first reached two years ago.

"I'm concerned we're going to get into the same box where we don't know
what's going on," Sher said. "You're asking for disaster if you proceed in
talking to federal agencies and keep us out of the loop."

Further complicating things, the Headwaters acquisition is linked to
logging on Pacific Lumber's remaining 200,000 acres of timber, home to 36
federally protected species.

Legislators authorized the Headwaters purchase as the clock ran down on the
1998 session after Pacific Lumber made some last-minute concessions.

The company agreed not to log within 100 feet on either side of streams
where the threatened coho salmon and other fish swim or within 30 feet of
tributaries of those streams. Pacific Lumber said the no-cut zones lock up
12,000 acres of timber.

Lawmakers said that part of the Headwaters price tag includes compensating
Pacific Lumber for agreeing not to cut near the streams.

"We want to get what we pay for," said Assemblywoman Carole Migden, D-San

Pacific Lumber says the no-cut zones and other logging restrictions
represent a "quantum leap" beyond current forest practice rules in
California, some of the most restrictive in the nation, and could set the
standard for California's $1 billion timber industry.

Other timber firms are concerned that Pacific Lumber has made too many
concessions and agreed to restrictions other companies could not meet and
still stay in business, said John Campbell, president of Pacific Lumber.
Published Wednesday, November 11, 1998, in the San Jose Mercury News
Sanction aids foes of Headwaters deal

Pacific Lumber license yanked

Damage to forests provokes suspension
Mercury News Staff Writer

In a sharp rebuke to California's most controversial logging company,
Gov. Pete Wilson's administration Tuesday suspended the timber
operating license of Pacific Lumber Co., which is already under fire
for its long-running attempts to log the ancient redwoods of Northern
California's Headwaters Forest.

The timber-cutting license was suspended for the rest of 1998 because
of ``continued violations of the state's forest-practice rules,''
according to state regulators.

In the past three years, Pacific Lumber has been cited 128 times by
state inspectors -- more than any other large lumber company in the
state -- for such offenses as logging too close to fragile streams,
constructing shoddy roads and removing redwoods near the nests of the
endangered spotted owl.

``This decision is not an easy one to make, considering the effects
on employees, but we simply cannot allow these violations to
continue,'' said Richard Wilson, director of the California
Department of Forestry and Fire Protection.

``Although we are aware of the potential economic impact of this
decision, our primary objective must be to enforce the rules which
protect our environment along with the economy.''

The company has five days to appeal. The forestry director then has
10 days to consider the appeal. If he decides to uphold his own
ruling, there is no further appeal.

Pacific Lumber, based in Scotia, 15 miles south of Eureka, is
Humboldt County's largest private employer, with 1,600 workers.

Tuesday's announcement will not shut down the 129-year-old company,
but it carries two serious consequences.

First, it gives environmentalists a legal tool to wield in an
almost-certain lawsuit next year to overturn a $495 million public
deal to buy 7,500 acres of Headwaters Forest. That deal was reached
in September, on the final day of the state Legislature's session.
Environmentalists have called the deal a taxpayer giveaway and one
that sets a bad precedent because it includes a permit to allow the
company to kill endangered species while logging on its remaining

Second, it could jar Wall Street investors, who have reacted
nervously when the state cracked down on Pacific Lumber, controlled
by Houston financier Charles Hurwitz.

Company reaction

``We take our responsibility to the forest and to the communities of
the North Coast very seriously,'' said John Campbell, president of
Pacific Lumber.

``As disappointed as we are by the California Department of
Forestry's decision, we remain committed to making the changes that
are necessary to regain our leadership as a responsible steward of
the state's timber resources.''

Campbell said the sanction will cause 180 Pacific Lumber employees to
``cease their work indefinitely.'' Those employees are people who cut
down trees -- the timber fallers, haulers and yarders.

Already, however, about half the logging on Pacific Lumber's 210,000
acres is done by independent contractors. Because they have their own
licenses, those loggers, known as ``gypos,'' will be allowed to
continue. Pacific Lumber employees working in the company's massive
redwood mills along Highway 101 also will be allowed to keep working.

Environmentalists were surprised and elated.

``It's about time,'' said Paul Mason, president of the Environmental
Protection Information Center (EPIC) in Garberville. ``Pacific Lumber
consistently disregards the law. They break the law in order to
maximize their profits.''

In fact, the company has been cited with nine misdemeanor criminal
counts since 1996, Mason noted. It has paid fines to courts. And it
already was working this year on a so-called ``conditional license,''
which the state issued after suspending its license last year for
repeated environmental violations. At least three criminal
misdemeanor counts were filed by the Humboldt County district
attorney this year and are pending.

On Aug. 16, the company was cited for removing second-growth redwood
trees along Freshwater Creek in an area that its permit said was
off-limits. Then on Oct. 22, the company was cited after workers
drove heavy equipment through the stream for a two-week period,
causing heavy erosion.

Also this fall, Pacific Lumber was cited for logging second-growth
redwood too close to spotted owl nests -- into a 500-foot buffer zone
that was set by the permit and flagged as off-limits.
License renewal

The repeated violations will not go unnoticed next month when the
Wilson administration decides whether to issue a 1999 license for
Pacific Lumber, said Gerald Ahlstrom, chief of the forest-practice
program for the state forestry department.

``We do consider the last three years. So virtually everything that's
happened will be looked at,'' he said.
Ahlstrom also said that last month state forestry officials
recommended that the Humboldt County district attorney prosecute
Pacific Lumber for unfair business practices.

``Essentially that means that a company has violated the law so much
that they have an unfair business advantage over those who have
complied with it,'' he said. In such cases, which are civil actions,
penalties can soar into the millions of dollars because companies can
be forced to return ill-gotten profits.

``We think the penalty could be anybody's guess in this case,'' said
Ahlstrom. ``Certainly very high.''
Some environmentalists called the crackdown a last-minute attempt by
Wilson officials to keep their jobs after Jan. 4 when new Gov. Gray
Davis, endorsed by the Sierra Club, takes office. Ahlstrom denied
that allegation.

Thursday, November 12, 1998
San Jose Mercury News

Pacific Lumber: cutthroat at work

The most vilified timber company in California just had its chainsaws taken
away for the rest of the year.

The California Department of Forestry has suspended the logging license of
the Pacific Lumber Co., owner of the Headwaters Forest of ancient redwoods,
through which mists and controversy swirl.

In reaction, Pacific Lumber seemed contrite. President John Campbell said
that the company was ``embarrassed'' by the suspension and will not appeal

But the company merits no slack. Already, it was operating on a conditional
license, which state forestry officials imposed last year. Since then, the
department said, the company has committed 16 violations of forestry rules,
including cutting too near streams and ignoring a buffer zone for spotted

Pacific Lumber announced it would lay off 180 loggers because of the
suspension, though logging already was winding down for the winter. Whether
there will be a more substantial penalty is to be determined in two
upcoming decisions.

The Department of Forestry will decide whether to grant Pacific Lumber a
license for 1999.

More important, the suspension occurs as the state and federal governments
are trying to nail down the details of buying the Headwaters Forest from
Pacific Lumber.

In that deal, the public would pay $495 million for ownership of 9,500
acres of forest and Pacific Lumber's agreement to operate under a ``habitat
conservation plan'' on its remaining 200,000 acres.

The adequacy of the stipulations in the plan about stream buffers and other
environmental protections has been hotly debated. Environmentalists now
argue that the violations of forestry rules make Pacific Lumber legally
ineligible for a habitat conservation plan.

Under a habitat conservation plan, some damage to members of an endangered
species is permitted on the grounds that the plan as a whole protects, or
even enhances, the prospects for the species.

Government lawyers will determine the eligibility. At a minimum, however,
the violations show the need for strict state supervision of any agreement.

Pacific Lumber has been in the environmental spotlight since it was
purchased by corporate financier Charles Hurwitz, and its rate of cutting
trees increased dramatically. It knew that the Headwaters deal, which is
still not nailed down, focused inordinate attention on the company. It knew
that the Department of Forestry already had given it only a conditional

Yet with so much as stake and so much scrutiny, Pacific Lumber still
compiled a record of violations that startled regulators. As they consider
a 1999 license and the Headwaters deal, officials should impose
requirements for independent monitoring and stiff penalties for violations.

Pacific Lumber has demonstrated that it can't be left alone in the woods.

The Village Voice
November 3 - 9, 1998

Press Clips by andrew hsiao

The Green Menace

It's been a remarkable month for the merchants of "ecoterrorism." In the
two weeks since a group calling itself the Earth Liberation Front claimed
responsibility for fires that engulfed a Vail, Colorado, ski resort, dozens
of news stories have raised the specter of violent environmentalism, a
supposedly growing "movement" of "murderers and arsonists," as an editorial
in Saturday's New York Post put it. But to establish the case that the Vail
fires are part of a trend, major media outlets elevated some of the anti-
environmental movement's most virulent and dubious propagandists to the
status of expert— without divulging their political ties.

The October 19 fires— seven separate blazes spread along a
mile-long ridge
on Vail Mountain— destroyed a restaurant, a patrol building, and a picnic
shelter, and damaged several lifts. Two days later, a fax purporting to be
>from the ELF said the fires had been set "on behalf of the lynx."
Environmentalists have been battling the proposed expansion of the ski
resort into 885 now-pristine acres of mountain forest, one of the last
known habitats of the lynx, and just days before the fires, workers had
begun clearing trees. No one was hurt, but the blazes caused some $12
million in damage.

Local activists and national environmental groups immediately denounced the
arson, and only the Animal Liberation Front, a small group on the fringe of
the animal rights movement, would unreservedly defend the ELF. But just as
immediately, network news brought us "ecoterrorism."

On October 23, CBS This Morning's Jane Robelot introduced one Barry
Clausen, identifying him as "an expert on these attacks working for North
American Research, monitoring left- and right-wing groups." Robelot began
their conversation thusly: "We don't hear a great deal about ecoterrorism.
Is it on the rise?" Clausen replied, "Yes, it is. . . . In 1986, there was
about 10 terrorist attacks. In 1994, '95, '96, there has been in excess of
300 a year. And now we're seeing more violence."

Meanwhile, ABC brought in Ron Arnold, identified in separate reports as
author of "a book on ecoterrorism," and as someone who's "been studying the
tactics of radical environmentalists for years." The New York Times
proffered Clausen's judgment that "we are seeing a decline in small acts of
sabotage, against timber and mining, and an escalation of large acts of
terrorism." In another piece, the Times had Arnold drawing a connection
between the ELF and the radical environmental group Earth First! The Times
blandly identified Clausen as "a Northern California researcher who studies
terrorist acts claimed by environmental extremists" and Arnold as "the vice
president of the Center for the Defense of Free Enterprise, a defender of
property rights and a critic of environmentalists who catalogues

These descriptions are astonishingly incomplete. Arnold is better known—
though not, apparently, by ABC, CBS, and the Times— as the founder of the
Wise Use movement, the corporate-backed anti- environmental coalition that
in the last decade has rallied more than a thousand western groups under
the banner of property rights, while being linked to the militia and
county-supremacy movements in their crusade against Big Government and the
hated Greens. Arnold once said of environmentalists, "We're out to kill the
fuckers. We're simply trying to eliminate them. Our goal is to destroy
environmentalism once and for all." And Clausen has been "trying to
discredit the environmental movement by any means necessary" for a decade,
says Tarso Luis Ramos, research director of the Western States Center, a
grassroots eco-coalition.

Relying on Arnold and Clausen for analysis of radical Green activism is
"like asking David Duke to assess the rise of black militants," says David
Helvarg, author of War on the Greens. Clausen has been dining out for years
on the strength of his "infiltration" of Earth First! for the timber
industry— an achievement, notes Helvarg, on the order of
"infiltrating the
Shriners." Clausen's industry sponsors terminated his contract when he
failed to produce any actual evidence of environmental terrorism. Instead,
Clausen produced a risible book about his exploits, Walking on the Edge.

Arnold helped Clausen distribute his book, but in recent years the Wise Use
guru has ostentatiously taken the high road. "When I say we have to pick up
a sword and shield and kill the bastards," he told Helvarg, "I mean
politically, not physically." In 1995, my colleague James Ridgeway, along
with Jeffrey St. Clair, found Arnold furiously backpedaling from the
militia movement: "I deplore them. I think the notion of taking up arms to
defend what we're trying to defend is wrongheaded. It's stupid." The
distancing became necessary after the April '95 Oklahoma City bombing
focused media attention on links between Wise Use and the militias and
county-supremacy groups. Arnold, for example, has sat on the advisory board
of the county movement's National Federal Lands Conference, whose October
1994 newsletter proclaimed, "Long Live the Militia!"

The mainstream media's failure to include any of this background in its
news reports on Vail allowed the extreme anti-Greens to "hijack the story,"
as Tarso Ramos puts it. ABC, CBS, and the Times all failed to respond to
requests from the Voice for comment, but those outlets were not alone in
hyping environmentalist violence. A report produced last week on the
coverage of Vail by FAIR, the progressive media watchdog, noted headlines
such as "Ecoterrorism Growing More Violent" (Chicago Tribune) and "Violence
Escalates in the Name of Environmentalism" (Christian Science Monitor),
though little evidence of a trend exists. Indeed, in their catalogues of
Green terrorism Clausen and Arnold— who claims to have coined the term
ecoterror— cite demonstrators engaging in civil disobedience, graffiti
sloganeers, and protesters who refused to climb down out of trees.

If anything, maintains Helvarg, the trend among radical Greens like Earth
First!-ers in recent years has been away from monkey-wrenching and toward
'60s-style c.d. And environmentalists, he says, are far more likely to be
victims of violence: only six weeks ago, Earth First!-er David Chain,
protesting logging in California's Humboldt County, was killed by a tree
felled by a Pacific Lumber logger.

What makes the mainstream media's performance even less creditable is the
fact that Arnold and Clausen have peddled these wares before. When Ted
Kaczynski was arrested in 1996, the two tried to use the Unabomber to
discredit Earth First! An ABC World News Tonight report claimed to have
uncovered Kaczynski's connection to the group and credited Clausen with
finding an Earth First! "hit list" that Kaczynski was said to have used to
target one victim. Much was made of a Clausen claim that a "T. Casinski"
had registered at a November 1994 conclave at the University of Montana at
Missoula, "attended by top Earth First! members."

All this was set right by Alexander Cockburn in a May 1996 Nation column,
which noted that the vaunted hit list had actually been put out by the
anarchist zine Live Wild or Die (which had urged boycotts, parodies, and
the like on its enemies), and that the Missoula gathering— in reality an
open conference attended by some 500 people, including Oklahoma
representative Mike Synar— showed no Kaczynski or Casinski on its
attendance roster.

Perhaps it's asking too much for mainstream reporters and editors to be
familiar with a Nation story. Still, ABC, CBS, and the Times have all
produced lengthy reports in recent years on the Wise Use movement and
virulent anti-environmentalists. Considering that much of this information
was available in-house— not to mention out in the wild blue
datastream— why
haven't big media wised up?

>from December 97

PL's Shame
Loss of license latest blemish on company's flagging reputation

The California Department of Forestry's decision to revoke the timber
harvesting permit of Pacific Lumber Co. may not harm the bottom line of the
forestry giant. Their permit may be renewed after further negotiations
between the company and state officials, or the company can increase its
reliance on private contractors who operate under separate permits.

But the decision--by an agency seldom accused of over-zealous
regulation--does damage the company's reputation and its credibility in the
give-and-take of forestry politics.

The Forestry Department charged the company with 103 separate violations of
state rules, most of them related to allegations that work was performed
without due regard for erosion control.

Jerry Ahlstrom, chief of the department's enforcement division, told the San
Francisco Chronicle that the regulators suspend only four or five out of more
than 2000 licenses issued in California each year. Needless to say, most of
the permitees are a fraction the size of PL, which owns 200,000 acres in
Humboldt County.

Environmental groups were quick to say that the decision only confirms what
they have been saying since Texas financier Charles Hurwitz acquired Pacific
Lumber in a hostile takeover--that the company disregards the law, the natural
environment and the impact of logging operations on neighbors.

"They're consistently bad actors who don't follow the rules," according to
Paul Mason of the Environmental Protection Information Center.

This new embarrassment unfolds against the backdrop of efforts to implement an
agreement in which the federal government would acquire Headwaters Forest, one
of the largest stands of virgin redwoods that remain in private control.

Some environmental groups want to sink the deal because they say it doesn't
provide for an adequate sanctuary around the forest.

For future claims from Pacific Lumber, there can be expected a popular reply:
Well, what can you expect? That's the company that couldn't even keep its
timber permit.

Breakthrough for Deal to Buy Headwaters
Alex Barnum, Chronicle Staff WriterSaturday, January 24, 1998

California environmental groups, whose support is crucial for a
June ballot measure to finance the purchase of Headwaters Forest,
yesterday laid out the conditions under which they would back the
It was the first time the state's diverse environmental community,
long split over the Headwaters deal, has reached a common position on
the government's agreement to purchase the 7,500-acre forest in
Humboldt County.
In a letter to the leaders of the state Legislature, 10
conservation groups indicated they would support the bond measure as
long as Pacific Lumber Co. commits to a strong conservation plan for
the rest of its 190,000 acres of Humboldt County timberland.
The letter represents a significant shift for two groups in
particular, the Sierra Club and the Environmental Protection
Information Center. Both have long criticized the deal for not going
far enough and have never said it would be acceptable.
Without support from the Sierra Club, the bond measure has little
chance of passing. Observers in the Legislature said yesterday that
the newly forged consensus gives a major boost to the prospects for a
ballot initiative.
``This is a breakthrough,'' said a state Senate analyst intimately
familiar with the initiative. ``This means that there's a possibility
that if the (conservation plan) is good enough, they'll come on
board. It's a much more positive step.''
The state must come up with $130 million to complete the
$380 million purchase of Headwaters, the largest tract of virgin
redwoods remaining in private ownership. Congress recently approved
the federal government's $250 million share.
The Wilson administration wants to include funding for the
Headwaters deal in an $800 million bond measure for park funding that
could go to voters as early as June. It would be the first parks bond
in a decade and include funding for open space around the state.
But for the funding to appear on the June ballot, Pacific Lumber
and government biologists must quickly wrap up their negotiations on
a ``habitat conservation plan'' aimed at protecting endangered
species on the company's property.
Key state Democrats, whose support is necessary for the Headwaters
funding measure, said they will not back it until they have had a
chance to review the conservation plan and determine whether it
provides sufficient protection.
Negotiations over the conservation plan have been at an impasse
for more than a year. Government biologists say Pacific Lumber's
remaining old-growth redwood groves must be preserved to ensure the
survival of the marbled murrelet, an endangered seabird that nests in
the ancient trees.
Company officials, on the other hand, want to be able to cut some
of the remaining virgin groves to keep their old-growth timber mill
in Scotia up and running for the next five years. A similar deadlock
exists over salmon protection.
It is still unclear whether Charles Hurwitz, whose Maxxam Inc.
owns Pacific Lumber, will ever agree to a conservation plan that is
acceptable to environmentalists. Government negotiators met with
Hurwitz in San Francisco this week and said they had made progress.
But time is running out. For the funding measure to appear on the
June ballot, it must pass both houses of the Legislature by a two-
thirds vote by March 9.
In their letter yesterday, environmentalists echoed the demands of
state Democrats for ``substantial new protections'' for Pacific
Lumber's remaining old growth groves and its populations of murrelets
and coho salmon.
Among the groups that signed were the California League of
Conservation Voters, Greenpeace, the Planning and Conservation
League, the Wilderness Society, Rainforest Action Network, the Rose
Foundation and the Bay Area Coalition for Headwaters.
Ted Nordhaus, who is executive director of the Headwaters
Sanctuary Project and helped broker the consensus among environmental
groups, billed the letter as a significant step.
``This is the first time that the core Headwaters groups have ever
articulated conditions under which the agreement would be an
acceptable resolution,'' Nordhaus said. ``To my mind, that's quite

-- A New Deal To Save Trees
At Headwaters
12 more ancient groves would
avoid loggers' ax
Carolyn Lochhead, Chronicle Washington Bureau

Saturday, February 28,

The Clinton administration and Texas
financier Charles Hurwitz agreed in
principle yesterday to protect 8,000
more acres of ancient redwoods near
the Headwaters forest, more than
doubling the size of the protected area.

The agreement constitutes a major
breakthrough in the decade-long effort
-- including 13 failed attempts by the
state and federal government -- to save
the last remaining privately owned
virgin redwood groves in Northern

The protections come at a cost: In
exchange for saving 12 of the 13
so-called lesser cathedrals of ancient
redwoods near the Headwaters,
Hurwitz's Pacific Lumber will be
allowed to log one grove.

The company will have a choice of
cutting either the Owl Creek or the
Grizzly Creek stands, according to the

The agreement provides the outline for
the ``habitat conservation plan'' that
will guide Pacific Lumber's logging
operations on its 200,000 acres for the
next 50 years.

The sweeping plan is the most
extensive ever in the state, and
officials predicted that it would
establish a model for future protection
of California's coastal habitat.

The agreement is intended to preserve
more than just the redwood stands,
where trees as old as 2,000 years
reach heights of up to 300 feet. The
marbled murrelet, an endangered bird,
nests in the treetops, and Coho salmon
spawn in the approximately 1,000
miles of streams in the forest.

It is also a key element of a $380
million deal to buy the 7,500-acre
Headwaters forest that was brokered
by Senator Dianne Feinstein, D-Calif.,
and approved by Congress last fall.

Officials said the entire Headwaters
agreement now would protect 84
percent of the the old growth forest in
Pacific Lumber's 210,000 acres.

Environmental groups reacted with
muted praise for the number of
old-growth stands saved. But they
leveled sharp criticism at the
protections for the Coho salmon on
remaining private land that will be
logged, calling the buffer zones for
streams inadequate and short of federal

The agreement is still preliminary. A
detailed plan must be drawn up and
submitted to a 60- day public review,
starting around mid-May. But it
already has the approval of each of the
key players: Hurwitz, Deputy Interior
Secretary John Garamendi and
California Resources Agency head
Doug Wheeler.

Garamendi, along with federal and
state biologists, insisted yesterday that the plan is ``biologically
driven'' and represents a ``major milestone'' in habitat protection.

``This scientifically sound (agreement) will protect the species in over
200,000 acres of the coastal forest,'' Garamendi said. ``That is a terrific
result for all creatures whether they're in the rivers, in the air or
the on land.''

Some environmentalists disagree on the merits of the agreement. Sierra
Club director Carl Pope issued a statement saying the plan is
``sacrificing the fisheries for the trees'' and warned that it would
``undermine habitat protection in coastal watersheds along the
entire Pacific Coast by setting a terrible precedent.''

But Jay Watson, regional director of the Wilderness Society, offered
some praise. ``I think it's a very positive thing that the remaining
redwood groves will be protected,'' Watson said, ``and I hope that it
wasn't accomplished at the expense of coho salmon.''

Government officials said the federal stream standards were developed for
public land, but the government was limited in its ability to regulate the
streams on Pacific Lumber's private property.

Watson conceded that a ``fundamental difference'' exists between private and
public lands and the standards that can be applied to them.

But Kathy Bailey, forest conservation chairwoman of the Sierra Club
in California, countered, ``There is no difference between federally
and privately held streams from the fish's point of view.''

Pacific Lumber President John Campbell said the agreement finally
gives his company and its employees some certainty and offers a
marriage between wildlife protection and sustained-yield logging. ``I
think it's going to work,'' Campbell said.

Frank Riggs, the Republican congressman representing Humboldt County,
also praised Feinstein for forging a compromise between interests
that have so long been at war. ``She is someone who is more
interested in solutions than in controversy,'' Riggs said.

Feinstein was instrumental in getting agreement on the conservation
plan as well as the original Headwaters purchase. All the principals
in the talks said that without her intervention, the deal would have

Feinstein said the negotiations were the toughest of her career, more
difficult even than citywide strikes during her tenure as mayor of San

``Up to this stage, we have had nothing but failure in attempts to save the
Headwaters,'' Feinstein said. ``If you had asked me 18 months ago,
would we be where we are today, I would have to quite honestly say,
`Not on
your life.' ''

The Headwaters deal is far from complete, however. The habitat
conservation plan must survive this summer's public hearings.

The state also must pony up $130 million as its share of the deal. A
bill in the state Assembly would appropriate the money, and the
Wilson administration is talking about a bond issue that would have
to be approved by state voters.

The deadline for final completion is March 1, 1999, when the $250 million
congressional appropriation expires.
San Francisco Chronicle
Wednesday, March 11, 1998

Lead Editorial
The Headwaters Deal -- Good Work in Progress

THE LONG and contentious negotiations to preserve the Headwaters Forest, a
grove of ancient redwoods in Humboldt County, have produced the outlines of
a sound deal.

It's not perfect, but it is reasonable, especially considering the
difficulty of balancing environmental protection and property rights. One
of the critical elements of the deal, a habitat conservation plan to cover
more than 200,000 redwood-graced acres owned by Pacific Lumber Company, was
agreed to late last month.

Here are the essentials of the deal at this point:

-- The 7,500-acre Headwaters grove and surrounding forest, with 2,000-
year-old redwoods that provide nesting habitat for the endangered marbled
murrelet, would be purchased by the state and federal governments. Congress
has authorized $250 million; the state must come up with the remaining $130
million by either a legislative vote or a bond measure on the November

-- A 50-year "habitat conservation plan" -- the result of extensive
negotiation -- spells out many of the rules for Pacific Lumber's remaining
timber holdings in the area. The plan offers a truce. Logging will be
allowed to continue on the private land, but with restrictions designed to
protect the murrelet and 21 other species.

"The idea is not to respond to crises, one site at a time and one species
at a time," said state Resources Secretary Doug Wheeler.

>From an environmental standpoint, the most serious criticism of the plan is
that it does not sufficiently protect coho salmon. The Sierra Club is
arguing for much wider no-logging zones around streams than the 30-foot
minimum specified in the plan.

However, the plan does call for significant restrictions on logging up to
170 feet from streams, and federal fisheries experts will retain the
ability to demand larger buffer zones for permits in particularly sensitive
watersheds. The buffer-zone issue is a legitimate concern for further
scrutiny, but is not a reason to torpedo the deal. Critics of the deal must
remember that this plan is substantially more restrictive than current
state forestry rules -- and Pacific Lumber owner Charles Hurwitz has agreed
to abide by it immediately. The alternatives to moving forward with this
deal are going back to the table with Hurwitz, or taking the risk of
extended legal fights over his property rights.

Hurwitz, the Texas financier, may be a favorite public villain -- with dual
notoriety as timber baron and savings-and-loan scandal figure -- but he
does have rights, and the resources to assert them.

U.S. Senator Dianne Feinstein should be commended for her central role in
producing a reasonable Headwaters compromise. The Clinton and Wilson
administrations also deserve points for perseverance, and state legislators
or voters should now come up with the money to complete the deal.
>from the SF Chronicle at:

Study Says Media Wrong on Headwaters
Jonathan Marshall

Monday, April 13, 1998

Americans love a morality play, and for years the media have
given them one in the saga of corporate raider Charles Hurwitz,
his takeover of Pacific Lumber and the ensuing struggle to save
the Headwaters redwood forest.

The popular story goes something like this: San Francisco-based
Pacific Lumber was a family run, environmentally responsible
firm until corporate raider Charles Hurwitz, backed with
junk-bond financing from Wall Street tycoon Michael Milken,
grabbed control of the company. To repay his huge debts,
Hurwitz ordered heedless clear-cutting of Pacific Lumber's virgin
redwood forests, including the 3,000 acres of ancient
Headwaters redwoods.

The only trouble is that a lot of the blame cast at ``Wall Street
greed'' for the threat to ancient redwoods is misplaced, according
to a provocative new article in a publication you don't often see
on newsstands or supermarket aisles, the Journal of Financial

The revisionist analysis by University of Southern California
business professors Harry and Linda DeAngelo doesn't portray
Pacific Lumber owner Hurwitz as an environmentally sensitive
white knight. Nor does it exonerate him of allegations that he
abused a Texas thrift and used questionable tactics in taking over
the timber firm in 1986. Nor, finally, does it champion the
cutting of redwoods.

But it does blow holes in the widespread impression that
Hurwitz's leveraged buyout of Pacific Lumber was responsible
for putting one of the last great stands of privately held,
old-growth redwoods at risk.

That story became the rallying cry for environmentalists who
ultimately persuaded politicians to take steps to protect the
Headwaters -- a feat that may actually be accomplished this year
if Washington and Sacramento come up with $380 million to buy
8,000 prime acres of timber from Pacific Lumber.

Even some traditionally conservative media bought into that
story. In a story titled ``California's Chain Saw Massacre,''
Reader's Digest wrote in 1989 that, ``Magnificent, ancient
redwoods, once carefully harvested jewels in the Pacific Lumber
Company's crown, have become expendable pawns in a game of
leveraged buyout and corporate greed.''

But the DeAngelos argue that Wall Street finance actually had
little or nothing to do with why Headwaters was threatened. Even
under old management, Pacific Lumber would have cut (or tried
to cut) its most valuable trees within only a few years of the
logging schedule Hurwitz set.

The scholars cite a 1985 Pacific Lumber memo noting that the
company was cutting about 1,200 acres of virgin old-growth
forest every year, fast enough to wipe out a stand the size of
Headwaters every 2.5 years.

At that rate, the old management's harvest policy would have
wiped out the last of Pacific Lumber's virgin forests (including
Douglas fir) by 1999. Using other harvest estimates from the
company, the DeAngelos estimate that the oldest trees might have
survived until about 2005, compared with 1996 under the
accelerated plans of Hurwitz's company, Maxxam.

Nine years' difference isn't much in the life of an ecosystem.

Ironically, they point out, Maxxam's more aggressive cutting
plans may have aided the cause of preservationists by making the
forest a cause celebre.

The company's old management ``was systematically logging the
firm's virgin forests at a pace that was slow enough . . . to keep
them off environmentalists' radar screens.''

The old regime's slower cutting schedule didn't reflect the
environmental benevolence of a family owned firm, the authors

For one thing, Pacific Lumber wasn't family owned; by 1985,
the family long associated with the publicly held company owned
less than 5 percent of its common stock.

For another, the firm simply didn't realize until Hurwitz
engineered his takeover just how much timber it had. It last
commissioned a thorough survey in 1956. Eventually, Pacific
Lumber would have figured out that it owned much more lumber
and would have increased its harvest rate.

Indeed, the firm's board had approved clear-cutting and a
speed-up in harvesting even before the Maxxam offer. Pacific
Lumber's old policy of selective cutting had been dictated by state
tax laws that discouraged clear- cutting. Those laws were
revoked in 1978, and the firm's policies began changing a few
years later.

The DeAngelos say Maxxam further increased the cut rate after
Hurwitz's takeover of Pacific Lumber because it knew, from its
own surveys, that the company had much more timber than
previously realized. Like most other timber owners, it also
figured that virgin forests were more profitable if they were cut
rather than left standing -- because old trees stop growing. Cut
forests, on the other hand, regenerate new timber stands.

Those economic considerations were entirely independent of
Hurwitz's debt financing, the DeAngelos argue, although
Maxxam itself once justified its timber cuts on the basis of those
debts. Even after Hurwitz refinanced his junk debt with
lower-yield bonds in 1993, he continued cutting at higher rates.

And Hurwitz hardly was unique in cutting old forests. ``The
steady reduction and ultimate depletion of nearly 2 million acres
of ancient forest by private owners of redwood land over the last
150 years cannot plausibly be due to junk-bond-financed hostile
takeovers, a phenomenon of the 1980s,'' they added.

The demonization of the Maxxam takeover had a couple of
counterproductive consequences, they said. One was that
grandstanding politicians, claiming that Hurwitz was
undeserving, tried to insist on below-market compensation for
Pacific Lumber's redwoods. That tactic never would have stood
up in court, and it might have delayed a settlement to save the

And, the DeAngelos believe, few policymakers stopped to
consider alternatives to saving the Headwaters once the story was
framed as a corporate raider's threat to a unique stand of virgin
redwoods. They point out that the $380 million needed to buy
8,000 acres surrounding the Headwaters could plausibly
purchase 600,000 acres of second-growth redwood lands -- and
then be left undisturbed to create an enormous new old-growth
forest over time.

Longtime residents of Humboldt County and redwood activists
insist that the DeAngelos have underplayed the differences
between the old Pacific Lumber and the new Hurwitz regime.

Citing the hiring of hundreds of new loggers and the purchase of
a new mill to handle bigger harvests, Ceclia Lanman, program
director at the Environmental Protection Information Center in
Garberville, said, ``To me, it's clear that management took a 360
degree turn. They started doing logging practices never seen on
this property.''

And since Hurwitz bought the company, Pacific Lumber has
gained what many argue is a well- deserved reputation for
slipshod practices. It has been cited hundreds of times for
improper logging that contributes to mudslides, soil erosion and
stream siltation. It temporarily lost its logging license last
December and was sued a few months ago by the district attorney
of Humboldt County for forestry-law violations, Lanman noted.

But the lesson that should come out of the Pacific Lumber
controversy is that virgin redwood is a valuable commodity in
anyone's hands. No timber company could afford to let it stand
uncut forever. If society values old- growth forests more as a
unique ecosystem and species habitat, as a rare example of
primeval nature or just as an awe-inspiring place for human
visitation, it should just dispense with demonology and buy the
land for posterity.


Paper: Houston Chronicle
Date: MON 06/22/98
Section: A
Page: 1
Edition: 3 STAR

Suits: Bad logging makes bad neighbors /
PacificLumber ruins watersheds, critics say

By BILL DAWSON, Houston Chronicle Environment Writer

EUREKA, Calif. - The bomblike sounds that roused Mike O'Neal from bed
one morning also woke him to the possibility that logging by a
subsidiary of Houston-based Maxxam could cause problems for people
living nearby.

In the early hours of Dec. 31, 1996, O'Neal spied a huge landslide
pushing down a steep canyon from a tree-stripped area toward his tiny
community of Stafford.

Huge trees "were snapping off like matches and hitting the ground,"
the truck driver recalled. He rushed to warn neighbors - "literally
running ahead of the slide."

Everyone escaped safely, but seven homes were destroyed and residents
abandoned several others. "It wasn't good logging that caused this,"
O'Neal concluded.

For Kristi Wrigley, a fourth-generation resident of Humboldt County who

lives adjacent to Pacific Lumber's land in another rural area, the
realization was more gradual.

The Elk River, her domestic and agricultural water supply, had
flooded an old family home every 10 to 20 years, she said, but then
did so three times in two rainy seasons.

Wrigley and her children moved to a hilltop house nearby, where her
family has grown namesake Wrigley apples for decades. But unusually
sticky and

plentiful sediment started filling in the river where she swam as a
child, threatening the orchard's future, she said.

"I said something's wrong here. Something's really wrong."

Some other Humboldt residents are saying the same thing - alleging
erosion-related problems have increased because Pacific Lumber
accelerated logging and expanded clearcutting after Houston financier
Charles Hurwitz , Maxxam's chief executive, seized control in 1986.

The best-known dispute over those policies is the long fight to prevent

logging of the Headwaters Forest, the largest grove of ancient
redwoods in private hands. The company has agreed to sell it as a
preserve, once government agencies adopt sweeping new logging rules
negotiated for its

other land.

Headwaters was never the only environmental issue facing Pacific
Lumber, however. The impact of timber practices - especially
erosion's effects on salmon, which sediment can harm in various ways
- is an old point of contention.

In its debate with environmental critics, Pacific has pointed to an
enlarged work force since the Maxxam takeover, and stressed its
constitutional right to use property zoned for logging.

That property-rights argument now has an ironic twist, however, in
residents' charge that Pacific, the largest county landowner, is
damaging their downstream property.

The company's president, John Campbell, blames the area's recent
spate of flooding, landslides and water-supply complaints on natural
causes - a steep, naturally erosive landscape beset by strong
earthquakes in 1992 and uncommonly heavy rains the past two years.

"It's saturated soils, it's heavy precipitation, it's slope and it's
gravity," he said, noting that many California areas without logging
had recent landslides.

"The urbanization of the forest" has degraded water quality in
streams, as newcomers seeking "a little rural lifestyle" installed
septic tanks and caused erosion in areas like the Mattole River's
flood plain, Campbell said.

"If you want to talk about ironies," he said, "on rural real estate
developments of that type there are no rules. The timber industry has
an enormously complex regulatory scheme."

But local attorney Bill Bertain, a conservative Republican long
critical of Maxxam's policies who won a $7 million pension settlement
for Pacific retirees, has a far different assessment.

"What we're seeing, after 12 1/2 years of Hurwitz pounding the
watersheds, is a regionwide collapse of watersheds," he said. "More
and more people are seeing it."

"Charles Hurwitz has nothing to do with these watersheds," Campbell
said. "If anyone does, I do - and my foresters and scientists."

Bertain represents 37 current and former residents of Stafford and 23
residents near Elk River in lawsuits alleging they were harmed by
"irresponsible logging" and "clear violations of the law."

Pacific Lumber denies the accusations, though it bought the property of

several Stafford residents, which Campbell said was "the right thing
to do." Spokeswoman Mary Bullwinkel said it is unknown if the
landslide started on land owned by Pacific or a smaller timber
company, also named in the suit.

The basic thrust of Humboldt residents' complaints is supported by
government officials, however.

"The general problem, and Pacific Lumber is no exception, is that the
watersheds are overharvested from a functional, riparian point of
view," said Jim Lecky of the National Marine Fisheries Service. "In
many instances,

there are not enough trees left for stream bank integrity, and roads
on slopes have led to landslides and excessive sedimentation in

Ralph Kraus, a retired science teacher, said he and his wife can no
longer pump Elk River water regularly, and it isn't suitable for

In summer, he said, "There's a very heavy load of decaying organic
matter on the bottom, which we didn't have before."

In March, regional water-quality officials ordered Pacific to provide
drinking water to landowners along the Elk, but it has not complied
yet and is appealing.

The company received court fines of $5,250 in 1987 and $13,000 last
month for violations of state forestry rules noted last year,
including erosion-linked problems.

In an unprecedented action last December, the California Department
of Forestry imposed new restrictions and threatened to yank Pacific's
license to log with its own crews. Inspectors had found
"substantially more" violations than at any comparable company, most
related to erosion, official Gerald Ahlstrom said.

Bertain said inadequate state enforcement is responsible for some
problems, and residents "are really planning to bend the ears" of the
state Board of Forestry at a rare meeting in Humboldt County next

But Campbell said residents' complaints are "opportunistic," given
recent heavy rains, with "known activists" joining "a lot of
individuals who have been stirred up by regular activists."

Kim Rollins, born in Pacific Lumber's company town of Scotia with "a
lumber identity - almost a genetic thing," doesn't agree. A Stafford
plaintiff, he moved his family following the landslide.

"Up until this, I defended the bastards, whether I liked them or
not," he said of the company. "Nothing makes my neck redder than an
Earth First! guy," he said, referring to a countercultural group that
obstructs logging.

Wrigley also has a new view of a company she once respected. She was
distressed when a Pacific official, hearing her concern that the
shrinking Elk channel could kill her apple business, suggested she
could cut her small stand of redwoods for cash.

"Those trees don't just belong to me - they belong to every apple
customer who's ever come and every one that ever will," she said.
"Besides, they hold the soil."

Mike Evenson, a former logger who ranches in the Mattole watershed,
said he doesn't entirely fault Pacific Lumber for his loss of seven
acres to the river since last year.

"It's an unstable area," he said, "but a good neighbor would not do
something on their land to aggravate an already significantly
degraded condition."

One local official reflected on Maxxam's neighborliness: "Treat
people like a colony long enough and we know what people do to
colonialists - the natives get restless."

Some citizens have organized a grass-roots group urging adoption of
county ordinances to regulate timber practices more strictly.

Recent actions by Pacific Lumber may ease tensions somewhat. Last
month, it held the first of a promised series of meetings to hear
complaints in Freshwater, a community near a clearcut area, where a
"Remember Stafford" banner went up last year.

"We're taking steps to immediately address some of their concerns,"
including cutting truck traffic by half, Bullwinkel said.

Maria Rea, of the U.S. Environmental Protection Agency, said recent
talks with Pacific about correcting landslide-related problems
produced "significant progress."

State forestry officials, meanwhile, see better compliance since
December's threatened license revocation, Ahlstrom said.

Campbell said an agency backlog in checking off corrective actions
led to that crisis. Still, he hired a new compliance team and sent "a
very stern note" telling employees, "we were embarrassed, and it
wasn't going to happen to this company again."

New conservation rules for Pacific Lumber's property would ban
logging of old-growth redwoods in large areas. But Evenson, a board
member of the Mattole Salmon Group, fears they will "sacrifice" the
Mattole watershed by authorizing extensive logging of old-growth
Douglas fir there.

State, federal and company officials who negotiated the proposed
rules said they will do much to reduce erosion on Pacific's land.

"We really have built roads that have failed. We really have had
landslides off some of our inner-gorge clear cuts that have done bad
things," said Jeff Barrett, recently hired as Pacific Lumber's fish
and wildlife director.

"The company desperately wants the environmental wars to come to an
end," he said. "I've heard so many people tell me, we want our white
hat back."


Paper: Houston Chronicle
Date: SUN 07/19/98
Section: A, Page: 1 Edition: 2 STAR

Redwoods, not red ink, may have motivated FDIC againstHurwitz
Documents show agency may have tried to hide truth in pursuing suit
against financier


Recently unsealed court documents suggest that attempts by federal
banking officials to collect $250 million from Houston financier Charles
Hurwitz may have more to do with redwoods in California than red ink on
the books of a now-defunct financial institution.

Officials with the Federal Deposit Insurance Corporation say they sued
Hurwitz because he cost taxpayers millions of dollars by mismanaging the
former United Savings Association of Texas.

But the court documents, including an internal FDIC report the agency
has fought hard to keep secret, suggest FDIC officials may have bowed to
pressure from environmentalists and government officials and filed the
lawsuit to force Hurwitz to turn over ownership of the Headwaters Forest
in Northern California to the federal government.

The forest of redwoods is owned by Pacific Lumber Co., which was
acquired in the 1980s by Maxxam Inc. Hurwitz is chairman and chief
executive officer of Maxxam.

After the acquisition, the company enraged environmentalists by making
plans to increase its harvesting of redwoods. In an attempt to preserve
the forest, the largest privately held stand of old-growth redwood trees
in the country, environmental activists on the West Coast conceived the
idea of inducing Hurwitz to give up the trees in exchange for the debt
the financier allegedly owed the federal government.

The unsealed internal documents also reveal:

FDIC officials brought the lawsuit despite their own assessment that it
was highly unlikely the agency could win the case.

FDIC officials specifically targeted individuals close to Hurwitz for
prosecution. And in one instance, the unsealed documents show that FDIC
officials decided against suing one highly respected person because it
would make the agency look bad.

The FDIC attempted to hide the fact that it was secretly financing
another government agency's investigation and prosecution of Hurwitz and
his associates, while claiming the action was "independent" of the FDIC

The internal documents have been at the center of an ongoing legal
battle by FDIC officials to keep them private. After U.S. District Judge
Lynn N. Hughes unsealed the documents late last year, FDIC attorneys
appealed the action to the 5th Circuit Court of Appeals and the
documents were resealed while the matter was under review.

When the appeals court declined to take any action on the matter,
Hughes again unsealed the documents.

After learning of his action several days later, FDIC attorneys
appealed the unsealing for a second time and the documents were again
placed under seal.

The Chronicle obtained a copy of the documents during the two-day
period that they were available to the public.

FDIC officials say they cannot discuss the contents of the internal
reports because they are again under seal, but say they are fighting to
keep them secret, not because there is anything embarrassing in them,
but because they contain sensitive information that can hurt their case
if it becomes public.

Similar internal reports are drawn up on every case brought by the FDIC
and are presented to the FDIC's governing board. Upon approval, the
reports become the agency's official memorandum authorizing FDIC
officials to bring a lawsuit.

FDIC spokesman David Barr said the internal reports spell out the
agency's strategies in pursuing a lawsuit, and even reveal the amount of
money the agency believes it can get to settle a case.

"It is our game plan for the lawsuit," Barr said. "And that is not
something you want to turn over to the other side".

Hurwitz attorney Richard P. Keeton, a partner with Mayor, Day, Caldwell
& Keeton, said federal officials have been maneuvering for more than a
decade to gain possession of the redwood forest from Hurwitz but have
not been able to come up with the money to purchase it. FDIC officials
hoped Hurwitz would give up the redwoods as part of a settlement of the
lawsuit, an idea that has become known as a "debt for nature" swap, he

"The agency could not stand the heat that they were getting from
Congress, the administration and from the environmentalists who wanted
them to do something about Hurwitz ," Keeton said. "So the easiest force
to apply was to bring the lawsuit."

Barr acknowledged that his agency was aware that numerous
environmentalists and members of Congress had an interest in seeing a
debt-for-nature swap, but said it had no effect on the FDIC's decision
to bring its lawsuit.

"There was no political influence on us to file this case," Barr said.
"There may have been some interest by politicians, but we did not see it
as pressure."

Hurwitz 's attorneys say their client has been unwilling to agree to
such a debt-for-nature settlement because FDIC's claims of mismanagement
of United Savings are simply not true and Hurwitz isn't liable for the
S&L's losses.

"There is no debt to swap," Keeton said.

Hurwitz declined repeated requests for an interview to discuss the
debt-for-nature proposal.

He did, however, address the subject several years ago in a Chronicle
opinion piece, saying the legal actions by federal officials represented
a form of political harassment and an attempt to gain ownership of the
Headwaters Forest without having to pay for it.

"The bottom line is that the Headwaters Forest will not be traded for a
debt that does not exist," Hurwitz wrote. "Nor will it be a pawn in any
abuse of governmental power."

Hurwitz and his companies have spent more than $20 million defending
against claims brought by federal banking authorities.

The events leading to the legal battle now being fought in a Houston
courtroom began more than 15 years ago. The year was 1982 and Houston
was experiencing the boom before the bust. In the midst of a thriving
economy, Hurwitz , known as a corporate takeover artist, bought just
under 25 percent of the financially troubled United Savings by
purchasing stock in United Financial Group, the S&L's parent company.
Hurwitz apparently wanted the S&L for the assistance the $3 .3 billion
institution could provide him in financing his ongoing corporate

For the next six years, as the Houston economy went from downturn to
disaster, United experienced financial difficulties, racking up huge
losses in its loan and securities portfolios. When federal regulators
finally moved in and closed the institution in the waning days of 1988,
United was an estimated $1.6 billion in the red.

FDIC officials began investigating the failure of United soon after it
closed. Since many of the potential claims against Hurwitz and others
involved in United's management were subject to a two-year statute of
limitations, FDIC officials asked Hurwitz to sign an agreement extending
- or tolling - the statute of limitations while the investigation
proceeded. Hurwitz , faced with the prospect of an immediate lawsuit
against him, agreed to sign the tolling agreement in the hopes that he
would eventually be cleared by the FDIC's investigators.

Banking authorities first probed Hurwitz 's connection with Michael
Milken, a Drexel Burnham Lambert Inc. broker known as the king of "junk
bonds," a high-risk corporate note that became the favorite tool used to
finance hostile corporate takeovers. Regulators were apparently
suspicious because United bought large amounts of Drexel's junk bonds at
the same time Drexel was arranging junk-bond financing for Hurwitz 's
takeover activities.

According to FDIC documents, United purchased approximately $1.8
billion in Drexel junk bonds and other Drexel-brokered securities
between 1984 and 1988. During that same period, Drexel provided $1.8
billion in junk-bond financing to Hurwitz , an action FDIC lawyers later
labeled an apparent "quid-pro-quo" arrangement between Hurwitz and the
Wall Street firm.

The same document, however, went on to contradict that characterization
of the relationship between Drexel and Hurwitz.

"There is very little, if any, evidence of fraud or self-dealing," the
report stated.

One Drexel-assisted transaction was Hurwitz 's $870 million takeover in
1986 of Pacific Lumber, a Northern California company that owned
thousands of acres of forest, including 3 ,000 acres that later came to
be known as the Headwaters Forest.

After Milken pleaded guilty to six security-related felonies not
connected to Hurwitz and went to jail in 1991, FDIC officials turned
their attention to other aspects of Hurwitz 's involvement in United's
failure. Court documents indicate they became especially interested in
United's heavy involvement in mortgage-backed securities and Hurwitz's
failure to pump additional money into the institution when it became

FDIC investigators faced a major hurdle in assigning blame for the
failure on Hurwitz because - although he was chairman of United's
holding company - he was never an officer or director of the failed S&L.

The FDIC investigation dragged on until August 1995 when, after more
than six years and 13 tolling agreements, Hurwitz refused to again
extend the statute of limitations. The FDIC quickly filed a lawsuit
against Hurwitz alleging mismanagement of the S&L and failure to
recapitalize the institution.

The lawsuit alleged that Hurwitz controlled the S&L, serving as a "de
facto" director, if not its "de facto" chairman."

One FDIC official told the Chronicle that Hurwitz 's refusal to
continue the tolling agreements forced the FDIC to take action before
the statute of limitations expired.

"I guess he had some strategy in mind, but he left us no choice but to
file a lawsuit," the official said.

But court documents also show that the FDIC, prior to filing the
lawsuit, was keenly aware of another development regarding Hurwitz and
the failed savings and loan.

After Hurwitz 's Maxxam Inc. completed its purchase of Pacific Lumber,
the company began to step up the pace in harvesting its redwood trees, a
move that angered environmental activists on the West Coast. By the
early 1990s, the environmentalists were applying formidable pressure on
members of Congress and federal agencies to come up with a plan that
would save the redwood trees in the Headwaters Forest.

While various plans were proposed that would bring the redwood forest
under the control of federal or California state officials, money to
purchase the property wasn't forthcoming. Then in 1994, more than a year
before the FDIC lawsuit was filed, the debt-for-nature proposal was
hatched by California environmentalists.

The idea - to force Hurwitz to swap the redwoods for his debt to
taxpayers as a result of United's failure - spread like wildfire among
environmentalists and garnered the attention of the national media.

Recent events make an ultimate debt-for-nature swap unlikely. Hurwitz
's companies recently agreed to sell the Headwaters Forest to the
federal and California governments, which would assure its preservation.

But during the period the FDIC was considering its lawsuit,
debt-for-nature seemed very much a possibility.

Prominent environmental groups, such as the National Audubon Society,
the National Heritage Institute and the Rose Foundation in California
began a concerted effort in mid-1995 to encourage members of Congress,
White House administrators, officials with the Department of the
Interior and FDIC officials to pursue a debt-for-nature swap.

Court records show their efforts were successful in garnering support
for the idea, and FDIC officials were kept apprised of their efforts.

One such show of support came from President Clinton's top White House

In a March 21, 1995, letter to the National Audubon Society, White
House chief of staff Leon Panetta affirmed the Clinton administration's
commitment to preserving the Headwaters Forest.

"Budgetary constraints have made it impractical to acquire such an
expensive tract of land through outright federal purchase," Panetta said
in the letter, which was written on White House stationery. "Your
suggestion to consider acquisition through a debt-for-nature swap or
other land exchange is worth pursuing."

Panetta went on to say that he asked a top official with the Department
of Agriculture to follow up on the idea.
The unsealed internal FDIC reports also reveal that the agency was aware
- prior to filing its lawsuit - that the Clinton administration
supported the idea of a debt-for-nature swap.

"The Department of the Interior recently informed us that the
Administration is seriously interested in pursuing such a settlement,"
FDIC attorneys wrote in the document seeking a go-ahead from the FDIC
board to bring the lawsuit.

Agency officials were also aware that they were being watched.

"Any decision regarding Hurwitz and the former directors and officers
of USAT is likely to attract media coverage and comment from
environmental groups and members of Congress," the report states.

FDIC lawyers also participated in several meetings with outside
agencies to discuss such a debt-for-nature settlement prior to filing

Court documents show that one of FDIC's lead attorneys on the case met
with Department of the Interior officials, and later attended a meeting
with a top White House environmental adviser and numerous federal agency
officials to discuss "whether or not a debt-for-nature swap had any
legs," according to one participant.

Hurwitz attorney David Griffith said FDIC's participation in these
meetings clearly shows that FDIC officials were responding to political
pressure from White House and congressional leaders.

"Why else would they be at these meetings to discuss settlement of a
lawsuit that had not even been filed yet," Griffith asked.

FDIC officials claim their participation in these meetings was at the
behest of Hurwitz , and not because of outside political pressure.

According to a deposition of FDIC attorney Robert J. DeHenzel, one of
Hurwitz 's attorneys called a Department of the Interior official and
suggested that his agency discuss with the FDIC the possibility of
resolving the potential FDIC lawsuit through a debt-for-nature swap.

That conversation led the Department of the Interior to invite an FDIC
attorney to a meeting to brief the agency on the status of the FDIC's
case against Hurwitz .

FDIC spokesman Barr said it was the first time his agency had heard
>from the Department of the Interior on the matter.

"Our attendance at that meeting was the direct effect of that telephone
call from a Hurwitz attorney," Barr said. "The other meetings were a
chain reaction stemming from the first meeting."

Griffith hotly disputed the FDIC's account of events. A Hurwitz
representative may have expressed an interest in discussing a
debt-for-nature settlement, but only because it was apparent that the
FDIC was going to hold Hurwitz hostage with legal actions until it got
what it wanted.

"That Mr. Hurwitz would make contact with the kidnappers should not be
held against him," Griffith said. "But we certainly did not initiate
these meetings."

Allen McReynolds, the Interior Department official who called the
initial meeting, said in a deposition that the meeting was held at the
request of two congressmen who had an interest in resolving the conflict
between environmentalists and Pacific Lumber and ending the protests,
where some participants were being injured.
Additionally, the FDIC's internal documents fail to back up the agency's
version of events. Although the meetings with Interior Department
officials were discussed in detail in the reports, there was never a
mention that the FDIC attended at the request of Hurwitz.

The unsealed documents also reveal that FDIC officials brought the
lawsuit against Hurwitz despite their own analysis that they would
probably lose the case, a decision that is in direct violation of the
agency's policies.

According to a copy of an FDIC publication obtained by the Chronicle,
the FDIC's policy is that a lawsuit should not be brought unless the
FDIC is "more than likely to succeed in any litigation necessary to
collect on the claim."

The unsealed FDIC documents discusses the two types of claims against
Hurwitz - the issues of mismanagement in the institution's investment
policies, and Hurwitz 's failure to live up to a "net worth maintenance
agreement," by failing to invest additional money in the institution to
keep it solvent.

On the mismanagement issues, FDIC lawyers concluded that there was a 70
percent chance that their case would be thrown out in the early stages
of the legal proceeding. Even if the case survived the summary judgment
level, the odds of a favorable outcome for the FDIC were "marginal at
best," the report stated.

FDIC lawyers concluded the claims regarding recapitalizing the
institution stood a better chance, but overall, the case had less than a
50 percent chance of success.

That assessment was virtually identical to a report prepared for the
FDIC several years earlier by two Houston law firms. That report
concluded the FDIC's chance of success was somewhere between 35 and 50

Nonetheless, the authors of the FDIC memo argued that a lawsuit should
be brought despite the high risk because of "the egregious character of
the underlying behavior in this case which caused enormous losses."

Despite the conclusions spelled out in the FDIC internal documents,
FDIC officials insist the lawsuit conformed to the agency's policy.

"It would not have been filed if it didn't," Barr said.

Houston attorney Joel Androphy, an expert in white-collar crime, said
it is disgraceful for a federal agency to bring legal action when it
knows it is so unlikely to win the case.

"The government is clearly acting in bad faith," Androphy said. "If
they lose, the FDIC should have to pick up every dollar Hurwitz had to
spend to defend himself in this case."

The unsealed memo also raises questions about the methods used by FDIC
officials in deciding who was sued and who was not in the United case.

Rather than basing their decision solely on the issue of wrongdoing,
the internal documents show that FDIC officials targeted people based on
their relationship to Hurwitz .

The authors of the internal documents recommended filing lawsuits
against the S&L's officers and directors who were members of Hurwitz 's
"core group," while allowing others to escape prosecution even though
they were judged equally liable in the institution's failure.

In one instance, the unsealed documents show that FDIC officials
decided against suing one person because it would make the agency look

George Kozmetsky, a co-founder of Teledyne and former dean of the
University of Texas business school, was a board member and close
Hurwitz associate. FDIC officials did not name him in the lawsuit
because of his background as a well-known contributor to charitable
causes and the recipient of numerous awards.

"A suit against him would produce sympathy for the defendants and the
impression that FDIC is pursuing a claim against him solely because of
his financial circumstances," the internal report states. "Although
Kozmetsky's high net worth could be relevant . . . the litigation risks
are too high to justify naming him in our suit."

The FDIC eventually named only Hurwitz in its August 1995 lawsuit
because the rest of the proposed defendants continued signing tolling
agreements with the FDIC.

Another federal banking agency, however, decided in late 1995 to pursue
legal actions against Hurwitz and a group of the former S&L's officers
and directors in an effort to recover a portion of the losses suffered
in the institution's failure. That suit also named Maxxam as a

The action by the Office of Thrift Supervision was relatively rare
because the agency's primary responsibility is to regulate the
operations of existing savings institutions rather than try to recover
>from insolvent institutions, something that is generally left to the
agencies that insure deposits. The OTS, however, had recently adopted a
controversial policy of stepping up its legal efforts to collect such
losses from failed S&Ls. The OTS suit mirrored almost exactly the
charges in the FDIC lawsuit.

The OTS had two advantages over the FDIC. Because its legal actions
took the form of an administrative hearing, it did not face the statute
of limitation problems that plagued the FDIC case, and its case would be
heard before an administrative judge in OTS' employ.

The legal actions continued on both fronts, much to the displeasure of
Judge Hughes, who was assigned the FDIC case. His orders in the case
showed his growing irritation over the dual prosecutions.

The issue reached its peak after Hughes ordered the FDIC to produce
their memorandum to sue, which revealed that the FDIC has not only paid
the OTS to investigate the United failure, but was also picking up its
sister agency's tab for prosecuting the OTS lawsuit, something the FDIC
had kept secret for several years.

The FDIC documents, which consistently refer to the OTS' actions as
"independent" of their own, also revealed that the two agencies had an
agreement providing for the FDIC to receive any money collected as a
result of the OTS suit.

Under pressure from Hughes, the FDIC dropped most of its federal
lawsuit, leaving only the claims that Hurwitz violated its agreement to
recapitalize the S&L.

The remaining portion of the lawsuit was also delayed until the OTS
action is complete, and will only be pursued if the OTS collects less
than $250 million in its case.

The OTS case began testimony earlier this year and is in trial in
Houston. It is expected to continue until the end of the year.

Hurwitz attorney Griffith is not optimistic of his client's chances of
winning that lawsuit. He expects that Hurwitz may only find himself
exonerated after getting the case heard before a federal appeals court.

"We are playing their game in their home court," Griffith said. "The
judge seems to be a reasonable and fair man, but he is still employed by
the other side."


July 23, 1998
San Francisco Chronicle, pg. A14

U.S. Assails State's Headwaters Logging Plan
Alex Barnum, Chronicle Staff Writer

In a move that raises new concerns about the deal to protect Headwaters
forest, federal officials have rebuked California's forestry agency for
approving what they said was possibly an unlawful logging plan on
property owned by Pacific Lumber Co.

The regional administrator of the National Marine Fisheries Service said
in a letter Turesday that the logging plan could violate federal
endangered species statutes and called on the state to immediately
revoke its approval.

"The (fisheries service) is deeply concerned and disappointed by the
Californial Department of Forestry's disregard for its responsibilities
and obligations," wrote the agency official, William Hogarth.

The letter said the state's approval "has the potential to compromise"
implementation of the $380 million deal to save the Headwaters forest.

In response, Pacific Lumber abruptly halted cutting trees in the area
covered by the logging plan. And state officials quickly called a
meeting with agency scientists and the company to discuss concerns about
the plan.

San Francisco Chronicle
Letters to the Editor
August 18, 1998


Editor -- While I don't question John Campbell's sincerity (Letters, August
6), I must question his characterization of Pacific Lumber Company, and by
extension corporate timber operators, as guardians of "the hard-pressed
North Coast economy."

As a 30-year North Coast resident, county supervisor and congressman, I
have long understood the incongruity between our region's rich resources
and "hard-pressed economy."

The economy of the North Coast bears strong resemblance to that of a Third
World country. The timber corporations exploit our natural resources,
taking huge profits while despoiling the countryside and threatening
long-term job prospects.

Many people seem to be confused about this. They think that
Louisiana-Pacific, Simpson, Pacific Lumber, Sierra Pacific and the rest are
the source of our wealth. After all, don't they provide the jobs?

No, they don't. It is the resources that provide the jobs. It is the
climate, the soils, the clean air and water that protect the jobs. Clearly,
this is the most important legacy we can leave our children. Unfortunately,
the Pacific Lumber Habitat Conservation Plan/Sustained Yield Plan that John
Campbell touts falls far below the mark in this regard.

Pacific Lumber Company has committed over 200 violations of the Forest
Practices Act in the last three years. In an action without precedent,they
have had their license to operate suspended by the state.

John Campbell wants us to think that the Wilson/Feinstein/ Thompson
Headwaters Agreement represents grand largesse on the part of Pacific
Lumber Company. This reminds me of stories of the nobility carriaging
through the countryside, tossing small coins and breadcrumbs to the rabble.

Enough is enough!

Dan Hamburg
Green Party candidate for Governor


Sen. Burton Calls Headwaters Deal
Greg Lucas, Chronicle Sacramento Bureau

Friday, August
21, 1998

The leader of the state Senate said yesterday that as far as he is
concerned, a much-debated deal to purchase the Headwaters Forest has

Senate President Pro Tem John Burton, D-San Francisco, said Pacific
Lumber, the owner of the 3,000 acres of ancient redwoods in Humboldt
County, has refused to compromise.

``The company has taken a no- negotiation, no-change position. They
refuse to address our legitimate concerns,'' Burton said after an
afternoon of talks with company officials.

Pacific Lumber President John Campbell disputed the claims.

Burton's comments came on the same day Pacific Lumber began running
newspaper ads touting a deal it cut with U.S. Senator Dianne
Feinstein, the Clinton administration and the Wilson administration.

That deal, which would combine $250 million in federal money with the
state's $130 million to buy Headwaters and an adjoining 4,500 acres,
does not go far enough, Burton and other state Senate Democrats say.

Burton has made the state's participation in the Headwaters purchase
contingent on commitments by Pacific Lumber to not log within 100
feet on each side of fish-spawning streams located on the firm's
other 190,000 acres in Humboldt County.

``If they ain't budging, they ain't getting $130 million of state
taxpayer money outta me,'' Burton said.

Environmentalists say the no- cut buffers should be 170 feet. Until
yesterday, Pacific Lumber would agree to no more than 30 feet.

Campbell said yesterday that his firm has agreed to not log within
100 feet of fish-bearing streams whose banks are susceptible to
landslides, at least for three years while watershed studies are
conducted. ``The company's come a very, very long way on this issue
and we've been more than reasonable,'' Campbell said.

State lawmakers and the firm have been negotiating for months. It is
unclear whether further talks are scheduled. If no further progress
is made, the Headwaters deal dissolves in March 1999, when the $250
million pledge from the federal government expires.

Friday, September 18, 1998
1998 San Francisco Chronicle
Page A21

Toppled Tree Kills Logging Protester in Humboldt
First fatality in decade of activism

Alex Barnum, Chronicle Staff Writer

A young anti-logging activist was struck in the head and killed by a
falling tree yesterday during a protest to block the cutting of redwoods on
North Coast land owned by Pacific Lumber Co.

It was the first fatality in more than a decade of contentious but mostly
peaceful protests against the company's logging of ancient redwoods on its
property in Humboldt County.

David Chain of Austin, Texas, thought to be in his mid-20s, was one of
about a dozen Earth First activists protesting logging near Grizzly Creek,
one of the redwood groves that would be protected under the pending
Headwaters Forest agreement.

Accounts of the incident conflicted. An Earth First spokesman said Chain
and others were trying to dissuade loggers from cutting down the trees when
he was struck and killed in the remote area.

"I'm not saying it was intentional. I'm not saying it was accidental. I
don't know exactly what happened," said Darryl Cherney, the group's

A spokeswoman for Pacific Lumber said the company's tree- felling crew was
unaware that any protesters were in the area when the accident occurred.

The company is "deeply saddened" by "what appears to be a tragic accident
on its property this morning," spokeswoman Mary Bullwinkel said.

"Pacific Lumber has one of the finest records in the industry. But despite
all our precautions, a trespasser was apparently killed by a falling tree
at one of our logging sites on our private property," she said.

Members of the logging crew told Humboldt County sheriff's investigators
that they heard yelling after a tree they were cutting knocked down a
second tree and apparently hit Chain, said officer Janet Held.

"They said they had no idea anyone was there," Held said. Authorities were
investigating the incident, she said.

The area had been the scene of a 12-day protest against the logging of
redwoods near Grizzly Creek, in a ravine near the mill town of Fortuna,
about 300 miles up the coast from San Francisco.

On Wednesday, eight Earth First activists were arrested blocking a logging
truck while protesting what they said was illegal logging in an area
bordering Grizzly Creek Redwoods State Park.

Earth First activists said the company was violating logging restrictions
while surveys were being conducted for the marbled murrelet, an endangered
seabird that nests in old-growth redwoods.

Bullwinkel said the work was being conducted in accordance with a timber
harvest plan approved by the state Department of Forestry.

The area is near Grizzly Creek, one of a dozen ancient redwood groves on
Pacific Lumber land. The grove recently was added to those that would be
protected in the $45 million Headwaters agreement approved by the state


10/3/98, SFChron


Editor -- Media coverage of the death of David Chain, defender of our
ancient redwoods, has been extremely limited. This has myself and
many others in our local community, gravely concerned. Our board of
supervisors has in effect ignored demands for an independent
investigation. Our sheriff's department has echoed Pacific Lumber
Co.'s absurd claim that this young man's death was an accident.

The California Department of Forestry has since reluctantly admitted
that PALCO was in violation of forest practice rules by conducting
operations at this site. Why were they not there to halt illegal
logging? Is that the question David ``Gypsy'' Chain was asking as the
redwood tree, he was defending, came crashing to the ground? Timber
fallers are able to ``put a tree on a dime.'' That logger knew
precisely what he was doing when he began to cut that tree!

Pacific Lumber/Maxxam and Humboldt County officials are guilty of
covering up this heinous crime. Governor Wilson's aide arrogantly
stated that David was trespassing. If Wilson does not act on our
requests for an inquiry and does support our corrupt local government
it would seem he is commiting a crime.
Ms. Boxer, Ms. Feinstein, where are you? We will only grow in
strength! Not one more ancient redwood!



1998 San Francisco Chronicle Page A19
Thursday, October 15, 1998

Pacific Lumber Faces Clear-Cutting Charge
Contractor razed sensitive area along creek near Eureka

Greg Lucas, Chronicle Sacramento Bureau

Just weeks after receiving $242 million from the state in a deal to save
several groves of ancient redwoods, Pacific Lumber is facing charges of
clear-cutting trees in a protected zone along a sensitive streambed.

The destruction along 500 feet of Freshwater Creek, just east of Eureka,
took place over Labor Day weekend and prompted the state Department of
Forestry to take legal action.

Pacific Lumber, which has already been cited for 14 violations of state
forestry laws this year, blamed a logging outfit it hired to harvest
adjacent areas.

Pacific Lumber President John Campbell said the company's own inspectors
discovered the clear-cut and ordered the logging outfit to report it to the

"There was no effort to hide this," Campbell said. "Procedurally, the
company took all the right steps. Our compliance guy found the problem and
reported it, and we notified the contractor."

The logging outfit, Rounds Logging, will not have its contract with Pacific
Lumber renewed, Campbell said.

State forestry officials found, however, that Pacific Lumber "shares
responsibility" for the violation.

"We're going to file a citation (against Pacific Lumber)," said Ken
Nielson, a deputy chief in the state Department of Forestry. "You're
supposed to leave 50 percent of the shade along this watercourse. There
wasn't any left."

Rounds Logging was also cited for cutting down the trees and for allowing
trees to fall into the stream.

If found guilty of the violation, the company is guilty of a misdemeanor.
Each violation carries a $1,000 fine, which is relatively small compared
with the $50,000 to $100,000 worth of a mature redwood tree.

Clear-cutting is prohibited under state law along the banks of streams and
creeks. Depending on the slope of the stream bank, the no-clear-cut zones
range from 50 feet to 100 feet on either side of the watercourse.

If fish live in the stream, the zones are bigger.

According to Department of Forestry documents, the area near Freshwater
Creek was found last year to contain a small number of spotted owls -- one
of the endangered species that inhabit the 190,000 acres of North Coast
forest owned by Pacific Lumber.

After finding the birds, Pacific Lumber scaled back its plans to clear-cut
the area, instead deciding to leave 60 percent of the trees.

This year the owls moved on, and Pacific Lumber opted to clear-cut.

But the company did not amend the timber harvest plan that it submitted to
the state. Nor did it mark the boundary of the protected creekside zone on
the plan.

Over the Labor Day weekend, nearly all the trees in the protected zone were

"This resulted in approximately 500 feet (of stream bank) with all but a
few trees removed," according to a state report on the incident.

Environmental activists, who have been fighting with Pacific Lumber for
years, say the latest alleged violation is normal behavior for the company.

"Breaking the law is business as usual for Pacific Lumber, but this
incident is especially egregious," said Kevin Bundy, spokesman for the
Environmental Protection Information Center.

The trees were cut a week after the Legislature adjourned for the year. Its
final act was to approve a deal using $480 million in state and federal
money to preserve a grove of 3,500 ancient redwoods in the Headwaters
Forest and an additional 5,000-plus acres of timberland that serves as home
to endangered fish and birds.

Signing of the deal ended months of often intense negotiations involving
the White House, U.S. Senator Dianne Feinstein, Governor Pete Wilson, state
legislators, environmentalists and Charles Hurwitz, the Texas billionaire
who owns Pacific Lumber.

During his ownership, the company has had a steady stream of violations of
state forestry laws.

Since 1996, Pacific Lumber has been cited for 272 violations on its lands
-- 12 serious enough to warrant criminal charges, according to the Humboldt
County district attorney's office.

In 1992, the company logged in the Owl Creek grove of redwoods, one of the
stands purchased in the Headwaters deal, without receiving state permits.

Last year, the company pleaded guilty to logging too close to streams and
improperly disposing of slash, the brush and limbs from felled trees.

The company was placed on probation, a condition of which was that there be
no more violations.

At the end of 1997, the state revoked the company's timber license but
returned it several days later.

Shortly afterward, Campbell said he sent a letter to all company employees
and to the various companies with which Pacific Lumber contracts, saying
"violations and citations would not be tolerated, and people (should) be
alert and vigilant."

In mid-1998, the state filed charges against the company for more
violations similar to the ones last year and for operating heavy machinery
in the rain, which is illegal because it increases sediment in streams.

The company was found guilty and fined the maximum amount: $13,000.


State Suspends Pacific Lumber Logging Again
Alex Barnum, Chronicle Staff Writer Wednesday, November 11, 1998

For the second time in a year, state officials have suspended the logging
license of Pacific Lumber Co. because of repeated violations of California
forestry regulations.

The embattled timber company -- which is involved in a deal with the
government to sell the ancient Headwaters Forest -- was notified yesterday
by the California Department of Forestry and Fire Protection that its
license is suspended until the end of the year.

The suspension comes during a seasonal lull in the company's logging. And
it does not apply to outside contractors, which will continue to be allowed
to cut trees on the company's 200,000 acres of Humboldt County forest.

But a Department of Forestry spokeswoman said the suspension is
``unprecedented'' for one of the state's largest timber companies. She said
the agency is considering a denial of the company's license for next year
as well.

In its action, the department cited 16 violations since the company was
granted a conditional license after the first suspension last December. The
violations showed ``gross negligence and willful disregard'' for state
forestry rules, the agency said in a letter to the company.

Altogether, Pacific Lumber has had 128 violations over the past three
years, the agency said, including logging too close to salmon-bearing
streams, failing to construct adequate drainage systems and logging in a
Northern spotted owl nesting area.

Pacific Lumber President John Campbell said the company will cease
operations for a couple of weeks and lay off 100 loggers and other workers
while the company discusses the suspension with the state and assesses its

But he defended the company's practices, saying it had made ``tremendous
improvement'' in reducing the number of violations over the past year. And
he said the forestry agency is under unusually heavy pressure to scrutinize
the company because of the Headwaters deal.

But environmentalists said the suspension was overdue.

``It's about time,'' said Paul Mason, of the Environmental Protection
Information Center. The company ``pushes the law on a regular basis. This
is a pattern of practice with the company.''

Mason said the suspension raised questions about whether Pacific Lumber can
be trusted to abide by a long-term timber and wildlife management plan that
is central to the $495 million Headwaters agreement.

``This puts the `habitat conservation plan' into a different light,'' he
said. ``It's a voluntary agreement that relies on the company's integrity,
yet they can't be trusted to run a chain saw on their own property.''

But state officials said the suspension shows the state intends to monitor
the firm's compliance to the plan closely.

``We're riding this company very hard to improve their forest practices,''
said Jim Youngson, spokesman for the state Resources Agency. ``Today is
proof of our commitment to that kind of scrutiny.''

Forestry Department officials say the department typically suspends only a
handful out of 2,000 licenses every year, and Pacific Lumber, one of the
largest timber companies in the state, is by far the largest operator to be

The department suspended Pacific Lumber's license last December, but it
issued a conditional license several days later after the company agreed to
greater restrictions and to give inspectors keys to its property so they
could make spot inspections.

Among the 16 violations this year are charges that company loggers built
roads and logged too close to streams, both of which increase erosion and
can destroy habitat for the threatened coho salmon and other species.

Some of the company's half- dozen outside contractors also have been
reprimanded. Last month, a contractor was charged by the state with
clear-cutting trees in a protected stream zone. Campbell said he has since
fired the contractor.

But in a letter, the Forestry Department said the company had concealed the
violation. ``This concealment and profiting from the concealment are
willful violations'' of the company's conditional logging license, the
letter said.

Forestry Department officials would not speculate about whether the
company's license will be renewed for next year. Spokeswoman Karen Terrill
said the department's director, Richard A. Wilson, could consider the
company's history of violations in its decision.

The company also faces a lawsuit from Humboldt County property owners who
charge that irresponsible logging practices led to 1997 New Year's
mudslides that devastated homes in the tiny river town of Stafford.


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