MAXXAM Contributes to Elected Officials Who Then Try to Curtail S&L Trials

May 1, 2000

Contact: Darryl Cherney, Environmentally Sound Promotions 707/923-4949. Documentation available upon request.

Charles Hurwitz, Chairman of MAXXAM, Inc. and controlling officer of a
Texas savings and loan that failed in 1988, made campaign contributions to
elected officials who then pressured banking regulators to curtail court
actions against him. In an emerging scandal reminiscent of the Keating
Five, House of Representative members Peter King (D-NY), Tom Delay (R-TX),
and Ken Bentsen (D-TX) all received significant contributions from MAXXAM,
according to Federal Elections Commission records. Senator Kit "Junk" Bond
(R-MO) and former Federal Deposit Insurance Corporation (FDIC) Chairman
William Isaac joined the three congresmen in a coordinated attack on
banking regulators from the Office of Thrift Supervision (OTS) and the
FDIC. The Hurwitz Five--King, Delay, Bentsen, Bond and Isaac--are
attempting to intimidate regulators to prevent the very last of the S&L
trials from reaching conclusions.

The FDIC and the OTS filed separate court actions in 1995 against corporate
raider Charles Hurwitz. The OTS action named MAXXAM Corp. and various
subsidiaries as additional defendants. The OTS administrative law hearing
concluded this year and currently awaits Judge Arthur Shipe's
recommendation. Director of the OTS, Ellen Seidman, will review the
judge's recommendation and issue a final determination. OTS lawyers are
asking for a ruling that MAXXAM and Hurwitz pay $832 million in restitution
for their roles in the $1.6 billion failure in of United Savings
Association of Texas (USAT).

Newly-released documents obtained under the Freedom of Information Act
reveal that each of the Hurwitz Five wrote menacing letters to either the
FDIC or the OTS on behalf of Hurwitz. In the case of former FDIC Chair
William Isaac, the tone was hysterical. The emergence of Isaac is
particularly disturbing to taxpayer advocates, environmentalists and
steelworkers who have battled Hurwitz over the last fifteen years. Isaac,
a super-lobbyist who runs the Secura Group, provides current FDIC Chair,
Donna Tanoue with an ominous example of the revolving door between the
public and private sector. His very presence signals that the lush life
awaits banking regulators if they play their cards right while in public
office. This improper contact heightens concerns that the FDIC or OTS may
settle out of court for pennies on the dollar, allowing Hurwitz to escape
serious penalty. Hurwitz additionally hired two other former high-ranking
banking regulators--John Douglas, former General Counsel of the FDIC, to
represent him in FDIC v. Hurwitz and former Federal Home Loan Bank Board
(OTS's predecessor) Chief Enforcement Officer Rosemary Stewart to perform
as an expert witness in OTS v. USAT et al. Much of the S&L debacle of the
1980's occurred under Stewart's watch, prompting analysts to call the S&L
scandals "Rosemary's Baby."

Hurwitz and MAXXAM bankrupted USAT while profiting from its failure. Using
the S&L's plundered assets, Hurwitz leveraged junk bond acquisitions of
Pacific Lumber and Kaiser Aluminum using notorious criminal broker, Michael
Milken, to engineer the deals. Activists have been calling for assett
seizure disgorgement of MAXXAM's ill-gotten gains, and criminal charges to
be pursued against Hurwitz..

Contributions referenced above were made as follows according to
* Charles Hurwitz donated $1000 each to Reps. King and Bentsen (1999).
* MAXXAM Properties Pres. James Noteware donated $1000 to Rep. Delay ('99).
* MAXXAM-connected Sallie Mae PAC donated $9500 to Rep. Delay. (98-99).
(Dr. Barry Munitz, CEO of the failed S&L, MAXXAM's VP for 9 years and
Hurwitz's former co-defendant sits on the Sallie Mae Holding Co. Board and
himself contributed $4000 to the Sallie Mae PAC).
* William Diefenderfer, MAXXAM Lobbyist and Board member of Sallie Mae
Holding, contributed $1000 to Sen. Bond (1998).
* William Isaac contributed $1000 to American Bankers Association PAC who
in turn contributed $3000 to Rep. King. Isaac is a member of the American
Bankers Assoc. and a columnist for American Banker.

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