>Date: Mon, 22 Jun 1998 14:49:36 -0700
>From: Bob Martel <sheds@humboldt1.com>
>X-Mailer: Mozilla 4.04 [en] (Win95; I)
>To: Headwaters Forest Coordinating Committee <HFCC@lists.sanmateo.org>
>Subject: OTS v Hurwitz
>Sender: <HFCC@lists.sanmateo.org>
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>
>Paper: Houston Chronicle
> Date: TUE 06/16/98
> Section: BUSINESS
> Page: 3
> Edition: 3 STAR
>
> Case over Hurwitz 's handling ofUnited
> Savings restarts today
>
> By GREG HASSELL
> Staff
>
> The federal case against Charles Hurwitz and his handling of United
>Savings
> - a thrift that collapsed in 1988 and was bailed out at a cost of more
>the $1.6
> billion - will resume in a Houston courtroom today after a six-month
>hiatus.
>
> When the case brought by the Office of Thrift Supervision started back
>in
> September, lawyers for both sides expected the case to wrap up late
>last
> year. But events have confounded those predictions, and now the case is
>
> expected to drag on until October.
>
> A ruling by the administrative law judge presiding over the hearing
>probably
> will follow a few months after the hearings have concluded. The judge's
>ruling
> will then be reviewed by the director of the thrift agency, a process
>that will
> take several more months.
>
> Already the case has generated more than 12,000 pages of testimony, and
>it
> has not even reached the halfway point. The primary players in the
>United
> Savings drama, including Hurwitz , have not yet testified.
>
> The hearing is not a formal trial but could result in the defendants
>being fined
> millions of dollars.
>
> In addition to Hurwitz , two companies and five men are named as
> defendants in the case. The companies are Federated Development Co. and
>
> Maxxam Corp., both of which are controlled by Hurwitz . Based in
> Houston, Maxxam is a big industrial company that owns Kaiser Aluminum
> Corp. and Pacific Lumber Co.
>
> Pacific Lumber owns of 196,000 acres of Northern California timber,
> including the Headwaters Forest. The Headwaters Forest is the largest
>stand
> of old-growth redwoods left in private hands.
>
> Nature lovers from across the country have expressed outrage that
>Pacific
> Lumber planned to harvest the majestic redwoods and despoil the ancient
>
> forest. The Congress and the state of California are working on a deal
>to buy
> the Headwaters from Pacific Lumber.
>
> In a nutshell, the Office of Thrift Supervision accuses Hurwitz and
>other
> executives at United Savings of duping regulators and violating
>regulations
> governing thrifts.
>
> "They engaged in smoke and mirrors," Kenneth Guido Jr., special
> enforcement counsel for the Office of Thrift Supervision, said in
>court. "They
> acted with reckless disregard for the requirements of the law."
>
> Attorneys for Hurwitz and the other defendants say the thrift's failure
>was
> the result of Texas' economic nose dive. They deny the defendants broke
>any
> laws or participated in any scheme to defraud the government.
>Regulators
> were kept informed of the thrift's activities, and in some cases,
>helped map
> out its financial strategy, Hurwitz 's lawyers claim.
>
> "We still think they have a bum case," said Richard Keeton, a lawyer
> representing Hurwitz during the hearings.
>
> Keeton and other lawyers representing defendants say the case is
>dragging
> on because the government's case is confused and often illogical.
>
> "The pace of the procedure and the unfocused nature of the government's
>
> case is highly frustrating," Keeton said.
>
> Officials at the Office of Thrift Supervision offered a different
>explanation.
>
> "It's a long, complex case," said Thomas P. Mason Jr., public
>information
> officer for the agency. "You just never know about these things."
>
>
>
>
>
>
David M. Walsh
P.O. Box 903
Redway, CA 95560
Office and Fax(707) 923-3015
Home (707) 986-1644


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