March 16, 1999
by Woody Justice
The last-minute Headwaters deal with Pacific Lumber (PALCO), brokered by supposed conservation-minded California and Federal officials, provided little actual environmental protection and probably increased Global Warming due to the excess hot air spouted over the past two weeks. One hasn't heard so much crowing over simple surrender to corporate greed disguised as conservation since President Clinton's Escalante National Monument deal two years ago. Despite the truth of the matter, everyone from Secretary of the Interior Bruce Babbitt to radical-leftist Senator Dianne Feinstein to Governor Gray Davis is more than eager to put a happy face on the disgrace known as the Headwaters Forest Agreement. (Even Sierra Club executive director Carl Pope, while admitting that "the management plan...has critical loopholes and serious problems" and does not "assure the protection and enhancement of the forest and the endangered species," calls it a victory and urges members to thank the politicians involved.)
It should come as no surprise that the Democratic leadership proved once again that invertebrate mammals are not endangered species. The scenario went like this: negotiations have been waxing and waning for ten years over the disputed Redwood forest; Charles Hurwitz, Maxxam company (owner of PALCO) CEO and S&L crook, was offered a final take-it-or-leave-it deal; he threatened to walk; the Feds capitulated; it was declared a "win-win" resolution.
Under the deal, the largest tract of ancient redwoods remaining in private ownership was transferred to the federal Bureau of Land Management and the state Department of Resources. This is the biggest government acquisition of private property in California since the creation of Redwood National Park thirty years ago. Ninety-seven percent of California's Redwoods have already been logged, and these trees exist nowhere else in the world. Saving from the chainsaw some of the last existing trees that sprouted 2,000 years ago is a worthy effort. Was too much given away? From the last minute balking by Hurwitz -- at the risk of the deal's provisions expiring -- one might think it a great act of charity on his part.
PALCO traded approximately 5,600 acres of holdings in exchange for over $300 million dollars plus 7,700 acres. While PALCO claims that the price is "a significant discount below full market value of property" Alexander Cockburn reports in The Nation that the compensation exceeds fourfold the highest estimates of the value of the trees as lumber had the company cut the groves. So the deal allots more money to PALCO than the trees were worth to the company -- and existing Endangered Species Act legislation could have prohibited the harvest in the core old-growth area anyway.
Within the acclaimed 5,600 acres about 3,000 are old-growth Redwoods in two separate groves, Headwaters and Elk Head Springs. Less than forty percent of the acquired land harbors virgin forest; the lion's share consists of clearcuts and inferior second-growth timber. While useful for a buffer around the prized ancient trees, the bulk of land hardly qualifies for intact old- growth forest, let alone scarce Redwoods.
Total liability of the federal and California governments approaches half a billion dollars. They jointly acquired 9,600 acres from another timber company for $78 million, and from this came the land traded to PALCO, with the 1,900 acre portion adjoining Headwaters kept to be part of the preserve -- the least intact portion, according to forest activists.
Another $22 million will be paid to Humboldt County to offset lost tax revenue and for job retraining programs for affected timber workers. Four more old-growth Redwood groves in nearby Owl and Grizzly creeks are up for additional negotiation and are expected to bring another $100 million to Maxxam. (Grizzly Creek is where Earth First!er David Chain was crushed by a logger-felled tree last September. Owl Creek now stands protected under the ESA because of a federal lawsuit against PALCO that went all the way to the Supreme Court. See links below and "A Violent Streak," 10/6/98 Harbinger.)
Not only was the ESA never invoked to persuade PALCO to deal, this statute was subverted to allow extensive logging on the company's 210,00 acres in two counties. The potential deal-breaker (as far as Maxxam was concerned), logging allowances were initially set at 137 million board feet by the California Department of Forestry. The company contended that it needed 210 million board feet to stay economically viable, so federal and state authorities applied political pressure -- calling the scientifically determined figure an "arbitrary cap" and urging the agency to use "alternative calculations" -- and the logging estimates were raised to180 million board feet.
If only the panderers would admit that they caved to another corporation and abandoned the public benefit for a placated business, it wouldn't be so distasteful. Instead we get such nonsense as "The strictest package of environmental restrictions placed on a timber company in the U.S." and "This plan was written by scientists, not politicians." (Feinstein) Davis claimed that none of the agreement's state requirements were changed during the last-minute talks, "We simply clarified our positions. It's a good agreement, a strong agreement. It provides what fish and wildlife need for recovery." Babbitt explained that interpretations of specific logging volumes allowed under the plan were not the issue, "The bottom line is that any decision made during the life of this plan must meet biological criteria. We're not talking about guaranteeing any level of cut. We're talking science."
Granted the US and California were facing a "takings" lawsuit brought by PALCO, but if regulators never stand up to such challenges then only the meek will abide by the lawful and legal regulations and the greedy will know no constraints. It would appear that the plaintiff in this case, at least, would be easy to beat.
The CDF suspended PALCO's timber operator's permit last November mainly due to the watchdog efforts of EPIC. The company attained sixteen violations of state codes since being issued a conditional license in December 1997, which required that no new infractions occur for 1998. CDF charged that PALCO violated Forest Practice Rules approximately 300 times since 1995, being cited with nine criminal misdemeanors since 1996 -- including three in 1998 while under the conditional license. The license to log was re-instated, however, just days before the Headwaters Agreement was passed. Whatever happened to habitual-offender sentencing guidelines and three-strikes-you're-out?
Both companies are well known to the courts already. The Office of Thrift Supervision and the Federal Deposit Insurance Corporation both have outstanding court actions demanding that over a billion dollars be returned by Hurwitz and Maxxam for a taxpayer bailout of United Savings Association of Texas. PALCO retirees recently filed suit to reclaim the $60 million Maxxam liquidated from their pension fund at the time of the takeover. Residents of the communities of Stafford, Elk River and Freshwater have filed suits against PALCO for damage done to their homes and private property by mudslides and flooding caused by over-cutting.
Of course, PALCO justifies frenzied logging rates because of its professed concern for the communities and potentially unemployed loggers. Independent contractors who are able to continue operations when PALCO faces restrictions and loss of license do about half of the company's logging. Residents of communities where previously nary a dissenting voice was heard are now wondering if Maxxam's goals are in their best interests. According to some estimates, Maxxam has siphoned $2 billion from the Humboldt County economy since acquiring Pacific Lumber in 1985. PALCO's debt load is now even greater than it was immediately following the takeover, and many locals fear that Hurwitz will allow the subsidiary to slowly go bankrupt. Victims of flooding and collapsing hillsides openly question Maxxam's management of resources.
Some loggers faced with unemployment because of company misdeeds have been recruited to cross a picket line at Maxxam-owned Kaiser Aluminum factories in Washington where members of the United Steelworkers of America and the Industrial Workers of the World have been on strike since November. An inevitable and welcome coalition has resulted between forest activists and the unions. The media dubbed it an "odd alliance," but it seems only natural when people realize that Maxxam exploits humans like it exploits the environment.