Monday, February 7, 2005
COMMENTARY:
Logging push a dilemma for Schwarzenegger
Environmental activists played right into the hands of Texas corporate
takeover artist Charles Hurwitz a few years ago.
Hurwitz's Maxxam Corp. had grabbed control of Pacific Lumber Co. and
its immense stands of redwood trees on California's North Coast in 1986,
using junk bonds brokered by Michael Milken and financed by Executive
Life, a company later seized by the state Department of Insurance. Maxxum
immediately announced plans to ramp up redwood logging to generate money
to service the bonds, setting aside
Pacific Lumber's much-heralded low-intensity logging.
Under Hurwitz, the company noisily declared its intention to cut what
came to known as "Headwaters Forest," a stand of old-growth
redwoods -- but Hurwitz's true intention, evidently, was to induce state
and federal officials to buy the tract, and anti-logging protesters
willingly, if naively, did the tycoon's work
by staging demonstrations that raised the issue's public profile immensely.
Clearly, Hurwitz didn't mind being portrayed as an environmental villain
as long as it resulted in a sweet deal from the politicians, and a sweet
deal is exactly what he got in the late 1990s. Govs. Pete Wilson and
Gray Davis, Sen. Dianne Feinstein and members of the Clinton administration
agreed to pay Maxxam almost a half-billion dollars for Headwaters Forest,
more than half of what Maxxam had paid for Pacific Lumber, even though
Headwaters represented less than 4 percent of the company's acreage.
And to boot, Hurwitz won the right to log remaining Pacific Lumber lands
with relatively light state regulation -- a right that was partially
placed on record, and partially contained in informal political agreements.
The sweet deal reverberated through the regulatory bureaucracy during
the Davis administration, including the departments of Fish and Game
and Forestry and Fire Protection and the regional water quality board.
Repeatedly, when rank-and-file regulators were tougher than the company
wanted, emissaries from the administration would jerk their chains.
Fast-forward to 2005. Pacific Lumber now wants to more-or-less renege
on the deal, saying it must accelerate logging beyond what the 1999
agreement envisioned or it could go bankrupt. Hurwitz himself came a
few weeks ago to plead his case to high-ranking officials of the Schwarzenegger
administration,
the Los Angeles Times reported. Specifically, the company wants the
regional water quality board to speed up action on 12 timber harvesting
plans that it has filed -- plans that would push logging operations
much closer to streams than the earlier agreement had allowed -- although
it is relying on a clause in the
agreement that would allow closer-to-the-water logging if it can be
done without environmental effect.
To underscore its demand, Pacific Lumber has shut down one mill shift
and laid off 38 workers, saying a lack of logs forced the action. "We're
running out of logs," one company official was quoted as saying.
But if the company is truly in financial peril, servicing those infamous
junk bonds may be one cause.
Pacific Lumber's push to ramp up logging, however it may be framed for
public
relations purposes, creates a political dilemma for Gov. Arnold Schwarzenegger,
who has positioned himself as both an advocate for business and a protector
of the environment, and has champions for both within his official family
-- including a one-time Pacific Lumber executive.
Logging redwoods, no matter how and where, is not just another regulatory
dispute; it's an emotional touchstone for environmental activists and
the involvement of Hurwitz and Pacific Lumber throws more fuel onto
the political fire. The Humboldt County district attorney -- whom Pacific
Lumber attempted to
recall at the polls -- has filed a lawsuit against the company, alleging
that it submitted fraudulent documents on environmental effects of logging
when it was negotiating the 1999 Headwaters deal.
Any action by the administration that environmental groups label as
softening regulation will touch off a firestorm of opposition and criticism.
DAN WALTERS
Is a columnist for the Sacramento Bee.
E-mail him at dwalters@sacbee.com>dwalters@sacbee.com
