REDWOOD NEEDLES Presented by the Sierra Club Redwood Chapter Newsletter, The REDWOOD NEEDLES Return to Article Menu Government Sanctions MAXXAM Blackmail By Josh Kaufman The Headwaters agreement, signed last fall by the Clinton Administration, Senator Dianne Feinstein, the State of California, and Maxxam Corp's Charles Hurwitz, aims to transfer two pristine ancient redwood groves and surrounding land from Maxxam to the public. The federal commitment of $250 million combined with the state of California's $130 million makes the total price tag $380 million for 7500 acres. About half of the acreage is logged over. Advertised as a win-win solution, a number of local and regional conservation groups, including the Redwood Chapter of the Sierra Club, Forests Forever, Taxpayers for Headwaters, and the Northcoast Environmental Center, oppose the agreement and the upcoming appropriation. Why oppose the purchase of some of the last unprotected redwoods? Many of us have spent a good part of the past decade fighting Maxxam's egregious logging practices - filing lawsuits, advocating for the reform of existing law and lobbying in support of legislation that would afford real protection. The kind of attention we brought to the forest ultimately produced the Headwaters agreement last fall. But the deal falls far short of the kind of protective measures needed and, more significantly, sets dangerous national policy precedents that threaten wildlife habitat around the country. These precedents include government surrender to illegitimate Fifth Amendment "takings" claims; diminished reliance on enforcement of one of the country's premier environmental laws, the Endangered Species Act; payment of a grossly inflated purchase price; and dependence on Habitat Conservation Plans to protect biological diversity. The Endangered Species Act now largely protects Maxaxam's uncut redwood groves. In 1992, because of its diminished numbers, the marbled murrelet - a seabird that nests in ancient coastal forests in the Pacific Northwest - was listed as a federally threatened species. Murrelets are so thoroughly dependent on these forests for survival that any additional nesting site loss could be fatal for the species. If the agreement breaks down, Maxxam will try to remove logs from the forest floor of the groves under a loophole in state law. But no standing trees, either live or dead, can legally be cut down because of prohibitions regarding the murrelet. Those and other environmental restrictions are the basis for an appraisal of Headwaters commissioned by the Justice Department that was recently uncovered by the Washington Post. In response to a Fifth Amendment takings claim filed by Maxxam last year, the Justice Department's survey confirmed that the purchase price of $380 million is grossly over-inflated. The appraisers determined that application of state and federal law meant Headwaters Grove and a surrounding buffer zone was worth $20 million - $360 million less than the government agreed to pay for only slightly more land. Paying that much, Washington and Sacramento are, in essence, waiving the laws for Maxxam. The Fifth Amendment to the Constitution says "private property shall not be taken for public use without just compensation." But legal precedents overwhelmingly favor the government in the type of claim Maxxam filed, holding that all or almost all economic use must be deprived to trigger a takings claim. A 1987 Supreme Court decision follows a long line of legal thought on the matter. The Court upheld a Pennsylvania law dealing with coal mine subsidence that requires at least 50 percent of the coal beneath certain structures be kept in place - for obvious reasons - and noted that, "Long ago, it was recognized that all property in this country is held under the implied obligation that the owner's use of it shall not be injurious to the community. Under our system of government, one of the state's primary ways of preserving the public weal is restricting the uses individuals make of their property. While each of us is burdened somewhat by such restrictions, we, in turn, benefit greatly from restrictions placed on others. These restrictions are properly treated as part of the burden of common citizenship." Maxxam's suit argues that taxpayers should have to pay for its financial loss when the Endangered Species Act is enforced in an area of roughly 6,000 acresÑthree percent of the company's land base. Maxxam bought Pacific Lumber with borrowed junk bond proceeds for $850 million, and in a dozen years has extracted almost twice that amount of money out of the company to pay its debt. That $1.5 billion represents irreplaceable old growth forests, lost opportunities for stable employment, blighted fisheries and devastation in the form of flooding and land slides to downstream communities. Astonishingly, after 12 years, the debt has barely moved, standing at $800 million and demanding annual interest payments of $90 million. ItÕs something of a leap to argue that Maxxam's business objectives have been materially constrained by the law. Imagine the response to a homeowner who threatened to play ear-splitting music all night long, disrupting his neighbors' sleep, unless he was paid $100 a month by the city. His argumentÑthat the boom box sits on private property and so is exempt from public nuisance laws because they limit his personal enjoymentÑwould be met with incredulity. If the boorish neighbor persisted, heÕd be cited and fined by the city because the value of quiet at night is considered to be an important benefit to the community. Just so, environmental laws are fashioned to protect the larger public's interests against excesses of irresponsible land owners. In an analogous situation, while Maxxam owns the land, it canÕt expect to operate at will. As the Supreme Court noted, that kind of irresponsibility isnÕt conducive to civil society. Like all property owners, MaxxamÕs actions are governed by a variety of laws that aim to protect the qualities that can reasonably be assumed to be important to the wider community Ñ air and water, fish and wildlife and even murrelets. In fact, these natural elements are so important to society theyÕre referred to as public trusts held in common by the people and entrusted to the protection of our government. In suing for lost revenues, Maxxam has thumbed its nose at these elemental public trusts and in the larger sense told us that if we want it to act responsibly, we have to pay. Unlike the example of the city enforcing its civil codes, however, the federal and state governments have caved-in to the extortion. The message to developers and speculators of the Hurwitz ilk couldnÕt be more clear Ñ blackmail works. That is, until the Treasury's drained. Despite this, in Washington the agreement has been heralded as a "win-win" solution primarily because it expedites the approval of a federal Habitat Conservation Plan (HCP) and state Sustained Yield Plan. To date, of the ever growing number of HCPs, all have resulted in a net loss of habitat for targeted species. We should expect nothing more from this plan. At the state level, Sustained Yield Plans are little more than recipes to lock in cutting regimes for up to a century, with no assurance that anything like sustainability be achieved. In addition, the agreement is mute as to implementation of these plans. The government's obligation, triggering the $380 million cash transfer, will be fulfilled when the documents are approved Ñ not implemented. If biologically inadequate, environmentalists can sue and win delays that keep the plans from going into effect, but the purchase will have been consummated. And Maxxam is negotiating with local timber companies to buy more forest land once the Headwaters cash is in hand. For every acre the government buys, Maxxam will buy 10 to 15 elsewhere in Humboldt County with a portion of the proceeds. Acquiring Headwaters Forest, the 60,000 acres surrounding Maxxam's old growth redwood groves, would begin to satisfy the need to preserve a biologically viable landscape. But the Headwaters agreement is not a positive step in that direction. Its terms too thoroughly favor Maxxam, and, by extension, unrestricted development, at the expense of the public's interests.   Return to Article Menu Last updated on 10/26/97 Comments or suggestions? Drop us a line at heyneedles@aol.com