California Redwoods: Saw or Save?

Row over world's largest private old-growth grove reignites

JUDI BARI and Vance Cook have one thing in common: They both love the coastal redwood forests of northern California. But beyond that, the Earth First! "rabble rouser" and the Pacific Lumber Company millworker part company.

Ms. Bari wants to end logging on the world's largest privately owned stand of old-growth redwoods. Mr. Cook, who followed his father and uncles into the mill, sees a place for tree-cutting and conservation.

The fight for these redwoods has become a symbol for political battles across the West involving traditional economies (logging, mining, and ranching) and the preservation of resources that modern science has designated as important habitat for declining species.

In the past few days, this years-old dispute over the 3,000-acre Headwaters Forest has taken several significant turns.

*Just as logging was about to begin Friday on Headwaters Forest, which is owned by Pacific Lumber, a federal judge in San Francisco issued a temporary restraining order giving the trees a week's reprieve.

*There was movement on high-stakes legal actions against Charles Hurwitz, the controversial Houston financier who controls the timber firm and recently was sued for $250 million by the Federal Deposit Insurance Corporation.

*And California State lawmakers advanced legislation that would acquire the forest as state property and prohibit loggers.

As all this was happening, about 2,000 activists rallied Friday near a Pacific Lumber mill in Carlotta, Calif. They then marched to the edge of company property where some 250 took turns being arrested for trespassing in a highly publicized ritual worked out ahead of time with law enforcement officials who had massed there.

Back up the road, a smaller turnout of loggers, millworkers, and their families carried signs in support of the timber industry. One worker scrambled up a log pile to lecture the demonstrators through a bull horn, and some insults were exchanged. But as police helicopters buzzed overhead, there also were earnest and polite discussions between members of the two factions.

At the center of the controversy are such species as the northern spotted owl, the marbled murrelet (a shorebird that nests in old-growth forests), and Pacific salmon - all considered endangered or threatened.

Pacific Lumber has been harvesting redwoods and Douglas fir here since 1869. Until 10 years ago, the family-operated business was known as a conservative steward of private holdings that had grown to 195,000 acres. Then, in 1986, the company was acquired by Maxxam Inc. (which Mr. Hurwitz heads) in a $900 million buyout involving high-risk junk bonds financed by Michael Milken and Drexel Burnham Lambert Inc. Critics say Hurwitz then ordered Pacific Lumber to accelerate timber cutting in order to pay off the bonds.

"Yes, some of the funds were used to pay the debt," says Maxxam vice president Robert Irelan. "But in excess of $100 million was reinvested in the company." A fourth mill was added, making Pacific Lumber (with some 1,400 workers) the county's largest private employer.

Mr. Irelan also acknowledges that timber harvesting was doubled. But he stresses that this was based on the advice of a professional forestry consulting group, which surveyed Pacific Lumber lands and found "considerably more trees than was thought." But, Irelan adds, "the preponderance" of the accelerated cutting was in stands of younger trees - not old-growth forestland that had never heard a chain saw.

These explanations do not wash with environmentalists, who point to declining populations of "indicator" species like the marbled murrelet (which has dropped from 60,000 to 2,000 birds in Califor-nia), and aerial photos of clear-cuts, as proof that logging has taken a heavy toll.

Over the past eight years, 14 lawsuits have been filed against Pacific Lumber and Maxxam (as well as government agencies) to prevent logging of the old-growth redwood groves in Headwaters Forest and surrounding area, totaling 4,500 acres.

When Congress was controlled by Democrats, there was a nearly successful effort to legislate federal purchase of these lands. But with a Republican-dominated Congress that is more budget conscious and zealous about private-property rights, that avenue seems closed for now.

So environmentalists and their political supporters have turned to another idea: A "debt-for-nature" swap involving some $1.6 billion taxpayer bailout of a Texas savings-and-loan institution in which Hurwitz had a major hand.

Last month, the FDIC filed a $250 million claim against the Texas financier citing "a pattern of deceptive financial reporting and balance-sheet manipulation," plus other activities amounting to "a grossly negligent and reckless gamble." Hurwitz's lawyers said the suit "is without merit." They declared the FDIC had acted in "an arbitrary and unreasonable manner."

Last week, the federal district court in San Francisco released information on another suit, brought on behalf of taxpayers by environmental lawyers, seeking triple damages for the $1.6 billion lost in the Texas S&L bailout.

Why not preserve the Headwaters Forest and surrounding land under federal protection in return for canceling some or all of this alleged debt, critics of Pacific Lumber and Maxxam ask?

"We believe that a debt-for-nature swap is the best way for the taxpayers to recover their debt from Mr. Hurwitz and also save the Headwaters Forest from destruction," five members of Congress from California wrote the FDIC last week.

Maxxam spokesman Irelan calls this scheme a "non-starter" since neither Maxxam nor Pacific Lumber is named in the suit against Hurwitz.

And the company points out that in the Headwaters Forest it only wants to log "a relatively small number of trees" that are dead, diseased, or dying. But as with other proposed "salvage" logging operations around the West, environmentalists see this as a ploy to let the chain saws roar.

But the company is also willing to relinquish the Headwaters Forest in exchange for some combination of cash, surplus government property (such as military land) that could be developed and other assets.

But nobody knows the forest's monetary worth. Two years ago, an appraiser hired by the US Forest Service put the figure at $500 million. Company officials say it's even higher twith increased prices for redwood lumber. Environmentalists contend that is too much to pay - even for a natural treasure found nowhere else in the world.