17 



Maxxam and Hurwitz are under investigation by the Federal De- 

 posit Insurance Corporation for a bsinkrupt thrift known as United 

 Savings Association of Texas. It is estimated that Hurwitz and 

 Maxxam could owe the Federal Grovemment in excess of $500 mil- 

 lion for what, according to the Wall Street Journal, was "breach of 

 fiduciary duty and wrongfully failing to maintain the net worth of 

 a failed thrift." 



I might ask you to think back to that $500 million owed to the 

 Federal Government as we talk about at some point in the future 

 the costs of this bill to our society. 



In order to show their concern for workers and retirees from Pa- 

 cific Lumber, the Maxxam Corporation systematically looted Pacific 

 Lumber's pension fund of over $60 million which they used for 

 other corporate buyouts and debt reduction. They purchased annu- 

 ities in collusion with the operators of what is now the bankrupt 

 Executive Life Insurance Company of California and putting all of 

 their retirees' pensions at risk. The U.S. Labor Department sued 

 Maxxam over this action alleging Maxxam breached their fiduciary 

 duty to the members of the Pacific Lumber's pension plan. The suit 

 is pending. 



Once the positive lumber was acquired by Maxxam, it imme- 

 diately and significantly increased the cutting of redwoods, includ- 

 ing virgin old-growth redwoods. Its rate of cut has doubled to tri- 

 pled the rate of the harvest under the old Pacific Lumber Com- 

 pany. According to Newsweek, "The Redwood Raider * * * began 

 plowing down California's coastal redwoods." And this level of cut 

 was based on what is good for servicing the junk bond debt, not 

 what is good for the economic stability of California's North Coast. 



I think I £im giving you a pattern of someone with no regard to 

 the environment, to job maintenance or indeed to the needs of this 

 country to preserve a landmark stand of 1,000-year-old trees. 



The intention, I submit, was quite clear was to liquidate this 

 country by virtually destro5dng this timber area in northern Cali- 

 fornia. 



The eagerness for quick profit has run them afoul further of the 

 U.S. Fish and Wildlife Service and California Department of Fish 

 and Game to illegally cutting significant amounts of old-growth 

 redwood in an area known as Owl Creek. This, too, is important 

 when we think about the costs of or the establishment of the value 

 for these trees. 



You will hear that this land has a high value because of the 

 trees. What you won't hear is that that value is not there because 

 it is against the law to cut many of those trees, a nicety that Pa- 

 cific Lumber is now overlooking. 



The top biologist for the Owl Creek area in California says they 

 are basically conducting sneak attacks while pretending to look for 

 marbled murrelets and they have renewed requests to cut down 

 prime habitat areas. 



The issue of the cost of this legislation is one of some debate. 

 Maxxam will provide inflated costs, obviously. Should this legisla- 

 tion pass, it is not the intention to provide a windfall profit to scur- 

 rilous operators, Maxxam and Hurwitz. If the legislation passes, 

 the value of the land would be judged not on what the timber 



