Maxxam, Hurwitz Beat Schwarzenegger Mar 17, 2005 http://www1.pressdemocrat.com/apps/pbcs.dll/article?AID=/20050317/NEWS/503170302/1033/NEWS01 The Press Democrat. Board lets Pacific Lumber log more Water agency overrules staff's sharp cut in timber cutting A state water board Wednesday overruled its own staff and gave Pacific Lumber Co. approval to log even more in two impaired North Coast watersheds. The 5-3 vote on a compromise motion culminated a five-hour Santa Rosa hearing, marked by testy exchanges, conflicting scientific studies and accusations that the North Coast Regional Water Quality Control Board had caved in to intense political pressure. "They didn't split the baby. They mutilated the baby," declared Richard Geinger, a Humboldt County forestry activist. The high-profile dispute is being closely watched in Sacramento, where Pacific Lumber has been lobbying key members of the Schwarzenegger administration for help. The company, which has been logging on the North Coast for 136 years, attracted statewide attention when it said constraints on its logging plans could force it to file bankruptcy or even close. At its core, the North Coast logging dispute underscores escalating conflicts between the water board, which is mandated by law to protect water quality, and state and federal agencies, which review logging operations to ensure fish and wildlife protections are met. On Wednesday, a tenseness pervaded the hearing as Geinger and other longtime Pacific Lumber critics lashed out at logging practices in the two decades since a corporate takeover by Texas financier Charles Hurwitz. A dozen or more law enforcement officers, fearing a possible confrontation between company workers and critics, stood watch. Wednesday's vote means Pacific Lumber can log up to 75 percent of the disputed timber volume spread across 1,100 acres. The company could gross an additional $20 million in revenue. It represents the second major concession the Santa Rosa-based water board has made in its current tug-of-war with Pacific Lumber. In late February, the board's executive director, Catherine Kuhlman, agreed to allow 50 percent of the proposed logging the company planned. Wednesday's decision enables the company to log another 25 percent. A throng of company employees cheered when the vote was taken, and some rushed up to thank board members for the compromise. However, Pacific Lumber executives expressed displeasure, as did downstream land owners and environmental representatives. "We're very disappointed," said Pacific Lumber President Robert Manne. The latest water board concession may not be enough to end the company's financial crisis, Manne said. It could take a week or more to analyze the effects of the decision on the company, he said. "But I don't think much has changed. We still need all of the plans. Our lenders are not likely to be satisfied," Manne said. Kristi Wrigley, a longtime landowner along the Elk River, blasted the compromise. "We got the shaft. They just keep giving away more and more," she complained. Mark Lovelace of the Humboldt Watershed Council, a Eureka environmental group, said he was baffled by how the board majority came up with the 75 percent figure. "What's magical about that?" he asked. Lovelace said his organization may appeal the decision to the state Water Resources Control Board. "This isn't over," he vowed. For water board staff caught in the crossfire, Wednesday's decision also was disappointing. "It means we will spend even more time and energy on issues that should have been resolved a long time ago," said Robert Klamt, acting director of the board's timber division. At the core of the dispute are a dozen Pacific Lumber timber harvest plans already approved by four state and federal agencies, who oversee implementation of a 1999 agreement that was supposed to assure the company of a steady supply of logs. But the regional water board staff, which was not a participant in the so-called Headwaters Forest deal, has held up the logging plans, citing water-quality and public-health concerns. Under state law, the nine regional boards across the state operate independently of state and federal agencies, who focus on fish and wildlife concerns. Two of the water board's four newest members voted in favor of the compromise. It was engineered by board member Gerald Cochran, Del Norte County's assessor. The new board members were appointed in February by Gov. Arnold Schwarzenegger, filling long-vacant seats just as the Pacific Lumber debate was heating up. New members Heidi Harris, a Humboldt State University professor, and Dennis Leonardi, a Ferndale dairy owner, supported the compromise with Pacific Lumber, Humboldt County's largest private employer and property taxpayer. Other board members favoring Cochran's 75 percent formula included John Corbett, a Humboldt County attorney, and William Massey, a Santa Rosa Junior College instructor. Board chairwoman Bev Wasson, a Healdsburg grape grower; Clifford Marshall, tribal chairman of the Hoopa Valley Indian tribe; and Sonoma County engineering consultant Richard Grundy opposed the move. Wasson, the longest-serving board member, said she's fed up with Pacific Lumber tactics. "We should stop bending to its every whim," she said. Gary Clark, the company's chief financial officer, urged the board Wednesday to grant the company's request. "Virtually, our survival is at stake," he said. Because of regulatory constraints, Clark said Pacific Lumber is facing an "extremely unstable financial condition that continues to deteriorate daily." Lovelace mocked the company's claims of a financial crisis. Since the 1986 takeover by Hurwitz, Lovelace said Pacific Lumber has paid nearly $1 billion in dividends to Hurwitz's Maxxam Inc. and subsidiaries. "If the company's broke, it's because they've been shipping hundreds of millions of dollars out of the local region," Lovelace said.