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1999 Cascadia Times

Redwood Ghosts

Why the battle for Headwaters Forest is far from over.


by Kathie Durbin
Cascadia Times

FORTUNA, Calif.

Snow, rare on California's North Coast, has fallen on Headwaters Grove overnight. In the morning, as we begin our trudge down a logging road past cut-over land, it crunches under our boots and frosts the boughs of spindly second-growth redwoods. We are eight miles from Humboldt Bay, and the air smells of the sea.

U.S. Interior Secretary Bruce Babbitt sets a brisk pace as the entourage of reporters, photographers and bureaucrats scrambles to keep up, all of us slipping in the slick black mud. Abruptly we veer right up an old skid track. As we enter the gray-green light of Headwaters Grove, walking single file along a narrow trail, a soft rain begins to filter through the canopy. Clumps of snow caught in the high boughs of thousand-year-old redwoods melt and fall down our necks. Shafts of sunlight pour through openings in the canopy, illuminating waist-high ferns. Rain, snow, sun. Headwaters Grove creates its own weather.

We went to this grove on a morning in early March not to soak up its wild beauty but to record a historic moment. Images of Babbitt standing next to big trees would be broadcast on tonight's TV news programs and printed in tomorrow's newspapers. Eight days earlier, at the stroke of midnight on March 1, 1999, at a cost of $250 million to the U.S. Treasury and $230 million to the state of California, the 3,000-acre Headwaters Grove and adjacent logged-over redwoods had become public land.

The deal allowing federal acquisition of this 7,400-acre tract, and of another 2,000 acres by the state, was sealed only after two and a half years of grueling negotiations between the federal government, the state of California and the land's owner, Texas financier Charles Hurwitz.

On this day, for the first time, it was possible to enter Headwaters Grove without trespassing on Hurwitz's property.

Babbitt clearly relished his hike in the mist and mud. "You really have to go deep into the woods to appreciate just how wild Headwaters is," he said. It is also true that a scramble through Headwaters Grove helps you appreciate what has been lost in California's coastal redwood region.

Babbitt and Mary Nichols, director of the California Resources Agency, presided over the installation of a handsome sign at the boundary of the new Headwaters Forest Reserve. Then Babbitt made a little speech in which he defended the Headwaters Deal as an attempt "to strike a nice balance between some use of the land" and the preservation of habitat for two threatened North Coast creatures, the marbled murrelet and the wild coho salmon, both now protected under the federal Endangered Species Act.

In coastal California, where so little of the original forest survives, Headwaters Grove is an island of towering ancient redwoods in a sea of clearcuts and plantations. It provides refuge for communities of salmon and salamanders, tailed frogs and murrelets and spotted owls. In the end it was not the age or beauty of the redwoods but the threat logging posed to these species that stilled Hurwitz's chainsaws.

Clearly the Headwaters Deal was a victory for the coalition of dedicated activists who spent more than a decade defending ancient redwoods in the courts and with their bodies in the woods. Without the protests and the passion, the lawsuits and the lobbying and the worldwide publicity, there would be no Headwaters Deal.

Still, some perspective is required. Though the deal saves the largest remnant stands of old redwoods in southern Humboldt County, the ecosystem is tattered almost beyond repair. Only about 80,000 acres of the original coastal redwood forest – 4 percent – remains after a century and a half of industrial logging, and far less exists in stands large enough to have ecological integrity. Thousands of redwoods as old as those in Headwaters Grove have fallen since 1986, when during the height of Wall Street's junk-bond frenzy, Hurwitz and his Houston-based Maxxam Inc. acquired 117-year-old Pacific Lumber Company and its 200,000 acres of redwoods in a swift and brutal takeover.

For decades, Pacific Lumber had managed its redwoods according to a conservative company policy. Its owners believed in logging selectively and sustainably. They did not clearcut, did not apply herbicides to their land, and they refrained from logging during the rainy winter months to keep soil erosion to a minimum.

All of that changed under Maxxam ownership. To pay off the high-yield bonds sold to finance the purchase, Hurwitz doubled the rate of cutting within months and began hacking away at the company's ancient redwoods, including Headwaters Grove, the largest tract of virgin redwoods left on private land. Immeasurable damage was done before the courts finally interceded on behalf of the marbled murrelet in 1995.

On our hike with Babbitt through Headwaters Grove, no one discusses the fierce thirteen-year battle waged over the fate of Headwaters Grove. We do not follow the faint paths made by the scores of forest activists who trespassed here repeatedly to photograph these trees and bear witness to their destruction. We do not walk the Death Road, 200 feet wide and lined with enormous stumps, built a decade ago to access trees at the heart of the grove that were ultimately saved.

From the beginning, North Coast environmentalists sought to protect 60,000 acres of old-growth and mature redwoods and Douglas-firs in Maxxam ownership. They christened this entire chunk of coastal mountains Headwaters Forest, for the many streams that rise here and flow to the sea. After a dozen years of accelerated logging, only about 6,000 acres of truly ancient redwoods in six groves survive. Forest defenders have explored and named each one: Headwaters Grove, Owl Creek Grove, All Species Grove, Elk Head Springs Grove, Shaw Creek Grove, Allen Creek Grove. Also scattered among younger maturing stands are "residual" old-growth redwoods and Douglas-firs, survivors of long-ago logging operations. Murrelets, which are intensely loyal to their nesting trees, are known to use these stands.

Only lawsuits, mass demonstrations and human blockades staved off the chainsaws until the political cost to the government of allowing the destruction of these trees became greater than the monetary cost of buying and preserving them. The rest of Headwaters Forest has been transformed since 1986 into a wasteland of road-scarred, tractor-logged watersheds and silt-laden streams.

One of the first tasks the Bureau of Land Management faces as it takes over management of the new reserve is to decommission logging roads that are bleeding sediment into Salmon Creek and burying critical salmon spawning areas--"a critical need," in the words of Arcata BLM resources specialist Don Averill..

In a larger sense, all of California redwood country is a landscape of loss that cannot be tallied in trees alone. An entire region has been torn apart. Rivers have been despoiled. People have lost their homes. A company has lost its soul. Last September, a young Earth First! activist trying to save some redwoods lost his life.

And the campaign for Headwaters is not over. It won't be over until the last ancient redwood is cut, or saved.

It has only taken new forms:

  • Steven Schectman, a San Francisco attorney recently transplanted to Eureka, is targeting Hurwitz with a series of high-profile lawsuits designed to pierce Maxxam's corporate veil. Schectman represents a group of rural landowners who are suing Hurwitz for damages over its timber practices; residents of the tiny community of Stafford, buried by a New Year's Eve 1996 landslide that began in a Pacific Lumber clearcut; and the estate of David "Gypsy" Chain, a young Earth First! activist who died in the woods last September when a log felled by a Pacific Lumber logger landed on him, crushing him to death.

  • Two nonprofit foundations, the Rose Foundation for Communities and the Environment and the As You Sow Foundation, are pressuring Maxxam's stockholders and directors to hold Hurwitz accountable to the environment and to communities affected by Pacific Lumber's logging practices. At last year's Maxxam board of directors meeting in Houston, the Rose Foundation secured nearly half the non-insider shareholder vote for a resolution seeking increased management accountability by Maxxam executives. The resolution also was backed by the California Public Employees' Retirement System, a major Maxxam stockholder.

At this year's meeting, two independent candidates for director who promised to stand up to Hurwitz, former U.S. Sen. Howard Metzenbaum of Ohio and former federal judge and White House attorney Abner Mikva, received an unprecedented one million votes, representing a quarter of all shares not under Hurwitz's control.

  • The United Steelworkers Union has allied itself with northern California environmentalists in opposition to Maxxam's labor practices. A contingent of 230 steelworkers from Spokane, who have been on strike against Maxxam-owned Kaiser Aluminum since last September, showed up at this year's Maxxam directors' meeting to support the dissident slate. The union is threatening legal action against Pacific Lumber for sending 30 laid-off California timber workers to Spokane to cross its picket line last fall. Hurwitz has not endeared himself to organized labor. At both Pacific Lumber and Kaiser Aluminum, he liquidated millions of dollars in pension funds to help make payments on the bonds sold to pay for his leveraged buyouts.

  • Northern California forest activists are making some headway in lobbying for stricter forest practices rules. This year they fought hard in the California Legislature for legislation to require better analysis of the environmental impacts of logging before permits are granted, more effective stream protection rules, greater accountability by state regulatory agencies, and stiffer civil and criminal penalties for illegal logging. A strong salmon protection bill and a second bill requiring a new state study of the relationship between logging and erosion passed the Senate in June. Two reform bills made it out of an Assembly committee but were pulled at the last minute under intense pressure from the timber industry.

Backers call the measures "modest, reasonable and necessary" and say their fate will be a key test of whether California's grassroots conservation movement can bring about political reform by working through the system.

Six months after the Headwaters Deal was sealed in a last-minute flurry of posturing, hardball negotiating and compromise, it's clear that the battle over Headwaters has done more than save a few thousand acres of old redwoods. It has transformed California forest politics forever.

Most people who know the California coast redwoods know them from visiting the great redwood parks along U.S. 101 – the Jedediah Smith, Prairie Creek, Del Norte and Humboldt redwoods – where immense specimens of Sequoia sempervirens, accessible by well-groomed trails, inspire awe and reverence. Headwaters Grove, further inland and at a higher elevation, feels different – wild, chaotic, primeval – as if one had been allowed to move among ghosts of the forest that once covered two million acres of coastal California.

Inside the grove, each massive redwood commands the ground around it. Fallen giants, some more than twelve feet in diameter, bridge the wet chaos of the forest floor. As they decompose over centuries and return to soil, these nurse logs provide seed beds for shrubby gardens of manzanita and salal. Some of the oldest redwoods have grown together into umber-hued walls. Many are blackened and scarred survivors of fires that swept through in past centuries. Even the dead snags soar skyward and look as if they will stand forever.

In 1992, loggers for Pacific Lumber, defying state and federal directives, began cutting ancient redwoods in the 44-acre Owl Creek Grove. It was this "Owl Creek Massacre" that brought matters to a head.

Both the federal government and the state of California had recently listed the marbled murrelet as a threatened species. Under pressure from the Environmental Protection and Information Center in Garberville, the California Department of Forestry had told Pacific Lumber to conduct surveys for murrelets in the grove before it began logging. But the survey was quick and dirty. When EPIC discovered the logging at Owl Creek, it sued Pacific Lumber and Maxxam under the Endangered Species Act on behalf of the murrelet.

During preparation for trial, EPIC lawyer Mark Harris uncovered evidence that the company had concealed seventy detections of the presence of murrelets in Owl Creek Grove. U.S. District Judge Louis Bechtle, in a sharply worded opinion, concluded that the surveys were designed to avoid finding murrelets or to grossly understate their presence.

In 1995, Bechtle issued a permanent injunction forbidding the logging of Owl Creek Grove. The ruling made it legally risky for Maxxam to proceed with logging in any of its ancient groves. Soon after, Maxxam sued the U.S. government, claiming that it had been deprived of economic use of its land without just compensation in violation of the due process clause of the Fifth Amendment.

By 1996, Headwaters had become a show business cause celebre. On September 15 a huge demonstration was held at the site of a Pacific Lumber mill in Carlotta. Musician Bonnie Raitt headlined a roster of more than 1,000 protesters who submitted to ritual arrest for trespassing. The event drew at least 6,000, making it easily the largest anti-logging protest in the nation's history.

Politicians in Sacramento and Washington, D.C., no longer could ignore Headwaters. Negotiations on the purchase of Headwaters Grove by the federal government and the state of California began that fall and continued off and on for two years. Hurwitz agreed to accept $380 million in cash or other considerations in exchange for the grove and not to log it while negotiations were underway.

But even as negotiations began, Pacific Lumber announced that it would begin salvage logging to remove dead and diseased trees on some of its land, including part of Headwaters Grove. Once again, EPIC staged a desperate attempt to head off the logging, petitioning the California Board of Forestry to adopt an emergency regulation preventing salvage logging in old-growth stands. Pacific Lumber never conducted salvage logging in Headwaters Grove, but it did remove dead trees from three smaller groves of ancient redwoods.

In negotiations with U.S. Interior Undersecretary John Garamendi and former California Governor Pete Wilson, Hurwitz was offered land, oil leases and surplus government property. After reviewing the list of bounty, however, he decided he preferred to be paid in cash. In 1997, U.S. Senator Dianne Feinstein of California introduced a measure authorizing $250 million for federal acquisition of 7,470 acres of Maxxam old-growth redwoods. The offer was to expire on March 1, 1999, if no agreement could be reached by that date. Congress passed the measure in November 1997. In September 1998, the California Legislature appropriated $130 million to complete the deal. No surprises

But the Headwaters Deal was more than a straight cash transaction. As a condition of selling the 10,000 acres, Hurwitz demanded that the federal government shield Pacific Lumber from further logging restrictions on its remaining 200,000 acres by approving a federal habitat conservation plan with a "no surprises" clause that would exempt it from the effects of new Endangered Species Act listings for fifty years.

The habitat conservation plan, written by the U.S. Fish and Wildlife Service and the National Marine Fisheries Service, was controversial from the beginning. Though it required Pacific Lumber to do more to protect murrelets and coho salmon, and barred logging for 50 years in several small redwood groves it called "lesser cathedrals," EPIC and other conservation groups insisted that its protective measures would not stop the damage to land and water wreaked by Pacific Lumber or rescue coho from extinction.

In the final weeks of negotiations, California Gov. Gray Davis stepped forward to insist on a legally binding side agreement that insured the protective measures in the federal plan would remain in place even if Maxxam sold its Pacific Lumber holdings.

But in the last days before the $250 million federal appropriation was to expire, Hurwitz and Pacific Lumber President John Campbell proved themselves the better negotiators. On February 26 Campbell walked away from the table, fuming that logging restrictions imposed in the federal habitat conservation plan and a companion state sustained-yield plan would sink the company. Pacific Lumber needed to cut at least 210 million board of feet of timber annually to make a profit, Campbell said. Under the government plans it would be able to cut only 136 million board feet. So, no deal.

Feinstein was dismayed. So were top U.S. Interior Department and Fish and Wildlife Service officials, who had labored to produce a habitat conservation plan acceptable to Hurwitz and Campbell. Over that last weekend, Interior Department lawyers drafted a memorandum that all but promised the company it could expect to cut 180 million board feet per year, 30 percent more than the state had projected. Among other concessions, the federal agencies said the company might be able to log in erosion-prone watersheds where "mass wasting" was a risk without waiting for required watershed analyses to be completed.

Two minutes before the midnight deadline on February 28, Maxxam lawyers finally agreed to sign on the dotted line.

Babbitt flatly denied that the government had caved in. But in the cold light of the morning after, the Deal revealed itself as a classic Clinton administration compromise.

On the positive side, the federal government gained title to 3,450 acres of old redwoods and 4,000 acres of surrounding logged-over land, and California won the right to purchase an additional 2,000 acres, including the contested Owl Creek Grove. In time, managers hope to restore the damaged buffers. California Parks and the National Park Service have restored thousands of acres of logged-over redwood forest since 1978, obliterating roads, recontouring slopes, and eradicating the exotic pampas grass that grows wherever native redwood forest has been disturbed.

The Deal also guarantees fifty years of protection for an additional 7,728 acres, including 1,446 acres of ancient redwoods used by murrelets. This land will remain in Maxxam ownership, at least for now, but it is off-limits to logging under the habitat conservation plan, and efforts are way to get the federal government to acquire it through a debt-for-nature swap.

The Deal also covers the rest of Maxxam's land, and that is where much of the controversy lies.

Under its terms, Pacific Lumber must restrict logging along streams to reduce the soil erosion that has smothered spawning beds and ruined rural drinking water supplies downstream from its logging operations over the past dozen years. In return, the company may proceed with liquidating nearly 18,000 acres of old-growth and mature redwood and Douglas-fir, including 450 acres of ancient redwoods, without fear of future ESA sanctions.

EPIC considers the environmental safeguards inadequate and is lukewarm toward the Deal as a whole. "It's hard to celebrate when you know it's coming at the expense of the rest of the landscape," says EPIC outreach coordinator Kevin Bundy. "There's so little good habitat left for fish and wildlife species in these forests." Pacific Lumber has wasted no time resuming logging on the land it retains. The company is preparing to move into an area environmentalists call "the Hole in the Headwaters" – a 705-acre parcel on the South Fork of Elk River that harbors one of the last populations of wild coho salmon in the state. Under the Headwaters Deal the federal government bought some of this parcel, previously owned by the Elk River Timber Co. But most of it went to Pacific Lumber – even though it is virtually surrounded by the new Headwaters Preserve. The California Department of Forestry has refused to confer special protection on the Hole in the Headwaters.

Hurwitz himself made out nicely in the deal. Some critics find it galling that he will receive nearly $500 million all told for a small fraction of the 211,000 acres he bought for less than $900 million 13 years ago. They point out that most of the timber he sold was off-limits to logging anyway. U.S. Fish and Wildlife Service biologist Phil Detrick, who helped broker the deal, concedes that restrictions imposed to protect salmon and murrelets would have left very little of the new reserve available for logging even without the deal.

Redwoods that cannot be logged have no commercial value beyond the value of the land on which they grow. A study commissioned by the federal government appraised the land involved in the trade at just over $30 million. Yet Hurwitz and his lawyers insisted on being compensated for the commercial value of trees they can't cut. That means they got a very sweet deal indeed.

Soon after the deal was closed, one investment analyst told Forbes magazine that Hurwitz would likely be able to generate $90 million in gross earnings annually from his remaining 20,000 acres. Analysts predict the Headwaters Deal will double the value of Maxxam stock and enrich Hurwitz, who controls 69 percent of the company's shares.

The purchase sets other troubling precedents. As part of the Deal, Hurwitz agreed to drop a "takings" lawsuit against the government for depriving Maxxam of the use of its land. But critics say the Clinton administration might have won that case if it had defended its enforcement of the Endangered Species Act vigorously in court. That, however, is something this administration has been loath to do.

Instead, under Babbitt's leadership, the government has courted developers and industrial landowners with land that harbors endangered species by offering to negotiate habitat conservation plans under which they may develop their land in exchange for modest concessions to wildlife. The scientific community, in a recent study, found that many of these plans are built on dubious scientific principles.

There's also the question of financial resources. Industrial activity threatens many privately owned fragments of vanishing ecological communities. Is there the money, or the political will, to buy each one?

Finally, there's the matter of whether the government ought to negotiate with corporate raiders like Hurwitz and environmental outlaws like Pacific Lumber in the first place.

Last November, the California Department of Forestry took the unprecedented step of suspending Pacific Lumber's timber operator's license after the company racked up more than 116 violations of the California Forest Practices Act between 1996 and 1998. Among other transgressions, the company was cited for using logging equipment near spotted owl nests and driving equipment across streams.

Both the Federal Deposit Insurance Corporation and the Department of Treasury's Office of Thrift Supervision have taken Hurwitz to court to recover a portion of the $1.6 billion taxpayers spent to bail out his Texas savings and loan, United Savings Association of Texas, which he acquired in 1982 during the height of the junk bond frenzy. Under Hurwitz, the S & L bought foreclosed real estate loans, shares in obscure South American companies, and lots of "below investment grade" paper--junk bonds that offered high interest rates in exchange for the high risk they posed to investors. United Savings Association of Texas was seized by federal regulators in 1988 after it collapsed under the weight of failed investments.

Jill Ratner, president of the Oakland-based Rose Foundation, believes the best outcome for Headwaters Forest now is a three-tiered acquisition: First, the federal and state land purchases authorized by the Deal. Second, a debt-for-nature swap in which the Treasury Department forgives part of the debt it is seeking to recover from Hurwitz in exchange for other old-growth groves. Third, private purchase of additional Maxxam land, possible through a land trust.

"We need more than isolated islands," Ratner said. "In order to create a sustainable preserve, you're going to have to protect a lot more land."

Traveling through Headwaters Grove we move like clumsy animals, pulling ourselves up and over behemoth logs and dislodging moss. Before long our boots are soaked through, our jeans caked with mud. We're grabbing for handholds, feeling for ledges. At one point I make a leap of faith across a chasm between two huge, precariously balanced logs. A Bureau of Land Management employee extends his hand. "Just jump," he says. Understanding that there is no possible foothold on the other side, I obey, and let strong arms pull me up the rain-slick side of the monster log. I walk its length along a path that ends in a tangle of limbs. It is the canopy, a different forest altogether, nourished for a millennium by coastal fog 250 feet above the ground.

Not many people other than guerrilla activists and a few hardy foresters have yet visited Headwaters Grove. Now it is public land. Now it is ours. What will we do with it? The answer is far from clear.

The reserve will be overseen by the federal Bureau of Land Management, which manages other patches of old growth, mainly Douglas-fir, along California's North Coast. Already there are calls to limit public access. Even the March 9 hike with Babbitt left its mark on the forest. Imagine if hundreds or thousands of people visited Headwaters Grove every week, trampling ferns and pulling moss from fallen logs. Trails will be necessary to focus disturbance and keep people from tearing up the wilderness.

"I think that it shouldn't be made easy," says Kevin Bundy of EPIC. "Vehicle access is not appropriate. BLM is floating the idea that people can drive to within one-tenth of a mile of the reserve boundary. But there are lots of places people can have a picnic in the redwoods. The Headwaters Forest Reserve doesn't look like the parks. There's still moss. The water is still drinkable in the Little South Fork of Elk River."

It is hard to know how many will come. Since it opened to the public on March 15, only about 75 people per weekend day have made the long trek into the reserve from the north access point. The south access point near Fortuna remains closed pending expansion of parking at the trailhead. The route Babbitt hiked in the snow last March will not be open to the public.

"We're not going to take them down into the Salmon Creek drainage," said Averill of the BLM. "Once you're in the old growth you can have quite an impact on the ferns and mosses."

To get to the edge of the ancient redwoods from the north requires a 10-mile round trip trek along existing roads and trails that takes three to eight hours, depending on one's physical condition. BLM officials estimate that no more than 20 percent of visitors hike all the way in. Those who do may be advised by a BLM ranger not to enter the old redwoods during murrelet nesting season, which begins March 21 and lasts until September 15.

Work is just beginning on development of a longterm management plan. In the meantime, interim rules prohibit overnight camping, hunting, fishing, firearms, motor vehicles, mountain bikes and horses, and require hikers to stay on trails.

Perhaps, for those who love the redwoods, it will be enough to know that Headwaters Grove survives, cradled in coastal fog, where the logging roads finally stopped.