Gallgos Appeals MAXXAM/PALCo. Fraud Lawsuit Decision

DA Gallegos is once again attempting to hold career criminal Maxxam/Pacific Lumber (PALCO or PL) CEO Charles Hurwitz responsible for fraud in the filing of their THPs;

"Gallegos appeals decision in PALCO fraud lawsuit"

by Nathan Rushton, 11/15/2006

"Humboldt County District Attorney Paul Gallegos has filed an appeal in the fraud lawsuit against Pacific Lumber Co., which was dismissed more than one year ago by visiting trial court judge Richard Freeborn.

The legal action was sparked by the Headwaters Forest deal in the late 1990s, in which PALCO received nearly $500 million in compensation for giving up more than 7,000 acres of its forest lands.

In the county’s original suit, Gallegos alleged that PALCO misrepresented scientific information it provided to regulatory agencies considering permit requests from the timber company following the deal.

Freeborn ruled in 2005 that PALCO was immune from prosecution under civil code litigation privilege, also known as the “Noerr-Pennington doctrine.”

In his brief signed Nov. 9, Gallegos said Freeborn’s conclusions weren’t correct.

Specifically, Gallegos argues in the brief that the litigation privilege does not apply to the lawsuit because the public was not a party to the underlying environmental review process, and that the Noerr-Pennington doctrine is not applicable to the case because PALCO wasn’t lobbying government, but was applying for a timber harvest permit."

read on @;
http://www.eurekareporter.com/ArticleDisplay.aspx?ArticleID=17507

Whatever people may think of Paul Gallegos, it is good to see the Humboldt DA's office being utilized in attempts to bring the greatest criminal of Humboldt County to justice. As a perpetual cynic, we need to remind Gallegos that Charles Hurwitz, CEO of Maxxam corporation, is nearly 'untouchable', and has a long history of white collar corporate crimes. Prior to the acquisition of Pacific Lumber by Texas based Maxxam corporation, the redwoods were selectively logged by locally owned PL and landslides were rare occasions. That all changed when Maxxam (with CEO Hurwitz at the helm) siezed PL assetts (& soon liquidated the unliquidated) in a hostile takeover and large scale clearcutting of redwoods began, soon followed by erosion, flooding, landslides, etc..

Let's begin with Hurwitz's entry into the realm of a corporate criminal;

Texas Savings & Loan Collapse; The collapse of the Texas United Savings Association was orchestrated by Mike Milken, Ivan Boesky and Charles Hurwitz. Employee pensions were raided, Boesky and Milken served time, yet Hurwitz remains CEO of Maxxam corporation..

"Even with his public relations team, Hurwitz faced embarrassment once the FDIC, in its 1991 lawsuit against junk bond king Michael Milken, directly tied the failure of United Savings Association to financing and acquisition of Pacific Lumber.

Then, in its August lawsuit in U.S. District Court in Dallas, the FDIC asked for $250 million from Hurwitz, charging that United Savings invested heavily in junk bonds underwritten by Drexel Burnham Lambert, in return for that firm's financing of Hurwitz's takeover activities.

Eventually, the FDIC paid more than $1.5 billion to cover the losses of United Savings Association, said the suit."

read on @;
http://www.sfgate.com/special/redwoods/part5.html

The FDIC's debt for nature swap occurred in the Headwaters deal, though Hurwitz was let off the hook when FDIC investigators were derailed from their investigations by Congressman John Doolittle (well, he must have done a little something!!)..

John Doolittle (4th District Congress) prevents an investigation by FDIC into Hurwitz's involvement in the Texas S&L collapse. Would Hurwitz remain free and CEO of Maxxam if Doolittle had allowed the FDIC investigators to perform their job? Reopening the investigation into Hurwitz without Doolittle/Pombo's interference may result an answer..

"January 8, 2006 the LA Times reported, "Reps. John T. Doolittle and Richard W. Pombo joined forces with former House Majority Leader Tom DeLay of Texas to oppose an investigation by federal banking regulators into the affairs of Houston millionaire Charles Hurwitz, documents recently obtained by The Times show."[39] Furthermore, "When the FDIC persisted, Doolittle and Pombo — both considered proteges of DeLay — used their power as members of the House Resources Committee to subpoena the agency's confidential records on the case, including details of the evidence FDIC investigators had compiled on Hurwitz."[40] Consequently, "the investigation was ultimately dropped."[41]

The Times explained "In key aspects, the Hurwitz case follows the pattern of the Abramoff scandal: members of Congress using their offices to do favors for a politically well-connected individual who, in turn, supplies them with campaign funds. Although Washington politicians frequently try to help important constituents and contributors, it is unusual for members of Congress to take direct steps to stymie an ongoing investigation by an agency such as the FDIC."[42] The article concluded, "in the Hurwitz case, Doolittle and Pombo were in a position to pressure the FDIC and did so. Pombo received a modest campaign contribution. In another case, Pombo helped one of Abramoff's clients, the Mashpee Indians in Massachusetts, gain official recognition as a tribe; the congressman received contributions from the lobbyist and the tribe in that instance."[43] [44] [45] "

read on @;
http://www.sourcewatch.org/index.php?title=John_Doolittle

Not only did Hurwitz takeover Pacific Lumber and raid longtime PL employees' pensions, the same occurred with Maxxam's takeover of Kaiser Aluminum/Steel, reasons the steelworkers union supported Judi Bari and other EF! activists against the tyranny of Maxxam's CEO Charles Hurwitz..

"A 19-year electrician and father of four, Scroggs shows up twice a week for his 12-hour shift on the steelworker’s picket line outside the Kaiser’s alumina refinery, an hour’s ride from New Orleans. It’s a big change, he says, from showing up to work. “Even if I lose my job, even if I never return to Kaiser, all of this is worth it,” says Scroggs. “It’s all about corporate greed. All of this is necessary to show that we won’t be victims of people like Charles Hurwitz.”

Hurwitz is the billionaire corporate raider who bought Kaiser in a hostile takeover in 1988. The son of an affluent haberdasher from the East Texas outpost of Kilgore, Hurwitz has been the target of a 15-year campaign by environmentalists to stop Hurwitz’s Pacific Lumber Co. from clear-cutting old-growth redwoods in the Headwaters Forest in Northern California. Hurwitz acquired the timber company in 1985 with the help of the soon-to-be convicted junk bond specialist Michael Milken of Drexel Burnham Lambert.

Hurwitz is also the target of several lawsuits filed by the Office of Thrift Supervision and the Federal Deposit Insurance Corporation seeking to recover up to $810 million for a series of risky investments that led to the failure of United Savings of Texas. Hurwitz denies he had anything to do with the S&L’s bankruptcy.

At the picketline, Rudolph Mitchell, a 27-year belt operator, exclaims that Hurwitz couldn’t be any more different than the man who once owned Kaiser Aluminum, the legendary industrialist Henry J. Kaiser. “You felt like coming to work when Henry J. Kaiser owned this company,” says Mitchell. “We were the highest paid employees on the river. It was teamwork, it was family. You just got a raise. It was automatic.”

When Kaiser died in 1967 at the age of 85, he passed his company, then known as Kaiser Tech, to family members who continued to operate it much as he had. By the mid-1980s, Kaiser was owned by an English investor named Alan Clore. Burdened by low aluminum prices, Kaiser turned to the USWA for concessions. The union agreed to wage cuts and other give-backs with the understanding that when the company’s fortunes turned around, they would be rewarded.

The new management, though, made a nearly fatal mistake predicting that aluminum prices would recover when in fact they would fall to historic lows. While Kaiser’s rivals, Alcoa Inc. and Reynolds Metals Co., laid off workers and stayed clear of debt, the company did just the opposite.

Following the 1987 stock market crash, Kaiser’s stock was weak and management was indecisive. Sensing a buying opportunity, Hurwitz seized Kaiser’s shares, adding another piece to his Houston-based holding company Maxxam Inc. To pay off his junk bonds, Hurwitz sold off some of Kaiser’s chemical plants, and began trimming the workforce. Since 1980, Kaiser’s workforce has fallen from 4,948 employees to 2,920 as of 1998."

read on @;
http://www.zmag.org/zmag/articles/lazeroffjune2000.htm

Not only does the new ownership of Kaiser abuse workers, the ecosystems are also up for grabs. Consider the effects of the Akosombo Dam owned by Maxxam via Kaiser/Valco corporation on Ghana's Volta River, and the rise in malaria from the stagnant water behind the dams. None of the electricity generated by the dams helps the local villagers (though the locals suffer from malaria, fish kills, unsanitary water from nearby dams), the hydroelectric energy is all absorbed by Maxxam/Kaiser's aluminum smelters..

"VALCO (Volta Aluminum Company Ltd.) is owned 78 percent by Maxxam [CEO - the notorious swindler and ancient redwood logger Charles Hurwitz], 10 percent by Reynolds [since acquired by Alcoa], and 12 percent by private interests; 80,000 people were relocated from 740 villages; the dam flooded 8,500 square kilometers; Ghana gave Valco low electric rates and numerous tax breaks; (Yao Graham, Drought Dims Ghana's Hydroelectric Power, World Rivers Review, Nov. 1995, p. 6-7; contact African Agenda, PO Box 94154, Yeoville 2198, Johannesburg, South Africa, afagenda [at] iaccess.za)."

read on @;
http://www.worldtwitch.com/ghana_bui.htm

(NOTE- Above website also has info on Halliburton's attempts to claim hydroelectric energy from Ghana's Volta River)

While the Akosombo Dam was contructed prior to Hurwitz's acquisition of Kaiser, the current profits continuously reaped by Maxxam/Kaiser/Valco are directly responsible for the ill health of communties who reside near the Volta River;

"Before the construction of the Akosombo Dam the cycle of farming was structured around the rise and fall of the river. Fertile flood plains provided a significant part of agricultural output, cattle grazed on these plains, people fished in the river and collected clams from its bed.

No more. The damming has put an end to a cycle which deposited silt on the flood plains, resulting in a drastic curtailment of agricultural output and herding. Communities have appealed unsuccessfully to VRA to time its spillage to coincide with the traditional flooding season to facilitate economic activity. Creeks have dried up, and salinization due to the penetration of sea water has destroyed the clam beds and lowered the quality of the drinking water.

As a result of slower flow and elimination of annual floods to flush the river, the incidence of stomach and intestinal diseases have increased. The stagnant waters of the reservoir also dramatically increased breeding conditions for vectors of three waterborne diseases: schistosomiasis (transmitted by snails) and malaria (by mosquitoes). Before the filling of the reservoir, schistosomiasis afflicted 1-5% of the population. By 1979 it had become the most prevalent disease in the area, and average infection rates in lakeside villages grew to 75%."

read on @;
http://www.irn.org/pubs/wrr/9511wrr.html

Given this record of corporate crimes against humanity, it is understandable that Hurwitz has the backing of other professional corporate criminals (other than Pombo/Doolittle), specifically his long-time friend and former Skull and Bones frat buddy GW Bush. In fact, we can also thank C. Hurwitz for breaking the vote deadlock in FL and swaying the election towards GW Bush!!

"Hurwitz has been a prolific campaign donor since the early 1990s. He has contributed personally and with funds provided by his Houston-based flagship company, Maxxam, Inc., through subsidiaries like Kaiser Aluminum, and through a company political action committee, Maxxam Inc. Federal PAC.

In the last three federal elections cycles, those entities have given more than $443,000 in political contributions -- most of it to conservative politicians including President Bush, for whom Hurwitz pledged to raise $100,000 in the 2000 campaign and also helped during that year's vote tally deadlock in Florida."

read on @;
http://www.dailykos.com/story/2006/1/7/231351/7142

While this author applauds Paul Gallegos on appealing the decision against the PALCO fraud lawsuit, it will require the participation of the entire community to dethrone Hurwitz from his fortified barony in Humboldt county. No we won't rest until Maxxam is out of Humboldt and Hurwitz is put on trial for his numerous crimes..

http://www.jailhurwitz.com/

No untouchables aqui!!

Still asking; Who Bombed Judi Bari??
http://www.judibari.org/

The trees need help!!

Direct action, treesitters, gear and food needed!!

Please contact;

http://www.northcoastearthfirst.org/

http://www.wesavetrees.org/

http://www.headwaterspreserve.org/