The Last Stand: The War Between Wall Street and Main Street Over California's Ancient Redwoods by David Harris, Random House, 373 pages, $25.
The News & Observer
March 3, 1996
Corporate raiders ax ancient redwoods
By Phillip Manning
What happens when a laid-back California business engaged in sustained-yield
logging is taken over by a corporate raider financed by Michael
Milken's junk bonds? Old-growth redwood forests get axed to pay
off the bonds; a car bomb injures two Earth First! environmentalists
who are trying to save the redwoods; and the raider's savings-and-loan
(which buys lots of Milken's junk bonds as a quid pro quo for
financing the takeover) goes broke when junk bonds collapse. Who
pays for all this? You and I. We lose the redwoods, which will
take centuries to replace, and, as tax payers, have to shell out
$1.3 billion to bail out the defunct savings and loan.
In "The Last Stand," David Harris tells a tale of capitalism
gone berserk. It begins in 1985, when Charles Hurwitz, chairman
of the Maxxam Group, begins accumulating shares in Pacific Lumber,
which owns 183,000 acres of redwood forests. Because the company
only cuts as much timber as it grows, its stock is undervalued
and easy pickings for the raider.
With the help of Ivan Boesky and Boyd Jeffries (both of whom later
served time for securities law violations, as did Milken), Hurwitz
easily outmaneuvers the company's president. When the takeover
is complete, Pacific Lumber is left with debts of $795 million.
To pay them off, the company doubles its cut by logging the largest
virgin redwood forest in private hands. Hurwitz's only opposition
is a dogged lawyer and a ragged group of environmentalists.
The ending is not happy. No one is ever prosecuted for the car
bombing, and though the courts have temporarily barred logging
in one spectacular grove of ancient trees, the redwoods continue
to fall.
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