Charles Hurwitz Is a Greedy Clear-cutter. Charles Hurwitz Is a Caring Environmentalist.

You decide.
by Kathryn Jones

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I met Hurwitz at Maxxam's offices in a high-rise tower near Houston's Galleria a few weeks after the agreement was signed. A tall man with dark, slightly graying hair, the 59-year-old was dressed in a conservative business suit. He looked like he'd been making deals all his life. And, in fact, he has.

Born in Kilgore, the son of a prominent haberdasher, Hurwitz became a stock-broker after graduating from the University of Oklahoma. While still in his twenties he raised more than $54 million to start the country's first publicly held hedge fund. Over the years, he acquired a series of businesses, including McCulloch Oil, which became MCO Holdings, Maxxam's predecessor; Simplicity Pattern; and a resort in Puerto Rico. He's a multimillionaire—he made Texas Monthly's list of the one hundred richest Texans for four straight years, from 1990 to 1993, with his net worth at the time pegged at between $140 million and $200 million—but he doesn't flaunt his wealth. His office is comfortably utilitarian. A small table holds a framed pencil drawing of a hawk owl made by U.S. senator Dianne Feinstein of California, who brokered the Headwaters deal for the government. Although Hurwitz's political loyalties lean Republican, he has a good working relationship with Democrat Feinstein: He has called her "the glue" who kept the accord moving forward despite intense political pressure from some environmental groups in her state; she says he "showed unusual knowledge, staying power, and determination."

During the hour and a half we talked, Hurwitz was measured in his responses to my questions but was much looser when the tape recorder was turned off. He rarely talks to the media and agreed to our interview only after, well, some serious dealmaking. But once he did, he went out of his way to be helpful. He suggested numerous things for me to read (such as David Harris' The Last Stand, a book about the redwoods fight that doesn't paint a favorable portrait of him) and put me in touch with various people he thought I should talk to (for instance, Washington, D.C., superlobbyist Tommy Boggs, the son of former Speaker of the House Hale Boggs and the brother of journalist Cokie Roberts). Of course, the Headwaters issue wasn't the first on which the famously controversial Hurwitz had taken flak. Maxxam's holdings—they include the Sam Houston Race Park, a Class 1 horse-racing facility outside Houston in which the company has a 98.2 percent stake—tend to operate in areas that attract scrutiny and litigation. But Hurwitz himself was never demonized until Maxxam bought Pacific Lumber in a 1986 leveraged buyout financed largely with junk bonds floated by junk bond king Michael Milken. When Pacific Lumber gave notice that it planned to double timber harvests and cut in the Headwaters Forest, environmentalists declared war, filing a barrage of lawsuits to stop logging by Pacific Lumber. To them, Headwaters was sacred ground, one of the last places of its kind on earth. These environmentalists weren't just members of grass-roots groups. California's green movement is big and sophisticated and holds great sway with politicians and the media—more than in any other state. And they weren't just fighting for the forest; they were fighting against Hurwitz. "They need an enemy, somebody they can accuse of pillaging of the environment, whether it's an oil company or a timber company," Boggs says. Environmental activists have been "very smart" in the way they've positioned themselves, says California attorney Jared Carter, who worked on the trans-Alaska pipeline agreement as a deputy undersecretary of the Interior in the Nixon and Ford administrations and advised Pacific Lumber on the Headwaters deal: "They know that if you want to be effective in a public relations campaign, you've got to fight evil. It's not adequate just to go do good things. You've got to be against things." Headwaters became a cause célèbre. Earth First!, the nation's most radical environmental group, staged colorful protests. At one, actor Woody Harrelson (who used to live in Texas) scaled the tower of the Golden Gate Bridge, and demonstrators hung a banner that read "Hurwitz, aren't redwoods more precious than gold?" At another, singers Don Henley (a Texas native) and Bonnie Raitt put on benefit concerts; Raitt was later one of several hundred people arrested for trespassing at a Pacific Lumber mill. In addition, virtual protests were in vogue, with several Internet sites attacking Hurwitz personally. One still up and running, www.jailhurwitz.com, offers $50,000 to anyone who can provide information that would result in his criminal indictment.

Predictably, the national media pounced on the story of the corporate raider from Texas versus the redwoods. The liberal political magazine Mother Jones—which is based in San Francisco, a few hours south of Headwaters—came right out and referred to Hurwitz as "the devil." Even mainstream publications like the Wall Street Journal and the New York Times portrayed him, in essence, as a wily financier wielding a chain saw. Hurwitz shook it all off. "I've got some pretty thick hide," he said. "When you think you're doing something that's right, it's not so bad. Some people have to be leaders and stand up for what they believe in. We can't please everybody." But while Hurwitz is a villain to some, he's a hero to others for saving timber jobs in Northern California and enduring years of frustrating negotiations with the government to resolve a conflict that pitted neighbor against neighbor for decades. Pacific Lumber's longtime president, John Campbell, notes that the company's previous owners had planned to harvest trees in Headwaters too. "It was all going to be cut anyway," he says. Hurwitz told me Pacific Lumber was simply asserting its legal right as a private property owner to use its property economically. After all, those tens of thousands of acres were zoned for commercial timber production. "The Constitution is very clear that somebody should get just compensation for his land," he said. "Our position has always been that if the federal and state government wanted to preserve Headwaters, that was fine with us."

Some observers didn't think Hurwitz would settle. They expected him to take his chances in court with the so-called takings suit that Pacific Lumber had filed seeking hundreds of millions of dollars from the government for interfering with its right to harvest the redwoods; the company's sales were falling, and its mills were shut down part of the time because of an inadequate flow of logs. In reality, though, the feds probably never would have let the case go to court. If Pacific Lumber had won, federal regulators would have been hard-pressed to stop environmentally harmful activity on private land anywhere, not just in Headwaters. Hurwitz knows he had them, as it were, up a tree. "I feel very comfortable that we would have won, and it would have been a huge amount of money," he said. Doug Wheeler, who was the secretary of California's Resources Agency under Governor Pete Wilson, agrees. If Hurwitz had won in court, he says, the government's bill for Headwaters "could have been much bigger."

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