The call came from Air Force One. It was February 25, and Charles Hurwitz, the chairman and chief executive officer of Houston-based Maxxam, had big reservations about a deal he’d been trying to cut with the federal government for years. The following day Maxxam’s board was going to vote on a historic agreement to save Northern California’s Headwaters Forest, the largest stand of ancient redwoods in private hands. For the considerable sum of $380 million, the feds and the State of California would buy the redwoods—some of which are one thousand years old—from Maxxam’s Pacific Lumber Company and protect them in a public preserve. Just as important to many environmentalists and the U.S. Department of the Interior was a provision for the strongest and most sweeping plan in history to protect wildlife habitats on private property.
The seeds of the agreement were first planted back in September 1996. It had taken nearly two and a half years of complex, contentious negotiations to reach a point where something—anything—could be approved. And yet at the very last minute the deal was on the verge of collapse, because state and federal agencies had proposed changes that Maxxam’s board feared would so greatly reduce the amount of timber Pacific Lumber could harvest that it couldn’t operate viably and keep its 1,400 employees on the payroll. A few days earlier Hurwitz had met with White House chief of staff John Podesta in Washington, D.C., to tell him that the board would likely reject it.
Then the phone rang. Bill Clinton said the transaction “was important for America,” Hurwitz recalled. “He wanted to make it very clear that he was behind it one hundred percent and that he’d be happy to work on any problems.” Hurwitz explained that he appreciated the gesture, but it didn’t change his mind. “I told him that if he were a director of this company, he would have voted against it the way it was constituted. And I proceeded to tell him why in a pretty lengthy conversation.” Not even the president of the United States could persuade Charles Hurwitz to sign an agreement he considered to be seriously flawed. On February 26 Maxxam’s board did indeed vote no.
Time was running out for the last, best chance to save Headwaters; congressional authorization for the federal government to spend its share of the purchase price—up to $250 million—was