Gallegos was accused of gang affiliation at Pelican Bay?

I'm not sure what to make of this article, but it's got a couple of interesting references to Gallegos time (defending prisoners) at Pelican Bay... There were rumors of double billing and being kicked out of Del Norte County, none of which can be verified at this time because as soon as the media made some inquiries, those who were talking stopped... plus the allegations of passing notes between prisoners and illegally taping guard/inmate conversations and having his tape recorder and tapes bagged into evidence right in front of him. That, at least is documented.

Then there's these two references from the article below that give another glimpse into what happened:

"...Other lawyers tell similar stories of beating the prosecution too many times and then finding themselves with fewer defense appointments. "Now the judges go all the way down to Humbolt to find incompetent, pony-tailed fuck-ups who alienate juries and can’t win cases," says de Solenni..."

..."I am convinced that they went after Easton because he filed suits on behalf of prisoners," say defense attorney Paul Gallegos, who has been accused of gang affiliation by the DA. "That accusation was patently absurd. The DA didn’t even realize he was, by implication, accusing the judge who appointed me to the case..."

So - Gallegos was accused of gang affiliation? What's the real story?

Rural Prison as Colonial Master
rsklnkv | 02 October, 2006 19:13

In 1964 a tsunami swept over Crescent City, California completely destroying the downtown. Only nine people died, but the town—nestled just below the Oregon border—never recovered. It was rebuilt as a shabby imitation of Southern California’s worst planning examples; empty parking spaces and box-like buildings dominate the landscape.

In 1989 another tsunami hit—this time the tidal wave was political. The California Department of Corrections (CDC) rolled in, and with little opposition, built the sprawling, $277.5 million Pelican Bay State Prison, one of the newest, meanest super-max prisons in the system. Pelican Bay is now an international model of sensory deprivation and isolation; half the inmates are deemed incorrigible and locked in their cells 23 hours-a-day. The prison is also Crescent City and Del Norte county’s largest employer—and, some say, its new colonial master.

The new prison has political and economic clout which is all the more exaggerated due to Crescent City’s extreme isolation and poverty. Only 4 of the area’s 17 sawmills were still in operation when the prison arrived, commercial salmon fishing was dead, and during the mid-1980s, 164 businesses had gone under. By the time the CDC came scouting for a new prison site, unemployment had reached 20 percent. Del Norte County, with Crescent City at its heart, was in a seemingly terminal economic torpor—the prison was its only hope.

It is a situation that has been replicated a dozen times in recent years—from Bowling Green, Missouri to rural Florida to Dannemora, New York—economically battered small towns are rolling over for new prisons. In fact, punishment is such a big industry in the American countryside, that, according to the National Criminal Justice Commission, 5 percent of the growth in rural population between 1980 and 1990 is accounted for by prisoners.

But the story of the rural prison boom is not all rosy economic statistics, critics say prisons bring an array of political costs. "We’re a penal colony, plain and simple. This is California’s Siberia or Guyana," says John Levy, a Crescent City lawyer, who used to make his living defending Pelican Bay prisoners charged with committing crimes in prison. Levy says that, at least in Crescent City, the CDC’s power extends far beyond the prison gate and prison officials use economic leverage and violent intimidation to silence dissent. Several other persecuted defense attorneys, former guards, and community members, tell a similar story.

For the most part, people in Del Norte county don’t agree, they’re just happy to have jobs. Pelican Bay provides 1,500 jobs, an annual payroll of $50 million dollars, and a budget of over $90 million. Indirectly, the prison has created work in everything from construction and pumping gas, to domestic violence counseling. The contract for hauling away the prison’s garbage is worth $130,000 a year—big money in the state’s poorest county. Following the employment boom came almost 6,000 new residents, Del Norte’s population (including 4,000 prisoners) is now 28,000. In the last ten years the average rate of housing starts doubled as has the value of local real estate.

With the building boom came a huge Ace Hardware, a private hospital, and a 90,000 square foot K-Mart. Across from K-Mart is an equally mammoth Safeway. "In 1986 the county collected $73 million in sales tax; last year it was $142 million," says Cochran. On top of that, local government is saving money by using low-security "level-one" prisoners instead of public works crews. Between January 1990 and December 1996, Pelican Bay inmates worked almost 150,000 hours on everything from school grounds to public buildings. According to one report, the prison labor, billed at $7 hour, would have cost the county at least $766,300. "Without the prison we wouldn’t exist," says assessor Cochran.

While the CDC’s economic impact is plain to see, its power in Del Norte County courts is quite opaque but just as real. "From our investigations it seems that the prison, in conjunction with local judges and prosecutors, is using every excuse it can to keep more people locked up for longer," says Leslie DiBenedetto-Skopek of the California Prison Focus (CPF), a human rights group based in San Francisco which investigates conditions in Pelican Bay. CPF investigators, who visited Pelican Bay in late January, say that minor administrative infractions—such as spitting on guards—are often embellished and prosecuted as felonies in the local courts in front of juries stacked with guards and their families. As a result, Pelican Bay inmates are getting new convictions and becoming permanently trapped in prison, regardless of their original conviction.

"For example," says attorney and CPF investigator Rose Braz, "I interviewed this one kid G—-; he’s 21, a white guy from [rural] Trinity County. He got 4 years for robbery, turned 18 in the Corcoran SHU (Security Housing Unity). But due to several fights inside, some of which were staged by guards at Corcoran, this guy is now facing his third strike."

"I am afraid I’ll never get out," said G—- in a taped CPF interview. Just to make sure, the CDC is paying 35 percent of the Del Norte county District Attorneys’ budget. The money covers the costs of convicting prisoners charged with committing new crimes. District Attorney Bill Cornel, says the CDC’s contributions don’t even cover the full cost of handling an annual average of 80 Pelican Bay cases. "It’s clear what this is all about," says CPF investigator Noelle Hanrahan. "These prison convictions are job security for the whole area."

Crescent City criminal defense attorneys say that while the CDC bolsters the local prosecutor’s office, it also uses behind-the-scenes leverage to prevent effective inmate defense. "Hell, all I know is that in 1995 I won four out of five of my Pelican Bay cases and they were almost all three strikes. Then, in 1996 the judge gave me only one case," says criminal defense attorney Mario de Solenni, a self-proclaimed "conservative, redneck pain-in-the-ass." According to de Solenni—who owns and drives a collection of military vehicles—successfully defending prisoners is a no-no: "Let’s just say the system doesn’t seem to like it if the defense wins."

Other lawyers tell similar stories of beating the prosecution too many times and then finding themselves with fewer defense appointments. "Now the judges go all the way down to Humbolt to find incompetent, pony-tailed fuck-ups who alienate juries and can’t win cases," says de Solenni.

Tom Easton—a defense attorney with the slightly euphoric air of someone who’s just survived a major auto wreck—in a modest house overlooking the sea. The National Review and American Spectator> cover his coffee table, but right-wing reading habits haven’t helped endear him to CDC compradors.

"The prison and the DA are trying to destroy my career," says Easton, who was facing felony charges including soliciting perjury from a prisoner. Easton says the charges were nothing more than retaliation for providing defense in criminal cases and handling civil rights suits on behalf of Pelican Bay inmates. In late January, all charges against Easton, save one misdemeanor count of soliciting business, were dropped or ended in hung juries. "But the DA could still try to have me disbarred," says Easton. In the meantime, he has been banned from communicating with the seven Pelican Bay prisoners he represents.

"I am convinced that they went after Easton because he filed suits on behalf of prisoners," say defense attorney Paul Gallegos, who has been accused of gang affiliation by the DA. "That accusation was patently absurd. The DA didn’t even realize he was, by implication, accusing the judge who appointed me to the case."

Absurd or not, DA harassment has a chilling effect. "I can see the writing on the wall," says John Levy. "They just don’t want these prisoners to get defense. The more of ‘em they can pack in, the more money comes down the pipe. I’ve had enough of it. I’m leaving town."

Among Levy’s clients are four prison maintenance workers who testified against administrators in a recent corruption case. "The former head of operations out there made death threats against my clients, the state is still investigating," says Levy, adding that one of his clients has since been forced to leave town after being fired from the local hardware store at the behest of a prison official. "Hey, the prison is the only place that buys in bulk," says Levy.

According to Levy and others, the CDC also has covert investigative units, with classified budgets, that conduct surveillance in the community and keep dossiers on trouble-makers. "Internal Affairs does investigations in the community but I don’t think that’s inappropriate," says Tom Hopper, former Del Norte county sheriff and the current Community Resource Manager at Pelican Bay. CDC officials in Sacramento also confirm that the department’s two undercover police forces—the Special Services Unit (SSU) and the Investigative Services Unit—do at times carry out surveillance off of prison grounds. During recent revelations of officially sponsored violence at Corcoran State Prison, SSU officers were caught trying to intimidate whistle-blowers. They even chased down a guard as he raced to the FBI with scandalous evidence.

John Cox looks like a poster boy for the CDC. But the former Pelican Bay correctional officer (CO) is, instead, a CDC target. Trouble began in 1991 when Cox broke the guards’ code of silence and testified against a fellow officer who had beaten an inmate’s head with the butt of a gas gun, and then framed the victim. Cox refused to go along with yet another set-up. According to findings in Madrid vs. Gomez—a high-profile class action against the CDC—Pelican Bay administrators called Cox a "snitch" and told him to "watch his back."

Even before Cox broke ranks in court he was hated by other guards. As sergeant in charge of the D yard SHU, Cox gave all his officers 100 extra hours of on-the-job training beyond the standard 40. This was seen as treachery by some hard-line CO’s. "They called D-Yard SHU, ‘fluffy SHU,’ because we didn’t hog-tie inmates to toilets or kick them in the face after cell extractions," says Cox. "There was one officer in there who used to take photos of every shooting and decorate his office with them."

Federal court papers are replete with other heinous examples of abuse at Pelican Bay, such as the notorious case of guards and medical staff who boiled an inmate alive. A central element in this slow-motion riot of sadism was the constant framing of prisoners, so that their sentences grew by decades with each year inside. Cox—trying to play by the rules—found it almost impossible to do his job.

"I broke up one fight without assistance, called for back-up but none came, and got a torn rotator cuff," says Cox. "The next day the lieutenant made me climb every guard tower ladder. It was pure harassment." The final straw was a series of death threats and close calls on the job. In one incident Cox found himself alone, surrounded by eight inmates and unable to get back-up. "That was it. If I stayed and tried to do my job I probably would have been killed," says Cox, who is currently suing the CDC.

Things have hardly improved since Cox quit. "Bullets through the window, death threats on my kids, hang-up calls, sugar in the gas tank, slashed tires— you name it," says Cox, recounting the continued harassment he still suffers at the hands of the CDC and its allies. "The DA and the sheriff have refused to even investigate. They told me to talk to the prison."

Other former guards have also had problems, most notably James Carp, who says he was harassed by superiors for pointing out security faults, such as an automatic door system which failed to lock and required a $2 million dollar overhaul.

Officials at Pelican Bay refuse to comment on Cox’s case. But Pelican Bay’s Tom Hopper did say: "The prison saved this community and people are grateful. There are a few disgruntled employees and other fringe elements that complain, but you can’t please everybody." As evidence of CDC bullying mounts this line may become harder to maintain.

"Face it—Crescent City has sold its soul to the devil. They got a few jobs but that’s about it," says CPF investigator and former prisoner, Louis Talamantez. According to the critics, the wreckage from Crescent City’s latest tsunami—rule by the CDC—takes the form, not of fallen buildings, but shattered lives. "Remember, the whole lockdown economy," says Talamantez, "feeds off prisoners, many of whom will never see the world again."

Christian Parenti teaches sociology at the New College of California in San Francisco and is working on a PhD for the London School of Economics.

article is reposted many times on the net including
http://www.pelicanbayprisonproject.org/history.htm

Houston Chron - It seems like Charles Hurwitz just can't catch a break

It seems like Charles Hurwitz just can't catch a break
By LOREN STEFFY
Copyright 2007 Houston Chronicle Jan. 23, 2007, 11:13PM

Victory seems to forever elude Charles Hurwitz.

In 1999, he hammered out an agreement with California and federal officials to preserve old-growth redwood trees while allowing his logging company, Pacific Lumber, to cut enough new-growth trees to make a profit.

The deal, known as the Headwaters Agreement, was supposed to broker peace between Hurwitz and environmental groups that opposed his company's logging operations.

More importantly, it should have been a model for how private industry can work with other groups to preserve the environment.

Last week, Pacific Lumber filed for bankruptcy, strangled by new regulations made outside the agreement.

"We were dealt a hand where we couldn't do anything," Hurwitz told me Monday. "It's a pure breach of contract."

Regional water boards, which weren't included in the Headwaters Agreement and therefore argue they aren't bound by it, ruled that runoff from Palco's logging was affecting rivers and streams in Northern California's scenic Humboldt County.
The boards imposed new restrictions.

Palco's timber harvest has fallen steadily as a result, to 145.5 million board feet in 2005 from 166.3 million in 2003, according to its annual filings with the Securities and Exchange Commission.

At the same time, the quality of the harvest shifted to lower grades of redwood and Douglas fir, which sell at a lower price.
The company wasn't making enough money to service its debt, part of which was incurred when Palco refurbished its mills for the newer growth trees as specified in the 1999 deal.

Over the years, the battle between Hurwitz and the environmentalists has grown personal. The protesters bristle at the thought of a single tree felled by Hurwitz's hand.

In a news release, Karen Pickett, director of one such group, the Bay Area Coalition for Headwaters, summed up the filing this way:

"The one thing we can look forward to ultimately is a Maxxam-free and Hurwitz-free company."

Unattractive

Then what?

What chance does Palco have for survival? It can't, under the latest environmental restrictions, produce enough lumber to turn a profit, whether it's owned by Hurwitz or someone else.

Bankruptcy may eliminate some of the company's debt, but it won't make Palco attractive to outside buyers. The threat of unending tree sittings and sabotage to logging operations makes Palco an unappealing purchase.

Hurwitz's adversaries spin a heartwarming myth about returning Palco to its days as an ecofriendly, family-run logging company.

But returning Palco to its old style of operations also returns it to the reality that left it vulnerable to Hurwitz's takeover 20 years ago. Palco was a mismanaged operation. Its executives hadn't done an accurate inventory of its timber lands in more than 30 years, and the "family" company's stock — which was traded on the New York Stock Exchange — languished.
In today's lumber industry, the margins have gotten thinner and the competition has increased. A return to Palco's past would promptly be followed by a return to bankruptcy court.

'Root of all evil'

For his part, Hurwitz has paid a hefty price for his ownership of Palco.

"This is the root of all evil for us," he said. "Everything that's bad in my business life has come out of this."

The environmental issues formed the basis for the Federal Deposit Insurance Corp.'s decade long legal battle against Hurwitz. The lawsuit involved the failure of United Savings Association of Texas, but documents released as part of a congressional investigation revealed that regulators pursued a flimsy case to extract a settlement that would have included forfeiting Palco's old-growth redwood forest.

Hurwitz won, but the government appealed. With the case headed back to court, the victory is hollow. Palco's bankruptcy represents another eroded triumph, the collapse of the Headwaters Agreement.

The cycle remains unbroken and as vicious as it was before. Hurwitz and his foes in the environmental movement seem locked in perpetual conflict.

In many of these battles, Hurwitz has been right. But as last week's bankruptcy filing shows, you can be right and still lose.

Loren Steffy is the Chronicle's business columnist. His commentary appears Sundays, Wednesdays and Fridays.

Houston Chron - Timber war may live longer than redwoods

Timber war may live longer than redwoods
By LOREN STEFFY
Copyright 2005 Houston Chronicle June 16, 2005, 9:37PM

SACRAMENTO, CALIF. — The timber wars were supposed to be over.
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The peace accord came in 1999, when the federal government and the state of California bought 7,500 acres of old-growth redwood trees from Pacific Lumber for more than $400 million. The lumber company agreed to new environmental and logging restrictions.

That, Pacific Lumber officials figured, would allow it to make a profit for its parent company, Houston-based Maxxam, and meet its obligations to employees.

"It all made sense in 1999," says Robert Manne, Pacific Lumber's president, sitting in his office in the company-owned town of Scotia. It was a balance among "the environmental, the economic and the social aspects of what we were doing."

These days, it's hard to believe there was a truce. Just this week, Palco, as the company is known, was in court in Eureka, where the district attorney had accused it of fraud. The DA claimed Palco submitted a misleading landslide study to a regional water board. A judge threw out the case on Tuesday.

By Thursday, Manne and other Palco officials were here in the state capital, five hours southeast of Scotia, arguing against state water board restrictions on logging in several key watersheds that Palco claims it has the right to cut under the 1999 agreement.

The water board disagreed. In public filings, Palco has said the restrictions may force it or its subsidiary, Scotia Pacific, into bankruptcy.

Environmentalists, cheering what they see as a significant victory, dismissed that notion.

"They deliberately keep themselves on the brink of bankruptcy," says Paul Mason, a legislative representative with the Sierra Club, which has battled Palco for years. "It's a shell game by very clever financial minds."

There are few things both sides agree on, but one is that the whole battle is probably headed to court. That would have to happen before July 19, which is the deadline for the next debt payments due on Scotia Pacific's publicly traded bonds. Those bonds are backed by the value of the company's timberland. Based on Thursday's ruling, the company can't log enough to make the interest payment, Manne says.

It's the latest twist in a 20-year battle that began when Houston financier Charles Hurwitz bought the company in a 1986 leveraged buyout. The deal made Hurwitz a villain to environmentalists, who portray him as a greedy corporate raider who wants to fell every redwood in the region for a quick buck.

Revisiting agreement

The water boards are, in essence, revisiting the 1999 agreement, which created the federal Headwaters Reserve of old-growth redwoods.

"That duplicative review process is killing us," Manne says. In the past five years, Palco's employment has fallen by half, to 800 from 1,600, and Manne says those declines may continue. The company has closed mills, and Manne says the log decks in Scotia, where the freshly cut trees arrive for processing, are "an embarrassment" because they're so empty.

Under the 1999 agreement with the state, Palco agreed to limit logging to 178 million board feet a year, down from more than 220 board feet before the deal was signed. With the water board restrictions, it's cutting about 100 million.

Mismanagement charged

In its review of Palco's operations, released in April, a member of the water board's staff said Maxxam has mismanaged Palco, burdening the company with debt and logging at unsustainable rates.

"It was almost juvenile in its analysis," Manne says.

Mason, with the Sierra Club, argues that Palco is hiding behind the Headwaters agreement, using it as a blanket exemption from all environmental restrictions.

Hurwitz has never been one to run from a fight, and he may enjoy testing the limits of government regulation. But no one's ever proven that he's broken it, and that is part of what galls his opponents.

As one told me after the hearing, what they find so upsetting about Palco is that everything it's done is legal.

Both sides determined

After years of following the Maxxam-Palco-redwoods saga, one thing is clear: The environmentalists are as determined to stop Palco from cutting trees as Hurwitz is to keep doing it.

The Headwaters agreement was supposed to end the timber wars. The activists came down from the trees. The company sold or set aside most of its old-growth timber and invested $30 million in a new mill here designed to handle younger trees.
It was part of a plan that was supposed to push Palco to forefront of the industry and make it an example of environmental responsibility.

"It never happened," Manne says.

The timber wars never ended. Sometimes, the battle is so divisive that a truce is unattainable.

Loren Steffy is the Chronicle's business columnist. His commentary appears Sundays, Wednesdays and Fridays.

Houston Chron - FDIC made its bed and can lie in it

FDIC made its bed and can lie in it
By LOREN STEFFY
Copyright 2005 Houston Chronicle Aug. 28, 2005, 1:36AM

I don't envy the Federal Deposit Insurance Corp.

Having botched the case against Charles Hurwitz at almost every turn, facing rare and hefty sanctions of as much as $72 million, the FDIC's board must now decide what to do next.

For most of last week, the FDIC has said it will appeal U.S. District Judge Lynn Hughes' ruling, issued Tuesday, awarding the sanctions to Hurwitz and Maxxam, the holding company he controls.

I pressed spokesman David Barr on that point. He acknowledged no final decision has been made.

"We're definitely leaning in that direction," he said.

Meaning that the FDIC staff, the same hapless band that has been wrong time after time in this case, now wants to keep it alive.

It leaves the FDIC in a deep hole of its own digging.

It can appeal the verdict and risk that an appeals court will smack down the claims as two judges already have, or it can pay the sanctions and set a dangerous precedent by admitting it overstepped its authority. The sanctions came after more than a decade of legal wrangling with Hurwitz and Maxxam over the collapse of Houston's United Savings, which cost taxpayers about $1.6 billion.

No proof

Even setting aside Hurwitz's claims of a government conspiracy to get redwood trees owned by Maxxam's Pacific Lumber unit — which the FDIC denies — the agency has failed to make its case.

The gist of its claims is that Hurwitz and Maxxam had a requirement to pump additional capital into the thrift. Hurwitz said there was no such requirement, and the FDIC has been unable to prove otherwise in court.

It filed suit in 1995. A congressional investigation later uncovered an internal memo that found the FDIC's own lawyers predicted that there was a 70 percent chance the agency would lose.

Barr says the FDIC can't discuss the issue because the related documents are under seal. At the FDIC's prodding, the Office of Thrift Supervision filed an administrative proceeding. The case went before an administrative law judge, who threw out the claims.

Facing appeal, Hurwitz agreed to settle by paying $200,000 and promising he wouldn't sit on the board of a bank. Barr says the FDIC decided to drop its case because justice had been served.

Scathing findings

It's a loser's revision of logic.

After seven years in court, the FDIC tried to walk away, but Hurwitz wouldn't allow it. He sued the FDIC for sanctions. Last week, Hughes issued his blistering decision. The ruling is startling in its word choice and scathing in its findings. It compares the FDIC to organized crime, and it faults the government for its "betrayal of the public trust" and "its vindictive political assault."

The FDIC wants to dismiss Hughes as something of a crank. He is, after all, known for ruling against government agencies. But Hughes didn't just dash off the opinion over a weekend. He took more than a year to come to his decision, which outlines a systemic abuse of power by the FDIC.

What emanates from the pages is an exasperation, a sense that Hughes believes the case should never have been filed in the first place.

"We strongly disagree with the ruling," Barr says. "It's not supported by the facts of the case." Those facts have been presented twice, before two judges who both found them lacking.

Upholding fairness

Hurwitz, as I've said before, is not a sympathetic victim. He is a wealthy man, a corporate raider whose buying sprees were financed with junk bonds from Michael Milken. He used surpluses from a workers' pension fund to help finance his acquisition of Pacific Lumber and has battled environmental regulations. But there has never been any evidence he committed a crime. Sympathy isn't a prerequisite for justice. Our system rests on fairness and truth.

The FDIC has been unable to prove its claims, and its pursuit of a case it knew from the start it was unlikely to win has now landed it exactly where it predicted: in defeat.

The current FDIC board inherited this case and must now decide what to do. It has become a blood feud of sorts, one that the staff doesn't want to relinquish.

With two strikes already against it, the agency has an unenviable choice: try again and risk further humiliation, or own up to its past sins.

Loren Steffy is the Chronicle's business columnist. His commentary appears Sundays, Wednesdays and Fridays.

Houston Chron - After Hurwitz's ordeal, questions remain for FDIC

After Hurwitz's ordeal, questions remain for FDIC
By LOREN STEFFY
Copyright 2005 Houston Chronicle Aug. 25, 2005, 9:53PM

Was it worth it?

That's the question I put to Charles Hurwitz on Wednesday afternoon as we talked on the phone about the court ruling that awarded the Houston financier and Maxxam, the holding company he controls,$72 million in sanctions against the federal government.

"That's a good question," he said. "Really, it's many questions."

Indeed. My own interest in the Hurwitz case started with a question. A few years ago, I asked why the FDIC would walk away from a case it had spent seven years preparing for and seven years litigating.

The ugly answer is revealed in some 2 million pages of court documents and congressional testimony: It brought the case simply because it could, because Hurwitz had something the government wanted. It walked away when its strong-arm tactics didn't work.

Some questions, though, remain unanswered. Why, for example, did the Federal Deposit Insurance Corp. continue to pursue a case its own lawyers predicted, before the case was filed, it probably would lose?

Or why, after getting almost everything they wanted, do environmentalists continue to dog Hurwitz over logging by his Pacific Lumber Co. in Northern California?

The answer, I'm convinced, is Hurwitz himself. He enrages his adversaries with his iron-jawed refusal to accede to their demands. He wouldn't acquiesce to the FDIC. His closest friends told him it wasn't worth it, that fighting the government would ruin him and that it was better to settle and get on with his life.

Meanwhile, environmentalists demonized him for cutting trees that his lumber company owned. He offered to sell his old-growth redwoods to the government, but it didn't want to pay.

So the government tried extortion. It offered to settle the FDIC lawsuit if Hurwitz would surrender the trees, according to documents unearthed during congressional hearings in 2000.

FDIC spokesman David Barr disputes that. He says the agency was never interested in trees, only recovering the $1.6 billion lost in the collapse of Maxxam's United Savings in 1988.

'Never mind'

After keeping Hurwitz in court for seven years, the FDIC tried to walk away from its lawsuit — a billion-dollar twist on Gilda Radner's signature line "never mind."

Barr says this was because a parallel case, pending before an administrative law judge for the Office of Thrift Supervision, had run its course. But the judge in that case essentially found the regulators' claims lacking. Hurwitz agreed to a token settlement, but not the recovery the FDIC wanted.

The old-growth redwoods are now protected in a national forest. The government ultimately paid for the property. Pacific Lumber, in turn, agreed to stringent logging restrictions. The FDIC has been verbally spanked by a federal judge and told to pay Hurwitz $72 million, a sanction that Judge Lynn Hughes noted in his ruling is unprecedented.

It's not over yet

Yet the fight goes on. Environmentalists are trying yet again to restrict Pacific Lumber's logging, this time by claiming that streams are being damaged by erosion from tree cutting. The FDIC intends to appeal Hughes' ruling, Barr says.

The fight goes on because Hurwitz himself goes on, because at every turn he's refused to bow to the incredible pressure brought against him.

Which brings me back to my original question: Was it worth it?

"I'm very gratified with the outcome," Hurwitz said matter-of-factly. "How could I not be?

"If somebody had said 15 years later we'd be here and have spent this kind of money, I probably wouldn't have done it." Then he added: "I always knew we were right."

Opportunities lost

Being right, though, came at a cost. Hurwitz's Maxxam holding company has passed on some potentially lucrative deals. Hughes made reference to the lost opportunities in his ruling.

"He captured the sense of this thing when he talks about taking the entrepreneurial juices away," Hurwitz said. "That's really what happened."

Maxxam has suffered, too. Pacific Lumber recently proposed giving creditors control of its timber operations to reduce debt. Maxxam's shares are trading almost 53 percent below where they were when the FDIC filed its lawsuit 10 years ago. The Standard & Poor's 500 Index has more than doubled during that time.

"This will put us back on a growth path," Hurwitz said. "We'll kind of pick up the pace. We'll divert our energies into other things instead of thinking about the government."

It depends, though, on if the government is done thinking about him.

Hurwitz, of course, says if the FDIC wants to go another round, he will. After all, he says, it's worth it.

Loren Steffy is the Chronicle's business columnist. His commentary appears Sundays, Wednesdays and Fridays.

Congress Should Hold Hearings on FDIC Abuse of Citizens

#267 October 1999

Congress Should Hold Hearings on FDIC Abuse of Citizens
by Amy Ridenour

Innocent until proven guilty, right?

That's what it says in civics textbooks. But in the real world, sometimes government officials want you to be guilty. If that happens, even if you are innocent, you can be in big trouble.

Take the cases of Charles Hurwitz of Texas and Glen Garrett of Missouri.

In Hurwitz's case, the government wanted valuable land owned by Hurwitz's company. Hurwitz was willing to sell, but as the land carried a high fair-market value, it was expensively priced. Rather than buy the land in an honest transaction, the government sued Hurwitz's business over an unrelated regulatory matter under the jurisdiction of the U.S. Federal Deposit Insurance Corporation (FDIC). Essentially, the government said: Give us the land; we'll settle the suit.

In other words, blackmail.

On that day, the Founding Fathers rolled over in their graves.

Internal documents show that the land-confiscation scheme, unconstitutional though it was, had the approval of government officials as high as the White House. On March 21, 1995, then White House Chief of Staff Leon Panetta, in fact, wrote a letter on White House stationery endorsing this scheme, saying, "Budgetary constraints have made it impractical to acquire such an expensive tract of land through outright federal purchase."1

Even more chillingly, after a federal judge forced the FDIC, over its protests - including an appeal to another court,2 to make public some of the FDIC's internal documents, it became clear that the FDIC knew perfectly well that it had little chance of proving Hurwitz guilty. Although FDIC policy prohibits the agency from pursuing cases unless it is "more than likely to succeed," in its zeal to acquire the land, the FDIC ignored its own policies and proceeded with a suit it knew lacked merit.3

Hurwitz refused to be blackmailed, but he did fully cooperate with investigators4 and he sold the government the land for a price lower than its value. The banking agencies were not grateful. Instead, the FDIC continued its case against Hurwitz in a federal court, where the government is unlikely to win. It also opened a "second front" against Hurwitz by way of an internal government Office of Thrift Supervision (OTS) regulatory hearing, paid for by the FDIC, where Hurwitz's rights are limited and where his guilt will be determined by administrators paid by the prosecutors.

According to the journal of the American Bar Association, the proceedings in this chamber are so greatly in the government's favor that one of the administrative judges has never once ruled against the government.5

Reportedly, the government hopes to force Hurwitz to surrender some additional land that was not included in the sale. A federal district judge called the case a "manipulation of the court system."6

So far, Hurwitz and his companies have spent over $20 million in this case7 and taxpayer expenditures are similar.8

The Oxford English Dictionary refers to the infamous "Star Chamber" as a court whose "rules of procedure... rendered it a powerful instrument in the hands of a sovereign or ministry desirous of using it for tyranny."9

We like to think we've come far since the 15th-17th century Star Chamber, but we obviously have not.

The story of small-town Missouri banker Glen Garrett is different, but no less alarming to those who believe that Americans who are innocent of any crime have the right not to be hounded by their government.

Garrett was the subject of an anonymous, ill-founded and false accusation of dishonesty against him made to the state bank examiners, who passed them on to the FDIC. It was later shown that the false charges were made by one of Garrett's business competitors, hardly an objective source.

The FDIC began an exhaustive investigation that would eventually take almost a decade to resolve. Despite finding insufficient evidence of any wrongdoing, the FDIC was undeterred. Worse, an FDIC senior management official demonstrated extreme bias, saying, "Glen Garrett should be castrated."

Rather than find proof of wrongdoing by Garrett, however, the FDIC racked up an impressive list of wrongdoing of its own. Among them:

* An FDIC official asked an officer of Garrett's bank to lie about the investigation. When the officer refused and the bank complained to the FDIC, no action was taken.

* During the investigation, a government official told another banker false derogatory information about Garrett's personal confidential financial affairs. It is a violation of criminal statues for government bank examiners to release personal financial information they learn during a bank examination to another banker. Again, no action was taken.

* The FDIC attempted to incite a U.S. Attorney to bring a criminal indictment against Garrett by sending the U.S. Attorney a written referral which contained numerous false and unsubstantiated allegations against Garrett, which the FDIC labeled as "facts," not "allegations" or "suspicions." The FDIC has conceded that they made false allegations.

* During a hearing Garrett subpoenaed two FDIC officials to testify about their knowledge of the case. In a blatant attempt to subvert Garrett's rights in court, the FDIC responded by sending letters to its own employees threatening them with criminal prosecution if they testified.

In the end, and after Garrett was forced to spend almost $2 million to defend against the false FDIC allegations, the FDIC decided to withdraw and dismiss (with extreme prejudice, which means they can never resurrect the charges again) all charges it made against Garrett, thus totally vindicating him of all wrongdoing. But even here, the FDIC required one last tribute from Garrett: he had to pledge not to sue the FDIC for wrongful prosecution.10

On October 11, Federal Reserve Chairman Alan Greenspan delivered a major speech to the annual convention of the American Bankers Association on the need for changes in the banking regulation system, but he said not one word about the urgent need to correct abuses like these.11 This was wrong.

One of Thomas Jefferson's complaints about the British government in the Declaration of Independence was that King George III had "depriv[ed] us in many cases, of the benefits of trial by jury." The Declaration of Independence retains a powerful resonance because it speaks of timeless, universal truths. The regulatory process should never be used as a substitute for objective adjudication by an impartial tribunal.

Our government today needs to reaffirm its commitment to these truths, which remain as important today as they were to our citizenry in 1776. Congress should hold hearings to look into these events, and develop policies to prevent future such abuses.

Footnotes:
1 Bob Sablatura, "Redwoods, Not Red Ink, May Have Motivated FDIC Against Hurwitz; Documents Show Agency May Have Tried to Hide Truth in Pursuing Suit Against Financier," Houston Chronicle, July 19, 1998, p. A1.

2 Sablatura, p. A1.

3 Sablatura, p. A1.

4 Letter of U.S. House of Representatives Majority Whip Tom DeLay to The Honorable Donna A. Tranoue, Chairman, Federal Deposit Insurance Corporation, and Mr. Gaston L. Gianni, Jr., Inspector General, Federal Deposit Insurance Corporation, February 3, 1999.

5 Terry Carter, "Banking and Fear," ABA Journal, July 1999.

6 United States District Judge Lynn N. Hughes, "Opinion on Dismissal of The Office of Thrift Supervision," Federal Deposit Insurance Corporation and Office of Thrift Supervision v. Charles E. Hurwitz, U.S. District Court, Southern District of Texas, Civil Action H-95-3956, October 23, 1997.

7 Sablatura, p. A1.

8 Quoted in "Charles Hurwitz is No Sap," by Kathryn Jones, Texas Monthly Biz, June 1999, Charles Hurwitz estimates the combined expenditures of Hurwitz and his companies and the government at $50 million.

9 The Oxford English Dictionary, Oxford University Press, 1971.

10 Information about the story of Glen Garrett was obtained from the following sources, among others: Terry Carter, "Banking on Fear," ABA Journal, July 1999; Interviews with Stephens B. Woodrough, legal counsel for Glen Garrett and former FDIC litigator, conducted in September and October 1999; Woodrough, Stephens B., "The Abuse of Regulatory Power - A New and Powerful Antidote," (unpublished); Prepared testimony by Stephens B. Woodrough before the Small Business Administration Regulatory Enforcement Fairness Board, St. Louis, Missouri, June 8, 1998; Testimony of Paul G. Fritts, former FDIC Executive Director of Supervision and Resolutions before the Small Business Administration Regulatory Enforcement Fairness Board, St. Louis, Missouri, June 8, 1998.

11 Prepared text of speech delivered by U.S. Federal Reserve Chairman Alan Greenspan to the American Bankers Association in Phoenix, Arizona, on October 11, 1999.

# # #
Amy Ridenour is president of The National Center for Public Policy Research.

Houston Chron - With Hurwitz, FDIC got more than it bargained for

With Hurwitz, FDIC got more than it bargained for

By LOREN STEFFY

Charles Hurwitz showed up in court Wednesday wearing a tie with a horseshoe pattern because, he said, he was feeling lucky.

He had good reason.

After almost a decade, Hurwitz is on the verge of prevailing in his efforts to extract as much as $61 million in sanctions from the Federal Deposit Insurance Corp.

Hurwitz claims he has been the target of a government conspiracy to force him to settle a lawsuit with the FDIC by surrendering a redwood forest his company owns in California. The FDIC's case stemmed from the $1.6 billion collapse of United Savings Association of Texas in 1988, the country's fifth-largest savings and loan failure.

The FDIC, which is used to playing the role of the taxpayers' champion, has found itself with few allies. Judge Lynn Hughes criticized the agency's attorneys for not being careful about the details of their testimony, he implied the FDIC may not have followed proper procedure in voting to sue Hurwitz in 1995 and even suggested one government lawyer may have perjured himself.

The FDIC approaches failed S&L cases with a presumption of guilt for all involved. After all, savings and loan deregulation allowed scores of developers and wheeler-dealers to loan money to themselves under ridiculous terms, all guaranteed by the government. Stories of excess are legion — prostitutes at board meetings, secretaries put up as bets in a $5,000 game of quarters, 12-year-olds given vintage Ferraris.

But the Hurwitz case had none of that. Whatever his business transgressions, Hurwitz didn't lead a flashy lifestyle.

What's truly stunning about the case is the flimsiness of the government's claims. It doesn't accuse Hurwitz of fraud or that he enriched himself by looting United Savings. In fact, as close as it comes is making an argument for what could best be described as "inverse enrichment."

It claims Hurwitz enriched himself not by taking money out of the thrift, but by not putting money in when the S&L was failing.

The government, though, has been unable to prove Hurwitz or his company was required to do so. Hurwitz, being the savvy deal maker he is, put several layers of interlocking companies between Maxxam and the thrift.

Massive investigations and legal proceedings by two government agencies over 15 years at a cost to taxpayers of $13 million, and this is where we end up: Hurwitz enriched himself by not spending money.

In the end, Hurwitz paid about $200,000 and agreed to be banned from the banking industry by the Office of Thrift Supervision, which settled that agency's arm of the case. The payment came after the office's administrative law judge recommended that the case be thrown out. The FDIC, after seven years in court, dropped its proceeding a month later.

With the original cases over, Hurwitz turned around and sued the government.

Hurwitz sat stoically with his wife, Barbara, during most of the proceedings, but his outrage boiled over after one memo from an FDIC attorney said the agency should "cause Hurwitz some pain."

"They want to cause me pain?" he said later. "This is the federal government talking. They should be embarrassed to be here."

Embarrassed? No, the FDIC's people seemed more annoyed. They know the case is going badly. They roll their eyes at Hughes' rulings, which in the past have gone so far as to liken their methods to the Cosa Nostra. Hughes, of course, is no friend of the government, but the FDIC isn't doing itself any favors.

The FDIC says Hurwitz's lawyers have selectively extracted pieces of documents to stitch together a conspiracy theory, but they have produced little evidence that cuts through the tapestry. They bristle at having their tactics turned on them.

A final ruling is weeks away, but Hughes gave a strong indication of his views.

"I think the FDIC is through picking on Mr. Hurwitz," he said Wednesday.

There aren't many people who feel sorry for Charles Hurwitz. A quick Google search on his name reveals how intensely he is disliked, especially among environmentalists. He has a Web site in his honor, www.jailhurwitz.com, that shows a likeness of him behind bars.

His takeover gambits in the 1980s are reminiscent of the Gordon Gekko character in the movie Wall Street. He raided the employee pension plan at Pacific Lumber to fund his takeover. When he increased logging to raise revenues, protesters climbed the ancient redwoods on Pacific Lumber's land and lived there to keep them from being cut down.

Internal memos unearthed in the various investigations show FDIC lawyers knew they had a poor chance of winning, yet the agency filed the case anyway. That decision coincided with pressure from environmental groups on the Clinton administration to get control of the redwoods.

The agency says it didn't bow to political pressure, but the pressure clearly was there, and Hurwitz's track record made him an easy target.

The FDIC, though, didn't expect Hurwitz to fight. Most S&L figures, guilty or not, settled so they could get on with their lives. In Hurwitz, the agency confronted a formidable combination of wealth and stubbornness. As a result, it's been outsmarted and outmaneuvered at every turn.

Before this week's hearings began, one of the FDIC lawyers said I must think they wear the black hats in this case. He's wrong. I think they wear the dunce caps.

Loren Steffy is the Chronicle's business columnist. His commentary appears Sundays, Wednesdays and Fridays
HoustonChronicle.com -- http://www.HoustonChronicle.com | Section: Business
July 1, 2004, 11:42PM

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BACH (Bay Area Coalition for Headwaters) spin on that story:
BACH's spin >>>Hurwitz is enriched--once again<<<

A federal judge issued an order for the FDIC to pay Charles Hurwitz up to $72 million, sanctioning the federal agency for its lawsuits against Hurwitz.

If you remember the Debt for Nature campaign, you will recall that federal banking regulators took unprecedented and courageous action to obtain justice in the face of Charles Hurwitz's Maxxam Corp. plundering of public trust resources and his corporate raider banditry.

Based on the crashing of a Texas Savings & Loan that left the U.S. taxpayers holding a $1.6 billion bag in bailout costs, the agency that insures bank funds, the Federal Deposit Insurance Corp. (FDIC) filed suit, seeking $250 in restitution based on its findings of wrongdoing, followed by a similar suit filed by the Office of Thrift Supervision (OTS) seeking to recoup $821 million.

Advocates for Headwaters Forest weighed in with a particularly innovative solution that could uniquely serve ecological goals and taxpayer justice: a "debt for nature" swap that would accept critical forest land owned by Maxxam subsidiary Pacific Lumber (PL) to satisfy the federal claims against the parent company, putting valuable assets, if not cash, in the public domain. While this solution attracted significant support in government, public and other circles, it did not come to fruition before the OTS claim was ultimately settled in 2002 by Maxxam's payment of $206,000 and a restriction barring Hurwitz from affiliating with or running banking institutions for three years.

Not only was Hurwitz charged with duping regulators and violating rules governing thrift institutions, it was alleged that his shady dealings including laundering money for Michael Milkin, prosecuted in Wall Street's biggest criminal prosecution every, charged with 98 counts of fraud and racketeering, bringing him a 10 year prison sentence. Milkin helped Hurwitz put together the junk bond financing for the take over of Pacific Lumber.

In light of the long history of blatant violation of hundreds of federal, state and regulatory laws and rules, this decision is a huge disappointment. It is all the more stinging because of the language in the opinion, incredibly portraying the poor corporate raider Hurwitz standing his ground against the "Goliath" of government agencies responsible for protecting the public trust. We can send you the Texas judge's opinion in a pdf document if you request it from us.

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Chron/Tom Abate on The financial wizard behind Pacific Lumber controversy

Note: Tom Abate is the founder of the North Coast Journal. The current owners of bought it from Tom and his wife, Mia,

The financial wizard behind Pacific Lumber controversy
Tom Abate, Chronicle Staff Writer
Sunday, June 12, 2005

In 40 years of doing business, Houston financier Charles Hurwitz has perfected the art of acquiring companies with borrowed money, the most infamous example being the junk-bond-financed takeover of Pacific Lumber in 1986.

That deal made Hurwitz and the Maxxam Corp. he controls anathema to many Northern Californians, who think he turned a company once known for stewardship into one reviled for cutting old-growth redwoods.

But Hurwitz, 65, may end up being judged the victim of one event that followed the buyout.

Several years ago, he sued federal banking regulators. He charged that they tried to blame him for the failure of a Texas savings and loan institution in order to bully him into selling Pacific Lumber's last groves of old growth, including what is now the Headwaters preserve.

That counter-punch lawsuit has already been argued before Houston Federal District Judge Lynn Hughes, who could rule at any time. Hughes once compared the government's prosecution of Hurwitz to mafia-like strong-arm tactics. Court-watchers say he seems favorably disposed toward Hurwitz's contention that the government should repay the $72 million he spent to defend himself against the charges, which have by now either been dropped or settled.

A Texas native who did a two-year stint in the Army after college, Hurwitz began his business career as a stockbroker in 1965, and soon became a pioneer in hedge funds. In 1978, he acquired a 13 percent stake in a now- defunct firm that had -- prior to his involvement -- disassembled the London Bridge and rebuilt it, stone by stone, as the centerpiece of the Lake Havasu City resort in Arizona.

In 1980, Hurwitz assumed control of that company, which, through a subsequent series of transactions ultimately became Maxxam Corp.

Today, Hurwitz owns 74.9 percent of Maxxam's stock. Maxxam owns Pacific Lumber, a handful of real estate ventures and two racetracks, one for greyhounds and the other, Sam Houston Race Park, for horses. Income from Pacific Lumber makes up about 57 percent of Maxxam's revenue, which totaled $361.1 million last year. In its last 29 quarterly financial reports, it has posted losses in 21 quarters and profits in eight.

Maxxam used to be larger by virtue of its 62 percent stake in Kaiser Aluminum, which it bought with $930 million in debt financing in 1988. But Kaiser filed for Chapter 11 bankruptcy protection in February 2002. Although Maxxam still owns the shares, they are essentially worthless, and it has no operational control over the reorganizing firm.

The Pacific Lumber buyout that thrust Hurwitz into the public eye involved storied names like the now-defunct Drexel Burnham Lambert investment bank and its junk-bond specialist Michael Milken, who paid a $200 million fine and served two years at the minimum security federal prison camp in Dublin in connection with his activities during the 1980s.

The case Hurwitz is pursuing against federal banking regulators grew out of a relationship among the Pacific Lumber deal, Drexel Burnham Lambert and United Savings Association of Texas. United was a financial institution in which Hurwitz held a minority share before it was declared insolvent in 1988.

In a controversy that has led to investigations, court cases and bickering for 17 years, the Federal Deposit Insurance Corporation suspected that United Savings had invested heavily in junk bonds issued by Drexel in return for Drexel's support of Hurwitz's acquisitions.

Two federal agencies, the FDIC and the Office of Thrift Supervision, ultimately brought charges against Hurwitz and Maxxam, alleging they contributed to the mismanagement that caused United Savings to fail.

By 2002, both federal cases had collapsed, and Hurwitz began turning the tables in a legal action that argues that officials of the Clinton administration, under pressure from environmentalists, encouraged bank regulators to lean on Maxxam to induce it to sell its old-growth redwoods.

Hurwitz's case was heard last June, and a decision on his claim for $72 million in sanctions could come at any time from the same federal judge who, in a ruling critical of the two federal agencies, once wrote: "systematic falsehoods are the tools of Cosa Nostra, not res publica."

EGA discusses how to discredit Wise Use Movement

Environmental Grantmakers Association 1992 Fall Retreat
Session 26: "The Wise Use Movement: Threats and Opportunities"

Judy Donald, Beldon Fund, Washington, D.C.: [tape begins in the middle of a sentence] ...as billed, "Threats and Opportunities," not dwelling too much on the threats, but really looking at what it means for the environmental movement. Deb Callahan and I are leading this, but we really want this to be--turn into a participatory session. We don't think of ourselves necessarily as the experts on this. We both are east coasters, and I'm inside the Beltway--Deb is nearly.

Debra Callahan, [W. Alton Jones Foundation, Charlottesville, Virginia]: Marginally outside the Beltway.

Judy Donald: Well, if you go to that second bypass, you'll be inside the Beltway. So, it's our sense that you folks know a lot about what's going on out there. You've experienced it yourself. Perhaps some of you are already engaged in some very interesting grantmaking, and I think those are the issues we need to start sharing. Our plan here is to begin with Deb, who is going to be talking about some of the information-gathering that's been going on about the Wise Use Movement, the Property Rights Movement from all across the country, just to give us a good grounding, that we're on the same wavelength and to show what's being done in that regard.

And then we'll move into a couple of case studies, a discussion of both the Wise Use Movement and next the property rights movement. That's the plan.

Debra Callahan: And we'll end by 2:15.

Judy Donald: Yeah. And we plan to end by 2:15. Deb, it's all yours.

Debra Callahan: Okay, good. Actually we had thought that this was a small group and we wanted to go around the room, but I don't know. What do you think, Judy?

Judy Donald: Did we all read [indistinct]?

Debra Callahan: I think we'll dispense with formalities. Just very quickly for point of reference, because it is real important when you're engaging in this discussion, sort of, what is the level of knowledge and interaction with Wise Use folks, so just as a point of reference, all of you who know who Ron Arnold is, would you raise your hand for me please?

Judy Donald: Did anybody else beside Deb have a conversation with him when he was in town?

Debra Callahan: The guy with the placards, the white beard and white hair.

Judy Donald: Deb was unique in that regard.

Debra Callahan: Okay, do all of you have a general sense of what Wise Use is? Okay, very briefly, I'll define Wise Use and a couple of terms that we'll be using throughout the session. For a couple of years now there has been a growing movement that you notice particularly in the western United States that really occurs -- we're finding -- all over the United States that is sort of generally referred to as the Wise Use movement. In fact "wise use" is a term that was coined by a figurehead named Ron Arnold who actually showed up here yesterday or the day before with these people who had yellow placards and they were walking around in a circle, and they were saying- - you know -- your grants are taking away our jobs and that sort of thing.

Before I go on any further, I'd like to ask, are any of you associated with wise use groups?

Unidentified male audience member: [Indistinct].

Debra Callahan: Out!

Unidentified male audience member: I attended a meeting.

Debra Callahan: You did?!

Unidentified male audience member: I was trying to form a local chapter of People for the West.

Debra Callahan: [Laughs] Fine. Alright. It's nice we have an exchange program going on here. I tend to actually think of the wise use movements as being more generically the environmental backlash movement, because in fact around the country as you talk to activists on the ground who are dealing with what we think of as wise use -- some of these organizations are formally associated with the wise use movement and Ron Arnold and really the vast majority often are not formally associated with wise use and Ron Arnold. So it's really in some ways sort of a mistake in nomenclature just to refer to this stuff as wise use, but we do it, and so that's how we're going to talk about it.

But this is really -- what I think has really occurred here is the environmental community has sort of adopted this term wise use to mean this growing environmental backlash out there in the country that's really being fueled in large part by a lot of the economic stresses that have been brought to bear through environmental regulations or because people would like to think that they've been brought to bear because of environmental regulations and it's sort of the anti crowd is what we think of as wise use.

Our foundation put together a report about eight months ago that was circulated very widely, which was our initial impressions of wise use, and for those of you haven't read it, I beg your pardon that I'm going to sort of jump off and go a little bit past that report but I'd like to update you a little bit on what we have learned in about the last four months in continued research about the wise use movement that has been conducted that's here in this small book here.

What we're finding is that wise use is really a local movement driven by primarily local concerns and not national issues. We tend -- you know, when you think of Ron Arnold and you think of Wise Use, you know, you think of command and control, top heavy, corporate funded, front groups that are organizing local people to get involved, get out there and attack environmentalists.

And that was the assumption I walked into this whole thing with. And in fact the more we dig into it, having put together a fifty -- really constructed over a number of months a fifty state fairly comprehensive survey of what's going on with respect to wise use organizing activity--we have come to the conclusion that this is pretty much generally a grass roots movement, which is a problem, because it means there's no silver bullets, it means this is, is, you know, something that is going to have to be confronted in states and communities across the country in different ways depending on what the various local issues are that those wise use groups are dealing with and campaigning on.

Ron Arnold and these other figureheads like Grant Gerber and Chuck Cushman and some of these other leaders -- Don Gerdts -- are not creating the movement. They're trying to get out in front of something that is going on, in fact. They're attempting to assert some control over this grass roots movement that's going on. And they're having a certain amount of success.

They're not having success in coordinating the national wise use grass roots community and coalescing it into one movement that has a common agenda, and works together to fight legislation or to pass bills or to defeat certain members of Congress.
What those national figureheads have done extraordinarily well is they have imposed a language and a set of messages into the grass roots community that is extremely effective.

And so what we have here is not an organization, we have a movement. The movement has a lexicon. The lexicon is very effective. And as I'm going to go into in a minute, there are three different sets of messages that the wise use movement employs to three different communities, that is very effective.

The movement is actually growing quickly at the grass roots as it finds its base. What I mean is, the movement is growing quickly around the country, in some states more quickly than others, but again, this is happening in every single state. We think of this as being a western phenomena -- it's not true.

It's in New England. In New England it's about the Adirondack Mountains, it's about private property right movements, it's about the North Eastern forests. In the Southeast it's about coastal zone management and coastal development. It's about shrimpers in Louisiana not liking turtle exclusion devices. In the midwest it's about farmland. In coastal Louisiana and Texas it's about, you know, minerals development; it's about, you know, coal mining in those states.

All over the country it's like a gas, this, this, it's filling -- it's, it's filling the available space, you know, whatever it is in terms of whatever issues exist there.

So the movement is growing quickly as these people at the local level who are angry about the environmental movement find this message and this movement to tap into. So you're going to find, I think, there's a natural threshold to which this movement will grow.

The real question here is, is this movement then going to expand beyond its natural base into mainstream America? All right? Are you going to find that suburbanites are beginning to associate with wise use, because when you poll -- and I'm sure you heard this morning -- and Celinda Lake who was supposed to be here today, who unfortunately was not able to make it to our panel either -- what one of her messages was going to be is, is that what people fundamentally want, what people fundamentally believe about environmental protection is that, no it's not just jobs, and no it's not just environment, why can't we have both?

The high ground here is capturing that message, ok? And in fact the wise use movement is trying to capture that message. What they're saying out there is 'we are the real environmentalists. We are the stewards of the land. We're the farmers who have tilled the land and we know how to manage this land because we've done it here for generations. We're the miners and we're the ones who depend for our livelihood on this land. These guys live in glass towers in New York City. They're not environmentalists, they're elitists. They're part of the problem, and they're aligned with big government and they're out of touch. So we are the real environmentalists.'

And if that's the message that the wise use movement is able to capture, we are suddenly the equivalent of incumbents in this election year. We're really unpopular.

And so that's really what the battle ground is that I want to talk about.

Very quickly, the three messages that we have found through our study that the wise use movement employs are first what you might call a vanguard message. The vanguard message is for the true believers. And this is, this encompasses this really hot rhetoric that we first became familiar with Ron Arnold and some of these other leaders using, things like "Environmentalists are watermelons, they're green on the outside and red on the inside like communists." Things like "Environmentalists are pagan worshipers or cow worshipers." Or things like Don Gerdts in the northeast said, you know, "How do you define private property? Well, private property is anything you own, it's your house, it's your land, it's your wife, it's your dog, it's your kids." You know, there's some pretty outrageous stuff.

That is the vanguard message. That is for these people who are the heads of wise use groups who are really the ideologues. Because we're talking about real ideologues, we're talking about the John Birch Society that organized a rally in Vermont in June, where what they did -- this private property rights organization -- hung twenty public officials in effigy from the ceiling and labelled them, had Patrick Leahy's general election opponent there asking them for their support while Leahy was hanging in effigy, and the governor of the state was hanging in effigy there from the ceiling. And that was organized by the John Birch Society who is involved in this private property rights movement.

So there's this crazy nut case element in this thing, you go, well, main street people aren't going to buy into this, you don't do that in Vermont. And that kind of activity is saved for people who're really attracted to that extremist message.
The second, basically, man's right to exploit nature, no matter what the cost, is the vanguard message. We have a right to dominate the land and we have a right to do whatever we want.

The second kind of message is a conspiracy message. It creates an us-versus-them mentality. The elitist environmental groups are locking up the land, they're pushing people out of their jobs, they're in league with big government. And this message is used to motivate the local groups and the local leaders, but the vanguard message and the conspiracy message are what you call narrow-cast messages in the media business, it's what you use to talk to a narrow group of people to get them motivated and sparked up.

Then you come to the main stream message. And this is the one that really poses the threat to the progress of our community. And what that message says is man and nature can live together in productive harmony. We're the real environmentalists. And it's a persuasive message for the average person.

And for those of you saw Ron Arnold when he was here yesterday or the day before -- I'm really losing track of time -- that's what he was doing. And he had, you know, ten folks who are real people out there, with placards, who've lost their jobs, who live in communities where there's real economic stress because of transition, economic transition, based on resource extracting issues.

And they were saying, and they were lookin' us straight in the eye, and they were saying, hey, because of the work that you've been engaged in, we're hurting, we're losing our jobs and it's not right. And how do you say to somebody, no, I don't want you to have your job.

And when Joe Sixpack hears that message he goes, 'you're right, dammit, people oughta be able to work, and the environment ought to be able to be managed.'

And the minute the wise use people capture that high ground, we almost have not got a winning message left in, in our quiver. So therefore, what I'm going to be advocating, is that we have to develop our own mainstream message. We have to develop case studies where environmental regulation has in fact created jobs, where it's in fact improved people's lives, because we have a lot of these same kind of stories and we're not just getting them out there.

When we're confronted with loss of jobs, with jobs versus owls, we are -- right, we're nodding our heads and say yeah we need to develop that, we need to develop that information about economics and the environment. But we also have to come back, and we also have to have our own stories that talks about how environmental protection is good for the human family.
Just side by side, let me talk to you about a couple of different ways the wise use people, advocates use message to promote their side and to hit us at the same time.

With respect to balance, the wise use advocates in this mainstream message say they're for balance, man and nature in harmony. They're for moderation and compromise about environmentalists. They're not for balance. Only nature is important to these people. Wise Use people say, people come first, jobs are primary, people are primary. Environmentalists: people don't come first, all life is equal. Man is the same value as an amoeba and they tie environmentalists with the animal rights community.

Wise users say they have a Can Do attitude. Technological fixes can solve problems. Environmentalists have a Can't Do attitude. The sky is falling and I can't get up. Wise users say we believe in freedom of choice and individual rights. Environmentalists believe the public comes first and the individual doesn't matter. So what it really comes down to is wise use versus no use.

Ron Arnold says, environmentalism is the last gasp of the old world view of man against nature. He wants to move us into the post environment era, man and nature can live together in productive harmony. So he's saying, we're outa' style, we're outa' sync, were passé, and he's really on the cutting edge.

Whereas in fact their agenda is regressive, but it's not the way that they're cutting it. It's not the way he's making it sound. So, to get to the constructive side of the building blocks that I think our community needs to put together to try and counter this wise use movement, there are four components, or five.

The first is message, and I hit over some of this. First of all, tell the conservation story. Describe the victories, talk about how the environmental movement has improved people's lives. Use human interest. Give -- people perceive environmentalism as being theoretical -- give it a human face, you know, the same thing politicians do. They always tell stories about, you know, Joe Mahoney and his community, you know, blah blah.

We have to redefine the term Federal lands to mean public lands. Federal is government, Federal is bad. Public is all of us, it's a concept that we need to push. These lands that are at stake belong to all of us.

Third, identify our opponents and how they're ripping off America. They are the public interest. A fine example of this is the 1872 mining act where land is getting sold off at $2.50 an acre to these people so they can go extract a lot of value out of it and not giving a lot back to the public purse.

Fourth, we need to side with the main stream. We're not the radicals. And that is probably the most critical message for us to take away from this: We don't want people to be jobless, and we don't believe it has to happen, but we need to work towards that goal. And address environmental economic concerns simultaneously.

We need to engage in coalition building with working people, farmers, sports people, main stream religious denominations -- and that's critical because they are, are in their elitist messages saying that we're not Christian, we're pagans, we're cow worshipers, blah blah blah. And in fact we worked in coalition on toxic spills on the Clean Air Act and a lot of really important legislation with lobbyists side by side from mainstream religious organizations. We need to pull these groups in to help us with this fight on wise use because they are our best defense because in fact religious organizations do support a strong environmental agenda very often.

Third, attack wise use. They're aggressive in our direction and we need to be aggressive back. Now I don't mean constantly engaging in negative campaigning because we have a real knee-jerk reaction to that, and in fact probably rightly so. But we need to find the ideological divisions in the wise use movement and exploit them.

Why are ranchers and miners in a coalition together? They have very different interests. But in the wise use movement they work together. Wise use versus wise use. A lot of these groups hate each other. A lot of these leaders really are fighting for the microphone. The Farm Bureau says they won't have anything to do with Ron Arnold because they believe he's extreme. Grant Gerber thinks that investigators, has actually suggested to certain investigators they should investigate Ron Arnold and he'll give 'em everything he's got to help them with their investigation.

These people don't get along really well in terms of internals. And finally, wise use versus labor. Because if this is a jobs issue, again who's better addressed the jobs issue than the labor community, than the working class, than working people. And wise use, part of its agenda is the dismantlement sometimes -- certain organizations -- of OSHA laws, of worker protection laws.

When you get into the takings issue, part of what's at stake here is industry's regulation for worker safety, so there's some really important hooks that we can talk with these communities about and try and find some wedge issues at least neutralize them if not bring them over to our side.

We need to reveal the extreme positions of the wise use movement, talk about the Wise Use Agenda. We need to expose the links between wise use and other extremists: the Unification Church, the John Birch Society, Lyndon LaRouche.

We need to talk about the foreign influences in the wise use movement. There's a lot of Japanese motorcycle industry money in the wise use movement. And I don't think mid-stream Americans want Honda and Yamasaki to be talking, to be dictating public lands policy. I mean I think that really drives the heart of the sort of nationalism that you're seeing showing up in polls that's popular right now in middle America.

We need to re-invigorate the grass roots, which is critical, and Judy is going to talk more about that and we need to facilitate the communication of information among all of us.

Later on I'll talk about some specific programs that are going on around the country that are pretty exciting, that are addressing wise use issues. And so I'll move off the general presentation and let Judy move on.

Judy Donald, You saw the hook, heh?

Unidentified audience member: Can I ask a question? How much money are we talking about?

Debra Callahan: From who, they have? That's been a really rough question. And there's been-- It varies. If you look at People for the West, they raised over $2 million dollars, 90% of which has come from primarily, mining companies. You can buy a seat on the People for the West Board for -- I believe it's a $25,000 contribution. And actually People for the West was started as a spin off from the Pegasus Gold Company. It started out as a spin off from a mining company and its primarily mining companies that sit on their board.

Judy Donald, And Canadian mining companies.

Debra Callahan: And Canadian mining companies to boot. If you look at some of the original wise use organizing meetings, they were co-sponsored by Exxon and a couple of other oil companies and they were sponsored by, you know, various and sundry resource extractive companies. We don't have a dollar figure. It's very hard. Some of these guys aren't (c)(3)s. A lot of these organizations don't have reporting requirements and its very difficult to determine just how much money are that we're talking about.

Judy Donald, The bottom line is that its more than we have.

Debra Callahan: It's more than we have. Some of these grass roots groups are dirt poor. And some, in fact at the last Wise Use Conference -- while we were down in Rio, at the Earth Summit, they were in Reno having a conference. And there were more environmental spies at that thing I think than there practically were wise use people, I mean they were everywhere [laughter] and there was one person -- and I talked to a bunch of these folks -- and one of these folks said they were sitting down with a wise use person and one of the speakers up there talked with great mirth about how the environmentalists were portraying them as being front groups of corporations and how they were just rolling in money and apparently the room just burst out hysterically laughing. It was about as funny as us hearing them say, oh those guys are corporate backed and they're just rolling in dough, which they're saying about us right now.

Where do you really find the money and the resources are some of these other groups that are based in Washington, that are coalitions of special interest groups, like the Wetlands Coalition, where the American Farm Bureau is a member of it, the Cattlemen's Association, the NRA, some of these existing associations have banded together around particular issues and they're working with the Wise Use grass roots operations. So, who knows, but its more than we've got is the right answer.

Tom ________, audience member: There's another question which I wonder if I could ask now, that is, I wonder if the whole wise use movement is a disinformation campaign in a certain element, that is -- let me just pursue this because I think it's pretty relevant to interface what's happening next door here, with what we're doing here to make this really a productive meeting here. I wonder if the wise use movement allows big corporations to disassociate themselves from the wise use extremism and to take the high ground with the theme of balance that we heard was so important this morning in how it plays in the American public. And I draw your attention to today's newspaper and yesterday's newspaper, Seattle newspaper, full page Weyerhaeuser ads which the theme is balance. Weyerhaeuser is taking the ground, the high ground of balance between people and the environment while never mentioning any of these themes in wise use of private property, admiring the new Forest Practices Act in Washington which allows clearcuts of 240 acres, which is larger than we've ever had for the last twenty years in California in State forest [drives?], as reform. I wonder how much these major -- we saw the same thing in British Columbia where MacMillan Bloedel wrote a letter, the CEO of MacMillan Bloedel wrote a letter explicitly disavowing connections with the Share group and taking exactly the same message, we are into balance between people and the environment. So it allows the major players, the big--here on the west coast--the timber corporations to appear as wonderful people while allowing the local groups to agitate for these themes which support the major corporations. I just wonder what your reaction is to that.

Debra Callahan: I think it might be a byproduct. It's hard to say what goes on inside, Tom, but I don't think its calculated, it might be an upshot. Like someone said a long time ago when John McPhee said in Conversations with the Archdruid, thank god for David Brower because he makes the rest of us look moderate. You know. Somebody's out there, that makes the rest of us look like we're moderates so it has that, whether or not it's intentional, it has that upshot.

Phil [Last name unknown]: That would be corporations that pull up on that and use their PR devices to...

Judy Donald, What I'd like to do now -- sorry to cut you off Phil, that's my job -- is just, I want to get it into an open discussion, but I want to use as a case study Montana. Anybody here work and live in Montana right now--or fund? Good. I can say whatever I want. [Laughter] No, please correct me if I make the, this thumbnail sketch any way inaccurate.

But Montana is a place where you've got a progressive coalition already, with labor and environmentalists working together, and have a history of working together. Although you have an environmental community that's not terribly unified, unfortunately. But you find that everywhere.

Montana is a place where there is a tradition of grass roots organizing on the part of the environmental community, with many groups employing field organizers who really know what they're doing. It's a place where there has been some thinking already, that's been going on about the economic future of how to make the transition from a state that is heavily dependent on resource extractive industries to -- something else. Studies, you know, responsible studies have been done on that. But it is still a heavily resource extractive industry with grazing and timbering and gold mining.

The other pieces of the puzzle is that--I'm sure my boss will like this--it's a pretty hot political context there right now--contest--with the two incumbent Congresspeople--they happen to be men, congressmen--battling it out for the single congressional seat that will remain after redistricting. And those two fellows happen to be polar opposites on most issues. and finally, it's a state that has been very fertile ground for and because of that last point, it's been very fertile ground for wise use organizing. There are some paid field organizers there for at least a year working up the emotions.

So what has been the response by the existing organizations in the state, by national organizations to what's been going on. What are the -- What's been going on, what have funders been doing?

One has been to beef up the amount of grass roots organizing that's already going on. It's kind of a base line concern, to just make sure that we're still, it's neighbor to neighbor, that we're talking to each other, adding additional field organizers on our side.

Getting more information, there have been discreet polls that have been funded to find out if the people's perceptions, or the assumptions of what people think about say the 1872 Mining act are really true, and that's been very useful information in a political sense as well as strategic sense for the environmental community there.

Folks have gone through some media training so that they can better respond to what's been going on and have a maybe more active aggressive strategy on how to deal with media.

There's been one national group, the Wilderness Society, that has set up a mini-grant program that has been able to direct $563 dollars to a particular group for a particular action at the right time and it's much faster response mechanism than I think any of us are able to do, including the Beldon Fund.

And so that's been very helpful. It's helped at least a half a dozen groups there in a very key and quick way. And Montana, because of its location as a progressive state generally, or at least in the past, is beginning to play an important regional networking role. Because as Deb has said, this is not an isolated phenomenon in just a couple of states, it's national, although the issues do vary across the region.

As so the groups in Helena and Bozeman and Missoula are connecting with groups in Wyoming and Idaho and Colorado, and cross fertilizing and exchanging information and that's also a very important function. So there's all kinds of opportunities for funders to be involved at any of those layers. And that's just a single state.

And I think we need to throw it open now to see what thoughts and actions perhaps this room can generate on other responses to the threats that Deb has laid out.

Debra Callahan: Or what kind of projects other people are funding.

Judy Donald, What other opportunities do you see out there that...

[end of Conference Recording Service tape. Short break in tape. Next Conference Recording Service tape spliced here, begins in mid-sentence.]

Unidentified male audience member: ...a major opportunity is on the tactics used in the 27 rural counties in Southern Oregon and Northern California. You have a committee of Wise Use advocates goes to our county board of supervisors and asks for emergency amendments to the County Master Plan to incorporate what Wise Use Agenda as an emergency into it. It's been very difficult given the short time frames that they used and the pressure tactics they've used for the local environmental groups to respond with numbers of people like the usually one or two hearings the boards have held on this. And strategically I think it would be very important to have a rapid response group to fund and assist the local people to respond to these initiatives for emergency, these demands for emergency amendments to the County Master Plan, which basically are [indistinct] you can't do anything to interfere with private property rights.

Judy Donald, I think that's right. I think there's a vast difference, staying with Montana, in what happened last year when there were hearings on the Greater Yellowstone Vision Document, where basically the environmentalists got blown away by opposition, and just vehement opposition. This year there were important hearings on Wolf Reintroduction to Yellowstone where environmentalists blew away the other side, because they were really geared up, they put a lot of emphasis on it. It's, and I mean, their hearings had been called by the right wing just as a opportunistic--to turn out their own side. Well, they were wrong. We were fortunately better organized this time. So it is being prepared for those hot organizing opportunities. I'm sorry, you should go.

Unidentified female audience member: Basically I have questions either for Montana or also more generally, I wonder whether those most active in the wise use movement, whether there's an age range that, you know, whether there's any demographic profile, whether it's men and women or primarily men, to what extent it overlaps with the right wing community that is active on other social issues, and particularly with the fundamentalist community in this country, and also, last question, to what extent it has infiltrated--I think that's too strong a word--but to what extent it has been active within the Republican Party.

Judy Donald: [Laughs] There's a bit of confluence.

Debra Callahan: Yeah. It, it it... Alright. Boy. It's so, this is a, such an, it's a such a difficult movement to track in a lot of ways. First of all, I guess, some of the demographic questions. I would say--this is flying by the seat of my pants, because we haven't commissioned a poll of wise use members about, to find out who they are. It would be great to get a list so you could do that, though.

But generally speaking, you see as many women as men. Again because who this is appealing to is, is families who are associated with the impacts of logging, with the impacts of mining -- miners' families. And so it's not just the people who tend to be men who are directly associated with that activity. And in fact there are groups that are -- Women in Timber is a wise use group. There are some women's organizations.

And so I believe that you're not going to find -- as far as age range -- same thing is true. Some of these groups were started by people who are in their late teens, early twenties. And some of these groups you see are headed by older people. So I don't -- again I think you're getting a cross section. If you're gonna find a demographic it's either gonna be, you know, region and what your economic base is. And also, you know, you don't see rich people aligned with the western wise use movement. In the east, when you're dealing with property rights, it's developers and real estate people. And there you find the money. So it's very different based on what is the issue that you're lumping in as wise use.

With respect to the Republican Party, I'm getting into real deep water here because I'm getting into some conjecture. And I do have an opinion that I'm not going to share, but what I can say is that on the face -- we do know that the head of the Vice President's Council on Competitiveness went to and addressed and received an award at this Reno conference, the most recent wise use conference, organizing conference.

And you have seen figureheads like Ollie North, G. Gordon Liddy, Pat Buchanan, Pat Robertson using the same words, and you don't know -- see if I want to talk, it's really easy to get into conspiracy theories here and you gotta get really careful. And you wanta pursue it, but it's very hard. But if you look at the right wing fundamental movement, it was really fueled by the communist threat, all right? And it's been fueled by some other issues of the day like abortion.

Communism in Eastern Europe for all intents and purposes is really not a coalescing issue for that right wing movement any more. The abortion issue is not quite, it appeals to a lot of people like it's somewhere down the road. And the terms that they use, they call us communists, OK? So I think that you can theoretically hypothesize that this movement makes a great next step for the fundamentalist right wing because it's about the same issues. It's about individualism versus the Federal government, it's Federalism, right to regulate. A lot of the same issues here. And you do find the John Birch Society and some of these same groups crossing over. So again, it's not something formal, but you can, your gut level you instinctively sort of say there's a lot of movement. And that's where you draw your membership from. Again that's your base-line I think.
Judy Donald: Anybody want to talk about other thoughts they have on strategies that we need to be pursuing?

Unidentified female audience member: When you call groups a wise use, I mean do they, do you have to join like an EGA of wise use people, or is it just you're applying the term wise use to just whatever groups are out there?

Debra Callahan: I'm using the term wise use very loosely. There is a wise use organization, and that is Ron Arnold's organization, it's the Center for Defense of Free Enterprise. And in fact it's not a hugely big membership organization. They're the folks who convene a lot of these coalition building national meetings. Those folks don't join, but they do work together or talk, or try to work together. I think of it as a confederation. In fact there's some indication that there's the multiple use movement, and the wise use movement. And these two factions hate one another.

And then there's the Farm Bureau and this that and the other thing. So we're using the term loosely, but it -- again the tie that binds is the message, the language, and this anti-Federal regulation, and anti-environmental regulation place that they want to get to, objective.

Judy Donald, Pat?

Pat __________, audience member: Back to strategy again. One observation and then a question. The observation is that it's not just the greenies who are in the opposition at the local level. It's the elk hunter that goes back and finds clearcut all across where his favorite hunting spot was. So there's potential for local coalitions that stretch across what would be traditionally environmentalist tags. My question is this, Deb, if you're right about this being grass roots movement, I don't think hardly any foundation in this room can actually get to the grass roots with grantmaking activities, and that brought up the re-granting possibility. Whether or not those small grants, whether they're $500 or $250, which in some cases can make an extraordinary difference in public education, whether there are vehicles in different states for re-granting, should one be interested in that sort of program.

Debra Callahan: I have a list of things that people who don't do direct grass roots funding might be able to--just some suggestions, and for what to watch out for. But I'm going to preface this with a statement that in fact what I would consider to be some of the, probably the majority of the best wise use organizing being done around the country a) isn't done as like in a vacuum anti-wise use organizing, it's done in the context of an issue campaign, it's done in the context of endangered species protection, it's done in the context of wetlands protection. It's done in the context of other things.

So probably most of you in this room have actually, or many of you in the room, have actually made grants that have supported environmentalists whose adversaries are largely wise users. So in fact you may already be engaged in some of this. And some of the best, you know, most effective organizing that we're seeing done is at the grass roots level, but there is an important role that I believe at every level of this community for activism on this wise use issue. So I'm just going to throw out--I'm new here, and I'm not sure how proper it is to name names and things , so I'm going to do it anyway, because I'm just not sure if that's right or wrong. [laughter]

Judy Donald, Anybody want to tell her? [laughter]

Debra Callahan: First of all, there is in the making right now, a Western Meeting on Wise Use that is going to bring together groups from all over the Western states, together to discuss this and share information. Information sharing is critical so you don't recreate the world constantly.

Greater Yellowstone Coalition and Southern Utah Wilderness Association are gonna be co-sponsoring that meeting and it's not fully funded yet.

Ruth Hennig with the John Merck Fund up in New England has put together -- is in process of putting together a really wonderful program that is again a New England state coalition building effort of organizations that are working on wise use, and that's an effort that's being organized. It's gonna be very strategic and I think it's gonna be really powerful up there, up in New England. They've got some pretty heavy issues up there.

Arnold, Gottlieb and Cushman all just went up to Maine about four weeks ago for a meeting. And they've been up there twice this summer and we know something is percolating up there and we're not exactly sure what it is, but we're getting organized anyway.

Judy Donald, So the funding opportunities for regional networking is --

Debra Callahan: big up in New England --

Judy Donald, We only have two regions covered right now.--

Debra Callahan: So contact Ruth Hennig at the Merck Fund if you're interested.

Judy Donald, In the Southwest, Southeast, Pacific Northwest.

Unidentified male audience member: Pacific Northwest. You have a group here, I'd be happy to give you any help you need.

Debra Callahan: Yeah, there's ga-jillions. Let me keep moving through.

Judy Donald, I'm just letting others think...

Debra Callahan: I'm sorry.

Judy Donald, That's okay.

Debra Callahan: Mostly constituency groups. There's Western Organization of Resource Councils: These guys do interesting kind of work. They have been organizing for a long time with ranchers and miners and resource based people, farmers, who are being fought for by the Wise Use people and what they're doing is getting their members to engage in peer to peer organizing, which is the best way to deal with this, at the grass roots level. If you have a wise use organizer in your community and they're trying to organize miners on this, who better to go talk to them than a bunch of miners to slow down that progress? And environmentalist or another miner? Well, they've been working with these people for years. So the Western Organization of Resource Councils is one multi-constituency group that in a number of states wise use programs.

Judy Donald, Now just do the sub-title: More Grass Roots Organizing.

Debra Callahan: More Grass Roots Organizing. Sorry. [laughter] Another thing that is going on is that there is a national group collaborative effort that is going on right now between Sierra Club, Audubon, and National Wildlife Federation and Wilderness Society, for those of you who only fund national organizations. And that is going to be a grass roots effort, that is going to be funded through those national organizations. The New Voices Wilderness Society campaign -- the Wilderness Society has a pot of money and they're giving out mini-grants to grass roots groups--

Judy Donald, Throughout the west.

Debra Callahan: Throughout the west. Trustees for Alaska, for those of you interested in forestry, has a very interesting battle that they're waging up there right now. there's a forest products company has private land. Alaska Forest Practices Act says you have to leave a hundred foot buffer strip between a clearcut and a stream and so this forest company up there says, "Fine, if you want us to leave up those trees, we want the state to compensate us to the value of those tree that we normally would have cut.

SIDE 2

Debra Callahan: collecting a lot of information. This project has been going on for years and now they're focusing very heavily on this sort of wise use activity. And you'll be seeing over the next year a number of stories in the national press that has been generated by information from the Center for Investigative Reporting.

Those of us who were just up in BC, there's the Share movement up in Canada which is actually founded by Ron Arnold, our buddy down here in the lower 48, and they're very active and very powerful. There're opportunities up there.

Audubon and Environmental Defense Fund put together a coalition of takings. So that's another opportunity for those who don't fund at the local level. I don't know how many rules I just broke here, but--

Unidentified male audience member: I want to mention The Fund for Wild Nature which has a ten year track record as a foundation of funding small groups in the eleven Western states, in the rural counties of those western states and is an excellent, excellent way -- Some of the things they've funded have been counter newspapers where people working in industries could write in anonymous letters to the editor when they found themselves censured in their own company, to express their views. If anyone's interested in the Fund for Wild Nature I'll be happy to give you more information about that after the end of the meeting.

Judy Donald, I just wanted to shift your initial laying out of the issues a little bit. I think it's helpful to look at this, the whole wise use movement, to separate out the parts of it that address real concerns and the parts of it that don't, because our strategies should be different in those two cases.

The way I look at it is there is -- look at it three ways. 1) there is the right wing and its interplay with the wise use movement, and ideologically, the wise use movement provides a vehicle for the far right and that's a concern, a danger, and there are groups that monitor that and try to expose the connections between the right wing, the organized right wing and wise use.

Second, there's the backing, the financial backing which is largely from extraction industries. And there's a need of course to expose that, to make it clear whose movement this is, who's paying for it, in whose interest is it.

But third, there are, as Deb has made clear, ordinary people, grass roots organizations who obviously feel their needs are being addressed by this movement. And I think when we think -- so, leaving the first two aside, for a second -- when we address that third issue, which is I think where we should be thinking, putting most of our thinking, and most of our money. We have to have a strategy that also is addressing those concerns. And that cannot come simply from environmentalists. And that's, I think that's -- it can come just from us. That's the -- I think that's the dilemma here. People it's not simply that they don't get it, it's that they do get it. They're losing their jobs. And in one way or another, environmentalists have to, have to address that issue. And I think if we hold, if we for instance pay for meetings where environmentalists get together to forge a strategy to counter wise use we may be going down the wrong track here. We have to be encouraging meetings where environmentalists and non-environmentalists, you know, and people who are losing their jobs talk about their real, both of their concerns and together come up with a local solution, and of course in the process the connections to the right wing have to be exposed, the connections to the extraction industry have to be exposed, and that probably has to be done on a local basis and you know, it's not that they're -- and it's different in the west than it is on a legal takings issue. I mean all these things are different. Thinking about the west just for a minute, I think we really should be thinking about all the ways in which we can bring those two communities together. Barbara?

Barbara [Dudley?] Executive Director, North Shore Unitarian Universalist, Veatch Program, Plandome, NY]: I just want to add to that and I want to use a different kind of case study, because I think it's important not to just think about what we might fund to counteract this movement, but we need to think about what we shouldn't be funding. And I will give you -- because we have done a lot of funding of the family farm movement and let me tell you they are not fond of environmentalists. And deservedly so. There is a major environmental funder who is very big into sustainable agriculture whose quotation is now being spread throughout the family farm movement and it is: "I don't give a damn if we're left with only one farmer as long as he farms without chemicals."

And that, I can't tell you, from the work we've done with the family farm movement, how many times I have been embarrassed to be associated with environmentalists, and with environmental grantmakers and there are projects like -- I don't know how many of you funded the Beyond Beef campaign, but that project has done more damage to any potential alliance between family farmers or ranchers or cattlemen, and the environmental movement. And that follows from a pretty good alliance being built up around bovine growth hormone and other additives and things like that.

If we don't screen our own funding and think about what, what is this group saying about people's livelihoods and incomes and what are they saying about the jobs. What are these wetlands groups saying, you know? I mean, and how are they projecting themselves? If we see this as a battle, we're gonna loose. And I think that's just another aspect of what Karin was saying, but it's very important that we think about this question in all of our funding. We don't put it over here in this box called 'counter the wise use movement' and we fund something over there to do that. We have to live that notion. And it means we have to face the economy as a question. And what does sustainable development or a sustainable economy really mean, and we have to look at what every piece of the conservation funding might be doing as well.

Barbara Dudley: This is a class issue. There is no question about it. It is true that the environmental movement is, has been, traditionally as someone said over the last three days sitting up at the podium, this has been in the past an upper class conservation, white movement. We have to face that fact. It's true. They're not wrong that we are rich and, you know, they are up against us. We are the enemy as long as we behave in that fashion. And I think that is the portrayal of the national environmental movement but when you get down to the state level you don't have it.

Unidentified woman (?): That's right. You don't need to do it. But we need to watch that we're not undoing the good that we're doing on the one hand with the funding on that we're doing on the other.

Judy Donald, Yeah. Go ahead.

Another female voice, possibly Hispanic: Do you think that adds to our opportunities to fund grass roots movement and social justice, to see that the whole environmental movement has evolved and has become a people-oriented movement. I think that's very fundamental, too.

Judy Donald, Thank you, Arinbe. Frank, you were going to say something.

Frank _________: As Phil _________ said in better words that I could use, but I tend to be a middle of the roader and more mediation oriented, and the guidelines of our foundation. And I guess I'm hearing the us-and-them theme played out among people who I believe need to step back and be objective. So I really appreciate your comments. Because the Wise Use People are not a hundred percent wrong. And the environmentalists are not a hundred percent right. Somewhere in there we have to find a common ground. And I was going to ask the question, given the evolution of just the terms "wise use" and defining how they describe environmentalists, what are the environmentalists and the funders of those organizations doing in effication of those charges. And I think that that again is, stepping back and saying, "What are we funding? Are we funding Anti? Or are we funding Pro-people? Who's down there hurting? What's the need. And what's the ultimate long-term need of this community. And how are we dealing with them? And is all this through the environment?" That I think we tend to get caught up in the fight and lose the battle. And yet we possess the most powerful tool of all, and that's in addition to money, that is objectivity. Of helping in the guidance of how these organizations are operating.

Judy Donald, Perhaps you're always entirely objective, but...

Unidentified male audience member: You know, there's a funding partner here that I think isn't tapped fully, and that's the community foundations in this country. There are 350 of these community foundations. They tend to be pretty broad based. They're viewed in many of their communities as being impartial. And I think there's a great potential there to get to the grass roots using the community foundation system throughout the country.

Judy Donald, Should we shift now to the private property side of things, the takings side of things? Are people ready for another twist of the dial? I don't want to cut anybody off, I really wanted to go forward on --

Unidentified female audience member: I do want to say one thing. I think that some ways in the other meeting that's taking place this afternoon, in spirituality: aspects of the environmental movement, is something and how that gets represented through churches or other kinds of ethnic and cultural expression is a very positive aspect of what can be there to fill some part of peoples' needs. A positive aspect that can stand in contrast to "what are we going to do against them?"

Judy Donald, Bring in the value issues. Why don't you do a quickie on takings.

Debra Callahan: I can't. Okay, takings, conceptually you probably all know what this is about. The Fifth Amendment of the Constitution says that the federal government shall not take private property without just compensation. And originally the interpretations that the Supreme Court handed down said that meant the taking of physical property. In the last couple of decades the courts have determined that that also means a legislative taking of the value of property. Have begun to cut into that area. Therefore, as regulations for example restrict someone's ability to build a home on a piece of coastal property that is now being interpreted to be in some places a taking under the fifth amendment of the Constitution.

And there is an aggressive movement both at the national and the local level to continue to push that takings clause farther and farther and farther. So if you played it out to its very ultimate extent, it would really restrict local, state and federal governments' abilities to impose regulations restricting individuals abilities to, well, they would not be able to regulate individual activities, taken to the farthest extreme. There's a lot of activity around the country.

Judy Donald, Can I just ask how many lawyers are here in the room?

Unidentified audience member: [indistinct.]

Debra Callahan: How'd I do?

Judy Donald, Just checking.

Debra Callahan: Alright. So far 28 states have considered takings legislation in their state legislatures. Just this year three states passed conservative takings bills: Delaware, Arizona, and Washington State.

250 counties around the country, that we have been able to find, have considered takings bills at the county level and over 50 counties thus far have passed.

That's last year. We're coming up on a new legislative year in most states and we know, I mean it's as easy as counting the fingers on your hands, there's going to be a lot of activity with introducing these takings bills in state legislatures and local government level.

In Arizona, the environmental community attempted to place a referendum on the ballot to repeal that takings law which was passed by the legislature and signed by the governor. And I keep hearing it's back and forth, back and forth. A week ago I talked to the woman who was heading up that effort, and she said, "Deb, you know, we don't think we're going to get enough signatures. I looks like we might get just enough and a lot of them are going to get bounced off. And then I heard yesterday from someone that had spoken to her, and they got 15,000 more signatures than they needed to to get the referendum placed on the ballot. That would be historic in Arizona. Only twice before has Arizona had referendums placed on the ballot and both of them had to do with Martin Luther King holidays. So this is really something. you know, it's exciting to have environmentalists really pulling together down there. And they're actually looking to do some focus group work and polling that could be very crucial for these other states where they're battling takings bills both at the state and local levels. So that's one thing that I want to put in front of you. There's also a national effort right now with national groups talking about takings.

The other thing I'll just raise and then stop. There's something that I hadn't heard about previously till we had this report. It's called R.S. 2477. It's something I think we're going to be hearing about a lot pretty soon. It's a pre-Civil War statute that says, quote, the right of way for the construction of highways over public land not reserved for public uses is hereby granted. And this law was repealed in 1976. What it means is that if you can prove that there was a road or a hiking path or a donkey trail that went through what is now public land pre-, if that was there previous to 1976, then it's a right of way. And if you can go out in a proposed wilderness area, show that there was a donkey path or there was a cart road or something, then you can argue that this is not really going to be able to be considered wilderness area. It really going to impact some wilderness fights. And this is something which a lot of--and other kinds of protective actions. So this is something that a lot of these local Western counties and state governments takings advocates are starting to spend a lot of time is trying to track down these old roads and pathways so they can use that in these protection battles.

Did you want Chuck to talk to them about the national trust?

Judy Donald, What? Was that all clear to everybody? No, we'll see if it comes up. And why don't we tackle this one, tackle takings. And what ought to be done about it. Any thoughts out there? Otherwise, I'm going to turn to Chuck.

Unidentified female audience member: I was going to ask to what extent has [indistinct] the takings as regards states rights laws in the environmental area that can be used for environmentally positive things. I mean the other flip side of this.

Debra Callahan: There's a conversation that we should be pushing something called 'givings' where in fact environmental regulations protect the public interest and therefore we should be using those arguments in Supreme Court cases and other cases and it hasn't been developed a lot yet in the briefs that have been filed to the best of my knowledge.

Unidentified female audience member: Like in North Carolina they had a more stringent law passed about the water quality which then was triggered under federal regulation. And that allowed the group to use the [property of?] building a hazardous waste incinerator and so I mean, the same principle, I mean it's sort of the state's rights thing being used to go forward with things we think are environmentally beneficial.

Judy Donald, Chuck, why don't you talk about the national trust?

Chuck _______, National Trust for Historic Preservation: There are essentially two kinds of problems we're facing with takings, and one is far worse than the other. The first is reversible, and that is the legislative finding of a taking. That is, a legislative body, whether it be a county board or the U.S. Congress, saying that from now on something is a taking when in the past it was not. Some form of regulation on the use of land is now a taking. That's a big problem because, as Deb was saying, these kinds of laws, statutes, ordinances are being promoted throughout the country. But another Congress or county board or state legislature could reverse it. The other kind of taking matter that's going on is the further definition of taking through the courts. And all of you have heard about the Lucas case in South Carolina, which Deb was implying at one point and my understanding of the Lucas case is that we neither won nor lost on it, it was not a definitive case in the end. Although it may have been a narrowing of things that was not beneficial, but if, with the Supreme Court that we now have, that the definition of a taking is broadened through time in the case law, there could then be no reversal. It could be far worse than say, the choice issue where there actually is a Congressional fix if the Supreme Court does the wrong thing on Wade v. Roe. We could just be out forever. Or at least for a very long period of time. Were we to have a Supreme Court many years to come that would some way find its way back to redefine it.

Then I just wanted to point out that these are two kinds of things with much the same impact, potentially. But the courts is a far more serious matter in the sense of its potential permanence, where our ability to effectuate very much of what we've tried to do in the environmental arena could be just out the window forever. Or practically forever.

Judy Donald, Want to talk about some of the happening at the national level in the environmental community?

Chuck: Well, I don't quite know what all you want me to say about the national trust, but the National Trust for Historic Preservation has set up an advisory committee that is attempting to bring at least some constituencies together. I'm a member of it. It has invited representatives of the environmental community, parts of the planning community, land trust community. And the idea is to try to form or to identify some common ground, at least among these communities, and work together on this whole variety of wise use questions.

They are most interested in these taking issues as they apply to potentially eliminating their ability to promote regulation for the protection of historic structures or properties.

On the other hand they are certainly, I think, concerned and share the public land kinds of issues that are coming up with the wise use movement.

In any case, there have been several meetings of this group, and it has three subcommittees: Presently, one--and the one that's probably doing the most work and most productively--is a subcommittee of basically a group of lawyers who have been working on first of all trying to track all the court cases nationwide about the takings issue. And they had a number of meetings before the Lucas decision came down about message, and after that interpreting what actually had happened and so forth. And they I think have now received some funding for their ongoing work, and I think they're looking for some more. And I think the National Trust would be a kind of a Secretariat of sorts for a group that includes groups like National Audubon, EDF, National Wildlife Federation and others.

A second subcommittee that is active has been trying to do an inventory of all the activities going on about these legislative taking kinds of bills in state legislatures and the county-local government level. And anyway, they are talking about having, trying to have some kind of ongoing monitoring capacity and some kind of capacity to get the word out to all those who care about this and want to be involved in trying to counteract it. And to actually trying to have some kind of action network of alerting people to where problems are and what they can do about it.

A third committee, which I happen to chair, was set up to try to define the commonality of the communities that are represented on this advisory committee, and to come up with a positive statement that could be used in return of what we stand for versus what the wise users stand for. And a number of people have talked to me and have worked very hard and we have a draft of a statement of principles about that. And our mission has been broadened to try to do some of these things that Deb was talking about at the beginning of her first presentation about the defining message and so on. We have not really gotten to that part. And I'd be happy to talk to anybody individually afterward. And we're looking forward to a whole lot of help because we're going to need it.

But the original concept was to see whether we could form a broad alliance to try to counteract the problem of the wise use movement and their activities. And we have been having some real trouble within our subcommittee and the broader advisory committee in that there are some of us who define the problem more or less the way Deb did at the beginning as for looking at it as a broad environmental backlash movement in general in its broadest sense, which would go to things like protection of health and safety codes in the workplace and etc, etc.

Many on the committee do not really want to go beyond the area of real estate whether it be private or public. And this has gotten to be kind of a big debate and I guess that during the many discussions we've had during this conference, I guess I feel all the more reaffirmed in the position I've been taking there that we ought to be doing this broader and that we ought to be doing it even with a much broader potential coalition that involves certainly the equity questions and broader set of groups with other parts of society and really trying to instead of just talk about why regulation of land or regulation in general is good, really trying to define our vision of sustainability or whatever.

So in any case, at the last meeting, we sort of went round and around and around about all this and we're far from any consensus. And, but it's just one more forum where this debate we were having this morning and yesterday and so and so I'll be pointing out, it seems like every meeting I go to, we end up basically in the same kind of discussion.

Judy Donald, Karen?

Karen: I want to go back to what Ann was asking. Were you saying, were you asking or saying that the takings legal strategy had been used to protect our?

Ann: I was just wondering whether that had been the case. We've had a number of, you know, instances in the past which, where states rights had superseded, you know, federal legislation and the result has been very beneficial. So that states had rights to determine some kind of environmental law and to adjustments, [indistinct long sentence.]

Karen: I guess it would have to be that the government was taking something we had, our environmental well being [laughs]. It was for the preservation of open space which benefits society, or whatever.

Ann: That's the fundamental, that's always been, that's always been the basis of the Supreme Court cases. Historically has been this tug of war between the public interest and individual rights. And, and I guess what you could say is with the Supreme Court composition now being more conservative, this, this is the fundamental, it's going more towards the individual rights side and away from the public interest side where the more liberal courts have gone more towards the public interest side and away from the individual rights side. So it's sort of, that concept is part of the fundamental construct of the argument. And I don't know, you know, about the specific part of using, invoking the states rights or other rights over the federal...

Judy Donald, Barbara?

Barbara: Well, this is sort of off the top of my head, but it seems to me that this takings issue is kind of the ideological soft underbelly for the wise use movement in a way if we use it properly, in that it does -- it doesn't speak to the interests and the needs of the workers who are losing their jobs in whatever fashion. It speaks to the interest and needs and wealth of the owners and I think if we use it properly, as opposed to just going and litigating it quietly in a corner somewhere, if we use it properly and publicize it properly and talk about it in those terms, that you start to -- I think that the fundamental problem for the wise use folks is that there is no real convergence of interest between, if I might be blunt, the ruling class and the working class. [Barbara chuckles] Just in case you were wondering where I came from. [laughter] I mean in the end, the people who own the timber and own the mines are not in the same camp as the people who are working for them and they haven't done them very many favors over the last four centuries. So this temporary convergence against the environmentalists--

Unidentified male audience member: Remember one thing: they're doing a better job.

Barbara: They are doing a better job. That's right. And at lower and lower pay any chance they could get and they've introduced as many technologies as they could to displace as many of them as they possibly could. I mean they don't do it as a favor. So, if in fact we could separate those two parts of the wise use movement, i.e., the owners, who are fighting, you know, the timber companies and the mining companies are fighting the environmentalists, from the people who work for them by saying "Who's going to get this many millions of dollars that the county or state or whoever is going to, or the feds are going to have to pay back, from taxpayer money, i.e., all of us, who's going to get that money. It's not going to be the displaced workers. You can bet on that. No one's talking about dividing that money up and putting it in the pocket of the coal miners who aren't going to be able to mine or the loggers who aren't going to be able to log. So, it really is to me a very divisive issue for the wise use movement and that's how we need to see it. I mean we need to play it that way if -- I mean, we're gonna lose it in the courts, we might as well admit that to ourselves. I mean the Supreme Court's not on our side on this one.

Chuck (NTHP): I think it's an important reason to comment. It would be great if we could pick the battles that get played out to determine whatever the court cases are. If it could be an issue like you were just describing, that would be wonderful. But it may be over some ridiculous zoning statute that even isn't environmental. It may even be anti-environmental, but we would be defending because we have to defend regulation. And I think that's something that our people should be really looking at. Is there a way to play the game here so that the facts of the issue that's before a court, or the examples or case studies that are used in the argument of the legislative part are in fact things that play our way to really broaden the support base for land or property regulation.

Judy Donald, Well, we've hit 3:15. I think that means we're supposed to hit the kayaks next. So, I feel we somewhat scratched the surface, maybe dug a little deeper on some of the issues. But there's lots there and I certainly hope that many more of you will be exploring these issues in your grantmaking and continue networking among ourselves to come up with better ideas. Thank you all for coming.

[Applause]
END OF TAPE

What this is: The Environmental Grantmakers Association (EGA) is a coalition of donor foundations that provide many millions in environmental grants each year. The EGA's annual retreats are strategy planning sessions during which grantmakers lay their plans for the coming year.

The classic gathering was in 1992, when key foundation leaders laid out their intentions to hijack the environmental movement with the goal of remaking the world in their own image. Twenty-four sessions of the 1992 annual retreat were taped by a professional recording service.

The Center purchased a copy of all 24 tapes and transcribed 8 selected tapes word for word without editing. These transcriptions reveal the hidden agenda of social control that lays behind the public face of environmentalism. Read the plans of these foundation minions in their own words. How much of what you see happening around you was orchestrated a decade ago by people you never heard of, who are not affected by their own actions, and who care nothing for your well-being?
Opening remarks by David Suzuki: 2000: The Challenge Ahead -
Session 2. North American Forests: Coping With Multiple Use and Abuse
Session 4. Population and the Environment
Session 8. Environmental Education K-12
Session 19. Environmental Legislation: Opportunity for Impact and Change
Session 21. Building an Environmental Majority
Session 23. Media Strategies for Environmental Protection
Session 26. The Wise Use Movement: Threats and Opportunities

(Note: I have reposted it here in an easier to read format - added paragraph breaks, etc. for the purposes of discussion)

RELATED:
W. Alton Jones Foundation helps to fund hundreds of environmental group

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