https://www.cnetscandal.com/search/label/Times%20of%20Terror/

Suspect in cop's death is killed / Fugitive wanted in Pittsburg dies in Modesto gunbattle

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Suspect in cop's death is killed / Fugitive wanted in Pittsburg dies in Modesto gunbattle

 Published 

2003-04-19 04:00:00 PDT Modesto -- A fugitive parolee wanted in connection with the shooting death of a Pittsburg police officer was gunned down late Thursday at a Modesto shopping center in an exchange of gunfire with officers, authorities said Friday.

Officers acting on a tip provided by the girlfriend of 40-year-old Earl Foster Jr., wanted for questioning in the death of homicide Inspector Ray Giacomelli, spotted him using a pay phone at the College Center Shopping Center shortly after 11 p.m., police said.

Foster had been the subject of an intense manhunt since Tuesday when Giacomelli, 46, was found shot to death in a house in Pittsburg that is owned by Foster's family. The 23-year veteran of the force had gone to the house on Abbott Avenue alone to investigate a killing that had taken place there a week before.

Modesto police Sgt. Ed Steele said officers from several agencies had approached Foster in the shopping center and had been shouting commands to him when he opened fire with a Glock semiautomatic pistol.

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The first officer to fire back -- wounding Foster -- was Kirk Bunch, an investigator with the Stanislaus County district attorney's office who was once a Pittsburg police officer, according to a source close to the case.

"Ironic, isn't it?" said Leo Baller, Giacomelli's former partner in Pittsburg, after learning the details of Thursday's gunbattle.

As Foster lay wounded, authorities called for backup from the Modesto Police Department.

"Four Modesto officers began to approach him," Steele said. "They noticed he was looking at them and had a gun in his hand. He raised the gun and shot once. They fired back, and he didn't shoot any more."

Foster was pronounced dead minutes later at a Modesto hospital. None of the officers involved in the shooting was injured. At least five of them were placed on standard leave pending an investigation of the shooting.

"Mr. Foster's violent life has destroyed a family, destroyed the Giacomelli family and devastated an entire community in the city of Pittsburg," said Pittsburg Police Chief Aaron Baker at a news conference in Modesto. "His days of hurting people, of being violent with people, are over."

Asked about Foster's motive for firing on police, Baker said, "He was a three-striker. He was going back (to prison). He had nothing to lose."

Foster had a long criminal history, including numerous drug offenses, parole violations and a 1980 manslaughter conviction in juvenile court.

Contra Costa sheriff's Lt. Dan Terry, who is assisting in the case, said police had compiled a list of places in the East Bay and central California where Foster was expected to hide out. A home in Modesto near the shopping center was one of them, he said.

"We gave him every opportunity to give himself up," Terry said Friday. "He chose not to do so."

Authorities believe Giacomelli was caught off guard and shot almost immediately upon entering the Foster family home Tuesday. He had received the key to the residence from the suspect's father along with permission to search it. Officials said they think the detective believed he was searching an empty house.

"Ray didn't even get a chance to get his gun drawn," Baller said.

The Contra Costa County coroner's office said Giacomelli had been shot several times. A source close to the investigation said it appeared that Giacomelli had been shot in the face and then again while the detective was lying on the floor near the front of the home. Authorities have termed his death an "execution."

On Thursday, police in San Francisco found Foster's gold Mercedes-Benz parked at an apartment building. He was driving a black Acura when officers discovered him in Modesto.

A woman who identified herself as Foster's mother but refused to give her name visited the crime scene Friday and took pictures of bloodstains and bullet holes in storefronts and parked cars. She said authorities had not officially notified her of her son's death.

Baller, who is handling the media on behalf of Giacomelli's wife and two daughters, said Foster's death offered the inspector's family "some closure."

"The main reaction that they had to me was, 'Did anybody get hurt?' " Baller said. "And when I told them no, they said, 'At least he won't hurt anybody else.' "

Funeral services for Giacomelli will be held at noon Monday at the Good Shepherd Church in Pittsburg.

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Mark Desaulnier and the Union Thugs

Bennett asks for homeless services from Senator Desaulnier instead his relatives murdered and his endorser indicted DA Mark Peterson convicted of a felony.

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The Anschutz Killing Fields Virgina Beach, Kobe, Bennett v Southern Pacific to Judi Bari Bombing



In the matter of Bennett versus Southern Pacific a witness was killed in an adjacent case the judge was given property in Montana about Bennett's attorney sided with the judge.

 Bennett lost Millions Anschutz went on to buy Bill Graham Productions another client of Bennett, another client killed in another plane crash.

 with the help of Contra Costa County legal counsel oh, the Contra Costa Bar Association and subsequent presidents and with the earlier version of this California State Bar plus the Contra Costa County Superior Court Bennett never knew his witness was killed.

My allegations all over this blog for close to 10 years.


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Posted by Founder of Nomoreh1b


Long Overdue changes too late for family the Strack relatives of Pete Bennett murdered with connections to outsourcing, Alamo 1st Ward, plus the theft of a trust, property with surreal links to the 1990 Judi Bari Bombing, the offices containing the SEC investigation of Enron lost in the demolotion of Building 7, and the 1989 witness in Bennett v. Southern Pacific.

A curious connection is SP Chairman Philip Anschutz knows SP Attorney Rick Kopf, who knows all the Bechtel CEOs via his second career as General Counsel of Fremont Group.





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EDITORS' PICK|133,721 views|12:51am EDT

High-Skill Immigration Restrictions Expected Soon From Trump



Showing no sense of irony, the Trump administration is celebrating the expected launch of a SpaceX rocketship at the same time Trump officials plan to restrict H-1B visas, the same type of visa the founder of SpaceX, Elon Musk, used to begin working in the United States. The new regulatory actions against employers will come days after the White House issued an executive order on “regulatory relief” for businesses.
An H-1B visa is typically the only practical way for a foreign national to work long-term in the United States. However, several sources have confirmed the Trump administration will soon implement new restrictions on H-1B visa holders and international students, intracompany transferees and likely even the spouses of high-skilled professionals.
An analysis of immigration law and regulations, as well as recent administration actions, leads to the conclusion a combination of methods will be used to implement the restrictions.
Blocking New H-1B and L-1 Visa Holders: The April 22, 2020, presidential proclamation suspended the “entry” of most immigrants. (H-1B visa holders are not immigrants; they have temporary status.) The word “entry” appears more than a dozen times in the proclamation. That is because attorneys note a president’s authority under Section 212(f) of the Immigration and Nationality Act can be used against the “entry” of people, as opposed to actions inside the country. “A proclamation issued under 212(f) may only restrict the entry of foreign nationals,” according to the law firm Berry Appleman & Leiden. “It may not be used to deny a petition to change or extend status, or to deny an application to adjust status.”
Given that limitation, a new presidential proclamation may suspend the entry of H-1B and L-1 visa holders, or achieve a similar result by imposing new conditions on their entry. Administration officials have discussed preventing the entry of H-1B visa holders who are not paid at the highest wage level – Level 4 – under the U.S. government’s prevailing wage criteria, even if the individual is applying for their first job. A National Foundation for American Policy analysis concluded such a requirement would become burdensome by creating exceptionally high minimum wages for H-1B visa holders: more than $254,000 a year for a financial manager in New York City, $144,165 annually for a biochemist in Chicago, including post-docs, and $172,640 for a software developer in Silicon Valley.
L-1 visa holders are multinational executives or managers, or employees with “specialized knowledge” transferred into the United States. The job protection arguments around L-1 visa holders are puzzling, since such individuals already work for the company. Preventing their entry will discourage businesses, particularly multinational companies, from investing more in the United States. Why invest in America if the U.S. government will not let you transfer your employees into the United States?
“Preventing businesses from transferring their highly talented workers into the U.S., even temporarily, will limit their ability to do critical scientific research, build new product lines, generate economic growth and create new jobs,” said Jon Baselice, executive director for immigration policy at the U.S. Chamber of Commerce, in an interview.
Using Regulatory Authority for H-1B, OPT, L-1 and H-4 Spouses: To impose new restrictions affecting international students, L-1 intracompany transferees and H-1B visa holders and their spouses the administration would need to use regulatory authority, which may include issuing regulations that have been on the agenda for months or years.
rule on H-1B visas already on the Trump administration’s regulatory agenda would “revise the definition of specialty occupation . . . and revise the definition of employment and employer-employee relationship.” That regulation may now be issued. The topics in the potential regulation overlap with a recent settlement between U.S. Citizenship and Immigration Services (USCIS) and the business group ITServe Alliance that overturned 10 years of policies restricting employers and H-1B visa holders. (See here.)
The administration continues to target Optional Practical Training (OPT), which allows international students to work for 12 months, usually after graduation, and 24 additional months in science, technology, engineering and math (STEM) fields. A summary of a rule proposal on the agenda states: “ICE [Immigration and Custom Enforcement] will amend existing regulations and revise the practical training options available to nonimmigrant students on F and M visas.”
Any action against Optional Practical Training could be labeled “temporary” or a “suspension,” yet even that would make it more difficult for U.S. universities to convince international students they should study in America, particularly when countries such as Canada continue to be so welcoming. On May 14, 2020, the Canadian government announced significant flexibility for international students, including preserving the ability to work after graduation. (See here.)
An item on the regulatory agenda for L-1 visas would “propose to revise the definition of specialized knowledge, to clarify the definition of employment and employer-employee relationship and ensure employers pay appropriate wages to L-1 visa holders.” There is nothing in the immigration statute about a wage requirement for L-1 visa holders.
For years, the Trump administration has placed a proposed rule on the regulatory agenda to rescind an existing regulation that allows many spouses of H-1B visa holders to work – called H-4 EAD (employment authorization document). The administration could issue the rule.
In a recent government filing to oppose a group’s lawsuit against the current H-4 EAD regulation, the Trump administration made what appears to be a damaging admission: “Save Jobs’s claim of irreparable harm relies on the H-4 Rule eliminating or significantly reducing employment opportunities, meaning that the number of available information-technology jobs would significantly decline due to the H-4 Rule. But this relationship has not been shown to be ‘certain’ and ‘actual,’ rather than merely ‘theoretical.’” In other words, there is little evidence the spouses of H-1B visa holders harm U.S. tech professionals.
What type of regulations would the administration issue? William Stock of Klasko Immigration Law Partners thinks issuing a 212(f) proclamation that prevents the reentry of international students on Optional Practical Training who leave the U.S. would have an immediate but limited effect.
In an interview, Stock said it is more likely the Department of Homeland Security (DHS) would issue an interim final rule eliminating or significantly restricting OPT or STEM OPT. “An interim final rule can have an immediate effect, but can only be issued in limited circumstances and it’s not clear that a court would hold they exist here,” he said. “If that happens, schools and interest groups will go to court right away and say the rule change cannot be done as an interim final rule, and have a stronger case than if the agency had done notice-and-comment rulemaking.” He notes a court struck down an interim final rule from the Bush administration on STEM OPT, though it was given time to go through the notice-and-comment process and issue a new rule.
An interim final rule allows a rule to take effect almost immediately and would change only if an agency believes public comments justified it.
Another option, raised by Berry Appleman & Leiden (BAL), is the administration would issue “temporary final rules” in potentially multiple areas, including OPT, H-1B, L-1 and H-4 EAD. “[A]gencies are required under the Administrative Procedure Act (APA) to provide the public with adequate notice of a proposed rule followed by a meaningful opportunity to comment on the rule’s content,” according to a BAL policy update. “That process normally takes 12-18 months. However, an agency may issue a rule without prior notice and opportunity to comment when the agency for ‘good cause’ finds that those procedures are ‘impracticable, unnecessary, or contrary to the public interest.’ Put simply: the government may, under certain situations, issue a regulation that is effective immediately. In the past month, DHS has relied on that exception to the APA multiple times to issue Temporary Final Rules.”
“A Temporary Final Rule must of course be temporary, and statutes outside of immigration law limit temporary final regulations to three years,” according to BAL. “The recent H-2B and H-2A Temporary Final Rules are valid for three years and 120 days, respectively.”
William Stock provides a guidepost: “One way to tell whether the immigration hardliners win their battle with the pro-business advocates in the administration will be to see whether any changes to summer student employment, the F-1 OPT program and other temporary work visas are ‘temporary final rules’ or ‘interim final rules.’ Both types of rule changes skip the formalities and public involvement required for new regulations, but as the name implies, ‘temporary’ final rules have an expiration date while ‘interim’ final rules just change the rules without public comment. If DHS enacts substantial limitations to temporary work visa rules by ‘interim final rule,’ it will be a sign that the hardliners have won in getting the president to authorize long-term changes without public comment, using the pandemic as their excuse and opportunity.”
Analysts believe the administration may use justifications for new immigration restrictions that are contrived. Recent data from the Bureau of Labor Statistics indicate the unemployment rate in computer occupations declined between January and April 2020 – and it makes little sense to institute permanent (or semi-permanent) immigration changes in response to temporary economic problems caused by a health crisis. Analysts see little justification for the types of immigration changes being discussed, particularly since the president and top economic advisers have promised the economy will improve significantly by the fall or summer.
On May 27, 2020, a group of Republican senators, led by Senators Lindsey Graham and John Cornyn, wrote a letter recommending the president take a reasonable approach on temporary visas by putting aside the easy populist messages some have urged and focusing instead on the need for foreign-born workers who can aid the recovery, help businesses and complement U.S. workers. The senators correctly noted not all sectors of the economy have been equally affected by the fallout from pandemic lockdowns and social distancing.
Many in the business community fear that those in the administration who are “pro-growth” and supportive of immigration have numerous issues to worry about, while those most opposed to immigration, such as White House adviser Stephen Miller, spend nearly every waking hour focused on denying opportunity to as many foreign-born people as possible. They fear in a fight between the zealous and the moderate, the zealous will win, harming America and its future for years to come.
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Milken Money Milking the Redwoods

Pete Bennett contracted to SBCglobal during 9/11 helped bring down Building 7 containing SEC documents aimed at Enron.

Bennett sued Southern Pacific, worked for ComputerLand where his reporting project revealed the owners sold to Merisel Fab a big bucket of cooked books that cost his peers thier retirement. 

Then Bennett became a pawn in the game of International Politics of War by deploying the global virus that wiped out servers around the globe.

Effectively ensuring the Enron investigation died along with 3000 during the previous week.

Amazing considering the tears of millions were weeping while the flesh was rotting and first responders inhaling the acrid toxins creating those last future beath decades later.

Bennett v Southern Pacific 
Contra Costa v Helix, kinder Morgan,  union Pacific 

MG Dan Helix grandson found dead in Las Vegas just like Madeline Seeley in connection to PG&E before San Bruno

Officer Clemente arrests Bennett over and over 
eeping 


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Feature

Ravaging the Redwood: Charles Hurwitz, Michael Milken and the Costs of Greed

by Ned Daly

The fate of the largest unprotected redwood forest in the world may now rest in the hands of an unlikely savior, the Federal Deposit Insurance Corporation (FDIC).

Since the 1985 MAXXAM takeover of Pacific Lumber, the redwood ecosystem known as the Headwaters Forest, located in Humboldt County on California's North Coast, has been under siege. Lawsuits, direct action, legislative efforts and all other attempts at preservation have so far failed to curb MAXXAM's ravenous appetite for redwood lumber. Now many environmentalists and community activists are hoping the FDIC can stop the forest from falling victim to corporate greed. The federal agency may be able to acquire the redwood forest as partial or full payment for the $548 million outstanding claim against the United Financial Group (UFG), a holding company for United Savings Association of Texas (USAT), a failed savings and loan controlled by MAXXAM and its chief executive officer, Charles Hurwitz.

Hurwitz is not averse to transferring part of the Headwaters Forest to federal government control, but he is insisting on rather different terms than environmentalists are proposing. Ignoring the fact that a company he controls, UFG, owes $548 million to the government, he has asked the government to pay him $600 million cash for a small grove of redwoods; if the offer is refused, he has threatened to liquidate the forest.

"If the federal government does not purchase the Headwaters Forest, Pacific Lumber will go ahead with its timber operations," says MAXXAM's Director of Public Relations Scott Lamb.

 A Wall Street Journal article said Hurwitz's proposal "brings new meaning to the term greenmail." Hurwitz paid approximately $900 million for the 196,000 acres owned by Pacific Lumber. If the government were to accept his proposal to buy 4,500 acres for $600 million, Hurwitz would earn a profit of more than 2,800 percent.

The people of California's North Coast know Charles Hurwitz and MAXXAM well enough to take his threat seriously. Twice in 1992, the company cut hundreds of trees in the old-growth grove of Owl Creek on holidays and weekends when state regulators were not working, in violation of the California Board of Forestry cutting regulations. Both times the cutting was eventually stopped by court injunction. Under current plans, MAXXAM will harvest all the remaining old-growth redwoods it owns within the next 14 years.

One of the last stands

 The government's response to MAXXAM and Hurwitz's threat will determine the fate of a unique ecosystem.

Many trees in the Headwaters Forest are as old as 2000 years. The cornerstones of an old-growth ecosystem are species diversity and a continual recycling process interlocking life and death. After a 300- foot redwood falls, it serves as a nurse log to help new seedlings grow. The seedlings grow right out of the nurse log, which provides nutrients to the new trees as it decays. As the older tree falls, it creates one of the few canopy breaks in an otherwise shady forest floor. The nurse log lies basking in the sunlight, offering the new seedlings essential light as well as nutrients.

 Logging, especially clearcutting, stops this ecological recycling process and seriously threatens the forest's ability to regenerate. When loggers remove cut trees, they also remove the nutrients that the trees would have returned to the soil. The soil itself will be lost after a rain because it no longer has trees holding it in place. As topsoil is depleted, desertification begins.

Though the redwood forests still support a diverse array of species, including California black bear, mountain lion, Pacific fisher and steelhead trout, logging is taking a severe toll on forest wildlife. Many rare and endangered species also call the redwoods of Humboldt County home, among them the northern spotted owl, marbled murrelet, pacific giant salamander, tailed frog and coho salmon. Their survival is dependent on a diverse and healthy old-growth forest.

 Carl Ross, co-director of Save America's Forests, the nation's largest grassroots forest protection organization, says, "If we fail to protect these last stands of redwoods, we will lose one of the greatest wonders of the living world for all time. Less than 4 percent of native redwoods are still standing, and that tiny percentage is being hacked and cut for the last shred of money that can be sawed from their red roots. If we allow the extinction of these largest of all living things, we will be condemned as a society that knew the price of everything and the value of nothing."

Takeover plunder

 The redwoods of Humboldt County may seem a long way from Houston, and United Savings Association of Texas, but whether the FDIC decides to pursue the connection may determine whether the Headwaters Forest survives.

 There was little need to worry about the Headwaters Forest before Hurwitz's takeover of the Pacific Lumber Company. The family-run business was one of the most economically and environmentally sound timber companies in the United States. Pacific Lumber rarely if ever clearcut; it generally left standing 30 to 50 percent of the timber in a harvested area. This not only created natural canopy break for new growth, it also kept much of the soil stable, increasing the forests' growth potential.

 The company was also generous to its employees. Pacific Lumber rented housing at below market rates to employees and maintained a "no layoff" policy despite downturns in the timber market. The company also funded a very generous pension fund.

 Pacific Lumber's strength soon became its weakness, however. The pension fund was overfunded by $60 million, and, because of its sustainable cutting practices, the company held tremendous assets (old- growth redwoods) that could be liquidated quickly. Assessing Pacific Lumber in 1985, Charles Hurwitz decided it was ripe for a takeover, and he plucked it in the fall of that year.

Almost immediately after the takeover, Hurwitz raided the pension fund and doubled the rate of cutting to pay off the loans and junk bonds used to finance the takeover. If there was any doubt about Hurwitz's intentions and his dedication to preserving the sustainability of his new acquisition, it was cleared up in his first meeting with the workers of Pacific Lumber. Hurwitz was quoted by Time magazine as telling his new employees, "There is the story of the golden rule: he who has the gold rules."

Creative financing

 The story of MAXXAM's takeover of Pacific Lumber is itself a tale of intrigue, shady dealings and questionable business practices. MAXXAM announced that it would make a cash tender offer for Pacific Lumber on September 30, 1985. Drexel, Burnham, Lambert structured the financing, which consisted of a $300 million short-term loan from the Irving Trust Company and $450 million dollars worth of junk bonds sold by Michael Milken's high-yield bond department at Drexel Burnham.

 Shortly after MAXXAM made its offer, the New York Stock Exchange (NYSE) initiated an investigation into the heavy volume of trading in Pacific Lumber stock which took place in the days before MAXXAM made its offer. A House Energy and Commerce Subcommittee on Oversight and Investigation report states that the NYSE investigation uncovered significant evidence of insider trading and parking stock, although no civil or criminal actions were brought against MAXXAM or its associates for their activities related to MAXXAM's purchase of Pacific Lumber.

 The NYSE investigation, the subcommittee's report and subsequent congressional hearings all make a strong case that stock parking took place. Parking stock is the practice of buying stock for another party in order to conceal the identity of the true or eventual owner. If Hurwitz had someone park stock for him, he could have accumulated Pacific Lumber stock anonymously and at a lower price than after the company was put "into play" (when it became known a single party was accumulating large blocks of the company's stock), which would drive the price of stock up almost immediately.

 Boyd Jefferies, former chairperson of the Los Angeles brokerage firm Jeffries Group, Inc., who later pleaded guilty to parking stock for Ivan Boesky, accumulated 539,600 shares of Pacific Lumber stock and sold the shares on September 27 to MCO Holding Company, a Hurwitz-controlled enterprise. Presumably, this purchase gave Hurwitz enough stock to begin the hostile takeover of Pacific Lumber which he commenced three days after MCO purchased the stock.

Hurwitz and Jefferies both deny any prior agreement to park stock, but Energy and Commerce Committee Chair John Dingell, D-Michigan, and Representative Ron Wyden, D-Oregon, concluded in October 1987 that it was unlikely that the sale took place without a prior agreement, because the stock was sold well below the trading price on September 27, 1985. Since there had been so much trading before Hurwitz's offer, the stock price had already begun to rise. On September 27, Pacific Lumber was trading at close to $34 per share. In what was probably one of the more philanthropic stock sales ever seen on Wall Street, Jefferies sold the Pacific Lumber stock at $29.10 rather than its market trading price of $34. The discount sale was not attributable to a prior agreement, according to both parties, but apparently to the fact that Boyd Jefferies felt good-hearted that day.

Jefferies' generosity was not enough to ensure the financial stability of the newly acquired company. Though the interest payments on the junk bonds Hurwitz and MAXXAM used to finance the takeover were not due for four years, it was evident soon after the purchase of Pacific Lumber that it would be difficult to cover the debt. The annual interest payment on the junk bonds was more than the historical annual profit of Pacific Lumber.

To make the bonds more attractive to potential bidders, MAXXAM announced it would terminate the pension plan and sell most nontimber assets to pay the bank loan. MAXXAM also decided it would increase Pacific Lumber's timber cutting rate to pay off the junk bonds.

Getting to the pension fund required some slick maneuvering. According to William Bertain, a lawyer representing shareholders in Pacific Lumber and residents of Humboldt County in a suit against Pacific Lumber, the company attempted to protect the pension fund before Hurwitz's raid by declaring that the pension fund's excess $60 million would vest directly to the employees and retirees in the event of a hostile takeover.

Under pressure from a suit by MAXXAM, the Pacific Lumber board of directors agreed to a "friendly takeover," and MAXXAM agreed to defend the Board if it was found to have breached its fiduciary duty to the shareholders. MAXXAM increased its offer by $1.50 a share, for a total increase of approximately $33 million. But since it was now undertaking a friendly takeover, MAXXAM had access to the $60 million excess in the pension fund - so MAXXAM came out $27 million richer, despite the higher price paid.

Hurwitz was later sued by the U.S. Department of Labor and employees for investing Pacific Lumber's pension fund with the now-failed Executive Life Insurance Co. allegedly in return for Executive Life's junk bond financing of the Pacific Lumber takeover. The suit is still pending.

Failing Finances

 Three years after MAXXAM's takeover of Pacific Lumber, another piece of Hurwitz's empire, United Savings Association of Texas, failed. The circumstances of the failure remain hazy. Although MAXXAM's Lamb claims that "USAT's decline can be attributed to a decline in the Texas real estate market," the S& L's deep involvement in Michael Milken's junk-bond schemes appears to have been an important factor in its downfall.

 By the time USAT failed in 1988, Hurwitz had already gained the attention of regulators. In 1971, Hurwitz was sued by the Security and Exchange Commission for alleged stock manipulation, and charged by New York State regulators with looting Summit Insurance Company. Hurwitz was not found guilty in either case.

 In the three years prior to its failure, USAT purchased more than $1.3 billion worth of junk bonds underwritten by Drexel Burnham. During those same years, the Milken group raised about $1.8 billion for Charles Hurwitz and his takeover ventures, including the takeover of Pacific Lumber, according to a FDIC lawsuit against Michael Milken.

 The FDIC told the United Financial Group (UFG) that the company and its officers are liable for breach of fiduciary duty for wrongfully failing to maintain the net worth of a failed savings and loan. The FDIC also alleges that Hurwitz used USAT to aid Michael Milken's scheme to manipulate the junk bond market. And the FDIC accused UFG of wrongfully causing USAT to pay dividends to UFG.

 At the time of the failure, MAXXAM owned approximately 22 percent of USAT and 28 percent of United Financial Group, the thrift's holding company. Charles Hurwitz was chair of both MAXXAM and UFG when USAT failed.

The questions of propriety surrounding the takeover of Pacific Lumber and the collapse of USAT may provide hope for the preservation of the Headwaters Forest, as Congress and environmentalists try to fashion a response to Hurwitz's demands.

 One possibility is for the government to accede to the proposal for a $600 million cash buyout of the forest. The Headwaters Forest Act, introduced by Representative Dan Hamburg, D-California, would authorize the Department of Agriculture to buy 44,000 acres of the forest. Because of Congress's understandable reluctance to pay $600 million, the bill leaves the amount and method of payment open to negotiation between the Department of Agriculture and Hurwitz.

 Hamburg's bill has passed the House of Representatives and Senator Barbara Boxer, D- California, has introduced a Senate version of Hamburg's bill, but it currently has no co-sponsors.

 Another, bolder approach would avoid the need for Congress to directly or indirectly authorize funds for the purchase of the Headwaters Forest. Prodded by some environmentalists, Representative Ron Dellums, D-California, Chair of the House Banking Committee Henry Gonzales, D-Texas, and other members of the House have asked the FDIC to consider "disgorging" Pacific Lumber from MAXXAM, on the grounds that MAXXAM's takeover of Pacific Lumber was inextricably bound up with USAT's failure.

 The case for disgorgement, Dellums wrote to FDIC Chairman Andrew Hove, "is based on the assessment that MAXXAM acquired Pacific Lumber as a direct result of certain alleged breaches of fiduciary duties owed United Savings Association of Texas (USAT) by MAXXAM, as controlling stockholder, and by similar alleged breaches of duty on the part of certain overlapping officers and directors." The letter explains, "These alleged breaches include causing USAT to invest heavily in junk bonds underwritten by Drexel, Burnham and Lambert as a quid pro quo for Drexel's underwriting of the bonds MAXXAM used to acquire Pacific Lumber."

 Jill Ratner, a lawyer at the Oakland-based Rose Foundation was the first to look into the idea of disgorgement. According to Ratner, "We based our theory on the FDIC's own allegations in a related case. The FDIC's complaint in FDIC v. Milken alleged that Drexel, Burnham and Lambert and MAXXAM's CEO, Charles Hurwitz, arranged for the S& L [USAT] to purchase millions of dollars of Drexel's underwritten bonds in return for Drexel's securing the financing that allowed MAXXAM to buy out Pacific Lumber. In the end, these alleged interested insider transactions were very much to MAXXAM's advantage and very much to USAT's detriment."

 In sum, Ratner says, "What we're saying is that if the FDIC can prove what it already alleged, MAXXAM should be made to surrender the profit it made on the allegedly improper financing deal, and that profit is Pacific Lumber."

 The FDIC has responded to the calls for disgorgement by stating that it is still reviewing the matter, and that it has entered into an agreement with UFG and others who may be responsible for losses resulting from the failure. The parties have all agreed to hold off legal actions and negotiate toward a settlement.

 Disgorgement would put the Headwaters into federal ownership, but many in the communities throughout Humboldt County would like to see Hurwitz pay for his actions with more than just trees. Darryl Cherney, an Earth First! activist in Garberville, California, has been working on this issue since MAXXAM took over Pacific Lumber. Cherney has a deep disgust for Hurwitz and his business practices. "Hurwitz has pilfered the Pacific Lumber pension fund, ripped off the redwoods, and swindled a savings and loan to do it. We say three strikes and you're out. The only thing that is up for negotiation as far as old growth redwoods are concerned is the length of Hurwitz's jail sentence."


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