Scandals Aplenty: DeLay, Pombo and Hurwitz in a Gruesome Threesome
By Karen Pickett

You've no doubt been reading about the DeLay/Abramoff scandals, chuckling knowingly, wondering if this is a significant crack in the armor. For we who value justice, it is encouraging to see that the net snagging some of the slime-balls is still widening. Let's look at Representative Richard Pombo, a major player in the Abramoff scandal, who authored legislation last year to eviscerate the Endangered Species Act (see EF!J November-December 2005). That same Pombo (call him Dick if you like) convened the Headwaters Forest Task Force (HFTF) in 2000, while a protege to Tom DeLay. The HFTF was part of an effort to bully banking regulators into backing off an investigation of Maxxam Corporation CEO Charles Hurwitz's crashing of the United Savings Association of Texas in 1988. That savings and loan failure, which cost US taxpayers more than $1.5 billion, was part of Hurwitz's nefarious scheme to seize Pacific Lumber (PL) in Northern California. A ripe plum of a company, PL was rich with old-growth redwood forest that had been only selectively harvested, not clearcut, for 100 years. Funds that Hurwitz liquidated from the savings and loan were essentially laundered through a firm that arranged for the junk bond financing of the PL takeover.

Because of the PL connection, the savings and loan failure caught the attention of activists, and intrepid citizen investigators uncovered Hurwitz's slimy manipulations for federal banking agencies. It ultimately caught the interest of the Federal Deposit Insurance Corporation (FDIC), and the Office of Thrift Supervision, which filed claims against Hurwitz and Maxxam, charging violations including gross negligence and reckless investing. Proposals for settlement at the time included the innovative "Debt for Nature" swap idea, where Hurwitz would make good on the money he owed taxpayers through the transfer of PL assets—forest acreage that would be transferred into public hands. But this wasn't sufficient for Hurwitz and his allies. DeLay and Pombo came galloping in to rescue their buddy Hurwitz. After scathing letters from DeLay denouncing the investigation, Pombo and California Representative John Doolittle used the HFTF's subpoena power to obtain confidential FDIC documents. The FDIC objected, and it asked the HFTF for assurances that those internal documents would not end up in Hurwitz's hands. But that is exactly what happened when Pombo and Doolittle quietly entered confidential documents into the Federal Register in 2001, shortly after the World Trade Center attacks. That was enough to damage the FDIC's case sufficiently, and the case was dropped in 2002.

But even that's not the end of the story. Hurwitz continued his counteraction against the FDIC, and against long odds, he prevailed last Summer. Judge Lynn Hughes, another right-winger from DeLay/ Bush country with ties to Hurwitz, awarded the corporate raider an incredible $72 million for having to suffer through being investigated, which "dampened Hurwitz's entrepreneurial energies." Part of the tit for tat here, of course, are the contributions Hurwitz made to these clowns. He donated not only to DeLay's campaign fund, but also to DeLay's legal defense when he was called up on money-laundering charges. Hurwitz has also slid money across the table to Pombo and Doolittle.

This story follows the Abramoff scandal pattern whereby Republican members of Congress use their posts to do "favors for funds" from corporate high rollers. The only bright spots I see on this particular horizon are the prospects of a change of ownership of California's redwoods through a probable PL bankruptcy and the fact that Pombo is up for reelection this year. It's time to unseat the scumbags.

K.P., a long-time defender of forests in Northern California, is still waiting for her check for lobbying all these years.

© Earth First! Journal March-April 2006