Treasury Nominee Eizenstat Connected to Hurwitz Could
Influence Ongoing S&L Trial if Confirmed
While the nomination of Lawrence Summers to replace Robert Rubin as Secretary of the Treasury has generated little controversy, the nomination of Stuart Eizenstat for the position of Deputy Secretary of the Treasury may not be received as smoothly. Environmentalists are outraged because Eizenstat was an attorney for savings and loan swindler and redwood raider Charles Hurwitz of MAXXAM and is now poised to assume the number two spot of a the very agency that oversees MAXXAM's ongoing savings and loan trial.
The Office of Thrift Supervision (OTS), overseen by the Department of the Treasury, is currently holding an administrative law trial to determine whether Charles Hurwitz, Chairman of MAXXAM Corp. of Houston, Texas defrauded the taxpayers of $1.6 billion in the failure and subsequent bailout of United Savings Association of Texas. "It would be a national embarrassment if a man who represented tax cheats like Hurwitz became the number two man at Treasury," said Headwaters Forest activist Darryl Cherney, who has contacted members of the Senate Finance Committee to try to stop the confirmation.
Environmentalists have taken a strong interest in the ongoing S&L trial in Houston because they believe that depositors' funds were illegally funneled out of the S&L by Hurwitz and broker Michael Milken of Drexel Burnham Lambert in order to take over both Pacific Lumber (PL) and Kaiser Aluminum.Kaiser workers, members of the United Steelworkers of America, went on strike last September and were locked out at the beginning of this year over a number of worker issues. Environmentalists have allied with the United Steelworkers to take on MAXXAM together on a number of fronts. In California, Hurwitz has been liquidating PL's redwood forest ever since. Some activists have suggested that Hurwitz trade his $1.6 billion S & L "debt for nature" to preserve precious ancient forests in Northern California.
Eizenstat represented Hurwitz in 1987 Congressional hearings held by Rep. Dingel (D-Mich) investigating stock parking and insider trading leading up to the hostile takeover of Pacific Lumber, the world's largest private holder of ancient redwoods. Eizenstat has also worked closely in a number of ventures with super-lobbyist Tommy Boggs, who works for MAXXAM, as well.
Hurwitz received $380 million for a small portion of California's Headwaters Forest this March. Hidden in the Headwaters deal was a clause which allowed for massive tax breaks to be given to MAXXAM and Hurwitz, potentially in the hundred of millions of dollars. " Putting Eizenstat in the Treasury Department is like putting the fox's lobbyist in charge of the chicken coop," said Cherney.