Takeover artist ruthless, philanthropic By Blair S. Walker Dubbed the ''Redwood Raider,'' he'll unflinchingly order majestic, 1,000- year-old California redwood trees chopped down to make a profit and in the next breath inquire warmly about an employee's well-being. A corporate takeover artist who has lifted $62 million from one victim's pension fund, he's also a philanthropist who generously gives time and money to several charities in Houston, his hometown. Charles Hurwitz is a curious mix of ruthlessness, compassion, chutzpah and Texas-sized ambition. Last week, Hurwitz's MAXXAM holding company received preliminary approval from a bankruptcy judge to buy 72% of Continental Airlines for $350 million. Putting a human face on Hurwitz, 52, is like trying to profile the Wizard of Oz: Those who dare to peek behind the curtain Hurwitz has erected around himself are greeted with stony silence. He's intensely private and abhors the media, shunning them as though they were dispensing takeover poison pills. Characteristically, he declined to be interviewed. Unlike the Wizard, Hurwitz's deeds aren't accomplished with smoke and mirrors and have real-life consequences for Wall Street, thousands of employees and the environment. Friends and associates say family and business are the twin gravitational forces holding Hurwitz's universe together. He dotes on his wife, Barbara, two sons and MAXXAM - a Houston-based, publicly traded, Fortune 200 holding company that has 12,000 employees and assets exceeding $3 billion. Tuesday, MAXXAM reported second-quarter net income of $1.4 million, compared with $17.5 million a year ago. The drop was blamed on an earnings decline in MAXXAM's aluminum business. Hurwitz, MAXXAM 's founder, chairman and CEO, patched the highly leveraged enterprise together with Herculean wheeling and dealing and with junk bonds provided by jailed junk- bond king Michael Milken and Drexel Burnham Lambert. Now Hurwitz is looking to add Continental to a trophy collection that already includes Kaiser Aluminum and Pacific Lumber . MAXXAM Property, a land-development firm with operations in California, Puerto Rico, New Mexico, Texas and Arizona, is also in the MAXXAM stable. He's said to be boning up on Continental and on the airline business, a task that shouldn't be terribly difficult when former Continental chairman Frank Lorenzo is a friend. If Hurwitz's successes are larger than life, so are his failures. Particularly the supernova demise of the United Savings Association of Texas. The savings and loan was a subsidiary of the United Financial Group, which Hurwitz headed. The S&L's 1988 failure cost taxpayers about $2 billion. A Federal Deposit Insurance Corp. spokesman says the agency is investigating to see whether charges are warranted against Hurwitz in the collapse. A man with a restless, analytical mind, Hurwitz usually excels at assessing potential business opportunities. Bespectacled, dour-looking and possessing an affinity for dark, pinstriped suits, he analyzes people, too, fixing them upon first introduction with a cold-fish stare. ''Your initial impression is that he looks at you with unblinking, cold, dark eyes, unsmiling,'' says former Texas governor John Connally, who is on MAXXAM's board of directors. ''He's just trying to read you.'' Houston Mayor Bob Lanier says Hurwitz is very guarded. A friend for about 30 years, Lanier jokes that Hurwitz ''started to loosen up after 20, 25 years.'' A rare crack in Hurwitz's public facade occurred earlier this year. He was overcome with emotion while donating $1 million to the Jewish temple he attends, a gift made in honor of his deceased parents. Connally, Lanier and others allowed into Hurwitz's tight inner circle comment on his dry sense of humor and dedication to family. But about 200 miles north of San Francisco, where MAXXAM-owned Pacific Lumber owns 195,000 acres of commercial timberland - including venerable old-growth redwood trees standing when Columbus set foot on North America - Hurwitz is viewed as a cross between Darth Vader and Gordon Gekko. In 1985, Hurwitz incurred a lot of junk- bond debt acquiring Pacific Lumber, an undervalued, debt-free company he paid about $900 million for. To service his debt, Hurwitz directed Pacific Lumber to begin cutting down redwood trees - some of which are 2,000 years old - at twice the rate as in the past. Because old-growth redwoods contain large amounts of pristine wood, one can fetch as much as $60,000. ''The problem we have now is that he's talked about liquidating the largest stand of old-growth redwood trees in California, Headwaters Forest,'' says Darryl Young of the Sierra Club. ''He's asking the state and federal government to pay upward of $500 million for this property.'' In Washington, members of California's Capitol Hill delegation have authored a bill that would buy back 29,000 acres of Pacific Lumber's territory, including Headwaters Forest, at an unspecified price - a variation on the greenmail game Hurwitz played so adroitly in the '80s. A play on the word blackmail, greenmail is money paid to an unwanted corporate raider to make him or her go away. Pacific Lumber has a voluntary moratorium on Headwaters Forest logging in place. For now. ''We'd like to harvest it,'' Hurwitz told Houston Metropolitan earlier this year in a rare interview. ''We paid for it, we pay taxes on it, it's zoned for timber production. Why shouldn't we harvest it?'' That's the carnivorous, fang-baring Charles Hurwitz that has one airline analyst cynically predicting that Kaiser Aluminum's owner would convert Continental's jet fleet into tin cans if it took that to make a buck. That prediction overlooks one thing: Continental and Hurwitz share the same hometown. The airline employs 17,000 Houston residents, and Hurwitz is active in the city's business and social scene. Hence, a tar-and-feather committee would probably await if he dismantled Continental. But it would be out of character for Hurwitz to be motivated only by civic concerns. ''Sure he hopes to make money,'' Connally says. ''But not by dismembering it and not by liquidation.'' MAXXAM's president, John Seidl, says, ''If Continental was not based in Houston, I don't think we'd be involved in the deal.'' With MAXXAM affected by depressed aluminum and real- estate markets and political outrage about its California logging operations, Continental, not to mention the cutthroat airline industry, should present an interesting challenge . What will determine if the airline gamble was worth it? ''We view our success (by) how much value or net worth ... companies have been able to grow over a period of time,'' Hurwitz told the San Francisco HURWITZ BIO: About Hurwitz - Born: To a clothing-store owner in Kilgore, Texas, May 3, 1940. - Business: Runs MAXXAM. Net income of nearly $58 million on $2.2 billion in revenue last year. - Personal: Married Barbara Raye Gollub in 1963; two sons. - Education: Earned bachelor's degree from the University of Oklahoma in 1962 in business. - Estimated worth: $250 million. - Background: After graduating from college, went to work on Wall Street. Was running his own brokerage firm at 24. - Familiarity with litigation: Has filed and been the target of numerous lawsuits. In 1977, he was sued in New York related to a failed insurance venture. The lawsuit was eventually dropped. - On the price of success: ''There's an old saying: The higher you climb the ladder, the more exposed is your ass. So more people are shooting at you.'' From a San Francisco Chronicle interview last year. Hurwitz's deals: 1968: At age 27, persuades backers to put up more than $50 million so he can start the Hedge Fund of America. 1973: Hurwitz engineers a deal to take over Federated Development. 1978: Acquires McCulloch Oil. 1982: Hurwitz's MCO Holdings and Federal Development pay $48 million for Simplicity Pattern and then changes the name to MAXXAM. 1984: After threatening to acquire real -estate company Castle & Cooke, Hurwitz accepts an $8 million greenmail payment to disappear. 1985: MAXXAM buys Pacific Lumber for $900 million in a hostile takeover that is half -financed with junk bonds. 1988: MAXXAM acquires KaiserTech, the parent of Kaiser Aluminum, for $930 million. 1992: In July, MAXXAM bids $350 million for a controlling interest in Continental Airlines. Chronicle last year. ''That's our measure of success.'' USA TODAY July 29, 1992, Wednesday, FINAL EDITION SECTION: MONEY; Pg. 2B NOTES: See bio box at end of text