The Seven Sins of MAXXAM
A Brief Outline by Darryl Cherney
PO Box 34, Garberville, California 95542

Hurwitz, the Early Years. 1971-82. Fresh out of college, Hurwitz was forced to plead "no contest" before the Securities Exchange Commission for illegal stock market dealings. Later admitted to looting Summit Insurance of New York of $400,000. Hurwitz started out a crook and he hasn't stopped since.

I. 1982-84. Raided Simplicity Pattern. Pension fund allocation to retirees reduced from $10,000 to $6,000/year. Off-loaded Pattern Division to another shark and gave Simplicity a new name--MAXXAM. (It has a nicer ring to it.)

II. 1984-88. $1.6 billion failure of S&L. With oodles of cash investments from Drexel, Burnham, Lambert, Hurwitz returns the favors by purchasing their junk bond with money from an S & L he picked up along the way. The failure of United Savings Association of Texas (USAT) cost the taxpayers $1.6 billion to bail out. USAT was controlled by MAXXAM. But there's more. The FDIC (Federal Deposit Insurance Corporation and OTS (Office of Thrift Supervision), both federal banking regulatory agencies, claim that Hurwitz and his holding company, United Financial Group (owned by MAXXAM), can not account for the billion or so of lost money and are now suing him to recoup taxpayer's money. Dr. Barry Munitz, who later became the Chancellor of the California State University System (1991-97), ran the S & L for Hurwitz and was the President of the USAT's executive committee. Munitz resigned as Chancellor and is now the head of the J. Paul Getty Foundation for the Arts.

III. 1983-present. Land swindle and ecological destruction in Rancho Mirage, CA (the "Playground of Presidents"), possibly the wealthiest town in the USA. Hurwitz has sued the City Council twice for hundreds of millions of dollars. The first time in '83, it was to stop the council from adopting a voter passed referendum to stop a Ritz Carlton Hotel and estate housing from being built on endangered Bighorn sheep lambing grounds. Despite the fact that the Bighorn is the official emblem of the city (embossed in their business cards, no less), the council caved in for fear of being held personally libel. The second time was in 1992 over a similar set of circumstances. The fight against Hurwitz has been led in the past by Susan Marx (Harpo's widow) and old blue eyes himself, Frank Sinatra. The hotel got built, but Hurwitz wants to build more. Hurwitz, Munitz, et al were sued by their fellow shareholders for approximately $30 million over this matter because Hurwitz swindled them by putting up worthless collateral from another one of Hurwitz's firms in exchange for cash to buy the land. What a guy. The shareholders won their suit against Hurwitz, but the Bighorn lost their place to have their babies.

IV. 1985-present. Takeover of Pacific Lumber and its Giant Redwoods. You know the story. Hurwitz teams up with Milken, Boesky reaps 3 million from insider trading, and the redwoods are being mowed down to pay off a junk bond debt to the tune of $750 million. Here's a couple of untold details, generally not spoken of in the press. Hurwitz is not actually paying off the debt as he disembowels the company. He received over $500 million for the welding operation, the pension fund, the PL San Francisco office building, and the redwoods, of course, but that is far more money than he paid off. Where did the rest of the money go? He then split up PL into three companies in 1993 (one with the 3,000 acre Headwaters grove, one with the rest of the old growth and the town of Scotia, and the other with the cut-over lands). He massively violated the federal Endangered Species Act with the logging of Owl Creek's marbled murrelet observation stations before a court ordered survey was complete. He later lost a lawsuit in federal court and was ordered to pay $1.2 million.

V. 1988. Takeover of Kaiser Aluminum. With heavy financial help from the nation's most wanted fugitive, Marc Rich ($500,000 price on his head for tax evasion), Hurwitz used all kinds of money, including profits from redwoods, to buy Kaiser. Kaiser put Hurwitz into the Fortune 200; and into toxic top ten, according to Mother Jones magazine. Around this time, John Connally, former Secretary of the Treasury and Governor of Texas, joins the MAXXAM board to add international influence. He later dies.

VI. 1989. Destruction of Arizona Desert water system In Pima County, Arizona, Hurwitz wins Board of Supes approval (3-2) to drain the Cienega Creek to build condos for 20,000 plus a golf course on the outskirts of Tucson. The Planning & Zoning Commission voted against the project (only the second time in their history they voted against anything) by a margin of 8-1, but P & Z's vote was advisory. Cienega Creek is located in a county park, but Hurwitz owns the water rights through his notorious Horizon Corporation, one of the most scandal-ridden development outfits in the U.S.

VII. 1991. Takeover of California State University System Barry Munitz, MAXXAM's number two boy and Hurwitz's proclaimed field manager, resigns from MAXXAM to become the Chancellor of the California State University System. That puts him in charge of the Redwood Science Lab at Humboldt State University, not to mention the largest educational system in the US with 350,000 students. To add insult to injury, Senator Barry Keene secures the passing of a Senate Assembly Joint Resolution that would create the Center for the Resolution of Environmental Disputes with whoever happens to be the Chancellor in charge of it all. To further bolster their environmental credentials, John Seidl, MAXXAM's President, is appointed to the Vice-Presidency of the Nature Conservancy. Shortly after Stormin' Norman Schwartzkoff is added to the board. Terrific. Seidl recently later from MAXXAM. Munitz resigned from the CSU in 1997 to become the President of the J. Paul Getty Foundation for the Arts.

Today and ongoing. The slaughter of the redwoods continues, although Hurwitz is attempting to sell a small 3,000 acre portion of the 60,000 acre Headwaters Forest Wilderness at an inflated rate. Presdient Clinton, Deputy Secretary John Garamendi and Sen. Diane Feinstein (Calif.) are facilitating the deal. Mudslides caused by Hurwitz's clearcutting have wiped out many peoples homes in Stafford, California. It's lucky no one died. Residents of Elk Creek are suing Hurwitz because of flooding caused by his logging that is threatening to wash away their homes. Earth First! and others maintain he must not be rewarded for his sins. Rather, a debt for nature swap would be appropriate with accompanying prosecution of the whole MAXXAM gang for the banking failure and criminal takeover of PL. The only thing to negotiate is how many years Hurwitz, Munitz, et al will spend behind bars.

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