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May 19, 2005

The Weekly Wrap

Debi August: To trial or not?


The Weekly Wrap

PALCO FINANCES, AGAIN: Maxxam, Inc. -- the corporate parent of Pacific Lumber -- filed its quarterly financial statement with the Securities and Exchange Commission last week. The statement, known as a 10-Q, showed that the company lost $16.3 million in the first three months of 2005, with $2.8 million of that attributable to actual losses from business operations. Palco shipped 33 million board-feet of Douglas fir lumber in the first quarter, nearly double what it had the previous year. Redwood sales were down slightly. The company again warned shareholders that it might not be able to meet a June 20 payment on its long-term debt, with possible consequences ranging from more layoffs to a sale of assets to bankruptcy. And on Monday, the staff of the State Water Resources Control Board issued a recommendation that the agency permit no new timber harvest plans in the Freshwater and Elk River watersheds before new waste discharge permits are designed, which may not happen until September. The board will consider whether to approve the staff report at its meeting on June 16.

MAY SHOWERS: Humboldt County could be in for one of its wettest Mays since the 1800s. With 3 inches of rain so far this month, Brett Lutz of the National Weather Service office on Woodley Island said average precipitation is almost double the May average of 1.62 inches. Last year Humboldt County had just .08 inches at this point in the month, and 1.37 inches total in May. The most rain ever recorded in May was 7.2 inches in 1889. Lutz doesn't expect the current storm to cease until Friday, bringing a possible three to four inches of rain. "That would be one of the wettest Mays we've seen," Lutz said.

STOEN TO MENDOCINO?: Is Deputy District Attorney Tim Stoen headed to Mendocino County? Probably not, he says. He did apply for a job as Mendocino's county counsel a couple of months ago at the suggestion of his former boss, Mendocino County District Attorney Norm Vroman. But he listed in his conditions that he would be allowed to return to Humboldt County in order to prosecute the county's fraud lawsuit against Pacific Lumber Co. He hasn't heard back. "I would imagine it's more likely than not that I'll be staying here, and just being a run-of-the-mill prosecuting attorney on special cases," Stoen said. Last week, in an administrative reshuffling of the District Attorney's Office, Stoen stepped down from his previous post as assistant district attorney, an administrative post that was reassigned to long-time Deputy DA Wes Keat.

PULP MILL HEARING: Evergreen Pulp will be back before the North Coast Unified Air Quality Management District on Friday, seeking a variance to allow it to exceed its permitted air pollution levels until the end of the year. In an appearance before the district's hearing board in March, the company explained that it needed the variance to continue operations while two defective pieces of equipment at the mill are repaired or replaced. The meeting is scheduled for 10 a.m. Friday in the Eureka City Council Chambers, 531 K St. at the corner of Fifth.

TRINITY WATER RESTORED: Following through with its promise to restore flows to the lower reaches of the Trinity River to protect spawning fish, the federal Bureau of Reclamation opened the gates to the Lewiston Dam last week, the bureau reported. Flows of 7,000 cubic feet per second surged down the Trinity through May 13 and will be kept at 2,000 cfs through July 9. Safety officials are cautioning the public to be mindful of the high, cold flows and to keep a close eye on children when near the river. Visit for a complete schedule of flows on the Trinity.

NO CHOICE ON FEES: HSU President Rollin Richmond passed a $44 per semester student health fee Friday, overturning a student vote last month that narrowly rejected the fee and a recommendation by the Student Fee Advisory Committee to let the vote stand. More than 5,000 students visit HSU's campus health center each year -- the highest per capita use rate of the 23 CSU campuses, university officials said. Without the fee, students would have faced slower, much more expensive health services at HSU, said Health Center Director Rebecca Stauffer. The facility would also have stopped operating at full hours, five days a week. Of the 788 students who cast ballots on the fee, 361 voted in favor of it, while 427 or 54 percent voted against it, leaving a winning margin of just 66 students. The overall turnout, less than 14 percent, was typical of student elections, which attracted just 12 percent of the student population last year. The student vote served only as an advisory to Richmond, who has the authority to make the final decision on all student fees recommended for his approval. The per-semester fee will go into effect this fall as part of mandatory enrollment and registration fees. Richmond said without the increased fee, students would have suffered a double setback, losing thrifty, timely and necessary medical services on campus, while becoming more dependent on high-cost urgent care and hospital services off-campus.

FATALITY IN HYDESVILLE: A Fortuna High School junior died after being ejected from her car May 12 on State Route 36, the California Highway Patrol and county Coroner's Office reported. Nicole Chyanne Arney, 17, of Carlotta was driving westbound shortly before 8 a.m. on SR 36, west of A Street in Hydesville, when for unknown reasons she failed to negotiate a sharp right curve, crossing the eastbound lane and driving off the road, the CHP said. Her 1988 Ford Aerostar struck the guardrail on the other shoulder and continued to travel over the rail and down a steep hillside. The car landed on its roof about 300 feet south of SR 36. Arney was not wearing a seatbelt.

BIG PRIZE FOR AUTHOR: McKinleyville author Barbara Kerley received a prestigious Commonwealth Club of California Book Award for her 2004 Walt Whitman: Words for America earlier this month. The book won the silver medal in the juvenile literature category, for children ages 11-16. Kerley, 44, was chosen from hundreds of California authors for the award, which included a $300 cash prize. "It brings [Whitman] to life the way a typical book about his life would not," Kerley said. Other winners of the 74th annual California Book Awards included feminist poet Adrienne Rich and novelist Andrew Sean Greer. The awards honor the exceptional literary merit of California writers and publishers. An awards ceremony will be held in San Francisco June 14, hosted by Chronicle book critic David Kipen and former L.A. Times Book Review Editor Steve Wasserman.

DISASTER RELIEF ASKED: Rep. Mike Thompson (D-St. Helena) called last week for disaster relief for West Coast commercial salmon fishermen, who are economically distressed by low salmon returns and a limited fishing season. In a letter, Thompson said that the estimated loss to the West Coast commercial fishing fleet could be tens of millions of dollars. NOAA is investigating whether fishermen can receive long-term, low-interest loans through the Magnuson-Stevens Act. The commercial fishing season will be open May 21-July 22. Meanwhile, tribes of the Klamath River area are preparing for a summer trip to Scotland to attend the annual meeting of ScottishPower, the owner of hydro-electric dams that block water flows on the Klamath, which has been plagued with massive fish kills due to low flows in recent years. Last year the tribes sued the power company for $1 billion. In April, a Scottish magistrate recommended the suit be dismissed.

PREZ OF THE YEAR: The California State Student Association named HSU President Rollin Richmond "President of the Year" last week, honoring his accessibility to students and commitment to the "RenewCSU" goals for system-wide building practices. The association also noted Richmond's support of the Associated Students voter registration drive. The award, given on behalf of the 23 campuses and more than 400,000 students in the California State University system, recognizes a CSU President who goes above and beyond normal duties and encourages the airing of student views.

CALLING ALL GRAND JURORS: The Humboldt County Superior Court is accepting applications to serve on the Humboldt County Civil Grand Jury for the fiscal year of 2005-06. The volunteer grand jury investigates citizen complaints as well as county and city government, elected officials, special districts, jails, service districts and nonprofit agencies that receive public money. At the end of the fiscal year, the jury submits a final report of completed investigations to the Superior Court and the county Board of Supervisors. The jury will be comprised of 19 members, including four or five of this year's members.
To receive an application, contact the Jury Commissioner's Office with your name and address at 269-1270 by 5 p.m. Wednesday, June 1.

WATERMARK SELLS DIVISION: WaterMark, corporate owner of the sports rack manufacturer Yakima, officially sold its water sport division to Trinity, N.C.-based competitor Confluence Holdings Corp. Monday, WaterMark officials said. Confluence will keep the division under the WaterMark name, and the rest of WaterMark -- including Rhode Gear and Yakima -- has been renamed Yakima Products. Nearly all of the 200 employees of the sold division will be retained by Yakima Products or offered positions at Confluence, said Jim Clark, CEO of Yakima Products. WaterMark, founded in 1998 with the merger of kayak brands Daggar and Perception, acquired a handful of other outdoor and paddle sport companies, including Yakima in 2001. The company moved its headquarters to Arcata the same year, only to announce this December that it would move most operations to Beaverton, Ore., a suburb of Portland, leaving jobs behind for 70 or so Arcata employees. But in January Watermark announced that the remainder of its operations would move to Beaverton by the end of this year. Around 50 employees are still employed in Arcata, but the facility is scheduled to close by the end of September.

BANK STOCK SOARS: Redwood Capital Bank received the "Market Cap of the Year" award last month for achieving the highest stock appreciation of any bank in California last year for the asset class below $50 million. The California Bankers Association and Carpenter & Company presented the award, which recognized that the bank achieved an 80 percent stock increase since its opening last year.

Debi August: To trial or not?


The long-delayed trial of Fortuna City Councilmember Debi August is scheduled to begin this Monday -- unless it is dismissed by a Humboldt County Superior Court judge sometime this week.

Late last month, after receiving a trove of newly released documents from the Humboldt County Grand Jury, August's attorneys filed a motion with the court asking that the charges against her -- which include conflict of interest, non-disclosure of income and revealing evidence from the Grand Jury investigation of her -- be dismissed.

Judge John Feeney had not ruled on the objection by the time the Journal went to press.

In the motion, August attorney Greg Rael argues that August's actions in representing a Fortuna developer do not meet several legal standards that would justify the action being brought against her, which seeks to remove her from office.

"[The] facts underlying each of the four counts contained in the First Amended Accusation reveal that Councilwoman August has violated no law justifying her removal from office," Rael writes.

In his legal analysis of the August case, Rael relies heavily on a 1996 state appellate court case that addressed the circumstances under which a grand jury could seek to remove an elected official from office. The case, Steiner v. Superior Court, arose when the Orange County Grand Jury sought to remove members of the Board of Supervisors following that county's bankruptcy.

In that case, according to Rael, the appellate court held that such actions by grand juries are permissible only in cases of criminal conduct or "purposeful failure to carry out mandatory duties of office." August's actions, he argues, never rose to that level, partly because Fortuna's code of conduct for elected officials did not specify mandatory removal from office as a potential punishment.

Deputy District Attorney Tim Stoen, who is representing the grand jury in the proceedings, replied in an argument filed with the court on May 4. He argues that Fortuna did not have to spell out the potential penalties for officials that violate its code of conduct in order for the grand jury to act.

"Neither Steiner v. Superior Court nor any other authority supports the preposterous notion that the `sanction of removal' must be enacted in a statement of duties before a public official may be removed for a violation," Stoen writes.

In a follow-up argument submitted to the court on May 9, Rael further hints that evidence recently released from the grand jury's deliberations shows that several of its members were biased against August from the early days of its investigation.

"The Grand Jury's e-mail correspondence reveals a body which relished its role, targeting the City of Fortuna in general and Councilwoman August in particular from early in its term," Rael writes.

As evidence, Rael quotes several e-mails sent between individual members of the grand jury. "[Maybe] the good ol' boys are running scared," Rael quotes from one such e-mail. "What is certain is that we are on to something that may clean up the act in Fortuna."

Rael writes that such prosecutorial zeal should have been tempered by Stoen, the grand jury's legal advisor. Instead, he argues, Stoen's actual advice amounted to "misconduct," in that his instructions to the grand jury showed a "grossly erroneous" understanding of the law.

The accusation against August, which was filed on May 4, 2004, stems from the grand jury's investigation of her involvement in a real estate subdivision proposal making its way through the city's regulatory process. On Sept. 30, 2003, August -- who is a real estate broker and was listed in the subdivision application as the project's agent -- argued vigorously for its approval before the Fortuna Planning Commission.

For more background on the case, see Journal cover story "The Debi August File," Sept. 9, 2004.


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