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Game Day 

All around the country, lawyers are burning the midnight oil in preparation for this Thursday, Feb. 28, when the Pacific Lumber bankruptcy hits the ninth inning. Sometime soon after court concludes on that day — or possibly even before it concludes — everything's going to be laid out on the table. There's going to be precious little room remaining for backstage conniving. There's only going to be a very few possible options left, and one of them will be the one that the county rides for the next couple of decades.

What's happening Thursday? Early in the morning, Corpus Christi Federal Bankruptcy Judge Richard S. Schmidt will convene what is known as a "confirmation hearing." He'll look at the three plans on the table for the future of the company (or four plans, depending on how you count them), and he'll give them either the thumbs-up or the thumbs-down. There will follow a month or so of frantic lobbying amongst the various parties with an interest in Pacific Lumber, and then one of the plans will be chosen, either by vote or by judicial fiat.

To recap them in the briefest possible manner, the plans are as follows. One, the Mendocino Redwood Co. out of Ukiah takes over Pacific Lumber, cutting logging down to sustainable levels. Two, the company is sold at auction, at which point a coalition of investors, conservation groups and small timber operators may be prepared to make a bid (along with God knows who else). Three, Maxxam — the Texas investment firm that shepherded the company to bankruptcy in the last two decades, extracting untold amounts of wealth in the meanwhile — embarks upon a massive property development scheme and tries to sell conservation property to the government at extortionary prices. Four, Maxxam keeps its choice bits of Humboldt County forest land to develop and extort, leaving creditors to foreclose on the scraps.

There's an outside possibility that come April none of these things will come to pass, probably in the event that the company's creditors fail to come to accord and the judge decides to wash his hands of the matter. Then the year-long bankruptcy proceedings would begin again. But no one wants to see that happen.

So the plan that does come to pass will likely shape Humboldt County history over the next 20 years, probably to the same extent that Maxxam's leveraged buyout of the old Pacific Lumber has shaped it in the last 20. And the main theme of Humboldt County history in the last two decades has been the Timber Wars and the associated cultural divide, the stupidity of which continues to impair our thinking about any number of critical issues to this day. The largest share of the blame for this state of affairs goes to Maxxam, which has lied and cheated and inflamed the divide at every turn because it found it profitable to do so. Maxxam's ideas for the future of the company — plans three and four, above — promise more of the same. The other plans on the table offer something different.

The Mendocino Redwood-centered option's advantages are evident. There'd be sustainable logging with a minimum of controversy, which could theoretically keep Humboldt County people employed logging and milling redwoods forever. Humboldt County is one of the last remaining producers of redwood, an absolutely unique product. If Mendocino Redwood can keep us in this game without screwing up our streams or inciting us to fight one another at every turn, then the county will benefit for generations.

Option number two — the auction of the company — is more dicey, but it's not to be discounted. The danger is that some Maxxam clone might step in and outbid the sustainability consortium, leaving us as bad off as we were in the beginning. But no one does things in quite the way that Maxxam CEO Charles Hurwitzdoes them, so whatever we end up with is bound to be an improvement. And the consortium of investors and ecologists outlined above — let's call it the "green-green" consortium — has some serious money on its side, besides.

The world is changing, and one of the ways it is changing is that there's more value in a forest than simply what can be hauled out of it at any given moment. As the managers of Fieldbrook's Van Eck Forest have shown, standing forests can now produce capital through the emerging carbon credit market, which is only going to grow. And many smart people are realizing that trees offer a natural return on investment. They grow. Buying a tree is putting money in a bank, and your rate of return is entirely predictable. That's why the state employees retirement fund, CalPERS, just announced that it's going to direct $10-$15 billion of its holdings toward sustainable forestry. That amount of money buys you a lot of forest — something like 10-15 Pacific Lumbers, even given the higher estimates for the company's land holdings. The CalPERS initiative was trumpeted on the website of The Nature Conservancy, one of the partners in the green-green consortium. It joins the Bank of America, which made its own investment in logged-over North Coast redwood land last year.

All in all, these are exciting and perilous times. It really could go either way. Are we going to have 20 more years of the same, or are we going to move forward and put the last 20 years behind us? Thursday's hearing will start to clarify things.

Finally, tonight —massive props to our colleagues over at the Times-Standard for fighting the good fight and winning. Last week, the T-S and their big, fancy San Francisco attorneys successfully argued for the unsealing of records in last year's criminal indictment of two Eureka Police Department commanders. A criminal grand jury returned charges against former EPD Chief David Douglas and Lt. Tony Zanottiin December. It charged the two with involuntary manslaughter stemming from their command of an April 2006 confrontation between the police department and Eureka resident Cheri Lyn Moore, which resulted in Moore's death by gunshot wounds fired by an EPD SWAT team.

The Times-Standard fought to have the grand jury testimony unsealed, and it won. The transcripts revealed many details about the indictment in the case, which has drifted far from the center of the county's attention in the last two years. (See our two 2006 cover stories on the subject — "Scenes from a Shooting" and "Cause of Death," April 27 and Sept. 21, respectively — for background on the case). The transcripts show that District Attorney Paul Gallegos' prosecution hinges on whether or not the two indicted officers should have sought a special type of court warrant before storming Moore's downtown apartment, as had been done in other police standoffs in the county. Also, it revealed the somewhat strange spectacle of Gallegos contradicting and arguing against an expert witness he had called to testify to the grand jury.

The Times-Standard's coverage of the unsealed grand jury testimony has been excellent; we won't attempt to add to it here. (If you've missed it, last week's articles are still on the paper's web site.) But we did want to take a moment to thank the Times-Standard for defending the public's access to legal proceedings undertaken in the public's name, against a public agency. And while we're at it, we'll also thank Gallegos for not opposing the Times-Standard's arguments. This is how it's supposed to work.

The arraignment of Douglas and Zanotti continues on April 1. Their attorneys have asked for the case to be dismissed.

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Hank Sims

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