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Jan. 27, 2005

The Weekly Wrap

Pacific Lumber cries near-bankruptcy
Secret meeting seeks easing of logging restrictions

Pulp mill will re-open
New owners say they'll turn around struggling mill

Wheetley campaign kickoff


The Weekly Wrap

TEACHER GUILTY OF SEX CRIME: Former Loleta teacher Ronald Vernon McCullough, 59, of Fortuna last week pleaded guilty to attempting to seduce a person he believed to be a 13-year-old Eureka girl over the Internet last year. On Sept. 28, McCullough struck up a conversation with "hum_cali_girl" through an online instant messaging program. During the course of the chat, he made several lewd propositions and arranged to meet his correspondent at Sacred Heart Church the following night. In fact, "hum_cali_girl" was a volunteer with, an organization whose members seek to find pedophiles on the Web and report them to the authorities. The volunteer notified the Humboldt County District Attorney's Office, which soon afterward conducted a search warrant on McCullough's home. A computer technician was able to verify that the chat had, in fact, taken place, even though McCullough had tried to erase it from his machine. McCullough was an eighth-grade math and science teacher who had taught at Loleta School for 36 years. The district placed him on administrative leave soon after the incident came to its attention. McCullough resigned on Jan. 18. James Malloy, district superintendent, said Tuesday that the school had conducted its own internal investigation and was satisfied that McCullough had not had sexual contact with any current or former Loleta School students. Deputy District Attorney Andrew Isaac indicated Tuesday that his office would not seek jail time in the case, noting that McCullough had already been kicked out of his profession and would have to register as a sex criminal and be listed on the state's Megan's Law database. There was no indication that McCullough had ever actually succeeded in seducing a child, Isaac said. "The important thing, from our perspective, is that we caught this very early on the curve," he said. "The facts in this case convinced me that this case was caught before a real child had a chance to say yes." The Web site offered high praise to the DA's office and local law enforcement in its write-up of the McCullough case: "We urge all law enforcement reading this to check out this case in greater detail, as it is a great example of avid, active prosecution. No runaround, no artificial slowness. Quick, speedy, justice." McCullough's sentencing hearing is scheduled for Feb. 16.

WATERMARK SHIPS OUT: Watermark, corporate owner of Yakima Products, the Arcata-based sports rack manufacturer, announced last week that it will be moving the remainder of its operations to Portland, Ore., by the end of the year. The company had previously stated that it would keep some 65 jobs in the area.

SCHECTMAN TO HELP DA: Arcata civil attorney Steve Schectman, who has made a name for himself in part through his work representing plaintiffs against the Pacific Lumber Co., will volunteer his time to help on the District Attorney's fraud case against the company. Schectman said Tuesday that the details are not yet ironed out, but that he would use "my many years of civil litigation in complex cases to aid in the prosecution of the case." Schectman ran as a replacement candidate in support of District Attorney Paul Gallegos in last year's attempted recall of the DA.

TRINITY WATER USERS: The Westlands Water District announced last week that it would not ask the U.S. Supreme Court to review a Clinton-era plan to send more water down the Trinity River. The decision effectively closes the door on a four-year legal dispute over the plan and marks a victory for the Hoopa Valley Tribe, which had fought for its implementation.

MISSING MAN'S BODY FOUND: A body believed to be that of a murdered Loleta man was found Jan. 20 on private land five miles east of Honeydew, the Sheriff's Office reported. An autopsy will be performed this week to identify the remains, but sheriff's officials believe the dead man is Rex Donald Shinn, 32, who was reported missing in July 2003. A homicide investigation began soon after Shinn's truck was found abandoned in Petrolia on Aug. 30, 2003. Detectives believe they know who killed Shinn and will forward the case to the District Attorney's office. Anyone with information can contact Humboldt County Sheriff's Detective Rich Schlesiger at 445-7251.

ANTI-SEMITIC VANDALS TAG TEMPLE: Temple Beth-El, a synagogue on Hodgson and T streets in Eureka, has been the target of a string of hate crimes over the past month, police said. Anti-Semitic graffiti was drawn on the temple; papers have been burned in the yard; a children's service was disrupted when someone threw a Christmas tree at a doorway; and hateful phone calls have been made to a neighboring church. The Eureka Police Department is investigating the crimes and has met with Temple Beth-El board members to discuss security issues. Representatives from area churches have also met recently to paint over the offending messages and consider how to stop the vandalism from continuing.

BIG DREAMS, BIG MONEY: Humboldt County has caught the eye of a major TV network, not for its scenic splendor, but for the likelihood that needy -- yet deserving -- community advocates live among us. A TV pilot has been pitched to NBC called "Wishes," in which exceptional people who have worked on behalf of the community and have not been given the credit they deserve are granted a wish that has always been too expensive to fulfill. The show supplies the dough to make a dream come true and in turn documents the tearful process. Nominations are due this week for potential candidates. Film Commissioner Barbara Bryant urges anyone who knows of a local unsung hero who fits the bill to write a nomination letter -- fast. Casting agents will finish reading nominations this weekend. or call (818) 556-6680.

Pacific Lumber cries near-bankruptcy
Secret meeting seeks easing of logging restrictions


Charles Hurwitz and other senior executives of Maxxam and the Pacific Lumber Co. told members of the Schwarzenegger administration in secret meetings held earlier this month that the company would soon file for bankruptcy if logging restrictions are not eased, according to a report in Tuesday's Los Angeles Times.

According to the paper, the company -- which seeks permits for 11 timber harvest plans in the Elk River and Freshwater areas from the North Coast Regional Water Quality Control Board -- argued that bankruptcy would mean the environmental compact it signed with the state in 1999, during the negotiations over Headwaters Forest, would effectively be null and void, as its assets would be turned over to creditors who were not signatories to the deal.

Reaction to the article was swift among the company's critics, some of whom suggested that the company should stop blaming others for its financial woes. "It's interesting that PL is openly talking about the fact that they're structured in such a way that they can't drop down below 100 percent" of what they seek to harvest, said Mark Lovelace of the Humboldt Watershed Council. "That's basically what they're telling us -- they can't accommodate anything other than everything."

Lovelace, who has been arguing against issuing the Elk River and Freshwater permits before the board, said that he wasn't exactly shocked at the closed-door meetings or the implication that Maxxam was, in effect, attempting to blackmail the state in order to escape environmental regulation. "We can complain of dirty pool, but we know that that's the way things are done -- unfortunately," he said. "That's how it happens in this country, and with this company."

Eureka attorney Bill Bertain, who has been suing Maxxam off and on since it bought out Palco in the mid-'80s, said that the Houston-based company's business strategy, with a ramped-up harvesting program, makes financial problems inevitable.

"This company could have lasted centuries," he said. "It could have been harvesting virgin old growth until 2045. And they could have employed about 800 to 900 people for way beyond that -- a second round of old growth would have been available. They didn't want to do that. They wanted to get the money out real quick and send it to Houston."

Pacific Lumber did not respond to a request for comment by deadline Tuesday.

Pulp mill will re-open
New owners say they'll turn around struggling mill


[Raymond Lee standing in front of pulp mill]With the Stockton Pacific Enterprises pulp mill in new hands, workers and industry backers are breathing a sigh of relief, and hoping that, this time, the mill can stay afloat financially.

The deal to purchase the mill was sealed last Thursday for an undisclosed amount, said Raymond Lee, the CEO of Lee & Man Paper Manufacturing Ltd. [photo at right] , the new owner, who was in town last week to complete the sale. The Hong Kong-based company, the second-largest producer of containerboard in China, will use the pulp produced in Samoa for its own plant. It expects to restart the mill in about a month.

"This pulp mill will be a natural extension of my operation in China," Lee said. His paper mills use about 12,000 tons of pulp each month -- approximately 60 percent of what Stockton-Pacific produces. It plans to expand the Chinese operation so that it will need 16,000 tons per month. "We were a customer, now we're the owner," Lee said.

A native of Hong Kong, the 34-year-old Lee attended high school and college in Vancouver, B.C. After graduating, he started his own paper company, "and it turned out pretty good," he said.

The fact that Lee & Man is well-capitalized will help it turn the pulp mill around, Lee said. "We have access to more money, and I think this mill will need some additional capital investment to make it run better." The mill will also be able to buy larger quantities of chips when it needs to, and perhaps get better shipping rates, since all of the pulp will be going to one location, Lee said.

Doug Gingerich, president of the Association of Western Pulp and Paper Workers Local 49, said the union workers were upbeat about prospects for the mill.

"I think everybody's pretty optimistic," he said. The new owners "have the money to repair the mill and they use the product, so it's not like they have to have somebody sell it for them. I think most people think it's going to be a pretty good relationship. I've got high hopes."

The union workers voted 95 to 5 last week to approve a new four-year contract, which includes no pay increases for the first year, but raises of 40 cents, 45 cents and 50 cents an hour, respectively, for each subsequent year.

One sticking point to the mill's future success could be the fact that its chip export facility was sold off separately to Simpson Timber Co., one of the pulp mill's two biggest suppliers of chips. Officials there did not return calls seeking comment, but Raymond Lee said he hoped Simpson would not decide to export.

"They're one of our big suppliers, so if they decide to export it all of a sudden it's going to cause some troubles for the mill," Lee said. "This mill has already been running at very, very thin margins, so it's going to be very difficult to swallow if we have to get chips from someplace else."

Another potential snag in the mill's continuing operations is the ongoing investigation by local environmental agencies that was sparked by a company whistleblower late last year.

Paul Hagen of the District Attorney's office declined to comment about the case, in which no charges have yet been filed. But he said that, in general, civil and criminal complaints involving companies can name both individuals and corporate entities as defendants, and that, when companies change hands, prosecutors may pursue past as well as new owners, depending on details of the sale.

The mill's sale is good news for the Humboldt Bay Municipal Water District and residential water users locally, who stood to get huge increases in their water bills if the mill went under. When it's running, the pulp mill uses about 15 million gallons of water a day, compared to about 10 million a day used by all other customers combined. A mill closure would have forced the water district to either find thirsty new customers or pass the costs on to others.

The mill's purchase also clears up a nearly $300,000 debt owed to the water district, said district General Manager Carol Rische. "Right now the pulp mill is totally current" on its payments, she said.

New owner Lee said his company is committed to making the mill a viable operation. "The previous ownership is a financial institution. We look at this as very convenient to our operation in China, and we're not looking to make a little profit and just run away. We really want to make this work."

[Mark Wheetley speaking before crowd]

Wheetley campaign kickoff

Mark Wheetley, a 55-year-old Bayview resident and employee of the California Department of Fish and Game, kicked off his campaign for the open seat on the Arcata City Council on the steps of city hall on Friday. Wheetley was joined by a bevy of supporters, including former mayors Jim Test and Alex Stillman, Supervisor John Woolley, Cheryl Seidner of the Table Bluff Rancheria and members of the city employees' union, International Operating Engineers Local 3. Five other candidates are competing for the open seat: Andrew Lord, Nicholas Bravo, Mary Scoggin, Greg Allen and Michael Winkler. The election will be held March 8.


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