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Full Circle 

We're counting down the days now to Jan. 30, when — as noted last week — plans for the reorganization of the bankrupt Pacific Lumber Co. are due to be filed in federal bankruptcy court. On that day, we plan to plunge headfirst into a mountain of technical and legal documentation, hoping against hope that we'll be able to make some sort of sense of what various Wall Street-type players have planned for the future of our county.

In the meantime, here's a spicy little lagniappe: A press release came in Tuesday from a new organization called the "Community Forestry Team." The group includes longtime forestry activists Mark Lovelace and David Simpson as contacts — could it be that the Community Forestry Team is an outgrowth of the so-called Timber Acquisition Group, which had hoped to make a "community forestry"-based bid for Pacific Lumber lands? It was.

And what a deal they've put together. The press release is co-signed by the Save-the-Redwoods League, the Nature Conservancy, the Redwood Forest Foundation, mill operator Atlas Holdings and Bank of America, among others. The deal they envision for Pacific Lumber's future looks something like this:

First of all, they'd place 12,000 acres of old growth forests and other ecologically important areas into preservation. Nearly 200,000 acres would be kept as working, harvestable forest, managed under the ecologically sensitive "community forestry" models, in which many disparate stakeholders get places at the table when it comes time to decide timber harvest plans. Atlas Holdings would manage the Scotia mill. Bank of America and other financial firms would inject the capital.

It all looks quite a bit like a deal put together by the Mendocino-based Redwood Forest Foundation, Inc. (RFFI), back in the summer, but on a much larger scale. In that deal, RFFI acquired around 60,000 acres of sawn-over land in northern Mendocino County, to be managed as community forest. Bank of America provided the capital for the venture, through an arm of the vast financial institution dedicated to green initiatives. B of A provided $65 million in capital for the Mendocino deal; its total fund for such deals amounts to $20 billion.

Now for the hard part. If it's ever going to come to pass, the Community Forestry Team has to find sponsors amongst the players duking it out in bankruptcy court. Reached Tuesday, Mark Lovelace said that he was still bound by a confidentiality agreement, but that he was hopeful.

"We're working on getting this evolved into a formal plan," Lovelace said. "That's still in development, obviously. It has to be done by the 30th. So we've got a little work ahead of us, but we thought it was important to get it out there to the community."

In the past, the biggest players in the bankruptcy court — the financial firms that own around $730 million of Pacific Lumber's debt — have said that they were in talks about Palco's future with The Nature Conservancy. The Nature Conservancy is now one of the partners in the Community Forestry team deal. Coincidence?

You'd have expectedsadness, grief, maybe anger. Nothing of it. When District Attorney Paul Gallegos called his mini-press conference last week to respond to the appellate court's decision to kill, yet again, his massive fraud lawsuit against the Pacific Lumber Co., the DA himself was perfectly accommodating and upbeat. From Gallegos' demeanor, you'd never have guessed that California's First District Court of Appeals had, in a stroke, erased his whole reason for being.

Rightly or wrongly, Gallegos' whole career as a prosecutor has been tied up with this suit, which he filed shortly after taking office in 2003. The backdrop was the Headwaters Forest deal, in which the state and federal governments bought the last remaining giant old-growth redwood stand in private hands from Palco and simultaneously set up a long-term harvesting regime for the company's remaining holdings. In the suit, Gallegos and his then-assistant DA, Tim Stoen , with help from local activist and pot doctor Ken Miller , alleged that Pacific Lumber defrauded the public in the late '90s when the company submitted incorrect data on the relationship between logging and landslides to California regulatory agencies. (The company corrected the data, but — alleged the DA — too late.) The false landslide data allowed the company to secure a much greater rate of harvest than otherwise would have been possible, the DA argued. His suit sought restitution to the tune of hundreds of millions of dollars.

The suit set off a shitstorm that now, five years later, people would find difficult to credit. Pacific Lumber funded a massive recall attempt against the DA, bringing in all kinds of out-of-town sharpies to do some very dirty political work. Gallegos himself became a folk hero, acquiring an aura of sainthood to some and of deviltry to others. Everything in the county boiled down to a single question — were you for Gallegos, or were you for Maxxam? If you answered wrongly, you were secretly beholden to pure evil. This vibe stuck around for quite a while, long after the failure of the recall and even after a trial court threw out the suit against Palco, two and a half years ago. (See "Case Dismissed," July 7, 2005.) When, in 2006, Gallegos was faced by a challenge from law-and-order-minded Deputy District Attorney Worth Dikeman , the three basic cases to be made for Gallegos were that: a) the cops didn't like him, b) he had basically legalized pot and c) the Palco case was on appeal. Despite the office chaos endemic to Gallegos' tenure as DA and the dissolution of programs like the Child Abuse Services Team, these three factors and the aura remaining around him from the recall fight were enough to put him over the top.

What's left? As stated above, Gallegos didn't seem very perturbed by the ruling. Though it had been out for a full day before the press conference, he said that he hadn't read it until a couple of hours before the conference. He disagreed with the court's ruling — that Palco's actions fell under the First Amendment-guaranteed right to lobby the government, and probably didn't affect the outcome anyway — but he said that he respected that this was apparently the law.

"Candidly, I get positive opinions, not negative ones," Gallegos said. "You've got a good 40 percent of the population that says ‘See, I told you so,' and you've got 40 percent that say, ‘Darn, it didn't work.'"

All in all, Gallegos said, it was worth it. Reasonably, he argued that the case itself wasn't divisive; it was, he said, "a flashpoint of preexisting divisiveness or animosity in this community." True enough, as far as it goes. But it's still shocking to go back over the last five years and tally up all the hatred, all the paranoia, all the frenzied dark energy expended on this lawsuit and on the Gallegos persona, both by his detractors and his supporters. And then to realize that is was all over nothing, in the end.

Speaking of theHeadwaters Forest: Yes, President Bill Clinton , who signed that deal on behalf of the federal government back in 1999, is scheduled to be in town today (Wednesday, Jan. 16).

As we go to press, here are the final details: Clinton is scheduled to speak to the public for an hour at the Home Arts Building at Redwood Acres in Eureka at 6:30 p.m. Doors open early, but we're not sure exactly when. Check the North Coast Journal Blogthing ( for up-to-the-minute details. We'll also post the full press release from the Community Forestry Team, referenced above.

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Hank Sims

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