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The Planet

Headwaters Debt-for-Nature Swap

What does a savings-and-loan failure in the heart of Texas have to do with the largest unprotected ancient coastal redwood forest in the world? Forest activists say it could end logging in Northern California's Headwaters Forest forever -- through an innovative plan called a debt-for-nature swap.

The Federal Deposit Insurance Corporation (FDIC) has filed suit against corporate raider Charles Hurwitz to recover $250 million of the $1.6 billion loss American taxpayers suffered when Hurwitz's United Savings Association of Texas collapsed in 1988.

Hurwitz's Maxxam Corporation took over Pacific Lumber Company, the owner of Headwaters Forest, in 1986. Outraged citizens watched as Hurwitz more than doubled the company's cut of old-growth redwoods to pay off a junk-bond debt.

Now activists are mounting a nationwide campaign to convince regulators to trade Headwaters Forest for part of the debt incurred by Hurwitz's savings and loan failure.

"A debt-for-nature swap may offer the public its best opportunity to recover a significant portion of the tremendous losses suffered in the USAT failure and save Headwaters Forest at the same time," said Kathy Bailey, the Sierra Club's state forestry chair in California.

The campaign comes at a time when logging poses an increasing threat to the ancient forest. More than 2,000 demonstrators rallied at Headwaters Forest on Sept. 15, denouncing Pacific Lumber's plan to log in the forest under a state salvage-logging exception. The company plans to use helicopters to remove as much as half of the downed trees there.

Biologists say dead and dying trees play a critical role in the ancient-forest ecosystem by nurturing new growth and providing habitat for wildlife species. Headwaters Forest's value is underscored by the fact that the federal government has identified it as "essential nesting habitat" for the threatened marbled murrelet, a bird species whose old-growth habitat is dwindling.

To take action: Write your senators and representative. Ask them to write to the FDIC and urge exploration of a debt-for-nature swap exchanging Headwaters Forest for money owed by Charles Hurwitz. Copies of the letters should go to:

Interior Secretary Bruce Babbitt
U.S. Interior Department, 
1849 C St., N.W.,
Washington, DC 20240

For a sample letter or to find out how to get a professionally produced 13-minute video about Headwaters Forest, contact Kathy Bailey at (707) 895-3716.

Headwaters Forest Update


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