Western Environmentalists’ Enemy No. 1 : Timber: Charles Hurwitz has come a long way from his East Texas birthplace. As his experience at Pacific Lumber has shown, confrontation has become a way of life.

On a May evening in Houston, a mock logger with a real chain saw dismembered a hunk of redwood at the 50th birthday banquet of financier Charles E. Hurwitz.

Just a poke in the ribs, Texas-style, for Western environmentalists’ most hated foe.

Over the decades in Northwest timber country, there have been many objects of environmentalists’ scorn. But for five years, Hurwitz has been at the top of the enemies list as he has doubled the logging rate on the world’s last big, private tract of old-growth redwoods--1,000-year-old trees that environmentalists view as unique, irreplaceable wildlife habitat.

Since he launched a successful takeover of Northern California’s Pacific Lumber Co. in 1985, Hurwitz has been a symbol of the various presumed evils of corporate raiders. Critics charge that he has set about destroying part of the national heritage for short-term cash.

The radical environmental group Earth First!, which is mounting almost daily protests this summer in Northern California, often makes Hurwitz a prime, highly personal target. An Earth First! rally last year, for instance, was called “Day of the Living Dead Hurwitzes: Will the Redwoods Survive?� and was announced on a release that featured movie-poster cartoon zombies of Hurwitz ranging through clear-cut tree stumps.

“He’s not only against the environment, he’s against people,� says Earth Firster Darryl Cherney, one of his loudest opponents.

Hurwitz is also condemned by mainstream environmentalists backing the Big Green and Forests Forever voter initiatives on the California ballot this fall. Big Green would provide $200 million in state funds to buy timberland, with Pacific Lumber’s old-growth forest a leading candidate. Forests Forever would go further and fundamentally change the state’s logging business with a ban on clear-cutting and a major reduction in the logging rate.

By unintentionally galvanizing anti-logging forces, Hurwitz has drawn criticism from within the timber business as well.

“It’s the old expression ‘D.P.A.S.’--Don’t poke a skunk. He raised the issue. It was his action that gave impetus and momentum to the Western environmentalist groups,� said Bruce Kirk, a forest products industry analyst at S. G. Warburg Co., a New York investment banking firm.

Hurwitz’s own rare public statements also haven’t won him fans. At a meeting with Pacific Lumber workers after his takeover, Hurwitz described his version of the Golden Rule: “He who has the gold, rules.� Environmentalists seized upon the story. Hurwitz later told a reporter that it had all been a joke. “The guy was kidding me,� said Hurwitz. “I was kidding him back.�

Hurwitz has rarely spoken to the press. He declined requests to speak to The Times, eventually offering an interview in November. That would be after initiatives affecting the timber industry are voted on in the California election.

Hurwitz’s clash with environmentalists may be his most ferocious encounter with opponents, but it is hardly his first. Tough battles have become a trademark of the financier as he has assembled a sprawling network of corporate ventures.

Beginning with $17,000 in the mid-1960s, Hurwitz has built an international conglomerate based on natural resources and real estate. Chairman of the board and chief executive of Maxxam Inc., he controls companies worth at least $3.2 billion in assets, the largest being KaiserTech Ltd., parent of Kaiser Aluminum & Chemical Corp. Maxxam also owns real estate management and sales companies operating in Arizona, Colorado, Texas and New Mexico, as well as an immense new resort complex he’s building on nine miles of ocean frontage in Puerto Rico.

Buying giant KaiserTech in 1988 made Maxxam, long a Los Angeles-based company, the fastest-growing publicly traded firm in California the past two years. Maxxam moves its headquarters to Houston this fall.

“I buy to build, not sell,� Hurwitz has repeatedly maintained.

“He’s not a raider. He’s not a speculator,� insists John B. Connally, former Texas governor, U.S. Secretary of the Treasury--and Navy--and one-time presidential candidate. “Every now and then, you get fed up with false propaganda.� Connally, after declaring personal and corporate bankruptcy in 1988, accepted an invitation to share a suite of offices with his friend Hurwitz and now acts as a consultant while serving on the boards of several of his companies.

Hurwitz’s personal stake in Maxxam, directly and through family holdings, is valued at $193 million.

As his wealth has grown, so have his antagonists. They have included taxpayer watchdogs, land-use activists and the likes of Susan Marx, widow of Harpo, and her friend Frank Sinatra, who tried to thwart a Hurwitz project in their town of Rancho Mirage. Sinatra even wrote his own newspaper ad in the battle against Hurwitz.

Some former foes in hindsight believe that Hurwitz’s hat may not be as black as routinely portrayed. But enemies and aides agree that he is tough and persistent.

“He is the most tenacious human being I’ve ever met,� says Barry Munitz, president and chief operating officer of Federated Development Co., a Hurwitz company.

Hurwitz works in a penthouse office on the 22nd floor of a plain, beige Houston office building, across the street from a diner. He keeps two secretaries busy--one on the 7:30 a.m. to 4:30 p.m. shift, the other coming in late and staying until 7:30 p.m. Aides say he tends to pace the room, trailing a long phone cord as he calls a network of bankers, brokers, analysts and friends.

“He doesn’t let go,� says Munitz. “And that accomplishes some things that I and many others might have surrendered on a long time ago. He’ll say, ‘Let’s try it once more. No, how about this other angle? Well, call him again. Well, maybe if you had--have you asked him this? . . .’

“You say, ‘Charles, I’ve tried all of those things; it won’t work,’ and five minutes later he’ll wander into my office and say, ‘You know, I was thinking about this . . . Did you talk to his wife? Did you talk to the florist? Did you talk to the barber?’ �

Hurwitz’s people sometimes do more than talk--as the Rancho Mirage city council found in his early-1980s fight to build a hotel, luxury housing complex and golf course in the hills above town. The town master plan banned building on the skyline. The project would also invade the turf of the rare, protected Santa Rosa peninsular bighorn sheep.

Hurwitz’s attorneys played rough, suing the small city for $240 million. Fearing municipal bankruptcy, council members let the development go ahead. Later, when the details were being worked out, Hurwitz sued again. In a nerve-rattling assault rarely seen in land-use fights, his lawyers sued a new set of council members individually, warning that they could be personally liable for multimillion-dollar damages. Worried for their life savings, and with spouses and bankers asking anxious questions, that council also reached accommodation.

“I’ll do what I have to with the guy; I’ll deal with the guy,� said a disgusted Jeffrey S. Bleaman, mayor of Rancho Mirage, earlier this summer. “But I won’t break bread with the guy. I consider him immoral . . . The deal always changes.�

A trim, tennis-fit, private man, Hurwitz drives his own car to work from an expensive condominium, but not the block-long Houston estate he could easily afford. He also owns no airplane or yacht and flies commercial. And he routinely applies the same standards to acquisitions--stripping corporate airplanes and other management perks from the companies he buys.

Hurwitz and his wife, Barbara, a college classmate, were married in 1963 when he was 23. They have two sons--one a recent college graduate, the other in an entry-level job as an investment banker in Houston. Barbara Hurwitz has appeared on best-dressed lists in the Houston newspapers. Hurwitz himself is known for his well-cut dark suits.

By all accounts, he has come a long way down the road from his small East Texas birthplace.

Kilgore was the basic Texas boom town of the 1950s. There were oil derricks next to the high school and in neighborhoods. Derricks downtown were strung with Christmas lights for the holidays.

The walls of homes would shake when diesel pumps on the wells kicked to life. The good parts of town had electric motors on their wells. The best part, though, didn’t have oil wells at all. Hurwitz came from that part.

His father owned an upscale clothing store in Kilgore. In high school, Hurwitz always had new cars and spending money. He was considered intelligent, popular, energetic, a bit mischievous but not a particularly good student.

Nor was he much noticed when he moved to the beautiful old campus of the University of Oklahoma in 1958. At a time when the hot topics in business education were mergers and acquisitions, Hurwitz majored in marketing, joined Pi Lambda Phi fraternity and graduated without fanfare in 1962.

He began his career on Wall Street, working as a stockbroker for Bache & Co. From the beginning, he was smart, self-assured and smooth over the phone. By 1965, he had set up the Invest-America Group to sell mutual funds. His first big deal came at age 27. With the backing of George Kozmetsky, co-founder of Teledyne and later dean of the business school at the University of Texas at Austin, Hurwitz formed another mutual fund, Hedge Fund of America. But the market turned sour, and Hurwitz sold both companies, apparently at a loss.

He put together an insurance venture called the Summit Group. Within a few years, it went belly up. In 1971, Hurwitz ran into trouble with the Securities and Exchange Commission, which accused him of filing false and misleading information about one of his many involved deals. Hurwitz says he was too preoccupied with a deal for financing one of his companies to fight the charge. He signed a consent settlement with the government without admitting wrongdoing.

He bought Federated Development, a New York real estate and insurance company, in 1973. By 1978, he had used profits from Federated to buy into McCulloch Oil Co., the chain-saw manufacturer that also owned a lot of Western real estate. By 1980, Hurwitz had control of the company. He sold off some of its assets, kept the real estate and renamed it MCO Holdings.

Two years later, at a time when fewer women were making their own dresses, he bought Simplicity Pattern Co. He sold the pattern portion of the business, changed the name to Maxxam and used that company to buy more real estate.

Through an interest in United Financial Group, parent of United Savings & Loan Co. in Houston, Hurwitz made aggressive moves in 1984 on Castle & Cooke, the food and Hawaiian real estate giant.

Ian Wilson, then Castle & Cooke’s president, spent an hour in Hurwitz’s Houston office trying to avert a takeover. Wilson says he verbally walked Hurwitz through the various company divisions, asking where he saw the unrecognized value that would fund a buyout.

“He had no idea where the value was,� recalled Wilson. “I asked specifically about Sea Ranch: ‘What about the San Jose property?’ ‘What about Lanai?’ He’d never heard of them . . . It was obvious that somebody had said to him, ‘Let’s take a run at it.’ �

Though Hurwitz executives deny it, Wilson believes that all along he intended to force Castle & Cooke to buy back his shares at a profit, which he later did, making about $8 million. “His game was greenmail, clearly--in those days anyway,� Wilson said.

In 1988, Hurwitz, through Maxxam, bought his biggest company, Oakland-based KaiserTech, parent of Kaiser Aluminum & Chemical, for $930 million. Kaiser Aluminum owns or shares ownership in mines and smelters in the United States, Ghana and Wales.

Along with most of the deals have come lawsuits, bruised management egos and suspicious shareholders. But none has raised the public furor that Maxxam’s buyout of Pacific Lumber has.

The takeover began in the spring of 1985 when Hurwitz, alert for undervalued companies, heard about what he later described as a “sleepy,� “under-managed�--and therefore desirable--logging operation.

Most important, the 120-year-old company, previously revered even by the Sierra Club for its conservative logging practices, hadn’t inventoried its trees for nearly three decades. Hurwitz quietly arranged for an aerial survey--the results of which were later confirmed by a respected timber consulting group--that showed that the company owned 30% more standing timber and 45% more high-quality old growth than it thought it had. The hidden assets weren’t reflected in the price of the stock, so they could be used to pay off the debt involved in buying the company.

Hurwitz raised $450 million of the $863-million purchase price through financier Michael Milken of Drexel Burnham Lambert Inc. for one of the first hostile takeovers to be funded with junk bonds. On Sept. 30, 1985, Hurwitz called Gene G. Elam, chief executive of Pacific Lumber, to tell him that he would make a tender offer. The stock was then $28 a share; Hurwitz would offer $36.

The Pacific Lumber board included--but was no longer dominated by--descendants of Simon Jones Murphy. Murphy and his heirs had always supported conservative logging policies. They had done so to ensure a log supply in perpetuity to company mills and to avoid stirring up public opposition to its cutting plans, as it had in a bruising and futile tree-preservation battle with the Save the Redwoods League in 1925.

Now, the board hired Salomon Bros., the New York investment banker, to hunt for higher bidders or to find another way to fight off Hurwitz. A takeover from some quarter was almost certain, because the extra assets in the Hurwitz aerial survey were no longer secret.

Many shareholders offered support to management, according to veteran Pacific Lumber executive David Galitz, even as they admitted that they had already sold most of their stock to Hurwitz.

“We found out that shareholder loyalty is worth about a quarter point a share,� he recalls ruefully. “If somebody comes in and offers a substantial profit on your investment, that shareholder loyalty goes right out, as they go directly to the bank.�

Salomon Bros.’ search for higher bidders or other solutions also failed, according to Ezra Levin, Maxxam’s attorney, who was at the negotiations. More than 100 companies were approached and no better bids came forth--even though, as Galitz recalls, visiting financiers made the tiny airport at Scotia, Pacific Lumber’s headquarters, look “like New York International, with planes flying in and out of here.�

Meanwhile, negotiations between the board and Hurwitz were tough, Levin recalls. They finally stalled at “$38 and change.� But as Hurwitz was walking away from yet another proposal, he turned and said to Elam, “Wait a minute. Let me talk to you a minute.� After a short, private meeting, the deal was made, at $40 a share.

A subsequent timber survey backed up the previous estimate of 30% more trees on Pacific Lumber, and Hurwitz promptly doubled the cutting rate.

Environmentalists have since repeatedly attacked Hurwitz’s cutting plans in court, often successfully. Currently, in a move dismissed as window dressing by environmentalists, Hurwitz has pledged to ban clear-cutting techniques on all Pacific Lumber old growth indefinitely and to refrain from logging in the old-growth Headwaters forest for the next two years. This grove, at the headwaters of Salmon Creek, 40 miles southeast of Eureka in Northern California, is a central concern of conservationists.

But environmentalists believe that his doubling--some claim tripling--of the cutting rate to pay off the takeover debt means that he will soon run out of the best trees and move on. Left behind will be clear-cut desolation and jobless loggers.

Hurwitz says he will continue to log at the doubled rate until the year 2005, when the company will fall back to the pre-1985 level. This is sound timber policy, he says, since Pacific Lumber has all those extra trees. In fact, previous Pacific Lumber management was logging old-growth too--on a timetable that by some accounting would have felled the company’s last virgin redwoods in 2013, only five years later than Hurwitz will.

Indeed, that old cutting plan “would have been a concern,� agrees Robert Sutherland, litigation coordinator and founder of Environmental Protection Information Center (EPIC) of Garberville, Calif., and the author of much of the Forests Forever initiative. “The accelerated cutting just made it an issue much sooner.�

Besides, say Hurwitz and his executives, contrary to public impression, it’s not that the last old-growth redwoods are about to be scythed. More than 76,000 acres of old-growth redwood are already in public preserves in California--20,000 of them donated by Pacific Lumber years ago. Why are environmentalists putting up such a fight in large part to save 3,000 more acres of old-growth redwood, the executives ask--and what’s inherently wrong with treating logging as an industry anyway?

Of the logging business, Hurwitz himself wrote recently in a Houston newspaper: “It is a clean, nontoxic production process that does no damage to the environment. It is renewable, provides clean air and water and wonderful wildlife habitats.�