HomeMy WebLinkAboutResolution 97-017 01/21/1997 Resolution No. s~-~7 N.GS.
of the Ciry of Petaluma, Califiomia
RESOLUTION REGARDING THE CA PUBLIC EMPLOYEES' RETIREMENT SYSTEM AND
CA STATE TEACHERS' RETIREMENT SYSTEM'S INVESTMENTS IN
THE MAXXAM CORPORATION
1 WHEREAS, Pacific Lumber was bought by MAXXAM Corporation in 1985 in a hostile
2 takeover for $900 million-$300 million in short-term bank loans and $450 million in junk bonds sold
3 under the direction of convicted felon Michael Milken and now-defunct Drexel Burnham Lambert; and
4 WHEREAS, MAXXAM reintroduced clear cutting, long abandoned before the takeover by
5 Pacific Lumber, and proposed to liquidate the entire ancient forest in 20 years; and
6 WHEREAS, Pacific Lumber is conducting salvage logging in three of the four old growth groves
7 causing disturbance to the critical habitat within the ancient redwood forest ecosystem; and
8 WHEREAS, the MAXXAM controlled savings and loan, United Savings Association of Texas,
9 collapsed in 1988 and was seized by the government and bailed out by the U.S. Taxpayers at $1.6
10 billion; and
11 WHEREAS, in 1995, the Council on Economic Priorities listed MAXXAM/Pacific Lumber as
12 one of the nation's worst environmental offenders; and
13 WHEREAS, in 1995, the Federal Deposit Insurance Corporation filed a $250 million claim
14 against Chazles Hurwitz, CEO of MAXXAM Corporation, which condemns his business practices; and
15 WHEREAS, in 1995, the U.S. Treasury's Office of Thrift Supervision named MAXXAM
16 Corporation and Charles Hurwitz in an action seeking $839,000 in penalties and unspecified additional
17 restitution for losses identified in the Notice of Charges amounting to $485,000,000; and
18 WHEREAS, the Office of ThrifUSupervision has the authority to make an asset preservation
19 order without a prior hearing or without advance notice, which would have the effect of freezing assets;
20 and
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2L WHEREAS, the City of Petaluma is a member of the California Public Employees' Retirement
22 System; and
23 WHEREAS, the California Public Employees' RetirementSystem is the second largest
24 institutional investor in the MAXXAM Corporation with 318,400 shares, or 3.66% holdings, and the
25 California Teachers' Retirement System the tenth largest institutional investor with 71,400 shares, or
26 0.8%: and
27 WHEREAS, a debt for nature swap has been supported by twenty-three members of Congress,
28 including Ronald Dellums, Pete. Stark, Amla Eshoo and Lynn Woolsey, and the Association of Bay Area
29 Governments;
30 NOW, THEREFORE, BE IT RESOLVED that the City Council calls upon the Federal Deposit
31 Insurance Corporation to pursue a debt for nature settlement; and
32 BE IT FURTHER RESOLVED that the City Council hereby calls upon President William Crist
33 of the California Public Employees' Retirement System Board and CEO James Mosman of the
34 California State Teachers' Retirement System Board to influence the MAXXAM Corporation to
35 immediately halt salvage logging in all old growth groves and riparian zones, and to surrender
36 Headwaters Forest to the Federal government in a debt for nature swap; and
37 BE IT FURTHER RESOLVED that if the MAXXAM Corporation refuses to negotiate or is
38 found to be negotiating in bad faith concerning a debt for nature swap, the City of Petaluma will
39 recommend that the California Public Employees' Retirement System divest its holdings of MAXXAM
40 stock.
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Under the power and authority conferred upon this Council by the Charter of said City.
REFERENCE: I hereby certify the foregoing Resolution was introduced and adopted by the Approved as to
Council of the City of Petaluma at a (Regular) (7A7B$di~lEiYdtl~X~di~ meeting form
on the ----2157:..---.._.. day of ........_~r`I0.Ur1P.Y 19...;).7, by the
following vote: . .
i At ney
.AYES: Keller, Stompe, Torliatt, Maguire, Vice Mayor Hamilton
NOES: Read, Mayor Hilligoss ~
ABSENT: None ,,J ~ ~/}~`~',~p;(~7
ATTEST: ~_~._..z`_r_`"_._.r_'__~ ' .L._~_._'_.----
Cr yClerk Mayor
Council File
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