February 29, 2004, Los Angeles Times, Firm Sued by D.A. Funds Bid to Recall Him, by Kenneth R. Weiss,

February 29, 2004, Los Angeles Times, Firm Sued by D.A. Funds Bid to Recall Him, by Kenneth R. Weiss, Times Staff Writer,

Pacific Lumber gives $229,000 to campaign to oust the Humbolt County official who filed fraud case.

SCOTIA, Calif. — Pacific Lumber Co., facing fraud charges over its state-approved plans to cut down giant redwood trees in rural Humboldt County, has poured $229,000 into a recall campaign to oust the elected district attorney who brought the charges.

Tuesday's recall race, with a last-minute infusion of cash, is saturating local radio and television airways and stuffing mailboxes with ads that portray Dist. Atty. Paul Gallegos as being soft on crime and a friend of illegal tree sitters and medical marijuana advocates.

Confidential e-mail from the district attorney's office was stolen -- investigators do not yet know by whom -- and distributed by the recall's campaign manager, who said someone slipped them under his door. Gallegos' family home just outside Eureka has been broken into -- twice. Nothing was stolen, but Gallegos believes the intruder left a message by turning up the heat to 90 degrees.

"They're trying to intimidate me," said Gallegos, who has raised $180,000 to fight the recall. "They're fabricating stuff. They're throwing every piece of garbage at me, hoping some of it will stick."

"They are angry at me that I would sue Pacific Lumber Co and even think to take power away from the good old boys," said Gallegos, a 41-year-old USC graduate who left Southern California for the North Coast a decade ago. "To them, even if they lose, they think they've sent a message, not only to me, but to all elected officials. County supervisors. Judges. They're elected too."

Pacific Lumber and its corporate owner, Houston-based Maxxam Inc., deny that the company's contributions -- more than 80% of the recall campaign donations -- are part of an effort to get rid of the fraud lawsuit.

Pacific Lumber spokeswoman Erin Dunn said the company joined the campaign -- which was launched 90 days after Gallegos took office -- merely to remove a district attorney who has a miserable record and to help preserve public safety and protect its 900 employees and their families.

"You cannot put a price tag on public safety," Dunn said. The contributions are perfectly legal, she said, and have been vetted by company lawyers. "We are absolutely following the letter of the law."

Robert Manne, president of Pacific Lumber, declined to be interviewed.

The recall campaign is shaping up to be more than a test of Pacific Lumber's century-old dominance of Humboldt County politics. It's become the talk of district attorneys around the state, many of whom view the campaign as an abuse of the recall process.

Donations by a defendant to a recall campaign are perfectly legal, said Norm Vroman, district attorney of neighboring Mendocino County. But it's not right for a wealthy corporation to buy its way out of a fraud case by eliminating its accuser, he added.

"This is not just a threat to Paul Gallegos, but to the independence of every sitting D.A. in the state," Vroman said. "What this is, is an example of a big-moneyed defendant challenging a prosecutor by bringing a recall rather than answering the charges in court."

In addition to disturbing other district attorneys, the battle between Gallegos and Pacific Lumber has roiled this county of 130,000 people. The area has seen the decline of timber, fishing and mining jobs along with an infusion of eco-sensitive newcomers who want to protect its clean air, water and iconic redwood trees.

The Eureka Times-Standard, the only daily newspaper in the county, editorialized against the recall Thursday. "It's not illegal, but frankly it smells bad" for Pacific Lumber to be "throwing an incredible $230,000 into a recall designed to remove the prosecutor" in its case, the editorial said.

Four of the six Superior Court judges in Humboldt County have recused themselves from hearing the case, citing perceived conflicts of interest. A fifth judge, who is presiding over the case, has indicated that he will take himself off it as well. The suit will be moved to another county, the district attorney's office says.

The battle began in February 2003, when Gallegos and Assistant Dist. Atty. Tim Stoen filed a $250-million civil fraud lawsuit against Pacific Lumber. The suit contends that the company deceived state agencies about its timber cutting practices on unstable slopes, resulting in massive landslides and flooding damage to local streams and farms.

The case focuses on environmental reviews linked to the historic 1999 Headwaters Forest agreement, which gave Pacific Lumber $480 million in tax dollars in return for the company's agreement to set aside 7,500 acres of ancient redwoods in public trust and accept other restrictions on logging. The suit charges that the fraud enabled Pacific Lumber to sidestep environmental restrictions and "unjustly enrich" itself by harvesting $40 million more worth of trees every year.

The recall petition drive began within weeks of the suit. Right before the deadline to qualify for Tuesday's ballot, Pacific Lumber, which calls itself Palco, donated about $40,000 to the effort, granted employees paid leave to work on the campaign and paid professional circulators as much as $8 for every signature they could get.

Once the recall qualified, three candidates jumped on the ballot. In debates, all three -- Steven Schectman, Worth Dikeman and Gloria Albin-Sheets -- have pledged that they would not drop the lawsuit against Pacific Lumber if they became the next district attorney. But at least two have hinted that they would dump Stoen, a gung-ho expert on corporate crime who has been handling the case. That raises the likelihood, Gallegos supports say, that the case would languish without a dedicated champion in the office.

Pacific Lumber President Manne, in a letter to the candidates last month, wrote that he was pleased that they would not drop the case. "This is a frivolous lawsuit with compelling legal reasons on why it should be tossed out," Manne said. "Palco wants its day in court."

Rob Flanigan, a 27-year-old campaign manager from Sacramento who is managing the recall effort, noted that two major law enforcement unions back the recall. "We have great ads coming," Flanigan said. "We are going to do our best to expose how the D.A. is soft on crime."

That accusation centers on the case of Pedro Martinez-Hernandez, who is serving a 16-year sentence for molesting his daughter over a five-year period. Gallegos' foes say Martinez-Hernandez could have been sentenced to life in prison if the D.A. had charged him with multiple counts of child molestation. Gallegos said he filed two charges, to which Martinez-Hernandez pleaded guilty, because he was concerned that the child and other family members -- all of whom were illegal immigrants -- would flee rather than testify.

A campaign brochure that arrived in mailboxes across the county Wednesday featured a picture of Martinez-Hernandez and text saying he was "arrested for raping a little girl 1,900 times.... Paul Gallegos gave him a get out of jail early card."

Then there is the e-mail, which Flanigan says reveals a conspiracy between radical environmentalists and the district attorney to get Pacific Lumber. Stoen says the e-mail shows diligent fact-checking he conducted with an expert consultant.

Although district attorneys are often threatened with recalls by disgruntled groups, this case is unusual because it's being bankrolled by a single wealthy defendant. Maxxam and Pacific Lumber post yearly earnings of $446 million, double the budget of Humboldt County.

"Maxxam and Pacific Lumber are facing a $250-million lawsuit," said Vroman, the Mendocino County district attorney. "Why wouldn't they spent $300,000 or $400,000 to get rid of the messenger. It's a

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Times special correspondent Emily Gurnon contributed to this report.