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Distrust of Big Government, Big Business Has Deep Roots

One in an occasional series of conversations with California voters.


FORTUNA, Calif. — FORTUNA, Calif.--Corky Cornwell is the picture of small-town prosperity, with his ample belly, ruddy cheeks and the service-club pin neatly fixed to the lapel of his tweed sport jacket.

His chain of six cell phone stores is thriving, even as much of the North Coast struggles economically. As Cornwell says, the little gadgets are as much a staple these days as bread or milk.

But his hail-fellow disposition melted at the mention of WorldCom, one of the blackest hats in the recent parade of corporate villains. "Terrible, terrible," Cornwell sputtered. "I wish I had that CEO standing right here. I'd punch him right in the nose."

But Cornwell doesn't want or expect the government to start storming the boardrooms of America to haul off its wayward chieftains. "We have enough government control," he said.

Bob Platt isn't counting on much of a corporate crackdown either. The rangy 24-year-old, who makes a living as a glass blower in the woods around the Trinity River, was on a weekly grocery run to one of Eureka's natural-food stores. "That's kind of how things go in America," he said, shrugging off the growing litany of blue-chip malfeasance. "Corporations run the world."

For more than a decade, California's North Coast was one of the country's most polarized places. Loggers and environmentalists occasionally waged literal hand-to-hand combat over the region's primeval forests, part of a bigger fight between hard-pressed locals and a hard-charging Texas businessman. The result left few satisfied; the only consensus here seems to be a shared skepticism about big business and big government alike.

The fight started in the mid-1980s, after a Houston financier, Charles Hurwitz, seized control of the family-run Pacific Lumber Co., siphoned $60 million from the employees' pension fund, then dramatically stepped up timber production to service his massive load of debt.

But the battle was much larger than a struggle over logging; it was a fight over culture and values and change and who controlled the region's destiny. It was a battle, too, involving junk bonds, hostile takeovers and a community's fealty to far-off Wall Street. It was fought long before talk of business ethics and good corporate citizenship came into their recent vogue.

After years of confrontation, many here are angry and mistrustful, fatigued from the skirmishing and perhaps more wary than most about the nature of unbridled capitalism and whether government has the ability to rein in capitalism's excesses--or should even try.

Debby Williams was sticking small American flags into the green flower boxes outside the Antique Depot on Fortuna's main drag as she lamented how "big CEOs are getting rich dumping companies, and the little guys are taking the fall." Hurwitz did the same thing, she went on, "except he did it with logs. He left the timber industry hanging here."

But it wasn't just corporate exploitation that ravaged the industry, she said. All around, luxuriant, tree-covered slopes stretch as far as a human eye could behold--much of it now off-limits to logging. "A lot has to do with environmentalists and all the rules you have to go through," Williams went on, with a frown. "You have to file too many reports. You can't do anything if there's a bird in the forest."

Irv Parlato, 59, shared that seeming ambivalence. His family restaurant, famous for its red sauce, has operated in Fortuna for 46 years, and he plies the tidy streets on his mountain bike like a roving goodwill ambassador.

Back in the 1950s, when the local timber industry was at its peak, one in two Humboldt County residents worked in the wood-products business or a related industry. Today that figure is about 8%. Parlato blames the decline on overly stringent environmental regulations, which "protect this bird and that salamander" at the expense of hundreds of workers.

But at the same time, he said, "there has to be more regulation" of big corporations to prevent the kind of misdeeds that took place at Enron, the Arthur Andersen accounting firm and, apparently, at many other major companies. "Some government agency maybe overlooked those issues," he said.

Decades of accumulated tension peaked here in the 12-year battle over the Headwaters Forest, which stood as the last unprotected grove of ancient redwoods on earth.

After taking control of Pacific Lumber, Hurwitz made clear his intention to cut down the biggest of the trees, some of which date to the first millennium. Years of lawsuits, bloodshed, mass demonstrations, thousands of arrests and a widely publicized tree-perching by environmental activist Julia Butterfly Hill finally culminated in a government-brokered deal.

Under the 1999 settlement, Pacific Lumber received $480 million from the state and federal treasuries to permanently set aside roughly 10,000 acres of North Coast forest. The agreement also established strict new guidelines for protecting water quality and wildlife habitat on another 200,000 acres.

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