Schwarzenegger spokeswoman Ashley Snee said the governor's office would not discuss the session because it was a private meeting.
However, Nathan Barankin, a spokesman for state Atty. Gen. Bill Lockyer, said, "I am sure if Pacific Lumber Co. sought to evade the requirements of the deal with California, there would be a fierce legal battle to prevent it." Barankin was not aware of Pacific Lumber's warning until contacted by The Times on Monday.
As part of Pacific Lumber's sale of the Headwaters Forest, the company agreed to operate according to a restrictive conservation plan on its 200,000 acres.
In May, the company moved to revise that plan to allow logging closer to waterways. But the recent bankruptcy warning raises the specter of wholesale abandonment of the tough safeguards in the hard-won Headwaters pact, allowing the company's timber management to revert to less protective rules.
Environmentalists allege that Pacific Lumber is exaggerating its financial condition to pressure state regulators into granting what it wants. "They are using their employees as human shields, and they are threatening to shut down the whole company if the governor does not intervene," said Paul Mason, a Sierra Club forestry representative.
Pacific Lumber has been battling environmentalists since Maxxam bought the company in 1986 and substantially increased its logging. During the last several years, residents who found themselves on the receiving end of floodwaters and mud joined the fray.
In the most recent skirmish, the state Water Resources Control Board last week upheld a decision by its regional arm to grant Pacific Lumber four logging permits on two watersheds. But the company is seeking at least 11 more.
At a hearing on Wednesday, Mark Lovelace of the Humboldt Watershed Council argued that additional logging in the Freshwater Creek and Elk River watersheds would exacerbate the suffering of residents. "It is a very small amount and the dire harm [claimed by Pacific Lumber] makes no sense," he said. "Residents are increasingly trapped on their property."
In upholding the four permits last week, Peter S. Silva, vice chairman of the resources control board, said he questioned the company's financial warnings but concluded that no one had presented evidence that the additional logging would add significantly to silting problems.
The water board has some jurisdiction because logging can disrupt earth that can be washed into waterways, affecting water quality and wildlife.
