Feature

The $1.6 billion failure of United Savings wasn't the biggest thrift crash Texas saw; Gibraltar Savings Association actually holds that record, costing taxpayers more than $5 billion. But for perspective, it should be noted that United's failure cost 26 times more than the $60 million collapse of Madison Guaranty, the Arkansas S&L that is the centerpiece of the Whitewater affair.

San Antonio Congressman Henry B. Gonzalez is quite familiar with the accusations against Hurwitz and his associates, having spent most of the past decade tracking down S&L violators as chairman of the House Banking Committee. Although Gonzalez lost his chairmanship after the Republicans won a House majority in 1994, he remains dedicated to cleaning up the debris left by S&L failures.

"While there are those who may argue that Charles Hurwitz faces no liability (for the failure of United Savings), I believe this is one of the biggest S&L cases outstanding," Gonzalez says. "Hurwitz may have significant liabilities to the FDIC, and it is possible that any liability could be utilized to preserve some of the most important redwood forests on earth. We're talking about a possible settlement that may be far more important than any money Mr. Hurwitz may owe."

The secretive Maxxam empire is in many ways a reflection of the man who created it: complicated, relatively unknown, mega-rich, often maligned, obsessed with control.

"When you look at Maxxam, it presents a nice, clear Mephistophelean picture of American business," says Dr. Lisa Newton, a professor of business ethics and environmental studies at Boston's Fairfield University. After preparing a case study on Maxxam for the Center for Business Ethics, Newton became convinced Hurwitz occupies a unique niche in corporate America. "I have never seen anyone with this much zeal and cleverness play things so close to the law," she says.

More than six feet tall, with inexpressive eyes and jet-black hair he slicks straight back, Hurwitz cuts a striking figure among Houston's power elite. He and his wife Barbara, a former school teacher uniformly described by acquaintances as a "wonderful person," are close friends of Mayor Bob and Elyse Lanier and until recently were frequently sighted at top-drawer charity events. (A month ago, however, Hurwitz decamped the family quarters in the Houstonian Estates for an apartment at the Four Seasons downtown. The couple has not filed for divorce.)

The son of a successful menswear retailer in Kilgore, Hurwitz earned a bachelor's business degree from the University of Oklahoma. He joined the Wall Street firm of Bache & Co. as a stockbroker, but soon moved to San Antonio to sell mutual funds with his brother-in-law. At 27, Hurwitz linked up with Kozmetsky, founder of Teledyne -- the giant electronics and defense contractor -- and the two kicked off a 20-year string of business deals that combined Hurwitz's smarts and Kozmetsky's money.

In the early 1970s, Hurwitz acquired Federated Development Co. and Summit Group, the latter of which he took public in 1971. But -- in Hurwitz Misstep No. 1 -- the Securities and Exchange Commission accused him of filing false and misleading statements regarding the Summit offering. Hurwitz signed a consent decree to settle the charges, but he later insisted he'd done nothing wrong and had settled to avoid getting bogged down in the midst of financing a deal.

Summit was declared insolvent just four years after Hurwitz took it over, and -- in Hurwitz Misstep No. 2 -- the New York State Insurance Department sued him for fraud and mismanagement of the company, claiming he had illegally siphoned off about $800,000 in profits to the parent company before Summit failed. Again, Hurwitz denied any guilt, but settled the case out of court, reportedly paying back about half of the profits he was accused of skimming.

Undeterred, Hurwitz forged ahead and acquired McCulloch Oil Company (MCO) in 1980 and Simplicity Pattern in 1982, stripping each company of its most lucrative assets and rechristening the remainder Maxxam. He jumped into the savings and loan business in 1983, becoming the largest stockholder in United Financial Group, which is United Savings' parent company. He then leveraged those assets in 1986 to conduct the first major hostile takeover paid for with junk bonds -- his successful raid on Pacific Lumber.

In perhaps his shrewdest deal, Hurwitz acquired massive Kaiser Aluminum at a fire-sale price, after its owner got spooked by the Wall Street crash of 1987. Along the way, he scooped up roughly $122 million in foreclosed properties from the Resolution Trust Corp. and developed a country club residential community in California's sensitive high desert country, drawing the ire of environmentalists and celebrity neighbors alike. More recently, he became the controlling partner of Sam Houston Race Park, emerging as the biggest player in Texas' nascent gambling industry.

"He is the Houdini of high finance," Craig Gilmore, a California investment adviser, told the Wall Street Journal several years ago. "Say what you will about him, the guy makes some great deals."