By Jeff Balke
By Aaron Reiss
By Angelica Leicht
By Dianna Wray
By Aaron Reiss
By Camilo Smith
By Craig Malisow
By Jeff Balke
The Case For Hurwitz
Your April 25 cover article by Laurel Brubaker Calkins defames Charles Hurwitz. The heading, "The Case Against Hurwitz," sets the blatantly prejudicial tone of the article, which continues into the subhead, "for once, Hurwitz may have no place to hide," and grows more inflammatory with each paragraph of text.
The text begins with a fictionalized "first-person" account and then proceeds to misidentify Maxxam, a publicly held, Houston-based, much-written-about company, as a "secretive empire." A company spokesman's comments are dismissed as being said for pay, while anyone volunteering a negative notion about Mr. Hurwitz, however misinformed and unverified, is accorded the mantle of unquestioned objectivity and authority. Although your reporter did not meet with Mr. Hurwitz, she freely volunteers the views that his eyes are inexpressive and that his hair is jet black and slicked back; in fact, it is graying and parted.
The article piles innuendo upon innuendo, all with the obvious purpose of creating a passionately unobjective and untruthful portrait. Mr. Hurwitz and Maxxam are cited as the only players involved in the Pacific Lumber acquisition who were not convicted in criminal court. No criminal prosecution has focused on Pacific Lumber, and not only have Mr. Hurwitz and Maxxam not been convicted, they have never been charged with anything resembling criminal conduct.
While the allegations of the FDIC and OTS are quoted at great length, the responses by Mr. Hurwitz and other co-defendants in those separate actions are given short shrift, described as a "grab bag of possible explanations" and "catch-all defenses." I would have expected from the Press that a private citizen who is defending himself against the considerable weight of the U.S. government would at least have been offered a level playing field. It is regrettable, and surprising, that his positions are so cavalierly dismissed in your publication.
Allegations of "reciprocal bond trading" are false. These allegations have been examined exhaustively over the years without any finding of merit. There was no incentive or quid pro quo in our business dealings with Drexel. Contrary to statements in your article, the FDIC specifically considered the allegation of quid pro quo (advanced by radical environmentalists with a political agenda) and determined it lacked sufficient merit to become a part of the FDIC's claims. No person of authority has made your reporter's allegation that United Savings' funds were used to acquire Pacific Lumber.
The following points -- not one of which appeared in the article -- are true with respect to United Savings.
* Neither Charles Hurwitz nor Maxxam ever took a dime out of United Savings.
* They received no dividends, no compensation and no fees from United Savings.
* United Savings invested and made money in high-yield securities offered by Drexel and others.
United Savings failed when it was overwhelmed by the same forces that took down every major savings and loan in Texas: the collapse of energy prices, the freefall in real estate values, violent interest rate fluctuations and the precipitous, incredibly damaging actions by federal regulators. Mr. Hurwitz and Maxxam lost their investment when United failed. They made a bid to recapitalize United Savings that was over $10 million more favorable than the winning bid. Incredibly and inexplicably, their bid was ignored by the regulators.
Mr. Hurwitz does not "cast himself in the role of civic benefactor." He is a businessman who chose Houston as his home and is committed to its future. He has taken on a range of projects (like the effort to keep Continental Airlines Houston-based and the continued corporate and personal commitment to the Sam Houston Race Park) that only your reporter could twist into pure self-aggrandizement. Thankfully, the citizens of Houston have taken a more balanced view of these efforts.
You chose to characterize Mr. Hurwitz as a corporate raider, falsely implying that he is someone who seizes companies, disassembles them and pockets the gains. Even the most cursory examination (had you done it) of Pacific Lumber (acquired ten years ago) and Kaiser Aluminum (acquired seven and a half years ago) contradicts this unfair, inaccurate portrayal. Both companies are far stronger today than when they were acquired, in large part because of hundreds of millions of dollars of reinvestment. Far from being a "raider," Mr. Hurwitz is a long-term investor and builder.
Your publication had an opportunity to report and publish an authoritative, objective article. I personally met at length with your reporter and supplied her with the materials she requested, including written responses to her questions. Unfortunately, you chose to produce an article that is grossly inaccurate, unfair, misleading and defamatory.
Robert W. Irelan
Vice president, public relations
Editor's reply: As Mr. Irelan knows, Laurel Calkins' request to interview Charles Hurwitz was not granted. However, in a photo of Mr. Hurwitz supplied by Mr. Irelan, there does indeed appear to be a very small touch of gray in Mr. Hurwitz's otherwise mostly black hair, which is parted at a point between the middle and one side of his head.
Thanks to Michael Berryhill for revealing yet another developer/businessman/elected official who has manipulated his way to the top ["Murky Water," April 11]. I wonder how loudly Buster Brown and his GOP buddies have complained about Whitewater?