Forest Service Wants to Pay More in Money-Losing Timber Sale

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Forest Service Wants to Pay More in Money-Losing Timber Sale

Alaska Region Urges Off-the-Books Cash to Logger to Sweeten Tongass Contract

Washington, DC — After losing nearly $2 million on a major timber sale, U.S. Forest Service officials are pushing for additional payments to the logging company, according to documents posted today by Public Employees for Environmental Responsibility (PEER). In a significant departure, the requested payoffs are both outside the timber contract process and without a formal claim from the logging company.

The documents from the Forest Service Regional Office for Alaska concern the Big Thorne timber sale on the Tongass National Forest. A 2016 Washington Office review of that sale faulted the Region for allowing Viking Lumber Company to cherry-pick more valuable trees and leave less valuable salvage trees standing, thus substantially shortchanging the taxpayer.

Although Viking bid on this contract at its own risk with no warranties, top Alaska Regional Office officials are trying to engineer ways to supplement the taxpayer subsidy using shifting and specious rationales:

  • On August 22, 2016 Regional Forester Beth Pendleton directed her staff to apply a retroactive “rate correction” to make up for “haul cost” differences which she characterized as a “material error.” Two weeks later, Pendleton “rescinded” her material error directive in a September 7, 2016 memo that offered no explanation for the swift reversal;
  • In a May 31, 2017 memo to Forest Service Chief Thomas Tidwell, Acting Regional Forester Rebecca Nourse (Pendleton had been elevated to Acting Associate Chief) requests permission to negotiate “revised rates retroactive to the beginning of harvest activities” in order to prevent Viking from filing a claim “which puts the Forest Service at risk of significant damages” adding that “correcting the situation on Big Thorne…is a high priority.”; and
  • Nourse argues that this off-the-books arrangement is necessary because, “there is no contractual mechanism to correct these errors and inequities, which we think will cost the Purchaser money under the contract.” This time the basis is a claim the company is owed more timber volume.

“There is ‘no contractual mechanism’ because there are no guaranteed timber volumes, so compensation for lower volumes is both legally bogus and, we suspect, rooted in pure fiction,” stated PEER Executive Director Jeff Ruch, who has been pressing for an independent audit of the Alaska Region timber sales. “Something is rotten in the State of Alaska – and it is not Tongass old growth.”

The Nourse memo also implies that the Alaska Region has pre-negotiated with Viking, indicating that the company is amenable to an “anticipated solution.” Ironically, this plan is premised on the notion that it is “outside the scope of authority” of Forest Service staff, yet the memo cites no legal authority for the Chief to cut a new deal behind closed doors. Not surprisingly, the arrangement bypasses agency legal staff.

The Nourse memo references the formation of yet another review team which has issued a “final report” identifying “issues related to sale preparation and appraisal activities.” This report has not been released.

“The justification for shelling out more tax dollars on a money-losing timber sale has yet to see the light of day,” added Ruch, whose organization is currently suing the Forest Service for failing to disclose documents about this timber sale in response to Freedom of Information Act requests. “The Big Thorne sale is proving to be both a financial and an ecological loser.”


Read the Nourse memo

View Pendleton “material error” U-turn

Look at taxpayer and eco-losses from Big Thorne

See Forest Service stonewall on documents

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