Shellenberger & The Rose Foundation

Pieces of the puzzle. Where the big money comes from? Evidence of the pressure tactics exerted on all levels. Michael Shellenberger, "The Rose Foundation," "The Committee of Concerned Maxxam Shareholders," "As You Sow Foundation" (seen that name recently.)

This isn't just passive donations, "Rose Foundation" was intensely involved, according to reports, in the negotiating of the Headwaters Deal, actively lobbying government officials, and pressuring for the "Debt for Trees" swap.

The following is part of a scheme to get their reps on Maxxam's board. A press release, one of many bits of information. This isn't even the most interesting piece - How they pressured them is another piece T/K (to come).

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(Communications Works logo)
Communication Works
FOR IMMEDIATE RELEASE May 10, 1999

Reporters: Call For Interviews With Metzenbaum or Mikva
CONTACT: Michael Shellenberger, Katrina Muniz, 415-255-1946
(cell: 415-398-4001)
Steelworkers: David Foster, Director, 612-623-8045 (cell:
612-710-1700)
Jon Youngdahl, cell: 612-810-8788; Rose Foundation: Scott Adams,
Tim Little, Jill Ratner, 510-658-0702

MAXXAM SHAREHOLDER GROUP TO BRIEF REPORTERS ON EFFORTS TO
IMPROVE CORPORATE GOVERNANCE AT MAXXAM

Who: Jill Ratner, Rose Foundation for Communities and the Environment
Tom Van Dyck, As You Sow Foundation
Dave Foster, United Steelworkers of America

What: Press Conference
Where: Crowne Plaza Hotel: Houston Galleria
2222 West Loop South, Houston (tel. 713-961-7272)
When: 12:00 Noon, May 18 (Day Before Maxxam Shareholder Meeting

The Committee of Concerned Maxxam Shareholders will brief reporters about their campaign to elect two independent directors to the Maxxam board and to improve corporate governance at the company.

The Committee's proxy materials note that Maxxam recorded a net loss of $57.2 million for 1998. Business Week named Maxxam's board the 10th worst in the list of "The Worst Boards of Directors" and called it a "tiny board with little business
experience dominated by CEO" Charles Hurwitz (Dec. 8, 1997). Apart from performance issues, the proxy materials also cite several factors that, in the Committee's opinion, demonstrate a need for independent directors and corporate reform.

The briefing will take place on May 18, one day before Maxxam's annual meeting, which is scheduled to begin at 8:30 AM on
Wednesday, May 19, 1999 at the Waterwood National Resort and Conference Center in Huntsville, Texas.

The Committee is urging holders of Maxxam common stock to elect former U.S. Senator Howard Metzenbaum and former federal Judge Abner Mikva to the two board seats filled by owners of common stock. The other three seats on Maxxam's board are chosen by the common and preferred shareholders voting together, with preferred shares outvoting common shares 10 to one.

Participating in the press briefing on behalf of The Committee of Concerned Maxxam Shareholders are Tim Little and Jill Ratner of the Rose Foundation, and David Foster of the United Steelworkers of America. Also participating is Tom Van Dyck of the As You Sow Foundation, which is sponsoring one of the two shareholders resolutions, but is not a Committee member. In proxy materials circulated to Maxxam shareholders, the Committee explains why it believes that Maxxam needs independent directors and governance reforms.

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* "Specifically, allegations of fiduciary lapses have surrounded Maxxam's CEO and Chairman, Charles Hurwitz. In April 1997, the Delaware Court of Chancery ruled in a case brought by minority Maxxam shareholders that Mr. Hurwitz had engaged in self-dealing with loans that were not found fair to the Company . . . . In addition, Maxxam faces potential liabilities in two separate legal proceedings based on the failure and subsequent $1.6 billion bailout of United Savings Association of Texas, a savings and loan association that Maxxam is alleged to have controlled. . . . These suits and related litigation have already been costly to the Company, which has paid approximately $40,000,000 in litigation expenses, including Mr. Hurwitz's expenses."

* "In 1997 and 1998 the California Department of Forestry and Fire Prevention ("CDF") suspended the timber operator license of Maxxam's Pacific Lumber subsidiary twice in a twelve month period, based on 128 cited violations of state forest practice rules. The most recent license suspension lasted over three months."

* "Maxxam's Kaiser Aluminum Corporation ('Kaiser'), 63% of whose outstanding common stock is held by Maxxam, is embroiled in a serious labor dispute, the longest in Kaiser's history. The Committee believes that this dispute and the associated costs were avoidable . . . If the NLRB [National Labor Relations Board] does decide to file a complaint, such a complaint could allege that KACC [Kaiser Aluminum Chemical Corporation] engaged in an illegal lockout. That contention, if established, could result in gross back pay liability of up to $3 million per week from January 14, 1999."

* KACC reported losses of $50 million in the fourth quarter of 1998 owing to the strike, and Kaiser reported a net loss of $38.9 million in that quarter."

* "In addition, serious accident rates and worker compensation claims increased at KACC since the strike began. According to the Occupational Health and Safety Administration ("OSHA") safety logs, serious workplace injuries increased 138 percent in the fourth quarter of 1998 over the average of KACC during the first three quarters of 1998 prior to the labor dispute."

* In addition, both Kaiser and Pacific Lumber have experienced tragic fatalities that the Committee believes could have been prevented. In October 1997, a 33 year old Kaiser mechanic died when he was crushed beneath the bucket of a front-end loader he was repairing. The Washington State Department of Labor and Industries found Kaiser at fault in the incident, cited Kaiser for five safety violations, and fined it $35,000. In September 1998, a Pacific Lumber employee logged a tree into a group of protesters, killing a 24 year old man. Attorneys for the young man's family have publicly announced that they expect the logging incident to be the subject of a lawsuit seeking damages."

The following may be deemed to be "participants" in this solicitation: The Rose Foundation for Communities and the Environment, which owns 50 shares of Maxxam common stock; Jill Ratner and Thomas W. Little, who own 90 shares of Maxxam common stock as tenants in common; the United Steelworkers of America, which owns 1002 shares of Maxxam common stock; As You Sow Foundation, which owns 100 shares of Maxxam common stock; Howard M. Metzenbaum, who does not own Maxxam stock; and Abner J. Mikva, who owns 50 shares of Maxxam common stock. The foregoing (except
the As You Sow Foundation) constitute the members of The Committee of Concerned Shareholders and the two nominees for
Maxxam common director.

Michael Shellenberger, Director
Communication Works
tel: 415-255-1946, fax: 415-255-1947
http://www.communicationworks.org
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