The Interior Department, apparently yielding to pressure from the Justice Department, California politicians and environmentalists, decided yesterday to "lay aside" the proposed transfer of thousands of acres of federally owned forest land in California to the Louisiana-Pacific Corp., one of the nation's largest timber companies.
The transfer had been eyed as a way of settling most of a $285 million claim the firm had filed against the government, maintaining that it was not compensated adequately when the government seized 26,783 acres of its timberland in 1978.
At the time, Congress had authorized the expansion of Redwood National Park in northern California to save 48,000 acres of older redwood trees that were owned by three major timber companies and 16 other landowners. Louisiana-Pacific was given nearly two-thirds of the $318.3 million that was paid the landowners.
After four years of legal haggling, the firm asked Interior Secretary James G. Watt last December to help it obtain 107,000 acres of the nearby Six Rivers National Forest as a way of settling the dispute.
Watt maneuvered quietly behind the scenes to make the trade. However, when environmentalists developed political opposition earlier this summer, Interior publicly distanced itself from the plan while officials privately asked Louisiana-Pacific to come up with an alternative that involved only forest land under Watt's control. National Forests such as the Six Rivers area are operated by the U.S. Forest Service, which is part of the Agriculture Department.
Throughout the discussions, the Justice Department has maintained that any trade might be "premature" because the "debt may not exist," said Max E. Findley, director of the team representing the government in the case.
Justice said any land transfer should wait until a court-ordered study is completed next May. The timber companies had forced Justice to take the time to complete a "100 percent cruise" -- measuring every tree in the area the government seized, recording its diameter and height and grading every 16-foot segment. Normally, only 20 to 30 percent of the trees are surveyed.
Watt, Findley said, "presupposes that we owe Louisiana-Pacific that much money. We may not. Like any other dispute, there's just two ways out of this mess. You've got to buy your way out or try your way out."
Louisiana-Pacific went back to Interior and asked for 70,000 acres held by the Bureau of Land Management in five northern California counties. But a study by the BLM's regional office uncovered problems. Some of the land was in wilderness study areas, some of it was supposed to be transferred to the state of California and some of it had valid mining claims.
The environmentalists got hold of that information, too, and provided sympathetic congressmen and officials in northern California with ammunition to shoot down the latest plan. Rep. Phillip Burton (D-Calif.), the author of the Redwood Park expansion bill, said he would "stop Secretary Watt's proposal dead in its tracks." Reps. James Weaver (D-Ore.) and Don H. Clausen (R-Calif.) and Huey Johnson, California's secretary of resources, also criticized various parts of Watt's proposals.
That seemed to leave Interior with little choice. "It is and should be a continuing embarrassment to the United States of America that it is unable to pay for lands taken from citizens and business entities by the Congress," Interior Undersecretary Donald P. Hodel wrote Harry A. Merlo, the firm's president, yesterday. "The issue is far too easily misunderstood. We believe that it is, therefore, appropriate to lay aside further consideration of your proposal and that we have done."
Beyond reading the letter, Interior spokesmen would not comment on the decision.
"This is not entirely unexpected," said Gerard R. Griffin, director of corporate communications for the company. "It turned out the issue was too sensitive . . . . There has been an enormous inclination to whip up a curse. We thought this was a reasonable way to solve a problem, and we still do. It's unfortunate."
Griffin said the company's four-year legal battle has inflated the company's original $97 million claim to $285 million. And, he said, it will "continue to go up."
"It's a common sense and logical idea," Griffin said of the land swap, "and so it probably won't happen, given all the political and legal constraints, and the sour grapes that some are spreading."