MAY 2018 FORBES ASIA | 59lion and forfeiting 22,500 acres to the federal government but
not admitting any wrongdoing. Emmerson’s portion: $47 mil-
lion and all the land. “We had a gun to our head,” says Mark,
who spends a quarter of his time in Washington, D.C., and
thinks the company was targeted for being so rich and suc-
cessful.
Sierra Paciic is appealing to the Supreme Court. It thinks
it has a chance because a California court ruled in its favor in
2013 in a related case and ordered the state’s Department of
Forestry & Fire Protection to pay the defendants about $30
million. he judge ruled that the investigation was “corrupt
and tainted” and that the prosecution “destroyed critical evi-
dence... and engaged in a systematic campaign of misdirec-
tion with the purpose of recovering money from the Defen-
dants.” hat case is ongoing. “It’s pathetic. Stuf like this, it’s
just demoralizing and it’s wrong,” Red Emmerson says. “But
I’m sick of it. Let’s go run our business.”
he problems
aren’t just with con-
tractors. An hour-
ly employee who
worked for Sier-
ra Paciic for over a
dec ade was convict-
ed of starting ive
ires in a national
forest last summer.
He pleaded guilty
and was sentenced
in November to 20
years to life in pris-
on and ordered to
pay a $25.2 million
ine. Sierra Pacif-
ic was not implicat-
ed in the case. he
culprit gave no rea-
son for his actions,
but the conviction
highlights a dirty
secret of the indus-
try: Sawmill work-
ers, who oten rely
on overtime, can
beneit inancial-
ly from forest ires.
he other dirty se-
cret is that local for-
est service ocials,
who decide whether
to sell the salvaged
wood, beneit from
the sales. Proceeds
from such sales typ-
ically go to regional
oces. Once debts tied to salvage logging are paid of, the of-
ices can use what’s let to pad their budgets.
It’s not just the forest ires that have gotten Sierra Paciic
into hot water. It has been sued at least 19 times for its logging
practices but says it has not lost a case. It hasn’t been so lucky
defending its sawmills. In 2007 Sierra Paciic paid $13 mil-
lion to settle a lawsuit involving four of its mills with Califor-
nia’s air quality regulator. he agency claims it operated with-
out air-pollution-control equipment and falsiied reports to
conceal the violations. (Sierra Paciic says it self-reported the
issue.) In 2016 the company settled two other lawsuits that re-
lated to Clean Water Act violations due to illegal runof from
some sawmills.
“here’s harvest rules, Clean Air Act, Clean Water Act,”
says Emmerson, whose daughter-in-law worked at the Envi-
ronmental Protection Agency under George W. Bush and now
lobbies for a diferent timber company. “hey’re all with good
purposes, but the environmental community uses them as ob-
structionist tactics to stop things from happening.”
But the political winds are changing, with the climate in
Washington becoming more favorable. Donald Trump’s ad-
ministration has rolled back protections on federal land and
recently approved a $28 million reforestation plan that will in-
clude clearing more trees on land burned in the Rim Fire.
Still, Sierra Paciic is looking to push beyond California to
places where it might not have to spend so much time ight-
ing environmentalists and bureaucrats. In 2017 it tried to ac-
quire six sawmills in Georgia and Florida but lost out to a
publicly traded Canadian irm. It has been more successful ex-
panding in Washington State, where Sierra Paciic has invested
more than $1 billion, largely on timberland and four sawmills.
In late 2016, Sierra Paciic opened a $100 million mill in Shel-
ton, just 80 miles southwest of Seattle. (Despite his record in-
vestment, Red’s thritiness is on display: Nearly every staircase
is recycled from an old sawmill.) he company says it is sim-
pler and quicker to cut in Washington than it is in California.
Sierra Paciic is now the largest lumber producer in the state,
which has been home to publicly traded timber giant Weyer-
haeuser for 118 years. Sierra Paciic is able to cut away in Wey-
erhaeuser’s backyard due in part to regulations that prohib-
it exporting companies from buying logs from state or federal
forests.
Emmerson, who is still very involved in the company’s stra-
tegic direction, spends much of his time now looking for tim-
berland acquisitions and infrastructure investments. Recent
projects include the opening of a new manufacturing plant in
Red Bluf, California, and the $60 million rebuilding of a saw-
mill in Burney, California.
Emmerson may be old, but he isn’t ready to step away. “Red
doesn’t work as much as he used to. Sometimes he’s not here
on Sunday. And that’s about the truth,” Mark says. Emmer-
son responds with a laugh: “[My children] are better educated,
better organized than I ever was. And smart. But I still think
there’s some things I can do pretty good.... I’m very optimistic
about the future.”F