Timber Wars

‘Timber Wars’ bonus episode: Big money bought the forest

By Aaron Scott (OPB) and Tony Schick (OPB)
Nov. 17, 2020 1:15 p.m. Updated: Jan. 19, 2021 7:33 p.m.

Despite the belief that the spotted owl shut down the forests, big timber corporations have continued cutting trees; they just do it on private land while employing fewer people and contributing much less back to the local economies.

Most people blame the spotted owl for the large reduction in timber jobs and timber revenue that helped turn the Northwest’s timber towns into struggling economies. But while the Northwest Forest Plan did cause a large reduction in logging on federal land, logging on private land has continued unabated. In this series of investigations, we explore how large timber corporations quietly transformed into real estate investment trusts and lobbied to get rid of a state tax that, in the end, has cost most counties more than the revenue they’ve lost from federal logging. We also explore how the industry has maintained political influence, despite employing fewer people and contributing less back to local economies than it did in the past.


Hosted and produced by OPB’s Aaron Scott in collaboration with 30 Minutes West (“Bundyville,” “Outside Podcast”), and with original music by the singer-songwriter Laura Gibson, “Timber Wars” is a seven-part podcast series from Oregon Public Broadcasting that tells the behind-the-scenes story of how a small group of activists and scientists turned the fight over ancient trees and a bird that no one had heard about into one of the biggest environmental conflicts of the 20th century. Episodes are available on Apple Podcasts, Spotify, the NPR One app and most other podcast apps.

In addition to the podcast, OPB is releasing an accompanying e-newsletter series that combines the podcast with further OPB reporting to take readers through the history of this epic battle — and explores the ways it’s playing out still — in stories, images, videos and more. You can explore the series here.

Related: 'Timber Wars' - an episode guide

Bonus Episode: Big money bought the forest transcript

AARON SCOTT, HOST: In the Timber Wars podcast, we chose to focus on the fight over logging in national forests, because that’s where most of the remaining old growth was, and it’s where environmentalists had the most leverage in the courts. In other words, it’s where the fighting was the hottest.

But the thing is, there are a lot of forests that aren’t owned by “we the people” and under the control of the federal government. There’re forests owned by states, there’re forests owned by Native American tribes, and there’re huge stretches of forests owned by private landowners, ranging from small families to giant corporations.

And these private forests have always fed a significant chunk of the timber industry. Chances are, if you see a clear cut these days, as you’re driving to the coast or the mountains, it’s private forest land. So you really can’t tell the story of the Timber Wars without talking about them. And that’s what we’re going to do for this and another bonus episode.

Remember how we talked about how the northern spotted owl took the blame for a lot of other things that cost jobs and hurt timber-dependent towns -- things like automation and international competition? Well, there was another huge thing the owl took the fall for. In fact, it’s something that cost timber towns even more money than locking up the national forests.

My OPB colleague Tony Schick has spent a year investigating this, in collaboration with the Oregonian and ProPublica. So I wanted to bring you his stories about how Wall Street real estate trusts and other investors gained control of the state’s private forestlands -- and how they’ve profited at the expense of rural communities. This is Tony.


TONY SCHICK: Here in Falls City, the back wall of Frink’s general store is covered in black and white photographs. In one, loggers stand on trees wider than a city bus. Photos beside it include a shot of main street complete with shops, a hospital and a sawmill.

LOWERY: “Hard to believe this little town had all that isn’t it?

TONY: That’s customer Cheryl Lowery, a third-generation Falls City resident. The town she lives in today has none of those things.

LOWERY: “No, there’s no mill or anything, not anymore. But they do still do a lot of logging … There’s trucks that go by my house all the time!”

TONY: She’s right. In fact, there’s more logging now in Polk County than in the three decades before the spotted owl hit the headlines. Falls City is surrounded by some of the most productive timberlands in the world, being logged more frequently than ever. And yet, as many as half the families in town get by on weekly food deliveries at the local church. The city doesn’t have a police officer anymore. It had to close its library, and it can’t afford to pave its roads.

Kathy Frink owns the general store. In a town of 1000 residents, she’s the biggest employer, with nine people on the payroll.

KATHY FRINK: We don’t have a lot out here. And when the timber industry is going to up in here and the loggers, all we really, from what we benefit from them logging here is the log truck drivers stopping either the bar or here.

TONY: Frink is tending the store and answering my questions when a customer walks in ...

FRINK: Hi Bill! Bill could tell you about this town.

BILL: This town is excellent.

TONY: I introduce myself to Bill Lawler. He’s a retired truck driver. Frink tells him I’m here to learn about what the town gets from the timber industry.

BILL: We don’t get any money from it, they just take our resources our timber and we don’t get nothing for it except dust from the log truck.

TONY: Most of the forests around Falls City are not owned locally, but by faraway investors. They are real estate trusts or hedge funds that buy timberland instead of stocks. Weyerhaeuser is the biggest timber owner in Oregon and has 21,000 acres around Falls City. The longtime Seattle timber company became a real estate investment trust in 2010. The company declined an in-person interview, citing the need to be cautious during the coronavirus pandemic. In a written statement the company said it is proud of its role supporting local communities and economies.

Weyerhaeuser said it has donated $1.6 million dollars to various causes across Oregon in the past five years, and that it currently employs 950 people in the state. That’s a fraction of the four-thousand workers it employed fifteen years ago in Oregon. Many of those jobs were lost to consolidation or automation.

Falls City Mayor Jeremy Gordon said timber is still a vital part of the town’s identity.

GORDON: I know a handful, a good handful of people who’ve worked in the industry, and there’s a lot of support for the industry.

TONY: He wishes it could be a bigger part of its economy.

GORDON: As those jobs kind of diminish, there’s less and less support to subsidize that industry, you know, in the community.

TONY: People talk about how cuts to sheriff patrols, libraries, and local schools are solely the result of logging cut-backs on publicly owned forests. But our investigation found that here in Oregon’s timber belt, half the counties have lost more money from tax cuts on private forests than they did from the reduction of logging on federal lands. In all, it’s cost Oregon $3 billion.

Unlike Oregon, Washington and California still fund local governments with a logging tax. Linc Cannon lobbied to get rid of Oregon’s tax. He was the director of taxation for the Oregon Forest & Industries Council until he retired in 2017.

CANNON: So why we should keep comparing ourselves to Washington. I know they’re next door, but uh, but their tax policy is out of whack.

TONY: Oregon got it right in the 1990s, he says, recognizing that, by then, native forests on private land had been chopped down and replaced by tree plantations. And since Oregon doesn’t tax farmers’ wheat or strawberries, the industry felt it wasn’t fair to keep taxing trees.

CANNON: It’s an inaccurate or an incorrect policy to tax timber independently from, uh, other, from the land. If you believe that timber was a crop, which is the policy in Oregon.

TONY: I asked Jaime McGovern about the money that local governments lost because of this tax break. She’s been analyzing the shift for Oregon’s Legislative Revenue Office. She said when revenue from timber land owners dried up, the burden fell to local voters, to decide if they wanted everyone else -- including homeowners -- to pay more taxes. In many cases, voters in poor, rural places like this said “No.”

MCGOVERN: And so of course you’ve seen, you know, libraries close. Yeah. Police stations close.

TONY: I told McGovern that when I talked with local people, they usually didn’t trace the problem back to the way taxes have been cut for the companies that buy up private forest lands.

SCHICK: it’s almost always attributed to, we’re not getting the forest service or BLM payments that we used to get. This never comes up.

MCGOVERN: I can’t explain why people do or don’t say things.

TONY: In fact, all these years later, I had a hard time finding someone who could even remember when Oregon got rid of its logging tax, let alone explain its impact. Not the legislative staffer who analyzed it, not the lawmaker, lane shetterly, who introduced it and ran the committee. I sat down with former Governor John Kitzhaber, who signed the bill that cut taxes on logging. He didn’t remember it either.

KITZHABER: I don’t question that I did, but I don’t remember the context.

TONY: This is a tax cut that cost counties millions of dollars a year. And almost nobody seems to remember it.

RADTKE: I do! But nobody listens.

TONY: Hans Radtke is a small woodland owner and an economist living on the Oregon Coast. I called him because he was an economic advisor to the governor’s office for years, and he served on the state task force about timber taxes that ultimately led to the tax cut. Radtke had pushed for a solution that didn’t eliminate the severance tax. But the task force ultimately failed to reach any agreement. Radtke remembers sitting next to a timber lobbyist during those task force meetings, warning about the future impact eliminating the severance tax.

RADTKE: I said ‘hey, you know, we’re going to lose a lot of revenues by the, by the counties.

TONY: Then, Radtke leaned in, and he told the lobbyist that the industry was screwing over Oregon counties. -- he didn’t use the words, “screwing over.” The lobbyist? He just looked back at Radtke.

RADTKE: And he just smiled.

A few months later, the industry got what it wanted, and the severance tax was gone.


AARON SCOTT, HOST: Do you remember back in episode 2, when we loaded into an SUV with the forest scientists Norm Johnson and Jerry Franklin to drive through the clearcuts that blanket Oregon’s coast range. I called it the Norm and Jerry Forestry Roadshow. Well, If you were listening closely, you’ll remember that I mentioned there were eight adults squeezed into that SUV. Tony was one of them, along with his collaborator at the Oregonian, Rob Davis. And this second part in his series is going to pick up on that trip, to continue the story about how this new wave of investors has transformed Oregon forests.


TONY SCHICK: Norm Johnson and Jerry Franklin are heading up a logging road in the Oregon coast range. It’s a drive they’ve made many times before. They’re two of the Pacific Northwest’s most renowned forest scientists. They’ve spent a lot of time doing research in what Johnson calls “Oregon’s wood basket”.

JOHNSON: Whoever said that money doesn’t grow on trees, wasn’t thinking of the coast range.

TONY: They’re heading for an iconic patch of old growth known as the Valley of the Giants. On the way, they stop and examine the miles and miles of industrial forest lands. As smoke and fog rise into the hills, patchy with clearcuts, Franklin is shaking his head at the stumps below.

FRANKLIN: This is not stewardship. This is exploitation.

TONY: It’s not that Franklin is against logging. He’s taken heat from environmental advocates because at times he’s pushed for more of it. It’s more that at 83, Franklin is older than most of the Douglas fir trees now growing in Oregon.

Douglas fir trees can grow to be more than 800 years old. But the investment companies that log these forests now typically cut them at 40 or 50. That not only stunts their ecological value, it means they’re not producing as much wood as they could either. Franklin sees a landscape being farmed for short-term gain.

FRANKLIN: This is being managed for capital return. It ain’t being managed for anything else.

TONY: It’s not happening just here, but across the Northwest. In western Oregon, at least 40% of private forest lands are now owned by investment companies that treat forests like stock portfolios. Decades ago, when more forestland owners also ran mills, they grew bigger trees because they wanted more wood for the long haul. For investment companies, growing trees for 80 years like companies did decades ago doesn’t pencil out. They can maximize profits by cutting them sooner, exporting additional logs overseas, and then selling off the land.


TONY: As Franklin is making his point, a truck passes us, as if on cue.

JOHNSON: Small logs.

FRANKLIN: Just chip them up, glue them back together.

TONY: Trees that size don’t store as much carbon as older ones. And in the past few years multiple studies have shown plantations growing nothing but young, thirsty trees really suck up water. That means lower stream flows for fish and other wildlife than on older forests. Herbicides and fertilizers go hand-in-hand with this kind of Intensive tree farming -- another blow against native species like songbirds and salmon.

FRANKLIN: One of the things that the foresters have deceived themselves about and they deceived society about is that these plantations are forests. They are not.

TONY: A few months later, I went back to those same plantations with Jerry Anderson. Anderson is a region manager for Hancock. It’s a subsidiary of Manulife Financial, a $25 billion public company out of Canada. It’s exactly the kind of company Franklin was talking about.

ANDERSON: I think our decision-making is very measured.

TONY: Standing on a rain-soaked hillside covered in trees and ferns, Anderson plunks a small metal tool into the side of a tree, and spins it like he’s uncorking a bottle of wine.

ANDERSON: So I didn’t go clear to the center of the tree, cause I’m not trying to find out how old it is. I really just want to see how well it’s growing.

TONY: Out pops a thin strip, like the core of an apple. Darkened stripes mark how fast it’s growing.

ANDERSON: Growing real good! This is a nice tree for 34 years old, but you can see it starting to slow down. So this stand will be ready to harvest in the next five to 10 years.

TONY: He acknowledges that’s much, much younger than the industry used to cut. But he said that’s not because his company is owned by investors. He said it’s because they’ve learned how to grow trees faster. That, and mills today want a smaller log. It’s what they’re tooled for, because it’s pretty much all that’s available. Anderson’s been a forester in Polk County under various companies for the past 40 years. The last eight have been with Hancock.

ANDERSON: There’s nobody from outside this area that has come in and told us what to do on these individual plantations. Those are local decisions.


TONY: In its investors materials, Hancock touts both its sustainability and its high rate of financial returns. Forest ecologists and the U.S. Forest Service have warned that investor-driven forestry can be worse for the environment and for rural timber towns.


TONY: Back in Falls City, mayor Jeremy Gordon is standing in the empty lot that used to house the town mill, dreaming about what it could be.

GORDON: I would love to see like a, like a, like a two story, two or three story, uh, restaurant and brewery or distillery with some rooftop access views to the, the river in the fall.

TONY: Falls City is rebranding itself. It’s like many struggling timber towns, looking to outdoor recreation and tourism for its future. Investment-fund forestry may have left Falls City surrounded by brown hillsides denuded of Oregon’s famous green trees. But it still has the Valley of the Giants, with trees the size of redwoods, older than the founding of the country.

GORDON: Access to recreation, that’s a necessary condition, I think, for this community to thrive.

TONY: One problem: the road through is owned by timber companies. Mac Corthell, the city administrator, said at any given time town residents or visitors could find locked gates blocking their way.

CORTHELL: I just don’t think that’s something that would sit well in the stomachs of most Oregonians, to know that there’s a town right here that’s suffering for lack of ability to support itself in many ways and that we have this giant asset right up the road that we can’t get to because the big corporations have control over it.

TONY: Timber companies close the road during peak wildfire season, which also happens to be peak tourism season. They’re also worried about vandalism. Hancock stopped charging people an access fee near Falls City after getting grant money from the state. Weyerhaeuser charges up to $250 for a permit. But before you get to any gates, there’s another problem. The road that leads out of town … it’s falling apart, cracked like a jigsaw puzzle.

Because it’s a main road for log trucks, Corthell, the city manager, figured the timber companies should be willing to help pay for the repairs. He said it took him nearly two years to get a meeting with Weyerhaeuser. The company said it was willing to chip in some, if the city could get a road-repair grant for most of the cost.

If towns like Falls City were still sharing in the wealth from logging, Corthell said, they’d easily have enough to fix the road.

CORTHELL: You’re left still with these companies that have reaped these benefits. But those small cities that have supported them over the years are left in the dust.

TONY: And that’s something that can’t be fixed by repairing a single road.


AARON SCOTT, HOST: Tony didn’t get into it much, but the other surprising thing we learned while looking at clearcuts with Jerry and Norm and their friend, the fish biologist, Gordie Reeves, is just how much weaker Oregon’s laws regulating logging are than Washington and California. In theory, there’re laws that require that logging companies buffer streams and leave a certain number of big trees behind that will act like a habitat lifeboat for all the animals that called the forests home before the logging. but in practice, there are loopholes big enough to drive a logging truck through.

NORM JOHNSON: The bottom line is that over a decade you still could clear cut whole watersheds, of course, keeping the riparian areas. So that clear cut size limit has had a modest effect, but has it really limited the ability to rapidly harvest large areas.

JERRY FRANKLIN: For all practical purposes, they can clear cut whole landscapes in a very short period of time.

AARON: Part of the reason Oregon’s logging regulations are weaker than our neighbors is that, despite the fact that timber companies employ far fewer people and contribute far less to their local economies than they did back in the 80s, they’ve managed to hold on to much of their status and influence. And they’ve done that with the help of an obscure public agency -- called The Oregon Forest Resources Institute. And that’s the focus in this third story in Tony’s series.

TONY: If you watch TV, listen to the radio, or surf the internet in Oregon, chances are you’ve encountered the work of the Oregon Forest Resources Institute.

[ARCHIVE CLIP, OFRI AD: We have strong laws to make sure our forests are replanted and well managed to protect wildlife habitat and water.]

TONY: These ads have been seen by hundreds of thousands of Oregonians, though the institute’s polling shows almost no one knows who is behind them. The institute was created in 1991, when timber companies were reeling during the height of the Timber Wars. At their request, state lawmakers created the Oregon Forest Resources Institute, known as OFRI. They funded it with a tax on logging and gave timber companies control of almost all of the voting seats on its board of directors.

Here’s Erin Isselmann, the institute’s director, describing its mission:

ISSELMANN: OFRI’s mission is to educate Oregonians about our forest and about forest practices and to encourage sustainable forestry practices through landowner education.

TONY: In the decades since its creation, OFRI has done a lot more than that. Our investigation found that, despite its educational mission, the institute has at times acted as a public-relations agency and lobbying arm for the timber industry, in some cases skirting legal constraints that forbid it from doing so.

It has on multiple occasions worked to undercut scientific research by public universities. Last year its board discussed whether rushing a report could help stop ballot measures that targeted logging practices. A year earlier, top staff sat through private timber industry deliberations about attack ads opposing the governor’s reelection.

The institute’s most visible work is the $1 million advertising campaign. Its overarching message, has been that Oregon’s forestry laws already protect the environment.

OFRI calls its messaging objective. But it has avoided publicizing information that could make Oregon’s forestry laws look inadequate. The institute’s ads often mirror the industry’s lobbying efforts to resist more stringent environmental rules. Like this one, featuring a father-son pair of loggers, and a glass of water drawn from a forest stream.


This is Oregon water.

“Oh thanks, Dad -- "

“Hey! That’s a prop for TV. And a reminder Oregon has strong laws that help protect our watersheds. And besides, it’s the right thing to do.”

“You’ve got to have clean water.”]

TONY: Our investigation reviewed thousands of emails from the institute. They revealed many instances where OFRI’s work was closely aligned with the industry’s political lobbying.

The institute’s public employees also tried to undermine science the industry feared could result in unwanted policy. Our investigation uncovered four examples. This is just one of them, which started to play out in 2018. That’s the year Oregon State University’s Beverly Law and Mark Harmon co-authored a study that identified industrial logging as one of Oregon’s biggest sources of carbon emissions, which contribute to climate change. Here’s professor Harmon.

HARMON: It kind of undermined the role that they have been telling people they were playing, which was that they were taking out carbon on the land and storing it in products.

TONY: The timber industry had spent years marketing logging as a climate solution. In a warming world, it promoted cutting trees down to store carbon in lumber, instead of letting trees burn in a wildfire. OFRI’s director at the time, Paul Barnum, sounded an alarm about the study, telling two industry groups the findings were, quote, “of grave concern to all of us in Oregon.”

Hours before professor Law, the lead author, was scheduled for an interview on Jefferson Public Radio, Barnum emailed her college dean suggesting the study was built on faulty assumptions, and that the radio interview seemed like policy advocacy, which should be out of bounds for a scientific researcher. Law said she recognized the institute’s tactics as the same ones used by the tobacco or oil and gas industries, to push back on unfavorable science.

LAW: It’s the same playbook: How do you discredit scientists and then continue to hammer on them and then try and prevent them from publishing more.

TONY: Law said she later learned that the same criticisms of her study made by the institute became talking points used by Oregon senators.

LAW: It’s, it’s dirty tricks. It’s just not in science. We don’t do that to each other.

TONY: Barnum was the institute’s director before his 2018 retirement. He sent Law’s boss a letter urging him to publicly announce a university review of the study’s validity. Law’s boss declined. My partner on this investigation, Oregonian reporter Rob Davis, asked him about his involvement in the pushback to the carbon study. He defended the institute’s actions.

BARNUM: Historically we have not felt it our role to be silent when we believe research to be biased, non objective or opaque.

DAVIS: Did you think that the Harmon law study was biased, non-objective or opaque?

BARNUM: There were aspects of it that concerned me, yes.

DAVIS: What?

BARNUM: I don’t think we need to go into specifics about it, Rob that is...water under the bridge at this point.

TONY: Barnum did acknowledge he had made inappropriate comments, including some that impugned the researchers’ motives. William Funk is a professor of law emeritus at Lewis & Clark. He said the institute’s pushback against Oregon State might have violated the law.

FUNK: If they’re using resources to try to undermine something that is in the public policy debate area, it may well be a violation of the statute.

TONY: The agency’s current director, Isselmann, said she has solicited an opinion from the Oregon Department of Justice about what the institute is and isn’t allowed to do under state law. She declined to make the document public, citing attorney-client privilege. Isselmann has been the director of the agency since 2018. She defended its record under her tenure.

ISSELMANN: I operate under the highest ethical standards and I would not stake my reputation to do something that’s unethical or to disseminate information that isn’t factual. And I stand by that.

TONY: In response to our findings, a spokesman for Oregon governor Kate Brown said OFRI’s actions merit an investigation by the Oregon Government Ethics Commission or an audit from the Secretary of State’s office. The institute hasn’t been audited since 1996.

AARON SCOTT, HOST: That was OPB’s Tony Schick. These three stories were produced through the ProPublica local reporting network, and they were co-reported with Rob Davis of the Oregonian and Laila Eunice of ProPublica. Maya Miller also contributed reporting. This last story came out in August, and there’s been some news since then. So I wanted to get Tony into the studio, by which I mean we’re in our respective closets talking over the phone. Although, you said you’re actually up in an attic, Tony?

TONY: Yeah. I’m in a closet in an attic.

AARON: Doing double duty. The only thing better would be a dungeon beneath a basement or something.

TONY: Well, that’s where I normally work out of, but I don’t get a signal down there. So I’m up in the attic.

AARON: So I wanted to pull the curtain back a little because you did a huge amount of research in these stories that I don’t feel like is immediately visible when we listen to it. I mean, I remember when you started, you had just these maps out of land ownership and tax maps and other tables. Can you talk a little bit about the process you went through as you were trying to figure out how much tax everybody’s paying on their trees?

TONY: Yeah. So the first step was figuring out who owns the forest, and that was trickier than I thought it would be. You can get a vague sense of like this patch of land is federal, this is private/industrial. And for some of the big companies, you can figure it out. But the details of who owns exactly what piece of land is only kept at the county level. And so we went to 18 different counties in western Oregon and requested their data of their tax lots. The Official County Recorder’s Office keeps like, “This is this plot of land and this person owns it,” and it all seems like fairly boring stuff, but with it, you can do a lot of stuff. You can track, like we figured out who owns how much land. And the tricky thing about it was a lot of these things are kept in LLCs of LLCs.

So, there are stretches around Falls City, which is where one of the stories that we heard just took place, where you’ve got one whole section of land that looks like it’s owned by 10 different companies, but it’s all the same company, or all the same two companies. So once we figured out ownership, we also wanted to figure out what kind of tax these companies were paying.

The question we wanted to answer really was what are Oregonians getting out of the forest compared to what they were and compared to other nearby states? And so we ended up looking at something called a severance tax as we just heard about. And so what we needed to do for that was go through all these old timber tax reports from 1989, 1985, all the way back as far as we could and gathered all these different reports. I was checking stuff out from the state library of Oregon and have a bunch of stacks on my desk as you said. And so what we found was the rate that Oregon was taxing on this timber has just been since the early nineties been dropping and dropping and dropping and dropping, dropping, and it hasn’t really been made up for in any sense through any other taxes.

AARON: To that end, I mean, talking about layers of LLCs, and I think you mentioned in this story, real estate investment trusts and TIMOs which is a timber... Help me out.

TONY: Timber investment management organization.

AARON: Right. So we’ve come a long way from our mom and pop landowners. Can you talk a little bit about these different financial vehicles that logging companies have transformed themselves into in order to basically rethink a plot of land from just trees to now an investment?

TONY: Yeah. Yeah. I mean, once upon a time, it made more sense. I mean, the trees they were seen as the fuel for your mill, what you would feed into your mill and the end product was what you were focused on. And so you didn’t really think of yourself as investing in trees. You thought of yourself as producing lumber, but now that’s all been kind of separated. And a lot of that has to do just with economic trends. And a lot of it has to do with what happened with the owl and how that changed the economics. And so now you’ve still got some of the old guard so to speak. You’ve got Stimpson, Lumber Hampton making stuff in mills. You also have companies like Weyerhaeuser, which still owns mills, but they’ve undergone massive corporate changes to the point that they are technically a real estate investment trust, which means that on paper, their primary aim now is not a company that manufacturers, but a company that invests in real estate.

And so the trees and the forest land is seen as a real estate investment and managed as such. And so in that you want different things. To an extent, you’d want to be looking at the rate of return on the land itself as opposed to, “How do I get the most wood fiber out of this to go into my mill?” And so that might mean cutting it and selling it on a shorter rotation, which we’ve seen and we’ve heard about.

AARON: And it has tax ramifications for governments as well because real estate investment trusts are taxed differently than corporations.

TONY: They are. So real estate investment trusts and these timber investment management organizations do not pay the same corporate taxes that an old school timber company would pay. Instead, they’re just paying a capital gains tax when it’s passed to their investors. And so Weyerhaeuser was able to cut its corporate tax bill significantly by shifting a few years ago from a traditional timber company to a real estate investment trust. And so you’ve got a lot less tax revenue coming in through these corporations. From the timber owners perspective, it just makes a lot more sense not to be taxed on it at a higher rate. And so you’ve also got companies who do still own mills. A lot of times, you’ll see the forest land captain in a different LLC from like the name of the company.

AARON: I’m really happy you were able to explore that because I feel like I wanted to go deeper into it and didn’t get to in the podcast of owls versus jobs and that it was so much more complex in that there’s much bigger business current that were swirling around the industry. And yet that’s the narrative that we still have is that spotted owl shut this down, environmentalist shut down the forest, the severance tax has been forgotten. The last story we just listened to about the Oregon Forest Resources Institute is part of that bigger narrative and crafting the way we see the forest. You ended the story by saying it hasn’t been audited since 1996. What happened since that story came up?

TONY: Yeah. So a few weeks ago, Governor Kate Brown announced that she was calling for an audit from the Secretary of State’s office to audit the Oregon Forest Resources Institute. And that is now underway. The other thing is that lawmakers in this upcoming session have signaled that they are going to take a close look at the Oregon Forest Resources Institute and also with the severance tax and wildfire funding and just a whole slew of forestry issues. It looks like it’s going to be a pretty eventful legislative session as far as forest issues go. Obviously, I don’t know what it’s going to look like, but I think a lot of these things are going to be up for discussion, which should be interesting to see.

AARON: And which comes on the tails of this past year where there was what was touted as this big compromise between environmentalist and logging companies around some new restrictions on aerial spraying of herbicides.

TONY: Right. Yeah. Which was pretty monumental or has the potential to be a pretty monumental agreement. The first domino in that was aerial spray restrictions around certain buffers for streams and things like that, a notification of when pesticides are going to be sprayed from helicopters. And there’s going to be some interesting discussions going forward because that was just part of a bigger negotiation over the future of Oregon’s environmental rules for logging, the Forest Practices Act, and what it does to restrict logging and protect habitat for salmon and other species. So that will be something to watch for sure.

AARON: So Tony, you have a little bit more reporting to come for us in another bonus episode. Do you want to give us a preview?

TONY: Yeah. Yeah. We’ve been looking at not just the economics, but also some of the ecology of all of this. And as you’ve noted in recent episodes, Oregon’s just devastating fire season. After that fire season, there is a lot that came out about, essentially blaming the lack of logging and blaming federal forest management and how it’s changed. And we dug into that, found it’s not really that simple.

AARON: Excellent. Tony, thank you very much. I will look forward to talking with you again in a couple of weeks for that episode.

TONY: All right. Thanks, Aaron. Take care.

AARON: That was Tony Schick. You can find the full series of investigations that he did with Rob Davis at the Oregonian and ProPublica at our site, opb.org/specialreports/timberwars. I also highly recommend that you check out Rob’s reporting into the influence that industry has over environmental laws here in Oregon. It’s called Polluted by Money and it’s on the Oregonians website. Thank you for listening. We’ll come back in a couple of weeks with some more reporting from Tony as well as a little treat involving greater sage-grouse.

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