Suit Targets Payout from Canadian Lumber Deal

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A lawsuit has targeted details of the settlement of a dispute between the U.S. and Canada over tariffs on Canadian lumber. At issue is a $1 billion payout that the Bush administration arranged to be made directly to U.S. timber groups.


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Three environmental groups are suing to find out why the Bush administration sent nearly a billion dollars to organizations connected to the timber industry without consulting Congress. The money entered the picture during a trade dispute with Canada.

NPR's Martin Kaste has the story from Seattle.

MARTIN KASTE: Back in 2006, the U.S. was losing a four-year-old trade dispute over Canadian lumber. So the Bush administration offered to end the legal wrangling if the Canadians were to send $1 billion to five American organizations, and that, says lawyer Peter Goldman, is where things got fishy.

Mr. PETER GOLDMAN (Washington Forest Law Center): We don't want presidents essentially earmarking money to their friends.

KASTE: Goldman is with the Washington Forest Law Center, a conservation minded organization in Seattle. On behalf of three environmental groups, including the Sierra Club, he's suing the White House to find out more about the billion-dollar deal.

KASTE: The administration acknowledges that the deal was unusual. Gretchen Hamel is a spokesperson for the Office of the U.S. Trade Representative, which negotiated the transaction.

Ms. GRETCHEN HAMEL: No. This has not happened before. This was a new for the administration to have to divvy up the money as they did with this.

KASTE: The money came from a kind of escrow account for the tariffs that were paid on Canadian lumber during the dispute. Because this wasn't technically U.S. government money, the administration says it didn't need to get Congress involved in dispersing it.

The billion dollars started to arrive in late 2006. Half of it went to something called the Coalition for Fair Lumber Imports, an industry lobbying entity that filed the original complaint against Canada. Goldman says it's not known why the coalition got that much.

Mr. GOLDMAN: We have no idea. I mean I'm not sure if somebody walked in with a shoebox full of receipts and legal bills and said - and they all add it up to half a billion or they round it off from, you know, 300 million, we have no idea.

KASTE: The coalition staff declined repeated request for interviews. In an e-mail, a spokesman said that as a private entity the coalition would not discuss the $500 million it received. The other half billion went to four non-profits, The best known being Habitat for Humanity, which got 100 million. The others have links to the timber industry and have goals such as education and sustainable forestry. But their dedication to those causes is questioned by some of the groups that were left out of the settlement payday.

Joe Scott is with Conservation Northwest, one of the groups suing the administration.

Mr. JOE SCOTT (Conservation Northwest): If these folks are truly interested in sustainable forestry and evenhandedness, it would include the real players in sustainable forestry.

KASTE: One of the groups, the U.S. Endowment for Forestry and Communities, was created in 2006 expressly to receive $200 million of the settlement money. The board of directors is made up primarily at people from the timber industry, but President Carlton Owen rejects the idea that his organization is anything but evenhanded.

Mr. CARLTON OWEN (U.S. Endowment for Forestry and Communities): If there's any politics being played, it's being played in somebody else's mind, because in the reality of what we're doing out here every day, it's people that care of buyout making a difference in America's working forests and forest-reliant communities.

KASTE: The environmental groups that are suing the government say they have no complaint against the organizations that got the money; they just want to know who in the White House picked them and why.

The plaintiff's lawyer, Peter Goldman, says the administration has already responded with some documents indicating that senior White House officials were involved. And he says he'll keep pushing until he finds out who they were.

Martin Kaste, NPR News, Seattle.

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