Not so fast. Even though politicians have been giving themselves self-congratulatory pats on the back for agreeing to purchase the Headwaters Forest in northern California, the current deal is just not worth doing.

Because the agreement has brought a temporary calm to the fierce battle over the future of the largest privately-held, old-growth forest remaining in the U.S., some conclude that it is a good deal. But taxpayers would pay too much and the federal government would be recognized as a pushover for future land acquisitions.

Last fall the federal government, the State of California and Maxxam Corporation CEO Charles Hurwitz jointly signed an agreement that would transfer ownership of roughly 7,500 acres, about half of it virgin redwood forest, from Maxxam's subsidiary, the Pacific Lumber Company, to the public domain.

The purchase price of the land is $380 million, of which the federal government would pay $250 million. In July, the Washington Post reported that an independent assessment of Headwaters commissioned by the Justice Department came up with a dramatically lower figure than the government and Maxxam. Under federal law, the appraised value of the area forming the core of the acquisition was determined to be only $20 million.

Paying almost twenty times the value for this single acquisition would set a troubling precedent and weaken the bargaining position of the government in future land transactions. This “blank check” approach — instead of relying on uniform appraisal standards — would inflate land prices everywhere the government is a potential buyer.

Finally, taxpayers have already gone the extra mile for Charles Hurwitz; bailing out Hurwitz’s failed savings and loan cost taxpayers $1.6 billion.

Congress can stop this sham deal and send negotiators back to the drawing board by denying the $250 million in federal funds necessary for the acquisition.

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