The Forest Stewardship Council-US (FSC-US) and two other groups filed suit Sept. 11 in federal court alleging that the Bush Administration illegally steered $350 million worth of funds from a lumber settlement with Canada into "Bush-selected, timber industry-dominated forestry foundations."

The suit argues that the Bush Administration violated federal appropriates law in September 2006 when it earmarked money from the U.S.-Canada Softwood Lumber Agreement to the U.S. Endowment for Forest and Communities and to the American Forest Foundation. That earmarking violated federal appropriations law and took place without any public process or Congressional approval, said the suit. It was filed by Conservation Northwest and the Center for Biological Diversity as well as by FSC-US.

William Hayward, president and CEO of Hayward Lumber in Monterey, Calif., told ProSales in an interview that joining in the lawsuit was an unprecedented action by FSC-US. "Our concern is that the government broke the law," he said. "We are an open public process organization ... and here the government allocated $350 million outside the public process." Hayward said his group wasn't so much critical of which groups got the money as the fact that the government didn't hear from the public and go through Congress to determine where the money should go.

"We feel that due process has been so violated ... we had to speak up," Hayward said.

"The Administration's action is a huge setback that, if left unchecked, could significantly lower the bar for what is represented as sustainable forestry," Corey Brinkema, FSC-US's president, said in a statement.

Added Bill Snape, senior attorney for the Center for Biological Diversity: "How this money is spent should have been up to Congress, not timber industry executives in a backroom deal with the Administration."

The Softwood Lumber Agreement, which took effect Nov. 1, stems from a dispute over lumber tariffs that erupted when the last agreement expired in 1996. The agreement called for $4.3 billion of the $5.3 billion in duties collected since 2002 to be returned to Canada; of the rest, $500 million was earmarked for the Coalition for Fair Imports, a U.S. lobby representing landowners and producers; $450 million was designated for "meritorious initiatives" such as assistance to timber-reliant communities; and $50 million to establish a bi-national group to discuss trade policy reforms.