NEWS ANALYSIS : Lujan Riding Winning Issue on Yosemite

Secretary of the Interior Manuel Lujan Jr. was upset when recent published reports suggested that he had been outsmarted in his attempts to force MCA Inc. and its Japanese buyer to donate Yosemite National Park’s tourist operation to the public.

Agitated and determined not to look like a pushover, Lujan called his aides at their homes last weekend and arranged a Monday morning meeting to plan an offensive.

What followed was a flurry of newspaper and television interviews in which Lujan derided the Japanese takeover of Yosemite’s lucrative tourist concession and threatened legal action to throw MCA and its new owner, Matsushita Electric Industrial Co., out of the park.

Lujan’s attacks--aimed in part at driving down the price of the Yosemite operation so the government could get it at a cheaper price--was criticized as “Japan bashing” and even racist in some newspaper editorials.

But reaction from the public and environmental groups has been favorable, and the cabinet officer who is best known for his gaffes appears to be riding a winning issue. A congressional hearing has been scheduled for later this week on the matter, and congressional legislation has been introduced to bar foreign companies from owning national park concessions.

“In terms of the court of public opinion, it’s definitely a win,” said Steven Goldstein, a Lujan spokesman. “We already have received an enormous number of calls and letters.”

MCA and Matsushita now rue the day they ever agreed to consider donating the tourist concession to a park foundation--a gift they decided not to make.

“It was like showing a little kid a shiny new bicycle and saying, ‘Maybe you can get that for Christmas,’ ” said an MCA adviser. “(Lujan) got so fixated on that bicycle, and in the end . . . when it didn’t work out, he was tremendously disappointed.”

The controversy goes back to October, when Lujan and National Park Service Director James Ridenour asked MCA to keep the Yosemite concession in American hands.

The Yosemite Park and Curry Co., an MCA subsidiary for nearly 30 years, is considered by park officials to be the most profitable of all national park concessions. The company owns most of Yosemite’s lodgings, including the famed Ahwahnee Hotel and tent cabins, in addition to restaurants, stores and the park’s skiing, bicycling and horseback operations.

Fearful that Yosemite could become a stumbling block to MCA’s sale, representatives of MCA and Matsushita contacted Lujan and Ridenour in November to try to work something out.

Although MCA initially considered donating the concession to the government or to a park foundation, the idea never really got off the ground, Ridenour said then.

At the time, the Park Service director described a donation as fraught with problems, both for the Park Service and MCA. He said the Park Service nixed a suggestion by MCA to donate the concession to the National Park Foundation, a group created by Congress to receive private gifts, because of a possible conflict of interest. Ridenour and Lujan are directors of the foundation.

Finally, MCA proposed spinning off Curry Co. when MCA was sold. The company would be placed in escrow and sold to an American buyer within a year. In the meantime, all profits would go to the National Park Foundation. With Ridenour publicly praising it, the Park Service accepted the offer in late November.

But in the weeks that followed, Interior officials became uneasy over what they had won and anxious about what had been lost. Their early concerns about possible legal problems with a donation turned out to have been ill-founded and they tried to pressure MCA into giving them what had been dangled before them during negotiations.

Paul Pritchard, president of the National Parks and Conservation Assn., contends that Lujan, Ridenour and their staffs were no match for MCA’s and Matsushita’s forces, which included such heavyweights as former Senate Majority Leader Howard H. Baker Jr. and former Democratic Party Chairman Robert S. Strauss, both MCA directors.

In a telephone call to Pritchard shortly after the escrow compromise was struck, Ridenour praised the deal in which the park foundation would get Curry Co. profits for a year. Pritchard was blunt in his opinion.

“I said, ‘Jim, there are no profits.’ ”

Pritchard pointed out that there was no guarantee of immediate profits and argued that there likely would be none because of possible high costs associated with the buyout. “I think they (Lujan and Ridenour) realized they had accepted something and gotten nothing,” Pritchard said.

Although he effusively praises Lujan and Ridenour for their recent efforts, Pritchard contends that the episode shows that the Park Service is ill-equipped to manage multimillion-dollar corporate-run concessions.

“The bottom-line question is not just how can the Park Service better manage the concessions, but is the Park Service capable of managing the concessions?” he said.

In December, Lujan and Ridenour repeatedly tried to get MCA and Matsushita to agree to a donation or a bargain-basement sale to the foundation. When the companies declined, the Park Service refused to approve the escrow agreement that would have made the Curry Co. independent of Matsushita. The action, in effect, put the company and its profits into Japanese hands.

“The only reason the profits are flowing overseas is that he won’t approve the escrow,” complained an MCA adviser about Lujan’s inaction.

When Matsushita bought MCA despite the Park Service’s refusal to approve the escrow, Lujan was furious.

Interior officials said he was particularly angered by a published report last Saturday about MCA and Matsushita’s success in pulling off the deal. To Lujan, the companies seemed “arrogant” about having “pulled something over on the American people,” an aide said.

Other Interior officials said Lujan was concerned that the transaction made him look weak, although his press secretary said he was upset not for himself but for the American people.

So Lujan launched his offensive and blasted MCA for allowing the Yosemite concession to fall into foreign hands. He called on Matsushita to sell or donate its Yosemite buildings to the Park Service or to the foundation and threatened to try to cancel the Curry Co. contract with the Park Service.

He also publicly declared that the Yosemite buildings were worth $40 million, even though the Park Service has not done an independent appraisal. The $40-million figure came from an environmentalist-founded trust interested in buying the concession. MCA has long contended its Yosemite holdings could sell for at least $100 million.

Lujan’s attacks almost backfired when critics complained that they bordered on Japan-bashing. Although he and his aides took pains to say he was concerned about all foreign ownership, an Interior official who knows him professionally said that the secretary has always singled out the Japanese for criticism. According to this official, foreign ownership bothers Lujan only when it involves the Japanese.

“He has a Japanese hang-up,” said the employee, who asked not to be identified.

Despite the criticism, Lujan’s campaign appears to have paid off politically.

Even an official close to MCA conceded that “beating the whole economic nationalism drum” tends to be popular with Americans.

“It has a certain resonance out there,” the official said.