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Rand Paul’s Strange Obsession With an Obscure, Century-Old Trading Act

The Republican Party, and its libertarian faction in particular, has a long—which is not to say distinguished—history of singling out bureaucratic bogeymen that allegedly represent the dangers of government overreach. It’s a list that includes the welfare office, the EPA, and the Federal Reserve. But its latest addition is also among its most obscure: a century-old technical piece of trade legislation called the Lacey Act.

Congressional Republicans—with Senator Rand Paul of Kentucky at the forefront—have not let the law’s relative obscurity deter them from mounting a full-scale attack against it, complete with dramatic hearings featuring sympathetic witnesses. The next is on May 8 in the House Committee on Natural Resources. But the most memorable was in the fall of 2010, when a former seafood distributor named Abner Schoenwetter appeared before the House Subcommittee on Crime, Terrorism, and Homeland Security, and related the tale of how he ended up in prison because of the Lacey Act. “I am a convicted felon,” he stated, “who has just spent the last six years in prison for entering into a contract to buy lobsters.”

Shoenwetter has been a sympathetic poster-boy for Senator Paul’s cause—on the face of it, it was hard to blame him for the chain of events that landed him in prison. But, there’s good reason to be skeptical of the libertarian-infused outcry against the Lacey Act, as well as the GOP-sponsored legislation designed to defang it. Indeed, we shouldn’t let Senator Paul’s brimming outrage about government intrusion distract us from the very legitimate reasons for the law’s existence.

PASSED IN 1900, the Lacey Act was originally designed to regulate the sale of certain game animals and birds between states within the U.S., and carried a maximum penalty of a $200 fine (a little over $5,000, in 2010 dollars). Since then, however, the law’s reach has slowly been broadened. In 1935, to account for the growing prevalence of international trade, the law was amended to include a provision for the enforcement of foreign laws: Traders could now be liable if the goods they dealt with had been procured illegally in the country of origin. The maximum penalties were also expanded to include a criminal penalty—six months in the tank—and a heavier fine of $1,000 ($15,900 in 2010 dollars).

But the real shift wasn’t until 1981, when a new amendment dropped the requirement that the offender must have willingly transgressed the law. After 1981, ignorance of the law, including the laws of foreign countries, was no excuse. Moreover, violations could be prosecuted as felonies. This, says Andrew Wise, a member of the National Association of Criminal Defense Lawyers who specializes in over-criminalization, has led to a growing number of people facing criminal charges for crimes that they unwittingly committed.

Schoenwetter is among them. In 1999, when he was working in Florida, he contracted with David McNab, an old friend and frequent business associate, to buy a “typical load of Caribbean spiny lobster” in Bayou La Batre, Alabama. On an anonymous tip, the shipment of Honduran lobsters was seized by the National Marine Fishery Service (NMFS) on the suspicion that it violated Honduran laws. Six months later, Shoenwetter heard McNab had cut a deal with prosecutors. Soon after, FBI, IRS, and NMFS agents appeared at Schoenwetter’s house at six in the morning with a warrant for his arrest. He rejected the prosecution’s offer of a three-year sentence, and was convicted of conspiracy and importation contrary to law, which carried a sentence of 97 months in prison, three years of supervised release, a $15,000 fine, and the forfeiture of the $100,000 staked in the shipment.

Schoenwetter’s story was summoned in February when Rand Paul introduced the Freedom from Over-Criminalization and Unjust Seizures Act of 2012, or FOCUS Act, which takes aim at the Lacey Act. In a press release, Paul states, “We have seen the damage this extremely broad and vague law has done to American companies and it is time to change its language to better serve Americans and the American jobs it threatens.”

This may seem like a feverish obsession, but it’s not confined to Senator Paul’s office; indeed, it has spread throughout the conservative movement. At a panel at the Conservative Political Action Conference (CPAC) in February, one panelist described McNab—Schoenwetter’s erstwhile associate turned apparent government informant—as a “hulking” man with “a walrus mustache” who you wouldn’t want to meet in a dark in alley; the real menace, however, was the Lacey Act. Gibson guitars, which was most recently raided last September over a shipment of Indian hardwoods was also cited at CPAC as a victim of malicious government over-reach. Paul’s FOCUS Act would remove all references to foreign laws, and would replace criminal penalties with lesser civil fines.

But the story being spun by Senator Paul and other members of the conservative movement overlooks some relevant details. Lacey, as it is currently written, arguably has a fair degree of flexibility. While ignorance of the law is not an excuse, it does factor into penalization. A sliding scale takes into account whether laws were knowingly violated. Knowingly violating the law carries the maximum penalty (felony fines and possible prison terms). Failing to practice “due care”—importing from a country where illegal practices are commonplace, for example—is treated as a misdemeanor, though it can also carry prison sentences of up to one year. The lowest-level violation, where due care has been exercised but the Act has nonetheless been violated, results in a light fine and the forfeiture of the goods.

It’s also important to point out that a number of American industries are in favor of ongoing Lacey Act enforcement. The health of the American timber industry, for example, is highly dependent on Lacey’s enforcement mechanisms. (In fact, the most recent amendment to the law was written in 2008 in close cooperation with the timber industry.) In counties like Russia and Madagascar, enforcement of local regulatory laws is hindered through lack of infrastructure and widespread corruption in law enforcement. The illegally harvested lumber that has flooded the global market as a result has driven down the price of timber, making American lumber less competitive both at home and abroad. Indeed, according to an industry report, the preponderance of illegal logging practices in foreign countries costs American timber companies billions of dollars annually. (The World Bank estimates the losses in taxes and revenue to be over $10 billion each year). Sometimes the only plausible deterrent to the formation of grey markets in foreign countries is the prospect of swift enforcement by American authorities.

In this way, the Lacey Act helps to correct the price imbalances resulting from uneven regulation abroad (not to mention its protective effect on the environment.) For industries like timber that depend on limited organic resources, then, it’s Paul’s FOCUS Act, not Lacey, that’s the threat. While there is truth in the Senator’s claim that over-criminalization is a problem, that’s an issue that should be corrected by changing how the law is enforced, not by gutting it entirely.

Senator Paul’s bill, ultimately, has little to do with American businesses, and much more to do with scoring a political win by trotting out the old ghosts of government overreach. It’s just the latest instance of libertarians subjugating reality to their rigid ideology.

Thomas Stackpole is a reporter-researcher at The New Republic.