by Rand Paul
Government prosecutors, not satisfied even with thirty-five tons of lobster, filed criminal charges against McNab. They also charged three American businesspeople, Robert Blandford, Abbie Schoenwetter, and Diane Huang, who frequently purchased and distributed lobster tails from McNab. All charges against McNab, and most charges against the others, were predicated on the three Honduran regulations applied through the Lacey Act. No charges against the defendants were ever brought in Honduras. The alleged Lacey Act violations served primarily to trigger more serious charges. If importing the lobster in bags instead of boxes was illegal, prosecutors reasoned, then planning to import it was criminal conspiracy, the actual importation was smuggling, and payments became felony money laundering.
At the district court’s foreign law hearing, McNab presented copious evidence showing that the Honduran regulations in question were invalid. No size restriction had ever been signed by the president of Honduras, an absolute requirement for such a regulation under Honduran law. The attorney general of Honduras supplied an opinion, confirming other testimony, that because the size restriction was not signed into law it did not have the force of law.
McNab presented other witnesses, including a former Honduran minister of justice, who testified that the egg-harvesting regulation was never intended to apply to animals that happened to bear eggs when caught. The prohibition against harvesting or destroying eggs for profit was meant to do just that, to prevent the harvesting of eggs themselves (turtle eggs in particular).
Government prosecutors somehow convinced the court to ignore McNab’s extensive evidence and instead accept the testimony of a single midlevel Honduran bureaucrat, Liliana Paz. For reasons that remain unexplained, the “secretary-general” of the Honduran Ministry of Agriculture and Livestock—an official whose primary duty is to be “an instrument of communication” and who has no expertise or authority to render legal opinions—testified that all the regulations were valid and had the force of law.
Despite the obvious lack of criminal intent on the part of the defendants, as well as concerns about the validity of the Honduran regulations, all four businesspeople were convicted on a general verdict. In August 2001, McNab, Blandford, and Schoenwetter were each sentenced to eight years in prison. Huang, a businesswoman from New Jersey who resold seafood to restaurants like Red Lobster, was sentenced to two years in prison.
The government trumpeted the convictions in press releases that labeled McNab “the ringleader of a smuggling operation.” The reports misled the public by suggesting that McNab was intentionally harvesting undersized and egg-bearing lobsters, never mentioning that these were a negligible portion of his catch. The government failed to note that the only reason for declaring the entire shipment illegal was that it was packed in bags, not boxes. In effect, the defendants were convicted of smuggling because they packed lobster in clear plastic bags instead of opaque cardboard boxes.
A press release issued by the National Oceanic and Atmospheric Administration, the agency that includes the NMFS, implied that McNab’s business success was part of his wrongdoing. NOAA pointed out that McNab owns a “fleet of vessels, each of which can deploy thousands of lobster traps,” as if this in itself is somehow a wrongful act. Striking an even more bizarre note, NOAA declared, “The wealth from McNab’s vast harvest was denied to the common citizens of Honduras.” McNab, a Honduran citizen, is apparently not “common” enough for the Sandinistas at NOAA.
After sentencing, the court was prepared to allow all four defendants to remain free pending their appeals. Federal prosecutors objected to allowing a foreigner like McNab to remain free on bond and the Eleventh Circuit Court of Appeals sent him to prison. McNab is now in his fourth year of incarceration.
On appeal before the Eleventh Circuit, two of the three appellate judges effectively declared Honduras a banana republic, unfit to construe its own laws. The court decided that it would be unwise to disagree with the prosecutors’ interpretation of these foreign laws. Basically, our government was saying that anything that the Honduran government said wasn’t worth listening to. This ignored the holdings of other circuits and the proper role of appellate courts in general. Even worse, the two judges asserted that Honduran officials could not be trusted because they might be bribed or manipulated. Somehow this failed to undermine the credibility of Ms. Paz, the midlevel Honduran bureaucrat who testified for the prosecution. In the interest of “finality,” the court of appeals upheld the lower court on every issue, no doubt because if just one of the three Honduran regulations was found to be invalid, all of the convictions would fail.
The decision of the Eleventh Circuit is only more troubling when considered in light of the critical new evidence that emerged from Honduras during and after the trial. After the foreign law hearing, McNab had filed an action in the Honduran Court of First Instance of Administrative Law challenging the size restriction. Several months after the end of the criminal trial, the Honduran court formally held that the size limit was void and declared that it had never had the force of law.
McNab’s attorneys also discovered that the law authorizing the packaging regulations was repealed in 1995. Under Honduran law, a regulation is automatically repealed when the authorizing statute is repealed. Even the prosecution’s witness from the Honduran Ministry of Agriculture and Livestock admitted this in an affidavit. It also became clear that the egg-harvesting provision had been repealed in a way that, under Honduran law, operated retroactively.
McNab additionally filed a motion before the Honduran national human rights commissioner challenging Ms. Paz’s testimony about Honduran law. The commissioner, Dr. Leo Valladares, is an internationally respected constitutional lawyer and human rights advocate. His office in Honduras is charged with addressing complaints that government officials’ actions constitute “legal error.” Dr. Valladares issued a report, which the minister of agriculture signed, stating that Ms. Paz’s testimony constituted “an error of law.” The scholarly report found that the packaging regulation was repealed in 1995, the size restriction had “never had the force of law,” and that the egg-bearing provision had been retroactively repealed.
The government of Honduras, through its embassy, directed all of this information to the U.S. State Department, asking that they forward it directly to the Department of Justice. The attorney general of Honduras also filed an amicus curiae brief with the Eleventh Circuit, providing this information and explaining that McNab and the other businesspeople had not violated any Honduran law. All of this was ignored by the court of appeals when it concluded that “finality” was apparently more important than justice.
How could this happen? What kind of a “justice” system is this?
The prosecution of four businesspeople for normal business activities highlights the dangerous but growing trend in our government to expand criminal liability against normal social and economic conduct. Historically, a criminal conviction required proof of criminal intent (mens rea, a “guilty mind”) in addition to the wrongful infliction of harm (actus reus, a “bad act”). Even if the Honduran statutes had not turned out to be uniformly invalid, there was never any evidence that showed the businesspeople acted with criminal intent. Rather the evidence seems to prove that they were simply engaged in catching and selling seafood in a way that any businessperson would consider lawful.
This prosecution also reveals the risks of federalizing criminal law. Observers have long warned against allowing the federal government to encroach on the traditional state function of enacting and enforcing general criminal laws. Here, the federal government, through the Lacey Act, claims to enforce foreign laws against foreign and U.S. citizens. These regulations were not made by the U.S. Congress or by some executive agency, but by a foreign government with unfamiliar procedures. If the government of Honduras had actually believed these regulations to be valid, they were free to bring charges. Instead, the U.S. government prosecuted a case on what turned out to be bad law.
Each of the
four defendants was trying only to earn a living through normal commercial activity when an anonymous accusatory fax sent the U.S. government to destroy their lives. This ordeal has been happening for over a decade. David McNab waits in prison to see if his appeal to the court of last resort will even take the case. The three American businesspeople, Robert Blandford, Abbie Schoenwetter, and Diane Huang, wait anxiously for the decision that could save them—or send them to prison for years.
11
Bureaucrats Destroy Caviar Dreams
“If the law supposes that… then the law is an ass, an idiot.”
—MR. BUMBLE IN OLIVER TWIST
On January 17, 2012, Steven and Cornelia Joyce Kinder, owners of Kinder Caviar and Black S tar Caviar Company, pled guilty in their federal case of harvesting paddlefish. The Justice Department’s plea agreement stated that both Steve Kinder and Cornelia Joyce Kinder admitted to aiding and abetting one another in harvesting the fish. The agreement stated that they should have known these paddlefish were harvested in Ohio waters in violation of state law, through the use of gill nets attached to the Ohio shoreline. This happened on or about May 5, 2007, and thereafter the Kinders had transported the paddlefish to Kentucky with the intent to sell them.
Now, if you’re like me, obviously we are getting down on our hands and knees to thank our federal government for addressing this pressing matter. But it gets even more ridiculous. As part of a plea agreement, both Kinder Caviar and Black Star Caviar Company have each agreed to pay a $5,000 fine and serve a three-year term of probation, during which time those companies will be prohibited from applying for or receiving a CITES Export Permit.
Additionally, Steve and Cornelia Joyce Kinder have agreed to serve a three-year term of probation, during which time they will each perform one hundred hours of community service, be prohibited from fishing anywhere in the Ohio River, where that river forms the border between Ohio and Kentucky, and be prohibited from applying for or receiving a CITES Export Permit, either on behalf of themselves or anyone else. In accordance with Kentucky law, the Kinders also face possible suspension of their Kentucky commercial fishing licenses. Finally, as part of the plea agreement, the boat and truck that were used in furtherance of the Lacey Act crimes have been forfeited.
So to recap, the Kinders may or may not have broken a law about which fish can be harvested in which water, a law, by the way, that differs from one side of the river between Kentucky and Ohio to the other. Not to mention the fact that, historically, the river is actually controlled by Kentucky, not Ohio. If the Kinders had hung their nets from the Kentucky bank and not the Ohio side, their fishing would not have been questioned.
To punish this heinous caviar crime, they have to pay fines, give up their livelihood, surrender their property, and be publicly branded as criminals. The government treated them as if they had just held up a bank.
As you might imagine, this isn’t the whole story, but even if it were, I think I would still be outraged.
I met Joyce and Steven on more than one occasion in northern Kentucky, near where their business is based. Joyce approached me at a political picnic when I was running for the Senate. She beamed from ear to ear as she described in exciting detail her new caviar business. I even tasted the caviar they were harvesting. I hope that wasn’t also a crime. I think I might have even carried some of their caviar across states lines—will the federal government come after me next?
Joyce and Steve Kinder are good and decent people, just trying to earn a living. When we first met, they were also active in the Tea Party, trying to take back our country. The Kinders thought the government was out of control based on the bank bailouts, Obamacare, and trillion-dollar deficits alone. They could not have fathomed the kind of tyranny our federal government was capable of, and the misery it was about to visit upon them—a husband-and-wife small business team.
In 2011, the Justice Department came after the Kinders, saying they were in violation of the Lacey Act, which we’ve described in other chapters. The act is supposed to address or regulate how fish and wildlife are caught, imported, or exported.
We have a trillion-dollar deficit hole in our budget. We have bridges literally falling down and an infrastructure that is crumbling. We have a military that is stretched entirely too thin. We have a broken entitlement system, and a bunch of Washington “leaders” too scared or inept to do anything about it.
We have a border so porous that illegal immigrants and terrorists alike could be coming across it at any moment. We are told it cannot be fixed because we don’t have the manpower.
Yet somehow, some way, we have the manpower and resources to prosecute people for the following major “crimes”:
Illegally harvesting paddlefish from Ohio and false reporting to the Kentucky Department of Fish and Wildlife Resources.
Providing false information about the paddlefish eggs to the U.S. Fish and Wildlife Service in order to obtain permits to export the paddlefish eggs to foreign customers, including the quantity of paddlefish eggs to be exported; the names of the fishermen who harvested the paddlefish; and the location where the paddlefish were harvested.
It would be funny if it weren’t so tragic. While the above statement itself seems comical because it is so illogical, it is serious—each count included a maximum fine of $250,000 and five years in jail. Per company.
So the Kinders were facing the prospect of decades in jail and millions in fines. For doing something the government didn’t like—harvesting eggs from paddlefish.
I don’t even know which direction to go in telling this story because it is so utterly ridiculous. The Kinders fought the government for a while, but realized that they were in an impossible position and accepted the guilty plea to avoid prison time and total financial ruin. It is hard to blame them in this situation.
It’s not as if the Kinders were operating in secret, trying to do something illegal under everyone’s nose. They were a well-known, and, at least they thought, well-respected company. Their company was featured on the Kentucky Department of Agriculture’s website, whose blurb for them reads:
Caspian Sea style caviar made right here in the Bluegrass! American caviar now comparable to the caviars of the Caspian Sea!
[A]s the catch and quotas of Caspian Sea caviar continue to decline, prices will steadily increase. Kinder Caviar is fast becoming the choice for the caviar savvy connoisseur.
Knowing that, and knowing the Kinders, I sought them out to discuss their case for this book and for my own information.
That proved to be more difficult than I thought. You see, the government nearly drove the Kinders into hiding. Even though we had many mutual friends, it took weeks to locate and contact Joyce and Steve Kinder, who were staying with friends in a different area of Kentucky than where they’re from.
They were scared of their own government.
This is what our government is doing to good and decent men and women just trying to earn a living. Government bullies, indeed.
12
How Can We Solve the Problem?
“Bad laws are the worst sort of tyranny.”
—EDMUND BURKE
The overcriminalization of commerce and general business activity through the Lacey Act has created exactly what concerned Justice Scalia, an increase in the volume of “imprecise laws”—laws that can mean virtually anything, at any given time, depending on the government-agency bureaucrat you’re unlucky enough to speak to or even unluckier to be targeted by. Americans shouldn’t be treated like this.
This year, I introduced the Freedom from Over-Criminalization and Unjust Seizures Act (FOCUS Act) to address these issues, cosponsored by Congressman Paul Broun of Georgia. I said during my testimony when introducing the FOCUS Act on May 8, 2012:
Congressman Broun and I introduced companion bills in the Senate and in the House because of our shared concern regarding a dangerous law called the Lacey Act. The FOCUS Act makes significant revisions to the Lacey Act, revisions that we be
lieve are necessary to prevent Americans from having their businesses raided by armed federal agents, their property seized, and even being sent to federal prison.
I refer to the Lacey Act as “dangerous” because of the ways in which it has already wreaked havoc in the lives of many innocent Americans. The Lacey Act serves as a high profile and frightening example of over-criminalization. Victims include Abner Schoenwetter and David McNab, who spent years in federal prison for “violating” Honduran fishing regulations that the Honduran government itself argued were invalid.
Most recently, just this past August, Henry Juszkiewicz, the Chairman and CEO of Gibson Guitar Corporation, had his company raided by armed federal agents. A half million dollars’ worth of Mr. Juszkiewicz’s property was seized, along with guitars and computer hard drives. His factory was shut down for a day, and his employees were ordered to go home. All this was done to him because he allegedly violated the Lacey Act, yet the Department of Justice has yet to file any formal charges against him.
In my testimony today, I will first provide a brief background regarding the history of the Lacey Act. I will then discuss the ways in which I believe this law violates the original intent of the Constitution, and will summarize the revisions the FOCUS Act makes to the Lacey Act. I will conclude with a discussion of the manner in which the FOCUS Act relates to my overall concern with the ever-growing threat of overcriminalization.