[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]




 
   FEDERAL IMPEDIMENTS TO COMMERCE AND INNOVATIVE INJURIOUS SPECIES 
                              MANAGEMENT

=======================================================================

                           OVERSIGHT HEARING

                               before the

                SUBCOMMITTEE ON WATER, POWER AND OCEANS

                                 of the

                     COMMITTEE ON NATURAL RESOURCES
                     U.S. HOUSE OF REPRESENTATIVES

                     ONE HUNDRED FIFTEENTH CONGRESS

                             SECOND SESSION

                               __________

                         Thursday, May 17, 2018

                               __________

                           Serial No. 115-45

                               __________

       Printed for the use of the Committee on Natural Resources
       
       
       
       
       
       
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                                   or
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                            _________ 

                U.S. GOVERNMENT PUBLISHING OFFICE
                   
 30-238 PDF             WASHINGTON : 2018              
          
      

                     COMMITTEE ON NATURAL RESOURCES

                        ROB BISHOP, UT, Chairman
            RAUL M. GRIJALVA, AZ, Ranking Democratic Member

Don Young, AK                        Grace F. Napolitano, CA
  Chairman Emeritus                  Madeleine Z. Bordallo, GU
Louie Gohmert, TX                    Jim Costa, CA
  Vice Chairman                      Gregorio Kilili Camacho Sablan, 
Doug Lamborn, CO                         CNMI
Robert J. Wittman, VA                Niki Tsongas, MA
Tom McClintock, CA                   Jared Huffman, CA
Stevan Pearce, NM                      Vice Ranking Member
Glenn Thompson, PA                   Alan S. Lowenthal, CA
Paul A. Gosar, AZ                    Donald S. Beyer, Jr., VA
Raul R. Labrador, ID                 Ruben Gallego, AZ
Scott R. Tipton, CO                  Colleen Hanabusa, HI
Doug LaMalfa, CA                     Nanette Diaz Barragan, CA
Jeff Denham, CA                      Darren Soto, FL
Paul Cook, CA                        A. Donald McEachin, VA
Bruce Westerman, AR                  Anthony G. Brown, MD
Garret Graves, LA                    Wm. Lacy Clay, MO
Jody B. Hice, GA                     Jimmy Gomez, CA
Aumua Amata Coleman Radewagen, AS    Nydia M. Velazquez, NY
Daniel Webster, FL
Jack Bergman, MI
Liz Cheney, WY
Mike Johnson, LA
Jenniffer Gonzalez-Colon, PR
Greg Gianforte, MT
John R. Curtis, UT

                      Cody Stewart, Chief of Staff
                      Lisa Pittman, Chief Counsel
                David Watkins, Democratic Staff Director
                                 ------                                

                SUBCOMMITTEE ON WATER, POWER AND OCEANS

                       DOUG LAMBORN, CO, Chairman
              JARED HUFFMAN, CA, Ranking Democratic Member

Robert J. Wittman, VA                Grace F. Napolitano, CA
Tom McClintock, CA                   Jim Costa, CA
Paul A. Gosar, AZ                    Donald S. Beyer, Jr., VA
Doug LaMalfa, CA                     Nanette Diaz Barragan, CA
Jeff Denham, CA                      Madeleine Z. Bordallo, GU
Garret Graves, LA                    Gregorio Kilili Camacho Sablan, 
Jody B. Hice, GA                         CNMI
Daniel Webster, FL                   Jimmy Gomez, CA
  Vice Chairman                      Raul M. Grijalva, AZ, ex officio
Mike Johnson, LA
Greg Gianforte, MT
Rob Bishop, UT, ex officio

                                 ------                                
                                CONTENTS

                              ----------                              
                                                                   Page

Hearing held on Thursday, May 17, 2018...........................     1

Statement of Members:
    Huffman, Hon. Jared, a Representative in Congress from the 
      State of California........................................     3
        Prepared statement of....................................     4
    Lamborn, Hon. Doug, a Representative in Congress from the 
      State of Colorado..........................................     1
        Prepared statement of....................................     2

Statement of Witnesses:
    Freeze, Mike, Vice President, Keo Fish Farm, Inc., Keo, 
      Arkansas...................................................     6
        Prepared statement of....................................     8
        Questions submitted for the record.......................    10
    Rickman, Mike, Deputy Director, Operations and Maintenance, 
      North Texas Municipal Water District, Wylie, Texas.........    18
        Prepared statement of....................................    20
    von Bismarck, Alexander, Executive Director, Environmental 
      Investigation Agency, Washington, DC.......................    13
        Prepared statement of....................................    15

Additional Materials Submitted for the Record:
    List of documents submitted for the record retained in the 
      Committee's official files.................................    34
                                     



  OVERSIGHT HEARING ON FEDERAL IMPEDIMENTS TO COMMERCE AND INNOVATIVE 
                      INJURIOUS SPECIES MANAGEMENT

                              ----------                              


                         Thursday, May 17, 2018

                     U.S. House of Representatives

                Subcommittee on Water, Power and Oceans

                     Committee on Natural Resources

                             Washington, DC

                              ----------                              

    The Subcommittee met, pursuant to notice, at 10:10 a.m., in 
room 1324, Longworth House Office Building, Hon. Doug Lamborn 
[Chairman of the Subcommittee] presiding.
    Present: Representatives Lamborn, LaMalfa, Graves, Hice, 
Johnson; Huffman, Barragan, Bordallo, and Sablan.
    Also present: Representatives Crawford and Westerman.

    Mr. Lamborn. The Subcommittee on Water, Power and Oceans 
will come to order. The Water, Power and Oceans Subcommittee 
meets today to hear testimony on an oversight hearing entitled, 
``Federal Impediments to Commerce and Innovative Injurious 
Species Management.''
    Under Committee Rule 4(f), any oral opening statements at 
hearings are limited to the Chairman, Ranking Minority Member, 
and the Vice Chair. I ask unanimous consent that all other 
Members' opening statements be made part of the hearing record 
if they are submitted to the Subcommittee Clerk by 5:00 p.m. 
today.
    Hearing no objection, so ordered.
    I ask unanimous consent that the gentleman from Arkansas, 
Mr. Westerman, and Mr. Crawford, also of Arkansas, be allowed 
to sit with the Subcommittee and participate in the hearing.
    Without objection, so ordered.
    We will begin with opening statements, starting with myself 
for 5 minutes.

    STATEMENT OF THE HON. DOUG LAMBORN, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF COLORADO

    Mr. Lamborn. Today, the Subcommittee on Water, Power and 
Oceans will meet to discuss the implication of the Lacey Act on 
U.S. industry. While the Lacey Act is a relatively unknown law 
to the average American, this law, and specifically the 2008 
amendments, can have sweeping impacts to a myriad of domestic 
industries.
    This morning, we will hear from representatives from the 
aquaculture industry, as well as from a municipal water 
district on conflicts they have been subject to under the Lacey 
Act for conducting what most of us would think of as routine 
and mundane business activities.
    I think all of us here today are familiar with one of the 
more famous Lacey Act cases, Gibson Guitar, where according to 
Gibson's CEO, ``several dozen armed agents'' abruptly raided 
their Nashville facilities. While the presence of armed Federal 
agents raiding a manufacturing facility is unsettling enough, 
these agents further demanded that the security cameras in the 
factory be turned off during the inspection.
    None of us want to aid in the spread of invasive species, 
and that is not what today's hearing is about. However, it is 
the duty of Congress to inspect these laws and ensure that they 
are not unfairly treating our citizens. And, also, we need to 
examine ways that we may improve upon their implementation.
    While the tedious Federal legislative process can sometimes 
stifle creative approaches, states have stepped up and crafted 
innovative solutions to address the threat of invasive species 
in a constructive way that does not impede economic activity. 
We have seen significant strides made in the Great Lakes region 
by states coming together to combat Asian carp; we have seen 
legislative action just up the road in Virginia to remove 
impediments to possession, sales, and purchases of non-native 
species; and we have seen Florida use social and economic 
incentives to combat the spread of lionfish.
    The states are the ones that will directly reap the 
benefits or costs of invasive species management, so maybe it 
is time we allow them to take the wheel.
    Many of us throughout the West, as well as those of us 
bordering the Gulf of Mexico, have seen the benefits of 
allowing states to lead the way on species management. While 
that may not be a silver bullet to conflicts under the Lacey 
Act, I think it is worthy of discussion.
    I want to thank our witnesses for being with us here today. 
This is the first time this Committee has conducted oversight 
on the law since 2013. This hearing serves as a good 
opportunity to examine this law, and to discuss possible 
updates to ensure that it is working for our states, our 
environment, and our businesses.

    [The prepared statement of Mr. Lamborn follows:]
Prepared Statement of the Hon. Doug Lamborn, Chairman, Subcommittee on 
                        Water, Power and Oceans
    Today, the Subcommittee on Water, Power and Oceans will meet to 
discuss the implication of the Lacey Act on U.S. industry. While the 
Lacey Act is a relatively unknown law to the average American, this 
law--and specifically the 2008 amendments--can have sweeping impacts to 
a myriad of domestic industries.
    This morning we will hear from representatives from the aquaculture 
industry as well as from a municipal water district on conflicts they 
have been subject to under the Lacey Act for conducting what most of us 
would think of as routine and mundane business activities.
    I think all of us here today are familiar with one of the more 
famous Lacey Act cases, Gibson Guitar, where, according to Gibson's 
CEO, ``several dozen armed agents,'' abruptly raided their Nashville 
facilities. While the presence of armed Federal agents raiding a 
manufacturing facility is unsettling enough, these agents further 
demanded that the security cameras in the factory be turned off during 
the inspection.
    Look, none of us want to aid in the spread of invasive species. 
That is not what today's hearing is about. However, it is the duty of 
Congress to inspect these laws and ensure that they are not unfairly 
treating our citizens and examine ways that we may improve upon their 
implementation.
    While the tedious Federal legislative process can sometimes stifle 
creative approaches, states have stepped up and crafted innovative 
solutions to address the threat of invasive species in a constructive 
way that doesn't impede economic activity. We have seen significant 
strides made in the Great Lakes region by states coming together to 
combat Asian carp, we have seen legislative action just up the road in 
Virginia to remove impediments to possession, sales and purchases of 
non-native species, and we have seen Florida use social and economic 
incentives to combat the spread of lionfish.
    The states are the ones that will directly reap the benefits or 
costs of invasive species management, so maybe it's time we allow them 
to take the wheel.
    Many of us throughout the West--and I can't forget the Gulf of 
Mexico--have seen the benefits of allowing states to lead the way on 
species management. While that may not be a silver bullet to conflicts 
under the Lacey Act, I think it is worthy of discussion.
    I want to thank our witnesses for being with us today. This is the 
first time this Committee has conducted oversight on the law since 
2013. This hearing serves as a good opportunity to examine this law and 
discuss possible updates to ensure its working for our states, our 
environment, and our businesses.

                                 ______
                                 

    Mr. Lamborn. I now recognize the Ranking Member, Mr. 
Huffman, for 5 minutes for his statement.

   STATEMENT OF THE HON. JARED HUFFMAN, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Huffman. Thank you, Mr. Chairman, and good morning. 
Today's oversight hearing on the Lacey Act, in my view, should 
focus on strengthening America's premier wildlife protection 
statute to face the threats of the 21st century, such as 
wildlife trafficking and the spread of invasive species. But 
instead, we will be subjected, I fear, to misleading arguments 
claiming that people will be thrown into jail for minor, 
unintentional violations of the Lacey Act. So, I want to go 
ahead and debunk some of these myths.
    First, we might hear that aquaculture business owners are 
living in fear of criminal charges or 6-figure fines if they 
accidentally transport injurious species after they have taken 
all reasonable and prudent precautions. However, this 
protection against that kind of criminal penalty is already 
built into the law.
    If a person didn't know he was violating the law, he is not 
going to be subject to criminal penalties, period. Criminal 
penalties only apply to people who knowingly violate the law. 
If a person, in the exercise of due care, should have known 
that he was violating the law, then civil penalties may be 
appropriate. If there is no consequence, however, for failure 
to comply with the law, the incentives to exercise that due 
care will evaporate. And that is really what much of this 
conversation is all about.
    Why is this so important? This provision of the Lacey Act 
helps fight against the spread of invasive species, which costs 
the United States billions of dollars in damages every year. 
Any weakening of the Lacey Act that could allow invasives to 
spread more easily would have significant negative impacts on 
ecosystems and economies that depend on natural resources.
    I am aware that there are difficulties with interstate 
water transfers because of invasive species, and solutions are 
needed. But broadly allowing transfers across state lines is 
not sufficiently protective to limit the spread of invasive 
species, if there are no efforts to control or eradicate the 
species.
    Zebra mussels and quagga mussels are a good example. They 
are a highly damaging invasive species. They cause hundreds of 
millions of dollars annually in damages, they establish easily, 
and they are nearly impossible to eradicate once they are 
established.
    Another example is Asian carp, introduced through the 
aquaculture industry. They are a huge threat to native 
fisheries. The Army Corps of Engineers released a study finding 
that in order to keep Asian carp and other invasives out of the 
Great Lakes, it is going to require 25 years and billions of 
dollars.
    We should be encouraging people to be careful, not 
careless, with these natural resources that fuel our economy.
    Next, we are likely to hear that the 2008 amendments to 
address illegal logging in the Lacey Act have not done anything 
to curb international illegal logging. This is not true. In 
2015, a report from the Union of Concerned Scientists found 
that imports of illegal wood into the United States have 
declined by between 32 and 44 percent since those amendments 
took effect. It has helped level the playing field for American 
businesses that are playing by the rules.
    There are also claims about Gibson Guitar. The Chairman 
mentioned this in his opening remarks, and the claim that this 
represents over-criminalization under the Lacey Act. Before we 
put Gibson forward as a poster child for over-criminalization, 
let's remember that this is a company that admitted to 
knowingly importing illegal wood. So, they are not such a good 
poster child after all.
    And I sure wish this concern about over-criminalization 
applied to the cannabis issue. We have thousands of people in 
this country filling our prisons and jails for possession of a 
substance that is legal in a dozen states, and we all know will 
be legal in all 50 states, it is just a matter of time. But I 
suppose it takes a corporation facing criminal consequences to 
evoke sympathy and concerns of over-criminalization for some 
folks. But, again, not a good poster child.
    Mr. Chairman, I wish that we were having a hearing to 
discuss what we can do to stop the spread of invasive species, 
protect our natural resources, and combat the global criminal 
assault on wildlife and ecosystems. But instead, we have no 
choice but to remind folks in the context of this hearing how 
important the Lacey Act is. It is important for curbing the 
growing global illegal wildlife trafficking industry, it is 
important for stopping the spread of invasive species, it is 
critically important for holding criminal enterprises who flout 
Federal law accountable.
    In fact, if you want a good poster child for the Lacey Act 
you should look to Massachusetts and Carlos Rafael, the 
infamous Codfather, who misreported over 782,000 pounds of fish 
over the course of his career, he harmed lawful fishermen, he 
harmed struggling fish populations. And it was ultimately the 
Lacey Act that brought him to accountability under the law.

    [The prepared statement of Mr. Huffman follows:]
     Prepared Statement of the Hon. Jared Huffman, Ranking Member, 
                Subcommittee on Water, Power and Oceans
    Today's oversight hearing on the Lacey Act should focus on 
strengthening America's premier wildlife protection statute to face the 
threats of the 21st century, such as wildlife trafficking and the 
spread of invasive species, but instead, we will be subjected to 
misleading arguments claiming people will be thrown into jail for 
minor, unintentional violations of the Lacey Act. So, I want to go 
ahead and debunk some of these myths.
    First, we might hear that aquaculture business owners are living in 
fear of criminal charges or 6-figure fines if they accidentally 
transport injurious species even after they have taken all the 
necessary precautions.
    However, this protection is already built into the law. If a person 
did not know he was violating the law, he will not be subject to 
criminal penalties, period. Criminal penalties only apply to people who 
knowingly violate the law. If a person, in the exercise of due care, 
should have known that he was violating the law, then civil penalties 
may be appropriate. If there is no consequence for failure to comply 
with the law, the incentives to exercise that due care will evaporate.
    This provision of the Lacey Act also helps to fight against the 
spread of invasive species, which cost the United States billions in 
damages every year. Any weakening of the Lacey Act that could allow 
them to spread more easily would have significant negative impacts on 
ecosystems and economies that depend on natural resources. I'm aware 
that there are difficulties with interstate water transfers because of 
invasive species, and solutions are needed, but broadly allowing 
transfers across state lines isn't sufficiently cautious to limit their 
spread if there are no efforts to control or eradicate the species. 
Invasive aquatic species like Zebra mussels and quagga mussels are 
highly damaging to aquatic ecosystems, cause hundreds of millions of 
dollars annually, establish easily, and are nearly impossible to 
eradicate.
    For example, Asian carp, which was introduced through the 
aquaculture industry, are a huge threat to native fisheries. The U.S. 
Army Corps of Engineers released a study finding that in order to keep 
Asian carp and other invasive species out of the Great Lakes, it will 
require at least 25 years and billions of dollars. We should be 
encouraging people to be careful--not careless--with the natural 
resources that fuel our economy.
    Next, we are going to hear that 2008 amendments to address illegal 
logging haven't done anything to curb international illegal logging. 
This couldn't be further from the truth. A 2015 report from the Union 
of Concerned Scientists found that imports of illegal wood into the 
United States have declined by between 32 and 44 percent since the 2008 
amendments to the Lacey Act took effect. This has helped level the 
playing field for American businesses that are playing by the rules.
    There are also claims that the Gibson Guitar case is an example of 
``over-criminalization'' of the Lacey Act. But Gibson Guitar admitted 
to knowingly importing illegal wood, and as I've already said, a person 
is guilty of a felony only if they knew they were dealing with an 
illegal product.
    The Lacey Act is a powerful enforcement tool to fight criminal 
activity. It should not be weakened. It helps combat the illegal 
harvest of wildlife and protects Americans from fraudulent labeling and 
black markets that drive prices down and cost law-abiding businesses 
millions each year.
    For example, Carlos Rafael, a cod fisherman from Massachusetts, 
flouted Federal law for decades by misreporting the amount of fish his 
boats caught, and then sold the fish for cash that he often smuggled to 
Portugal to evade Federal taxes. His crimes likely impacted already 
struggling fish populations, in turn harming other fishermen. The self-
proclaimed `Codfather' misreported more than 782,000 pounds of fish 
over the course of his career. After bragging to two undercover IRS 
agents posing as Russian mobsters, he inadvertently unraveled his reign 
over the region's fishing industry. Thanks to the Lacey Act, his 
disreputable acts were punishable by law. He pled guilty to 28 criminal 
counts, 23 of which were Lacey Act violations. The provisions of the 
Lacey Act had the strongest force to dethrone the infamous Codfather 
and alleviate the pain he caused to honest, hard-working commercial 
fishermen and the cod fishery itself.
    Last, the Lacey Act is a key weapon in the fight against widespread 
and highly profitable illegal wildlife trafficking. Wildlife 
trafficking is an estimated $23 billion-a-year industry, making it the 
fourth most lucrative illicit activity in the world after the drug 
trade, counterfeiting, and human trafficking. That money is bankrolling 
terrorists and other criminal groups around the globe, causing wildlife 
poaching to surge to unpreceded levels and threatening our national 
security.
    We should not be trying to muddy the waters by distorting the 
intent and effect of one of our strongest conservation laws. Rather, we 
should be holding a hearing to discuss what we can do to help stop the 
spread of invasive species, protect our natural resources, and combat 
the global criminal assault on wildlife and ecosystems.

                                 ______
                                 

    Mr. Huffman. With that, I yield back.
    Mr. Lamborn. Thank you. We will now hear from our panel of 
witnesses. Each witness' written testimony will appear in full 
in the hearing record. So, I ask that witnesses keep their oral 
statements to 5 minutes, as outlined in our invitation to you, 
and under Committee Rule 4(a).
    I will also explain how the timing lights work. When you 
are recognized, press the talk button to activate your 
microphone. Once you begin your testimony, the Clerk will start 
the timer, and a green light will appear. After 4 minutes, a 
yellow light will appear. At that time, you should begin to 
conclude your statement. At 5 minutes, the red light will come 
on, and I would ask that you finish your statement at that 
time.
    Our first witness is Mr. Mike Freeze, Vice President of Keo 
Fish Farm from Keo, Arkansas; our second witness will be Mr. 
Alexander von Bismarck, Executive Director for the 
Environmental Investigation Agency from here in Washington, DC; 
and our third witness will be Mr. Mike Rickman, Deputy Director 
of Operations and Maintenance for the North Texas Municipal 
Water District from Wylie, Texas.
    Thank you all for traveling to be here with us today.
    We will now begin with opening statements from our panel, 
beginning with Mr. Freeze.
    You are now recognized for 5 minutes.

STATEMENT OF MIKE FREEZE, VICE PRESIDENT, KEO FISH FARM, INC., 
                         KEO, ARKANSAS

    Mr. Freeze. I would like to thank Chairman Lamborn, and my 
own Congressman Rick Crawford and Bruce Westerman and the 
remaining members of the House Subcommittee on Water, Power and 
Oceans for allowing me to address you concerning Federal 
impediments to commerce and innovative injurious species.
    My name is Mike Freeze and I am a fish farmer. I sit or 
have sat on numerous aquaculture and government advisory 
boards. Since 1983, I have been the co-owner of Keo Fish Farm 
along with my business partner, Martha Melkovitz. Our farm has 
over 1,000 acres of ponds in which we produce hybrid striped 
bass and U.S. Fish and Wildlife-certified sterile triploid 
grass carp for live sales nationally and internationally.
    For aquaculture facilities that ship live product 
nationally, our Number one Federal regulatory issue and 
impediment to interstate commerce is the Lacey Act. Written in 
1900 and amended numerous times, including in the 2008 Farm 
Bill, the Lacey Act prohibits the international and interstate 
trafficking of illegally obtained wildlife and fish or parts as 
designated by Federal, state, tribal or foreign governments.
    When the Lacey Act was written, it was specifically 
designed to regulate only wild animals, and aquaculture was 
practically non-existent. The 1981 amendments to the Lacey Act 
included a provision that broadened its application to all wild 
animals, including those having been bred, hatched, or born in 
captivity. The U.S. Fish and Wildlife has used this broadened 
definition to regulate domestically produced aquaculture 
species, but not other domesticated species, such as turkeys, 
elk, deer, bison, or quail.
    Of particular concern to our industry is the Lacey Act 
elevates the violation of even misdemeanor state regulations to 
Federal felonies, simply because a $350 domesticated product 
has entered interstate commerce. Penalties for Lacey Act felony 
violations begin at $100,000 and mandatory incarceration. This 
scenario is analogous to a $50 speeding ticket being elevated 
to a $100,000 speeding ticket, simply because you are driving 
on an interstate highway instead of a state highway.
    In a report by the National Agricultural Law Center 
entitled, ``Aquaculture and the Lacey Act,'' author Elizabeth 
Rumley states, ``The Lacey Act should be amended to exempt 
domestically produced aquatic species,'' and I could not agree 
more. This report by Ms. Rumley has been provided for your 
examination.
    But today, I want to speak specifically about one of the 
aquaculture industry's most egregious concerns with the Lacey 
Act, and that is the prosecution of farmers for the accidental 
inclusion of unintended species in the interstate shipment of 
aquatic species produced in commercial aquaculture for human 
consumption or for recreational or ornamental purposes.
    Prior to 1981, the accidental violation of the Lacey Act 
could not be prosecuted, as the Lacey Act contained language 
stating that any person that willfully violated the law was 
subject to penalty. Unfortunately, the 1981 amendments changed 
this ``willfully'' requirement to a ``knowingly'' requirement. 
And though I am not an attorney, I have been advised that it is 
much easier to prove ``knowingly'' in a court of law than 
``willfully'' or ``purposely.''
    Keeping track of Federal, state, tribal, and foreign-
regulated animals and plants is extremely difficult for U.S. 
fish farmers. The laws are amended frequently, and the states, 
tribes, and foreign governments do so without national public 
notice.
    Hearing my testimony, you may think I would like to see the 
Lacey Act repealed. But I can assure you this is not the case. 
Besides being a fish farmer, I consider myself an 
environmentalist, and the Lacey Act is extremely important for 
the purposes that it was written for: to prevent the 
exploitation of our natural resources. If you examined my 
resume, you will see I have a Master's Degree in Fisheries and 
Wildlife Management, was a former employee of the Arkansas Game 
and Fish Commission, and was appointed by Governor Mike 
Huckabee to a 7-year term as an Arkansas Game and Fish 
Commissioner.
    It is just hard for me to understand why the Lacey Act is 
being used to regulate domestic livestock, fish born on a farm, 
raised on a farm, and slaughtered on a farm. Until farm-raised 
fish are actually stocked into state or Federal waters, why are 
they considered wild fish?
    Finally, I am not asking for a free pass on animals that 
are accidentally included in a shipment of an aquatic species 
produced in commercial aquaculture for human consumption or for 
use on recreational or ornamental purposes. State agencies have 
state regulations that farmers still must abide by, such as the 
Wisconsin DNR has a prohibition on mosquito fish, but these 
state regulations are normally misdemeanors, not felonies. 
Instead, we are asking for protection from Lacey Act felony 
prosecution for the accidental inclusion of an animal in a 
shipment of an aquatic species produced in commercial 
aquaculture.

    Congressman Crawford understands this problem, and has 
worked throughout multiple Congresses on the Aquaculture Risk 
Reduction Act, which provides an exemption to the Lacey Act for 
the aquaculture industry when animals are accidentally 
transported across state lines. Please consider legislation 
like the Aquaculture Risk Reduction Act when looking at ways to 
reduce the burdens of the Lacey Act. Thank you.

    [The prepared statement of Mr. Freeze follows:]

         Prepared Statement of Mr. Thomas Michael (Mike) Freeze
                          Keo Fish Farms, Inc.

    I would like to thank Chairman Lamborn, my own Congressman Rick 
Crawford and the remaining members of the House Subcommittee on Water, 
Power and Oceans for allowing me to address you concerning Federal 
Impediments to Commerce and Innovative Injurious Species.

    My name is Mike Freeze and I am a fish farmer. I sit or have sat on 
numerous aquaculture and government advisory boards and since 1983 I 
have been the co-owner of Keo Fish Farm along with my business partner, 
Mrs. Martha Melkovitz. Our farm has over 1,000 acres of ponds in which 
we produce hybrid striped bass and USFWS' certified sterile triploid 
grass carp for live sales nationally and internationally.

    For aquaculture facilities that ship live product nationally, our 
Number one Federal regulatory issue and impediment to interstate 
commerce is the Lacey Act. Written in 1900 and amended numerous times, 
including in the 2008 Farm Bill, the Lacey Act prohibits the 
international and interstate trafficking of illegally obtained wildlife 
and fish or parts as designated by Federal, state, tribal or foreign 
governments. When the Lacey Act was written, it was specifically 
designed to regulate only ``wild animals'' and aquaculture was 
practically non-existent. The 1981 amendments to the Lacey Act included 
a provision that broadened its application to all ``wild'' animals, 
including those having been ``bred, hatched, or born in captivity'' (16 
U.S.C. 3371(a)). The USFWS has used this broadened definition to 
regulate domestically produced aquaculture species but not other 
domesticated species such as turkeys, elk, deer, bison or quail. USDA, 
however, has defined wild members of the plant kingdom and excluded 
common cultivars and food crops (except planted trees). Hence, today 
our domesticated fish are regulated as if they were taken from the 
wild.

    Of particular concern to our industry, is that the Lacey Act 
elevates the violation of even misdemeanor state regulations to Federal 
felonies simply because $350 of domesticated product has entered 
interstate commerce. Penalties for a Lacey Act felony violation begin 
at $100,000 ($200,000 for organizations) and mandatory incarceration. 
This scenario is analogous to a $50 speeding ticket being elevated to a 
$100,000 speeding ticket simply because you are driving on an 
interstate highway instead of a state highway. In a report by the 
National Agricultural Law Center entitled ``Aquaculture and the Lacey 
Act,'' author Elizabeth Rumley states: ``The Lacey Act should be 
amended to exempt domestically produced aquatic species'' and I could 
not agree more. This report by Ms. Rumley is provided for your 
examination.

    But today I want to speak specifically about one of the aquaculture 
industry's most egregious concerns with the Lacey Act: the prosecution 
of farmers for the accidental inclusion of an unintended species in the 
interstate shipment of aquatic species produced in commercial 
aquaculture for human consumption or for recreational or ornamental 
purposes. Prior to 1969, any accidental violation of the Lacey Act 
could not be prosecuted as the Lacey Act contained language stating 
that any person that ``willfully'' violated the law was subject to 
penalty. Unfortunately, the 1969 amendments changed the ``willfully'' 
requirement to a ``knowingly'' requirement. Though I am not an 
attorney, I have been advised that it is much easier to prove 
``knowingly'' in a court of law than ``willfully''.
    Keeping track of Federal, state, tribal, and foreign regulated 
animals and plants is extremely difficult for U.S. fish farmers. These 
laws are amended frequently and the states, tribes and foreign 
governments do so without national public notice. For example, 
Wisconsin has prohibited the importation of mosquito fish (Gambusia 
sp.) into their state, even though this species cannot survive their 
harsh winters, and was previously allowed into their state for many 
years. While minnow farmers try very hard to exclude native mosquito 
fish from their production ponds, federally protected migratory birds 
sometimes contaminate their ponds by transferring eggs or fry into 
these ponds. Just a few mosquito fish accidentally included in a 
shipment of several thousand pounds of fathead minnows shipped to 
Wisconsin would be a Lacey Act violation because the underlying 
Wisconsin state regulation prohibiting mosquito fish was violated 
during interstate commerce.

    Hearing my testimony, you may think that I would like to see the 
Lacey Act repealed but I can assure you that is not the case. Besides 
being a fish farmer, I consider myself an environmentalist, and the 
Lacey Act is extremely important for the purpose that it was written 
for: to prevent the exploitation of our natural resources. If you 
examined my resume, you would have seen that I have a Master's Degree 
in Fisheries and Wildlife Management, was a former employee of the 
Arkansas Game and Fish Commission and was appointed by Governor Mike 
Huckabee to a 7-year term as an Arkansas Game and Fish Commissioner. It 
is just hard for me to understand why the Lacey Act is being used to 
regulate domestic livestock (fish) born on a farm, raised on a farm and 
slaughtered on a farm? Until farm raised fish are actually stocked into 
state or Federal waters, why are they considered ``wild fish''?

    Aquaculture is defined as the farming of aquatic organisms such as 
fish, crustaceans, mollusks and aquatic plants under controlled 
conditions with some form of intervention in the rearing process to 
enhance production, such as regular stocking, feeding, protection from 
predators, etc. Or put in simplistic terms: aquaculture is underwater 
farming. Total U.S. aquaculture production is currently estimated by 
NOAA to exceed $1 billion, while the U.S. seafood trade deficit exceeds 
$10.4 billion annually. In Alabama, Arkansas, Louisiana and Mississippi 
alone over 250,000 acres are devoted to commercial aquaculture 
production.

    Finally, I am not asking for a ``free pass'' on animals 
accidentally included in a shipment of an aquatic species produced in 
commercial aquaculture for human consumption or for use for 
recreational or ornamental purposes. State agencies have state 
regulations that farmers still must abide by, such as the Wisconsin DNR 
prohibition on mosquito fish, but the state regulations are normally 
misdemeanors, not felonies. Instead, we are asking for protection from 
Lacey Act felony prosecution for the accidental inclusion of an animal 
in a shipment of an aquatic species produced in commercial aquaculture 
for human consumption or for use in recreational or ornamental 
purposes. Protection, I might add, that we had until 1969.

    Congressman Crawford understands this problem and has worked 
throughout multiple Congresses on the Aquaculture Risk Reduction Act, 
which provides an exception to the Lacey Act for the aquaculture 
industry when animals are accidentally transported across state lines. 
Please consider legislation, like the Aquaculture Risk Reduction Act 
when looking at ways to reduce the burdens of the Lacey Act.

                                 *****

The following document was submitted as a supplement to Mr. Freeze's 
testimony. This document is part of the hearing record and are being 
retained in the Committee's official files:

    --``Aquaculture and the Lacey Act,'' an Agricultural Law Research 
            Project by Elizabeth R. Rumley, The National Agricultural 
            Law Center, March 2010.

                                 ______
                                 
Questions Submitted for the Record to Mike Freeze, Vice President, Keo 
                               Fish Farm

                    Questions Submitted by Rep. Hice

    Question 1. Does the Lacey act unreasonably expect an American 
citizen who is engaged in importing to know an extensive set of laws 
and regulations of a foreign nation?

    Answer. The Lacey Act requires a U.S. citizen engaged in the trade 
of fish or wildlife defined as ``any wild animal, whether alive or 
dead, including without limitation any wild mammal, bird, reptile, 
amphibian, fish, mollusk, crustacean, arthropod, coelenterate, or other 
invertebrate, whether or not bred, hatched, or born in captivity, and 
includes any part, product, egg, or offspring thereof'' (U.S.C. 16 
Sec. 3371(a)) to be familiar with any law, treaty or regulation of the 
United States, any Indian tribal law, or any foreign law (U.S.C. 16 
Sec. 3372(a)).

    This requirement is unreasonable given that U.S. states and 
territories are constantly amending their regulations. The National 
Aquaculture Association has recommended to the Federal Interagency 
Aquatic Nuisance Species Task Force and to the FWS that a Federal 
agency should publicly post U.S. Federal and state laws to inform the 
public and importers as a preventative measure and service to benefit 
the United States. This recommendation was presented with the 
understanding that commercial import shipments are inspected but 
overnight courier services are not. As an example of the challenge 
associated with monitoring state laws, the National Aquaculture 
Association presented to the Aquatic Nuisance Species Task Force in 
November 2016 an analysis that importers or distributors of aquarium 
fish into the United States or across state lines must be familiar with 
the regulations of 50 states and Puerto Rico which collectively, but 
not uniformly, prohibited 2,256 species. There are not uniform 
regulations for each state, as each state recognizes different species 
as posing a risk to its unique aquatic environments.

    Question 2. What type of reforms do you suggest that would 
eliminate the risk of criminal liability or imprisonment for those not 
engaging in purposefully deceitful conduct?

    Answer.

    Domestically cultured aquatic species should be excluded--The 
intent of the Act was to support state wildlife and fishery 
regulations; however, with the growth of U.S. aquaculture and its 
recognition as an agricultural activity, there has not occurred 
revisions to the Act to exempt domestically produced aquatic species. 
As an example, within the Lacey Act wild members of the plant kingdom 
are regulated and common plant cultivars and food crops are excluded 
(except planted trees). Within the Lacey Act, ``fish and wildlife'' is 
defined as any wild animal including those bred, hatched or born in 
captivity. The Act should be amended to exempt domestically produced 
aquatic species while recognizing the Act continues to support state 
regulations that have an aquaculture focus.

    Extreme penalties should be reduced--A 1981 amendment to the Act 
established the punishments of 5-year imprisonment or $20,000 fine; 
however, as provided for in 18 U.S.C.A. Sec. 3571(e) misdemeanor 
penalties can be 1 year in prison and/or $100,000 fine ($200,000 for a 
business) and felony penalties can be up to 5 years in prison and/or a 
$250,000 fine ($500,000 for businesses). The Act should be amended to 
exclude penalty provisions from the extreme penalties provided in 18 
U.S.C.A. Sec. 3571.

    Market value should be increased for farm-raised aquatic species--
Misdemeanor penalties are assessed when the market value is below $350. 
Felony penalties are assessed if market value is above $350. The $350 
value was included in the 1981 amendment to the Act and may only be 
sensible when applied to the wildlife trade. The market value is far 
too low when compared against the $50,000 value of a truck load of bait 
fish sold interstate. Unless aquaculture species are excluded from the 
Act, then the Act should be amended to raise the market value that 
triggers penalties for violations concerning domestically produced 
aquatic species.

    ``Willfully'' versus an all-encompassing ``knowingly''--As a result 
of the 1969 amendments to the Lacey Act, any person that ``willfully'' 
violated the law was subject to penalty. However, the 1981 amendments 
changed this, holding all those who ``knowingly'' import or 
``knowingly'' engage in certain conduct subject to felony penalties. 
The higher standard of willfulness required Federal prosecutors to 
prove that the defendant not only wanted to cause harm but that he also 
knew that harm was certain to occur as a result of his actions. 
However, ``knowingly'' only requires proof that a person is practically 
certain his conduct will lead to the violation. For example, a farmer 
could be found guilty under the ``knowingly'' standard if he knows that 
an injurious or listed species is present near the farm, but still 
sends out a shipment that happens to include a hitchhiking live animal. 
Even if the farmer is ignorant of and may not be able, for all 
practical purposes, to exclude the hitchhiker, he may still be 
convicted because of his knowledge of the nearby population. As a 
result, the Act should be amended back to the original mens rea \1\ 
requirement of ``willfully'' or to the more contemporary requirement of 
``purposely.''
---------------------------------------------------------------------------
    \1\ The Model Penal Code was written by the American Law Institute 
in 1962 to standardize the definition of crimes across all states. Many 
states have adopted parts of it, including the ``mens rea'' or mental 
state provisions. The Code has five mens rea categories. They have very 
specific legal definitions and are summarized here for clarity. The 
categories are:

       Purposely--the actor wants to cause the harm and he 
knows that the harm is virtually certain to occur as a result of his 
conduct.

       Knowingly--the actor is practically certain that his 
conduct will lead to the result.

       Recklessly--the actor is aware that the attendant 
circumstances exist, but nevertheless engages in the conduct that a 
``law abiding person'' would have refrained from.

       Negligently--the actor is unaware of the attendant 
circumstances and the consequences of his conduct, but a ``reasonable'' 
person would have been aware.

       Strict liability--the actor engaged in conduct where his 
mental state was irrelevant.

    The misdemeanor provision states that ``. . . any person who 
knowingly engages in conduct prohibited by any provision of this 
chapter . . . and in the exercise of due care should know that the fish 
or wildlife or plants were taken, possessed, transported, or sold in 
violation of . . .'' The ``knowingly'' standard, where a person is 
practically certain his conduct will lead to a harmful result, is 
modified to incorporate elements of negligence through the phrase, ``in 
the exercise of due care.'' Negligence is a very low standard to prove. 
As a result, the prosecutor would just have to prove that the producer 
knew he was shipping fish across state lines and didn't use due care in 
preventing injurious or listed species from hitchhiking in the load. 
The Act should be amended to remove the phrase ``in the exercise of due 
---------------------------------------------------------------------------
care.''

    Fail to label a package is a crime--The Act states, ``It is 
unlawful for any person to import, export, or transport in interstate 
commerce any container or package . . . unless the container or package 
has been previously marked, labeled, or tagged in accordance with 
regulations issued pursuant . . .'' to the Act. This provision does not 
require any mens rea at all, and is thus a strict liability offense, 
where a person's mental state is irrelevant. Strict liability is very 
rarely a standard in criminal law, as legislatures prefer to only hold 
people responsible for actions they intentionally or negligently 
perform. Instead, ``the Act should be amended to read that ``It is 
unlawful for any person to knowingly import, export, or transport in 
interstate commerce . . .'' a package that is not labeled as required 
by regulations developed pursuant to the Act.

    Warrantless arrest and search-and-seizure--The 1988 amendments 
amended the enforcement powers section to allow arrest and search-and-
seizure without a warrant. This provision may make sense when an 
active, ongoing wildlife violation is suspected, but it is onerous to 
farmers that manage extensive and fixed operations growing aquatic 
species. The Act should be amended to exempt farmers and farms from 
warrantless arrest and search-and-seizure.

    State or foreign law violations versus Federal law violations--
Currently, a Federal agency can, unilaterally, take action under the 
Lacey Act when state or foreign wildlife laws are violated. The law 
should be amended to require the Federal agencies to recognize the 
primacy of the state or foreign country wildlife regulations and to 
complete a consistency determination prior to initiating legal action.

    States increasingly regulate non-native species--Aquaculturists can 
be placed in extreme jeopardy when state-listed native and non-native 
species might be accidentally moved or possessed due to species 
similarity of appearance and the open access by species to aquaculture 
facilities (e.g., pond and shellfish production systems). The Act 
should be amended to exempt domestic producers of aquatic species from 
prosecution related to the unintentional shipment of state-listed 
native or non-native species. As noted earlier, the 50 states and 
Puerto Rico collectively prohibit 2,256 aquarium species.
    Disease responsibilities reside in USDA-APHIS--The U.S. Department 
of Agriculture, Animal and Plant Health Inspection Service, is charged 
with regulating all livestock diseases, including aquatic animal 
species. The recent report by the Government Accountability Office, 
Live Animal Imports (2010), noted that the Animal and Plant Health 
Inspection Service is expanding its mission to beyond a focus on 
agricultural animals (including aquaculture species) to address 
zoonotic and wildlife diseases. The Act should be amended to direct 
USDA-APHIS to assume responsibility for Lacey Act derived regulations 
relative to salmonid eggs, fry, fingerlings and live or dead whole 
fish.

Defenders of Wildlife. 2007. Broken Screens: The regulation of live 
animal imports in the United States (http://www.defenders.org/
resources/publications/programs_and_policy / international_conservation 
/ broken_screens / broken_screens_ report.pdf accessed May 23, 2018).

Rumley, E.R. 2010. Aquaculture and the Lacey Act. University of 
Arkansas, The National Agricultural Law Center (http://
nationalaglawcenter.org/wp-content/uploads/assets/articles/
Rumley_lacey.pdf accessed May 23, 2018).

U.S. Department of Agriculture. 2008. Amendments to the Lacey Act from 
H.R. 2419, Sec. 8204. (http://www.aphis.usda.gov/plant_health/
lacey_act/downloads/background_redlinedLaceyamndmnt_forests_may08.pdf 
accessed May 23, 2018).

U.S. Fish and Wildlife Service. Undated. Lacey Act Amendments of 1981. 
(http://www.fws.gov/laws/lawsdigest/LACEY.HTML accessed May 23, 2018).

U.S. Fish and Wildlife Service. undated. Lacey Act. (https://
www.fws.gov/le/pdffiles/Lacey.pdf accessed May 23, 2018).

4U.S. Government Accountability Office. 2010. Live Animal Imports: 
Agencies need better collaboration to reduce the risk of animal-related 
diseases. (http://www.gao.gov/products/GAO-11-9 accessed May 23, 2018).

Wisch, R.F. 2003. Lacey Act Overview. Michigan State University, 
College of Law, Animal Legal and Historical Center (http://
www.animallaw.info/articles/ovuslaceyact.htm accessed May 23, 2018).

    Question 3. I understand that a ``blanket declaration'' program was 
created to allow importers to make declarations on a month's worth of 
shipments, but that as of 2017 less than 100 participants were still in 
the program.

    a. Was this test program a success?

    b. Did it improved the ability to protect wildlife, fish, and 
plants?

    c. Did the test show an improvement or hindrance to trade?

    Answer. Neither I nor anyone in the aquaculture industry that I 
know are familiar with or have been informed by the FWS about a blanket 
declaration program. I wonder if such a program is available relative 
to authorities granted to inspect wildlife and wildlife product imports 
or exports under the Endangered Species Act (ESA), Convention on 
International Trade in Endangered Species of Wild Fauna or Flora 
(CITES) or the Lacey Act. FWS inspectors must have Form 3-177 or any of 
the several Form 3-200 variants in-hand, when inspecting incoming or 
out-going shipments to confirm the contents match information provided 
by the importer or exporter. Please see https://www.fws.gov/Le/
declaration-form-3-177.html. Wildlife and wildlife products import/
exports are restricted to 18 ports of entry, ports where an importer/
exporter has submitted an application for entry/exit of a shipment, 
customs ports or special ports. Please see https://www.fws.gov/le/
ports-contact-information.html.
                  Question Submitted by Rep. Crawford

    Question 1. Aquaculture is often falsely credited for the 
introduction of invasive species. One often stated example is that 
Asian carp were introduced by U.S. aquaculture. Is this true?

    Answer. No. The four species of the taxonomic family Cyprinidae 
generally recognized as Asian carp (grass, black, silver and bighead) 
were imported by the U.S. Fish and Wildlife Service (FWS) and farmers 
with assistance from the FWS, in the 1960s, 1970s or 1980s in response 
to the Clean Water Act's directive to utilize biological control 
methods as opposed to chemical control methods. Asian carp were seen as 
potential tools to mitigate the use of chemicals to control nuisance 
native or introduced aquatic plants (grass carp), increase the 
treatment capacity for municipal sewage treatment plants (silver and 
bighead carp), control nuisance freshwater snails that are vectors for 
fish parasites (black carp), and for consumption as a human food 
(primarily the bighead carp and grass carp). Numerous state and Federal 
agencies, such as the Arkansas Game and Fish Commission, the Illinois 
Natural History Survey, the EPA and many others funded and conducted 
this research. The initial escapes of the grass, silver and bighead 
carps occurred via these public agencies. The source(s) of the initial 
escape of black carp is unknown.

Conover, G., R. Simmonds and M. Whalen (ed). 2007. Management and 
control plan for bighead, black, grass, and silver carps in the United 
States. Asian Carp Working Group, Aquatic Nuisance Species Task Force, 
Washington, DC.

Kelly, A.M., C.R. Engle, M.L. Armstrong, M. Freeze and A.J. Mitchell. 
2011. History of introductions and governmental involvement in 
promoting the use of grass, silver, and bighead carps in D.C. Chapman 
and M.H. Hoff, editors. Invasive Carps in North America. American 
Fisheries Society, Symposium 74, Bethesda, Maryland.

Mitchell, A.J. and A.M. Kelly. 2006. The public sector role in the 
establishment of grass carp in the United States. Fisheries 31(3):113-
121.

Nico, L.G., J.D. Williams and H.L. Jelks. 2005. Black carp: Biological 
synopsis and risk assessment of an introduced fish. American Fisheries 
Society, Special Publication 32, Bethesda Maryland.

                                 ______
                                 

    Mr. Lamborn. Thank you for your testimony.
    Mr. von Bismarck, you are now recognized for 5 minutes.

   STATEMENT OF ALEXANDER VON BISMARCK, EXECUTIVE DIRECTOR, 
       ENVIRONMENTAL INVESTIGATION AGENCY, WASHINGTON, DC

    Mr. von Bismarck. Mr. Chairman, Ranking Member, and members 
of the Subcommittee, thank you for inviting me today. My name 
is Alexander von Bismarck. I have investigated and studied 
global crime and natural resources for over 20 years. As 
Executive Director of the Environmental Investigation Agency, I 
have conducted field investigations on every continent into 
criminal networks dealing in illegal wildlife and timber. I am 
also proud to have served as a U.S. Marine.
    I am grateful for the chance to correct some misperceptions 
about the Lacey Act and show how enforcement of it, in fact, 
has benefited law-abiding American businesses and helped curb 
environmental crime across the globe.
    The Lacey Act is one of our oldest and most effective 
wildlife conservation laws. It has been around for over 100 
years. We figured out back then that unless you tackle the 
trade and demand, you will lose the fight against poaching and 
the incursion of invasive species. In today's global economy, 
illegal poaching and logging are multi-billion-dollar crimes. 
Our investigations have found that they fund terrorism, fuel 
conflict, and undercut law-abiding U.S. companies. Without the 
Lacey Act, designed to keep illegal wildlife and plant products 
out of our markets, U.S. citizens and U.S. businesses are 
forced into supporting these crimes, and to being dependent on 
them.
    A recent prosecution involving flooring made in China from 
illegal Russian wood stolen from endangered Siberian tiger 
habitat illustrates this case. The importer, Lumber 
Liquidators, was making about $1 billion in revenue a year off 
a business model that was looking for the cheapest and often 
illegal raw material around the world. They were fined $13 
million and asked to revamp their sourcing. This and other 
cases today give family operated sawmills and foresters and 
other manufacturers in the United States a chance to compete in 
the global marketplace, going forward.
    I was undercover in Russia and China collecting evidence 
related to this case, and I can tell you that no American 
businessman or woman wants to be put in the position of having 
to do business with the mafia that is running the wood trade 
there. This case was possible because of an amendment in 2008 
that is an example of how the Lacey Act has been modernized and 
strengthened, and how U.S. industry has seen the benefits.
    The Lacey Act plant amendment was born out of strong 
evidence that illegal logging and associated trade had harmful 
impacts, not only on the world's forests, but also on the 
American timber industry. Illegal timber imports were costing 
American businesses over $1 billion annually. By ensuring that 
trees and other plants need to be legally sourced, the Lacey 
Act provides a level playing field, which is why so many 
American businesses have rallied behind it.
    Next week, the 2008 amendment will be 10 years old, and 
there is reason to celebrate. A 2015 study found that imports 
of illegal timber had decreased by over 40 percent since the 
amendment was passed. I have personally seen the impacts while 
undercover in factories and with traders around the world that 
companies are beginning to reward products that are made with 
legal material coming from the United States, increasingly.
    Critics of the Lacey Act have cited the example of Gibson 
Guitar alleging unfair government over-reach and citing 
infractions involving Indian rosewood. In fact, and I was 
personally undercover with the timber boss involved, the 
centerpiece of the case was that the company admitted knowingly 
importing illegal rare ebony wood from Madagascar national 
parks, and that it continued to do so, even as management knew 
of the relevant laws. An e-mail showed that the company chose--
chose--to knowingly import ebony stolen from national parks 
when its American competitor said no. The illegal wood was 
forfeited, and Gibson entered into an enforcement agreement 
that included a compliance plan.
    The only one arguing that that is over-reach or an unfair 
result are those uninformed of the facts of the case, or those 
benefiting directly from illegal wood trade.
    We believe that the introduction of this bill, H.R. 3041, 
is based on misperceptions regarding the Lacey Act that we wish 
to correct. In previous testimonies, the biggest concern stated 
by the National Aquaculture Association was ``that the Lacey 
Act elevates the violation of even misdemeanor state 
regulations to Federal felonies simply because $350 of 
domesticated product has entered interstate commerce,'' 
implying that accidental inclusion of certain species in 
aquaculture shipments would lead to hundreds of thousands of 
dollars in penalties.
    It is a relief to report to you that this simply is not 
true. Although illegal goods may be seized under the Lacey Act, 
criminal penalties are imposed only if a person knew, or in the 
exercise of due care should have known, that the goods that he 
or she traded were illegal.
    Our enforcement agencies are over-stretched and in urgent 
need of more tools, more resources to catch the big fish to 
protect American businesses and consumers. The last thing they 
need is exemptions thrown their way that will benefit foreign 
fish farmers who are skirting the rules.
    In conclusion, the proposed bill is not necessary because 
the protection it aims to provide is already included in the 
Lacey Act. With the Lacey Act, the United States has set an 
example to the rest of the world that criminal wildlife and 
timber trade is not acceptable. It is imperative that the 
spirit of this law be upheld and its effectiveness not be 
undermined. Thank you.

    [The prepared statement of Mr. von Bismarck follows:]
   Prepared Statement of Alexander von Bismarck, Executive Director, 
                   Environmental Investigation Agency
                              introduction
    Mr. Chairman, Ranking Member, and members of the Subcommittee on 
Fisheries, Wildlife, Oceans and Insular Affairs, thank you for inviting 
me to appear before the Subcommittee today for the oversight hearing, 
``Federal Impediments to Commerce and Innovative Injurious Species 
Management.''
    I have investigated and studied global crime in natural resources 
for over 15 years. As an investigator and the Executive Director of the 
Environmental Investigation Agency, I have conducted international 
field investigations on every continent into criminal networks dealing 
in illegal wood, endangered species and harmful chemicals. Before 
joining EIA, I researched linkages between economics, ecology and human 
health with the Harvard School of Public Health and the New England 
Aquarium. I have a master of science from the London School of 
Economics in Environment and Development and a BSc from Harvard 
University in Environmental Science and Public Policy. I am also proud 
to have served as a U.S. Marine.
    The Environmental Investigation Agency, Inc. (EIA), a non-profit 
501(c)(3) organization, has worked for nearly 30 years to investigate 
and expose environmental crimes, and advocate for creative and 
effective solutions. EIA's analyses of the trade in illegal timber, 
wildlife, and ozone-depleting substances have been globally recognized. 
As an example, our investigative work in the late 1980s provided 
evidence that led to the international ban on ivory trade.
    In my testimony, I will correct some misperceptions about the Lacey 
Act and its implementation, and show how enforcement of the Lacey Act 
has benefited American businesses and helped curb environmental crime 
across the globe, in particular illegal logging.
                      international wildlife trade
    The Lacey Act is one of our oldest and most effective wildlife 
conservation laws, it has been around for over 100 years. I think we 
all agree that the effective implementation of this law is having a 
positive impact in the United States and indeed around the globe. 
Numerous criminal trade networks have been stopped and once threatened 
species are on the road to recovery since the Lacey Act was signed into 
law.
    Illegal poaching and logging of natural resources is a billion-
dollar crime, and our investigations have found evidence that it funds 
terrorism, fuels conflict and undercuts law-abiding U.S. companies. 
Without the Lacey Act, which is designed to keep illegal wildlife and 
plant products out of our markets, U.S. citizens would unwittingly be 
supporting these crimes.
    John Cruden, former Assistant Attorney General of the Department of 
Justice's Environment and Natural Resources Division, dubbed the Lacey 
Act ``the single most important Federal wildlife protection law.'' \1\ 
Indeed, the Lacey Act is a fundamental tool for the U.S. Government's 
efforts to combat illegal trafficking of wildlife products such as 
elephant ivory and rhino horn. In the 2008 case United States v. Tania 
Siyam, the accused pleaded guilty to Lacey Act violations for illegally 
selling and importing raw ivory from Cameroon into the United States, 
and was subsequently sentenced to 5 years in prison and fined $100,000.
---------------------------------------------------------------------------
    \1\ https://www.justice.gov/usao/page/file/439556/download.
---------------------------------------------------------------------------
    The Lacey Act is an essential legal component of Operation Crash, 
an ongoing multi-year investigation into rhino horn and ivory smuggling 
led by the U.S. Fish and Wildlife Service and the Department of Justice 
that has resulted in more than 30 convictions, over $2.1 million in 
fines, and approximately $8 million paid in forfeitures and 
restitutions. Among those successfully convicted of Lacey Act 
violations as a result of Operation Crash was Zhifei Lei, a rhino horn 
trafficking syndicate leader who smuggled 30 rhino horns along with 
elephant ivory objects together worth over $4.5 million from the United 
States to China. In 2014 Lei was sentenced to 70 months in prison and 
forfeited $3.5 million in proceeds from his criminal activities.
    As one of the world's largest markets for illegal wildlife 
products, the United States sees more than just ivory and rhino horn 
smuggled across its borders. The Lacey Act has been used to prosecute 
companies and individuals illegally trading in protected species of 
coral, sharks, sea horses, rattlesnakes, leopards, and a multitude of 
other native and exotic wildlife species.
    The Lacey Act not only protects endangered wildlife and vital 
natural resources from destructive exploitation, it also protects law-
abiding American businesses from having to compete with criminals. For 
instance, in 2012 three men were arrested for running an aquaculture 
company in Florida that knowingly mislabeled wild-caught turtles as 
captive bred for international sale. Without the Lacey Act, prosecutors 
would not have been able to bring criminal charges against the 
traffickers.\2\
---------------------------------------------------------------------------
    \2\ http://wildlife.org/wp-content/uploads/2014/11/Policy-
Brief_LaceyAct_FINAL.pdf.
---------------------------------------------------------------------------
                            illegal logging
    Times have changed in the more than 100 years since the Lacey Act 
first became law, and Congress has kept apace, through thoughtful 
amendments, to meet the challenges increasingly sophisticated 
international criminal networks pose to legal trade. Most importantly, 
past amendments and phase-ins have strengthened the law and its 
implementation over time, while carefully avoiding the creation of 
dangerous loopholes that would incentivize more illegal trade.
    The 2008 plants amendment provides an excellent example of how the 
Lacey Act has been modernized and strengthened, and how U.S. industry 
and manufacturing sectors have seen the benefits of it. The Lacey Act 
Plant Amendment was born out of strong evidence that illegal logging 
and associated trade had harmful impacts not only on the world's 
forests, but also on the American timber industry. A 2004 study by 
Seneca Creek Associates concluded that illegal timber imports were 
costing American businesses over $1 billion annually.\3\ The 2008 
amendment ensures that trees and other plants need to be legally 
sourced, protecting American producers from having to compete with 
cheap illegal timber imports. The Lacey Act provides everyone a level 
playing field. That's why so many American businesses have rallied 
behind this law, and are in fact demanding even stronger enforcement 
today, rather than the creation of loopholes that would water it down 
and increase the chances for illegal goods to enter our market.
---------------------------------------------------------------------------
    \3\ http://www.unece.lsu.edu/responsible_trade/documents/2003-2006/
rt03_036.pdf.
---------------------------------------------------------------------------
    Next week, the 2008 amendment will be 10 years old, and there is 
reason to celebrate, as there is evidence today that the Lacey Act has 
indeed contributed to reducing illegal logging while strengthening our 
domestic industries. A 2015 study by the Union of Concerned Scientists 
found that imports of illegal timber had decreased by over 40 percent 
since the amendment was passed, and concluded that stronger enforcement 
could bring even more progress.\4\ A more recent study by Jeffrey 
Prestemon for the U.S. Fish & Wildlife Service in 2016 looking at 
timber imports from high risk regions found that implementation of the 
Lacey Act had reduced overall U.S. timber imports by 24 percent.\5\
---------------------------------------------------------------------------
    \4\ https: / / www.ucsusa.org/global-warming/stop-deforestation/
lacey-acts-effectiveness-reducing-illegal-wood-imports#.Wvt_o0yZORY.
    \5\ Daowei Zang, Yin Ling and Jeffrey P. Prestemon: From Deficit to 
Surplus: An Econometric Analysis of U.S. Trade Balance in Forest 
Products, For. Sci 63(2):209-217, copyright Society of American 
Foresters.
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                        facts on the gibson case
    Critics of the Lacey Act have cited the example of Gibson Guitar, 
alleging unfair government over-reach. In fact, the case is a prime 
example of how the Lacey Act should and does work. In the criminal 
enforcement agreement Gibson stated clearly that it ``accepts and 
acknowledges responsibility'' \6\ for knowingly and illegally importing 
rare ebony from Madagascar. The emphasis here is on ``knowingly.'' 
Gibson admitted that it continued to order Malagasy ebony despite the 
fact that one of its employees knew about the relevant laws and had 
informed the company's management. The wood was subsequently forfeited, 
Gibson paid respective fines and entered into and enforcement agreement 
that included a compliance plan, which served as a useful guidance for 
responsible American companies who wanted to ensure they are sourcing 
legal wood.
---------------------------------------------------------------------------
    \6\ https: / / www.justice.gov / opa / pr / gibson-guitar-corp-
agrees-resolve-investigation-lacey-act-violations.
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    The enforcement action also had a decisive impact on enforcement 
against illegal ebony in other important markets, and helped bring 
illegal chainsaws in one of the most threatened protected areas in 
Madagascar to a halt.
                           lumber liquidators
    In 2015, Lumber Liquidators pleaded guilty to importing solid oak 
flooring from Chinese manufacturers made from illegally harvested 
timber from the Russian Far East. The company admitted to both criminal 
felony and misdemeanor, and agreed to pay $13.2 million in forfeitures 
and fines. The plea agreement included a detailed compliance plan to 
ensure that all future imports would be legally sourced. Through its 
reckless business model, the company contributed to destroying valuable 
forests and harming people and wildlife in the Russian Far East, 
including the last remaining wild populations of the Siberian tiger. 
Enforcement in this case was an instrumental move to level the playing 
field and to protect honest American businesses from unfair competition 
through unacceptable practices.
                        facts on the mcnab case
    Another frequently cited example of how the Lacey Act allegedly 
punishes companies unjustly is the case United States v. McNab. Nothing 
could be further from the truth. In fact, law enforcement in this case 
put an end to a large scale, sophisticated international criminal 
scheme involving more than 40 shipments of illegal lobster tails from 
Honduras, comprising more than 1 million pounds of lobster at a retail 
value of over $17 million.\7\ Four defendants were found guilty of 
knowingly violating the law, including charges of: conspiracy, 
smuggling, money laundering, Lacey Act violations, and false 
labeling.\8\
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    \7\ Press Release, NOAA, McNab to Continue Serving Federal Prison 
Sentence for Lobster Smuggling (Mar. 22, 2004), available at http://
www.publicaffairs.noaa.gov/releases2004/mar04/noaa04-r119.html.
    \8\ United States v. McNab, 331 F.3d 1228, 1234 n.10 (11th Cir. 
2003).
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    The notion that the perpetrators in this case were wrongfully 
sentenced due to a misinterpretation of a foreign law can only be 
viewed as either regrettably misinformed, or deliberately misconstruing 
the facts.
            other common misperceptions about the lacey act
    We believe that the introduction of H.R. 3041, the Aquaculture Risk 
Reduction Act, is based on misperceptions regarding the Lacey Act that 
we wish to correct.
    In previous testimonies in 2012 and 2014 supporting the Aquaculture 
Risk Reduction Act, it was stated the biggest concern by the President 
of the National Aquaculture Association was ``that the Lacey Act 
elevates the violation of even misdemeanor state regulations to Federal 
felonies simply because $350 of domesticated product has entered 
interstate commerce,'' implying that accidental inclusion of certain 
species in aquaculture shipments would then lead to hundreds of 
thousands of dollars in penalties and even ``mandatory incarceration.''

    We are pleased to clarify today that nothing could be further from 
the truth. We would like to further correct some of the mis-information 
that apparently has led to the belief this amendment would be 
necessary.

  1.  Although illegal goods may be seized and forfeited under the 
            Lacey Act, criminal penalties are imposed only if a person 
            knew or, in the exercise of due care should have known, 
            that the goods he or she traded were illegal. We understand 
            Congressman Crawford's point that someone shouldn't go to 
            jail under the Lacey Act for a simple accident. As a matter 
            of fact, that is already the law and has been for a very 
            long time. Someone who commits an ``accidental infraction'' 
            is not guilty of a crime under the Lacey Act. We therefore 
            need to correct the notion that state regulation 
            misdemeanors would be elevated to ``Federal felonies'' 
            through the Lacey Act.

  2.  Since fisheries were included in the Lacey Act, we have not been 
            made aware of a case where accidental inclusion of illegal 
            fish species would have resulted in prosecution, let alone 
            jail time under the Lacey Act. The reason for that is that 
            the Lacey Act already provides the necessary protections 
            against such accidental infractions that were committed in 
            the exercise of due care.

    We also wish to draw attention to the fact that U.S. Government 
agencies have for many years emphasized, that unwitting individuals who 
accidentally come in contact with small amounts of potentially illegal 
merchandise, are not the target of enforcement. Our enforcement 
agencies don't waste their energy and resources on the ``small fish.'' 
The intent is to shut down large illegal networks that are threatening 
our natural resources base and are harming our economy. As the U.S. 
Fish and Wildlife Service clarified in 2011: ``Under the Lacey Act, we 
focus on law enforcement where it counts: Principally, on those who 
knowingly transact in larger volumes of illegal products.'' \9\
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    \9\ https: / / www.fws.gov/news/blog/index.cfm/2011/9/22/Where-We-
Stand-The-Lacey-Act-and-our-Law-Enforcement-Work.
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    In fact, our enforcement agencies are already over-stretched and in 
urgent need of more resources and staff to catch the ``big fish'', in 
order to protect American businesses and consumers.
                               conclusion
    In conclusion then, it appears that the proposed bill is not 
necessary because the protection it aims to provide is already included 
in the existing Lacey Act. In turn, however, an exemption such as 
proposed could do real harm by creating legal loopholes for illegal 
merchandise to enter the market. While providing no additional 
protection to law-abiding American enterprises, the only ones who would 
be benefiting from such an explicit exemption would be criminals who 
knowingly violate the law and can then use it to ``accidentally'' bring 
illegal merchandise into circulation.
    Creating an exemption here would also set a dangerous precedent by 
opening the door to potential other, future proposals, including 
exemptions regarding the international illegal trade. Why would an 
international supplier or trader not claim to be subject to the same 
exemptions that U.S. producers enjoy? Once applied to aquaculture, why 
not apply it to other wildlife and timber sectors? We at EIA have been 
investigating the illegal wildlife trade for decades, and we have seen 
firsthand how quickly criminal networks can adapt in order to exploit 
legal loopholes.
    Such explicit exemptions would only increase the risk and the 
demand for illegal aquatic species and incentivize questionable 
businesses to trade in illegal fish ``by accident.'' These exemptions 
would benefit those willing to trade in other illegal wildlife products 
as well. For example, the International Trade Center, a joint agency of 
the World Trade Organization and the United Nations, published a paper 
in 2012 on the trade in Southeast Asian python skins suggesting that 
smugglers knowingly mix illegal python skins into legal skins shipments 
to confuse customs officials.\10\
---------------------------------------------------------------------------
    \10\ http://www.intracen.org/uploadedFiles/intracenorg/Content/
Publications/The%20Trade%20in 
%20Southeast%20Asian%20Python%20Skins%20for%20web.pdf.
---------------------------------------------------------------------------
    With the implementation of the Lacey Act and its evolution over 
time, the United States has set an example to the rest of the world 
that illegal wildlife and timber products are not acceptable. It is 
imperative that the spirit and rationale of this law be upheld and its 
effectiveness not be undermined.
    Allowing illegal goods to enter our market is bad for business, 
forces legitimate suppliers into unfair competition and may threaten 
long-term supply.
    We understand the concerns of the National Aquaculture Association. 
However, as we have shown today, and contrary to what its name 
proposes, the ``Aquaculture Risk Reduction Act'' threatens to increase 
the risk of illegal trade and may end up hurting the very law-abiding 
American fish farmers it aims to protect.

                                 ______
                                 

    Mr. Lamborn. Thank you.
    Mr. Rickman, you are now recognized for 5 minutes.

  STATEMENT OF MIKE RICKMAN, DEPUTY DIRECTOR, OPERATIONS AND 
MAINTENANCE, NORTH TEXAS MUNICIPAL WATER DISTRICT, WYLIE, TEXAS

    Mr. Rickman. Chairman Lamborn, Ranking Member, and members 
of the Subcommittee, my name is Mike Rickman. I am the Deputy 
Director of the North Texas Municipal Water District. My 
testimony is to update you on the experiences of my agency with 
the Lacey Act that we have been dealing with for about 10 
years.
    Congressman Gohmert's H.R. 1807 represents an important 
step in the process of allowing the Lacey Act and water supply 
to co-exist. I believe that the solution my agency was forced 
to implement to restore our water supply will not be possible 
with other looming cross-border water transfer issues.
    Most water supply agencies do not have surplus raw water 
sources permitted, constructed, or operational. You cannot get 
them permitted without having purpose and need, so you cannot 
have redundant supplies.
    I do not believe that it was the intention of Congress to 
use the Lacey Act to shut off public water supplies when it was 
involved in a cross-border transfer. Nor do I believe that it 
was Congress' intention to force citizens to pay hundreds of 
millions of dollars--potentially, even billions of dollars--to 
construct closed conveyance systems or treatment protocols 
that, despite the fact that the invasive mussels can travel in 
different pathways to spread, it goes beyond the public water 
transfers. I don't think it is good public policy to shut down 
cross-border transfers between states should an invasive 
species be listed.
    Look at the Sabine River Authority's water supply. There is 
a Sabine River Authority of Texas, a Sabine River Authority of 
Louisiana--coming out of the same river, but if it is across 
state lines coming out of the same body of water, it could 
still have an impact because of the Lacey Act. That just does 
not make good sense, when you are going to provide water for 
cooling large, petrochemical plants that are on the Gulf Coast. 
It would create economic chaos for the region.
    The Colorado River Aquaduct is another one that is 
responsible for providing millions of people with drinking 
water and irrigating a significant portion of our food supply. 
If quagga mussels that are already present in the waters are 
listed as an invasive, should the people of Southern California 
have to pay billions to create a closed conveyance system or 
treatment to manage the mussels, similar to what our agency had 
to do?
    Rather than building on and expanding the requirements that 
my agency was forced to implement, there is a better way, and 
it is already in place. I am referring to the Federal, state, 
and local cooperative efforts that have already been well 
established and growing every day that includes mandatory boat 
inspections and the decontamination of boats found to have 
invasive mussels attached to them.
    My own state's program is led by the Texas Department of 
Wildlife, Texas Parks and Wildlife, and it is funded by the 
state of Texas and numerous water supply agencies. We 
participate. This is the Protect the Lakes You Love program, 
and it is currently being operated at a number of Texas lakes 
and waterways, especially where invasives have been discovered. 
It combines public education with mandatory inspections, 
decontamination of boats, especially that move from body to 
body. It has not stopped invasives, but it has reduced the 
relentless march across the state.
    Another example is the Western States Governors' 
Conference, which is, most notably, with the Department of the 
Interior, to control invasive mussels out of both the Columbia 
River and its watershed. To date, those efforts have focused 
mainly on inspection and decontamination.
    The Lacey Act is not well suited to stop invasives in the 
millions or even billions that have been established in the 
water bodies in different ways. And unless boat traffic is 
minimized between the lakes, it is going to be very difficult 
to control the invasives in those situations. Most invasives 
that we have seen have been transferred by boat.
    It is not the kind of threat that is addressed by shutting 
down long-established public water supplies, but instead 
through cooperation among Federal, state, and local partners in 
establishing and operating inspection and decontamination 
programs. I am not stating a concept here, but instead I am 
referring to a current reality that is in operation in the 
state of Texas and throughout much of the rest of the country.
    Bringing the Lacey Act into the 21st century with regard to 
cross-border water transfers must blend a public necessity of 
water transfers with the strengthening of an invasive control 
program.
    I would just conclude by saying public water supply is 
something that is for the public health and safety. We are 
talking hospitals, we are talking what you consume, we are also 
talking firefighting. You cannot let that be challenged by and 
threatened by something that we cannot control. Thank you.

    [The prepared statement of Mr. Rickman follows:]
   Prepared Statement of Mike Rickman, Deputy Director, North Texas 
                        Municipal Water District
    Chairman Lamborn, Ranking Member Huffman, members of the 
Subcommittee, I am Mike Rickman, Deputy Director of the North Texas 
Municipal Water District headquartered in Wylie, Texas. I appreciate 
the opportunity to testify today concerning the experiences of my 
agency with regard to the Lacey Act and its impact on innovative 
management of injurious species management.
    The North Texas Municipal Water District supplies drinking water to 
1.6 million people in north Texas. Our service area includes all or 
parts of nine (9) counties in north Texas including Collin, Dallas, 
Denton, Fannin, Hopkins, Hunt, Kaufman, Rains, and Rockwall counties. 
To meet the needs of a rapidly growing population, we rely on a number 
of water supply resources, including reservoirs, and one of the largest 
artificial wetlands in the Nation.
    I want to thank Mr. Gohmert for introducing H.R. 1807, the ``Public 
Water Supply Invasive Species Compliance Act of 2017'' and for the 
opportunities provided by this Committee to review this important 
legislation. H.R. 1807 provides an exemption of certain water transfers 
from the Lacey Act and the Lacey Act amendments of 1981 for water 
transfers between and among the states of Louisiana, Arkansas, and 
Texas as long as all prohibited species in the water transferred are 
located in both of the public water supplies of these three states. 
There is also an exception for water transferred in a closed conveyance 
system directly to treatment facilities where all prohibited species 
contained in the water transferred will be removed.
    H.R. 1807 provides an important path forward and helps to bring the 
Lacey Act into the 21st century in terms of how it addresses interstate 
water supply transfers. I believe that it could be expanded to address 
additional states that are potentially facing the problem that my 
agency encountered. To help explain the need for this process, I wish 
to briefly review how my agency found itself on the front line of the 
Lacey Act/Federal Invasive Species Management issue. If this is 
understood then the reason we are here today becomes easier to 
appreciate. Lake Texoma is a Corps of Engineers reservoir that 
straddles the state boundary lines between Oklahoma and Texas. In 1989, 
my District was granted an easement from the Corps of Engineers to 
locate a pump station in Lake Texoma to help the North Texas Municipal 
Water District satisfy part of our water supply needs. The District 
spent over $100 million constructing a pumping facility on the Texas 
side of Lake Texoma that became operational in 1989, and unbeknownst to 
us, a surveyor's error made in the late 1990s by the Red River Boundary 
Compact Commission, incorrectly but effectively moved two-thirds of our 
pump station into Oklahoma.
    In late 2009, zebra mussels, a listed invasive species under the 
Lacey Act, were discovered in Lake Texoma. In early 2010, the U.S. Fish 
and Wildlife Services, after conducting a Google Maps search of the 
lake, noticed that our Texoma pump station was now located partially in 
Oklahoma and called our attention to the fact that this was an issue 
under the jurisdiction of the Lacey Act. The Red River Boundary Compact 
had already been in existence for nearly 10 years having been approved 
by the legislatures of Texas and Oklahoma, U.S. Congress and signed 
into law by the President. Although the portion of our pump station now 
incorrectly located in Oklahoma involves less than 1 acre of land, 
correcting the mistake requires action by both State Legislatures in 
Oklahoma and Texas, and potentially U.S. congressional consent. This 
will likely require a number of years to accomplish.
    The policy response of the U.S. Fish and Wildlife Service to our 
predicament was that regardless of the fact that the location of the 
pump station was the result of a surveyor's mistake, the Lacey Act had 
to be enforced and that required the District not resume pumping water 
from Lake Texoma. We complied with this request.
    The sudden loss of 28 percent of our water supply for nearly 1.6 
million people and in the midst of a severe drought created an instant 
water crisis for my District. When the U.S. Fish and Wildlife Service 
told us that it had no flexibility over how it enforced the Lacey Act, 
we turned to Congress and to this Committee to see if you could help us 
restore the Lake Texoma portion of our water supply. This was 
accomplished first through P.L. 113-237 that became law in December 
2012 and allowed us to transport zebra mussels from the Oklahoma 
portion of Lake Texoma into Texas if specific conditions were met. In 
June 2014, P.L. 114-117 broadened our exemption to include all 
injurious species that were present or that might be discovered in the 
future and listed as invasive under the Lacey Act. This was important 
to my agency because it helped to ensure our future water supply 
regardless of the invasive species that might be discovered in our 
cross-border water transfers.
    The two specific conditions were first that both legislative 
exceptions applied only to Lake Texoma and second we were required to 
construct a 46 mile long barrier pipeline at a cost of $310 million 
which carried all Lake Texoma water directly to our water treatment 
plant in Wylie, Texas. All zebra mussels and any other invasive species 
although transported across a state line were removed before the 
treated water was released directly into our distribution system. Under 
the authority of the two Lacey Act exemptions provided by the Congress, 
the District resumed pumping from Lake Texoma in June 2014, almost 5 
years after we were deprived of this water source.
    Given the sudden loss of 28 percent of the water supply that my 
agency provides to nearly 1.6 million customers, all in the midst of a 
severe drought, we had no choice but to agree to construct a closed 
conveyance for our interstate water transfer and to remove all invasive 
species via treatment. But the actions that restored our water supply 
are not possible or make little sense for many other water agencies 
that may face a similar situation.
    For example, the Sabine River Authority of Texas is currently in 
the process of constructing a new pump station in the Sabine River that 
forms the eastern boundary between Louisiana and Texas. Because the 
river is relatively narrow, the intake of the pump will by necessity be 
located just a few yards from the Louisiana State line. Zebra mussels 
have not been discovered at this location. But with hundreds and even 
thousands of possible candidate species to consider, disruption of 
water transfers involving the Sabine River may only be an invasive 
species listing away. In 2015, the U.S. Fish and Wildlife Service 
adopted a policy of ``categorical exclusion'' for identifying and 
listing new invasive species under the Lacey Act. This gives the U.S. 
Fish and Wildlife Service the tools to list an invasive species in as 
little as 1 year.
    An invasive species discovered on the Louisiana side of the Sabine 
River and listed under the Lacey Act could also be expected to be 
present on the Texas side as well since the waters of the two states 
intermingle. Under such a scenario how could the Sabine River Authority 
of Texas continue to operate its pumping facility that currently serves 
the water supply needs of water agencies as well as providing cooling 
water for large industrial plants along the Texas Gulf Coast? Would 
this water transfer simply be shut down in deference to the Lacey Act 
like it was for my agency? And if so, what would be the economic impact 
upon the entire region?
    The potential for future water transfers between Oklahoma and Texas 
is another area of concern. One of the impacted agencies is the Tarrant 
Regional Water District that supplies water for Fort Worth, Arlington, 
and scores of other cities and districts. The state of Texas 
authorization for the Tarrant Regional Water District stipulates that 
it provide wholesale raw water to its customer cities and districts but 
may not treat this water. This precludes it from making use of the 
arrangement that allows my agency to move water across the Oklahoma-
Texas border. The presence of zebra mussels in Oklahoma triggers the 
Lacey Act and lacking the legal authority to treat water means that the 
Tarrant Regional Water District is unable to explore the potential for 
satisfying a part of the future water supply needs of its customers.
    The Colorado River supplies water for both agricultural and 
municipal uses including the Imperial Irrigation District, the 
Coachella Valley Water District, and the Metropolitan Water District of 
Southern California. This includes helping to meet the water supply 
needs of more than 20 million people as well as the food supply for our 
Nation and much of the world. Quagga mussels were detected in the 
Colorado River a number of years ago. Unlike zebra mussels, quaggas are 
not listed by the U.S. Fish and Wildlife Service as an invasive species 
although this omission is subject to change. The suspension of Colorado 
River water transfers to California would create a mega-crisis for both 
food production and for water supply. Moreover the imposition of the 
closed system/water treatment that my agency was forced to adopt would 
cost many billions of dollars and would hit millions of water customers 
directly in their wallets while also raising the price of the wide 
variety of foods that are grown using irrigation made possible by the 
Colorado River. Given these implications it is hard to believe that 
such a scenario would be allowed should quagga mussels be listed as an 
invasive species.
    Millions of people in communities across the Arid West rely on 
interstate water transfer from Corps of Engineers, Bureau of 
Reclamation, and other water supply projects for their municipal, 
domestic, and industrial water supplies. It is critical that such 
public water supplies be protected from disruption under the Lacey Act, 
especially in these ever-increasing seasons of drought.
    The Lacey Act was passed more than 100 years ago. There is no 
indication in the Act, its 1981 amendment or its legislative history, 
that Congress intended to prohibit vital interstate water supply 
transfers between states. Interstate water transfers are critical to 
the health and well-being of the public and to the economic viability 
of entire regions. Congress must therefore make it clear that the 
existence of an invasive species in a water body of one state will not 
leave citizens in neighboring states high and dry.
    Any changes or amendments in the Lacey Act must recognize the 
realities of decreasing western water supplies. Water supply projects 
transferring water from one state to another for municipal, domestic 
and industrial use should be expressly exempt from any prohibition on 
the movement of invasive species across state lines.
    The title of this hearing is ``Federal Impediments to Commerce and 
Innovative Injurious Species Management.'' I hope that my testimony has 
helped to illustrate how commerce was impacted by Federal invasive 
species policies in the case of my agency. The North Texas Municipal 
Water District serves one of the fastest growing areas in the Nation. 
In fact two of the top five fastest growing cities in the Nation are 
included in our service area. The very economic underpinning of ours or 
of any other region requires an affordable and an assured drinking 
water supply. This assurance was suddenly removed from my District in 
2009-2010 when we lost 28 percent of our water supply in the midst of a 
multi-year severe drought. The affordability assurance was removed when 
we were obliged to spend nearly a third of a billion dollars paid by 
our customers to build the infrastructure that ensured our cross border 
water supply was being delivered through a closed system with 
additional many millions of dollars being spent on water treatment and 
maintenance of this conveyance system.
    We don't want anyone to have to travel the same road with the Lacey 
Act that we were forced to use in order to restore an important part of 
their water supply. That is again why we are so grateful to this 
Committee for the two Lacey Act related bills that have been signed 
into law in 2012 and 2014 and for H.R. 1807 which was reported out of 
this Committee late last summer. Public water supply must be considered 
an essential public good that must be protected and sustained including 
an accommodation with the Lacey Act.
    One thing being missed in all of the back and forth with regard to 
``closed conveyances'' and ``treatment to remove all invasive mussels'' 
is the fact that the Federal Government, in partnership with the states 
and a number of local governments including water agencies is making 
great strides limiting the spread of zebra and quagga mussels. This 
takes hard work and cooperation and communication at every level of 
government. The challenge is to ensure that these successful efforts 
and the lessons that have been learned are incorporated into a new 21st 
century Lacey Act where both water supply and control of invasive 
species is fully addressed. Until this is accomplished, bills like H.R. 
1807 represent an important means to protect water supply transfers 
among and between selected states. As mentioned earlier in my 
testimony, I believe that the number of protected water transfers 
should be extended to other states that may be facing similar problems, 
all while the Federal Government and local and state stakeholders work 
toward a more comprehensive solution via an updated Lacey Act.

    Here are three examples of the invasive mussel control efforts that 
are making a difference in their spread through states and regions:
Texas Parks and Wildlife Department's ``Don't Move A Mussel'' Program
    This effort was established in 2012 by the Texas Parks and Wildlife 
Department and is funded both by the state of Texas and by numerous 
water agencies. It combines a public education program with required 
inspections of watercraft, especially those being transferred from lake 
to lake and it also legally requires that certain listed invasive 
species be removed before further boat movement. This program has not 
completely stopped the spread of zebra mussels in Texas but it has 
arguably slowed it since the mussels were first discovered in 2009. We 
are optimistic that with increased boat inspections and continued 
public education that the ``Don't Move A Mussel'' program will be even 
more effective in the future.
    Texas State law also requires that any water agency that will 
transfer water supplies containing invasive species under certain 
circumstances must notify the Texas Parks and Wildlife Department on an 
annual basis regarding such transfers. We believe that there is great 
merit in this Committee making such public notification a part of the 
national updating of the Lacey Act as long as any provisions under 
consideration reflect the different scenarios for how, why, and when 
water is transported in the Arid West. What works for water agencies in 
one state might be unworkable for colleague agency in another state. 
Regardless of the challenges involved, notification at the state and 
Federal level could play an important role in coordinating an invasive 
species response at all levels of government.
Western Governors' Association/Federal Government
    The Western Governors' Association has launched in partnership with 
the Federal Government, primarily the Department of the Interior [DOI], 
a program to keep invasive mussels out of the Columbia River and the 
Columbia River watershed. This features coordination and communication 
between the DOI and numerous state agencies with a particular emphasis 
on boat inspections including regulation of ballast dumping of ships in 
the Columbia River. This program has so far helped to prevent the 
appearance of quagga mussels in the Columbia River Basin. The 
bipartisan Senate draft of the Water Resources Development Act released 
late last week includes important new provisions to strengthen invasive 
mussel interdiction in the Columbia River.
California Mussel Control Efforts
    Two examples of successful efforts to control the spread and 
presence of quagga mussels include activities by the Metropolitan Water 
District of Southern California [MET] and the Coachella Valley Water 
District [CVWD]. As previously discussed quagga mussels were discovered 
in the Colorado River a number of years ago. While quaggas are not yet 
listed as an invasive species by the U.S. Fish and Wildlife Service 
their presence hampers the operation of water agencies including the 
surface water supply of MET and the groundwater supply of the CVWD.
    MET has an aggressive program that is budgeted at more than $5 
million a year and includes 24/7 scrapping of adult quagga mussels off 
of intake structures by divers and also the chlorinating of sections of 
the Colorado Aqueduct that severely restrict the ability of the mussels 
to progress into adulthood including the creation of a hard shell. CVWD 
has discovered that increasing the velocity of water flow at the intake 
structure greatly reduces the ability of the mussel to progress to 
adulthood and almost impossible to attach itself to any structure. Both 
MET and the CVWD also conduct an active and continuous surveillance 
program whose goal is to detect and monitor for the presence of 
mussels.

    It is also good news that research, particularly the effort being 
led by the Bureau of Reclamation, is giving water agencies new 
operational tools to control and prevent the movement of mussels 
through water supply transfers. The most recent report and update from 
the Bureau of Reclamation was released less than 2 months ago and these 
new tools will be adopted by water agencies in their management of 
waters where invasive species have been detected.
    The Lacey Act should not be used as a one-size-fits-all response 
that cancels out the public good and necessity of water supply/water 
transfers in order to interdict at a single point the transfer of an 
invasive species. This costs the public huge amounts of money for 
infrastructure and O&M expenses, all to stop a single point of the 
introduction of the species and despite the fact that they are making 
their way across state lines by many other means, most especially boat 
transfers between bodies of water. My testimony has also sought to 
identify areas where it is economically impossible for the local 
ratepayers to assume the cost of the kind of ``solution'' like the one 
used by my water agency and also other instances, most especially 
California, where interruption of the water supply would have severe 
consequences for both water users and also for the food production made 
possible through irrigation. Finally, the time of this Committee could 
be constantly taken up by the needs of water agencies that have fallen 
afoul of the Lacey Act and are seeking the kind of legislative 
exemptions granted twice by this Committee and the Congress for my 
agency. What worked for us is not a substitute for a sensible national 
update of the Lacey Act that addresses this issue on a wider scale.
    The ``solution'' to all of this is already a working reality in 
numerous states including the specific examples I have identified in my 
testimony. That involves an active program of public education, boat 
inspections, and decontamination efforts that have been shown to 
greatly slow the spread of invasive mussels and in some cases to 
actually prevent their becoming established in a whole region. Such an 
effort cannot depend upon pulling the plug on water supply that 
contains an invasive species but instead must rely upon the reality of 
a well-thought out and coordinated response among the Federal 
Government, the states, and local entities like water agencies. 
Cooperation and information sharing embodied in an update of the Lacey 
Act is in my respectful opinion a better use of the time of the 
Congress and this Committee rather than trying to address what I 
believe will be a growing list of local water agencies who have run 
afoul of the Lacey Act and are seeking the restoration of their water 
supply.
    Thank you. I would be happy to answer any questions that you may 
have.

                                 ______
                                 

    Mr. Lamborn. OK, thank you, and thank all three of you for 
being here today and for your testimony. We will now have 5 
minutes of questions by each member of the panel. I will begin 
with myself, and then we will alternate with the Majority and 
the Minority for each questioner.
    Mr. Rickman, in your testimony you talked about categorical 
exclusions by the U.S. Fish and Wildlife Service. Do you think 
that the use of that to list an invasive species and circumvent 
the need for an environmental impact statement, do you think 
that that was the original intent behind categorical 
exclusions?
    Mr. Rickman. I don't know exactly what the original intent 
was, but it is very troublesome for utilities such as ours if 
you can list something within 1 year without going through a 
process and finding out what the impacts of that exclusion will 
allow.
    Mr. Lamborn. By not doing an environmental impact 
statement, what impact does that have on operations of your 
water supply operation?
    Mr. Rickman. As an example, we lost 28 percent of our 
supply overnight back in 2009, and we lost it for 5 years, 
didn't have enough water to go around, simply because zebra 
mussels were found in that source.
    Mr. Lamborn. And with the Colorado River, if you include 
the Lower Colorado and Upper Colorado, I think there are 10 or 
12 states, at least 8 states that would be impacted. In a 
worst-case scenario, what would a precipitous action like that 
by the U.S. Fish and Wildlife Service do to the water supply of 
those 8 or 12 states?
    Mr. Rickman. It would have huge impacts, because the 
Colorado River provides an enormous amount of water to the 
western states. And based on our experience, there is not an 
option when they find an invasive that is going across state 
lines, and it is in violation of the Lacey Act. They threatened 
us with fines and jail time if we were to continue to pump. So, 
there is not an option.
    Mr. Lamborn. Mr. Freeze, talking about your aquaculture 
operation in Arkansas, when the 1969 amendments changed the 
standard for prosecutors from having to prove willful violation 
to just a knowing or should have known violation, what does 
that do to industry with that kind of loosening of the 
standards?
    Mr. Freeze. Well, it had a huge impact, because it means 
that you could be prosecuted for accidentally getting a listed 
species in a shipment not because it was on your farm. And I 
will use an example of the zebra mussel or quagga mussels.
    Our farms are inspected for aquatic nuisance species every 
year. And we have never had zebra mussels on our farm. Yet, 
zebra mussels are found in the Arkansas River 5 miles from our 
farm, and if a zebra mussel was found in a shipment that I 
send--maybe it was left over in a truck from a previous 
transport--I could be charged, because I should have known 
there could have been a zebra mussel on there, because they are 
located within 5, 10 miles of my farm. It is a very low 
standard, to me, for prosecution.
    Mr. Lamborn. Is there a difference between criminal 
prosecution and civil penalties, or civil prosecution?
    Mr. Freeze. Well, you have heard several people here say 
that that does not occur. I can assure you it does, and I can 
provide examples where all it takes is over $350 to be involved 
in the shipment. There is not a shipment of fish that is 
shipped just about anywhere that is not over the $350. And in 
all the cases I am aware of, the felony provisions are what are 
invoked.
    Mr. Lamborn. Even if it is not a felony, even if it stays 
in the civil realm, what are the fines in that category, in 
that realm?
    Mr. Freeze. Well, I really don't know, because I think it 
almost always goes to the felony. If they prosecute you in the 
Lacey Act, you are going to be looking at felonies. They may 
plea bargain down, and that is usually what U.S. Fish and 
Wildlife does. They start off with very high fines, and then 
they plea bargain down to where finally your attorney says, 
``Look, you need to take this.'' This is why they have a 99 
percent conviction rate.
    Mr. Lamborn. I guess what I was wondering is even if it is 
not jail time someone is looking at, but a hefty fine, that 
could still have an inhibiting effect on business operations.
    Mr. Freeze. Well, what really gets you is your attorney. In 
one of the most recent cases, although they dropped the fine 
from $1.5 million against the fish farmer, they plea-bargained 
to $600,000, then $60,000, then finally $6,000. So, their 
attorney told them take the $6,000 fine, but they had over 
$100,000 in attorney fees. This was a small farm, and it almost 
bankrupted them.
    Mr. Lamborn. All right, thank you.
    Mr. Huffman, you are now recognized for 5 minutes.
    Mr. Huffman. Thank you, Mr. Chairman.
    Mr. Freeze, you have made your case for creating a new 
exemption for domestically produced aquaculture species under 
the Lacey Act, and you have suggested that the Lacey Act is a 
threat, basically, to your ability to conduct business. Have 
you faced criminal prosecution?
    Mr. Freeze. No, I have been threatened with Lacey Act 
violations. Any time you violate a state violation, when you 
cross state lines, no matter how minor, then the Lacey Act can 
be invoked. And it basically just depends whether they want to 
charge you under the state statute or they want to get the U.S. 
Fish and Wildlife involved and charge you under the Federal 
statute.
    Mr. Huffman. Yes, but you have never actually experienced 
that yourself?
    Mr. Freeze. No, sir.
    Mr. Huffman. How about civil penalties? Have you 
experienced any civil penalties under the Lacey Act?
    Mr. Freeze. I cross every T and dot every I, and live in 
fear that some day I will be charged.
    Mr. Huffman. Mr. von Bismarck, let me turn to you. The 
question was just asked about the amount of civil penalties. 
The witness was unable to answer it. Are these massive, onerous 
civil penalties, or can you enlighten us on that?
    Mr. von Bismarck. Certainly they haven't been in practice. 
I mean even the criminal ones, if you look at the Lumber 
Liquidators case, $13 million for a company that was making $1 
billion in revenue based on a business model that was 
specifically seeking out illegal wood. I think again and 
again--if you look at the Gibson case, the actual fines were, I 
think, around $300,000. And there you have the specific willful 
importation of illegal wood from national parks that was 
undermining all of their domestic competitors. It was having 
injurious consequences to U.S. industry, never mind the 
extraordinary biodiversity of Madagascar. And a few hundred 
thousand dollars for a company like that is actually, from our 
point of view, far too low.
    But the benefit is that everybody sees it happening, other 
companies are beginning to take action.
    Mr. Huffman. Right. And Mr. Freeze earlier expressed his 
fear that he could be criminally prosecuted for an accident. 
Can you enlighten us as to whether that is, in fact, the way 
the Lacey Act works?
    Mr. von Bismarck. Well, I don't think it is up for debate. 
It is just a matter of the way the law is written that you 
cannot be criminally prosecuted unless it was an accident. If 
you didn't know and you shouldn't have known. That is it. That 
is the----
    Mr. Huffman. Right. I am hearing sort of the different 
standards between civil and criminal liability conflated in 
this conversation. I am also waiting to hear of some specific 
examples, where someone who has exercised due care has gotten 
into trouble under the Lacey Act. You would think, if there 
were examples of that, we would hear them today. What I have 
heard is abstract concern, hearsay upon hearsay.
    Are you aware of any case anywhere in the United States of, 
let's say, a domestic aquaculture producer being prosecuted 
under the Lacey Act for moving aquaculture products within the 
states?
    Mr. von Bismarck. I am not.
    Mr. Huffman. I think, Mr. Chairman, we are talking about a 
solution in search of a problem here. And we could probably go 
on on that, but I think the point is made.
    With the time I have remaining, Mr. von Bismarck, can you 
explain how environmental crimes are a threat to our national 
security, and how the Lacey Act is used to hold criminals 
accountable?
    Mr. von Bismarck. It is an enormous problem. Natural 
resource trade and the stealing of natural resources often 
underpins instability around the world, underpins insurgencies. 
One example is a now-declassified study by the Department of 
Defense that found significant illegal trade of trees in the 
northeast of Afghanistan moving through Taliban-controlled 
areas to Pakistan, being sold as jihadi wood in the Gulf 
states.
    I was personally undercover with a cocaine dealer in Miami 
who was bringing in mahogany, in addition to cocaine, and in 
fact was supplying the company that was manufacturing the 
Capitol doors for here, in order to have them be bulletproof. 
Luckily, the Capitol Architect canceled that order because of 
potential attention from the Lacey Act. This natural resource 
theft is a national security issue.
    Mr. Huffman. All right. Thank you for your work to enforce 
the Lacey Act and other environmental laws. With that, Mr. 
Chairman, I yield back.
    Mr. Lamborn. Thank you. Representative LaMalfa is 
recognized.
    Mr. LaMalfa. Thank you, Mr. Chairman.
    For Mr. von Bismarck, the growing production and sale of 
marijuana still remains illegal at the Federal level. So, what 
I am wondering is, with this illegal cultivation of what is a 
non-native and invasive plant species, marijuana, how does it 
impact the ability to enforce the Lacey Act and on those folks 
that have that duty and responsibility to do so?
    Mr. von Bismarck. I am not sure I understand the question. 
I apologize for that. It is certainly not my area of expertise, 
the trade of marijuana in the United States. If you could 
clarify, I would be grateful.
    Mr. LaMalfa. The illegal production of marijuana, which is 
a non-native and invasive species, how much extra work does 
that make for those that are charged with enforcing the Lacey 
Act?
    Mr. von Bismarck. I don't know, Congressman. I apologize.
    Mr. LaMalfa. Do you think the law has adequate enforcement 
and accountability in that area? With all the illegal growers 
we see all over, especially in the western states, but who 
knows how far--in areas in some of the counties I represent and 
the neighboring counties, rampant production, rampant 
environmental damage, and threat to its neighbors.
    So, do you think this law has adequate enforcement in that 
area of illegal marijuana cultivation, whether it is Federal 
lands or bootlegging going on in private lands?
    Mr. von Bismarck. I honestly don't know. I have not come 
into contact with that trade or the use of the law to address 
that trade.
    Mr. LaMalfa. How do Federal agencies prioritize their 
enforcement of this, whether it is on plants, forests, 
wildlife, or fish? What receives the first level of attention, 
and why?
    Mr. von Bismarck. Clearly, you would want to ask the 
enforcement agencies. From my experience in bringing evidence 
to the government and observing what cases they took, it has 
been a rational focus on what are the biggest cases that have 
the most injurious consequences to industry in the United 
States--say of import of stolen wood or import of rhino horn 
that is coming from organized crime in South Africa. So, it 
seems to be an assessment of the seriousness of the crime and 
the impact on U.S. businesses.
    Mr. LaMalfa. How is the progress of halting illegal logging 
within the United States itself going?
    Mr. von Bismarck. It has actually, interestingly, had 
positive impacts there already. One of the cases involved trees 
coming from a national park on the West Coast used for the 
guitar industry. And only because the Lacey Act was amended was 
that theft from a U.S. national park able to be prosecuted.
    Mr. LaMalfa. Thank you. For Mr. Rickman, please expound a 
little bit on the effects of this should-have-known aspect of 
the way the law is being enforced.
    How does that really play out, day to day, in the real 
world? This should-have-known provision.
    Mr. Rickman. The should-have-known, in our district, we had 
no clue on zebra mussels being in Lake Texoma, simply because 
the scientists, when zebras were first introduced into the 
Great Lakes, said they will not survive in the warmer waters in 
the southern states. So, no one in our area was looking, 
anticipating anything with regard to zebra mussels. And if you 
look at the map now from where zebra mussels and quagga mussels 
are, they are all over the United States. So, they adapted and 
they are very prolific, everywhere they go.
    So, it is something we didn't anticipate, simply because of 
the scientific community.
    Mr. LaMalfa. The bill introduced by Mr. Gohmert, the Public 
Water Species Compliance Act, how do you see that as being 
helpful with this dilemma?
    Mr. Rickman. In our case, it would because our pump station 
was across the state line in Oklahoma--the Lacey Act was in 
place--it literally stopped us from being able to pump for 
almost 5 years. And if this bill were in place, we would have 
an option that we could continue to use that water for public--
--
    Mr. LaMalfa. Merely because of an arbitrariness of a state 
line is the problem.
    Mr. Rickman. Yes. That is correct.
    Mr. LaMalfa. All right. I thank you for that, and I think 
we have indeed shown that there is a problem seeking a solution 
here. And I am glad Mr. Gohmert has paid attention to this and 
is bringing it forward.
    With that, Mr. Chairman, I will yield back.
    Mr. Lamborn. Thank you. Delegate Sablan is recognized for 5 
minutes.
    Mr. Sablan. Thank you, Mr. Chairman, for holding this 
hearing. I do remember in 2013, when I sat where Mr. Huffman is 
right now, and we have had hearings that brought up the Gibson 
Guitar issues and all of those things.
    Mr. von Bismarck, thank you very much for the work you do. 
I am not exactly sure what you do, but I am sure it was at 
times dangerous, so thank you very much.
    Let me ask you, Mr. von Bismarck. The statistic is 
alarming. A football field of forest is lost every 2 seconds. 
In 2012, the World Bank released a report estimating that 
illegal logging accounts for 50 to 90 percent of the volume of 
forestry activities in key producer tropical countries and 10 
to 30 percent of all wood traded globally. This tragedy is 
occurring even in formally protected forests.
    So, how are the 2008 Lacey Act amendments essential in 
reducing global trade in illegal timber? And have they set an 
example for other countries? You have alluded to that earlier, 
but you could expand on it if you want.
    Mr. von Bismarck. The amendments of the 2008 Lacey Act have 
been the beginning of a global sea change in, for the first 
time, saying no to trade in stolen wood. And that was a problem 
that was condemning all the world's forests to being stolen and 
then to being used up by the global economy. And the United 
States took the stand before anybody else, and said we should 
not be importing wood that was stolen somewhere else. That 
resulted in Europe following suit, then Australia and Japan. 
Mexico passed its law through its second chamber just a few 
weeks ago. It is beginning to become the law of the land.
    And it is so important that the United States, who started 
this wave, stay strong on it. Everybody is still looking to the 
U.S. law to see that it works.
    Luckily, everything that has happened so far has been 
positive in that regard. The impact on U.S. industry, the 
impact, in fact, on any company around the world that wants to 
play by the rules has been extraordinarily positive.
    I have seen it myself, talking to companies, sometimes 
undercover, sometimes not, who are starting to buy legal wood, 
starting to buy wood from United States, family owned forests, 
instead of getting it from a shady dealer who they know is 
getting cheap wood from a UNESCO World Heritage Site in 
Madagascar.
    Mr. Sablan. All right. I understand also that illegal 
Russian oak has been mislabeled as U.S. oak for smuggling 
purposes, since they are largely indistinguishable. Does this 
happen across borders, frequently? How does the Lacey Act 
foreign laws provision help curb this for unsuspecting U.S. 
consumers?
    Mr. von Bismarck. The U.S. Lacey Act, and its amendments in 
2008, for the first time, is sending the signal that it is 
actually important to say where your wood is from. And that is 
the beginning to solving this problem. Unfortunately, again and 
again, importers pretend that the wood is something that should 
have low risk--say oak from Germany--when actually it is 
procured from an organized crime syndicate north of 
Vladivostok. And that was the case in the Lumber Liquidators 
case.
    And, specifically, this law, for the first time anywhere in 
the world, requires imports of manufactured products to say 
where is the wood actually from, where was the raw material 
actually taken. You need to declare that. And it was the basis 
of lying on those declarations that that crime was able to be 
uncovered.
    Mr. Sablan. Just in the short remaining seconds, can you 
explain a little bit more about how did we get lumber imported 
to be used as probably the doors for the halls and the offices 
here in Congress?
    Mr. von Bismarck. Well, it was a surprise to me also, being 
undercover with this individual. We were in Honduras, looking 
at illegal logging in the national parks, and tracking the wood 
out of Honduras. Unfortunately, that trail took me to Miami, 
and then right to the doors of the Capitol building that were 
being replaced, post-9/11, to have high security. And mahogany 
is a very dense, dense wood.
    Unfortunately, this mahogany was stolen out of a national 
park--again, a UNESCO World Heritage Site with the most 
extraordinary biodiversity you could possibly imagine, and 
traded by a cocaine dealer right to the doors of, the feet of 
the Capitol.
    Mr. Sablan. Thank you. My time is up.
    Mr. Chairman, thank you very much.
    Mr. Lamborn. Thank you.
    Representative Crawford.
    Mr. Crawford. Thank you, Mr. Chairman.
    Mr. von Bismarck, you are the Executive Director of the 
Environmental Investigation Agency, correct?
    Mr. von Bismarck. Yes.
    Mr. Crawford. Is that an arm of the Federal Government, or 
is that private entity?
    Mr. von Bismarck. It is a private non-profit.
    Mr. Crawford. Got you. So, you don't work for the Federal 
Government?
    Mr. von Bismarck. That is correct.
    Mr. Crawford. OK. I just wanted to clarify that. Sometimes 
people can get confused with the name of an organization and 
maybe associate them with some organization that actually has 
some adjudicative authority. In this case you don't have any 
adjudicative authority?
    Mr. von Bismarck. No, we simply collect evidence and pass 
those on to the appropriate authorities.
    Mr. Crawford. Excellent. Changing the subject here, how 
many times has the Lacey Act been amended, that you are aware 
of?
    Mr. von Bismarck. Sorry, I am not exactly sure. I know of a 
key amendment in the 1980s and then a more recent key amendment 
in 2008. But I don't have the total at hand.
    Mr. Crawford. About 100 years old, correct?
    Mr. von Bismarck. That is correct.
    Mr. Crawford. Right. So, it is safe to say it is not 
perfect, that over 100 years we have found opportunities to 
make it better and work more efficiently for the folks it 
purports to protect?
    Mr. von Bismarck. Absolutely. And I do think that if the 
concern is aquaculture in the United States, I would think that 
increasing enforcement of the Lacey Act, and making changes to 
have a more active enforcement might be the most effective way 
to support aquaculture in the United States.
    Mr. Crawford. Yes. You mentioned you have been undercover 
in numerous locations in a variety of different industries. 
Have you ever been undercover on an aquaculture farm?
    Mr. von Bismarck. I have been undercover in some of the 
transport, the supply chains of seafood.
    Mr. Crawford. In the supply chain. In the United States, or 
overseas?
    Mr. von Bismarck. Overseas.
    Mr. Crawford. OK. I would say, given the fact that you have 
exposed yourself here as an undercover agent, you probably 
wouldn't have the opportunity to go undercover in a U.S. 
aquaculture operation, but you could save yourself the trouble 
by talking to Mr. Freeze to your right, and let him enlighten 
you on some of the issues regarding the Lacey Act and how that 
is, in fact, quite onerous to aquaculture producers.
    Nobody is suggesting that we do away with the Lacey Act 
with regard to the aquaculture industry. What we are suggesting 
is there may be some better ways to manage it, make it more 
efficient for those aquaculture producers.
    Do you view aquaculturists as a national security threat to 
the United States?
    Mr. von Bismarck. No, I would view the import of illegally 
farmed fish and illegally wild-taken fish that competes with 
U.S. aquaculture as often being indeed a national security 
threat.
    Mr. Crawford. So, an aquaculturist who, let's say for 
example, is raising striped bass and takes a shipment of 
striped bass across the state line, inadvertently maybe, and 
certainly unbeknownst to them, certainly I wouldn't think would 
be specific and willful disregard of the Lacey Act. You don't 
think that that necessarily rises to the level of prosecution, 
in your opinion?
    Mr. von Bismarck. No, but I would hope that their 
competitor that brings in illegal fish from overseas would.
    Mr. Crawford. Sure. So, what we are basically trying to do 
is make sure that we don't introduce species from outside of 
the United States that create a problem for us with regard to 
transporting aquaculture-produced products from, say, Arkansas 
to Mississippi or Arkansas to Louisiana or Arkansas to wherever 
else that it might need to be transported.
    Mr. von Bismarck. Yes, but I would imagine that Mr. Freeze 
would also be interested in making sure that his domestic 
competition is not willfully breaking laws.
    Mr. Crawford. I am very certain that Mr. Freeze is 
committed to that, as well. I have worked with him on many 
occasions on that, so I know that firsthand.
    I want to switch gears just a little bit and go back to 
something that my colleague, Mr. LaMalfa, mentioned. You talk 
about invasive species being problematic here in the United 
States. And as he pointed out, marijuana is an invasive 
species. It is a non-native invasive species. I would think 
somebody in your position would have some background on, and a 
position on how a non-native invasive species such as marijuana 
might be treated with regard to transport from state to state.
    You said that you don't really have any expertise in that, 
although you also said that you have been undercover with 
cartels. I would think that you would probably have some 
expertise in that, but you can't comment on the non-native 
species of marijuana?
    Mr. von Bismarck. I don't think I am the right witness to 
comment on that. Certainly, I think enforcement is important 
across the board, but I have not seen the use of the Lacey Act 
in this area, and that is the basis for my comment.
    Mr. Crawford. All right, thank you.
    In the last 20 seconds I have, Mr. Freeze, obviously you 
support H.R. 3041. Do you have any real-world examples where it 
was evident that the Lacey Act in its current form did not 
provide enough protection for accidental aquaculture shipments?
    Mr. Freeze. Mr. Crawford, one of the examples, and this 
goes back to Congressman Huffman, has to do with Dave and Tim 
Gollen in Wisconsin. They are the people that were faced with 
the $1.5 million fine, initially. They forgot to get a free 
import permit from the Department of Ag. in Wisconsin. No other 
fish farmer got an import permit that year because the 
Department of Ag. kept changing the dates as to when these 
permits expired. They self-reported themselves to the 
Department of Ag. that they had brought disease-inspected fish 
in from Arkansas, bait fish, but they brought them in after 
their import permit had expired. The Department of Ag. told 
them that wasn't a problem.
    Then, about 3 weeks later, they get a subpoena from the 
U.S. Fish and Wildlife. It took them 80 hours to gather up all 
the documents the U.S. Fish and Wildlife wanted. The U.S. Fish 
and Wildlife called them in and charged them with violating the 
Lacey Act, a felony provision. Initially, these two brothers 
were told, ``Your fine is $1.5 million, you are both going to 
the Federal penitentiary for 5 years.''
    Of course, they got attorneys. Then they plea bargained it 
down to $600,000. Then they plea bargained it down to $60,000. 
Then finally they got it down to $6,000. And as I stated 
earlier, by this time they had $100,000 in attorney fees.
    They did agree to allow the U.S. Fish and Wildlife, for the 
next 2 years, to inspect their fish coming into the state for 
diseases. They paid over $80,000 to U.S. Fish and Wildlife to 
do this inspection, even though all of these fish had already 
been inspected by a USDA facility.
    Mr. Lamborn. Mr. Freeze, the time has expired, so we need 
to wrap up.
    The Chair now recognizes Delegate Bordallo for 5 minutes.
    Ms. Bordallo. Thank you very much, Mr. Chairman. Mr. 
Chairman, the Lacey Act makes it illegal to import any animal 
or plant product into the United States if it was taken, 
transported, or sold illegally in the country of origin.
    This is, in my opinion, one of the most effective Federal 
laws we have to ensure that access to the American market--a 
privilege, not a right--does not drive the global black market 
trade in illegal wildlife, plant, or seafood products. Under 
the Lacey Act, Congress protects fair and honest global 
commerce. And those playing by the rules are never expected to 
compete against corruption, fraud, or other crimes.
    Last week, Mr. Chairman and members of the panel, I was 
proud to introduce H.R. 5697. It is called the Wildlife 
Conservation and Anti-Trafficking Act. And I am very proud to 
say that our colleague, Congressman Don Young of Alaska, is the 
co-sponsor. Our bipartisan legislation would strengthen Federal 
enforcement against poachers, traffickers, and the trade in 
illegal wildlife and seafood products.
    Our bill would engage whistleblowers in the fight to bring 
down global trafficking rings by creating a financial incentive 
to report wildlife poaching. And this will lead to more action, 
successful action, enforcement, criminal convictions, and 
restitution paid to the U.S. Government, all at no cost to the 
American taxpayers.
    Our bill would direct Federal agencies to finally implement 
authorities provided under current law to reward whistleblowers 
for crimes against wildlife trafficking, poaching, and black 
market imports.
    So, I have a question to ask you, Mr. von Bismarck. Do you 
agree that incentivizing whistleblowers will help to address 
the global poaching crisis?
    And the second part of the question is, do you believe 
Federal agencies and law enforcement can do more under existing 
Lacey Act authorities to prevent wildlife trafficking and/or 
trans-shipment of black market products into the United States?
    A two-part question.
    Mr. von Bismarck. Thank you, Congresswoman. Absolutely, 
whistleblowers have been critical in bringing the cases that 
have been brought to date. Most of our work is not us actually 
investigating, but it is working with, really, intrepid people 
on the ground around the world, sometimes in the United States, 
that are outraged by the crimes that they are witnessing, and 
at great personal peril and cost giving information to those 
that they trust will actually do something with it.
    The Lacey Act, as it stands, does that for many for the 
first time, meaning that if they take the risks they are to 
bringing the evidence forward, that something will actually 
happen, that the big company at the end of the chain that is 
providing all the money will actually be held to account.
    But additional steps to reward and protect those 
whistleblowers are absolutely needed, because they are still 
often sort of hanging out in the wind. And, unfortunately, 
every month people are getting assassinated that we are working 
with around the world to protect natural resources.
    Ms. Bordallo. Thank you. Thank you very much. And I don't 
know if you have read the bill yet, but it was introduced last 
week. I wish you would. I am working very closely with Mr. 
Young, and he is very knowledgeable person, the Dean of 
Congress right now. So, I certainly hope that you look at it to 
see some of the improvements.
    I thank the Committee here, and the panelists that have 
come in. Thank you, Mr. Chairman, and I yield back.
    Mr. Lamborn. Thank you. And that is not a giraffe skin that 
you are wearing, is it?
    Ms. Bordallo. Pardon?
    Mr. Lamborn. I am just joking.
    Mr. Huffman. He likes your----
    Mr. Lamborn. I like your giraffe-skin-style jacket.
    Ms. Bordallo. Thank you very much. Well, it is not an 
animal print or anything.
    [Laughter.]
    Mr. Lamborn. No, we know that. I am just being silly.
    I want to thank the witnesses for being here, thank you for 
your testimony. It was very helpful. Thank you for the distance 
that you traveled to be here.
    Members of the Subcommittee may have additional questions 
for you that they would like to give you in writing. If you 
receive those, we would ask that you respond to those in 
writing. Under Committee Rule 3(o), members of the Committee 
must submit questions to the Clerk within 3 business days 
following this hearing. And the hearing record will be kept 
open for 10 days for responses.
    If there is no further business, the Subcommittee stands 
adjourned.

    [Whereupon, at 11:03 a.m., the Subcommittee was adjourned.]

[LIST OF DOCUMENTS SUBMITTED FOR THE RECORD RETAINED IN THE COMMITTEE'S 
                            OFFICIAL FILES]

Rep. Grijalva Submission

    --Letter addressed to Chairman Bishop and Ranking Member 
            Grijalva opposing H.R. 3041 from National Wildlife 
            Federation dated May 21, 2018.