It's official: Lumber Liquidators, the nation's leading hardwood flooring retailer, broke the law, and now they're paying the price. After a two-year investigation, yesterday the Department of Justice announced a plea agreement with the company, with Lumber Liquidators agreeing to $13.2 million in penalties for importing flooring made of illegally logged wood. This marks the first time a major U.S. company has been found guilty of a felony for smuggling illegal wood products into the country.
Over the last two years, reports by the Environmental Investigation Agency, 60 Minutes and others provided sobering accounts of how the company purchased flooring that had been illegally harvested in the Russian Far East, home to the last wild Siberian tigers, then laundered through China and shipped to the United States. During that time, more than 150,000 Sierra Club members and supporters wrote the Obama administration, asking them to investigate Lumber Liquidators and to hold the company accountable under the Lacey Act if the allegations were found to be true. The Lacey Act is a landmark conservation law that requires companies importing wood products to the U.S. to report the species and origin of those products and prohibits companies from importing illegally-sourced wood products.
Now we know that Lumber Liquidators imported flooring they knew was made from illegal wood for years. The plea agreement lays out some of the facts. In one instance, the company imported solid oak flooring, purchased from a Chinese company and made from Mongolian oak, stating that oak came from Germany. Unfortunately for Lumber Liquidators, Mongolian oak doesn't even grow in Germany, a fact noted internally by an employee. In another instance, the company imported 79 shipments of oak flooring, worth nearly $8 million, all logged from the same permitted area in Russia. The amount of wood in those shipments was equivalent to 800 percent of the allowed harvest in that permitted area, and Lumber Liquidators officials were aware of the permitted amount.
In addition to pleading guilty to several charges, the company agreed to pay millions in fines and to implement a compliance plan to ensure their products are sourced legally in the future. Although penalties in excess of $10 million is nothing to sneeze at, the real cost to Lumber Liquidators will come when they can no longer rely on cheap, illegal wood to reduce prices.
Illegal logging is a big business around the world. Worth up to $100 billion, illegal logging threatens communities that depend on forests, funds organized crime, and undercuts American workers and companies that play by the rules. As a leading consumer of wood products, from flooring to guitars, the United States has a critical role to play in fighting illegal logging. By enforcing the Lacey Act and holding Lumber Liquidators accountable, the United States is putting other companies on notice that they must take steps to protect the planet and source their wood products legally.
Strong environmental laws don't work unless they are enforced. The announcement by the Department of Justice shows that the United States is serious about enforcing the Lacey Act and holding violators accountable. The plea agreement with Lumber Liquidators is a welcome step, but it's no silver bullet. The United States must continue to support efforts to reduce illegal logging and fully enforce the law.