Fur trade back in business, scandal - East Valley Tribune: Business

Fur trade back in business, scandal

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Posted: Sunday, September 3, 2006 7:48 am | Updated: 4:04 pm, Fri Oct 7, 2011.

SEATTLE - In a drab conference room in a nondescript Renton, Wash., warehouse last spring, an auctioneer took a podium beneath huge photos of supermodels in mink coats and fur lingerie. He turned on his microphone and began soliciting bids.

Before him, dozens of men and women buzzed in foreign languages — Russian and Italian, Chinese and Korean. But their common language was hanging on racks in the room next door: some 1.7 million shimmering pelts of farmraised mink, and hundreds of thousands of wild beaver, raccoon, weasel and fox.

This is the American Legend auction, the largest remaining fur market in the United States, where $100 million in business is transacted in a few days.

Much as they have for more than a century, merchants from all over the world come to Western Washington to pick over silky skins of North American mammals on behalf of garment manufacturers who will produce next year’s lines of boots, hats, gloves, scarves, blankets and coats.

After a few rough decades, fur is back. Spurred by a boom in demand from China and recent popularity at home thanks to glossy marketing, the price of American mink pelts jumped 33 percent just last year.

Yet a trade that helped put Seattle on the map today takes place largely out of view, in a heavily guarded, fenced-in warehouse protected from anti-fur demonstrators. And there’s an entirely new unease: Two years ago, a handful of buyers from New York, Canada and China hatched a scheme to rig bids and buy hundreds of otter pelts on the cheap, according to federal prosecutors.

That led to a long-running Justice Department antitrust investigation that may still be in the works. Federal prosecutors remain mum. But class-action lawyers are circling.

And once again the fur trade faces the prospect of being drawn into an uncomfortable spotlight.

‘‘Everybody’s nervous right now, because they don’t know what’s coming next,’’ said Sandy Parker, a New York journalist who has published a newsletter on the fur industry for more than 40 years.

The fur business is a lot different than it was in the 1780s, when English explorer Capt. James Cook first got sea otter pelts from Northwest tribes and sold them in Asia, launching a trade that became as integral to the Pacific Northwest as salmon and trees.

Nowadays, Denmark rules the fur industry, selling 80 percent more mink than the U.S. Garment manufacturing is ruled by Asia, rather than New York. Expanding markets in China, Korea and Russia are helping drive new demand.

Fur was becoming controversial as early as the 1960s, and by the 1980s and early 1990s it was the target of sabotage by animal rights activists, who vandalized stores. All over the country, mink were sprung from their cages, and farms were raided, even torched.

In addition, there were economic troubles in Asia and a glut of furs. Prices crashed. To resuscitate the business, American Legend, a cooperative of 220 North American mink ranchers, undertook advertising campaigns, hiring supermodels Cindy Crawford, Gisele Bundchen and Elle MacPherson. They capitalized on exploding Westernization and wealth in Asia brought by a rejuvenating economy.

‘‘Beginning in 1999, we tried to refocus the industry and consumers that (fur) could be an integral part of fashion,’’ said Steve Casotti, vice president of American Legend. While protesters continue to portray the fur industry as cruel, inhumane and unnecessary in the modern world, celebrities such as rapper Sean ‘‘Diddy’’ Combs and pop singer and actress Jennifer Lopez are now seen and photographed in mink coats.

Now the fur industry is so global that some Native Alaskans buy wild-animal skins through Renton furriers to make traditional clothing, some traders say.

In fact, the Puget Sound region is the country’s primary link to fur. American Legend is the country’s biggest seller of mink, hosting international auctions twice a year, in February and May, drawing hundreds of buyers from up to 20 countries.

And for one day each February, Canadians take over the Renton auction house and sell hundreds of thousands of furs from wild animals — squirrel and coyote and lynx and otter — that were mostly trapped in Alaska or the Canadian territories.

Still, a share of this business is conducted as it always has been — by well-traveled men, capitalizing on personal relationships, shouting out bids in a room where $4 million can change hands in seven minutes.

Otter furs were suddenly fashionable in China, so on February 13, 2004, just before the Renton wild-fur auction, a group of traders agreed that David Karsch, a fixture on the international fur-buying scene, would buy several ‘‘strings’’ of otter pelts, and split them with his competitors after the auction, according to court records. That would keep prices down because few would bid against him.

But it also was a federal crime: collusive bidding, or price-fixing.

Karsch, 76, was charged with restraint of trade. He pleaded guilty this summer. He faces up to three years in prison, and a fine of up to $350,000. His sentencing is scheduled for this fall.

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