Combating Wildlife Trafficking: Opportunities Exist to Improve the Use of Financial Rewards
Released: 2018-05-08T00:00:00

Letter

Background

As reported by the United Nations, the International Criminal Police Organization, and other organizations, wildlife trafficking networks span the globe. These organizations have attempted to measure the value of illegally traded wildlife, but available estimates are subject to uncertainty. In 2016, for example, the United Nations Environment Programme (UNEP) reported that various sources estimated the global scale of illegal wildlife trade to be from $7 billion to $23 billion annually. UNEP also estimated that the scale of wildlife crime has increased in recent years in part based on a rise in environmental crime.

U.S. trade in wildlife and related products includes a variety of species, such as live reptiles, birds, and mammals, as well as elephant ivory, according to law enforcement reports and government and nongovernmental officials. FWS and NOAA data on wildlife products seized at U.S. ports provide examples of the diversity of illegally traded plants, fish, and wildlife imported into or exported from the United States. For example, from 2007 to 2016, the top 10 plant, fish, and wildlife shipments seized nationally by FWS were coral, crocodiles, conchs, deer, pythons, sea turtles, mollusks, ginseng, clams, and seahorses. During that time, FWS reported that more than one-third of the wildlife shipments it seized were confiscated while being imported from or exported to Mexico (14 percent), China (13 percent), or Canada (9 percent).

FWS and NOAA law enforcement offices are responsible for enforcing certain laws and treaties prohibiting wildlife trafficking.

FWS Office of Law Enforcement. This office enforces certain U.S. laws and regulations as well as treaties prohibiting the trafficking of terrestrial wildlife, freshwater species, and birds. Among other things, the office aims to prevent the unlawful import, export, and interstate commerce of foreign fish and wildlife, as well as to protect U.S. plants, fish, and wildlife from unlawful exploitation. As of fiscal year 2016, the office had a budget of $74.7 million and employed 205 special agents to investigate wildlife crime, including international and domestic wildlife trafficking rings. Most of these special agents report to one of eight regional offices, which receive national oversight, support, training, and policy guidance from the FWS Office of Law Enforcement headquarters. The office’s headquarters houses a special investigative unit focused on conducting complex, large- scale criminal investigations of wildlife traffickers. In addition, the FWS Office of Law Enforcement has deployed special agents to serve as international attachés at seven U.S. embassies. These attachés provide countertrafficking expertise to embassy staff, work with host government officials to build law enforcement capacity, and contribute directly to casework or criminal investigations of wildlife traffickers.

According to FWS data, the FWS Office of Law Enforcement opened more than 7,000 investigations on wildlife trafficking and other illegal activities in fiscal year 2016, including nearly 5,000 cases involving Endangered Species Act violations and nearly 1,500 cases involving Lacey Act violations. FWS Office of Law Enforcement investigations have disrupted wildlife trafficking operations. For example, Operation Crash—an ongoing rhino horn and elephant ivory-trafficking investigation launched in 2011—has led to over 30 convictions and more than $2 million in fines.

NOAA Office of Law Enforcement. This office enforces certain U.S. laws and regulations as well as treaties prohibiting the trafficking of marine wildlife, including fish, as well as anadromous fish. Among other things, the office aims to prevent the illegal, unregulated, and unreported harvesting and trade of fish as well as the trafficking of protected marine wildlife. As of fiscal year 2016, the office had a budget of $68.6 million and employed 77 special agents to investigate wildlife crimes within its jurisdiction. These agents report to one of five regional offices, and those offices receive national oversight, support, and policy guidance from the NOAA Office of Law Enforcement headquarters.

According to NOAA data, the NOAA Office of Law Enforcement initiated more than 5,000 investigations in fiscal year 2016. About half of those investigations involved violations of the Magnuson-Stevens Fishery Conservation and Management Act, as amended, and some of the 5,000 investigations involved violations of the Endangered Species Act or the Lacey Act. NOAA Office of Law Enforcement investigations have disrupted wildlife trafficking operations. For example, in fiscal year 2016, a NOAA Office of Law Enforcement investigation led to the conviction of a company and five individuals for illegally trafficking whale bone carvings, walrus ivory carvings, black coral carvings, and other products derived from protected species into the United States.

The FWS and NOAA law enforcement offices collaborate with other government agencies and organizations to combat wildlife trafficking. Both agencies work with other federal, state, and tribal law enforcement officers as well as their international counterparts as needed during wildlife trafficking investigations. For example, FWS and NOAA work with U.S. Customs and Border Protection, U.S. Immigration and Customs Enforcement, and the U.S. Department of Agriculture to maintain import and export controls and interdict smuggled wildlife and related products at U.S. ports of entry. In addition, FWS and NOAA collaborate with Department of Justice prosecutors on criminal cases that result from agency investigations.

Both agencies also collaborate with nongovernmental organizations to combat wildlife trafficking. For example, FWS and NOAA officials said that nongovernmental organizations have, in some cases, offered financial rewards (in addition to rewards offered by FWS and NOAA) for information on a wildlife crime. In addition, some nongovernmental organizations proactively provide information to FWS and NOAA on wildlife trafficking activities in the United States or foreign countries that violate U.S. laws. For example, in 2017, a nongovernmental organization created a website to collect tips on wildlife crime and to connect the sources of those tips with relevant U.S. authorities for potential financial rewards.

FWS may pay financial rewards from moneys in two accounts.

Law Enforcement Reward Account. FWS may pay rewards under the Endangered Species Act, the Lacey Act, and the Rhinoceros and Tiger Conservation Act from moneys in the agency’s Law Enforcement Reward Account. The moneys in this account come from fines, penalties, and proceeds from forfeited property for violations of these three laws. According to FWS officials, these moneys are available until expended. These moneys can be used to (1) pay financial rewards to those who provide information that leads to an arrest, criminal conviction, civil penalty assessment, or forfeiture of property for any violation of the Endangered Species Act, the Lacey Act, or the Rhinoceros and Tiger Conservation Act or (2) provide temporary care for plants, fish, or wildlife that are the subject of a civil or criminal proceeding under the Endangered Species Act, Lacey Act, or the Rhinoceros and Tiger Conservation Act. As of the beginning of fiscal year 2017, the balance of the Law Enforcement Reward Account was about $7 million.

Law Enforcement Special Funds Account. FWS may also pay rewards from moneys in its law enforcement office’s Special Funds Account. The moneys in this account come from an annual line item appropriation and are available until expended. Since fiscal year 1988, this appropriation has provided FWS up to $400,000 each year to pay for information, rewards, or evidence concerning violations of laws FWS administers, as well as miscellaneous and emergency expenses of enforcement activity that the Secretary of the Interior authorized or approved.

NOAA generally pays rewards from moneys available in the Fisheries Enforcement Asset Forfeiture Fund. The moneys in this account come from fines, penalties, and proceeds from forfeited property for violations of marine resource laws that NOAA enforces, including the Magnuson- Stevens Fishery Conservation and Management Act, the Endangered Species Act, and the Lacey Act. According to NOAA officials, moneys are available until expended and can be used to pay certain enforcement- related expenses, including travel expenses, equipment purchases, and the payment of financial rewards. As of the beginning of fiscal year 2017, the Fisheries Enforcement Asset Forfeiture Fund had a balance of about $18 million.

Academic literature on the use of financial rewards to combat illegal activities and stakeholders we interviewed identified several advantages and disadvantages of using financial rewards to obtain information on wildlife trafficking. Potential advantages of using financial rewards include the following:

Providing incentives. The potential for a financial reward can motivate people with information to come forward when they otherwise might not do so.

Increasing public awareness. Financial rewards may bring greater public attention to the problem of wildlife trafficking, including federal efforts to combat wildlife trafficking.

Saving resources. Using financial rewards may save agency resources by enabling agents to get information sooner and at a lower cost than they could have through their own efforts.

Potential disadvantages of using financial rewards include the following:

Eliciting false or unproductive leads. Financial rewards may generate false or unproductive leads.

Affecting witness credibility. Financial rewards may lead to a source’s credibility being challenged at trial by defense attorneys since sources receive compensation for the information they provide.

Consuming resources. The potential for a financial reward may create a flood of tips that take agency time and resources to follow up on or corroborate.

Outside of wildlife trafficking, multiple federal agencies and federal courts are authorized to pay financial rewards for information on illegal activities under certain circumstances. For example, U.S. Customs and Border Protection—which controls, regulates, and facilitates the import and export of goods through U.S. ports of entry—is authorized, under certain circumstances, to pay rewards for original information about violations of any laws that it enforces. The Department of State may also pay rewards under certain circumstances, including for information leading to the disruption of financial mechanisms of a transnational criminal group. Similarly, the U.S. Securities and Exchange Commission (SEC) and Internal Revenue Service (IRS) may pay rewards for information about violations of federal securities laws and the underpayment of taxes, respectively, if certain conditions are met. Federal judges may award money to persons who give information leading to convictions for violating treaties, laws, and regulations that prohibit certain pollution from ships, including oil and garbage discharges.

Multiple Laws Authorize FWS and NOAA to Pay Rewards for Wildlife Trafficking Information, but the Agencies Reported Paying Few Rewards from Fiscal Years 2007 through 2017

FWS and NOAA officials identified multiple laws, such as the Endangered Species Act and the Lacey Act, that authorize the payment of financial rewards to people who provide information on wildlife trafficking. FWS and NOAA reported paying few financial rewards under these laws from fiscal years 2007 through 2017. However, agency officials could not provide sufficient assurance that the reward information they provided to us represented all of their reward payments for this period.

The Endangered Species Act, Lacey Act, and Other Laws Authorize the Payment of Financial Rewards

FWS and NOAA officials identified over 10 laws prohibiting wildlife trafficking—including the Endangered Species Act, Lacey Act, and Bald and Golden Eagle Protection Act—that specifically authorize the payment of financial rewards in certain circumstances to people who provide information on violations of the law (see app. II for a complete list of the laws). These laws provide discretion to the agencies to choose whether to pay rewards but have varying requirements for who is eligible to receive a reward and the payment amounts. For example, the Bald and Golden Eagle Protection Act caps rewards at $2,500 for information that leads to a conviction. In contrast, the Endangered Species Act does not cap reward amounts and authorizes rewards for information that leads to a conviction as well as to an arrest, civil penalty, or forfeiture of property. Table 1 identifies the laws that FWS and NOAA officials indicated they have used to pay financial rewards for information on wildlife trafficking from fiscal years 2007 through 2017, along with information on these laws’ requirements for payment of rewards.

FWS and NOAA Reported Paying Few Rewards for Information on Wildlife Trafficking but Could Not Assure the Completeness of the Information

FWS and NOAA reported paying few financial rewards for information on wildlife trafficking from fiscal years 2007 through 2017, but agency officials could not provide sufficient assurance that this information was complete. Officials from both agencies said that their agencies have not prioritized the use of rewards, and they believed that the reward information they identified—such as the number, dollar amount, and year that rewards were paid—appropriately captured the few reward payments they made during this time frame. Based on the agencies’ reviews of their records, FWS reported paying 25 rewards for a total of $184,500 from fiscal years 2007 through 2017, and NOAA reported paying 2 rewards for a total of $21,000 during that same period (see table 2). See appendix III for additional details on the cases where financial rewards were paid.

FWS reported paying rewards in trafficking cases involving a variety of wildlife species, such as eagles, bears, reptiles, and mollusks, across the 11-year period. FWS officials said they generally paid rewards to thank sources who proactively provided information. For example, based on our review of a reward case, FWS paid a reward in 2010 because the source provided information that was crucial in uncovering an attempt to illegally traffic leopards into the United States from South Africa. FWS would not have known about this illegal activity if the source had not come forward with the information. In several cases we reviewed, FWS officials said that the sources did not know about the possibility of receiving a reward when they contacted the agency with information.

The two rewards NOAA reported paying from fiscal years 2007 through 2017 involved the illegal trafficking of sea scallops and a green sea turtle. NOAA officials said that in both cases they paid a reward to thank the source who proactively provided information to law enforcement agents. For example, the agent who investigated the sea scallop case reported requesting the reward because the information the source proactively provided was timely, credible, and led to the criminal conviction of several individuals.

FWS and NOAA officials could not provide sufficient assurance that the reward information they reported to us represented all of the rewards their agencies had paid from fiscal years 2007 through 2017, but they said the information was complete to the best of their knowledge. Specifically, FWS and NOAA officials said they track all their expenditures, including reward payments, in their financial databases. However, they are not able to readily identify reward payments because their financial systems do not include a unique identifier for such payments and their reward information is located in multiple databases and formats. As a result, FWS and NOAA officials said they identified the rewards they reported to us by manually reviewing their financial and law enforcement records. In particular, FWS officials said they reviewed their paper records to identify instances when the agency paid rewards and then retrieved additional information from their financial and law enforcement databases, such as final payment amounts. NOAA officials said they identified instances when the agency paid rewards by using a combination of paper and electronic records located at NOAA’s headquarters office. NOAA officials also contacted their regions to obtain additional information located at the regional offices to confirm information about the rewards NOAA had paid.

Seventeen stakeholders we interviewed who had experience investigating wildlife trafficking or expertise in using financial rewards as a law enforcement tool said that it would be useful for FWS and NOAA to maintain comprehensive information on the rewards they paid. For example, two stakeholders said that maintaining comprehensive information and making that information available to law enforcement agents could motivate agents to make greater use of rewards as a law enforcement tool. Two other stakeholders said that maintaining information on and monitoring reward use would allow the agencies to make ongoing adjustments, such as adjusting payment amounts, to make the most effective use of rewards in combating wildlife trafficking.

Federal internal control standards say that management should clearly document internal control and all transactions and other significant events in a manner that allows the documentation to be readily available for examination. Control activities can be implemented in either an automated or a manual manner, but automated control activities tend to be more reliable because they are less susceptible to human error and are typically more efficient.

FWS and NOAA officials agreed that maintaining reward information so that complete information is easily retrievable may be beneficial. FWS officials said having clearly documented and readily available reward information could improve how they manage rewards and enable them to monitor and examine their use of rewards more holistically. The officials said they may analyze options for creating a single repository for reward information but did not commit to doing so. They said that creating a single repository for reward information may involve some drawbacks, such as duplicating some data entry in separate databases. Similarly, NOAA officials said having clearly documented and readily available reward information would provide agency management with easier and more consistent access to that information. As a result, they said that they are exploring modifications to their financial and law enforcement databases to better identify and track rewards. For example, NOAA officials said they may be able to create a unique identifier to flag payments that are for rewards in their financial system to enable them to identify payment amounts more easily. NOAA officials did not provide a time frame for completing modifications to their financial system. By tracking reward information so that it is clearly documented and readily available for examination, FWS and NOAA can better ensure that they have complete information on the rewards they have paid to help manage their use of rewards as a law enforcement tool.

FWS and NOAA Have Policies for Administering Reward Payments, but FWS’s Policy Does Not Specify Factors to Consider When Developing Reward Amounts

FWS and NOAA have policies to guide their law enforcement agents on the process for preparing and submitting a request to pay a financial reward. Specifically, both agencies’ policies call for agents to include a description of the case, the nature of the information that the source provided, a justification for providing a reward, and an explanation of how a proposed reward amount was developed. These policies also outline the general review and approval process, how payments are to be made upon approval of a request, and eligibility criteria to receive a reward. For example, FWS and NOAA policies prohibit paying rewards to foreign government officials as well as paying rewards to any person whose receipt of a reward would create a conflict of interest or the appearance of impropriety.

NOAA’s policy explicitly states that the NOAA Office of Law Enforcement is to use statutorily authorized rewards as a tool to obtain information from the public on resource violations and that rewards can help promote compliance with marine resource laws. NOAA’s policy suggests that agents consider advertising reward offers to assist investigations, encourages press releases, and describes the process agents should follow to do so. Moreover, NOAA’s policy specifies factors that agents might include in their reward requests to support the proposed reward, such as (1) the benefit to the marine resources that was furthered by the information provided; (2) the risk, if any, the individual took in collecting and providing the information; (3) the probability that the investigation would have been successfully concluded without the information provided; and (4) the relationship between any fines or other collections and the information provided.

FWS’s policy specifies that rewards may be provided in situations in which an individual furnishes essential information leading to an arrest, conviction, civil penalty, or forfeiture of property. However, it does not discuss the usefulness of financial rewards as a law enforcement tool or the types of circumstances when rewards should be used or advertised to the public. Further, FWS’s policy does not communicate necessary quality information internally that agents may need when deciding to request the payment of rewards. In particular, it does not specify factors for agents to consider when developing proposed reward amounts. Instead, the policy leaves it to the discretion of field and regional agents to develop proposed reward amounts within any limitations specified in law. Some FWS agents we interviewed said that they developed proposed reward amounts on a case-by-case basis and did not know whether their proposed amounts were enough, too little, or too much. In addition, some agents said that because FWS’s policy does not specify factors for agents to consider, the reward approval process is subjective and unclear and this has made it challenging for the agents to develop proposed reward amounts. For example, one agent we interviewed said he submitted a request to his supervisor to pay a $10,000 reward to a source who provided information on a major wildlife trafficker. But, for reasons unknown to the agent, his supervisor reduced the amount to $1,000. FWS headquarters officials said field agents submit reward requests to headquarters for approval, and these officials were not aware of instances of proposed reward amounts being changed or denied during the review process.

Seven of the 20 stakeholders we interviewed suggested that FWS augment its reward policy to specify factors for agents to consider when developing proposed reward amounts. For example, helpful factors to consider when developing a proposed reward amount may include (1) the number of hours the source dedicated to the case, (2) the risk the source took in providing the information, (3) the significance of the information provided by the source, and (4) the amount of fines or other penalties collected as a result of the information. Two stakeholders expressed concern that some of FWS’s reward payments were insufficient, especially when comparing the amount of time and effort or the risk a source faced in providing the information. A couple of stakeholders also said that without a policy that specifies factors for agents to consider, reward amounts may be subjective and could vary depending on which agent develops the reward proposal. Another stakeholder said that it was important to specify factors for agents to consider when developing proposed reward amounts so that the agency has a reasonable and defensible basis for the reward amounts it pays across cases.

According to federal standards for internal control, management should internally communicate the necessary quality information to achieve an agency’s objectives. For example, management communicates quality information down and across reporting lines to enable personnel to make key decisions. FWS officials said they believe that their reward policy is sound, indicating they believe that law enforcement agents have the information they need to develop proposals for reward amounts in cases where rewards are warranted. However, they also agreed that it may be helpful to review their policy but did not commit to doing so. By augmenting its policy to specify factors for agents to consider when developing proposed reward amounts, FWS can better ensure that its agents have the necessary quality information to prepare defensible reward proposals.

FWS and NOAA Communicate Little Information to the Public on Financial Rewards

Based on our review of the agencies’ websites and other communications, we found that FWS and NOAA communicate little information to the public on financial rewards for reporting information on wildlife trafficking, such as the potential availability of rewards and eligibility criteria. Specifically, some FWS and NOAA law enforcement websites provided information to the public on ways to report violations of the laws that the agencies are responsible for enforcing, such as via tip lines. Some of the websites also provided examples of the types of information the public can report, such as photos or other documentation of illegal activities. However, most of the agencies’ websites did not indicate that providing information on illegal activities could result in a reward. In contrast, the FWS Alaska regional office’s website provided information on the potential availability of rewards and ways the public may submit information for a potential reward. For example, this website provided phone numbers and an e-mail address for the public to use when submitting information. Figure 1 shows the information available on FWS’s and NOAA’s national and regional websites relevant to reporting violations of the laws the agencies enforce in general and on receiving rewards in particular.

In addition, FWS and NOAA headquarters officials said their field agents have used other means to communicate the potential availability of rewards in specific cases when the agents had no other information that could help solve those cases. For example, a FWS field official said that the agency advertised a reward offer for information on a case of bald eagle killings by distributing reward posters and posting news releases in the vicinity where the killings occurred. Similarly, NOAA officials said they have advertised reward offers through various means, including circulating reward posters in specific geographic areas after an illegal activity has occurred. Figure 2 shows a reward poster that NOAA distributed in Guam in 2017 advertising a $1,000 reward for information leading to the arrest and conviction of sea turtle poachers.

Instead of having a plan for communicating general information to the public on rewards, FWS and NOAA grant discretion to their regional offices and law enforcement agents to determine the type and level of communication to provide, according to FWS and NOAA policies. FWS officials explained that because they typically use financial rewards to thank individuals who come forward on their own accord—rather than using rewards to incentivize individuals with information to come forward—they have not seen the need to communicate more information to the public on the potential availability of rewards. NOAA officials said they have targeted their communications on rewards by publicizing reward offers for specific cases where they do not have leads. They added that they want to receive quality information and already receive a substantial amount of information from sources who reach out to them proactively, so NOAA has not seen the need to communicate more information to the public on the potential availability of rewards.

Sixteen of the 20 stakeholders we interviewed said that it would be useful for FWS and NOAA to advertise the potential availability of financial rewards. Several stakeholders said that if the public does not know about the possibility for rewards, then some people with information may not be incentivized to come forward. Two stakeholders added that agencies should carefully consider how and which reward information to communicate to the public so that people who are most likely to have information on illegal wildlife trafficking learn about the potential for rewards. For example, one stakeholder suggested advertising rewards at ports where international shipments are offloaded or placing advertisements at wildlife trafficking nodes, such as entrances to African wildlife refuges. This stakeholder suggested advertising rewards along with wildlife trafficking awareness-raising posters that nongovernment organizations place in some airports.

In addition, 14 stakeholders suggested that it would be useful for FWS and NOAA to provide information to the public on the process for submitting information to potentially receive rewards. Several other stakeholders said that it is important for the public to understand whether they may be eligible for a reward, how to submit information, and whether or to what extent their confidentiality will be protected. Another stakeholder provided examples of how other agencies provide information about their reward programs on their websites. SEC and IRS, for instance, use their websites to communicate information to the public on the process for reporting illegal activity for financial rewards. This information includes the types of information to report, confidentiality rules, eligibility criteria, and the process for submitting information to obtain a reward. In addition, the Department of State posts instructions on its websites on how to submit information on an illegal activity and potentially receive a reward.

Federal internal control standards say that management should externally communicate the necessary quality information to achieve an agency’s objectives. For example, using appropriate methods to communicate, management communicates quality information so that external parties, such as the public, can help the agency achieve its objectives. This could include communicating information to the public on the types of information and eligibility requirements for potentially receiving rewards for reporting information on wildlife trafficking.

FWS officials said that making more reward information available could lead to a significant increase in the amount of information the agency receives, which, in turn, could strain FWS’s resources in following up on that information. However, FWS officials also agreed that it was reasonable to consider making more reward information available to relevant members of the public, particularly in targeted circumstances, but did not commit to doing so. Similarly, NOAA officials said they had some concerns about the additional resources it might take to investigate potentially unreliable or false tips that may result if they make reward information broadly available to the public, but they agreed that it would be reasonable for the agency to consider doing so. NOAA officials also said they may consider making more reward information publicly available at the conclusion of our audit but provided no plans for doing so. By determining the types of additional information to communicate to the public on rewards—such as providing information on the agency’s website on the potential availability of rewards—and then developing and implementing plans to do so, FWS and NOAA can improve their chances of obtaining information on wildlife trafficking activities that they otherwise might not receive.

FWS and NOAA Have Not Reviewed the Effectiveness of Their Use of Financial Rewards

FWS and NOAA have not reviewed the effectiveness of their use of financial rewards or considered whether any changes might improve the usefulness of rewards as a tool for combating wildlife trafficking. FWS officials said their agency has not reviewed or considered changes to its use of rewards because the agency has not prioritized the use of rewards. NOAA officials said their agency has not focused on using rewards or identified the need to review its use of this tool, particularly in light of other, higher mission priorities.

Nine of the 20 stakeholders we interviewed said that FWS and NOAA should review the effectiveness of their use of rewards and consider potential improvements. Several stakeholders said that it would be useful for FWS and NOAA to compare their respective approaches to those of federal agencies that use rewards in contexts outside of wildlife trafficking to identify best practices or lessons learned that might be applicable in the context of combating wildlife trafficking. For example, one stakeholder said that SEC has an effective whistleblower program and may have lessons learned that are relevant for FWS and NOAA to consider. Another stakeholder we interviewed separately indicated that in 2010, before SEC had a whistleblower program that publicized rewards and provided detailed instructions on how members of the public could report information on illegal activities, SEC received few tips. Once SEC implemented a whistleblower program that publicized rewards and provided detailed instructions on its public website, the agency’s use of the program grew substantially, according to the stakeholder. Other stakeholders said it would be useful for the agencies to consider potential improvements to their use of rewards, such as making a standing reward offer for information on wildlife trafficking targeted at high-priority endangered species or particular criminal networks. Two of these stakeholders said such an offer might improve FWS’s and NOAA’s use of rewards by generating more tips than reward offers focused on individual cases. At the same time, they said such an offer would likely filter out some of the false or unproductive tips that the agencies might receive if they made an untargeted standing reward offer.

Federal internal control standards state that management should design control activities to achieve objectives and respond to risks by, for example, conducting reviews at the functional or activity level by comparing actual performance to planned or expected results and analyzing significant differences. Further, under the standards, management should periodically review policies, procedures, and related control activities for continued relevance and effectiveness in achieving an agency’s objectives or addressing related risks. FWS and NOAA officials agreed that reviewing the effectiveness of their use of rewards would be worthwhile. Specifically, FWS officials said that it would be useful to compare their approach to those of other federal agencies that use rewards in investigating crimes that involve interstate and foreign smuggling of goods. Similarly, NOAA officials said that reviewing the agency’s use of financial rewards would be worthwhile but cautioned that such a review would need to be balanced against the agency’s constrained resources and many mission requirements. FWS and NOAA officials said they may consider conducting such a review at the conclusion of our audit but provided no plans for doing so. By reviewing the effectiveness of their use of rewards, FWS and NOAA can identify opportunities to improve the usefulness of rewards as a tool for combating wildlife trafficking.

Conclusions

Wildlife trafficking is a large and growing transnational criminal activity, with global environmental, security, and economic consequences. The federal government has emphasized strengthening law enforcement efforts to combat wildlife trafficking, and using financial rewards to obtain information on illegal activities is one tool that some federal agencies have used. However, to date, FWS and NOAA have not prioritized the use of rewards and were unable to provide sufficient assurance that the 27 rewards they paid during fiscal years 2007 through 2017 represented all of the rewards they provided during that period. By tracking reward information so that it is clearly documented and readily available for examination, FWS and NOAA can better ensure that they have complete information on the rewards they have paid to help manage their use of rewards as a law enforcement tool.

Additionally, FWS and NOAA have policies outlining the processes their law enforcement agents are to use in making reward payments, and NOAA’s policy specifies factors for its agents to consider in developing proposed reward amounts, such as the risk the individual took in collecting the information. FWS’s policy does not specify such factors that could inform agents in achieving the agency’s objectives, which is not consistent with federal internal control standards. By augmenting its policy to specify factors for its agents to consider when developing proposed reward amounts, FWS can better ensure that its agents have the necessary quality information to prepare defensible reward proposals.

Both agencies have also advertised the potential for rewards in specific cases when agents had no other information, but FWS and NOAA have otherwise communicated little information to the public on the potential availability of rewards. If the public does not know about the possibility of rewards, then some people with information may not be incentivized to come forward. By determining the types of additional information to communicate to the public on rewards—such as providing information on the agency’s website about the potential availability of rewards—and then developing and implementing plans to do so, FWS and NOAA can improve their chances of obtaining information on wildlife trafficking activities that they otherwise might not receive.

Finally, FWS and NOAA have not reviewed the effectiveness of their use of financial rewards or considered whether any changes might improve the usefulness of rewards as a law enforcement tool. By undertaking such reviews, the agencies can identify opportunities to improve the usefulness of rewards as a tool for combating wildlife trafficking.

Recommendations for Executive Action

We are making a total of seven recommendations, including four to FWS and three to NOAA. Specifically:

The Assistant Director of the FWS Office of Law Enforcement should track financial reward information so that it is clearly documented and readily available for examination. (Recommendation 1)

The Director of the NOAA Office of Law Enforcement should track financial reward information so that it is clearly documented and readily available for examination. (Recommendation 2)

The Assistant Director of the FWS Office of Law Enforcement should augment FWS’s financial reward policy to specify factors law enforcement agents are to consider when developing proposed reward amounts. (Recommendation 3)

The Assistant Director of the FWS Office of Law Enforcement should determine the types of additional information to communicate to the public on financial rewards and then develop and implement a plan for communicating that information. (Recommendation 4)

The Director of the NOAA Office of Law Enforcement should determine the types of additional information to communicate to the public on financial rewards and then develop and implement a plan for communicating that information. (Recommendation 5)

The Assistant Director of the FWS Office of Law Enforcement should review the effectiveness of the agency’s use of financial rewards and implement any changes that the agency determines would improve the usefulness of financial rewards as a law enforcement tool. (Recommendation 6)

The Director of the NOAA Office of Law Enforcement should review the effectiveness of the agency’s use of financial rewards and implement any changes that the agency determines would improve the usefulness of financial rewards as a law enforcement tool. (Recommendation 7)

Agency Comments

We provided a draft of this report for review and comment to the Departments of Commerce and the Interior. The departments transmitted written comments, which are reproduced in appendixes IV and V of this report. The Department of Commerce concurred with the three recommendations directed to NOAA and stated that NOAA is developing procedures to ensure that its rewards are closely tracked, clearly documented, and better communicated. In written comments from NOAA, NOAA stated the report fairly and thoroughly reviews NOAA’s use of financial rewards. NOAA outlined the steps it plans to take in response to our recommendations, including developing a procedure to track financial reward information, reviewing information currently disseminated to the public and evaluating whether additional information may be useful, and reviewing the agency’s reward policy to determine whether changes are needed to enhance reward effectiveness.

In its written comments, the Department of the Interior concurred with the four recommendations directed to FWS. Interior stated that it appreciated our review of the challenges faced by FWS’s Office of Law Enforcement in combating wildlife trafficking and identifying areas where FWS and NOAA can improve the use of financial rewards as a tool for combating wildlife trafficking. Interior also provided technical comments, which we incorporated as appropriate.

As agreed with your office, unless you publicly announce the contents of this report earlier, we plan no further distribution until 30 days from the report date. At that time, we will send copies to the appropriate congressional committees, the Secretaries of Commerce and the Interior, and other interested parties. In addition, the report will be available at no charge on the GAO website at http://www.gao.gov.

If you or your staff have any questions about this report, please contact me at (202) 512-3841 or fennella@gao.gov. Contact points for our Offices of Congressional Relations and of Public Affairs may be found on the last page of this report. GAO staff who made major contributions to this report are listed in appendix VI.

Appendix I: Objectives, Scope, and Methodology

The objectives of our review were to (1) identify laws that authorize the U.S. Fish and Wildlife Service (FWS) and the National Oceanic and Atmospheric Administration (NOAA) to pay financial rewards for information on wildlife trafficking and the extent to which these agencies paid such rewards from fiscal years 2007 through 2017, (2) evaluate FWS’s and NOAA’s policies on financial rewards, (3) evaluate the information available to the public on financial rewards, and (4) determine the extent to which FWS and NOAA reviewed the effectiveness of their use of financial rewards in combating wildlife trafficking.

To address these objectives, we reviewed academic literature on the use of financial rewards to combat illegal activities and United Nations Environment Programme reports on the scope and scale of wildlife trafficking. We also interviewed officials from federal agencies that play a role in combating wildlife trafficking or manage programs that pay financial rewards for information on illegal activities. Specifically, we interviewed officials from the Departments of Agriculture, Commerce, Homeland Security, the Interior, Justice, and State, as well as officials from the Internal Revenue Service, the U.S. Securities and Exchange Commission, and the U.S. Agency for International Development. In addition, we reviewed documentation that the Department of the Treasury provided on its role in paying financial rewards. We did not compare FWS’s and NOAA’s use of financial rewards in combating wildlife trafficking to federal agencies’ use of financial rewards in other contexts because the different contexts are not directly comparable. However, we reviewed information on other federal agencies’ use of financial rewards as examples of how financial rewards are used in contexts outside of wildlife trafficking. In addition, we interviewed representatives of six nongovernmental organizations that we selected based on those organizations’ knowledge or experience in combating wildlife trafficking.

Specifically, we interviewed representatives from the Elephant Action League, the Environmental Investigation Agency, the National Association of Conservation Law Enforcement Chiefs, the National Whistleblower Center, TRAFFIC, and the World Wildlife Fund.

To identify laws that authorize FWS and NOAA to pay financial rewards for information on wildlife trafficking, we asked FWS and NOAA attorneys to compile a list of laws that each of their agencies implements or enforces that prohibit wildlife trafficking and authorize the agency to pay rewards for providing information about trafficking. We then compared that list to the results of our search of the United States Code for such laws. We also reviewed FWS and NOAA documentation for accounts where the fines, penalties, and proceeds from forfeited property that are used to pay rewards are deposited as well as the accounts where appropriations available to pay rewards were deposited. To identify the extent to which FWS and NOAA have paid financial rewards for information on wildlife trafficking, we analyzed FWS and NOAA data on financial rewards the agencies reported paying from fiscal years 2007 through 2017. The data included information on, among other things, the fiscal years in which rewards were paid, laws under which rewards were paid, types of wildlife involved in those cases, the amounts of civil penalties or criminal fines imposed in those cases, the numbers of arrests and convictions as a result of those cases, and whether reward recipients were individuals or groups and U.S. or foreign citizens.

To assess the reliability of the data FWS and NOAA provided on financial rewards, we interviewed agency officials knowledgeable about the data and compared the data to case records the agencies provided.

Specifically, FWS and NOAA officials said they track all expenditures, including reward payments, in their financial databases, but they are not able to readily identify reward payments because their financial systems do not include a unique identifier for such payments and their reward information is located in multiple databases and formats. As a result, FWS and NOAA officials said they identified the rewards that they reported to us by manually reviewing their financial and law enforcement records, and officials said the information was complete to the best of their knowledge. Based on these steps, we found the data that the agencies provided to us to be sufficiently reliable for reporting information on the rewards the agencies reported paying. However, as we discuss in the report, FWS and NOAA officials could not provide sufficient assurance that the data included all the financial rewards that they had paid from fiscal years 2007 through 2017.

To obtain additional detail about cases where financial rewards were paid, we reviewed a nongeneralizable sample of 10 wildlife trafficking cases. We selected these cases based on the agency that investigated the case (to include both FWS and NOAA cases), the amount of the reward paid in the case (to reflect both low and high amounts), the year in which the reward was paid (to include rewards paid more recently), and the type of wildlife trafficked in the case (to include both fish and wildlife cases—there were no plant trafficking cases to select).

While the findings from our review cannot be generalized to cases we did not select and review, they illustrate how FWS and NOAA have used financial rewards in wildlife trafficking cases.

To evaluate FWS and NOAA policies on financial rewards, we reviewed relevant FWS and NOAA policies and compared them to each other; interviewed FWS and NOAA officials about those policies; and compared the information in the policies with federal internal control standards on information and communication. To evaluate information available to the public on rewards, we reviewed relevant FWS and NOAA publications and examples of communications to the public on the availability of rewards in specific cases and interviewed FWS and NOAA officials. We also reviewed information available on FWS’s and NOAA’s national and regional websites as of December 2017 and January 2018, respectively, relevant to reporting violations of the laws that the agencies enforce in general and on receiving rewards in particular. We compared the agencies’ public communications on rewards with federal internal control standards on information and communication. To evaluate the extent to which FWS and NOAA reviewed the effectiveness of their use of financial rewards in combating wildlife trafficking, we interviewed FWS and NOAA officials and requested any reviews the agencies had conducted regarding their use of financial rewards to compare with federal internal control standards on control activities. FWS and NOAA did not have any such reviews to provide.

In addition, for all four objectives, we interviewed a nongeneralizable sample of 20 stakeholders who had experience investigating wildlife trafficking or expertise in the use of financial rewards as a law enforcement tool. To select stakeholders to interview, we first identified a list of stakeholders by reviewing (1) FWS and NOAA data on law enforcement agents with at least 5 years of experience who had investigated wildlife trafficking cases and used financial rewards, (2) Department of Justice data on federal prosecutors who had prosecuted wildlife trafficking cases since fiscal year 2014, (3) literature search results identifying academics with expertise in the use of financial rewards as a law enforcement tool and federal programs that use financial rewards to combat illegal activities in contexts outside of wildlife trafficking, (4) the biographies of members of the federal Advisory Council on Wildlife Trafficking, and (5) recommendations from stakeholders we interviewed. From this list, we then used a multistep process to select the 20 stakeholders to interview. To ensure coverage and a range of perspectives, we selected stakeholders from the following groups:

FWS and NOAA law enforcement agents, including field and federal prosecutors responsible for prosecuting wildlife trafficking cases; federal officials responsible for programs that use financial rewards to combat illegal activities in contexts outside of wildlife trafficking; academics with expertise in the use of financial rewards as a law members of the federal Advisory Council on Wildlife Trafficking; and representatives of nongovernmental organizations that investigate wildlife trafficking.

We conducted semistructured interviews with the 20 selected stakeholders using a standard set of questions. We asked questions about stakeholder views on the usefulness of financial rewards in combating wildlife trafficking; the strength and weaknesses of the statutory provisions that authorize federal agencies to pay financial rewards for information on wildlife trafficking; FWS’s and NOAA’s use of financial rewards to combat wildlife trafficking; and how, if at all, the two agencies could improve their use of financial rewards to combat wildlife trafficking. We analyzed the stakeholders’ responses to our questions, grouping the responses into overall themes. We summarized the results of our analysis and then shared the summary with relevant FWS and NOAA officials to obtain their views. Views from these stakeholders cannot be generalized to those whom we did not select and interview.

We conducted this performance audit from February 2017 to April 2018 in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives.

Appendix II: Laws Implemented or Enforced by FWS and NOAA That Prohibit Wildlife Trafficking and Authorize Financial Rewards

The Department of the Interior’s U.S. Fish and Wildlife Service (FWS) and the Department of Commerce’s National Oceanic and Atmospheric Administration (NOAA) implement or enforce multiple laws that specifically authorize the payment, under specified circumstances, of financial rewards to persons for information about violations of laws that prohibit wildlife trafficking. The laws that FWS officials identified are listed and summarized in table 3, and the laws that NOAA officials identified are listed and summarized in table 4.

In addition, as noted above, the reward provisions in the Magnuson- Stevens Fishery Conservation and Management Act as amended and the Fish and Wildlife Improvement Act as amended authorize the payment of rewards for information about violations of multiple laws. Specifically, the Magnuson-Stevens Fishery Conservation and Management Act as amended authorizes the payment of rewards for information about violations of the act as well as any other marine resource law that the Secretary of Commerce enforces. Further, the Fish and Wildlife Improvement Act as amended authorizes the payment of rewards for information about violations of any law administered by NOAA’s National Marine Fisheries Service relating to plants, fish, or wildlife. NOAA officials identified 14 such laws that prohibit wildlife trafficking (see table 5). If a violation of the laws listed in table 5 occurs, NOAA officials said they could use the Magnuson-Stevens Fishery Conservation and Management Act or Fish and Wildlife Improvement Act reward provision to pay a reward for information on the violation. None of the laws listed in table 5 specifically authorize the payment of financial rewards.

Appendix III: FWS and NOAA Cases in Which the Agencies Reported Paying Rewards, Fiscal Years 2007 through 2017

Table 6 provides information on U.S. Fish and Wildlife Service and National Oceanic and Atmospheric Administration cases where these agencies reported paying rewards for information on wildlife trafficking from fiscal years 2007 through 2017.

Appendix IV: Comments from the Department of Commerce

Appendix V: Comments from the Department of the Interior

Appendix VI: GAO Contact and Staff Acknowledgments

GAO Contact

Staff Acknowledgments

In addition to the contact named above, Alyssa M. Hundrup (Assistant Director), David Marroni (Analyst-in-Charge), Cindy Gilbert, Keesha Luebke, Jeanette Soares, Sheryl Stein, Sara Sullivan, and Judith Williams made key contributions to this report.