Beginning in late 2011, an anonymous whistleblower worked closely with the U.S. Fish and Wildlife Service (FWS) to expose a large-scale illegal commercial fishing operation in Northern Michigan. Due to the whistleblower’s assistance, FWS special agents successfully carried out Operation Fishing for Funds, a two-year undercover operation that documented hundreds of illegal fishing transactions. As of April 2019, the Operation led to over twenty convictions and over $1.6 million in restitution ordered to FWS National Fish Hatcheries and tribal fish hatcheries. At that time, it was expected that several more arrests and over $1 million more in restitution would arise from the case. Despite the millions of dollars in restitution stemming from the operation, the whistleblower was awarded only $25,000.
Details of the whistleblower’s integral role in Operation Fishing for Funds were made available to Whistleblower Network News in response to a Freedom of Information Act (FOIA) inquiry. Strikingly, this case is the only whistleblower reward issued by FWS since it amended their reward regulations in 2018 in order to increase the usage of its rewards program. Therefore, this whistleblower story is simultaneously a story of success and of failure. The whistleblower’s contributions reflect the individual’s courage and highlight the key role whistleblowers can play in combating wildlife crime. However, the relatively small whistleblower award amount, the lack of publicity about the whistleblower’s contributions, and the fact this is the only whistleblower award FWS has issued in the last several years all underscore the continued failure of the United States’ wildlife whistleblower programs. Wildlife crime is a multi-billion industry which continues to decimate the environment and undermine conservation efforts worldwide. As this case demonstrates, whistleblowers can be a key tool in fighting this crime — if the programs designed to incentivize and protect them are properly utilized.
Operation Fishing for Funds
According to the FWS reward documentation, the whistleblower began working with the FWS in fall 2011 because “he wanted to make a difference.” The whistleblower had a history of involvement with illegal activity and “wanted to make a change so that his family would think better of him.” The reward justification notes that the whistleblower was not facing prosecution when he made contact with FWS agents.
Prior to this whistleblower coming forward, the FWS obtained information that illegal commercial fishing was occurring in the Great Lakes Basin. However, the FWS notes that “[d]ue to the vast geographical area and the fact that the commercial fishing industry is historically difficult to infiltrate, it was challenging to effect deterrence utilizing overt law enforcement techniques.”
The difficulty of detecting and deterring wildlife crimes through traditional law enforcement techniques is well documented. In a 2016 article titled “Monetary Rewards for Wildlife Whistleblowers: A Game-Changer in Wildlife Trafficking Detection and Deterrence,” whistleblower attorney Stephen M. Kohn of Kohn, Kohn & Colapinto explains that “[d]espite the enactment of scores of wildlife protection laws, including laws designed to protect plants and habitat, illegal activities are difficult to detect under current enforcement policies.” A 2018 report by the United Nations found that “despite a 38-fold increase in environmental laws put in place since 1972, failure to fully implement and enforce these laws is one of the greatest challenges to mitigating climate change, reducing pollution and preventing widespread species and habitat loss.” A 2018 report by the National Whistleblower Center (NWC) offers numerous examples of the critical role whistleblowers play in exposing wildlife crime that would otherwise remain undetected.
The whistleblower’s involvement was thus critical to the genesis and eventual success of Operation Fishing for Funds. According to the FWS, special agents first vetted the original information the whistleblower provided. After finding the intel to be true and accurate, the FWS enlisted the whistleblower as a “Cooperating Private Individual.” With the whistleblower’s help, the FWS agents established and operated an undercover wholesale fish business in Baraga, Michigan.
The undercover business, Upper Peninsula North Fish Company (UPNFC), bought and sold fish wholesale from individuals across the region. Eventually, UPNFC began buying illegal fish. The FWS whistleblower reward justification implies that the only reason commercial fishermen trusted UPNFC to buy illegal fish was because of the whistleblower’s involvement. Overall, Operation Fishing for Funds conducted over 550 covert buys of illegal fish through UPNFC and documented hundreds of felony and misdemeanor violations of the Lacey Act, the preeminent anti-wildlife trafficking law in the U.S.
Aftermath of the Operation
The largest known enforcement action to stem from Operation Fishing for Funds are wildlife trafficking charges filed by the U.S. Department of Justice (DOJ) against John H. Cross III and his company John Cross Fisheries Inc. Cross and Cross Fisheries were sentenced in April 2019 after pleading guilty to violations of the Lacey Act. Cross and Cross Fisheries were charged with trafficking in illegally transported and sold lake trout.
According to the DOJ, from 2011 to 2013, Cross Fisheries made approximately forty-two purchases of lake trout, totaling approximately 48,498 pounds, from a fisherman who could not lawfully harvest lake trout. The fisherman was in violation of an initiative started in 2000 to reduce the negative impact gill net fishing had on the Great Lakes Fishery. In order to mitigate the harmful effects of gill net fishing, the State of Michigan paid eligible tribal fishers as much as $200,000 each to convert their gear from gill nets to trap nets. Fishermen who use these taxpayer-financed trap nets are required to release lake trout caught in their trap nets as part of the effort to re-establish the fishery. However, the fisherman who sold the lake trout to Cross Fisheries illegally used a taxpayer-financed trap net to catch the fish.
Furthermore, according to the DOJ Cross Fisheries falsely reported these purchases as being from “a licensed gillnet fisherman who could legally harvest lake trout.” Lastly, the DOJ claims the illegally purchased trout was “subsequently offered for sale and sold by Cross and others in interstate commerce.”
The Lacey Act prohibits trafficking in fish sold in violation of underlying federal, state, foreign, or Indian tribal law. The Act also prohibits individuals from submitting false records of fish intended to be transported in interstate commerce. Cross was sentenced to 12 months in prison, and both defendants were ordered to “pay $1,032,132.00 in restitution, jointly and severally, to the National Fish Hatcheries, which stock Lake Michigan with lake trout.”
“We are pleased to see this long-term illegal commercialization come to an end. This type of large-scale wildlife trafficking can significantly impact the sustainability of the resources we are charged to protect. This is especially relevant because we have been working for years to restore the Great Lakes fishery,” said Edward Grace, Assistant Director of the Office of Law Enforcement in the DOJ’s press release.
In an important way, this case is a massive success story. The contributions of an anonymous whistleblower made possible a multiyear operation which helped root out illegal fishing operations and protect the sustainability of the Great Lakes fishery. However, when viewed in a larger context, this case underscores many of the failures of the United States’ wildlife whistleblower reward programs.
Rewards for Wildlife Whistleblowers
In June 2019, the FWS issued a $25,000 reward to the Operation Fishing for Funds whistleblower – the whistleblower had also previously received $17,300 in compensation. The reward was authorized under a 1981 amendment to the Lacey Act. This amendment granted the Department of the Interior, as well as the Departments of Commerce Treasury and Agriculture, the broad discretionary power to issue monetary rewards to whistleblowers.
The relatively small size of the reward is the first way in which this whistleblower case highlights the failures of the wildlife whistleblower reward programs. Unlike the False Claims Act (FCA) and the whistleblower provisions of the Dodd-Frank Act (DFA), the Lacey Act amendments do not set maximum or minimum amounts for the size of rewards or for the percentage of collected proceeds used to determine the reward size. The standards set by the FCA and DFA have been shown to incentivize whistleblowers. Even though the Lacey Act allows for large rewards, this case shows how in practice, the total discretion within the law can hurt the whistleblower. Wildlife whistleblowers are clearly not being awarded sums commensurate with the fraud that they uncover.
In this case, the whistleblower’s contributions led to over $1.6 in restitution (and potentially even $1 million more, according to the FWS) yet only received a $25,000 reward. In contrast, through the highly successful SEC Whistleblower Program, a qualified whistleblower whose disclosure led to $1.6 million in sanctions would be entitled to a reward ranging from $160,000 to $480,000 (10-30% of collected proceeds).
While this whistleblower was motivated by altruistic intentions, large whistleblower rewards are necessary to incentive whistleblowers to come forward. This is particularly true in regards to wildlife crime where whistleblowers do not just risk losing their careers but also their lives. Additionally, large whistleblower rewards have been shown to increase a whistleblower program’s deterrent effect. The possibility that accomplices or witnesses may report a crime to receive a large reward has been shown to deter crime.
In this case, however, even if the reward was large it would not help incentive whistleblowers or deter potential wrongdoers because the FWS has in no way publicized the reward. Details of this reward are being made public for the first time in this article. WNN only received the details because of a FOIA inquiry. While the FWS publicized the sentencing of Cross and Cross Fisheries, neither it nor the DOJ mentioned the contributions of the whistleblower to Operation Fishing for Funds.
The lack of publicity around this whistleblower’s contributions corresponds to the general failure of FWS to publicize its whistleblower reward program. In April 2018, the Government Accountability Office (GAO) released a report, “Combating Wildlife Trafficking: Opportunities Exist to Improve the Use of Financial Rewards,” reviewing the FWS’s use of whistleblower rewards. According to the report, the FWS “communicate(s) little information to the public on financial rewards for reporting information on wildlife trafficking, such as the potential availability of rewards and eligibility criteria.”
In the same report, GAO recommended that the FWS amend the regulations of their whistleblower program. FWS amended the regulations but failed to publish them. The amended regulations were not made public until WNN published them after obtaining them in response to a FOIA request.
While the small reward size and lack of publicity highlight specific shortcoming of U.S. wildlife whistleblower programs, the case’s most damning aspect is the fact that it is the only whistleblower reward issued by FWS since 2018. The Lacey Act is not even the only piece of legislation which grants the FWS the authority to issue awards. In fact, a 1982 amendment to the Fish and Wildlife Improvement Act, established that the FWS could pay whistleblower rewards for all wildlife laws it administers. Congress clearly views whistleblower rewards as an essential element to fight wildlife crime. Yet despite the several avenues through which rewards can be paid the FWS continues to under utilize the tool.
Wildlife crime continues to decimate the planet, threatening to drive species into extinction and irreversibly damage the Earth’s biodiversity. Wildlife whistleblower reward statutes exist to incentive individuals to report on wildlife crime, and the story of Operation Fishing for Funds shows how successful whistleblowers can be in fighting wildlife crime. The only way to stem the tide of egregious wildlife crimes is to emphasize the contributions of whistleblowers, publicize the policies under which they can report, and celebrate those brave enough to come forward. If the FWS addresses its program’s failures, more success stories can be on the horizon.