Chasing the Illegal Loggers Looting the Amazon Forest
The cargo ship Yacu Kallpa rode impatiently at anchor off Iquitos, Peru, a ramshackle city on a bend in the broad, turbulent waters of the Amazon River. She was a midsize ship, a tenth of a mile long, low-slung, with a seven-story superstructure in the stern and plumes of rust fanning down the hull from her main deck scuppers. She was like any other cargo ship in the world, but with a dark history. At that moment, in November 2015, she needed to get out of town fast.
The captain and crew had a long run ahead, nearly 2,300 miles down the Amazon, then another 4,000 miles north to Tampico, Mexico, and finally to Houston, with lumber harvested from the Amazon rain forest. It was a route the ship and its predecessors had run hundreds of times for more than 40 years, hauling millions of pounds of timber at a time, to supply lumberyards and big-box stores across the United States with the ingredients for the floors, decks, and doors of the typical American home.
In Iquitos, the waters were too shallow for the Yacu Kallpa to dock amid the tin-roofed stilt houses and the brightly painted tourist boats that lined the riverfront. So small workboats were ferrying stacks of lumber from shore, to be lifted into the hold by two onboard cranes. This was a job that could take two weeks under the best of circumstances. The longer it took, the more time customs officials had to prove that the lumber being heaved aboard the Yacu Kallpa had no business being there at all.
As the loading crews worked, 35 inspectors from a government agency called Organismo de Supervisión de los Recursos Forestales y de Fauna Silvestre (Osinfor) were slogging through forests all around Loreto Province. The inspectors were armed with handheld GPS navigators and a few batches of documents that listed the supposed harvest sites and the species of trees on the ship. More often than not, as they visited the sites listed on the paperwork, they found no evidence that any trees had been cut down there—no stumps, no debris, no disturbance—much less the trees listed on the documents. Sometimes there was no suggestion that trees ever grew there in the first place. They’d leave a mark in spray paint and jot a note on a report: “No existe en un radio 50m,” shorthand for no trees logged here, nor within 50 meters in any direction.
The vast scale of illegal logging in the Peruvian Amazon has long been an open secret. Government officials didn’t care, and until recently there was little anyone else could do to stop it. Local activists often died trying. But for a few defiant government agents, this time there was hope. The urgent question: Could they finally prove that enough trees came from illegal logging sites for prosecutors to stop the ship from sending its cargo into the US market?
As the Osinfor inspectors pushed deeper into the Amazonian forests and dockworkers hurried to load the ship, 30 or so staffers at the Environmental Investigation Agency, a nonprofit organization, waited nervously in an office just off Dupont Circle in Washington, DC. They had been developing methods to tie the ship to illegal logging for four years. But at this moment, they just had to wait and see what would happen next. It was up to government agents in Peru and Washington to make stick all the work the EIA staffers and forest inspectors in Peru had done. If everything went right, this would be the last voyage of the Yacu Kallpa.
The Environmental Investigation Agency got its start in the mid-1980s when a trio of Greenpeace investigators became disenchanted with that organization’s increasing scale and incendiary tactics. The idea was that the new organization should stay small—and focused on environmental crimes. Over the years, the EIA’s investigators have made a reputation for meticulously assembling detailed evidence of criminal behavior, via undercover work, in some of the most dangerous corners of the world.
One such investigator is a mild, studious figure named Alexander von Bismarck, now 45 years old, tall and thin with close-cropped red hair retreating at the temples to form a widow’s peak. Von Bismarck grew up spending part of each year with his American mother in the United States and part with his father in Germany. He graduated from Harvard on what he calls “the 12-year plan,” after a diversion to try his hand as a professional equestrian show jumper, another to study the demise of cichlids in Uganda’s Lake Victoria, and finally a tour in the Marines, where he trained as a scout swimmer for an amphibious landing unit. If his name brings to mind Otto von Bismarck, the 19th-century German statesman and grand European strategist, that’s because he is descended from the Iron Chancellor’s brother (“a potato farmer,” he notes). A penchant for strategic thinking nonetheless persists.
In 2005, von Bismarck set out to persuade Congress to amend the Lacey Act, the nation’s chief law against trafficking in stolen wildlife. The ambition was to include stolen forests too, making it a federal crime to import illegally harvested plants. Von Bismarck was able to help forge what was later termed “a Baptist-bootlegger alliance” with US timber producers, who were ready to push for the amendment because, by their own estimate, competition from illegally imported timber was costing them $1 billion a year.
As the amendment was under debate, one of von Bismarck’s undercover investigations revealed that new terrorism-resistant doors ordered for the US Capitol building may have been supplied by an illegal timber-trafficking network in Honduras, and the wood may have been harvested illegally from a Unesco World Heritage Site. The contract for the doors was quietly canceled. (Other doors from the same source allegedly ended up at Mar-a-Lago, according to von Bismarck.) The Lacey Act amendment sailed through Congress and became law in May 2008.
Von Bismarck, who became executive director of the Environmental Investigation Agency in 2007, credits his tour in the Marines with giving him the “operational awareness” for undercover work. He once tracked wood from a protected tree species stolen from a habitat for endangered orangutans in Indonesia to baby cribs being sold by Walmart in the United States. He and other EIA agents also went undercover in the Russian Far East and helped prove that Lumber Liquidators was knowingly buying hardwood flooring made from illegal timber taken from the last remaining home of the critically endangered Siberian tiger. (Lumber Liquidators pleaded guilty to violations under the Lacey Act and agreed in 2015 to pay a $13.2 million penalty.)
Of the logging industry, von Bismarck says: “So many of them would love to have a system based on legal wood—so many of them feel trapped in a system that is a race to the bottom.” He pauses. Then he adds, “But some guys just need to go to jail.”
In 2009, with the Lacey Act amendment in place, von Bismarck began trying “to figure out how to make a case with the new law.” A trade deal between the United States and Peru was just going into effect, and it included new penalties for illegal logging and made Osinfor an independent agency. Von Bismarck saw an opportunity. He and Andrea Johnson, then director of the EIA’s forest campaign, hired a Peruvian journalist named Julia Urrunaga, who had spent 15 years investigating corruption for Peru’s leading newspapers.
Urrunaga is a happy warrior sort, 47 years old, just over 5 feet tall, with a great mane of curly light-brown hair. “I’m a journalist. I didn’t know much about forestry,” she admits. She and Johnson, blue-eyed, freckle-faced, and also 5 feet tall, with a degree from Yale’s forestry school, set off to find out exactly how the lumber business worked. They visited river ports, attended endless meetings, and interviewed people about life in the logging camps. Then, one day out of the blue, an email arrived at the EIA office in Peru. It came from an Italian immigrant in Iquitos named Francesco Mantuano, who said he had been duped into buying a logging concession for what he imagined would be a lazy jungle retirement. Instead, he found himself entangled with the “wood mafia,” as he called it, in a deeply dishonest business that was sweeping away the rain forest “in a maelstrom of semi-slave exploitation, social and environmental changes … and looting of biodiversity.”
Urrunaga was suspicious at first. “Maybe someone was sending us ‘the perfect case’ to lead us to a horrible mistake,” she says. But she was also curious, so she and Johnson headed to Iquitos. They found Mantuano—“a rail-thin, wildly gesticulating Italian,” Johnson says—with a friend, an Iquitos native. The two men spent their afternoons sipping coffee and smoking in sidewalk cafés, “as though Iquitos were Milan and not this chaotic frontier river city where the mufflerless moped taxis drown out anything you say whenever the light turns green,” she adds. Urrunaga and Johnson joined the two at their habitual café to hear out their tales.
According to Urrunaga, Mantuano said he had bought into a concession with large stands of trees approved for harvest by the national forest authority. But when timber crews showed up, they left far too quickly to actually have cut the trees they had supposedly purchased. Then the timber merchants expected him to hand over transit documents for large amounts of lumber. The intent, he gradually realized, was to launder timber that had already been illegally cut elsewhere—places like national parks, indigenous community lands, and other protected areas.
Mantuano launched an indignant letter-writing campaign to explain all this to officials in Lima and Washington. But his efforts produced no investigation until Johnson and Urrunaga showed up. Mantuano’s story backed up what the EIA was already beginning to suspect: The logging industry’s basic operating method was to cut down trees on protected lands and then produce falsified permits, either purchased on the black market or via corrupt government officials. The permits typically listed legal sites—but ones that often were remote, or sparsely forested, and thus wouldn’t yield big profits. Meanwhile, Peru’s Amazonian rain forests were being destroyed at a rate of 400,000 acres every year—an area larger than the city of Los Angeles. The women could piece together the pattern. But there was a hitch. After a tree was cut down and loaded onto a ship for export, there was no way to prove where it came from. As they compared Mantuano’s documents and data with their own, Johnson and Urrunaga started thinking: Why not prove where the trees didn’t come from? The key was to compare export documents detailing where protected species, like mahogany and cedar, were supposedly harvested with Osinfor inspections of those areas.
The remoteness of the place made cutting timber there about as
practical as harvesting trees on the moon.
It took nine months of pestering government officials in Lima, but finally the EIA received “thousands of pages of crappy photocopies,” Urrunaga says. As they waded through them, Johnson and Urrunaga could see, for the first time, where the trees had supposedly been harvested, right next to data on the ships that had sailed away with that wood. Some of those areas—like the most remote parts of Mantuano’s concession—hadn’t yet been inspected by Osinfor. Now they would just have to follow the paper trail back to the forest themselves.
With data from one of the ship’s many voyages in hand, Johnson set off on a field trip. It took her three days by boat upriver from Iquitos, then a day of hiking into land owned by an indigenous community, and another two days slogging deeper into the forest, trying to find a way around—and then across—a dense, almost impassable palm swamp. Exhausted, drenched in sweat, and wiping swarms of insects from her forehead, she finally reached the harvest location. Cedar trees from the site had supposedly been exported to a company named Global Plywood & Lumber, incorporated in Las Vegas, but no one had ever cut trees from anywhere around her. The remoteness of the place made cutting timber there about as practical as harvesting trees on the moon. There was no way the export companies were getting their wood from sites like this one. “We had set out looking for one shipment” to prove the wood being exported from Peru was illegal, Urrunaga says. “We found 100.”
Until then, most of the government officials the two women had tried to work with had been “very hostile, very aggressive” when the EIA team approached them about illegal logging, Urrunaga says. But at a meeting with Rolando Navarro, the newly appointed head of Osinfor, she and Johnson laid out evidence that “the entire system is corrupt,” Johnson recalls. “He said, ‘You’re right.’” Navarro had grown up in a river town, and he knew how loggers operated. He had worked with the World Wildlife Fund in Peru helping local communities find alternatives to illegal logging. He also knew, from Osinfor field inspections, that the documents listing the supposed harvest sites didn’t make sense. The women, Navarro, and the Peruvian customs officials they were working with realized that by homing in on suspicious exporters, they’d have a better shot at making a bust.
Eventually, customs officials asked Interpol for help, which allowed Navarro’s agents to expand their investigations. That meant they could get more documents and slog through more forests. Finally, in 2015, a multiagency team released its report: It found that about 90 percent of the wood coming out of the Peruvian Amazon was illegal.
But “stopping the shipments and putting people in prison, that wasn’t happening,” Urrunaga says. The Yacu Kallpa kept sailing with what seemed like its old impunity, making four trips in 2014 and three more in the first half of 2015, carrying timber on its regular route to Tampico and then Houston.
To stop the shipments—to stop the Yacu Kallpa—Navarro pressed for his field agents to get transport documents earlier, while the timber was still being loaded, so they could demonstrate there was enough of a mismatch, enough deceit, to stop it before it set sail—or at least before the timber landed on the docks in Houston. So throughout early 2015, customs agents got better at extracting documents from the exporters, while Osinfor agents got more efficient in their field checks.
Soon after the ship left Iquitos for its August 2015 voyage toward Houston, Peruvian officials sent word to US investigators: A significant percentage of the timber aboard was of illegal origin.
Back in the States, the Department of Justice was just settling its illegal logging case against Lumber Liquidators and was eager to build on that success. But everyone wanted to tread carefully, as the investigation into the Yacu Kallpa could affect trade agreements between the two countries. To complicate matters, Urrunaga had been working with an Al Jazeera reporter and television crew on a story about the use of fake export documents in Peru’s logging trade, and in August the network aired its story. Prosecutors and investigators worried that it could blow the case.
In the Al Jazeera broadcast, a reporter doorsteps Kenneth Peabody, the general manager of Global Plywood, at his home near San Diego. The company had been selling Amazon rain forest timber into the US market for at least eight years, in steadily increasing quantities. Its business with a Peruvian exporter named Inversiones La Oroza had surged from $250,000 in 2012 to $2 million by 2015. Standing in his driveway, a Honda minivan on one side and a Mercedes Benz SUV on the other, Peabody looks like a soccer dad—middle-aged, in black shorts, a gray CATHEDRAL CATHOLIC DONS T-shirt, sunglasses, and a two-tone Nike golf cap.
“I’d like to talk with you about shipments of illegal wood your company is importing from Peru,” the reporter begins. He’s lean, hunched, and dressed in the shabby manner of journalists everywhere.
“Ah, I don’t have anything to say about that,” Peabody says, glancing down and then turning away to the SUV.
“According to Peruvian authorities,” the reporter continues, “your main supplier, this company called La Oroza, has been shipping many shipments of illegal wood to your company. I’ve got three of them here,” he adds, holding out some paperwork. “You don’t know about this?”
“I don’t know what you’re showing me,” Peabody says, turning back now.
“These are the documents of shipments sent to your company by this company in Peru,” the reporter explains.
After the reporter reveals that he has been to the tree harvest sites and seen no harvested trees, Peabody swallows and shifts his keys in his hand, ready for his exit.
“Do you know about the Lacey Act?” the reporter persists.
“Of course. We comply with all the requirements,” Peabody says with a dismissive sweep of one hand. The two of them go back and forth for a moment longer. Then Peabody gets into the SUV, the corners of his mouth compressed in disgust, and drives off. (Peabody declined to speak to wired. La Oroza, reached in Iquitos, denied any wrongdoing.)
Remarkably, the Al Jazeera broadcast did not stop the Yacu Kallpa from sailing on. As it neared Houston in September, agents from Homeland Security gathered. When the ship finally settled in port, they boarded and set about inspecting the cargo. Then they issued a temporary order “detaining” the timber—denying, at least temporarily, its import into the US market—and put the wood in a storage facility at the port in Houston.
A few days later, in early October, according to an affidavit from a Homeland Security investigator, a man in the dock area was directing forklift operators to move bundles of timber. It was Peabody. He’d flown in from California. Confronted by federal agents, he told them that Global Plywood owned 85 percent of the wood the Yacu Kallpa had just delivered, and it was the largest shipment in the company’s history, worth $1 million. An official of the port told Peabody that customs agents would be taking samples of the shipment to verify that the timber species on board matched the timber species listed in the paperwork required under the Lacey Act. A week later, Peabody sent in revised paperwork that added another 40 tree species for this shipment.
It seemed like the end of the run for the Yacu Kallpa. But then, as if out of irresistible habit, the ship turned around and headed back to Iquitos to pick up another load.
By 2015, it had been six years since the Peru free trade agreement, with all its environmental commitments, had gone into effect, and trade between the United States and the South American nation had almost doubled, to $20 billion. It promised to get even bigger under the upcoming Trans-Pacific Partnership. But the Yacu Kallpa was quickly turning into a test case of whether the environmental commitments in free trade treaties amounted to anything more than words on paper. For critics, the ship was a big ugly billboard advertising the utter failure to stop the illegal timber trade. Potentially at stake: free trade between the two countries, and Peru’s already precarious economy.
At the same time, Urrunaga was hearing from her government sources that the lumber bosses were putting pressure on cabinet ministers to rein in Osinfor. Angry workers were taking to the street. Logging, after all, made the livelihoods of thousands of Peruvians. “The economy in Loreto moves because of logging,” Navarro says. Demonstrators staged noisy, sometimes violent protests, driving logging company trucks and tractors to the agency’s offices and carrying banners: osinfor works for the gringos. One inspector received a photograph over WhatsApp of his 1-year-old daughter in her stroller at a local park. The note said simply, “I am from Ayacucho,” birthplace of the brutal 1980s militant group Shining Path. That same week, demonstrators showed up at Navarro’s office in Iquitos carrying coffins, one of them bearing his name. Even after changing his phone number, the threatening calls rang through: “We know where your family lives.” At 3 am on November 30, two men in hoods tossed Molotov cocktails into the front of the agency’s office in Pucallpa, another logging town. “To get rid of people who are in the way is the normal thing to do,” Navarro says.
In late November, the Yacu Kallpa was loading up in Iquitos, and Osinfor agents were once again scrambling in the field. By the day before the ship was scheduled to depart, the agents had found that 15 percent of the timber coordinates were faked. A customs agent in Iquitos rushed a summary of the investigation to the local prosecutor—who hesitated. “You want me to prosecute them based on where the timber in the shipment didn’t come from?” he asked, incredulous. The details about what happened next are murky, but according to news reports and Navarro, the prosecutor wasn’t even sure he had the authority to stop the ship from leaving. The agent cajoled and bantered with him until 11:30 that night, reminding him that just weeks earlier, the nation had adopted a decree authorizing a prosecutor to seize a timber shipment on suspicion of illegality. Finally, the prosecutor agreed to meet the agent, before dawn, at the Iquitos dock—if Osinfor could provide all the documents from the investigation. Osinfor’s agents spent the next four hours printing out documents, downloaded via the creaky Iquitos internet.
The reluctant prosecutor and agents from Osinfor and customs arrived at the port before the sun had risen. Iquitos is a small city, and word had gotten out. A platoon of timber company lawyers and managers followed on their heels. Word also reached Urrunaga, who soon had someone recording the scene. The discussion raged—a representative of the regional forest department wanted the ship to get under way—but the prosecutor pointed out that he was in charge. Arguments went around for hours until finally the captain said, “OK, take your 15 percent”—meaning the illegal wood. Reports say the prosecutor was told that the cost of offloading the timber would be $20,000. It then took him days to obtain the necessary permissions, but when he returned to the ship, the price was suddenly more than $200,000. The Iquitos prosecutor finally agreed to accept a declaration from the captain that the ship would bring the allegedly illegal 15 percent of its cargo back after dropping off the rest. So on December 2, the Yacu Kallpa weighed anchor and turned downriver at full speed.
In the EIA offices in Washington, Alexander von Bismarck and other staff immediately went on alert. They could track the ship’s movements minute by minute, as the Automatic Identification System that all cargo ships must use pinged its location, bearing, and speed. Government agents in Peru, the United States, and at Interpol were watching too. When the ship crossed into Brazil, police there, responding to a call from a prosecutor in Lima, boarded it briefly. But they had no Lacey Act nor any other means of real enforcement. The ship pushed on, with captain and crew now aware that everyone was watching.
Osinfor investigators were also pushing, heading deeper into the forests, working their way down the long list of GPS coordinates for the cargo. By mid-December, as the ship made its way north along the Atlantic coast, the investigators sent word to law enforcement agencies in Lima and the US: More than 60 percent of the cargo was illegal.
On December 20, the Yacu Kallpa paused unexpectedly in Trinidad and emerged again in the new year—suddenly under a new flag of convenience. “I thought I was going crazy,” says an EIA technician who was tracking the ship when the flag of Panama popped up on his cell phone.
On January 3, the Yacu Kallpa made a beeline for the Dominican Republic and began to unload its tainted cargo. “Meaning we lose,” von Bismarck says. An EIA staffer called a photographer friend in Santo Domingo and persuaded him to get to the scene and start recording. But then international pressure came down on the Dominican government, and the Yacu Kallpa sailed on—“Meaning we won,” von Bismarck says. The ship staggered onward, jinked briefly toward Jamaica, then reluctantly turned back on its familiar course, heading toward Tampico.
On January 8, agents sent out a new field report: 72 percent of the cargo was illegal.
One day in mid-January, as the ship was still en route, Navarro had a meeting in his office with two lumber trade association representatives, one of whom he later found out was also the CEO of Global Plywood. The men lamented that they had never had such trouble in 30 years of buying timber in Peru. “Yes, that’s probably the case,” Navarro said, “and we have nothing against private investment.” But, he told them, the evidence was showing that even shipments with apparently legal documents were coming from illegal sources.
As they talked, the businessmen periodically checked their cell phones. Then, abruptly, they announced that they had to leave. A few minutes later, Navarro found out he had just been fired by the president of the country. Four days later, feeling vulnerable without the protection of public office, he fled to the United States. (The Global Plywood executive did not respond to requests for comment.)
On January 26, 2016, at 8 pm, the Yacu Kallpa limped into Tampico. At the request of Peru, the US, and Interpol, Mexican officials seized roughly 8 million pounds of rain forest timber. When its holds were finally empty, the ship anchored in the harbor—and waited. A month later, the hapless crew was still onboard, abandoned 2,500 miles from home, unpaid, and requesting help and food. Finally, at the end of February, the Peruvian embassy intervened and brought the men home. The owners of the ship, based in Lima, liquidated their assets and abandoned the Yacu Kallpa in Tampico, according to a former employee. The Mexican government assumed ownership and reportedly plans to use it as some kind of training ship.
That May, a potential timber buyer from Shanghai phoned Peabody, the Global Plywood manager, and said he’d read about the case in the newspaper and wanted to sell the wood still stuck in Houston into the Chinese market. Peabody flew to meet the buyer at a Chinese restaurant in Vancouver. Even though the wood couldn’t be imported to the US, Peabody could theoretically still sell it elsewhere. He warned the prospective buyer that any sale might be complicated by the US government. The buyer sought reassurance that Global Plywood’s suppliers in Peru could be trusted. Peabody smiled. “We trust them to do what they need to do to get by in Peru,” he said. The customer, operating under a false identity and with a video camera recording, was of course an undercover agent with the EIA.
Many months later, final reports on the ship’s last voyages were complete. For the August shipment—the one impounded in Houston—it would show that at least 92 percent of the 3.9 million–pound haul was illegal. As for the vessel’s final voyage, it took nine months for agents to complete their field checks of all the GPS sites listed on the harvest documents. They found that more than 96 percent of the ship’s cargo had been illegally harvested from the Amazon rain forest and sent north.
The ship paused unexpectedly in Trinidad and emerged again in the new
year—suddenly under a new flag.
In June of last year, federal agents showed up at the one-room office of Global Plywood, next to a volleyball court in a San Diego suburb, with a warrant to haul away paperwork, Peabody’s cell phone, and copies of computer hard drives. Peabody later emailed the “potential buyer”—the EIA’s undercover agent—to say that any possible deal was off the table. In the end, all the illegal lumber in Houston was destroyed earlier this year in a no-fault settlement with US Customs. A criminal investigation is ongoing, but so far no charges have been filed.
After more than four years and the work of hundreds of people, one offending ship responsible for carrying millions of pounds of illegally harvested wood into the US market had been stopped. It was a tremendous victory. But it was limited.
This past January, within days of taking office, President Trump pulled the US out of the Trans-Pacific Partnership. It was no longer clear just how much it mattered whether trade partners stood by their environmental commitments. Von Bismarck’s biggest concern was that timber importers in the United States would now persuade the administration to roll back the Lacey Act ban on importing illegally harvested lumber. That may not matter for the rain forests of Peru; China has now become the leading export destination for Peruvian timber, and it puts far fewer environmental conditions on its massive market for timber.
Von Bismarck says the EIA will also adapt. In fact, the agency is already developing a system to monitor forests worldwide by satellite, with updates every few days. Meanwhile, Osinfor agents continue their field inspections.
One day a few months back, in his office, von Bismarck rolled a video taken from a DJI Phantom 3 quadrotor drone. It showed two Osinfor agents in hard hats, traveling in a local man’s dugout, to check one of the GPS coordinates listed for lumber on the Yacu Kallpa’s final shipment. There was no sign that a tree could have been felled in the area, and one of the agents sprayed no e, for no existe, in blue paint on a grassy hummock. The men paddled slowly onward to the next GPS point. Then the drone pulled back to reveal that the site was in fact a vast, grass-fringed lake, glittering in the sun, with not a forest in sight and where none had ever grown.
After this piece appeared in print, the United States government blocked future timber imports from Peruvian exporter Inversiones La Oroza for up to three years.
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Additional reporting by Gregory Barber and Blanca Myers.