Priceonomics

According to a popular story, when Ronald Reagan called the Animal Kingdom pet shop at Harrods, the luxury London department store, and asked if the store sold elephants, the agent on the line replied, “Would that be African or Indian, sir?”

As of this year, the world famous store closed the Animal Kingdom to make way for more racks of women’s apparel. A London tabloid dubbed its closing the end of “one of the most extraordinary eras in retail history.” For decades, Animal Kingdom was a fantasy come to life. The above story appears to be a myth -- Reagan actually received a baby elephant from Harrods as a gift from the exiled crown prince of Albania, who lived in California when Reagan was governor. But wealthy Harrods customers did buy lion cubs, rare birds, and even an alligator. The Daily Telegraph quoted a patron: “It’s a great shame, it’s a London institution and an amazing place to go.”

Animal rights groups cheered the news, although no more than the closing of any pet shop. (They prefer responsible breeders and rescue operations.) The Animal Kingdom lately featured mostly a pet spa and overpriced animal collars. Due to increased animal welfare concerns and legislation such as the Endangered Species Act (passed in 1976 in Britain), more commonplace dogs, cats, and hamsters long ago replaced lions and elephants on the store shelves.

Patrons and store representatives described Animal Kingdom as emblematic of a past that contrasts with today’s concern for animal welfare and appreciation of endangered species. Yet the attitudes that put lion cubs on store shelves is not completely gone. The most well known example for Americans is the former boxer Mike Tyson, whose ownership of 7 tigers inspired jokes in the movie The Hangover. Rather than being an outlier case of an eccentric celebrity, however, the purchase of exotic animals is a multi-billion dollar industry straddling the border between legal and illegal. 

More Than Pets

Exotic pets retain fringe appeal. Owning a pet tiger is the ultimate status symbol in some circles -- Mexican authorities are finding it challenging to deal with all the monkeys, tigers, and zebras kept by the heads of busted drug cartels. A Texas businessman who bought a chimp and dressed it in a suit to amuse clients offers an example of gimmicky rare animal ownership. 

But the black and gray markets for rare and exotic animals goes far beyond pets. Trophy hunters in Florida pay to kill water buffaloes and antelope; Chinese dealers pay several thousand dollars for the gall bladders of bears and use their bile in traditional Chinese medicine; and dead tigers fetch prices of $10,000 between restaurants that sell their meat and individuals that wear their pelts or display their heads. The general flow of animals is from biologically rich regions, particularly in Southeast Asia, to the Unites States, Europe, and China.

Media stories often describe the illegal wildlife trade as a $10 to $20 billion industry, bested only by the black markets for narcotics and weapons. According to investigative journalist Bryan Christy, however, no one really knows the size of the market. His attempt to trace the figure to its source led to Interpol, which previously tried and failed to ballpark the exotic animal trade. The market brings in billions every year, but no one really knows its full scope.

Part of the reason that the size of the wildlife trade resists official estimates is that it blends so well into the legal buying and selling of animals. 

The Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), establishes the border between the legitimate and illegitimate animal trade. The treaty, which has over 175 signatory countries and entered into force in 1975, created 3 tiers of protected animals. Animals in the top tier rank among the world’s most endangered and cannot be bought or sold. The trade of animals in the second tier is regulated by systems of limited permits. Tier 3 animals operate under a similar permit system, but only when exported from a country that requested help protecting its domestic population of a species. 

In Christy’s words, however, “The CITES treaty has one gaping exception: Specimens bred in captivity do not receive the same protection as their wild counterparts.” This means that poachers and traffickers can camouflage their activities as the legitimate (if not exactly celebrated) trade of bred-in-captivity animals, which makes the exotic animal trade much more difficult to regulate.

One of many YouTube videos that went viral showing the reunification of "Christian the Lion" with the two men who bought him as a cub from Harrods in 1969, raised him, and gave him to a conservationist who introduced him into the wild.

From Animal Mules to Zoo Fronts

The flow of animals from the wild to wealthy homes, markets, and trophy hunting preserves resembles that of illegal drugs. 

Just as farmers and producers sell to big-time dealers, poor hunters and farmers sell rare animals up the food chain to traders and then traffickers. (Less frequently, major dealers send their own poachers disguised as tourists.) People working as mules often transport animals across borders. Mules have been arrested with suitcases full of reptiles. Law enforcement at Los Angeles airport took a man with 15 live lizards strapped to his chest into custody. Other dealers ship crates full of animals (or animal products like bear bile or the beaks of rare birds) through the mail and fake shipping documents or pay off customs and postal employees.

It’s these tactics that lead animal rights groups to cite the inexact if potentially apt statistic that for every 1 exotic pet, 10 died in transport

The trick to profiting off the wildlife black market at scale is laundering wild animals through zoos and accredited institutions that give the animals the illusion of being bred in captivity. Thanks to the CITES loophole, the transport and sale can be legal and even follow exemplary standards for animal care. 

Anson Wong, the kingpin trafficker profiled by Bryan Christy who boasted “I could sell a panda,” excelled at this. He previously ran a legitimate business selling frogs, lizards, and geckos to pet shops around the world, which gave him a cover for animal transport. The zoo he ran in Malaysia (where he lived) also provided legal cover to claim poached animals were bred in captivity and to transport rare animals. In addition, Wong used outside breeding sites, fake or real, to paint a poached animal as a legal one and fudged paperwork. If all else failed, he dissuaded customs from discovering his rare specimens by surrounding their crates with boxes full of poisonous or aggressive animals. Wong also could reportedly enforce his deals “using Chinese muscle.”

Most importantly, Wong had the friendship and cooperation of Malaysia’s customs and Department of Wildlife and National Parks. (Wong boasted about it to agents in a sting operation, and the number 2 in the Department of Wildlife, which helped Wong fund a zoo after his release from prison for animal trafficking, described him as a “friend”.) In an interview, Wong explained to Christy that bribing Malaysian customs to look the other way and the Department of Wildlife to certify his zoo and sign his CITES paperwork allowed him to operate with impunity.

Wong’s practices are generalizable for other traffickers. Zoos, captive breeding sites, and legitimate animal businesses serve as a front for animal trafficking and -- especially if complemented by a friendly customs and wildlife department -- the means to create a seemingly legitimate paper trail for smuggled animals. Christy writes:

As long as a few countries are willing to bend the rules and fudge some paperwork, it doesn't really matter what everyone else does: A single country, even a single wildlife enforcement official, can undermine the entire global “system" to control trafficking.

Risk Free Crime

The exotic animal trade can be lucrative. Dealers can sell a komodo dragon for tens of thousands of dollars. A dead tiger for $10,000. An animal trafficking business set up as part of a sting operation to take down Anson Wong did half a million dollars worth of deals over 5 years. During that time, Wong offered products including “20 Timor pythons for $15,000” and a Spix’s macaw, a critically endangered bird worth $100,000 on the black market. 

Bryan Christy describes the appeal of trafficking animals as “profit margins [that] drug kingpins would kill for” and its status as quite possibly “the world's most profitable form of illegal trade.” Exact margins aren’t known, but a few factors help explain why Christy believes this.

One is that with habitats shrinking, animals’ values are increasing with their increased scarcity. At the same time, the (mostly) developing countries where the majority of popular species can be found often lack the resources to protect them. The contrast of the animals’ high values to locals’ low incomes makes poaching hard to control, and preserves without strong protection can essentially reduce the cost of poaching by making rare species easy to find. 

The great appeal of animal trafficking, however, is that the risks are so low. Although law enforcement could charge traffickers with money laundering, smuggling, and breaking foreign and international trafficking laws, Christy describes the penalties as typically “no more severe than a parking ticket.” He explains that “For too long in too many countries (including the U.S.), placing the word ‘wildlife’ in front of the word ‘crime’ diminished its seriousness.” 

Compared to the armies assembled to fight the war on drugs, wildlife anti-trafficking efforts can count on only one agent in the CITES Secretariat, one INTERPOL employee managing its wildlife-crime program, and a handful of American federal agents devoted to special operations like the sting operation that led to Wong’s arrest in 1998. That sting -- an unprecedented, 5 year operation with the goal of making an example of Wong -- led to a sentence of 71 months in prison and a fine of $60,000. (The maximum sentence was 25 years in prison and a $750,000 fine.) That’s fairly modest for the largest player in a black market offering millions of dollars (if not tens of millions) in annual profit.

Complicity at Home

A baby elephant at the Taronga Zoo. What's his retirement plan? Credit: Flickr user The Waterboy 

The flow of the wildlife trade is generally from biologically diverse Southeast Asia, Africa, and South America to the United States and several other wealthy countries. But the intrepid efforts of investigative journalist Alan Green led to the discovery of an unexpected supply line closer to home: America’s zoos and research facilities. 

Green first became interested in the story while conducting research for an article about the Reston Petting Zoo, which has a poor reputation for its treatment of animals. He discovered an animal health certificate showing that the National Zoo had sent animals to Reston. Green -- who loved zoos enough that he nearly switched careers after volunteering at one for years -- worried that animals from prestigious zoos might face grisly ends, and he decided to track the path of animals leaving the country’s zoos. 

Zoos once bought and displayed animals with the same carelessness as Harrods’ Animal Kingdom. And even today, in most cases, there would be nothing illegal about zoos selling surplus animals to small, “roadside” zoos with poor conditions. Since wildlife regulations rarely apply to animals bred in captivity, zoos could legally sell orangutans to Donald Trump’s chef. 

Contemporary zoos’ rhetoric, however, stresses the humane treatment of animals and the preservation of endangered species. It’s key to their legitimacy as educational nonprofits. So the accrediting organization for zoos, the Association of Zoos and Aquariums (AZA), sets guidelines about the acquisition and disposition of animals. 

Following its policies, zoos mainly acquire their animals through breeding and loans with other zoos (often to match breeding pairs). Rescues or donations from nature preserves are an option. Capture of a wild animal is regulated but not totally banned. 

Animals leave zoos through these loans or donations to other zoos, as well as the occasional release into the wild. Euthanization is allowed only when it alleviates the animal’s suffering, and giving or selling an animal to an animal auction, private collector, or hunting preserve is banned. Other zoos and individuals can only take zoo animals if they are accredited and will care for the animal. 

Zoos, as well as some research institutions, coordinate these trades on Animal Exchange (a newsletter when Green investigated in the mid to late 90s -- now an online database). But more than just the top AZA zoos and research institutions contribute to Animal Exchange. When Green investigated, he found that breeders, dealers, and “roadside” zoos could all participate, if properly credentialed.

But as Anson Wong has shown, achieving a veneer of respectability is a key part of the exotic animal trade playbook. Green writes in his book Animal Underworld:

By artfully exploiting loopholes in the Endangered Species Act, exotic-animal dealers have rendered some parts of the law virtually meaningless, turning protected species like tigers, snow leopards, and lemurs into just more pet-trade fodder. And the dealers have done so with an unlikely set of partners: the nation's zoos, research centers, and universities, which keep them well stocked with their endangered surplus. 

Green starts his book with the example of a baby giraffe named Amber at the National Zoo. Amber proved a hit with guests -- zoos refer to giraffes, along with animals like tigers and pandas, as “flagship species” since they are admired and not shy around guests. Two years later, however, guests only had eyes for Amber’s new brother Aaron, and zoo employees worried that Amber would harm her younger brother or cause inbreeding due to the advances of her father.

So, the National Zoo advertised Amber on Animal Exchange. At the time, however, over 40 zoos had giraffes advertised in the newsletter. Given the surplus, no AZA zoos wanted Amber. This meant that Amber, like many other surplus animals, could be sold to other breeders, dealers, and roadside zoos that participated in Animal Exchange.  

Green found that some animals like Amber end up in roadside zoos that, in AZA parlance, prioritize entertainment without balancing it with animal welfare and conservation concerns. Another giraffe sold to such a zoo died of a broken neck at a zoo where animals often froze to death. Other animals went to dealers and experienced the same fates as animals trafficked by Anson Wong. 

Over years of research spent driving to state agriculture departments to search for animal health certificates, sending in Freedom of Information Act requests, and even literally following sold animals hundreds of miles from zoos to the dealers that purchased them, Green discovered how animals went from prestigious zoos to accredited but unscrupulous institutions and dealers that sold or auctioned them to trophy hunting preserves, private dealers, and restaurants selling exotic meats. One reviewer writes:

One mountain lion [Green] writes about ended up in private hands and was confined--for months--in an oil drum. Primates find themselves in squalid, cramped pens in roadside pet stores. Coyotes are rounded up by the thousands and sent to "fox camps," where hunters train their dogs to kill. Bears are sent to a Chinese bear farm, where bile is harvested from them through shunts implanted in their gall bladders.

In cases where animals from prestigious zoos are, say, discovered to have been sold to dealers who auctioned them off to hunters, zoo directors express shock that a certified institution acted in such a way and commitment to preventing a recurrence. 

But Green sees willful ignorance. He gives the example of a dealer named Burton Sipp, who owned a pet store and petting zoo and self-described as an animal rights activist. Sipp had a history of insurance fraud and the New Jersey Division of Fish, Game, and Wildlife had records of him auctioning off animals or selling them to pet owners. Nevertheless, AZA zoos and research institutions sold him surplus giraffes, ring-tailed lemurs, sable antelopes, and exotic birds. AZA guidelines make zoos responsible for ensuring that animals go to responsible owners, but doing so thoroughly would force zoos to face hard choices about what to do with surplus animals if they can’t be dumped off to the exotic animal trade. The result, according to Green, is that zoos act as an additional supplier to animal traders.

Endangered Yet Plentiful

When Green published his book, the National Zoo’s public affairs director described Green’s muckraking as the 1% of poor outcomes that are inevitable in a large bureaucracy. He insisted that 99% of the time, the AZA guidelines ensure good outcomes for animals. And it has now been 15 years since Green published Animal Underground

Certainly the picture Green paints is of a systemic problem. But it’s hard to evaluate the National Zoo’s rebuttal, or to know whether zoos continue to act as suppliers to the exotic animal trade today. Piecing together the paper trail of surplus zoo animals (or the “laundering” of animals as Green calls it) simply required an inhuman effort by Green.

In all, the work of the agents that brought down Anson Wong and investigate journalists Bryan Christy and Alan Green reveals the inner workings of the exotic animal trade. At its heart, the seeming inevitability of the illegal wildlife trade is due to the same disproportionate incentives that govern special interests in politics: The beneficiaries of preserving biological diversity are decentralized and benefit indirectly while traffickers have extremely strong, direct incentives to plunder nature for valuable specimens. 

The result is a paradox. Since the United States passed the Endangered Species Act in 1973, advocates have worried about a lack of progress. Only 28 out of 2,000 endangered species have been delisted due to recovery. Despite their rarity, however, these species are all available on the black and gray markets. As Green related in the course of his research:

"Everybody always says, the 'rare white tiger. They're not rare. I'll find you one tomorrow. Give me 500 bucks, I'll go buy you a white tiger. Tiger cubs sold at auction in Missouri last April fetched $250. Go find a golden retriever that runs for $250 bucks."

Or as "lizard king" Anson Wong told an American agent, “I can get anything here from anywhere. It only depends on how much certain people get paid."

This post was written by Alex Mayyasi. Follow him on Twitter here or Google PlusTo get occasional notifications when we write blog posts, sign up for our email list.


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