An internal audit by the U.S. Forest Service says the federal agency mismanaged two timber sales. The report blames pressure to meet timber harvest targets. Mistakes meant $2 million less for habitat restoration work on the Tongass National Forest. Auditors also found the sales failed to outline planned restoration work and potentially violated conflict of interest rules among other findings.
The August 2020 internal agency audit found problems with the oversight and administration of two large timber sales in the Tongass National Forest in Southeast Alaska. The report only saw the light of day after Public Employees for Environmental Responsibility sued for it.
Jeff Ruch, Pacific director of the Maryland-based watchdog group, said the report only tells part of the story.
“The report concludes that the problems were motivated by pressure to meet timber sale quotas but doesn’t explain pressure by whom, what about that pressure, how was it manifested, which officials were responsible,” Ruch said. “That sort of cryptic, unspecific kind of finding makes it difficult for the Forest Service to use it as a basis for reform.”
The report was done by an oversight branch of the Forest Service’s Washington office. It reviewed the Big Thorne Stewardship Contract, awarded in 2014 to Viking Lumber on Prince of Wales Island. It found the agency underestimated the volume of timber by more than 10%.
That matters because the Forest Service isn’t legally allowed to put out timber sales that don’t pencil out for companies. If the cost of getting wood out of the forest is more than the lumber is worth at market, it’s a no go.
The report said the agency lowballed the timber, “making it possible for a positive value, and ultimately helped the Tongas and the Region obtain its annual timber sale goal.”
In the end, to avoid a lawsuit from Viking, the agency effectively reduced the overall contract amount to around $2 million.
The agency also reviewed the state of Alaska’s Good Neighbor Authority Agreement from 2017. That agreement allows the state’s Division of Forestry to do the preparation, administration and oversight for logging on federal lands.
Under the pact, nearly 30 million board feet on Kosciusko Island in southern Southeast were awarded to Alcan Timber of Ketchikan. Auditors were concerned by potential conflicts of interest: The same unnamed person who did the state’s appraisal later contracted with the purchaser to do preparation work for logging. The report said that would give the individual the ability to gain financially based on privileged details of the sale.
Alcan’s Eric Nichols said a state employee with 40 years of experience in Southeast Alaska did the appraisal, and retired from the state after it was awarded to Alcan. Then, according to Nichols, the appraiser got an ethics clearance from the state and started a forestry consulting company doing timber sale layouts, adding people with the necessary experience are “very hard to find with the downward spiral of the timber industry.”
The Forest Service’s report also notes problems with the state’s software for estimating timber and valuation of trees, and said the 2017 agreement omitted the habitat restoration work supposed to accompany logging.
Environmentalists seized upon the critical audit to question the Forest Service’s timber management practices in the Tongass.
Sally Schlichting, with the Southeast Alaska Conservation Council in Juneau, said the 20-page audit’s findings are concerning.
“They really call into question whether the other timber sales that the Forest Service has planned are being properly developed and whether there are other issues out there with other timber sales that are not being properly managed,” Schlichting said.
Forest Service officials declined an interview, but in a statement the agency said it’s updating its policies to clearly define roles and responsibilities, strengthen internal controls over timber sales, improve oversight of the program, and provide additional training for employees.
Unlike a prior agency analysis, the report didn’t find low-value hemlock was being left uncut in the woods, but said “the contractor is cutting every decent hemlock in the forest.”
The report also didn’t include any mention of the Tonka timber sale near Petersburg that was flagged in prior internal reviews for sale oversight problems.
State forester Chris Maisch was not available for an interview Monday. An agency spokesperson referred questions to the Forest Service. The timber industry group Alaska Forest Association also declined to comment.
Correction: An earlier version of this story misstated the impact of the lost value from the timber contract. The $2 million reduction is not paid by taxpayers but impacts the habitat and restoration work that could happen on the Tongass National Forest.