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Stephen Taufen

We bring you Victor Smith, champion of fishermen and public rights

March 24th

Ocean Reform School Needed:

Groundswell once again brings you Vic Smith's insightful voice speaking more truth to power: so that you may bear Witness to the need for more law enforcement, again. But first, let's discuss the so-called United Fishermen of Alaska association.

UFA has re-elected Bobby Thorstenson Jr. to its "presidency" and Joe Childers replaced Jeff Steele as vice president - that's it! It's time for the courts to issue an injunction against them using the word "fishermen" in the association's name. Considering its membership list, by substituting "racketeer facilitators" instead, you'll get a bit closer to the truth than their public relations facelift of late. Don't be fooled.

Just look at the "Mission" and "Statement policies" of UFA and you'll understand why it is a prime example of how Structure Implies Strategy - and in this case, that nefarious strategy is to prevent Alaskan fishermen from being truly united and climbing up the economic ladder independent of the whip of the processing segment.

The strategy is to avoid anyone breaking up the price-fixing mechanics in place. Why any true fisherman belongs to UFA is a complete mystery! But, let's not criticize without examining the problems, and guiding to solutions. The basis of the UFA policy-defined problems is its mission and policies approach, re:

1) It's a utopian idea (or childish notion) that all components of the fishing industry actually have a "common interest" - they do not and lender liability law, antitrust laws, and other factors illuminate the truth that fishermen should look out for their independent small business economic self-interests - that cannot be done when linked to the opponents' wrist.

2) To "remain neutral on allocative issues between commercial gear groups" is hardly an obeyed duty of the majority of members of UFA in their industry policy-dealings - what most of the members are after is a silencing of the fleets altogether. This served processors the best during the Salmon Task Force - when no price issues rose to the top; during rationalization, when no severe fight was put up, and cronies were supported; and during the Habitat move (as Vic illuminates so well); and during the governor's race, when UFA backed the wrong player and got no law enforcement (on price-fixing etc.) concessions in return.

3) UFA's "education" policy has been severely limited by its avoiding serious discussion or even mentions of Transfer Pricing and Price-Fixing and support for Antitrust investigations, or about organizing fishermen around their own marketing agencies protected under harvester-protecting antitrust law (you can't do that with this conflicted membership);

4) It's another myth that you can "protect consumer access to seafood by maintaining a stable supply of product to processors" - as that only serves processing masters to enslave fishermen to low prices, and serves lowest value product uses, destructs attainment of consumer-value focused economic efficiencies, and offers no hope to ever raise ex-vessel prices through creating new direct marketing that establishes 'comparable, uncontrolled prices.' It leads to key questions: Why not promote a fishermen-only owned vertically integrated corporation that distributes our own catches? Why is that never an option in crab rationalization or other schemes?
Now, back to Vic's watch-dogging. from April 2005, a reprint of the Fishermen's News' FROM THE FLEET piece:

There will be No Ocean Reform without Reform School for Senator Stevens' Ocean's Eleven

PART 1 - By Victor Smith

Coming soon to a fishery near you

Since about 2001, it's been clear that Alaskan seafood processors-with complicit backing from specific fishermen's association leaders-intended to use fleet reduction plans (like the recently approved crab buyback program) as the carrot in a bait-and-switch scheme to acquire Processor Quota shares (PQS).

Anyone who's followed this will remember that it was to be only for crab and only for safety. And anyone who's followed the spread of PQS will realize now that was baloney; PQS are about the money, and they are for every fishery their proponents can apply them to. For crabbers, the stick was forcing those remaining to join 'cooperatives' selling 90% of their catch to a few PQS holders. Crab rights "restructuring" and the fleet buyback plan were joined at the hip by a shared dependence on U.S. Senator Ted Stevens' power to forge Appropriation riders (in Omnibus spending bills) that legislated and funded the inseparable schemes. But Stevens doesn't deserve all the credit. Both of those deals were brokered through the National Marine Fisheries Service (NMFS) and the North Pacific Fisheries Management Council (NPFMC), who both answer to NOAA. So the policy is also NOAA's.

"It was pretty obvious from the way the promised crab buyback money kept disappearing that it wouldn't occur until PQS were secured for processors," said Oliver Holm, a former United Fishermen of Alaska (UFA) vice president. "At one point, the money got shunted aside for use to pay trawlers and processors for supposed losses from the sea lion closures. Kodiak pot cod fishermen suffered the greatest losses from those closures in our region and didn't receive a dime. Of course the pot cod fishermen weren't colluding with the processors like the trawlers were to lock up the resource rights."

"When I advanced a resolution, four years ago, against processor quotas in the Bering Sea Crab fishery at the UFA board [UFA president Bob Thorstenson, Jr.] came unglued. So did [UFA executive director] Tom Gemmel; he said 'It would ruin everything.' Later that same year, UFA approved 'salmon restructuring'. I was UFA vice president and had not been included in any of the discussions. The whole thing was obviously worked out by someone else."

Randy Babich, a widely respected seiner, told me that he had watched Thorstenson fishing fall chums in lower Hood Canal, well below quality cut off lines for other boats fishing for NorQuest, the company Thorstenson was selling to. When he inquired with another fisherman as to why there were no other NorQuest boats, he said they were not allowed to go below a Canal line, 12 to 15 miles further out, due to quality concerns. Thorstenson was getting this special treatment in Alaska, too, at a time when other fishermen were on strict limits.

Knowing this, I was concerned to learn that Thorstenson was at NorQuest's offices in Seattle in March of 2002. "He was just coordinating our positions for the Governor's Salmon Summit," quipped John Sund. Whose positions? It was NorQuest brass who had also just written several industry white papers seemingly intended to coordinate salmon processor's incredible market and pricing consolidation that put so many fishermen out of business that winter. And of course, NorQuest was a key player in coordinating the crab plan. It was the Salmon Summit that formally kicked off salmon industry restructuring and the Salmon Task Force, and where Thorstenson claimed the permits of his fishermen constituents didn't give them the right to fish.

"It was a setup," said Holm. "Get the UFA board to endorse the idea of restructuring and then the real control would be in the processor's hands."

"I was at first surprised at the opposition to my processor quota resolution from all the SE seine groups: Petersburg Vessel Owners Association (PVOA), Purse Seine Vessel Owners Association (PSVOA) and South East Alaska Seiners (SEAS)," Holm continued.

Surprised because at that time it appeared as if only a few fishermen's association executives were in on a dirty little secret that the eleven-member NPFMC - Senator Stevens' own Ocean's Eleven - had been seemingly rigged for a unanimous vote of approval for the BSAI plan that transferred rights to crab from fishermen to processors.

Conflicts of interest ran so deep and unchecked on the Council that the economic gospel endorsing PQS as the preferred option for the BSAI plan was written by an economist who referred to fishermen simply as parasites, or in his exact words, "those most egregious rent seekers."

The Council's unanimous vote wouldn't have been even plausibly credible if fishermen were opposed to it, so with the complicit aid of fishermen's association leaders they appeared to be colluding with, processors made sure fishermen didn't "wreck everything" by weighing in.

"It later became clear that [Southeast seiners] were expecting to get bought off by receiving a big buyback payment from Senator Stevens. They were evidently perfectly willing to sell out other Alaska fishermen for their payoff," Holm said.

Payoff and the rest of the story on the seine buyback

Details of the seine buyback became public knowledge on November 13, 2004, in Lynnwood, Washington, as nearly 80 members of the PSVOA attentively listened to executive director Rob Zuanich's discussion of the annual meeting's main agenda item: the Southeast seine buyback. Although the seine buyback originated with SEAS when its board made fleet reduction a priority in 2001, SEAS membership has sagged under the heavy-handed leadership of Thorstenson necessitating PSVOA's assistance.

In his short presentation, Zuanich expressed cautious optimism that seiners might get a fleet reduction plan before the start of the 2005 salmon season. He also expressed confidence that buyback could be kept under control, in U.S. Senator Ted Stevens' hands, despite jurisdictional protests from NMFS over its administration.

Then it became known that Ted's son, Alaska state senator Ben Stevens, was in the middle of the deal; a deal that has begun to look less like a payoff to seiners than a scam to funnel money into Ben's future Senate campaign war chest, and to support his continued efforts to transfer Alaskan state fisheries resources to processors.

Convoluted defined

"How are we going to pay the $500,000 administration fee to Ben Stevens?" Randy Babich asked Zuanich. Zuanich replied it would "take some convoluted accounting" but he was "confident the payments could be kept off the books." He then approached Babich and suggested that a public meeting might not be the place for more such questions.

It was soon discovered that in the federal Congressional Record that exactly $500,000 was set aside for the Pacific Salmon Treaty by language that Ted Stevens wrote in the Omnibus rider that funded the $50 million buyback program and other pork. Knowing ahead of time about the fees arrangement, it is only fair to ask, "Could this be a coincidence?" Or, is it the "convoluted accounting" design creating those administration fees?

Groundswell adds: Later information from a reporter indicated that the $500,000 went to NMFS for administration, but Groundswell still doubts that explanation, by NOAA staff, and would like to see it in writing. Why? Because it was originally said to be a line item in a Commerce working paper, and to be a new allocation (you know, an earmark!) to the PST, not a use of existing funds.

We think Vic's piece got them to scrambling, and it would now take a bit more looking to see how they made up for that missing money promised in November of 2004 - the same month Ben Stevens needed that exact amount to exercise his "secret option" on Adak Fisheries. Just go back and read Vic's Part 2 again. Now do you understand why we'd also like to see the State or Feds look into the alleged contract for Ben's services?
Part of the reason SEAS hired Ben was said to been because of his success in getting the crab plan funded and his obvious access to his father and the Congress. But when knowledge of Stevens' porcine riders were first made public, the senior Senator claimed he didn't know his son was involved in lobbying for the seine appropriation, so if part of Ben's sales pitch was that he had access it was either bravado, or someone wasn't telling the truth.

But in spite of Ben Stevens only getting seiners an ineffectual 130-word bill seemingly designed to fail SEAS had another vote in December to continue the deal with Ben to get a grant in the next Congress.

If Oliver Holm was right that the crab buyout was held up until the Stevens's could secure PQS in crab for the processors, perhaps salmon seiners like cooperative leaders at UFA are about to get their wish. On February 25th, with Thorstenson's and UFA's approval, Ben Stevens filed SB113A, "an Act relating to entry into and management of Gulf of Alaska groundfish fisheries."

According to Holm, "If this bill is passed, it could grant broad powers to the Board of Fisheries to make quota allocations in State managed fisheries directly to processor controlled 'associations' very similar to 'pollock coops' or federal 'groundfish coops' proposed for federal Gulf of Alaska groundfish." Certainly if you imagined PQS were going to be allocated to Alaskan salmon processors you might expect the process to be kicked off with a similar move. Could SB113 apply to other fisheries? What about halibut?"

"Last fall, trawlers in the Kodiak region had an outrageous bycatch of halibut while targeting pacific cod," Holm said. "Doug Hoedel's boat was one of the worst offenders. Afterwards, when a ruckus was raised locally by halibut fishermen, the response of both Doug and Julie Bonney (of the Alaska Groundfish Data Bank) was that the trawlers "needed" 8,000 MT of halibut bycatch instead of the 2,000 MT allowed now. They have also been pursuing being allowed to retain halibut, at least initially, to give to food banks.

Doug sits on the North Pacific [Fishery] Management Council, which allocates halibut bycatch. You can see that 8,000 MT is 17,600,000 lbs. that would come out of area 3A and 3B quota. The trawlers have opted for rationalization, which includes processor coops, and they would get a big boost in revenue from selling the halibut and the processors would gain a guaranteed cheap supply. I believe that it would be a big enough share of the resource to wreck the open competitive halibut market."

Couldn't happen? That's exactly what Thorstenson was telling salmon fishermen several years ago. And rest assured every single pound of product acquired by Stevens' favored group of processors under this scheme works against the competitive markets of every other fishery.

"Thorstenson and the UFA board have endorsed Stevens' bill despite there being practically no guidelines as to how the BOF or the Entry Commission would allocate those fishing rights," said Holm. "This whole thing is nuts for fishermen. An intelligent board doesn't just endorse an unspecified concept for politicians to pursue. You work out the specifics of what you want first while you still have control." Exactly!

The UFA's is an intelligent board and that's exactly what Thorstenson has done on this and many other issues-worked out the specifics with his Seattle Seven friends who have control, and apparently it's all legal. Hoedel's and the trawlers halibut bycatch is an illuminating recent example. While it may be a matter for discussion, "There is no violation to investigate... (and) we do not investigate conflict of interest matters," said one official within NOAA's Office of Law Enforcement. "Conflicts of interest are the responsibility of a 'designated official', defined in the Magnuson-Stevens Act as a person with expertise in Federal conflict-of-interest requirements who is designated by the Secretary, in consultation with the Council...the MS Act addresses conflicts of interest, but it does not make them a crime....The fish allocation process is always sticky because typically, someone gains and someone looses. Unfortunately, that isn't illegal either."

Which leaves one to wonder what is illegal? It's hard to believe no distinction is possible between personal conflicts of interest and deal making by those with conflicts. Before the Magnuson Act was hyphenated there was undoubtedly no idea conflicts on the Council would reach such an apparent level of influence. Sadly, as we have seen, the only control that exists now is that of a complicit Government and few big corporations' intent on reducing fishermen to the status of share-cropping field hands. It is a one-way street when NMFS plays along with processors to link cooperative losses to buyback gains, without demanding processors give up their bargaining powers when receiving Title XI financing.

"Any input from fishermen to the Alaska legislature against the changes in fishing rights ownership that SB 113 would permit would be very helpful," Holm concluded.

Victor Smith is a life-long Alaskan fisherman, reluctantly retired in 2003, who now resides in Friday Harbor, WA, and has been a frequent contributor to industry media since 2001.

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Groundswell reminds you of this week's attempt by the Board of Fish to once again influence the Legislature to overturn the Chignik rulings by Alaska's Supreme Court, with new "SB113-like" coordinated rationalization language for 'directed access privilege' allocations. The most egregious statement in the BOF "Whereas" prattle is that by enforcing the Alaska constitution the court has somehow participated in fisheries management. What the court was saying was that political appointees are not doing their jobs, and are politically rearranging the deck. For whom?

Update on Part 2: UFA's News Release on Duffy the Racketeer Influencer, at