To Homepage

Stephen Taufen
A public watchdog and advocate for fishermen and their coastal communities. Taufen is an "insider" who blew the whistle on the international profit laundering between global affiliates of North Pacific seafood companies, who use illicit accounting to deny the USA the proper taxes on seafood trade. The same practices are used to lower ex-vessel prices to the fleets, and to bleed monies from our regional economy.

May 1st

Seafood: A Strategic National Resource

That's what the New England Fish Company named its June 27, 1977 report to President Jimmy Carter about what was already going wrong after the Fishery Conservation and Management Act of 1976 went into effect on March 1, 1977. NEFCO's chairman and president, C. R. Rogers stated, "Mr. President: The country needs from you a national policy statement and the leadership that this opportunity deserves." That was good advice then, and is still true today, because we've yet to protect our national fisheries and "To Stem the Tide" of foreign encroachments.

We've long known NEFCO's report was part of 'a divine prophesy,' and it's going to resonate like an Oracle with you; especially in Reid's cover letter, but also in its other observations. In the next Groundswell article, we'll bring you the genius of professors Per Heggelund and Jeremiah Sullivan who, in 1979, predicted the abusive transfer pricing and other problems caused by excessive foreign investment in the North Pacific seafood industry.

First, in our quest to document more of the true events of your industry's history, let's hear more of Reid's salient perspective. Consider it "A Square-Head's Guide to Alaska's Fishing History" - and Hints for the Future. Put on the large coffee pot.

A Times Washington Bureau article by Frank Hewlett on March 1, 1977 quoted Senator Warren G. Magnuson, who wrote the Act (greatly aided by the pen of Harold Lokken) saying today "will go down in history as a red-letter day for the United States fishing industry. For the first time ever, the US has the legal authority to control the foreign-fishing efforts which in the past has taken as much as 85 per cent of the annual catch within 200 miles off U.S. shores. I am confident the days of overfishing are over."

Hewlett's article noted, "The American senator said American fishermen will now be given first crack at all available fish and only the surplus will be available to foreign fishermen." Magnuson said, "A new future with brighter prospects is before the American fishermen. With innovation and hard work, our fishing capability should improve substantially. Several thousand jobs will be created in what has been described as a dying industry. I am proud to have played a part in the renaissance of the American fisheries."

An April 22, 1977 Telex to state and federal officials from NEFCO's Kodiak office by United Fishermen's Marketing Association manager, Thomas A. Casey, gave early warning that "Unless American fishing and processing capacity is fully developed, ultimate control over the destination of America's ocean protein resources could drift into the hands of foreign interests." UFMA asked Senators and others, "Insure that foreign processors will be allowed only that portion of the U.S. catch of any species which American processors are not capable of processing."

And working with NEFCO's consultant, Edward Furia, UFMA also addressed the goal of "Preservation of coastal community cultures, economies and traditions," adding, "in a world where food is becoming scarcer, it will guarantee a bountiful supply of fish protein," which they termed "a strategic natural resource." In a May 30, 1977 letter to Furia, UFMA noted, "foreign ownership and control of Alaska fish processing plants has resulted in cartel pricing of several species, especially tanner crab;" and this "could quickly reduce U.S. fishermen to 'share-croppers' or 'tenant farmers' of the sea, rather than masters of their own productivity." The letter concluded, "The U.S. fishing industry must be prevented from drifting into the hands of foreign interests if the value of the 200-mile limit law is to be realized by this nation."

Soon after, under the Issues section of the NEFCO report, Rogers noted, "Simplistically stated, the issue is whether or not the United States will move the capitalization, employment, marketing and utilization control of the strategic food resource of 30 billion pounds of fish protein from foreign hands to domestic, as was contemplated by the FCMA of 1976. The national interest requires dealing with the whole subject, in depth, and with great thought regarding the implications both to the United States and the other nations of the world."

The Politics section covers "How the 200 Mile Zone Law is Being Avoided; How Americans are Reacting." It says, "Prior to the 200-mile zone, foreign interests . frequently decimated whole species of marine life in their quest for protein and foreign exchange off U.S. shores. Because foreign nations greatly value the fish protein resource of the U.S., they have sought to avoid the impact of the law in three ways: First, to disobey it; second, to circumvent it; and third, to buy out the American fishing industry."

As Business Week noted on June 6, 1977, after a press conference the week before where he challenged journalists to understand the new law's opportunities, "What Rogers was talking about was economic war - a no-holds-barred scramble, with NEFCO on one side and a giant Korean fish-packing company on the other, to gain control of the huge bottom-fish processing business in the Gulf of Alaska and the Bering Sea. And the stakes may be high enough to warrant an all-out effort."

Business Week noted, "NEFCO moved at once [over plans for the Korean Marine Industry Development Corp. to take 130,000 metric tons of U.S. pollock on its ships in our waters], claiming such a deal would be illegal under the new fishery law. The company turned the problem over to consultant Edward W. Furia Jr., . [who] put together a coalition of Kodiak fishermen, Alaskan environmentalists, and labor leaders and lobbied from Kodiak to the banks of the Potomac against government approval of the deal. With the help of Thomas A. Casey, manager of the United Fishermen's Marketing Association on Kodiak Island, Furia prevailed upon the North Pacific Fishery Management Council in Anchorage to veto the Korean proposal."

It went on, "In explaining its vote, the fishery council made clear that it regarded the nurture of the Alaskan state economy as its prime concern. Harold Lokken, the council vice-chairman, said he was worried that the deal would 'replace to a considerable extent American labor with Korean labor' and that the size of the proposed operation would inevitably bring 'outside' fishermen to Kodiak. [And] Lokken and the others may have also had in mind some of NEFCO's rosier estimates of the total economic impact of developing U.S. control of the fishery."

Furthermore, "As NEFCO sees it, the rise in American processing will reduce foreign influence, and that will help turn around the $1.8 billion balance-of-trade deficit that the U.S. suffers annually from seafood exports alone." Business Week noted, "While New England Fish Company seems to have won its battle for now, other American processors and fishing companies face a different threat - takeover by the foreigners (see also BW - May 9 article)." Some 60 U.S. fishing companies are now owned at least in part by foreign interests, and the number is growing. What is more, American subsidiaries of foreign-owned companies can send their catch back to the parent corporation's home country for subsequent re-import to the U.S."

Continue to Part 2