Undercover Sting Shows Us Why We Need Better Monitoring of the Fleet
Generally, I try my best to avoid writing about New England. Mostly because it’s a train wreck. It’s really the perfect example of what happens when for decades you avoid imposing hard quotas on managed fisheries. Gulf of Maine Cod, the iconic New England fish, is now at something like 3% of the abundance needed to sustain a healthy population. Entire fishing communities are in shambles. And more than once, your tax dollars have been used to bail them out. If fishery managers had spent more time trying to comply with the intent of federal fisheries management law, rather than figuring out ways around it, the region arguably wouldn’t be in the difficult place it is now.
But that’s not what I intend to focus on in this blog. I want to talk about Carlos Rafael, perhaps the largest owner of fishing operations in New England, who just got arrested. Apparently the charges are no joke.
This guy owns a big part of New Bedford, with over 40 fishing vessels. Plus he’s one of the largest fish wholesalers in the Northeast. I’ll try not to get too much into the details, as there’s been a ton written about it already. But it’s actually pretty cool… Hollywood-movie-type stuff.
The short version is the feds, posing as Russian mobsters wanting to buy Mr. Rafael’s business, tricked him into admitting that his operation was much more valuable than it appeared to be on paper.
Allegedly, he had been lying to the feds (falsifying documents) about the size and species composition of his catch for the last 30 years, with the clear intent to evade federal quotas intended to ensure that groundfish fisheries were in fact sustainable.
According to the affidavit, he told federal agents that if there was a constraining quota on a species one of his boats caught, he’d have his captains label it as the more abundant haddock, but then sell it for cash, under the table, for the higher price that the more restricted species commanded, to some shady guy in New York City named Michael Perretti, owner of South Street Seafood. (Note: interestingly enough, Mr. Perretti is same guy who got busted back in 1999 for selling untagged, contaminated striped bass caught in the lower Hudson River). At lot of that cash was laundered by smuggling it to Portugal. All this, of course, is at the expense of the resource itself.
Because he owned the boats and the wholesaler, and there was very little monitoring on the boats and at the dock, he got away with it, for an awful long time! And it looks like he made millions doing it!
I know I shouldn’t let this kinda thing bother me the way it often does, but it makes me pretty angry for a few reasons.
For one, I guess I just don’t understand how someone is able to own that many vessels and that much quota in limited access/transferable quota fisheries, and a fish distributer business, without violating some sort of excessive-share provision or conflict of interest standard. And, well, this sort of thing illustrates the sort of consolidation that seems to be happening around the globe, while the little, arguably more sustainable guy, is becoming extinct.
Two, this guy isn’t a first-time offender. He actually did time in a federal prison for tax evasion in the 80s. In the early 90s he was charged with price-fixing, although acquitted. Then in 2000 he was sentenced to the firm punishment of “probation” for making false statements on landing slips. Peter Shelly echoes my thoughts exactly in a Talking Fish post: “Why was this man still fishing, let alone being allowed to own and operate 40 boats and probably holding the most quota under one man’s control in the region?”
Three, this is the same guy who was whining a couple of years ago about not getting enough of the federal emergency relief funds allocated by Congress in response to the collapse of Cod and the measures that resulted. Apparently he felt he was entitled to over $600k. Seriously? This guy cheated for 30 years, raking up a ton of cash under the table, undoubtedly contributing to the collapse of the groundfish stocks and the industry. And then he had the cojones to demand he deserved more than the $300k “relief” money he was getting? Really?
Certainly the rest of the New England groundfish fleet isn’t as crooked as Mr. Rafael “allegedly” is. But it would be naive to think they are all playing by the rules also. The fact of the matter is that the recent indictment proves that for one, we absolutely need aggressive enforcement. Perhaps even more important is the fleet needs a higher level of monitoring. Because to manage fisheries, and ensure there aren’t egregious violations of the law, like this one, we need to know what’s going on out there. The thing is, rules don’t mean a damn if there are not trained people on these boats communicating what’s being caught, what’s being kept, what’s being discarded.
No, “observers” are not meant to enforce laws, but they do tip managers off to trends that enforcement might need to address. The fact of the matter is that the fleet coverage we have now probably isn’t enough to do much. Just 20% of trips made by the New England groundfish fleet currently have observers.
Yet observer coverage, even at this low level, is a real hot-button issue right now, as the feds aren’t picking up the costs anymore. And the fishing industry claims it can’t afford to pay for them. And I do get that some of them probably can’t. Yet on the other hand, what’s the alternative? It’s stupid to think we can count on everyone to just be honest, and the Rafael indictment illustrates that point quite well.
I’m not trying to vilify, that’s just the way it is. Compliance will understandably be low where there’s no monitoring and not enough enforcement… and fish stocks will suffer.
“Electronic monitoring” could very well be a cost-effective solution. In other words, putting technology on boats that can film tows, and then have a robust portside monitoring and enforcement program. But even that will likely cost money, and the reality is that NOAA Fisheries and the fleet aren’t exactly flush right now. There is some progress on this front, but it still seems like we are a long ways away from implementing such a program.
It would be good if NOAA Fisheries and the Councils would GET ON IT. Figure out a way to fund it. Iron out the details. Initiate those pilot programs. Get these monitoring cameras on the boats. Get enforcement personnel on the docks.
Otherwise this kind of thing will probably just keep happening.
In the meantime, Bravo Zulu to the enforcement folks for catching this guy. It’s a BIG DEAL!
6 comments on “Busted in New England”
Kudos to IRS Criminal Investigation for catching this Tax Cheat as well as exposing his intentional disregard of the fishery laws!
IMHO, The way to transition into vessel and quota owners paying for monitoring and enforcement would be to liquidate all of Rafael’s assets, including quotas in small units, to small vessel, selective gear fisheries and use the proceeds of the auction to pay for a year or two of gradually reducing coverage for monitoring coverage. Remaining funds could go toward installing electronic monitoring and shoreside monitoring systems.
Maybe its time to take the observers off the vessels which have no value at all and have dock monitors like Canada does.This only goes to show what fisherman have said for years that this system is broken and nobody wants to listen which has had no good results.After all I have been taking them for thirty plus years only to be told now where all liars,cheats and thieves and cant be trusted.Those of us that are left in this political nightmare have to much to lose and could never think to pull off what happened New Bedford and get away with it.
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Spagnolo and Quintina have served prison terms themselves. Spagnolo pleaded guilty to numerous racketeering and drug dealing charges in 1991 and was sentenced to nine years. Quintina was sentenced in 1995 to 7 years. He was charged with setting up Angelo Patrizzi for murder in 1981, though he pleaded guilty to racketeering charges in an agreement with prosecutors.
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