NAMA Statement on Divestiture of the Codfather’s Assets
Two years ago, we applauded the conviction and sentencing of Carlos “Codfather” Rafael for seafood fraud and tax evasion, but warned about the risk that his assets would be sold to another seafood mogul or big corporation. We are disappointed to say that NOAA has failed the public by quietly negotiating a deal with Mr. Rafael that will serve him financially at the expense of fishermen who followed the rules.
The federal government agency reached a settlement with Mr. Rafael this summer which essentially allows the Codfather to make a fortune while serving prison time, and handoff his empire to other big players in the industry that are waiting in the wings. NOAA has given Mr. Rafael the latitude to sell his fleet and permits to the highest bidder in proceedings that are taking place behind closed doors.
According to recent reports, the likely buyer of the Codfather’s groundfish fleet and permits is Blue Harvest Fisheries, a wholly-owned subsidiary of private equity firm, Bregal Partners. Bregal Partners is the U.S. arm of Bregal Investments, a global private equity firm owned by a German-Dutch family.
Bregal Partners, which is currently valued at over $1 billion, saw an investment opportunity in U.S. fisheries and formed Blue Harvest Fisheries in 2015. Blue Harvest has since been gobbling up scallop and groundfish fleets and seafood processors on the East coast. The company acquired Peabody Corporation and its eight scallop vessels based in Virginia; Harbor Blue and its seven scallop trawlers out of New Bedford, Massachusetts; Hygrade Ocean Products, a seafood processor in New Bedford; and Canadian seafood company High Liner Foods’scallop business in New Bedford.
In late 2018, Blue Harvest purchased Atlantic Trawlers Fishing, a groundfish supply company, formerly owned by Jim Odlin, that manages a fleet of five large fishing vessels in Portland, Maine. The companyalready controls approximately 3-5% percent of the total groundfish quota in New England.
Hundreds of fishermen and community members fought against privatization of fisheries through the Catch Share system that has resulted in this scenario. The Catch Share system has converted our fisheries from a public resource to a fish-stock market where privately owned shares can be bought, leased and traded. Public information showing which individuals and entities have fishing privileges has morphed into “proprietary data” that is no longer available to the public.
We are calling for NOAA to publicly disclose all the criteria that it is using to evaluate proposed deals, and to publicize all final sales, including the names of buyers and the amounts paid. We are also urging NOAA to act in the best interests of the public and our fisheries when reviewing proposed transactions, and seize the final opportunity to prevent Wall Street investors from controlling fisheries access indefinitely.