A billionaire Dutch family gobbles up more and more of the New Bedford fishing fleet and pays its crew members what amounts to near-slave wages. Its Swiss holding company in turn protects the sixth-generation plutocrats’ money that’s been invested by a Manhattan-based private equity firm. The investor gains control of the largest groundfish business on the New Bedford waterfront and that company proceeds to relentlessly squeeze out any hope that a local captain can ever buy his own vessel and compete with them.
In the end, it’s enough to make you wonder whether the Port of New Bedford was better off with the Carlos Rafael types or Blue Harvest Fisheries.
Carlos — everyone, it seems, has always been on a first-name basis with him — at least was a colorful character. Crude and irreverent, ambitious and ruthless — he was a guy you could walk down to the piers, or to his South End seafood plant, and talk to face-to-face.
“Motherf—– this and motherf—– that,” he’d tell you, going on and on. You couldn’t trust three-quarters of what Rafael said, but there was always a grain of truth about the way the New Bedford waterfront operated in there somewhere.
Carlos Rafael was not the only person skirting the law on our harbor before the big money speculators arrived. We’ve all read about mob enforcer Timmy Mello muscling his way into ownership of a share of fishing boats and a seafood distributor. And the list of home-grown rogues who smuggled drugs, intimidated witnesses, laundered money and evaded taxes in the city’s signature business includes some of the most recognizable and even respected waterfront names.
Former Standard-Times reporter John Doherty documented much of the way the waterfront works back in 2003. Some of the most familiar names in the fishing industry, including Martin Manley, Roy Enoksen, Daniel Tichon and Erik Orman, had been convicted of one thing or another, small and large. There is almost a natural tension between government regulation and an industry where the product can go bad so quickly on the docks.
It’s a world where untaxed “shak” — the holding back of a portion of the catch to be divided up by crew members off the books — is the metaphor for the opportunity for underground deals that is always there.
Carlos himself did everything from price fixing to collusion to forging documents before he got to the point of selling his fraudulently labeled fish to a New York City wholesaler and finally got sentenced to nearly four years in prison.
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But the Manhattan investor money, the Swiss holding company money, somehow it seems even worse, in some respects, than the old ways.
At Blue Harvest, the local guy is a corporate soul, huffily shooting off an email to a New Bedford Light reporter that he’s too busy to talk even as he mouths bureaucratic double-speak about all the things Blue Harvest has done for New Bedford.
Don’t you know we’ve invested more than $10 million “to promote the health and welfare of employees and crew members,” his spokesman at one point exclaimed without a shred of embarrassment for such an absurd description of his company’s relationship with the working people of the city.
It’s all enough to make you give up on the idea that New Bedford can ever again regain control of its fishing fleet.
Blue Harvest is just one cog in the Brenninkmeijer family’s vast web of investment wealth. But for a city with pride in its legacy of ocean-based industries going back to whaling, it’s certainly a comedown to be part of a conglomerate that is also known for its association with sweatshops in Bangladesh and the forced labor of Uyghur Muslims in China. Not that many of the local boat owners ever really paid their crews a fair wage either. Heck, by the time the crews of the New Bedford whalers returned to port it was as if they were being paid nothing by those cranky old Quakers.
One thing Carlos and Blue Harvest do share is their penchant for vertical integration of their businesses.
Carlos owned both the boats and the fish processing plant so he could fake the numbers of how many groundfish he was taking out of the sea without anybody checking. Blue Harvest also owns both the boats and the seafood houses but it doesn’t seem to be interested in cooking the books. It’s a big fishing company — really big — and can afford to abide by the federal regulations that protect the cod and flounder and still make a killing. Blue Harvest’s eradication of species is more targeted at human beings — the local guys who just want to buy one or two boats and make a decent living for themselves and their families.
The growing takeover of the New Bedford waterfront by outside, and often foreign capital, has taken place in broad daylight over these last few decades.
Assisted by environmentalists convinced it would be easier to regulate big, corporate behemoths than an ornery army of small-boat owners, the big money attacked like big money always attacks. As a predator.
It moved in when the groundfish fleet was weak. With cod and flounder almost disappeared from nearby North Atlantic waters, Bregal Partners bought up a bunch of boats — some from Carlos after his fraud conviction, some from small local guys who could no longer make a living under the weight of the environmental regulations and the disappearing stocks.
Meanwhile, Blue Harvest’s real goal is the far more lucrative scallop fishery. This, the biggest of the New Bedford private equity viruses that is growing up and down the harbor says so itself: Its goal is “dominance” over the scallop industry.
How could any of this happen?
Seafood is a basic foodstuff. Isn’t it dangerous for such a vital American commodity to be under the increasing control of a foreign-owned company? Not to mention a company that has historically demonstrated it is not above working with despots like the Nazis.
The private equity inroads into the New Bedford waterfront took place over the course of more than 10 years, but thankfully the congressional delegation has at last found religion about the ever-worsening working conditions for crews on the boats owned by some of these companies.
Senators Elizabeth Warren, Ed Markey, Richard Blumenthal and Congressman Bill Keating right on time were all out with press statements last week calling for more effective federal government oversight of the fishing industry. They condemned lax government antitrust policies and weak enforcement of the restrictions against foreign fishing vessel ownership that’s enabling a situation that could eventually lead to a few remote companies controlling the whole New Bedford fishing industry.
It all seems to go back to the ocean conservation groups and their alliance with wholesalers and the biggest fishing companies. With catch shares, they devised a scheme that would make it easier to regulate, and in all honesty, protect, the North Atlantic fishery. And certainly, it’s fair to ask whether a big local fishing company like Carlos Seafood mislabeling fish for years, if not decades, accelerated the collapse of fish stocks like cod, sole and flounder. Maybe we’ll never know the answer to that question.
For now, the problem is that the private equity companies have been able to exploit the catch shares system so effectively that they now control much of the fishery, even to the point that the permit leasing system allows them to evade the federal government’s cap on how much they can control.
As Will Sennott’s fine New Bedford Light investigation explained, when catch shares were implemented in the Pacific fishery, they capped the allotment low so no one company could come to dominate it. They didn’t do that in the Northeast, and why they didn’t do it is a question worth its own investigation.
After more than a decade of the catch share system’s weak rules and the lax government oversight of how much of a fishery a company controls, we now have increasingly foreign-based ownership of America’s most lucrative fishing port. A situation that is not just bad for local New Bedford families, but for the country as a whole.
Regulation of one of the most valuable fisheries in the world is a complex endeavor at best, and certainly increasingly so in an era when groundfish, and even scallop stocks, are endangered. But the story of how the Brennikmeijer family added New Bedford’s fishermen to more than a million workers wrapped into its global industries is an especially worrisome one. The way that Carlos Rafael and generations of waterfront rogues did business was certainly a scandal for the city, but so are these private equity speculators.
It’s yet another challenge for those of us who take pride in living in New Bedford, and want a fair playing field for this, the nation’s most important fishing port.
Email Jack Spillane at firstname.lastname@example.org.
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