The right of first refusal in the business plans of all 12 sectors organized by the Gloucester-based Northeast Seafood Coalition — representing more than half the active boats in the catch share groundfishery — has been used to wrongly restrain trade in catch shares and fishing permits, a New Bedford fisherman has alleged.
Outlined in a letter last month to Patricia Kurkul, then the regional administrator based at the National Oceanic and Atmospheric Administration's Northeast regional headquarters in Blackburn Industrial Park, the fisherman, Pat Kavanagh, identified Vito Giacalone, policy director for the coalition, and two other industry leaders as linked in a cartel-like relationship to control fishing quota.
The others in league with Giacalone, according to the letter, are New Bedforders Carlos Rafael, who owns the region's largest fleet of groundfish and scalloping boats, and Richie Canastra, who, with his brother Ray owns and operates the region's dominant auction business, with an outlet in Gloucester operated by Giacalone's sons on Fisherman's Wharf.
Giacalone, Canastra and Raphael are all Northeast Seafood Coalition board members. Giacalone is also president of the Gloucester Fishing Community Preservation Fund, which acts as a permit bank for local boats.
"Busting the Rafael/Canastra/Vito cartel would be a wonderful legacy for you ..." Kavanagh wrote to Kurkul, who retired from her administrator's job at the end of December.
In a letter to the chairman of the New England Fishery Management Council soon after receiving Kavanagh's complaints, Kurkul said she saw the potential in the mutual extension of first refusal across the 12 Northeast sectors to "affect the liquidity" of catch share trading within what operates as a virtual commodities market.
The system, launched in New England in 2010, is consolidating the fleet rapidly, driving out some 25 of Gloucester's 95 boats during the 2010-2011 fishing year alone, according to NOAA figures. It is also creating fissures between haves and have-nots within the industry, and pressure for the government to consider whether and how it might institute trade controls and accumulation limits, with more and more fishermen's quota being landed by fewer but larger businesses.