GloucesterTimes.com, Gloucester, MA

September 20, 2012

Fishing fund hires ex-AG for probe

By Richard Gaines
Staff Writer

---- — Former state Attorney General Scott Harshbarger is under contract to — and has already begun an assessment of — the “governance, policies and operations” of the Gloucester Fishing Community Preservation Fund, the locally-based nonprofit corporation announced.

Fund President Vito Giacalone declined comment Wednesday, a day after the fund announced the hiring of Harshbarger, who agreed to take on the task last month, the former attorney general said in a telephone interview. Instead, Giacalone referred questions to the fund’s newly hired spokesman, David Guarino.

A partner in Melwood Global, an international communications consulting firm, Guarino said it was too early to estimate the cost or duration of a prepared statement by the fund called “an independent” assessment of the propriety of preservation fund activities — primarily the buying and selling permits and leasing catch shares and days at sea to the fleet of about 75 boats.

The preservation fund and the Northeast Seafood Coalition, which have interlocking directorates, were advised by letter last Feb. 7 by Sen. Bruce Tarr and Rep. Ann-Margaret Ferrante that the lawmakers had received complaints of “conflicts of interest and unfair business advantages” benefiting “some...” The only potential beneficiary of insider activities named in the letter was Giacalone.

Tarr and Ferrante advised Giacalone and seafood coalition Chairman John Bell, the former Gloucester mayor, to get legal counsel on the conflict-of-interest and ethics constraints for nonprofits under Massachusetts law. Tarr and Ferrante — both lawyers — wrote that “seeking the advice of the Charities Division of the Attorney General’s Office may be appropriate under the circumstances.” The existence and contents of the letter was first reported by the Times last July.

Asked Wednesday why the fund chose instead to hire Harshbarger’s international law firm, Proskauer Rose, Guarino issued a statement saying, “The board determined that engaging with a reputable outside counsel with direct experience both as attorney general overseeing nonprofits and leading similar nonprofit governance reviews is the most aggressive and proactive step that could be taken to address these allegations head-on....

“The board is more than confident the former attorney general is the best and most appropriate choice to conduct a thorough, independent review on its behalf,” Guarino added.

The preservation fund is organized as a 501(c)3 non-profit, charitable corporation. It was organized rapidly in 2007 under then Mayor Bell’s aegis, and was capitalized with $12 million in a mitigation grant from the state for the surrender of Grade A fishing and lobstering grounds to a liquefied natural gas terminal just off Gloucester’s shores.

By Dec. 31, 2010, the date of the preservation fund’s most recent filing of financial statements with the state attorney general’s office, the fund had $3,252,184 in cash and cash equivalents, among total assets of $9,810,163, which includes the value of commercial fishing permits.

“This (Harshbarger) effort is not being funded through the initial funding but through interest and small fees collected as part of that work,” Guarino said.

He added that the preservation fund board was “committed to fully communicating whatever actions it decides to take” based on the assessment by Harshbarger, but is not necessarily committed to making the Harshbarger report itself public.

“We can’t prejudge what’s in that report, or what actions will be taken,” Guarino said.

Along with Giacalone and Jackie Odell, who is executive director of the seafood coalition, the preservation fund board includes Angela Sanfilippo, president of the Gloucester Fishermen’s Wives Association, and Dale Brown, a former department head in the Bell administration.

The Northeast Seafood Coalition and the Gloucester Fishing Community Preservation Fund were created separately during Bell’s mayoralty which ran from 2002 through 2007. Giacalone and Odell were his “go-to” fishery advisors and operatives as he attempted to assemble structures that would empower Gloucester, the nation’s oldest fishing port, to persevere through ever harder times as well as ever changing regulatory schemes. And a residue of this history is the interlocks between the organizations.

But, as the Tarr-Ferrante letter made clear, it is Giacalone’s involvement across both core non-profits and in various for--profit fishing enterprises that drew the concern of less well-connected industry participants. Giacalone links the preservation fund to the seafood coalition, where he serves as policy director, and numerous nonprofit fishing cooperatives organized under the Northeast Sector Service Network.

In addition to his role as president of the preservation fund, policy director of the seafood coalition, the region’s largest commercial groundfish industry organization, Giacalone is also an active groundfisherman, and a commercial real estate developer who has redeveloped Fishermen’s Wharf at Harbor Cove. Giacalone’s three sons operate an arm of BASE, the region’s largest auction from Fishermen’s Wharf.

The preservation fund’s 2010 filing in lieu of taxes to the Internal Revenue Service shows that Giacalone was paid $72,000 as the full-time, 40 hour a week president of the organization, which leases space at Homeport Development Corp. — a self storage facility on Witham Street of which Giacalone is also president.

The press announcement by the preservation fund Tuesday quoted Harshbarger as being determined to “get to the bottom of these vague but serious allegations made by some in the community about the governance of the fund and the perceptions they have created.”

The fund also reported that Harshbarger who was attorney general for two terms, 1991-1999, “has already begun analyzing internal operations of the fund and interviewing board members. The review will also include interviews with community leaders and others in the fishing community,” the preservation fund’s statement announced.

The announcement of the decision to retain Harshbarger came just days after the National Oceanic and Atmospheric Administration declared the groundfishery centered in Gloucester and New Bedford to have declined into an economic disaster.

That declaration opens the political door to an effort led by Sen. John Kerry to obtain $100 million in disaster assistance for the region’s ports, fishermen and communities.

Richard Gaines can be reached at 978-283-7000, x3464, or at rgaines@gloucestertimes.com.