GloucesterTimes.com, Gloucester, MA

March 29, 2011

Report: Congress ate away at seafood promo dollars

By Richard Gaines
Staff Writer

Revelations that $400 million that should have been used to promote seafood caught or farmed in the United States was instead used as part to pay for the running of the NOAA and its National Marine Fisheries Service has sparked anger in the commercial fishing industry from Florida to New England.

A Congressional Research Service report, which the Times began analyzing Monday, brings to light how the spirit and letter of the original law, the Saltonstall-Kennedy Act of 1954, and multiple amendments in later years have been ignored or abandoned, to the detriment of the domestic seafood industry.

"Beginning in 1979," the Congressional Research Service reported, "increasing amounts of Saltonstall-Kennedy dollars have been transferred to ... NOAA's operations, research and facilities account," the agency's general operating budget.

Since 1982, the service continued, "the Saltonstall-Kennedy program has never allocated the minimum amount specified by law for industry projects."

Instead of devoting at least 60 percent of the revenue stream from import tariffs gathered by U.S. Customs for fishing industry projects, as Congress had mandated beginning in 1983, larger and larger amounts of the tariff money was diverted into the operating budget of the National Oceanic and Atmospheric Administration, parent of the National Marine Fisheries Service.

From 2007 on, less than 10 percent of the tariff charges given to NOAA were used as the Saltonstall-Kennedy legislative history required.

The diversion of the money was a congressional decision, not the choice of NOAA, said Gary Reisner, CFO of NOAA Fisheries in a telephone interview with the Times.

NOAA and members of Congress said they were attempting to determine how the Saltonstall-Kennedy program operated, and what factors were responsible for altering its mission.

"The Congressional Research Report raises serious and troubling questions about NOAA's management of fishery finances, and warrants an immediate investigation," U.S. Sen. Scott Brown said Monday.

"Unelected and unaccountable federal agencies should not be ignoring bipartisan laws passed by Congress," the Massachusetts Republican said. "I intend to look into this issue thoroughly, and request immediate congressional action if necessary."

Congressman John Tierney, a Bay State Democrat who helped uncover how fines paid by fishermen were misused by NOAA police and prosecutors over a 10-year period, said, "it is important to ensure that ... the intent of the Saltonstall-Kennedy Act for addressing fishing products is carried out.

"To that end, I requested an updated report from Congressional Research Service, and am working with my colleagues and relevant federal agencies in order to fully evaluate the distribution and allocation of these funds and how that may impact our local fishing community," Tierney said

Another Bay State Democrat, Congressman Barney Frank said he too intended to get to the bottom of the murky system, which seemed to evolve in plain sight from a source of funding for marketing into a general fund budget offset.

"It wouldn't surprise me if Congress had directed the shift," Frank added. "Congress had done that before."

Frank's district includes the port of New Bedford, the No. 1 port when it comes to value of the catch brought in.

"While it appears that the Saltonstall-Kennedy Fund may be used for research and development projects, I'm reviewing whether it can be better structured to direct funds to specific programs that assist our fishermen," said U.S. Sen. John Kerry, the Democratic nominee for president in 2004, losing to Bush.

It was in March 2004, that NOAA's National Marine Fisheries Service announced it was closing down the competitive grants program for seafood marketing that traced to a law co-sponsored a half century earlier by then Sen. John F. Kennedy and was designed to use ocean product import tariff payments to promote and market domestic seafood.

NMFS said there was "insufficent funding" in then President George W. Bush's budget request for the next fiscal year to continue the Saltonstall-Kennedy grants program.

But two months earlier, while gearing up his the reelection campaign, Bush signed legislation carrying earmarks that distributed at least $15.5 million from the Saltonstall-Kennedy program.

The earmarks included one for $10 million from the late U.S. Sen. Ted Stevens of Alaska, according to a report to Congress in May 2004 by the Congressional Research Service of The Library of Congress.

The recipient of the earmark funding, according to the research service report, was the Alaska Fisheries Marketing Board, whose chairman was Stevens' son, Ben Stevens.

Other earmarks were $2 million for the Gulf and South Atlantic Fisheries Foundation, $2 million for the South Carolina Seafood Alliance, $1 million for the Oregon Trawl Commission and $1.5 million for the Oregon State University Seafood Laboratory.

Another $250,000 was directed to the Gulf and South Atlantic Fisheries Foundation.

The Alaskan earmark was far from the first time the late senator — co-author of the Magnuson-Stevens Act in 1976, which set the nation on a course of fisheries conservation — used his influence to channel federal monies to family or allied interests.

The earmark played a small role in a multi-tentacled federal corruption probe into Stevens's use of political influence that led to an indictment, his trial and conviction during his failed re-election campaign in 2008.

In 2009, his conviction was overturned due to prosecutorial misconduct. Stevens died in a plane crash last August.

That millions in earmarks were distributed from the Saltonstall-Kennedy fund while competitive grant funding evaporated was documented in the footnotes and a chronology of the Congressional Research Service report.

NOAA Fisheries administrator Eric Schwaab issued a statement, lauding the "the Saltonstall-Kennedy Fund for "a long history of supporting industry and sustainable fisheries whether through grants or support for NOAA research and programs."

He pledged to work the Congress and the National Seafood Marketing Coalition to find "the best ways to help the coalition and industry ensure continued sustainability of U.S. fisheries and effective marketing of those products."

Members of the coalition, which is based in Alaska, met with Schwaab last week during the International Boston Seafood Show, and began talks about how to reconstitute a structure to produce money for seafood marketing.

Although the federal government mandates a pass-through charge on beef and pork, whose marketing operations together spend well over $100 million a year, there is no parallel government-mandated system to finance a marketing program for domestic seafood, which must compete with the other U.S. meat protein options, and floods of imported seafood, that leave more than $9 billion trade deficit in seafood.

Bruce Schactler, director of the seafood marketing coalition, said, "The industry has no one to blame for this but themselves."

"The industry was not paying attention," he added, "but I can't find anything malicious anywhere other than bureaucratic creep."

Richard Gaines may be contacted at 978-283-7000 x3464 or rgaines@gloucestertimes.com.