The Ciulla family, recipients of a Cabinet-level apology in May for a decade of government law enforcement harassment against the Gloucester Seafood Display Auction it founded and has operated at Harbor Loop, Wednesday announced the sale of the business.
President and CEO Larry Ciulla said the family sold for an undisclosed amount to Kristian Kristensen, the president and owner of Zeus Packing Co., a dogfish and skate processor that has been a tenant at the Ciullas' facility.
The transaction was completed on Friday, and will not interrupt the normal business activities at the auction house, Ciulla said. The auction is the linchpin of the Gloucester waterfront economy, and the leading platform for the brokering of seafood taken from the Gulf of Maine.
"It was just time," Ciulla said in a telephone interview.
Ciulla said the government harassment — in the form of three lawsuits, countless visits by NOAA agents who were on site almost daily during the past decade and litigation that reached the federal courts — helped beat down the business.
"We went as far as we could as long as we could," Ciulla said. "We wanted to make sure the auction remains in the community."
The new name for the business is Cape Ann Seafood Exchange; Ciulla noted that the sale involves only the business, not the harbor front property.
Kristensen, 39, who grew up in Denmark but has lived in Gloucester with his family for six years, acquired Zeus from Spanish interests last spring. He had previously worked as the CEO of the company that buys, processes and transports fish overseas and domestically.
Kristensen described the transaction as an "asset purchase."
He added that Ciulla would be working for the new auction company.
"We go well together," Kristensen said. "We're here to create stability, we want to make sure that the boats are happy."
An email to the buyers of the exchange — among them, the largest and most prestigious, including Legal Seafoods — went out Friday.
The Ciullas and their business became the flashpoint for a decade of law enforcement excesses against the fishing industry, and it was only when the Ciullas went public in February 2009 after being hit with a 59-count allegation that was worth more than $300,000 in fines that events were set in motion revealing how ugly the NOAA law enforcement system had become.
The Ciullas fought back in the press, and drew support from local political and government figures, galvanized by State Rep. Ann-Margaret Ferrante. That led to a letter from the state's congressional delegation, led at the time by Sens. Edward M. Kennedy and John Kerry, that spurred the Commerce Department inspector general to open a national probe of law enforcement abuses.
The work drew the focus back to Gloucester and the relentless effort of NOAA law enforcers in the regional office in Gloucester to shutter the auction.
In June 2009, just as the inspector general was organizing the investigation, the NOAA agent-in-charge of the office attempted a virtual public relations coup against the Ciullas, disseminating a press release that the auction was being closed as penalty for a violation. But it wasn't — the violation and closure order were on appeal in U.S. District Court at the time, and no shutdown order was ever enforced.
This past May, as the revelations reached a climax, the Ciullas and eight other businesses received a public apology by then-Commerce Secretary Gary Locke and NOAA administrator Jane Lubchenco and reparations for fines unfairly collected through justice miscarried.
A special judicial master, employed by Locke, concluded that the decade of investigations had found no sign of any alleged black market fish trading or any other significant violations of federal law or regulations.
The fierce resistance by the auction and the fishing industry as a whole led to a cleaning out of the entire leadership of NOAA law enforcement in Silver Spring, Md., where NOAA has its national offices.
But, while all of the agents and litigators stationed in Gloucester were transferred, no one has lost a job or been penalized or sanctioned for the wrongdoing. Within weeks of the apology to the auction, NOAA announced the decision to enforce a 21-day closure of the business which had been written into a general settlement of three major cases — terms that included no admission of any wrongdoing.
"They (federal officials) tortured the auction house," Richard Burgess, who owns small fishing boat business based at the auction, said Wednesday. "They have wanted to eliminate the small boat fleet and the auction. You can't blame (the Ciullas) for selling."
"It was a good run, Larry," wrote Paul "Sasquatch" Cohan, a gillnet, small boat fisherman who sells at the auction. "You stuck your neck out, bet on a long shot, and raised the quality bar, which set new standards for the entire industry."
Cohan was referring to the first modern, computerized auction in New England that was organized by the Ciullas in 1997.
"As with any radical innovation — particularly in a port which is sometimes so hard aground in the past that it seems incapable of hauling itself off and setting a course for the future," Cohan wrote, "you defied conventional business assumptions, and boldly steamed, headlong, into uncharted waters."
The sale comes during a time of an engineered radical consolidation of the industry, with small boat owners selling out and a few big businesses with many boats buying up permits. The region's leading auction, based in New Bedford and owned by the Canastra brothers, has established a permanent branch in Gloucester, operated by Vito Giacalone.
Less than 200 yards from Harbor Loop, Giacalone's Fisherman's Wharf facility now off-loads boats choosing to do business with the Whaling City Seafood Display Auction. There are perhaps a half dozen of other fish processors, brokers and shippers along the waterfront.
Richie Canastra, who co-owns the Whaling City and Boston Seafood Display Auctions, said he hoped and expected fishing boats that were loyal to the Ciullas to consider doing business with him now that the Ciullas no longer are owners of the operation at Harbor Loop.
He said Giacalone's dock and cold storage facility can handle 250,000 pounds of fish per day.
Richard Gaines can be reached at 978-283-7000, x3464, or at firstname.lastname@example.org.