GloucesterTimes.com, Gloucester, MA

January 30, 2013

Ex-AG clears fishing group, spurs questions

By Richard Gaines
Staff Writer

---- — A 48-page report on a four-month investigation by a former state attorney general has found allegations of wrongdoing by Vito Giacalone in his role heading the Gloucester Fishing Community Preservation Fund “without merit” or with no “credible basis.”

But in clearing Giacalone of any taint, the report by former Attorney General Scott Harshbarger confirmed finding that the New Bedford brothers, Richard and Raymond Canastra, made a $100,000 loan to a Gloucester fisherman to take his business to the Canastra’s auction outlet in Gloucester, on property owned by Giacalone and operated by his three sons, from another one on the Gloucester waterfront.

Questions of collusion between Giacalone, the Canastras and Carols Raphael, a major fishing business owner in New Bedford, have been swirling in both ports for more than a year, sparked by a letter claiming Giacalone, the Canastras and Raphael — alpha figures in the New England fishing industry — had effectively begun functioning as a “cartel.”

In his report, Harshbarger wrote that Gloucester attorney Paul Muniz made a similar claim about financial inducements to fishermen to leave auction acquired by Kristian Kristiansen from the Ciulla family, whose pyrrhic victory against federal fisheries law enforcers in 2010 and 2011 was achieved with Muniz as attorney for their Gloucester Seafood Display Auction.

Muniz also represented the Ciulla family in interviews during the Harshbarger probe and before the Ciullas sought bankruptcy protection and sold the business to Kristiansen in September 2011 — months after they and 10 other fishing businesses were given a cabinet level apology and reparations for prosecutorial harassment by the federal government.

The investigation and report released Tuesday, filled with compliments and praise for Giacalone, in one place noting that his many admirers consider him a “genius” of foresight, was commissioned and financed by the Preservation Fund. Fund officials would not disclose the price it paid for Harshbarger’s work.

The report was presented to the Times Tuesday morning in a meeting and joint interview at the newspaper attended by the author, former Attorney General Harshbarger and the Preservation Fund board — Giacalone, Jackie Odell, who is also executive director of the Northeast Seafood Coalition, Dale Brown, a senior staffer in the administration of former Mayor John Bell, and Angela Sanfilippo, president of the Gloucester Fishermen’s Wives Association.

Expanding board

In upholding Giacalone’s actions at the fund which was organized as a non-profit corporation in 2007 and vested with $12 million from the state to serve as a permit bank for Gloucester boats, the Harshbarger report did recommend that the board be doubled in size to eight.

And Harshbarger also reported that Giacalone’s overlapping roles in the fishing industry were destined to raise questions and suspicion.

“Whether these (conflict of interest) questions should be raised was never in question. These were legitimate questions to be answered,” Harshbarger said during his presentation to the Times.

Giacalone was the president and full-time executive director, and remains executive director, paid $72,000 for his full-time work for the Preservation Fund in 2010, the last year for which the Times has a copy of the public financial statements of the nonprofit.

Along with heading the preservation fund, Giacalone has served as a volunteer policy official and board member of the seafood coalition, an active fishing boat owner, owner of the property on Harbor Cove that is used by the Canastra brothers as the site for landings to be sold via their BASE (Buyers and Sellers Exchange) auction system headquartered in New Bedford, and landlord to the preservation fund of office space at his Home Port Self Storage facility on Witham Street.

The first allegation against Giacalone was made in a letter by a New Bedford fisherman, Paul Kavanaugh, to then NOAA Regional Administrator Pat Kurkul in December 2011. In his letter Kavanugh said Giacalone, the Canastras and Carlos Raphael, the largest groundfish and scallop fishing business owner in New Bedford, were engaged in “cartel”-like activities.

Harshbarger said Muniz had told his investigative team that “the Canastras, through Giacalone, offered fishermen $100,000 to take their business to his sons during an informal meeting of carefully-selected fishermen.”

Loan deal

We were able to confirm that Richard and Raymond Canastra provided a loan of approximately $100,000 to Joe DiMaio, who had expressed interest in leaving Kristiansen’s auction but could not do so without paying off an existing loan from Kristiansen,” Harshbarger wrote. “The conditions of this loan provided that DiMaio would drop his fish at (Giacalone’s) Fishermen’s Wharf for a period of one year.

“After receiving the loan, DiMaio did in fact patronize Fishermen’s Wharf (the Canastras’ BASE Gloucester) for a short time, but shortly thereafter repaid the loan and returned to Kristiansen’s auction after Kristiansen offered DiMaio more money for his fish if he returned.”

Richie Canastra could not be reached. Kristiansen said while it is not uncommon for “some (fishermen) to need help in the form of loans,” he considered these agreements to be “all private,” and declined comment on the situation discussed by Harshbarger.

Giacalone, however, said Tuesday night that the loan was just a “standard business practice” had “nothing to do with” any allegations that he was offering “cash payments” to land at the BASE auction.

“That allegation was found to be completely false, and it was,” Giacalone said.

Harshbarger’s report identified Muniz as the lead accuser against Giacalone and sought to discredit the accusers as naive to the proper operation of the preservation fund and the 13 sectors or business cooperatives organized under the aegis of the Northeast Seafood Coalition.

The investigation by Harshbarger for and into the preservation fund last August following a report in the Times on a letter to Giacalone and former Mayor Bell, president of the Northeast Seafood Coalition, who catalyzed the creation and financing of the preservation fund, from state Sen. Bruce Tarr and Rep. Ann-Margaret Ferrante.

Lawmakers’ letter

The Harshbarger report said that Tarr and Ferrante dismissed their own February 2012 letter to Bell, president of the seafood coalition, and Giacalone as full-time paid Preservation Fund director as nothing more than “a formality.” The letter, however, “strongly recommended” the two organizations which have interlocked boards of directors, “seek advice from legal counsel regarding their respective obligations under the law.”

Harshbarger’s report went further, asserting the lawmakers said they wrote it only “to cover them” in case “the allegations were substantiated.”

A senior counsel in the Boston office of the New York City based international law firm, Proskauer Rose LLP, Harshbarger wrote that Giacalone and Bell “insisted” that Tarr and Ferrante “must have leaked” their letter to the Times, “since there was no other way that the newspaper could have gotten a copy of it.

In fact, however, the Times was informed of the letter by an official of the seafood coalition, then provided a copy on request by the lawmakers.

Tarr and Ferrante issued a statement to the Times Tuesday saying, their letter “was intended to memorialize in writing the advice provided to them verbally at a meeting they had requested, and to document that we had responded fully to their request and counseled them to seek the type of independent review necessary to ensure that neither the presence of a conflict of interest or the appearance of one were possible.

“Far from being a leak,” Tarr and Ferrante said, “it was the release of a document in response to a formal request by the Times.

“Given that a discussion between the recipients of the letter and the Times about its existence and contents had led to the paper’s request,” the lawmakers said, “they certainly had reason to anticipate that request.”

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