Saving Seafood

Permit banking threat helped drive Canastra Rafael deal

October 6, 2017 — Richard and Raymond Canastra weren’t the only ones interested in buying Carlos Rafael’s New Bedford, Massachusetts-based fishing empire, Richard Canastra said in an interview with a local radio station on Thursday.

Several big corporations have approached both Rafael and the two brothers to inquire about either buying or investing in the 42-permit, 32 fishing vessel operation, he told drive-time, talk-show host Phil Paleologos on WBSM 1420 AM, in the nearby town of Fairhaven. But the “biggest competitors” Canastra said he was concerned about are non-governmental organizations that could buy Rafael’s permits and “bank” them.

The Nature Conservancy has been making an effort to buy up fishing permits in coastal towns, especially for groundfish, and leasing quotas to fishermen for more than a decade. Geoff Smith, marine director for the NGO’s Maine chapter, estimated that between 12 and 15 groundfish permits have been bought in New England over the past seven years, but he said the Nature Conservancy has not met with Rafael or anyone to make an offer for his permits.

“We’re not interested,” he told Undercurrent Friday. “…We’ve had no contact and we have no plans to contact anyone.”

Smith’s group was interested, two years ago, in obtaining at least one of the groundfish permits now owned by Rafael, according to Canastra.

“There was only one offer up in Maine and that was from the NGO, and I believe it was Nature Conservancy,” Canastra said, adding: “So do you want to see those permits go to an NGO, where it can be put on a shelf or the permit could be leased out to their favorites? That’s been happening since sectors.”

Read the full story at Undercurrent News

MASSACHUSETTS: Canastra Brothers Offering $93 Million for Carlos Rafael’s Fishing Fleet

October 5, 2017 — Last week in court, it was publicly revealed that the potential buyers of Carlos Rafael’s fishing fleet are brothers Richard and Ray Canastra, owners of the Whaling City Seafood Display Auction in New Bedford, Massachusetts. This morning, Richard Canastra appeared on WBSM to confirm that the brothers have entered into a memorandum of agreement with Mr. Rafael to buy his fleet for $93 million.

“We wanted to keep everything in New Bedford,” Mr. Canastra said. “Ray and I had to make a decision – do we want to do this? I’m 56 years old, Ray is 60 years old. It’s a big task…at this later stage in our life. We believe that it’s the right thing to do for New Bedford. The waterfront has been good for us since 1986, [we] started the auction in ’94, and we’d hate to see the industry collapse because of what Carlos did in the past.”

When asked about those who have raised questions about the relationship between the Canastras and Mr. Rafael, Mr. Canastra  said, “I look at it this way. We are the largest fish auction in the United States, and Carlos Rafael is the largest boat owner on the East Coast.” He said that although the Canastras and Mr. Rafael are friends, the negotiations became tense, and there was a period where tensions ran so high that the brothers and Mr. Rafael did not speak for three weeks. 

Mr. Canastra also discussed competition with NGOs over the permits. “Our biggest competitors here are the NGOs and people up in Maine who are in cahoots with the NGOs,” he said. He described a situation in 2015 in which Mr. Rafael purchased quota from a Maine seller at fair market value when no one else would. “There was only one offer up in Maine and that was from the NGO, and I believe it was Nature Conservancy. So do you want to see those permits go to an NGO, where it can be put on a shelf or the permit could be leased out to their favorites? That’s been happening since sectors. It was a fair deal, and everyone wants it back now.”

“There are groups up in Maine that believe that these permits should be dissolved back into the industry, or even given back to them,” Mr. Canastra added. “In reality, if they dissolve all these permits into the industry, every permit holder would receive anywhere between 200 to 300 pounds of each species, so it would not really gain anything for that permit holder but it would destroy New Bedford.”

The following is excerpted from WBSM’s exclusive article on the potential transaction:

NEW BEDFORD, Mass. — One of the owners of the Whaling City Seafood Display Auction in New Bedford is shedding more light on a proposed deal to buy [Carlos Rafael’s] fishing fleet.

Carlos Rafael has been sentenced to 46 months in prison for his illegal fishing scheme, and cannot be involved in the fishing industry during that time and three years after his release.

In an exclusive interview with WBSM’s Phil Paleologos, Richard Canastra confirms he and his brother, Ray, have entered into a memorandum of agreement with Rafael to buy his business, Carlos Seafood, Inc, for $93 million.

“We know boats. We know the business. We’re doing this to keep this in New Bedford,” said Canastra. “My plan is to get out, hopefully, in ten years when things lighten up and it can be sold properly instead of this fire sale where people want everything for nothing.”

Read and watch the full story at WBSM

Constitutionality of seizing Carlos Rafael’s permits in question

September 27, 2017 — BOSTON –Judge William Young decided half of Carlos Rafael’s fate on Monday: The New Bedford fishing mogul was sentenced to 46-months in prison with three years supervised release and a $200,000 fine.

The other half, which Young continues to take under advisement, involves the 65-year-old’s 13 groundfish vessels and permits.

In court Monday, Young repeatedly questioned the constitutionality of the forfeiture, citing the excessive fines clause in the Eighth Amendment.

Young said courts with higher authority have heard and decided that fines exceeding four-times the maximum guideline are unconstitutional.

Regardless of how many permits Young orders to be forfeited, he made it clear he has no authority to decide what’s done with them.

NOAA’s guidelines call for the permits to be redistributed throughout the Northeast, which is why for months organizations and politicians have publicly called for redistribution or a deal that would remove Rafael from the industry. Many arguments focused on all 13, without consideration of a partial forfeiture.

Argument against redistribution

Allyson Jordan actually contributed to a portion of Rafael’s groundfish permits.

She sold two boats and four groundfish permits. Jordan said Maine’s fishermen had no interest in the permits until Rafael entered the picture.

“He bought permits and boats to make his business survive,” Jordan said. “I don’t believe they should be given back to the state of Maine. The state of Maine did nothing to help my industry, not to mention my business.”

“Everyone is coming out of the woodworks now,” Jordan said. “To be honest, they could have bought the permits.”

Support of redistribution

The Cape Cod Commercial Fishermen’s Alliance, which also manages the Cape Cod Fishermen’s Trust, also contributed to Rafael’s enterprise, but argued for redistribution of the permits as well as better monitoring.

According to Seth Rolbein, the director of the Cape Cod Fisheries Trust, Rafael acquired more nearly a million pounds of quota from the Trust.

From 2011 through 2015, the Trust leased 992,646 pounds of quota. The Trust has no records from 2010 and didn’t lease any to Sector IX after the U.S. Attorney released the indictment, tying Rafael to falsely labeling fish quotas.

“Our priority is to service our fishermen and our community,” Rolbein said. “If there are fish stock that our community is not using that we can not lease out at our subsidized rate to our own fishermen, we then will lease out to other sectors. The trust will lease fish to other sectors. But we will only do that once we’re satisfied that our own fishermen can’t use or don’t have use for that quota.”

What’s next?

The defense revealed Monday that Richard and Ray Canastra, of Whaling City Seafood Display Auction, have entered a Memorandum of Agreement to purchase Rafael’s entire fleet. Neither the U.S. Attorney nor NOAA have taken a final position on the sale.

Read the full story at the New Bedford Standard-Times

Scallop auction owners, friends of Carlos Rafael, tipped as likely fleet buyers

September 25, 2017 — Could old friends of Carlos Rafael’s wind up with his massive New England fishing fleet?

Speculation is building that the Buyers and Sellers Exchange (BASE), an electronic seafood auction firm in New Bedford, Massachusetts, could be the company mentioned in court documents as having signed a memorandum of agreement to buy the 30-something vessels, an unknown number of skiffs, and some 50 state and federal permits to catch scallops, cod, haddock and many other fish found in the Gulf of Maine.

Richard and Raymond Canastra, BASE’s co-owners, were not in their offices on Friday, a company employee told Undercurrent News. But many see it as a likely match.

Raymond Canastra is reported to be a long-time friend of Rafael’s. The two mens’ daughters co-own a seafood brokerage firm in New Bedford.

The Canastra brothers don’t have fishing boats, but if they were able to acquire the Rafael operation, “it would not be a surprise to anyone”, Jim Kendall, a longtime member of the area fishing community and the executive director of New Bedford Seafood Consulting, told Undercurrent.

The Canastras know the fishing industry well, and probably wouldn’t have too much trouble making Rafael’s business work with theirs, he said. There is little money to be made in groundfish, but Rafael’s scallops permits could be quite valuable. Also, it would satisfy the goal of keeping nearly 300 jobs in the area.

Read the full story at Undercurrent News