By Wesley Loy, Anchorage Daily News, November 25, 2007
25 Nov 2007 // Some of the toughest money in America is made fishing for king and snow crab in the tempestuous Bering Sea.
But some crab boat owners also do well on the opposite coast in Washington, D.C.
A case in point is an arcane section written into a bill Congress passed in December, just hours before adjourning for the year. President Bush signed the bill into law about a month later.
Section 122 of the act, an updated version of the nation's main ocean fisheries law, gives three fishing companies -- and only three -- the right to exchange certain rights to catch and process Bering Sea crab for a new and potentially more profitable kind of right. The change could lower the costs of running crab boats and hauling catches to an onshore processing plant.
The three companies -- Yardarm Knot, Blue Dutch and Trident Seafoods -- are all headed by people who have made substantial political contributions to U.S. Rep. Don Young, the Alaska Republican who inserted Section 122 into the legislation.
Two of the companies, Yardarm Knot and Trident, also have long-standing ties with Young and U.S. Sen. Ted Stevens, R-Alaska, employing firms with lobbyists who used to work as aides to the two lawmakers. Yardarm also has paid the senator's son, Ben Stevens, for consulting and business services while he was a state legislator.
Some competing seafood companies fought the section, but their managers declined to discuss their complaints publicly.
Alaska's crab fishing industry is a distant and dangerous trade that has become household entertainment across the country, thanks to the popular Discovery Channel reality show "Deadliest Catch."
The crab fisheries are lucrative, worth well over $100 million at the docks in recent years.
Craig Holman, of the congressional watchdog group Public Citizen, said Section 122 is the same kind of earmarking tactic that has stirred lots of trouble recently for Young on bills that benefited associates or campaign contributors elsewhere in the country.
The provision smacks of political favoritism, sidestepped the normal process for changing federal fishery rules, wasn't subject to a public debate or hearing, and was inserted into a major bill at the last minute, he said.
"This section is typical of Don Young-style legislating," Holman said. "He appears to view his role on Capitol Hill as protecting the interests of those who will give him campaign contributions. He's been doing that extensively through the earmarking practice, and he did it in this case in legislation that was otherwise a very noble act."
Young declined repeated requests for an interview.
"Unfortunately I just do not think Congressman Young's schedule is going to allow for an interview, though I appreciate your interest," his press aide, Meredith Kenny, said in an e-mail.
She provided another e-mail, however, in defense of Section 122, saying part of the reasoning behind it was to "make participants in the fishery more economically viable."
CRABBING REVOLUTION
The law, the Magnuson-Stevens Fishery Conservation and Management Reauthorization Act of 2006, on the whole won widespread praise from fishermen, environmentalists and others concerned with safeguarding the nation's ocean fish stocks.
It was the first overhaul in a decade for the law, which originally was passed in 1976 and is partly named for Ted Stevens, who made the act's passage a personal priority last year.
The law helps govern the Bering Sea crab fisheries, which in 2005 switched from a derby style of fishing to one in which boats and processing plants effectively own individual shares of the catch.
Normally, the Anchorage-based North Pacific Fishery Management Council helps make changes in federal fisheries management off Alaska.
But Young's Section 122, amounting to about a page and a half in a 91-page act, never got a council review.
That troubles Kodiak fisherman Terry Haines, who said vessel crewmen often have been ignored or disadvantaged when corporate fishing companies lobby policy-makers for changes in fishing rules.
The Young provision, he said, should have been subject to a public review "simply to avoid any appearance of impropriety and to give other stakeholders a chance to be involved."
A version of the language appeared last year in a U.S. Coast Guard bill Young sponsored as chairman of the House Transportation and Infrastructure Committee. But Congress didn't pass the bill.
The language reappeared in the Magnuson-Stevens Act in early December. The House Resources Committee had jurisdiction over the bill, and Young was a senior committee member.
The act would be one of the last Congress passed in 2006.
Regulators with the National Marine Fisheries Service are working now to implement Section 122, which would take effect with next year's crab fisheries.
CHANGING THE RULES
According to a NMFS analysis, the law qualifies just three seafood companies to convert their existing crab fishery shares into a new type -- one that will allow them to catch as well as process crab aboard boats equipped to do both jobs.
Such a consolidated operation could save the three crab producers sizable costs. For instance, they don't need to run separate boats to catch crab and haul them to port for processing in a packing house.
Crab rights also can be sold or leased, and the combo catch and processing quota created under Section 122 likely would be worth up to 25 percent more than straight catch quota, said Jeff Osborn of Dock Street Brokers in Seattle.
The federal analysis says the three companies each can switch up to 1 million pounds of crab annually to the new kind of shares. It does not estimate the financial benefits the companies could realize.
The three companies, all based in Seattle, are:
• Yardarm Knot, a unit of Yardarm Knot Inc., whose president is Al Chaffee.
• Blue Dutch, a unit of parent company Blue North Fisheries.
• Trident Seafoods Corp., one of the largest Bering Sea crab fishing and processing companies.
A potential loser under Section 122 was St. Paul, an island town in the middle of the Bering Sea that relies heavily on tax revenue from local crab processing. But a provision says companies that catch and then process crab offshore must compensate St. Paul by paying a fee of 5 percent on the crab's value.
Dave Whaley, a Republican fisheries staffer on the House Resources Committee, said a lobbyist for Yardarm Knot -- he said he couldn't recall the name -- came to see him last year about the crab provision.
One concern was that the St. Paul harbor was clogging with winter ice that could keep crab boats from delivering crab to the docks, and the goal was to find a way to process the crab at sea and still protect St. Paul's interests, he said.
"This was viewed as a legitimate policy concern," one Congress could handle faster than the North Pacific Fishery Management Council, Whaley said.
CAMPAIGN CASH
Chaffee did not respond to repeated requests for comment.
He has made campaign contributions to several members of Congress in both parties, with Young among the most frequent recipients. In the past five years, Chaffee gave Young a total of $4,500, according to Federal Election Commission records compiled by the Center for Responsive Politics. Employees of his companies gave $8,500 more.
Chaffee has other connections to Alaska's congressional delegation. In the past two years, Yardarm Knot has paid a total of $100,000 to two law firms for lobbying: Robertson, Monagle & Eastaugh, in which former Stevens staffer Brad Gilman is a partner, and Blank Rome, which counts former Young chief of staff C.J. Zane and former Young aide Duncan Smith as principals.
Ben Stevens, in financial disclosures required of legislators, said Chaffee's companies paid him $121,800 total from 2002 through last year for consulting and business services.
Chaffee was among four men, including Young's son-in-law, Art Nelson, and former Stevens fisheries aide Trevor McCabe, who together bought 60 acres on mostly undeveloped Point MacKenzie across Knik Arm from Anchorage.
Young earmarked $229 million in a 2004 highway bill for a commuter bridge across the arm, which could make Point MacKenzie land more valuable. Critics nationally lambasted the project as a "bridge to nowhere."
Executives with Trident Seafoods, a titan among seafood companies operating in Alaska, offered limited comment on Section 122.
"Trident did not push for the conversion language," Trident general counsel Joe Plesha said in an e-mail. "Congressman Young was really trying to find an answer that helped everyone."
Top Trident executives including company president Chuck Bundrant, his wife and son, and Plesha have given $12,900 to Young in the last five years, according to the Center for Responsive Politics. Trident also has employed Robertson, Monagle & Eastaugh for lobbying.
'WORST OF LEGISLATION'
The center says Mike Burns, president of Blue North Fisheries, and his brother, Patrick Burns, have given Young $3,500 since 2003.
But Mike Burns said his company also didn't seek Section 122 -- and has no plans to take advantage of it.
"When I first got a written version of it, it took me about a week to understand what it was," he said. "Obviously it serves some purpose."
Burns added that Young a couple of years ago helped his company win initial crab fishery shares it wasn't able to get through the North Pacific Fishery Management Council.
"As a last resort we went to Congressman Young, who looked at it, saw an injustice there, and went to bat for us and fixed it," Burns said. "I have nothing but the highest regard for the man. He didn't ask for any favors or anything like that."
But Holman, of Public Citizen, said earmarks or last-minute "riders" on major bills -- items such as Section 122 -- are "usually done to benefit special interests or campaign contributors."
"This is an example of the worst of legislation and the legislating process -- representatives producing legislation specifically designed to benefit a very small sector, either friends, colleagues or campaign contributors, which indirectly benefits the lawmaker himself."
Find Wesley Loy's commercial fishing blog online at adn.com/highliner or call 257-4590.
Crab coup
U.S. Rep. Don Young, R-Alaska, last year pushed obscure legislation through Congress qualifying three seafood companies for potentially lucrative new rights in the Bering Sea crab fisheries.
Company: Yardarm Knot, a unit of Yardarm Knot Inc.
Headquarters: Seattle
Leadership: Al Chaffee, president
Politics: In the last five years, Chaffee made campaign contributions totaling $4,500 to U.S. Rep. Don Young of Alaska. Employees gave $8,500 more.
Company: Blue Dutch, a unit of Blue North Fisheries
Headquarters: Seattle
Leadership: Mike Burns, president, and brother Patrick Burns
Politics: In the last five years, the Burns brothers have given Young a total of $3,500 in campaign contributions.
Company: Trident Seafoods Corp.
Headquarters: Seattle
Leadership: Chuck Bundrant, president
Politics: In the last five years, Bundrant, his wife and son, and other company executives have given Young a total of $12,900 in campaign contributions.