Shame to share for scallop shenanigans

Alaska’s rural communities will lose out after a backdoor move to preserve the status quo in the state scallop fishery backfired in the closing days of the legislative session.

The stage for the standoff between Rep. Paul Seaton of Homer and Sen. Donny Olson of Nome was set when Olson attempted to bypass Seaton’s Fisheries Committee by attaching an unrelated permit program onto an uncontroversial House bill to extend the 25-year-old Alaska Regional Development Organization.

Known as ARDOR, the program consists of 12 regional organizations that received a total of $1.03 million from the state in the last fiscal year. That doesn’t sound like much, but it generated some $4.4 million in federal matching grants.

That’s real money, so I’m still scratching my head over how Olson could refuse to heed the calls from Kawarek Inc., his home district ARDOR, to pass a clean bill and keep the program from sunsetting.

There have already been layoffs around the state at ARDORs, who were to receive $859,000 in general funds for the next fiscal year. Based on typical matching rates, the gambit by Olson supported by the Washington-based Alaska Scallop Association and the state Commercial Fisheries Entry Commission, or CFEC, may end up costing Alaska another $3.5 million or so.

None of this had to happen, and little of it makes any sense.

The limited entry program for scallops and hair crab Olson was trying to protect doesn’t sunset until Dec. 30. There was plenty of time before the 2014 fishing season to work on it, which is what Seaton offered Olson.

ARDOR, on the other hand, will sunset July 1. (In a sad twist, that is also the start of the next scallop season.)

There is no hair crab season. It hasn’t been open for years and there’s no chance it will be open any time soon. Two of these hair crab permits are held by Coastal Villages Region Fund, the Community Development Quota group for the Kuskokwim Delta that isn’t even a part of Olson’s district.

In a nutshell, Olson traded a bird in the hand for nothing in the Bush.

The general funds and grants for ARDOR were real. The benefits to rural Alaska are nonexistent from a hair crab fishery that is closed and a scallop fishery that is almost entirely controlled by a Washington cooperative consisting of a few partners and American Seafoods.

You may be wondering why Seaton refused to blink on this. The reason is the only thing that makes sense in this whole debacle.

In a little more than a decade since state and federal limited access permits were required for the scallop fishery, a core group of partners has methodically consolidated licenses through a combination of regulatory loopholes, some as simple as forming separate LLCs to get around a federal two-license ownership cap.

Jim Stone, Glenn and Egil Mikkelsen, and John Lemar, all of Washington, now hold a combined four federal permits and Stone holds a fifth. Kodiak skipper Tom Minio, who runs a scallop boat that operates solely in federal waters for the partners, also owns a share of one of those federal permits purchased in 2008.

The corresponding state waters permit acquired by Minio has yet to be assigned to a vessel and is therefore in suspended status.

None of this is illegal, at least on the federal side, even if it does tiptoe if not trample on the intent language of the two-license cap published in the Federal Register back in 1999.

But on the state side, Seaton has a legitimate constitutional question of whether the consolidation of federal permits — which has naturally consolidated the parallel state permits — violates the prohibition on creating an exclusive right of fishery under the Limited Entry Act.

The fact that few legislators are willing or able to understand such fisheries minutia or Alaska Supreme Court case law makes it no less legitimate.

The scallop fishery has gone from nine vessels when the program was conceived to only two operating in state waters today. It has consolidated to such a point that fisheries tax and landings data can’t be reported.

Such an obvious change in the fishery, almost entirely accruing to the benefit of out-of-state owners, makes it a little more than strange that the state CFEC would go to the mat so hard to extend the scallop entry program.

If Chair Bruce Twomley and Commissioner Ben Brown of the CFEC really believe the scallop fishery operates best with just two vessels as it does now, they should say so. To treat the clear consolidation under this unique version of limited entry with a nothing-to-see-here attitude fails to meet their obligations to put the state and its constitution first.

The state can’t do anything about liberal federal definitions of ownership, but it is under no obligation to preserve a program that has seen systematic relinquishment and leasing of permits as a means to control the fishery, especially when the Alaska Supreme Court has ruled in that active participation is central to the Limited Entry Act.

It is not easy to get into the scallop business. Costs are high and 100 percent observer coverage is required to prevent exceeding crab bycatch limits or the harvest quota. That makes it unlikely much will change even if limited entry for scallops goes away.

The federal scallop beds will still account for 75 percent to 80 percent of the total harvest, and the Alaska Scallop Association will still take all of that and most of the rest in state waters.

Things are already changing, though, at ARDOR offices around the state where funds have been cut off and jobs lost. The people who made that happen should be ashamed of themselves for holding rural Alaskans hostage to a bill to benefit a few permit holders.

Andrew Jensen can be reached at [email protected].

Updated: 
12/06/2016 - 12:17pm