The bidding starts early at the seafood auction in Gloucester, Mass. Each day about 30 tons of fish—mostly cod, haddock, and flounder—come in by boat on Cape Ann, a fist jutting into the Atlantic Ocean. Fishermen motor up to the concrete docks behind the beige-and-white warehouse, then wait while workers in rubber boots hoist their catches and weigh them out on a stainless-steel digital scale. At 4 a.m. grocery store buyers, restaurant owners, and distributors file in to inspect and bid on the haul.
The traders and graders were wrapping up their business just after 9 a.m. on Dec. 7, 2006, when 16 federal agents in Crown Victorias and Ford Expeditions pulled into the parking lot. They entered the building in pairs. Although most of them worked for National Oceanic and Atmospheric Administration, they wore bulletproof vests and carried Glock pistols, according to interviews with participants and the NOAA investigative report.
They were looking for the auction’s founder and chief executive officer, a mustached man named Larry Ciulla. When they found him in an office off the auction floor, they officially informed him of their search warrant. They suspected he had illegally bought and sold cod, one of the world’s most valuable, most threatened, and closely watched stocks of fish. The agents were there to seize the auction’s last three years of records and had rented a U-Haul for the mountain of evidence they intended to truck away. In raiding the Gloucester Seafood Display Auction, the largest fish dealer on the Gulf of Maine, which extends from Cape Cod up to the southern tip of Nova Scotia, they hoped to send a message to the fishermen of Gloucester: Overfishing doesn’t pay.
Within minutes the feds herded everyone—longtime auction employees, Central American dockworkers, and three generations of Ciullas—to the auction floor, a high-ceilinged room with rows of folding desks outfitted with laptops. Drivers loading trucks with frosty cod, haddock, and flounder were told to turn off their engines. Restrooms were off-limits for fear papers would get flushed down toilets. While some agents went looking for records, others stood guard at the docks.
The auction’s curly-haired bookkeeper, Nina Jarvis, was printing invoices from the morning’s sales to Whole Foods Market (WFM) and other buyers when two agents strode in. They asked whether any records were kept offsite. “I’m not saying anything,” she replied, according to the NOAA investigation report. The agents hunted under the stairs and in rooms around the auction floor before discovering that an entire year, 2004, was missing. “We need to see those records,” they demanded of Ciulla. Eventually they found them at a nearby self-storage facility and loaded 38 boxes into their truck.
All day the agents checked in with their boss, Andy Cohen, the man responsible for policing NOAA’s northeastern fisheries. Cohen was at a fish farming conference in Connecticut, but even from a distance he sensed that things might not work out the way he had hoped. Several local politicians had shown up at the auction house. The Ciullas’ friends were bringing the family sandwiches. The Gloucester mayor sent a veteran police detective to watch over the feds. A representative from Democratic U.S. Representative John Tierney’s office had stopped by for half an hour.
Cohen knew that fishing was the business of Gloucester, but the next five years would reveal just how powerful the industry could be. The battle between Cohen and Ciulla had begun many years earlier and would end this past summer with NOAA’s enforcement powers severely compromised and with Cohen out of a job. Starting that day in Gloucester, much would be revealed about the balance between the world’s fisheries and the businesses that harvest them. “I don’t think the fishing industry is ever going to be the same,” says Cohen.
Read the full article at Bloomberg Businessweek.
Analysis: The article overlooks and minimizes many violations and abuses committed by Charles Juliand and the Office of Law Enforcement (OLE). Two independent investigations into the OLE and Juliand found numerous instances of wrongdoing.
An independent examination of OLE activity by Special Master Charles Swartwood, appointed by the Secretary of Commerce, found that both OLE and Juliand subjected the Seafood Display Auction to “selective targeting” and could not produce credible evidence of illegal activity (p. 53). Swartwood found that affidavits submitted by the OLE on the matter contained “an egregious misstatement of the facts,” (p. 55) that the evidence submitted by OLE was misleading, and that allegations against the Auction were unsubstantiated (p. 56).
Similarly, in a 2010 report, NOAA’s Office of Inspector General (OIG) found that there were widespread instances of excessive fines issued by Juliand’s office, including in the cases of the Auction and Larry Yacubian. According to the Inspector General, fines issued by Juliand in his region were more than double those of fines in the second highest region, and five times greater than the remaining four regions (p. 13). Similarly, in the Yacubian case, Swartwood’s investigation found that “credible evidence” existed to indicate that NOAA pursued the case primarily for financial gain (p. 129).
The cases of aggressive, selective enforcement and excessive fines primarily benefited OLE’s Asset Forfeiture Fund (AFF), which used the fines to fund OLE activities. While the article claims that no evidence of corruption was uncovered in the investigations, the OIG did find widespread abuse of the AFF. For example, the OIG found that the AFF was used to purchase a fleet of 200 unmarked vehicles, even though OLE only has 172 employees and agency policy does not allow use of the AFF for the purchase of vehicles (p. 3).
In addition to abuse of the AFF, the investigations revealed other instances of improper conduct. Dale Jones, head of OLE, was found to have been shredding documents during the middle of the OIG investigation, and in violation of Department of Commerce policy. Andy Cohen was found in Swartwood’s report to have improperly intimidated a witness in the investigation (p. 120-121). Juliand was cited by the OIG for “serious lack of judgement” and “conduct unbecoming a federal government attorney.” (p. 9)
The findings against the OLE and Juliand’s office were not politically motivated, as the article implies. The OIG operated free of any local political influence on behalf of the Commerce Department, and Judge Swartwood was chosen to review the allegations against OLE due to his longstanding reputation for fairness and legal knowledge as a former US Magistrate Judge and current Chairman of the Massachusetts State Ethics Commission.