New Bedford Standard Times King of New England groundfishing plans to sell his fleet out of New Bedford Carlos Rafael, king of New England groundfishing says he plans to sell his fleet out of New Bedford — and that would be a serious problem By Simón Rios srios@s-t Posted Jan. 4, 2015 @ 2:01 am NEW BEDFORD — The biggest player in the New England groundfishing industry says he is cashing out of the business, selling off his scallopers and later his groundfish draggers, which count among the last in the countrys top-grossing fishing port. Rafael refused to name the company but said his decision is in response to the states cutting in half the amount of federal groundfish disaster relief aid he would get. The policy applies to all Massachusetts permit holders but will affect only Rafael because hes the only one with more qualifying permits than the 10.9 permit cap. The deal is they have to go out of state; I do not want them in Massachusetts, Rafael said in his raspy voice, calm one minute and yelling the next. That is the deal: They cannot bring any revenue to this state ever again. Im gonna cash in and screw. Rafael said he expects to close on the scallop boats early this year but said hes not naming the company because the deal hasnt closed. He said its a multi-billion dollar company based overseas that will operate out of Virginia. Rafael said hes staying in Dartmouth, where he lives, and will keep his city fish processing facility, Carlos Seafood. But he said hes moving his fishing business to the Cape Verde islands, where he will focus on the virgin mackerel fishery. John Bullard, NOAA Fisheries Northeast regional administrator, expressed skepticism Rafael would carry out the deal. I dont have any reaction at all, Bullard said. I dont know it to be true number one; number two, the scallop industry and the groundfish industry are very different industries; number three, people get in and out of industries all the time. All Im hearing right now is just noise. And Ive known Carlos a long time ... Ive heard noise before, lets just put it that way. Some refer to Rafael as the savior of the citys groundfish industry, which has been battered by declining stocks and draconian catch limits that took effect five years ago. Rafaels 12 scallop boats are only a part of the citys thriving scallop fleet, but according to his count, the sale of his 37 working groundfish boats (eight others are not working) will leave just 11 groundfish vessels in the port, and only four of these are in decent condition. If (Rafaels) boats stop fishing in New England period ... then its a serious problem for the groundfishery, said Dan Georgianna, an economist at the School for Marine Science and Technology in New Bedford. The situation is already dire, Georgianna said. The value of groundfish landed in New Bedford declined from $31 million in 2011 to $19 million in 2013, according to an SMAST study, a 44 percent drop. Georgianna said he doesnt doubt Rafaels estimate on the number of vessels that will remain, though with scallop and other boats from other states regularly docking in New Bedford, its difficult to say exactly how many New Bedford can call its own. Carlos has I think kept the groundfish industry going in New Bedford, Georgianna said. Its not just me that says that, its a very common statement. I think hes kept the groundfish industry working in New Bedford, otherwise, at some point its not a viable fishery (in the port) if theres not that many boats left. For Rafael, the decision to pull out of Massachusetts and the United States would be highly personal. He described a phone call from Paul Diodati, director of the state Division of Marine Fisheries informing him of the decision to cap his federal aid — a decision Rafael said was based on his success (he has a fleet, whereas many fisherman own only one or two boats). He said Diodati — who declined to comment for this story — told him that because a lot of people didnt get any disaster money, they set the cap so more could benefit. What a minute, Rafael said. Out of my money? Why the (hell) didnt they take money out of everybody? ... Im the one whos gotta be Mother Teresa? I will put over a thousand people looking for welfare when Im done, over a thousand will be on welfare, Rafael said, referring to people he said are employed by him directly and indirectly. So the state wants that, this is what you do: Ill eliminate all my companies, Ill sell my business, Ill move everything out of there and Ill start my business in a foreign country. Rafael said his 84 crew members will be out of work in New Bedford, though theyre guaranteed positions on the boats in Virginia. He also said his annual payroll is $15 million, and estimates the state will lose $10 million in revenue. Georgianna said he doubts that the sale of the boats can be coupled with an obligation not to do business in Massachusetts. For Tor Bendiksen, COO of Reidars Manufacturing, the idea that Rafael would sell his groundfishing boats is bad news. Hes basically a good customer of, I would say, everyone in the city of New Bedford ... Any one of us, a percentage of our sales come from him. Bendiksens company makes fishing nets used widely in both the scalloping and groundfish industries, which respectively comprise 30 percent and 70 percent of his business. He said Rafael always has a boat in the shop, which means constant work. And he said its like that for the electronics guys, the ice guys, the fuel guys — every one of the citys shoreside businesses. Despite the prospective It was kind of rotten what the government did to him with the relief money, because as a company, if I had to spend my money on 10 boats, I have 10 times the debt ... and sometimes even more. I understand him as a businessman on that side. New Bedford Mayor Jon Mitchell downplayed the effect Rafael leaving New Bedford could have and, like Bullard, noted that the deal is only talk so far. Its hard for me to speculate about a business deal that hasnt happened and that Im not otherwise privy to, but its widely known in the industry that New Bedford is the best port on the East Coast if not the whole country to land fish. As for boats leaving the city, Mitchell said the trend has been for out-of-state boats to come to New Bedford rather than the other way around. The success of the scallop industry in particular has enabled the port to maintain its infrastructure so that we can remain successful fishing port in the long run. Interviews with various people in the industry suggest that Rafael is a man that inspires respect in some and resentment in others. Also crediting Rafael for buoying the moribund industry, groundfisherman Willis Blount falls somewhere in the middle. Hes screwed me a few times, said Blount, who has been doing business with Rafael for decades. But he added that at other times Rafael would simply give him money when he was short on a payment, or throw him an extra chunk for riding out a hurricane blow. Hes good like that, too. Hes not all bad. What he is is a very shrewd businessman. Blount suggested that Rafael could be using his plans as a threat, as leverage against the government. Thats a claim Rafael flatly denies, as does veteran scalloper Jim Kendall, president of New Bedford Seafood Consulting. If it doesnt work out, then I think thats just a case of business, but I think hes dead serious about it, Kendall said. Hes spent a lot of money and he probably attained a lot of debt to get those boats and those permits, and now hes got an offer to get out ... and hes saying the hell with everybody, and thats just Carlos. Kendall said fisheries closures off Georges Banks and south of Nantucket mean Virginia-based scallopers could benefit from their proximity to mid-Atlantic fishing grounds, which is expected to be a focal point for scalloping in the season ahead. That could change in the future, Kendall said, but a trip to Georges Bank from Virginia (rather than New Bedford) could add a couple thousand gallons of fuel. It also means an additional day of traveling. Rafael, 62, said he started working on the docks when he was 19. He said he will seek to become a citizen of Cape Verde, which he said is a democracy where hell be exempt from paying taxes for the first eight years. They work with you, he said of the Cape Verdean government. Here they want to tax you to death.
Posted on: Sun, 04 Jan 2015 16:43:03 +0000
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