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Mistakes by federal agency foul up buyout of crab fleet

By Hal Bernton
Seattle Times staff reporter

ERIK HILL / ANCHORAGE DAILY NEWS, 1992 The Aleutian Mariner takes a wave before sending a crab pot back over the side in the Bering Sea. Federal officials want to shrink the North Pacific crab fleet of more than 250 vessels; the Aleutian Mariner would continue in the harvest.

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Federal fishery officials have bungled a $100 million buyout of the North Pacific crab fleet, admitting yesterday to flawed computer calculations that overstated the amount of crab caught in past years by the 28 vessel owners who submitted winning bids.

Those vessel owners were told by the federal officials just last week that their bids were accepted and they could expect multimillion-dollar checks later this summer in return for dropping out of the fishery.

But this week, they received terse e-mails from the National Marine Fisheries Service that notified them of the foul-up and warned that "any reliance on NMFS actions in acceptance of the bids may not prove beneficial."

"We greatly regret the error," the e-mail concluded.

Washington is home to most of the North Pacific crab fleet, which now totals more than 250 vessels.

The NMFS miscalculation is a setback to the congressionally authorized buyout that is supposed to shrink the fleet, which is far larger than needed to claim the annual harvests of red king, snow and other Alaska crab species. It's unclear what will happen next.

The federal fisheries service could decide to withdraw its acceptance of the bids, and make new offers, according to agency spokeswoman Sheela McLean. But winning bidders might claim the federal purchase contracts are legally binding and might try to collect that money from the federal government, according to some industry officials.

The vessels join in short seasonal harvests that in 2003 brought in more than $130 million worth of crab. The buyback is part of a broader effort to reform the harvest, replacing the traditional mad-dash derbies with slower-paced harvests that offer each vessel a predetermined share of the catch. The size of those catch shares — and thus the value of remaining vessels — would be boosted by the buyback of the 28 vessels.

But in order to proceed, the majority of the vessel owners that continue to crab had to agree to repay the $100 million cost of the buyback over a 30-year period.

A vote on that plan ended June 11. It was based on federal calculations that the 28-boat buyback would boost remaining king-crab shares by nearly 20 percent and snow-crab shares by more than 17 percent, according to agency documents. Those calculations were based on federal estimates of the five-year catch history of the 28 vessels.
 
But the fisheries service now admits the voters were given bad estimates that significantly overstated the share boosts that would result from the buyout. Instead of counting the catch history of each vessel once, federal officials mistakenly doubled or tripled the catch history if the vessel had two or three owners, according to McLean.

McLean said the agency is still trying to figure how inflated its calculations were.

But industry officials who track the catches think the NMFS may have overestimated the 28 vessels' catch by up to 50 percent, said Tom Casey, of the Alaska Fisheries Conservation Group, a crabber association.

The government's about-face on the buyback comes as a shock to winning bidders.

Gary Painter, of Newport, Ore., thought he was selling out after four decades of crabbing. "It's been a week of ups and downs," Painter said. "I already notified the crew that the boat had been purchased, and was working on some sort of severance deal for them. It's a mess right now."

Even with the federal missteps, there is still support for the buyback within the fleet, according to Arni Thomson, who represents Seattle-based vessel owners of the Alaska Crab Coalition. Thomson said his group wants the bids recalculated, then put up to a new vote.

"There has been a tremendous amount of industry and NMFS time expended on the development of the program," Thomson said. "A second referendum with correct results seems appropriate."

Hal Bernton: 206-464-2581 or hbernton@seattletimes.com