Analysis of EDF, Catch Shares, $15-20 BILLION Profits
First, the Milken of Milken Institute is none other than Michael Milkin, convicted felon and financier. He was indicted on 98 counts of racketeering and fraud in 1989. A plea bargain reduced the charge to six securities and reporting violations. He was sentenced to ten years in prison and made to pay $900 million in fines and settlements, but was released after less than two years. Milken was also banned for life from the securities industry. Sentenced to 10 years and served only 2? Justice in this country is for sale I guess.
The moderator of this conference was Larry Band, "Consultant to the Environmental Defense Fund". Mr. Band worked for almost 20 years at Lehman Brothers. You know, THE Lehman Brothers investment firm that just 6 months prior to this meeting where Mr. Festa is laying the Plan out, the Lehman Brothers filed the largest bankruptcy filing in U.S. history, with Lehman holding over $600 billion in assets. $600 BILLION. Financial services firm Lehman Brothers filed for Chapter 11 bankruptcy protection on September 15, 2008.
And THESE people want us to trust them to commodify our fisheries into tradeable shares? Seriously?
Mr. Band is also on the Governing Board of EDF's California Fisheries Fund, along with EDF Vice President Peter Accinno, EDF Vice President Dave Festa, and EDF Vice President Amanda Leland.
The California Fisheries Fund (CFF) is a nonprofit revolving loan fund that invests in the fishing industry on the West Coast. Our mission is to help our borrowers (fishermen, fishing businesses, ports, communities and others) succeed in fisheries that achieve environmental conservation, improved profitability for the industry and stability for port communities.
By investing in sustainable fisheries, CFF aims to achieve the following goals:
Promote tangible conservation benefits, including sustainable fishing, reduced bycatch where applicable, and improved monitoring, enforcement, and data collection.
Promote tangible community benefits as defined by fishing organizations, ports, and other community-based groups.
Sustain a revolving pool of funds for future investments.
Anyone familiar with what has happened to California recreational fishing in the last 3 years? MLPAs? Anyone? These people are NOT the friend of ALL recreational fishermen and most commercial fishermen. We are simply competitors for the resource that they intend to profit from - what is their business plan? Remove the competition.
Jason Winship, Managing Principle of Sea Change Management. Mr. Winship was an investment banking analyst with Lehman Brothers, and serves on the Fund Credit Committee of EDF's California Fisheries Fund.
Here are some quotes from this meeting;
Dave Festa; "If I had to do – if I had to boil everything down to just three basic points, I’d say the three things that I want to say here today is that I’m glad Jerry used an FDR quote because I think we are sitting at the precipice of a period of governmental innovation and entrepreneurialship in fisheries that as significant as the changes that FDR pushed through in things like Social Security; a complete redefinition of our relationship with a natural resource because that’s what we’re talking about here. We’re talking about a natural resource. It’s the same thing as trees, as gold, as any other natural resource that we use except that it has the potential to be renewable.
The second thing is that there is a significant – that there is a business opportunity here. We don’t know how big it is, but it is potentially significant.
And then the third is that any change in the status quo is really, really hard, and we need your help in pushing forward these changes both in terms of the political process but also in terms of bringing capital to the table to help grease the skids."
"So the innovation is to say, okay, don’t catch more than 10 fish. (Laughter.) What you do is you take – the scientists come back and say fine, here’s the quota; it can be a hundred million metric tons or whatever it is. Then you allocate shares to that fish to fishing entities. They can be individual fishermen. They can be a community. They can be an association. They can be a trade group. It can be a consortium. It doesn’t really matter.
What matters is that they now have a quota. And for every fish they land, they have to have quota share. And the other innovation is that, because you’re going to monitor, your control mechanism is this quota. What really matters is that you have excellent monitoring and policing.
Right now, there is hardly any monitoring and policing except for what happens at the dock, and that’s inadequate. Under these systems which are called Catch Shares...."
So you can see the only thing – through applying the old-school regulations, you’re actually reducing the number of days at sea. You know, so they were catching all the fish in 27 days. Five years after the catch shares went into place, the season was up to 202 days."
STOP RIGHT THERE.
Look at what has happened to the recreational Gulf Red Snapper fishery since EDF was successful in getting its agenda implemented into law when their Oceans Team was "instrumental in crafting and passing the changes to Magnuson in 2006" - THE HIJACK;
In 2006, the last year we fished before the Hijack, we enjoyed a 194 day season, 4 fish limits, each fish weighed 3.2 pounds, we landed about 4.22 million pounds or about 1.3 million fish.
Ever since the Hijack, the NMFS has reduced our seasons/bag limits due to the EDF-inserted controls on our fisheries, resulting in a 48 day season in 2011, and well on its way to a 27 day season soon.
In 2011, our access was reduced by 75% (from 2006 levels) to 48 days, our bag limits reduced by 50% to 2 fish, each fish was larger - 6.4 pounds, and somehow we miraculously were able to land even more poundage - 4.5 million pounds, and about ONE-HALF the number of fish.
The NMFS has been able to do this by claiming that our EFFORT has increased exponentially since 2006. In effect, they are claiming that we supposedly took 4-5 fishing trips per season day in 2011 for each single trip that we took per season day in 2006.
It simply didn't happen.
I personally believe that quite the opposite happened - recreational fishing effort went DOWN - not up, and certainly not increased 4-5 times.
The similarities to what Festa was proposing in his speech, where the fishing days went from 27 days (under the old-school regulations) to over 200 days with this gizmo FMP called catch shares is parallel to what has happened in the Gulf SINCE THE HIJACK;
The NMFS has been complicit with EDF in artificially reducing our seasons each year to the point that we are today - we are PROHIBITED from fishing for red snapper 90% of the year based on bogus effort claims.
IF YOU TAKE INTO ACCOUNT, FOR CONVERSATION'S SAKE, THAT EFFORT VERY POSSIBLY REMAINED CONSTANT BETWEEN 2006 AND 2011, THE FACT IS THAT IT WOULD HAVE TAKEN US RECREATIONAL FISHERMEN OVER 200 DAYS TO CATCH THAT 4.5 MILLION POUNDS.
In other words, if true and factual data was used relative to recreational effort, THERE WOULD BE NO NEED TO EVEN BE DISCUSSING SECTOR SEPARATION, CATCH SHARES, OR ANYTHING OF THE SORT.
Back to Festa's speech;
"...You know, so how do I – you know, but I know that if I fix all that, I can be profitable in the future. So I pull together investors and I buy the factory and I sink a whole bunch of money into it and, you know, retrain workers and then get paid back on the profits on the other end.
Well, why can’t we do that with fisheries? Well, first – and I hope David (Crane) will address some of this – first, we have to have commitment from the government to the regulatory change. (refer to Jane Lubchenco).
And then, second, we have to have capital. And that’s where I think public-private partnerships come in because the government has the mandate and the authority to change the rules, but it doesn’t have as much capital as it once had.
The private sector has the capital but, of course, doesn’t have the responsibility of defending the public trust way the government does. So it’s a perfect partnership.
So that’s the second thing that I think needs to happen.
How much money is to be made out there, and how do we think about the risks associated with this? You know, that’s where we need your help.
Just one statistic, in all of the catch-share fisheries that have transitioned over, the value of that fishery tends to increase by – or the shares in that fishery tend to increase by a factor of four (400%). That’s an average. The current U.S. industry is a $5 billion industry.
So, you know, it’s not – it’s not telecommunications-size money, but it’s real money."
So, that's it, in a nutshell. They are looking at $15-20 billion to be made by privatizing our Public Trust Resource with strategies from people who have already cost the American taxpayer HUNDREDS of BILLIONS of DOLLARS in failed investment schemes.
We need to demand that these extreme anti-fishing, profit-motivated corporations be removed from our fisheries management process. We need to demand that the changes to Magnuson in 2006 be rescinded and we return to sane, fair, and equitable fisheries management.
Capt. Thomas J. Hilton