Pacific Surimi LLC, a seafood processing corporation with a plant in Warrenton, Oregon was found guilty Wednesday on charges of theft in the first degree by Judge Philip Nelson following the entry of a no contest plea by the company's corporate attorney.
Attorney General Hardy Myers and Clatsop County District Attorney Joshua Marquis announced an extensive settlement that resolved an investigation that had spanned two years. A special grand jury had been empanelled in early 2002 and heard from 36 witnesses and reviewed thousands of documents. In June of 2002 a settlement was reached and the grand jury adjourned without returning any indictments because the company agreed to plead no contest to resolve the investigation.
Myers said that the plea returns hundreds of thousands of dollars to Oregon fishermen and taxpayers. The amounts paid by Pacific Surimi amount to one of the largest financial settlements ever assessed in a criminal case in the state.
Myers explained that his office had joined the investigation at the request of the Clatsop County District Attorney's office. "The message is that fishing is a critical natural resource of Oregon," Myers said. "When the rules are not followed and fishermen do not receive what is rightfully theirs the state will step in and, when necessary, bring criminal charges."
Marquis said that the charges arise out of conduct by employees of Pacific Surimi from 1997 to 2000. There is no indication that the practices that resulted in the charges continued after the investigation began in spring of 2000. Troopers from the Oregon State Police Fish and Wildlife Division's Special Investigations Unit conducted the investigation.
"The men and women who fish our oceans risk their lives and are particularly economically vulnerable to the companies that buy their catch." Marquis explained, "The word is don't break the rules, don't break the law, or we will come after you with all the resources of the state. It is our goal that this message, which we are confident this company has received, will go out to the rest of the industry."
Pacific Surimi LLC is co-owned by a Japanese company, Koyo, Inc., and Pacific Seafood Group. The criminal conviction arises out of actions by employees at Pacific Surimi's Warrenton plant. That plant processes pacific whiting, a fish also known as hake. Individual fishing boats harvest hake and deliver it to the plant where it is processed into a variety of products including imitation crab.
Marquis explained that as part of the plea agreement Pacific Surimi is paying restitution totaling $166,000 to more than twenty fishing vessels and has paid approximately $185,000 to reimburse the State Police and Oregon Department of Justice for the costs of the investigation. The Company will also pay $104,000 to the Oregon Department of Fish and Wildlife (ODFW) for groundfish taken by Pacific Coast Seafoods, a sister company to Pacific Surimi that operates another plant in Warrenton. The last amount is repayment for "bycatch" of groundfish that was under-reported to ODFW. Bycatch are other fish that are brought up in the nets when whiting is harvested. The monies paid by Pacific Surimi are for fish taken by Pacific Coast Seafoods. That company was not charged with criminal charges as a result of this agreement.
This year, the federal government restricted the groundfish fishery, further reducing the groundfish quota. However, the conduct of Pacific Coast Seafood in underpaying ODFW for the bycatch (made up of groundfish) did not impact the quota. The decision to restrict the ground fishery did not result in any way from the criminal action.
The restitution is based on amounts of money individual boats should have been paid based on a formula referred to as "weighback" in the fishing industry. When Pacific Surimi purchased whiting from the fishermen, it was supposed to sort out damaged, unusable whiting. Pacific Surimi did not have to pay the fisherman for the unusable fish. These unusable fish are known as "weighback." Weighback is defined by administrative rule as fish of no commercial value. From 1997 to 1999, Pacific Surimi had a much higher percentage of weighback compared to other whiting processors in Oregon. The investigation revealed that Pacific Surimi was processing almost all the whiting, and inflating the amount of weighback. This meant that fishermen were not being paid for all the usable whiting delivered, and Pacific Surimi was getting free fish.
Marquis explained that the prosecution had agreed not to seek further financial penalties after the company had made a donation of $325,000 to a newly created "Clatsop County Endowment Fund" which will be administered by the Oregon Community Foundation (OCF) and $20,000 to the Oregon Wildlife Heritage Foundation's "Catch a Poacher" program. OCF is a statewide umbrella organization that administers more than $350 million in donations for a variety of charitable and educational purposes.
Restitution will go to 21 boat owners, who will receive letters explaining the details of the plea negotiation. The Circuit Court will issue checks within a few weeks. Many of the boat owners were unaware of the existence of the investigation. Only 12 boats were named in the information charging Pacific Surimi with theft, but as part of the agreement the company agreed to pay restitution to 10 other boats that will receive payments for the 1997, 1998 and 2000 whiting seasons.
In addition to the more than $800,000 Pacific Surimi has paid and donated, the plea agreement forbids any retaliation against fishermen who cooperated in the investigation. Pacific Surimi and its parent corporation, Dulcich Inc. of Portland agreed not to deny a market to any boat owner or skipper involved in the investigation. Dulcich, Inc, one of the largest seafood processors in the western United States, was not a target of the investigation.
Kevin Neely, Justice, (503) 378-6002
Josh Marquis, (503) 338-3614, Clatsop County District Attorney