21 



STATEMENT BY 



FRANK DEGEORGE 



INSPECTOR GENERAL 



U.S. DEPARTMENT OF COMMERCE 



BEFORE THE 



SUBCOMMITTEE ON FISHERIES MANAGEMENT 



HOUSE COMMITTEE ON MERCHANT MARINE AND FISHERIES 



March 23, 1994 



Mr. Chairman and Members of the Subcommittee, I am pleased to be here to discuss 

 conflicts of interest as they relate to fishery management councils. Two years ago, we 

 reviewed allegations of conflicts of interest against several members and former staff of the 

 North Pacific Fishery Management Council in Alaska. We concluded that two members of 

 the Council did vote on matters in which they had a financial interest. However, the 

 Magnuson Act specifically exempts council members from legal prohibitions on such 

 conflicts, and the two members had properly disclosed their interests, so Chey did not violate 

 the law. ' We also found that another member received a precontractual payment for 

 consulting work while on the Council, but there was no conflict between that contract and his 

 work on the inshore/offshore issue which occurred before he got the contract. From a legal 

 point of view, there was no conflict of interest. 



Under the Magnuson Act, the regional fishery management councils prepare fishery 

 management plans for each fishery within their geographic area of authority that requires 

 conservation and management. If it becomes necessary to allocate or assign fishing 

 privilegesamong various U.S. fishermen, allocation plans are supposed to be fair and equitable 

 to all fishermen; reasonably calculated to promote conservation; and carried out in such a 

 manner that no panicular individual, corporation, or other entity acquires an excessive share 

 of such privileges. Judging from the many articles in the press which discussed allegations 

 about the North Pacific Fishery Management Council and our investigation, there was a 

 perception that cenain members were controlling council actions to maximize their personal 

 financial interests. We found no evidence of such actions. 



Let me start by stating that I believe that the laws that apply to other federal 

 operations should also apply to fishery management councils. The existence of concurrent 

 financial interests, whether actually conflicting or not, and whether exempt from prosecution 

 or not, damages the credibility of the councils. Public confidence in the process that manages 

 a public resource depends on the absence of even an appearance of conflict 



What then is the solution to the legal and management dilemma associated with these 

 actual or perceived conflicts of interest? First, we must find a legal means of assuring the 

 American public that the decisions made in the regional councils are for the long-term good 

 of the industry, the resource, and the country, not just for the short-term profit of council 

 members. As such, I fully recognize the importance of industry participation in the councils. 

 Certainly industry associations, companies, and individual fishermen must be invited to 

 participate in decisions which will affect their livelihood, their families' future, and the status 

 of their communities. But those interests can be represented on the councils without 

 damaging the councils' ability to conserve and manage such a vital public resource for future 

 generations. 



I am submitting with my written testimony a list of options to mitigate potential 

 conflicts for your consideration. I hope you wiir accept them for further study as possible 

 ways to enhance the management and reputation of the councils. Let me briefly discuss a 

 few of them. 



' One former staffperson violated the prohibition imposed on council employees from 

 maintaining financial interests that conflict with their fair and impartial conduct of official 

 duties. The U.S. Attorney's office in Alaska, however, declined to proceed further. 



