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April 1, 2007

Oystermen reap federal bounty

Bid to revive bivalve benefits watermen more

By Rona Kobell and Greg Garland

Baltimore Sun

At the Hyatt Regency resort in Cambridge, several dozen scientists, watermen and government regulators gathered to sip martinis and mingle over hors d'oeuvres. Later, there were cheers and tributes as they dined on crab and filet mignon.

The mood was celebratory at January's annual meeting of the Oyster Recovery Partnership. Yet the government-financed nonprofit has made little progress toward its stated mission of restoring oysters to the Chesapeake Bay.

Maryland officials set up the group more than a decade ago in what was envisioned as a groundbreaking attempt to revive a species all but destroyed by overharvesting and disease. Since 2002 alone, the partnership has received $10 million in federal funds to lead Maryland's efforts to make oysters an abundant, self-sustaining species again.

The way to do that, leading scientists say, is to leave the shellfish in the water so they can reproduce and propagate the species. But the partnership puts most of its oysters in places where watermen can take them out - and sell them for roughly $30 a bushel.

"If you're serious about the ecological value of oysters, then they must remain in the bay and live," said veteran oyster biologist George Krantz, former fisheries director at the Maryland Department of Natural Resources.

The partnership's spending has done more to create income for watermen than bring back the Maryland oyster, an investigation by The Sun has found. The group not only provides watermen a crop to harvest, but it also pays them to do work that many scientists say has little merit.

The Sun found:

• While the partnership has planted tens of millions of hatchery-raised oysters, less than a third have been put in protected sanctuaries. Most are planted in places where they can be harvested.

• The group is paying the Maryland Watermen's Association nearly $400,000 this year to remove diseased oysters from one part of the bay and dump them in another. Proponents say this practice helps other oysters survive, but it has no proven scientific value. Critics say a primary benefit is to provide work for watermen.

• The head of the Watermen's Association sits on the partnership's board and is among those who benefit financially from the federal grants. Association president Larry Simns Sr. doled out tens of thousands of dollars of the grant money to watermen last year to help plant or move oysters. Also, he collected $40,100 for supervising their work.

• The group used $46,000 in federal funds to hold its annual meeting at the Hyatt Regency, a golf resort and spa. The money went not just for the fancy dinner but also for hotel rooms for 50 of the guests. Private funds were used only for the alcohol.

While solid figures are not available, the Department of Natural Resources estimates that there are fewer oysters in the Chesapeake today than when the Oyster Recovery Partnership began its work in 1994. Its efforts have failed to overcome the devastating impact of two oyster parasites, MSX and Dermo, that have all but wiped out the oyster population.

Partnership officials nonetheless consider their work a huge success.

"We're certainly doing infinitely better than what has been done in the past," said Torrey C. Brown, a former state natural resources secretary who now serves as the partnership's unpaid chairman. He is proud of the group's extensive oyster-planting program.

Partnership officials say it makes sense to let watermen harvest many of those oysters because the shellfish would die eventually of disease. They point out that in the several years before the oysters are harvested, they help the bay by filtering away pollution.

"The idea that it is a watermen's welfare program is nonsense," Brown said. "I don't think that they're getting any untoward benefit."

Though the partnership gets millions in federal funds, it operates with virtually no governmental oversight. The group gets the money as the result of a budget "earmark" arranged by Sen. Barbara Mikulski, a Maryland Democrat, and the grant is distributed by the National Oceanic and Atmospheric Administration.

A top NOAA official acknowledged that his agency hasn't intervened as the partnership used the grant to run programs that he said are effectively subsidies for watermen.

Because the money was approved specifically for the partnership through an earmark, agency officials believed they had no authority to interfere, said Lowell Bahner, a NOAA administrator who until recently oversaw the agency's Chesapeake Bay office.

"Senator Mikulski said, 'I want oysters in the water for harvest by watermen,'" Bahner said. "Is that a subsidy? That's what it looks like. And I think she would be proud of that."

Mikulski declined to be interviewed for this article. But in a written response to questions from The Sun, she said she expected NOAA "to have strong oversight" of how the grant was being spent. In addition, she said the money "was never intended to be a subsidy for industry or watermen."

"Unlike farm subsidies, this does not guarantee revenue for watermen or industry," Mikulski said. "This was intended ... to help jumpstart restoration for the economic and environmental health of the Bay."

Many scientists question why the partnership is spending millions of federal dollars to plant oysters, only to let watermen take them before they can reach full reproductive potential.

"You can't justify doing it," said Krantz. "The agenda has virtually excluded any scientific personnel who voiced opposition to this concept. ... The decision to take them out is based on a harvester's wishes, not a conservationist's wishes."

Rock bottom

The Oyster Recovery Partnership traces its roots to the winter of 1993, when Maryland's oyster industry hit rock bottom. Watermen harvested fewer than 80,000 bushels of oysters that season, taking home about $1 million. Just a decade earlier, they were bringing in more than a million bushels, which fetched $16 million at the dock. In the years before that, the harvests were even better, providing a stable income for thousands of people who earned their living on the water.

The fast decline of the oyster was alarming not just because it was putting watermen out of a job. Oystering was part of Maryland's identity, the old-fashioned simplicity of the work immortalized in sepia-toned photographs of watermen plying their wooden tongs from sail-powered skipjacks.

The collapse of the species was of tremendous concern to scientists. Oysters are the backbone of many aquatic communities, providing reefs that are crucial habitat for crabs and small fish. They are also critical to the health of the Chesapeake because, as they suck in water to filter out food, they literally filter away pollution.

Among those most concerned was Brown, then Maryland's secretary of natural resources. He gathered everyone he could think of with a stake in keeping oysters healthy, assembling in one room a motley coalition of 40 - watermen, regulators, legislators, university professors.

He hired a facilitator to calm tensions at what became known as the Oyster Roundtable. No one was allowed to leave the table until everyone agreed on what to do next.

But as further meetings were held, Brown said, it was clear the warring parties didn't trust each other. So he suggested creating a nonprofit agency that would get the various groups involved in an effort to bring back oysters.

It would not be a research organization - plenty of those already existed. Rather, it would work with scientists and watermen to plant oysters in the water and monitor their progress. Ideally, the group would receive a small amount of government money, but it would also raise private funds.

The Oyster Recovery Partnership was formally created in 1994, under a board that today numbers 18 people, including seafood executives, other businessmen and environmentalists. Its purpose, according to a written agreement with the state, was to develop projects to promote "the ecological restoration of oysters in the Chesapeake Bay." The agreement says nothing about helping watermen.

But the group's first office was in a back room of the Maryland Watermen's Association headquarters in Annapolis. The partnership has since moved into space across the hall.

The organization got off to a rocky start. It never raised the private money its founders had hoped for, and its small staff often seemed overwhelmed. By 2000, the group had gone through two executive directors and was in poor financial shape. It advertised for a new executive director and interviewed dozens of candidates. Charles Frentz was one of the last.

"I told them, 'I am either going to put you out of business or straighten you out,'" Frentz recalls.

'A lack of focus'

Frentz conceded that he knew little about the biology of the bay - he had spent much of his career running several horse racing businesses in Florida, including one that put on the prestigious Breeders' Cup. He said he hadn't been looking for a job; he was retired and had moved to Maryland largely to marry his high-school sweetheart, an executive at the Social Security Administration.

But he brought with him a passion for the bay that came from growing up near Sparrows Point and spending summers at a family home in Tolchester Beach, trawling for soft-shell crabs. More importantly, he said, he could apply sound management practices to a foundering organization.

"It was almost a feel-good situation where you had good intentions, but there was a lack of business focus," Frentz said. "There was no question that I challenged how they did business, why they did business and how they would do business in the future."

When Frentz came on board, the partnership was getting about $450,000 from NOAA and had little other income. It was using volunteers to plant small clusters of oysters on tiny plots throughout the bay.

If the partnership had any prayer of significantly increasing the number of oysters in the Chesapeake, Frentz reasoned, it would need to plant many more baby oysters. To do that, it would need more money.

Frentz persuaded Donald Meritt, the manager of the University of Maryland's Horn Point hatchery, to produce more oysters, promising to get money to upgrade the facility.

Frentz also cultivated Mikulski, who had been earmarking money for the partnership. In his first year in the job, Frentz nearly doubled the ORP's federal funding, to $850,000. By 2002, the group was getting $1 million; by 2004, $2 million. Last year, the funding doubled again to about $4 million.

As the money increased, so did Frentz's pay. He was hired for $58,000 in 2000, according to the partnership. By the time he retired three months ago, he was earning $151,000, most of it from federal funds. He still gets $10,000 a month as a consultant.

Frentz frequently praised Mikulski, even presenting a video tribute to the woman he called "Our Bay Lady." She returned the compliments. In a 2004 letter to Frentz, she called him "just about the best thing that has happened to the Chesapeake Bay since the skipjack."°

Helping watermen

The idea of using government money to help watermen isn't new. The Maryland Department of Natural Resources has for years run oyster programs that are essentially subsidies.

The state agency moves baby oysters from the lower Chesapeake, where they are abundant naturally, and spreads them around the bay. A committee of oystermen tells the department where they want this "seed," as the babies are called, and the department delivers. The idea is to help watermen from upper bay counties earn a living, state officials say. The agency has been doing this for decades.

But when parasites began to attack the bay's oysters in the 1970s and 1980s, this practice turned out to have a down side. The parasites that attack oysters thrive in the same salty waters where oysters reproduce. So when the state moved oyster seed to lower-salt waters, the parasites hitched a ride - spreading disease.

Initially, state officials thought that wouldn't happen because they believed the parasites wouldn't survive in the fresh water of the upper bay. Once it was clear the parasites would survive, the department continued to move the seed around anyway, arguing that since the bay's oyster population was so far gone, stopping the program wouldn't lessen disease and would only hurt watermen.

"History is what it is," said Chris Judy, the department's longtime shellfish director, explaining why the practice has continued. "The time to [say] 'Let's not move diseased seed' was at the beginning."

'Managed reserves'

Charlie Frentz didn't want to spend millions of dollars to plant disease-resistant oysters only to have the state turn around and deposit diseased seed nearby.

So he asked the watermen to turn down the state's seed. He said the partnership would instead provide hatchery-raised oysters that would eventually be available for harvest. The oysters would be planted on special bars that he called "managed reserves."

Normally, watermen can take oysters from the bay when they are 3 inches long. In the managed reserves, they had to wait until the oysters were 4 inches. The larger size meant the oysters would have an extra year or so to live in the bay.

But after the first year, when one waterman was so mad about the restrictions that he threw an oyster hammer at Larry Simns, the partnership changed the rules. Today, when half a bar's oysters reach 4 inches, watermen also can remove the 3-inch oysters.

Meritt, the hatchery manager, calls the managed reserve "a really nice compromise" because it gives many oysters an extra year in the bay to provide ecological benefits. But other scientists say the program is nothing more than an expensive put-and-take fishery falsely billed as restoration.

An oyster's ability to reproduce increases exponentially with each year it survives. So harvesting the animal after just four years - about the time it takes to reach 4 inches - cuts off its life span at a critical time, according to Krantz, the former fisheries chief.

He estimates that if an oyster reaches 5 or 6 inches, it will have a 3,000 percent increase in reproductive capability. Krantz and other scientists say it's crucial to leave the oysters in the water; even if many will die of disease, the ones that live will help propagate a species that can withstand disease.

Of the 950 million hatchery-raised oysters that the partnership has planted since 2000, more than half have gone into managed reserves. About 100 million were planted for harvesting without any special restrictions. Only about 265 million were put in oyster sanctuaries where harvesting is prohibited.

The sanctuary oysters have done better than many expected.

About 20 percent of them are still alive, according to Kennedy T. Paynter Jr., a University of Maryland scientist who is paid by the partnership to monitor its bars. That survival rate is good, Paynter said, given that half of the oysters planted anywhere in the bay are expected to die in the first year.

The numbers appear to contradict the watermen's assertions that if oysters are not harvested, they will just die of disease.

"To use that as an excuse to harvest is a logical absurdity," said University of Maryland oyster biologist Roger Newell. "If an oyster is harvested, there is a 100 percent chance of it dying." If you leave it at the bottom, he said, there is a chance it will live.

Bar-cleaning

More lucrative for Simns and some other watermen has been the "bar-cleaning" work - removing diseased adult oysters from some of the partnership's bars and dumping them in another spot.

Watermen will return to the spot later to harvest the oysters for private sale; while disease eventually kills the shellfish, infected oysters are safe for people to eat. So the watermen earn money twice in this process. They are paid by the partnership to move the diseased oysters, and then they get to harvest them.

The bar-cleaning work is done in the spring, between the end of oyster season and the start of crabbing season - a period when many watermen have time on their hands. But removing the bad oysters is also good for the bay, according to Paynter.

When oysters die, they gape open and spread disease. So it's important, Paynter said, to get them out while they're alive.

Paynter said, however, there is no scientific benefit to putting the diseased oysters back in the bay for watermen to harvest later.

"Really," he said, "we'd like to take the diseased oysters out and put them into the driveway."

Other scientists and state officials say bar cleaning has little merit even in terms of removing disease. A state study in 2005 showed that bar cleaning leaves behind infected oysters.

"Bar cleaning may buy you a little bit of time to produce more market-size oysters, but eventually disease is going to take hold," said DNR assistant fisheries director Tom O'Connell. He argues the partnership shouldn't be spending so much money on bar cleaning until it is studied more.

Despite the lack of scientific evidence that the process works, the ORP allocated almost $400,000 of this year's $4 million federal grant to the Maryland Watermen's Association for bar cleaning.

Simns, a member of the ORP's executive board, hands out that money - wearing his hat as president of the Watermen's Association. He says he uses a process that is above board and fair.

He sends out "bid forms" to the roughly 500 watermen who have oyster licenses asking them to suggest a daily price for the work, he said. Then, Simns said, he sets a rate based on the average of the bids he receives - last year, $450 a day. He gives work to pretty much everyone who asks, Simns said, about 50 watermen last year.

Simns acknowledges that he used ORP money to pay himself $40,100 last year, in part to supervise this work that is done by men who are members of his association. The people who are paid include his son, Larry Jr., who gets $100 day as a crewman on his father's boat, partnership records show.

The Watermen's Association itself gets about $65,000 of the money for administering the contract - money it uses for operating expenses.

As for his own pay, Simns argues that the partnership needs him to oversee the work - he has been working the water since he was a boy, and he knows all the watermen. "It's better for ORP to have someone like the Watermen's Association manage the watermen," said Simns, 70. "They can't blow smoke at me, because I know. I've done all that stuff."

He said Frentz assured him that his role in the Watermen's Association was not a problem - that he could be on the ORP board at the same time he was getting money from an ORP grant. "I don't vote on anything that has to do with the Maryland Watermen's Association," Simns said.

But his position as a member of a nonprofit's board who derives financial benefits from the relationship raises conflict-of-interest questions. Daniel Borochoff, president of the American Institute of Philanthropy, a watchdog group that monitors nonprofits, said it generally is not good practice for an organization to pay one of its governing board members for services. "A board member receiving money to perform services, that is frowned upon," he said.

According to Simns, the other watermen net from $100 to $125 from their $450 bar-cleaning checks after paying for gas and the expense of keeping up a boat. Nevertheless, it can be an important source of income, said Floyd "Bunky" Chance, an Eastern Shore waterman.

"Everyone who participates likes it, for the income if nothing else. ... Most watermen are just trying to keep the wolf from the door," he said.

'Hey, trust us'

NOAA officials acknowledge that they have done little to manage or oversee the money their agency gets from the earmark and passes on to the Oyster Recovery Partnership. The agency does not scrutinize the partnership's salaries, administrative expenses or the money it spends on its annual banquet, said NOAA grant manager Rich Takacs. "It's up to the organization receiving the funds to use their internally approved business practices," Takacs said.

When asked for copies of the partnership's contracts with the Watermen's Association for bar cleaning and other work, Takacs said he didn't have any. The partnership wasn't asked to provide them, he said.

Takacs said the partnership's approach to its bar cleaning and oyster planting operations has been "a lot of 'Hey, trust us.'" Unlike many other NOAA grantees, which provide detailed reports on their scientific work, the partnership provides only cursory reports of one to two pages with a broad general description of its work, he said.

As a result, there has been no comprehensive assessment of what the $10 million in federal funds granted to the partnership in the past five years has done to help the cause of restoring oysters to the bay, NOAA officials said.

Even in terms of helping watermen, the program almost certainly is not cost-effective, partnership and NOAA officials admit. A government analysis of the Department of Natural Resources seed-moving program showed that, for every dollar the state spent to create a crop for watermen to harvest, the watermen earned 13 cents in oyster sales.

Bahner, who ran NOAA's Chesapeake Bay office until last year and has taken a job at the agency's Silver Spring headquarters, said he believes the partnership is making a valuable contribution to the bay in planting millions of oysters. He also said, however, that Mikulski's earmark put his agency in a difficult position.

Federal scientists and grant managers wanted to ensure that the money was used in the best way to restore oysters, he said. But partnership officials argued that the program was designed to help watermen and that NOAA's job was to hand over the checks.

"When the program started, it was primarily, 'Put the oysters in the water for the watermen,'" Bahner said. "You've got this whole watermen's community. It's a subsidy program."

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