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Non-NYers control much of surf-clam catch

This is the Heaven Sent, one of the

This is the Heaven Sent, one of the last two independent clammers on Long Island. (April 27, 2012) Credit: Daniel Goodrich

For decades, the small fleet of independent fishermen who dredged for surf clams in ocean waters off Long Island's southern coast resisted out-of-state interests in a fishery they considered New York's.

State residency regulations have permitted a significant portion of the surf clam industry -- once the province of Long Island families with names such as Granau, Doxsee, Karlin and Smith -- to fall legally into the hands of non-New Yorkers.

And a 2011 state law that was backed by companies with ties to out-of-state interests has made it possible for the companies to operate more efficiently than ever.

"This was traditionally a Long Island fishery," said Michael White, former Long Island Regional Planning Council chairman and an attorney who has represented independent clamming interests. "If you look at it today, it doesn't exist anymore. This is now an entity that exists in another state."

Companies with links to New Jersey brothers Leroy and Martin Truex now have a hand in most of the roughly 300,000 bushels -- about 30 million surf clams -- taken annually in New York waters that extend three miles off the Long Island coast, from Far Rockaway to Smith Point.

The companies hold nearly 70 percent of the New York permits, according to state records and interviews. The brothers also are principal investors in a Maryland company that long has purchased the Long Island surf clam harvest. At its height, the Long Island surf-clam business was valued at $6 million and nearly all processing and harvesting was done locally.

But economics and increased regulation have caused the industry to recede.

Local firms close shop

Four years ago, Doxsee Sea Clam, one of the major local players, shuttered its clam processing facility in Point Lookout. And many independent families who held local permits have sold out to companies linked to the Truexes, interviews and records show.

Many local clammers cite rising expenses and reductions in the allowable clam take as the primary reasons that independent companies have largely disappeared, unable to sustain profitable operations. Fuel, insurance and crew costs can be high. And conservation efforts to preserve a sharply declining clam population resulted in tightened limits on the number of clams that can be harvested, making small-time clammers less viable.

Regulators say consolidation of the industry intensified with the unanimous passage in the State Legislature last year of a law for which Truex-linked consultants successfully lobbied. Last July, Gov. Andrew M. Cuomo signed the bill, which paved the way for what some former clammers are calling "unlimited consolidation" in the surf-clam industry.

The bill has two major provisions: It allows permit holders who do not own boats, or who choose not to clam, to harvest "cooperatively" by assigning their quotas to other clammers. It also allows those with more than one permit to pool their combined quotas onto a single boat. Before, individual permit holders had to harvest their catch using their designated boat.

State Sen. Lee Zeldin (R-Shirley), the bill's Senate sponsor, said the measure was meant to help New York clammers by allowing them to acquire multiple permits and catch the combined quotas using fewer boats, vastly cutting expenses.

Instead, local clammers and representatives of the state Department of Environmental Conservation say the law made the fishery more attractive to large entities that could benefit from new economies of scale.

The bill and the acquisition of New York clamming permits by companies with links to the Truexes dovetailed in recent years with what New Jersey officials say is a sharp depletion of their state's surf-clam fishery.

Meanwhile, small independent New York clammers lacked the accumulated permits to take advantage of the economies of scale that the bill offered. Many say they were forced to sell out by the time the new rules took effect last year.

Shortly after the measure went into effect last summer, Doxsee sold its two boats and permits. By most accounts, only one or two companies owned by local families remain in the fishery.

'Sunset' clause inserted

The DEC initially opposed the consolidation legislation on environmental grounds, but dropped that position after a "sunset" clause was added that effectively winds down the new rules at the end of next year, DEC Commissioner Joseph Martens said in an interview.

Lisa King, a spokeswoman for the DEC, said agency rules that once kept consolidation in check were largely dismantled by the 2011 legislation. "Once this legislation was enacted the surf clam industry proceeded to consolidate to the maximum extent possible," she said. "DEC's management measures that were developed to prevent consolidation of quota and permits and transfer of tags have been rendered ineffective by the legislature."

For Long Islanders, the changes are almost invisible.

The four busiest surf-clamming vessels operate from an industrial port in Oceanside known as Oil City. The facility consists of a loading dock and a large freezer. Four hulking clam-dredging boats are frequently moored there. None of the clams are processed on Long Island.

Surf clams are a different species from smaller bay clams; they have softer flesh and shells, and burrow deep into ocean sands in up to 90 feet of water. Also, unlike clammers in the bays around Long Island, surf-clammers pilot large commercial fishing vessels 70 feet long. They harvest by dragging large steel cages along the ocean bottom, helped by water guns that blast away sand to expose the clams.

State regulations enforced by the DEC generally limit permits to harvest surf clams to New York residents. If the permit holder is a New York corporation, all the members of its board of directors and all its stockholders must also be New York residents. But the regulations don't apply to holding companies -- or equity owners -- that own the permit-holding firms. The holding companies are free to have non-New York residents as owners or managers.

In online State Department business records, the Truexes are listed as officers of four holding companies -- Bonaker Bivalve, Good Ground Bivalve, Mecox Clam and Promised Land Shellfish. The Truex-related holding companies have acquired permit-holding companies including Freeport Sea Clam, St. Peter Dock, Lady Kim Inc., and, most recently, Doxsee Sea Clam, records and interviews show.

The Truexes also are among investors in the clam-processing company Sea Watch International in Easton, Md., according to the company, which long has bought the Long Island surf-clam harvest. The clam meat is used for deep-fried strip clams and other products. Sea Watch describes itself as the largest harvester and processor of clam products in the world.

At least 10 of the 17 firms that now hold New York surf-clam permits are linked to the Truexes, state records say. The 10 companies own at least 15 of the 22 New York clamming permits, nearly 70 percent. All 10 also list Bellport lawyer J. Lee Snead as their attorney of record.

Snead said in an interview that in the case of one holding company, Squassux Shellfish Llc, the Truexes were among the equity stakeholders but declined to name other owners or the size of the brothers' ownership stake.

Snead said all permit holders he represents comply with rules requiring New York boat captains, crews and corporate officers and shareholders. But he also took issue with the residency rules, calling them "improper" and "unconstitutional."

"Why would it matter that somebody that's not a New Yorker has any kind of economic interest in a [New York] corporation?" he asked.

One of the few remaining independent clammers from Long Island says Byzantine state rules governing the surf-clam fishery have worked against him.

Robert Hart, of West Sayville, is the son of longtime clammer Charlie Hart and president of Shellfish Inc. of West Sayville.

"We're just barely hanging on," said Hart, who holds one permit. Because of quotas on the surf-clam harvest limiting the annual catch to 13,600 bushels per permit, he worries that he cannot stay in business for more lucrative food clams. Most of his clam harvest is in bait clams. "You can't survive on one permit -- it's impossible," he said.

Attempts to reach the Truexes were unsuccessful. Verne Conaway, a Sea Watch vice president, referred calls to Snead, who said he does not represent the Truexes or Sea Watch.

In any case, Snead said, "There is absolutely no connection between any of these [New York clamming] companies and Sea Watch." The DEC said neither the Truexes nor Sea Watch directly were holders of New York permits.

Asked about the clam permit holders' connections to the Truexes, DEC spokeswoman Emily DeSantis said, "We continue to look into this matter."

Brothers' business

Both Truexes long have been associated with commercial fishing and clamming, with deep roots in the New Jersey and federal fisheries. Martin Truex is a one-time race-car driver and the father of NASCAR star Martin Truex Jr.

Leroy Truex, on Sept. 11, 1991, was convicted in Florida of federal charges of conspiring with others to import more than 100,000 pounds of marijuana into the United States and was sentenced to 8 years in prison. He was released on Dec. 9, 1996, federal records show.

Much of the work to promote the 2011 law came from a new group calling itself the Coalition of Long Island Surf Clammers. In letters and memos written by Snead, the companies urged lawmakers to pass the bill, which also allowed the creation of clam cooperatives, so those holders without boats could have others do the harvesting.

"Each day that this legislation remain(s) unsigned . . . is another day that seventeen New York companies continue to lag in profitability," Snead wrote in a letter last July to Cuomo, who signed the bill that month.

According to state lobbying records, Snead and another coalition consultant, Mark Middleton, were paid $19,334 by Bayhead Inc. to lobby for the law.

Brooks Dermont, a Bellport resident listed as an officer/shareholder in many of the permit-holding companies, is chairman of the Coalition of Long Island Surf Clammers, state lobbying records say. Dermont said in an interview that he is not a surf-clammer; he works for a Ronkonkoma printing company. He described the coalition as "more of a political thing," and referred calls to Snead.

Another listed shareholder/principal of the companies is Ernest Sykes Jr. A woman who answered the phone at Sykes' Brookhaven home last week, and identified herself as Sykes' mother, said he was traveling and not available for comment.

Middleton acknowledged he lobbied for the state law, but declined to discuss the clamming companies he once owned or to whom he sold them. He also referred questions to Snead.

NJ connections known

One lawmaker who backed the 2011 bill said he had indications of the New Jersey ties of many of the permit holders.

"The people that hold the permits have to be New York [residents], but I didn't fall off the turnip truck yesterday," said Assemb. Fred Thiele Jr. (I-Sag Harbor), the bill's Assembly sponsor.

"There have always been rumors that there were interests from New Jersey and I certainly have heard that," he said. But "my concern was that the permits got worked," a reference to the bill's creation of clamming cooperatives.

Zeldin said one of the reasons he got behind the law, in addition to believing it would boost New York clammers and benefit the environment through fuel savings and disrupting less sea bottom, was that no opposition came forward.

"Even still to this day I'm not aware of a single person contacting our office giving us any type of negative feedback [about] the legislation," he said.

While state lawmakers say they heard no opposition, some Long Island opponents did make their case to the DEC. The Marine Resources Advisory Council, a local panel of fishermen and academics that advises the DEC, unanimously opposed the law last year because it "opens the door, wide, to the possibility of one or two licensees gaining a potentially unlimited fraction of the total allowable harvest," said council member, William Wise, director of Stony Brook University's School of Marine and Atmospheric Sciences.

Wise said the involvement of the New Jersey companies in the New York fishery is "a lesson in the difficulties in safeguarding such things in light of the complexity of corporate ownership and law."

Snead contended that the advisory council was "not in a position of giving advice" on the bill, and he called its stance a "lobbying effort by the DEC" to oppose the bill and "improper."

Leann Smith belongs to a longtime Long Island clamming family, and says she long fought out-of-state encroachment. But like two other local clamming companies, the Smiths' Ocean Fresh Sea Clam, which operates the boat Heaven Sent, last year leased its allotment of food clams -- 10,000 bushels at $2 a bushel -- to a Truex-related company

"At one time we had three boats running," she said of vessels operated by her husband, Curtis Smith, and their son William. "I'm down to one boat now. If I was going to be getting out, [Truex] is the one with the money. In the end he's going to wind up with everyone's permits."

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