The Wednesday attack on Gov. Mike Dunleavy and his Fish Board appointments/Facebook

The Senate Resource Committee spent hours Wednesday listening to Alaskans testify that a former member of the Board of Fisheries either brought a hint of fairness to an unfair government regulatory body or failed to act fairly in a system with no standards for determining fairness.

One after another, commercial fishermen testified that retired Anchorage Superior Court Judge Karl Johnstone wasn’t fair to commercial fishermen.

When they weren’t in front of the microphone, non-commercial fishermen stepped up to tell the panel Johnstone was a man of integrity who tried to bring some fairness to what has long been a feudal management system dominated by commercial fishermen.

Objectivity and fairness, the main topics of the day, appeared wholly in the eyes of the beholder as the legislative panel began the confirmation hearings for Gov. Mike Dunleavy’s appointments to the Board that regulates state fisheries.  Lost in the smoke of the battle were Dunleavy’s other three appointments.

It was all about Johnstone and commercial fishermen.

“We have a small voice,” lamented Dan Norman, who bought a permit to catch salmon with a set gillnet in Cook Inlet a decade ago. The small voice was a reference to the Alaska Limited Entry Law, which in 1973 restricted commercial fishing to fewer than 15,000 established fishermen.

As of 2005, according to the Alaska Department of Fish and Game, the number of permits was down to 11,301, but those then less-than 2 percent of Alaskans caught more than 98 percent of the annual catch of salmon. The number of permit holders is even smaller now given consolidation in some of the fisheries and the population larger.

Norman is even more of a minority than when he bought his permit in 2008. But the commercial fishing percentage of catch has not changed despite a doubling of the state’s population since 1972 when Alaskans voted to amend the state Constitution to allow limited entry.

At the time, giving the Legislature power to restrict entry in commercial fisheries to prevent competition from making it impossible for anyone to earn a living seemed a good and noble idea.

Little did voters realize they were turning a common property resource – salmon – over to the lords of the Alaska seas. Legally, the Limited Entry law made it clear no ownership attached to the fishing permits.

As a practical matter, however, commercial fishermen seized control of the resource shortly after limited entry, and they have steadfastly – largely successfully and equally understandably – fought every effort to force them to share the resource with noncommercial fishermen.

Not fair

The problem of the new millennium is that commercial fishermen are right. Salmon allocation as now practiced in Alaska is not fair.

Were it totally fair, the pie would be cut into equal pieces and every Alaskan would get her or his slice. But Alaskans, whether they were conscious of what they were doing or not, decided with that 1972 Constitutional amendment that economics mattered more than fairness.

As a result, they committed to an idea destined to give an economic interest – the commercial fishing industry – a bigger slice of the pie. And for a time, as Alaska salmon runs were rebuilt from the disastrously low numbers of the 1970s, this worked.

Cook Inlet, the finger of the Gulf of Alaska that punches into the urban gut of the state, is the best example of both the success and the eventual and ultimate failure. Commercial fishermen were harvesting about 1.1 million Inlet sockeye per year there when limited entry began.

As the ocean warmed and state management improved, that number started going up fast.  By the 1980s, the 1,300 permitted, commercial fishermen in the Inlet were netting 4.4 million sockeye per year on average.

With more fish returning, fishery managers with the Alaska Department of Fish and Game also started upping escapements to the Kenai and Kasilof rivers and the catches of anglers and dipnet fishermen – personal use, then subsistence, then back to personal use – crept upward as well.

The vast majority of salmon in the newly rebuilt fisheries went to commercial fishermen, but with so many fish returning everyone benefited. Sport and personal-use fisheries grew and fishery-based tourism on the Kenai Peninsula boomed.

This worked fine as long as the number of fish returning continued to increase. But problems arose as the 4.4 million per year of the 1980s, shrank to the 3.8 million average of the 1990s and then 3 million in the 2000s.

This decade started off well with a harvest of more than 5 million but then started sliding fast.

“In 1996, the Upper Cook Inlet sport and personal use sockeye harvest was 368,367,” the United Cook Inlet Drifters Association (UCIDA) reported in 2015. “In 2014, that number had grown to 904,064 sockeye salmon. That number is greater than the harvest of the commercial set netters and was 60 percent of the commercial drift gillnet harvest.”

Commercial fishermen in the Inlet had an off-year in 2014 and harvested approximately 3.2 million sockeye – 20 percent of the previous 10-year average catch of 3.9 million.  Though they’d netted more than three out of every four salmon harvested, they looked at the missing 700,000 sockeye as fish the sport and personal-use fisheries stole in order to push the non-commercial harvest over 900,000.

UCIDA’s view hasn’t changed since then. The organization on Wednesday lashed out at both Johnstone and Dunleavy, the man who appointed him.

Who owns Alaska’s fish?

“Most of this increase in the sport and personal use salmon harvest has been taken directly out of the commercial harvest with no financial compensation to the Commercial Fishery Entry Commission (CFEC) permitted users, aquaculture associations or state and municipal governments that receive shared tax revenues,” UCIDA charged in 2015. “The commercial industry loses the economic benefit of this salmon harvest and the state loses revenue. These losses have never been accounted or considered.”

The most powerful fishery lobby in the region, UCIDA was right that losses have “never been accounted or considered,” but there are also gains, and a road running two ways. No accounting has ever been done on any of it.

The booming Kenai tourism economy encouraged Fred Meyer, a Kroger company, to build a shopping center in Soldotna, a crossroads community on the Peninsula.

Sales taxes generated by that store now generate half the city’s revenue. How much the Kenai Peninsula Borough pulls in on vacation homes occupied by people who request little in the way of services but pay significantly in the form of property taxes is unknown, but there are thousands of such homes on the Kenai.

And Alaska outdoor recreation, much of which focuses on the Kenai and the Matanuska-Susitna boroughs, is now reported to be a $7.3 billion business in the state. A lot of the business in the Mat-Su north of Alaska’s largest city focuses on the Susitna River and its tributaries.

To escape to the salmon fisheries in the clearwater creeks and rivers draining into the Su, salmon must get past the net fisheries in the Inlet. The situation today is not as simple as it was when limited entry was passed.

Tourism business are now also economic entities that need fish to survive. As Board chairman, there is no doubt Johnstone tried to roll consideration of that issue into Board discussions.

In the view of the Inlet’s commercial fishermen, that was unfair. In the view of Mat-Su and Kenai tourism interests, the unfair part was that their fisheries for decades fell victim to commercial fishermen.

Johnstone did a good job of mediating between competing interests, said John Wood, a former legislative aide from Willow in the Mat-Su.

“That is not a bias,” Wood said. “That is in my opinion an asset…What more can you ask for?”

A lot, said commercial fishermen.

Tim Moore from Homer accused Johnstone of disrespecting commercial fishermen.

“He can’t be trusted to act objectively,” said Howard Peterson, a commercial fisherman from Kodiak.

“We need an open-minded set of board members,” said Mike Mitchelson, a commercial fisherman from Cordova.

In the absence of any standards to guide the Board on how it decides allocation issues, the words open-minded and objective from talking points supplied by the United Fishermen of Alaska (UFA) rang hollow. The Board is charged with managing salmon for the maximum benefit of all Alaskans, but that has never been in any way defined.

Is the maximum benefit feeding hungry state residents? Supporting the commercial fishing economy? Supporting the tourism economy? Sustaining old fishing businesses in decline? Supporting new fishing businesses of greater value? Maximizing the economic return to the state from its salmon resource? Generating the greatest economic value per pound of salmon?

Johnstone took considerable heat from commercial fishermen and Sen. Jesse Kiehl, D-Juneau, for writing an op-ed for an Anchorage newspaper pointing out that farmed salmon are taking over markets and capping prices, thus altering the economics of fisheries  competing for salmon allocations.

Kiehl suggested Johnstone was supporting farmed fish, a near unforgivable sin in the state that banned net-pen fish farms thinking it would then be able to dominate salmon markets. It has instead become a minor player, and the situation is only expected to get worse despite what is significant salmon production from no-net farms in Alaska that simply dump young salmon in the sea and await their return for harvest.

“Because farmed Atlantic and Pacific salmon compete with wild Pacific salmon in global markets, the economic value of wild Pacific salmon and the economic value of farmed salmon are jointly determined,” University of Alaska Fairbanks economist Keith Criddle concluded.

“Barring radical changes in the organization of wild salmon fisheries, the long run prospects are for declining net revenues to commercial fishermen and their communities.”

Control

Evolving markets do argue for considering which fisheries, including recreational fisheries, produce the greatest value from Alaska salmon, but commercial fishing interests don’t like that idea.

They don’t want Johnstone back on the Board because he won’t let them continue to dominate fisheries management in the state, said Fairbanks’ Virgil Umpenour, a former three-term Board member and Yukon River fish buyer.

“The same people opposing Karl Johnstone opposed me,” he said. “The United Fishermen of Alaska should change their name to the commercial fishermen of Washington state.”

The reference was to the statewide fishing organization – one of the state’s most powerful political lobbies – leading the battle to block Johnstone’s confirmation. The UFA’s annual report earlier this year showed Outside fishing interests the big beneficiaries of the Alaska fishing industry.

Of the 6.4 billion pounds of seafood harvested in Alaska in 2017, UFA’s 2018 Alaska Commercial Fishing and Seafood Processing report listed 4.6 billion pounds – almost two-thirds – harvested by permit holders from Washington, Oregon or California.

The report indicated 1,526 Washington residents who fished an Alaska permit hauled in more than $500,000 on average.  The only Alaskans who came close to that were 475 permit holders who called Fairbanks home; they averaged over $140,000. Average earnings fell from there: $89,736 for Kenai communities, $77,709 in Cordova, $64,452 in MatSu communities; $8,266 in Yukon-Kuskokwim Delta communities.

Umpenour had a simple view on UFA.

“They have their own selfish interests at heart,” he said. “They’re for irresponsible management, not responsible management.”

And then there was Clem Tillion from Halibut Cove at the southern tip of the Kenai Peninsula, a former state lawmaker, the old sidekick of iconic and long-passed Gov. Jay Hammond, a one-time commercial fisherman and grandfather of Inlet commercial fishermen of today.

Long a political pragmatist, the 93-year-old Tillion suggested the Legislature simply confirm Johnstone and get it over with. Dunleavy picked him, Tillion said, and commercial fishermen could get a lot worse.

“My bias is actually toward commercial fishing,” said the nonagenarian. “Yes, he’s a sportsman. Yes, I’d love to have a commercial fisherman. You’re not going to get one.”

And in the struggle with the federal government, which manages massive trawl fisheries on the high seas off Alaska’s coasts, fisheries that sometimes compete with “small boat fisheries along our coast,” Tillion said. “He’s with us.”

The now 77-year-old Johnstone might spend part of the year Outside in Arizona, one of the favorite hangouts of former Gov. Sarah Palin, but Tillion judged him enough of an Alaska-firster to serve on the Board.

Some commercial fishermen, however wanted to make an issue of Johnstone’s residency even though he qualifies for a Permanent Fund Dividend, and said he would be willing to open up his PFD application to show that he meets the legal requirements of Alaska law unlike former Board member, former UCIDA executive director, and continuing UCIDA activist Roland Maw.

Maw had to quit the Board when it was discovered he was claiming to be a resident of Montana. When Montana subsequently charged him with illegally claiming residency in two states to get cheaper hunting and fishing licenses in both, Maw admitted to the crime. But he has tried every legal manuever in the book in effort to avoid going before an Alaska jury to explain why he applied for and accepted PFD payments while claiming to be a resident of Montana.

The state has charged him with multiple felonies. He is now scheduled to go on trial in Juneau in May. He continues to be among UCIDA’s leaders.

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