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Fishing nonprofit hires Harshbarger to look into alleged conflicts of interest

Under fire for potential conflicts of interest that may have created unfair business advantages, the Gloucester Fishing Community Preservation Fund has hired L. Scott Harshbarger, a former Massachusetts attorney general, to conduct an investigation into the way it operates.

Last month, the five-year-old nonprofit said it had hired Harshbarger, senior counsel in the Boston office of global law firm Proskauer, to investigate what it calls “vague but serious allegations” made in a February letter from two local state legislators, Senator Bruce Tarr and Representative Ann-Margaret Ferrante. According to the letter, the legislators had received complaints from others in the fishing industry about “conflicts of interest and unfair business advantages” for some of those involved with the fund, notably president Vito Giacalone.

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In the letter, Tarr and Ferrante said they had received complaints from some in the industry that some leaders, particularly Giacalone, are “wearing too many hats.” In addition to his paid job as preservation fund president, Giacalone is the unpaid policy director for the coalition, he is a commercial fisherman, and he has a financial interest in the property that rents space for the fund offices. He also owns Fisherman’s Wharf Gloucester, where his sons run a fish auction.

“In these situations, the mere fact that people have conflicting interests does not in and of itself mean that it’s wrong,” Harshbarger said. “Has it been disclosed? Is it transparent? Has it in any way affected their fiduciary obligation to the fund? Have they used it in a way that has promoted their own interest at the expense of others?

“Obviously the fund believes it has not done that. They would argue it’s open, it’s transparent, it’s public and the criticisms are public. They obviously are concerned about it, and trying to figure out what the basis for it is. To be clear, that’s a lot of our job here. We’re going to tell them what we find, one way or the other.”

The letter from the legislators also was sent to the Northeast Seafood Coalition, an organization of commercial fishing interests headquartered in Gloucester that shares board members with the Gloucester Fishing Community Preservation Fund. At a follow-up to a meeting with leaders of both groups, the letter advised seeking legal advice.

“We will be making recommendations to the board, if we believe changes are needed in their governing structure,” said Harshbarger. “We will also inquire into what the basis is for these vague but serious allegations.”

Harshbarger said that the investigation began in August. There is no date for completion.

Created with mitigation funding for the permitting of liquefied natural-gas terminals off the Gloucester coast that limited commercial fishing, the preservation fund serves as a permit bank for local fishermen, buying and leasing commercial fishing permits for the 75 boats in the Gloucester fleet. According to fund spokesman David Guarino, the ability to buy permits from fishermen leaving the industry has helped keep it alive in Gloucester.

The news of the outside investigation came just days after the Sept. 13 declaration by the acting US secretary of commerce, Rebecca Blank, of a Northeast commercial fishery failure because of low numbers of cod, flounder, and other groundfish. Massachusetts lawmakers have requested $100 million in economic disaster assistance for the region.

“Our fishermen are the farmers of the sea, and today our fishermen are facing exactly what farmers in the Midwest are facing: a drought,” Senator John Kerry said in a prepared statement.

“Instead of a lack of rain, our fishermen are facing a lack of fish. Our fishermen and fishing communities did not cause this drought, but they need our help to get through it.”

Nick Brancaleone, spokesman for the Northeast Seafood Coalition — whose board is chaired by former Gloucester mayor John Bell — said that among the factors that fishermen are dealing with are reduced catch limits of key species such as cod, which are expected to be reduced again in 2013.

“The industry in Gloucester has been under fire for years, but the declaration of disaster really has focused even more attention on it,” said Guarino. “This is a time when fishermen really need support, so the fund is committed to doing what it needs to do in this case, so it can continue to do the work to help the fishermen.”

David Rattigan may be reached at DRattigan.Globe­@gmail.com.

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