Maine’s lucrative elver fishery is facing some big changes, including smaller catch quotas and a new swipe-card monitoring system that state officials hope will help manage the resource while reducing the poaching of baby eels that fetched up to $2,000 a pound last season.

Both changes follow the state’s promise to the Atlantic States Marine Fisheries Commission last month that it will find ways to reduce the 2014 harvest between 25 percent and 40 percent. In the background is a recently uncovered welfare and tax fraud investigation that specifically targets elver fishermen, many of whom are members of the Passamaquoddy Tribe. Records obtained by the Portland Press Herald/Maine Sunday Telegram show that the investigation is scheduled to conclude at the end of January, about two months before the next season.

State officials have refused to comment on the fraud initiative, which involves three state agencies reviewing catch records and tax filings from 2010 to 2013 to determine whether any elver fishermen who received welfare benefits have failed to report income. It’s unclear what motivated the special investigation or how much money the state is devoting to the initiative.

A spokesman for the Passamaquoddys worried recently that the initiative specifically targeted his tribe, but was generally supportive of the investigation. Representatives for the tribe have not returned calls seeking comment since the Maine Sunday Telegram published the story Nov. 3. State officials have also declined to comment, citing advice from Office of the Attorney General not to discuss an investigative matter.

Tensions between the Passamaquoddys and the state have been simmering since last year, when the tribe cited its sovereign nation status and issued 575 licenses, far more than the 433 that the state certified. The industry is bracing for another clash between the tribe and state officials, who in April sent wardens and police officers to Pembroke to seize fishing nets and equipment from Passamaquoddy fishermen whose licenses weren’t certified with the state.

The conflict abated after the administration of Gov. Paul LePage and tribal leaders agreed to enter negotiations at the end of the 76-day season.

However, a long-term settlement hasn’t been reached and the Passamaquoddys still believe that their plan to manage the elver fishery is sufficient, a signal that tensions could reignite next year over an industry that was worth nearly $40 million in 2012 and $33 million this year.

Fred Moore III, the fisheries coordinator for the tribe, told the Press Herald recently that the Passamaquoddys were still hopeful that the state would adopt elements of their management strategy.

“We believe that our management plan is superior to the (Department of Marine Resources’) and that the state and the elvers would benefit by making our plan part of their plan,” Moore said.

That appears unlikely.

State officials are working with federal regulators to reduce the catch limit amid growing concerns about the sustainability of the fishery because of increased harvesting pressure.

The number of licensed fishermen, some migrating from other, less lucrative pursuits, such as clam digging and harvesting periwinkle snails or seaweed, has soared amid strong demand in Asia for the baby eels. Elver prices skyrocketed after a 2011 tsunami in Japan wiped out eel farms. In the past, elver prices were as low as $25 a pound, but they climbed above $2,000 in 2012.

Some have described the current market as a gold rush, which suggests that the elver boom is temporary. Jeffrey Pierce, executive director of the Maine Elver Fishermen Association, believes it may turn out that way if market prices decrease once Japanese eel farms are rebuilt.

In the interim, federal regulators are worried about the sustainability of the fishery. A stock assessment by Atlantic State Marine Fisheries found that eel populations were depleted “coast-wide.”

Federal regulators have been pushing new regulations for eels along the Eastern Seaboard. Maine and South Carolina have the only two commercial elver fisheries, but Maine’s annual harvest is much larger.

Members of the industry are concerned that the decreased catch limit could exacerbate tensions with the Passamaquoddys should the tribe issue more licenses than the state in 2014.

Patricia Bryant, an elver dealer and licensed harvester in Nobleboro, said she anticipates “a real problem” with the tribe next year.

Jeff Nichols, a spokesman with the Department of Marine Resources, said the state has no plans to reduce the number of state-issued licenses in 2014 unless there is a legislative mandate to do so. Instead, the state is poised to closely monitor the catch through a new reporting system that would require fishermen to carry state-issued swipe cards.

When a fisherman brings his or her catch to an elver dealer, the dealer would swipe the card, assigning the harvested pounds to that fisherman’s license number and recording the catch in the department’s landings database.

If approved, the card system would be a significant change for an industry that until this year was primarily a cash business. Cash transactions were prohibited in 2013 as regulators attempted to tackle increased incidents of poaching.

Bryant said that licensed dealers would sometimes take poached eels at a lower price but sell them at the market rate. Dealers were able to do that because they could manually assign the illegal catch to a legally licensed fisherman. That will be more difficult if the card system is implemented.

The swipe card system is a rule change proposed by the agency and subject to a public hearing. The first hearing will be held Nov. 18 at the American Legion in Yarmouth. The deadline for written public comment is Dec. 2.

Pierce, with the elver association, said the system may help regulators crack down on poaching, a problem for an industry where the financial incentive for illegal activity is high.

As for the secret fraud and tax crackdown launched by the state, Pierce said most of the association’s 197 members accept it.

“Some of them were insulted that our industry was being singled out,” Pierce said. “But the overall consensus, I think, was, ‘Go for it, we know how to file our taxes.’”

Bryant told the Press Herald recently that “the Elver Project” – the name given to the initiative by state officials – could ensnare fishermen fishing legally and accurately reporting their income.

According to documents obtained under the Freedom of Access Act, the project involves comparing elver license holders in 2010, 2011, 2012 and 2013 with welfare benefit eligibility and tax data over the same period.

With some elver dealers crediting poached eels to legal fishermen, Bryan said, some fishermen could be wrongfully accused by Maine Revenue Services of committing tax or welfare fraud because part of their reported catch had actually been made by someone else.

Steve Mistler can be contacted at 791-6345 or at:

[email protected]

Twitter: @stevemistler

Only subscribers are eligible to post comments. Please subscribe or to participate in the conversation. Here’s why.

Use the form below to reset your password. When you've submitted your account email, we will send an email with a reset code.