The 85-foot trawler, deep green and speckled with rust, was returning from a grueling fishing trip deep into the Atlantic swells. Leeman and his crew of four had worked 10 consecutive days, 20 hours a day, to haul in more than 50,000 pounds of fish: pollock, haddock and ocean perch, a trio known as groundfish in the industry and as whitefish in the freezer aisle.

As sunrise broke over New Bedford harbor, the fish were offloaded in plastic crates onto the asphalt dock of Blue Harvest Fisheries, one of the largest fishing companies on the East Coast. About 390 million pounds of seafood move each year through New Bedford’s waterfront, the top-earning commercial fishing port in the nation.

Leeman and his crew are barely sharing in the bounty. On deck, Leeman held a one-page “settlement sheet,” the fishing industry’s version of a pay stub. Blue Harvest charges Leeman and his crew for fuel, gear, leasing of fishing rights, and maintenance on the company-owned vessel. Across six trips in the past 14 months, Leeman netted about 14 cents a pound, and the crew, about 7 cents each—a small fraction of the $2.28 per pound that a species like haddock typically fetches at auction.

“It’s a nickel-and-dime game,” said the 40-year-old Leeman, who wore a flannel shirt beneath foul weather gear and a necklace strung with a compass, a cross, and three pieces of jade—one piece for each of his three children. “Tell me how I can catch 50,000 pounds of fish yet I don’t know what my kids are going to have for dinner.”

Leeman’s lament is a familiar one in New Bedford, an industrial city tucked below Cape Cod on the south coast of Massachusetts. In recent years, the port of New Bedford has thrived, generating $11.1 billion in business revenue, jobs, taxes and personal income in 2018, according to one study. But a quiet shift is remaking the city and the industry that sustains it, realizing local fishermen’s deepest fears of losing control over their livelihood.

Blue Harvest and other companies linked to private equity firms and foreign investors have taken over much of New England’s fishing industry. As already harsh working conditions have deteriorated, the new group of owners has depressed income by pushing expenses onto fishermen, an investigation by ProPublica and The New Bedford Light has found. Blue Harvest has also benefited from lax antitrust rules governing how much fish it can catch.

Since it was founded in 2015, Blue Harvest has been acquiring vessels, fishing permits and processing facilities up and down the East Coast. It started with the self-proclaimed goal of “dominance” over the scallop industry. It has expanded into groundfish, tuna and swordfish, as well as becoming a government contractor, winning a $16.6 million contract from the U.S. Department of Agriculture this past February to supply food assistance programs.

The acquisitions are backed by $600 million in capital from Bregal Partners, a Manhattan-based private equity firm. Bregal is an arm of a firm owned by a Dutch billionaire family, who are best known for their multinational clothing company, which maintains a steady track record of environmental philanthropy and low-wage labor around the globe.

Bregal, its parent company and Blue Harvest President Chip Wilson did not respond to questions. Wilson said in an email that he has been “fighting a handful of fires” and that “speaking with the press has been low on my priority list of late.” He is more concerned “about moving our strategy forward so that the 200+ folks who work for Blue Harvest can be confident about their future,” he said.

“New Bedford is an interesting community, particularly in this ‘colorful’ sector, and the rumor mill is particularly vicious,” he added. “I cannot tell you how many times I have listened to employees scared to the core for themselves and their families due to unsubstantiated rumors about our company.”

In the first half of 2021, private equity firms, which often invest in privately held companies with the goal of ultimately selling them for a profit, accounted for 34 percent of mergers and acquisitions in the fishing industry, nearly double the 2017 percentage, according to trade publication Undercurrent News. Last fall, one such firm, ACON Investments, purchased three seafood processing companies, including one with a 38,000-square-foot plant in New Bedford. Another private equity company—Solamere Capital, which boasts as partners former Speaker of the House Paul Ryan and Taggart Romney, son of former Massachusetts Gov. and current Utah Sen. Mitt Romney—also acquired processing plants.

“What we’re seeing is a fundamental transformation of the fishing industry,” said Seth Macinko, a former fisherman who’s now an associate professor of marine affairs at the University of Rhode Island. “Labor is getting squeezed and coastal communities are paying the price.”

To be sure, private equity can inject capital to buy new equipment or renovate a processing facility. Boosters say that consolidation can improve efficiency and make U.S. seafood more competitive against cheaper fish imported from foreign countries that subsidize their fleets.

Still, private equity’s gain has largely been small fishermen’s loss. Known for seeking profits by slashing costs in retail sectors such as toys and shoes, private equity investors have taken a similar approach to the fishing industry, which offered an opportunity to make a significant return on investment through economies of scale.

The number of employers in New Bedford’s fishing industry has dropped by more than 30 percent in the past decade, according to Bureau of Labor Statistics data. Fishermen are working much longer hours—45 percent of fishermen reported working 18 hours or more per day in a federal survey published last year, up from 32 percent in 2012.

Almost all fishermen in New Bedford are paid a share of the earnings from their catch. It’s an arrangement with origins in the 19th century, when whale oil made New Bedford the Dubai of its day. Whaling captains built the city’s historic mansions; the whale ships’ investors built churches and hospitals.

But today, companies like Blue Harvest take advantage of this pay structure to shift costs onto fishermen, reducing their income. Under the private equity takeover, regional economies like New Bedford’s are keeping less of the industry’s profits while a cut of the owners’ share is shuttled to skyscrapers in Manhattan and, in some cases, overseas. Despite rising consumer prices for New Bedford’s fish, the poverty rate in the city has been double the state average for the past decade.

“Without question, there is an increase in costs that are being passed down to crew,” said Matthew Cutler, who studies socioeconomic trends among fishermen for the regional arm of the National Oceanic and Atmospheric Administration. NOAA, which is part of the Department of Commerce, governs the fishing industry.

So far, private equity mainly dominates New England’s groundfish, which constitutes roughly 11 percent of all seafood caught off the region’s coast by weight. But a proposal being considered by federal regulators could expand private equity’s control over scallops—the most lucrative seafood for New Bedford fishermen. The proposal has roiled New Bedford, where more than 100 fishermen signed a petition against it. It also worries New Bedford Mayor Jon Mitchell.

“Private equity owns a piece of the waterfront now,” he said. “Remote ownership is always going to be driven by dollars and cents. Without any loyalty to the place, business decisions can become cold and harsh.”

But an overhaul of federal rules adopted in 2010 halted Leeman’s ascent and that of thousands of other fishermen in the northeast. Promoted by an alliance of conservation groups and some of the largest seafood distributors, the new framework sought to end decades of overfishing that had devastated species like the Atlantic cod while also helping American businesses compete with cheaper, imported fish by making the domestic supply more predictable.

Under “catch shares,” as the system is called, regulators cap how much of each species can be fished and require permits to catch them. Federal scientists set a “total allowable catch,” determining the amount of each kind of fish that can be sustainably hauled from regional waters each year. Based on a decade of their catch history, individual fishermen and companies were granted rights to a percentage of the annual total allowable catch—in perpetuity—free to fish it, sell it or lease it to others.

The catch shares system has proven to be an effective tool to reduce overfishing. Overall, New England waters have “shown slow recovery since the major declines,” a 2021 study noted. But the change hurt small fishermen. Their shares were based on their historical percentages of the catch for a given species. As the total allowable catch for some species was reduced to avoid overfishing, the same percentages translated into fewer pounds of those fish. Many fishermen sold their permits to bigger companies that had been granted larger shares and rushed to expand. New England’s fleet of vessels actively catching groundfish was reduced from 596 in 2007 to 269 in 2015, according to a NOAA study.

“This is the door closing on an entire generation of fishermen,” said Brett Tolley, who comes from a family of Cape Cod fishermen. After a series of reductions, he said the catch allocated to his family—about one-third of 1 percent of pollock and haddock—was too small to make a living. They sold their permit a year ago to a midsize local company.

While consolidation started before catch shares, the new system accelerated the process. It “turned the privilege to catch a pound of fish into a commodity that could be bought or sold without owning a boat,” Macinko said. “It opened the door to private equity.”

Recognizing the potential for consolidation, the Pacific Coast branch of NOAA built in controls prohibiting any individual from owning more than 2.7 percent of groundfish permits, limiting the inroads that private equity could make. Accommodating business interests, the New England office initially set a much higher cap of 20 percent before reducing it to 15.5 percent in 2017.

“You have to limit entry in order to have a profitable fishery,” said Chad Demarest, an economist with the Northeast Fisheries Science Center under NOAA. “The goal is to create some profit in the industry that is shared by the owners.”

Because Leeman was a hired hand when catch shares were adopted, he wasn’t allocated any permits. And as the price of a single permit climbed to as much as $500,000 for groundfish, he couldn’t afford to buy in. His dream of captaining a fishing boat that he owned was dashed.

Rights to fish “were free 30 years ago,” he said. “But then came the conservation groups. Then there was consolidation. Then there was big money.”

A charismatic rogue who liked to describe himself as a modern-day pirate, Rafael was openly opposed to the catch shares system at first, believing it would eventually mean only one company would be left fishing on the East Coast. Yet as New England transitioned to the system, he was granted about 9 percent of the region’s total groundfish permits, one of the largest initial allocations. He decided that if only one company would be left standing, it would be his.

“So he [a smaller fisherman] doesn’t have the money to buy a fucking quota,” he said. “So he’s fucked either way. He’s hanging by his shoestrings. So this is a matter of fucking time for me to pick the rest of these fuckers and just get them all out of the picture. . . . I always had the ambition to get fucking control of the whole fucking thing.”