King of Fish Sticks

Chuck Bundrant’s built a seafood empire on “trash" fish--with a little help from Sen. Ted Stevens.

It’s been a tough year for Seattle’s titans of industry. Starbucks just reported a 97 percent drop in quarterly profit. Boeing suffered a machinists strike that cost it an estimated $5 billion in revenue. Safeco was bought out by Liberty Mutual after its shares plummeted. Washington Mutual went bankrupt. And Microsoft just can’t get many people excited about its new version of Windows. Bill Gates even dropped from first to third on Forbes‘ list of unimaginably wealthy humans, perhaps the surest bellwether of the region’s economic woes.

But as the rest of Seattle’s corporate world succumbs to the economic headwinds, Trident Seafoods, headquartered in a three-story converted warehouse on Shilshole Bay, just had its biggest year, hitting over $1 billion in sales, according to the company (Trident is privately owned and so does not publicly report audited financial results). The company, run by a tall 66-year-old Tennessean named Chuck Bundrant who started with an Alaska crab boat in the 1970s, has become one of the biggest players in the United States fishing industry. Saleswise, Trident is more than 20 times the size of local companies like Jones Soda or Redhook, and yet it remains relatively unknown in its hometown.

Bundrant propelled his company to the top of the food chain by recognizing the unexploited potential of groundfish—fish that live near the bottom of the ocean—in the waters of Alaska. Over three decades, Bundrant worked to develop new markets for what were previously considered “trash fish,” convincing fast-food chains and retailers like Costco to use pollock, for instance, in sandwiches and fake crab dips. As other U.S. fisheries have gone into steep decline, the Alaska groundfish fishery has become the biggest in the country by far, thanks in part to Bundrant. At the same time he built a vertically-integrated enterprise that now does everything from the mass processing of fish to the creation of a special “gourmet” fish stick with Bundurant’s face on the package.

“It’s a pretty incredible success story,” says Steve Hughes, president of Seattle-based Natural Resources Consultants, which tracks fish stocks and the companies that catch them.

To get the high-value, brand-name retail operation going, Trident bought a warehouse off Pier 91 in Magnolia. There, slabs of cod or pollock are sliced on assembly lines. Fillets rumble down conveyor belts, dumping into vats of hot oil for frozen fish ‘n’ chips. Others are seasoned and packed. In an attached kitchen, chefs come up with new ideas for easily frozen and packaged retail products. On the other side of the warehouse is a freezer the size of a city block—chilled to minus 10 degrees Fahrenheit. Row after row of boxed and frozen fish wait for distribution trucks to whisk them off to grocery stores.

Bundrant, who granted SW just one five-minute in-person conversation after several requests for interviews, says he recently walked down the aisles at Costco and counted 10 products on the shelves that came directly or indirectly from Trident. The company recently got an account with Safeway to make a line of frozen fish dinners under the name Waterfront Bistro.

“What we have been trying to do is be a one-stop shop for seafood,” company spokesman John van Amerongen says.

But Bundrant’s good fortune has not come from the magic of the free market alone. Over the years, Bundrant cultivated some strong allies in Congress—most especially, just-deposed Alaska Senator Ted Stevens and Representative Don Young, both famous for sponsoring the “bridge to nowhere.” They worked to provide legislation of benefit to Trident, and generally sought to reduce foreign competition, bringing more of the Alaskan catch under domestic, and Bundrant’s, control. Other regulatory bodies have also been kind to Trident. Just last week, a decision by the Pacific Fishery Management Council granted Trident and a handful of other companies 20 percent of the whiting catch off the West Coast, overriding the objections of individual fishers.

Bundrant’s reliance on legislative help could put Trident in a more vulnerable position in the years ahead. He is about to lose his biggest ally in Congress. Pending recounts in Alaska, Stevens’ 40-year career is now over. He just lost his bid for re-election. Last month, a jury found Stevens guilty of making false statements on financial disclosure forms after he accepted unreported gifts from a contractor to whom Stevens steered government contracts. While Trident was not implicated in the felony charges against the Senator, an investigation of Stevens’ son has hit closer to home.

Federal agents raided Ben Stevens’ office in 2005 in an ongoing investigation of the onetime state senator’s relationship to the fishing and oil industries. The U.S. Justice Department has issued subpoenas to fishing companies, including Trident, as part of that investigation. (A Trident attorney says the company complied with the subpoena but hasn’t heard anything since.)

Meanwhile, Alaska’s sole representative, Don Young, has started building a defense fund of his own as feds investigate him for corruption. Young helped push Trident’s legislative agenda through the House, where he serves as ranking member on the House Natural Resources Committee. Bundrant, his wife, Diane, and son Joseph, also a Trident executive, have donated more than $25,000 to Young’s campaigns since 1993, according to the Center for Responsive Politics.

Bundrant no longer quite resembles the photo used on Trident’s Ultimate Fish Sticks package. The salt-and-pepper hair is completely white, and his back is a little stooped. In a later interview, his 38-year-old daughter, Julie Bundrant, was quick to say her father can still run circles around her. But other industry insiders say they are dealing less with the man himself as decisions are passed to other Trident department heads.

In 1961 Charles Bundrant was in a pre–veterinary medicine program in Tennessee. That summer, like many college kids, he decided to take some time off, consider his future, and earn some cash fishing in the great white north. Unlike most college kids, he never went back to school.

Alaska fishing industry lore has it that he spent that first summer sleeping under a boat on the docks in Bristol Bay, taking any work he could get on the boats and in seafood plants. But within seven years, he was doing well on the crab boats in Kodiak, making money and looking for a way into the business himself.

At that time, crab was the catch of choice for American fishers. Most people were running their haul back to the docks—where processing companies pulled the crab meat out and sent it off to market—leaving them with less time on the water lifting shellfish out of the Bering Sea. Bundrant wanted to eliminate a step by outfitting his boat to pry the crab meat from their shells and freeze it while still at sea. He and two other fishers pooled their money, and in 1973 bought the 135-foot Billikin. With that, Trident was born—a company that could catch crab, shell it, and take it straight to seafood wholesalers.

The advantage of Bundrant’s strategy became apparent two years later, when the crab fishers went on strike, refusing to deliver more crabs until the processors gave them a better price. But Bundrant didn’t need the processors—he went straight to the sellers. So while the rest of the fleet stayed in the docks, he shoved off in the Billikin, taking advantage of unfettered access to crab stocks. Brent Paine, a former fisherman and the current executive director of United Catcher Boats, which represents small independent players in the West Coast fishing industry, says that move established a tense relationship between Bundrant and small catchers that continues to this day.

Bundrant also showed a tough attitude toward his own workers. In October 1978, a dozen members of his processing crew went on strike, demanding a raise from $3.45 to $6 an hour, according to records from the National Labor Relations Board. Bundrant offered $4. When the strikers rejected that, he fired them, deducted the cost of transporting them to Alaska from their wages, and told them they were on their own to get back to Seattle.

The Board sued on behalf of the employees, pointing out that as strikers they couldn’t be fired. The workers together won almost $30,000 in federal court.

Ten years after the launch of the Billikin, Alaska Senator Frank Murkowski and his staff were meeting with a group of Japanese fishing representatives in Washington, D.C. The Japanese wanted legislation that would expand their rights to take pollock from Alaska’s Bering Sea. In the course of the conversation, one of Murkowski’s staffers, Joe Plesha, learned how much of the tasteless fish the Japanese were pulling out of American waters—about 2 billion pounds annually.

“I kind of interjected that I was surprised,” Plesha recalls. “‘We give you two billion pounds of fish every year?'”

He asked why Americans weren’t interested. “It’s a trash fish,” they responded. American boats weren’t equipped to handle the giant nets dragged along the sea floor to catch pollock. And even if they were, there weren’t any American processors with the equipment necessary to turn the fish into blocks of minced-up fish or into a paste called surimi, the two most common uses for pollock.

There is one American guy having a go at pollock, the Japanese told Plesha: Charles Bundrant, but he won’t be successful. “That’s the first thing I heard about Chuck,” says Plesha, who today works as Trident’s in-house counsel. “‘He’ll never make it.'”

Instead, pollock proved to be even more lucrative for Bundrant than crab (stocks of which had begun to dwindle by the early 1980s). The fish, growing up to three feet long, is one of the most populous in the Bering Sea. In the ’70s and ’80s, Japanese, Korean, and Norwegian trawlers the size of football fields pulled in tons of it. The catch was then gutted and frozen on board to be shipped back to Asia, where it was used to make things like fake crab meat. The fish stayed abroad; Americans didn’t eat it.

Bill Woods, a former Trident executive, worked for a Bundrant competitor in the early 1980s, and recalls arranging a trip to quietly look at Japanese pollock boats and processing plants. [This story has been corrected to say that Woods is not currently an executive at Trident.] His business spying took him to Hokkaido, the second largest of the Japanese islands. There he walked into a restaurant—and found Bundrant already seated, eating with a different group of Japanese fishers. “He seemed to always show up at what I was interested in,” Woods says.

In 1981, Bundrant built a processing plant on Akutan, a tiny outcropping of rock so far east in the Aleutian Islands that claiming to see Russia from your house there wouldn’t seem so outlandish. Fewer than 100 people, mostly native Alaskans, live there year-round. The plant could shell crabs and gut salmon and pollock caught by Trident’s ever-expanding fleet of catching boats.

Several years passed, but U.S. consumers still didn’t quite cotton to pollock, recalls David Abbasian, the Akutan plant manager, speaking by phone. Attempting to convince a group of skeptical Long John Silver’s executives to put pollock fillets on the chain’s menu, Bundrant brought them to Akutan. Abbasian says the fast-food execs were so impressed by the taste of Trident’s frozen product, they thought it was fresh. That day, he says, Trident signed a multimillion dollar contract to provide breaded, frozen whole pollock fillets to the chain. “That was the first big, big major contract to introduce pollock to the U.S. market,” he says.

Consultant Steve Hughes says that before Trident started pushing the fish to restaurants and food wholesalers, things like fish ‘n’ chips or fish sandwiches were made with cod or whiting (also known as hake), both much less populous in the Pacific than pollock. When Bundrant convinced Long John Silver’s executives that pollock could taste as good and cost less than the fish they used, an enormous domestic market opened up, making the “trash fish” suddenly valuable. Trident’s business skyrocketed, and other suppliers benefited as well, as companies like McDonald’s and Burger King started buying pollock for their fillets. Now pollock makes up the biggest share of the Alaskan fishing industry.

In the meantime, Bundrant received invaluable help in his empire-building from Congress, which started pushing for Americanization of the fishing industry in the mid-1970s. Brent Paine of United Catcher Boats says that back then, American fishers would look out from the docks in places like Dutch Harbor and see the lights of enormous foreign trawlers in the water.

Frustrated that foreign companies were making money from an American resource, domestic companies went to Congress and asked for legislation to give them first rights to fish in Alaskan waters. In 1976, Washington’s long-serving senator Warren Magnuson and Alaska’s senior senator Stevens sponsored a comprehensive bill that, among other things, pushed the boundary where foreign fishing boats could freely operate from 12 miles offshore to 200 miles. Foreign companies could still come closer, but first rights to fish within the 200-mile boundary went to American companies.

This act gave Trident an immediate leg up on the competition, as one of the few companies at the time actually pursuing the pollock caught by foreign companies. “Without that legislation, Trident would be a much different and smaller company because [the pollock industry] would be dominated by foreign fishing fleets,” Plesha explains.

But the real gift to Trident came two decades later, when Stevens introduced the American Fisheries Act. At that time, Alaska’s pollock-fishing waters had actually gotten crowded with boats, and the annual fish “derbies” were becoming dangerous for all parties.

Bundrant was using his processing factory at Akutan to handle some of the catch, while foreign-owned companies were using giant factory trawlers that could gut and freeze the fish on board, store them, and keep going—much as Bundrant had done with crab in his career’s early years, but on a much larger scale. These factory trawlers were able to get around the 200-mile restriction as long as they were registered as a business in the U.S.—even if they were entirely owned by foreign citizens.

In 1998, Trident and other Alaskan fishers turned to Stevens for relief. Trident spent over $150,000 lobbying Congress that year, according to the Center for Responsive Politics. Bundrant and his wife had donated a total of $4,000 to Stevens for his re-election bid two years earlier.

Stevens’ American Fisheries Act called for a reduction in the number of factory trawlers allowed in the Pacific, required 75 percent American ownership in companies operating out of Alaska, and created a quota system that gave individual fishing companies and smaller cooperatives allocations, rather than letting the factory trawlers scoop up everything they could. All of the measures benefited Trident.

Bundrant hired Joe Plesha as his bulldog in the fight, with the former Senate staffer testifying before committees he once worked with. Also pushing for the Act was an industry group, led by Trident, called the American Fisheries Act Coalition, or AFAC (which some in the industry referred to as All Fish Are Chuck’s). Bundrant pitched the fight as a protection of American businesses. That wasn’t entirely accurate. At the time, Arkansas-based Tyson Foods had a seafood arm operating offshore trawlers. Hoping to squeeze out some of their foreign competition, they backed Trident. The processors also formed their own lobbying group, the At-Sea Processors Association, enlisting help from local politicians like Ron Sims and Patty Murray.

The Act passed in October 1998 with a compromise that gave the trawlers a little more than they’d had under the original bill. But the Act still made Trident the biggest winner. The Akutan Catcher Vessel Association, a cooperative made up of Trident boats and boats selling their catch to Trident, walked away with more than 30 percent of the pollock not allocated to the trawlers—the most of any cooperative.

Ironically, Trident itself got into the offshore pollack-processing business only a year later, purchasing Tyson’s fleet of factory trawlers. Never one to let past disputes get in the way of good business, Bundrant is now a member of the very association that lobbied so hard against him, the At-Sea Processors.

“It might seem very awkward from the outside,” says Jim Gilmore, public affairs director for At-Sea Processors. “But all these people have known each other for decades.”

Not all decisions divvying up the Alaska catch are made back east. The 1976 Magnuson-Stevens Act also created regional regulating bodies known as Fishery Management Councils. The North Pacific council, for instance, regulates the yearly operations of Bering Sea fishers. Each year, the council—made up of industry representatives, government officials, and maritime scientists—sets annual quotas for the number of fish that can be caught in Alaskan waters, to ensure that no species is fished out of existence. A Trident executive sat on the council for its first six years; since then, many council members have had ties to Trident, either as employees or fishers who sell to the company.

After the pollock victory, Bundrant turned to the council, seeking a new way of divvying up the crab catch that would be favorable to his company. This time he ended up on the opposite side of the fence from individual fishers. They liked the idea of quotas to prevent a dangerous race to maximize the catch. But under Trident’s plan, the annual catch was also to be divided among the processors, giving each company a right to a certain percentage. It’s referred to as a two-pie system.

Terry Haines, a former crabber and current Kodiak city council member, criticized Trident’s proposal as a form of sharecropping, depriving fishers of the chance to sell to the highest bidder. Instead, processors got an automatic right to the product he and others sell. “It kind of flies in the face of the free market,” Haines says.

The two-pie crab quota system passed the council in 2002. The dramatic changes required an act of Congress, though, and Trident again poured more than $150,000 into lobbying. At a 2004 Senate Commerce Committee hearing, Plesha argued that crab processors like Trident would be hurt by the introduction of quotas. Without a mad rush by the crabbers to get all they can at once, there would be less demand for processing plants, and some would have to shut down. To protect companies like Trident from serious losses, they should be guaranteed rights to the crab as well, Plesha argued.

The crabbers, on the other hand, argued that they’d be hurt under the new system. Handing out individual quotas would encourage bigger companies with several crabbing boats to consolidate, since they would no longer need to run as many boats as possible to get as big a haul as possible in the shortest possible time.

The crab rationalization plan passed Congress with 90 percent of the catch going to a handful of processors. Trident got the biggest share, more than 20 percent.

Haines says that about 1,000 deckhands and boat skippers lost their jobs almost immediately as companies consolidated their catching operations. And while the price fishers got for their catch didn’t go down, the processors required steep lease fees for the rights to catch for them.

“It worked out great for Trident, but for independent fishermen, it didn’t end up very good,” Haines says.

This year, Trident lobbied to create similar rules for groundfish like red snapper and whiting, the most-caught fish off the West Coast of the lower 48. Trident has a processing plant in Newport, Oregon, for such fish. The processors didn’t aim as high, asking for 20 percent of the catch.

Several independent fishers showed up at a Pacific Fishery Management Council committee meeting in October in jeans and flannels to oppose the idea. Their advocate on the committee is Pete Leipzig of the Fishermen’s Marketing Association. He says the proposal gives companies like Trident too much control over the price by guaranteeing them part of the catch.

“Fishermen are businessmen, and they’d like to have lots and lots of customers,” Leipzig says.

Processors say that without quotas, the opposite problem occurs. Fishers guaranteed a certain catch don’t have to compete with each other, and as a result have too much control over the price they command from the plants that buy their fish.

Earlier this month, Trident emerged mostly victorious again: The council gave processors a 20 percent allocation for whiting.

Meanwhile, the FBI’s investigation of Ben Stevens continues, which could shine an unflattering light on Bundrant and his industry. The investigation involves his chairship of the Alaska Fisheries Marketing Board, which Congress created in 2003. The board’s purpose was to give seafood companies grants to market their products. Between 2003 and 2006, Senator Stevens funneled $34 million in federal grants to the board, according to an online federal spending database. Heading the board was Ben, who had been appointed by then-Alaska governor Murkowski. The board decided who received the federal grants. Under Ben Stevens’ watch, Trident got more than $1.3 million, according to a board report.

That $34 million was also doled out to industry groups, such as the North Pacific Crab Association, of which Trident is a member. The Association then turned around and hired Ben Stevens for vaguely described consultant work. According to legislative reporting records and tax forms, North Pacific paid him more than $86,000 from 2004 to 2006.

Using grant money to pay the son of the legislator who got you the money looked fishy to former Alaska state representative Ray Metcalfe. In 2004, under the banner of the Alaska Moderate Republican Party, he began filing complaints on the matter with the state Public Offices Commission. The complaints were consistently thrown out. “I was taking all kinds of flak,” Metcalfe says.

Then in 2005, he wrote a four-page manifesto called “Ben’s Bribes” detailing the state senator’s relationship to fishing and oil companies. By the end of that year, FBI agents had raided the office of Ben Stevens, who withdrew his candidacy for re-election to the state senate. Federal agents also launched an investigation into the Stevens family. In December 2006, the Feds issued subpoenas to fishing companies, including Trident, as part of that investigation.

Meanwhile, another Ted Stevens earmark that could significantly benefit Trident is in danger. Last summer, Stevens attached $1.25 million to a transit bill to fund an airport in Akutan. Village residents are backing the measure, but opponents say the biggest beneficiary would be Trident, which currently flies about 1,000 seasonal employees out to the island in a tiny Grumman Goose water plane.

Neither branch of Congress has voted on the bill, and earmark opponents want it taken out. “There’s a real question as to whether this would go forward if it wasn’t for this one company,” says Steve Ellis of the D.C.–based Taxpayers for Common Sense. The airport has gotten negative press in The New York Times and elsewhere.

Bundrant also backed the wrong candidate for Alaska governor, contributing to Frank Murkowski’s 2006 bid for re-election against primary challenger Sarah Palin. Palin’s message to voters—throw the corrupt politicians out.

Plesha says that even if the most prominent member of Alaska’s three-person Washington delegation has been thrown out, Trident has good relationships with other legislators.

Standing in Trident headquarters, Bundrant says his company is doing better than ever, on track to beat the $1 billion sales mark reached last year. “So now I’m going to retire,” he says, laughing. But he doesn’t take it back.