Court Documents Reveal Controversial Oyster Company's Financial Reporting Deceived State

At the April 17th California Fish & Game Commission meeting in Santa Rosa, the National Parks Conservation Association, on behalf of conservation and public interest advocates, demanded accountability for a huge financial discrepancy in documents filed by the controversial Drakes Bay Oyster Company that operates in Point Reyes National Seashore. The discrepancies identify that the Commission and the public has been misled by the Company’s reporting and that the Commission and/or taxpayers may have to pick up the tab for more than $600,000 worth of unreported clean-up costs.

Every year for the past 7 years, the Company submitted documents to the Commission stating that its clean-up costs for their multi-million dollar business would be only $10,000. Immediately after the expiration of its Federal permit that allowed it to operate, the Company sued the Interior Department and submitted documents to the Federal court under penalty of perjury stating that their clean-up costs would be more than $600,000, an amount over 50 times greater than what the Company reported every year to Commission and the public.

The Commission’s lease to the Company that expired when the Federal permit expired required it to provide a good-faith estimate of the value of clean-up for the required clean-up bond. The Company repeatedly failed to provide that good-faith estimate to inform the Commission, policy-makers, and the public.

The Lease’s Proof of Use Report states:

Lessees need to determine annually the cost to clean-up their lease(s). The clean-up estimate will include the cost of labor and supplies for the removal of all materials, growing structures, and any other non-natural debris associated with aquaculture activities. This cost estimate shall be included in the narrative portion of your Proof-of-Use Report for each lease.

The Lease (Section D) states:

The escrow account shall be increased if the Fish and Game Commission determines that, if abandoned, the culture operation is likely to be more expensive to remove. The escrow account may be reduced by the Commission upon demonstration that the probable cost of removal of all improvements would be less than the deposit previously required. In its annual Proof-of Use Report, the Lessor shall advise the Commission of its best estimate of the probable cost of removal the lease operation. (emphasis added).

Even as recent as their last filing in 2011, the Company’s owners reported that they “do not expect the cleanup costs to change.”
This annual filing to the Commission ensures that the business assumes responsibility of clean up and does not stick the State, Californians, or taxpayers with the bill when the business vacates public property. The clean-up bond is intended to help protect public trust resources and shield taxpayers from cleaning up after industry’s waste and environmental damage.

STATEMENT by Neal Desai, Pacific Region Associate Director, National Parks Conservation Association:

“For years, Californians have expressed outrage over the Company’s repeated violations of regulations that protect our fragile coastline at this national park. While the Company has evaded its responsibility to protect this sensitive marine habitat, its reporting and financial discrepancies have deceived the public and Fish and Game Commission. Taxpayers should be outraged that they may have to foot the bill for cleaning up the significant mess that could be left behind by this unsustainable oyster operation.”