Catching the Codfather Part 1: Red Lobster

Hey listeners, Chris Kimball here. Sola El-Waley is coming to Milk Street Radio to answer your cooking questions soon. If you need new recipes or culinary inspiration, we're here to help. Or you can try to stump me and Sola with your toughest culinary mystery, like why your pie exploded or why your soup tastes just well off. Email us at questions at MilkStreetRadio.com. One more time, that's questions at MilkStreetRadio.com, and we'll be in touch. Hey, it's Christopher Kimball. Today we're sharing a special episode from the Big Dig podcast from GBH News. This is the first episode of their latest season, Catching the Codfather, all about the rise and fall of fishing mogul Carlos Rafael. We had the show's host, Ian Koss, on Mill Street Radio a few weeks ago to share Carlos' story. But keep listening to hear more, including more recordings from the undercover sting operation that brought Carlos down. Enjoy, and don't forget to follow The Big Dig wherever you get your podcasts. Can you tell me about how you did ultimately get arrested? This all started a few years back when I wanted to sell my business. see my legacy it was to grow this to a point that i would turn it over to my keys i did it that said i'm done i wanted to give the business to my my middle daughter and i told stephanie i was 62 at the time i said stephanie daddy's die i got enough I'm going to give you the business. I don't want no money. At the end of the year, the profits you split with your sisters. It's yours. So she looks at me and she says, do you think I want the kind of life you have? And she didn't want a company over $100 million just for them. Can you blame her? No. No. No, because I see what I did to my family. I never get to spend time with them. I never get to go to the school place and all this other shit. You can't buy those things back. It's over. But if you get the American dream, it's a certain amount of sacrifice you got to make. It doesn't come from heaven. And they say, luck, luck, bullshit. You have to go look for luck. luck doesn't come to you and by luck is work your butt off in America and you will get ahead I don't want that kind of life are you crazy so that's why I end up getting in a shade because if I were to get out at 62 none of this bullshit would have happened Carlos Rafael leans back and lights a cigarette one of many over the course of our conversation. Could you talk about all the Scarface pictures? My daughter gave me that one. She bought that one in New York. Carlos's office is covered with images from the movie Scarface. There's an actual cigar from the set, a hand-drawn sketch of Tony Montana, the cocaine kingpin, and a still from the film of Al Pacino in the big hot tub. Carlos told me that Netflix once approached him about making a movie about his life and asked who should play him. Carlos didn't need to think about it. It was obvious. I said, Scafix, he'll be the only one who could do the job the right way. Al Pacino. Al Pacino. So you can picture an older Pacino if you want, but with jowls hanging under his chin and totally bald, except for the sides of his head. That's Carlos. And what did the producer from Netflix say? No, I asked him for, when I mentioned $20 million, I said, forget it, look, if I'm going to, something's going to get done, I want money. And you'll see as we go along, there are some parallels, for sure, between Carlos Rafael and Tony Montana. It's the story of an immigrant who has to make his own luck and is willing to push that luck again and again and again. hunger, opportunity, excess, ruin. There's a famous scene in the movie when Montana is out to dinner and gets in a heated argument. It's at a fancy restaurant. Everyone's very well-dressed, lawyers and bankers, and they all fall silent, watching as Montana lunges across the table, spilling wine and food all over the white tablecloth. But then Montana turns and addresses the crowd directly, calls out their silent judgment of him, saying, you need people like me. You need people like me so you can point your fucking fingers and say, that's the bad guy. Then he asks, so what does that make you good? You're not good. You just know how to hide, how to lie. Me? I don't have that problem. When he's done, Montana stumbles out, shouting over his shoulder, say goodnight to the bad guy. I can hear a little of Carlos in that scene. Even after he was investigated and labeled a crook, after federal agents carted him off to jail and dismantled his empire, He keeps pointing his finger right back at the government that brought him down, saying, that right there, that is the real bad guy. They think they solve the problem. Haven't solved shit. Because fishermen are a lot smarter than they are. From GBH News, this is The Big Dig. I'm Ian Koss. Carlos Rafael is an American success story. He started from nothing, working in a neglected industry in a neglected city, and he built something real. His business was fish, Carlos Seafood. And by the end of his run, he owned the biggest fleet of boats in the most valuable fishing port in America. So why did it all come crashing down? And why does Carlos insist to this day that he did nothing wrong? Welcome to Season 3, Catching the Codfather. It's a story about work, about dreams, and ultimately about how all of us relate with our government. Part 1, Red Lobster. Carlos Rafael grew up in the Azores, a string of islands in the Atlantic that are maybe a quarter of the way to North America, if you're coming from Europe. So way out there and small enough that you have to really zoom in on the map in order to see them at all. The Azores are part of Portugal. And in the 1960s, when Carlos was a kid, Portugal was fighting colonial wars on several fronts in Mozambique and Angola and Guinea. Carlos had friends who were drafted off their tiny island and sent abroad, who died in the jungle fighting for a lost and distant cause, a pointless cause. His parents did not want that for their son, so they sent young Carlos to study at a monastery. That's the way they would keep me off the military if I stay in a monastery. I mean, I've only known you for about an hour, but it's hard for me to picture you in a monastery. Oh, my friend says, what a hell of a priest you would have made. But once my sister, she told me, dad has an American passport. Carlos's dad had an American passport. This revelation is not entirely surprising in a place where lots of families move back and forth to the U.S., but it was news to Carlos, infuriating news, because it meant his dad had an easy out all along, and was so comfortable in his island life, he just didn't want to take it, and instead sent his son to a monastery. I freaked out. I said, oh, yeah, we're going to America. He says, you know you're not going to America because you stayed in a monastery. That's where they put you here. So I did shit so they could throw me out. Every night, the priests in training would have dinner, then go to prayer, and by 9.30, they would go up to their dormitory. So everybody went up to the dorm. I went to the football field and I jumped the fence and I took off. Carlos didn't care about actually getting away with this little escape act. He wanted to get caught. He wanted to get punished. Didn't go too far. I went for a walk until I was about a quarter of 11 when I come back. I jumped the fence and I come back. Little I know that the priest was upstairs waiting for me. he says, you'll be your next pal tomorrow. I'm calling your parents and we're shipping you back home. Now Carlos would find out if his gambit paid off. It looked like either way he was leaving the Azores. Could be for the U.S., could be for Angola. Which one was up to his father. So I was terrified to get home. I said, he's going to beat the living crab out of me. My father says, I'm going to teach you a lesson. We're not going anyplace. He's the one. He was in the right place. He should have stood there and all that. But there was my mother. She every day would be harming at him. And she says, you know what's going to happen? If he goes, he'll probably come in the coffin. Carlos was 15 at this point. At 16, he would register for the draft. So after she kept battling, battling, he decided to come here. So you got out just before your 16th birthday? I got you in March. June would have been too late. Carlos boarded a TWA flight and followed the same route across the sea that people from the Azores had taken for generations to the small coastal city of New Bedford, Massachusetts. The flight attendant gave him a little set of plastic wings he could pin on his shirt. He was proud of those wings, proud to be starting fresh, proud to be in America, finally free. When I arrived in the United States in 1968, I always said to myself, I am not going to be working for anybody else all my life. I'm going to do this for myself. And it turned out that Carlos was arriving at the right time, A time of crisis, actually, for the industry that defined New Bedford. But as Carlos himself has told me, a crisis, now that is when you can make a lot of money. And Carlos Rafael would do just that. Throughout the world, New Bedford, Massachusetts, is best known as the whaling city. New Bedford, as you may know, is the port that inspired Moby Dick and where the author, Herman Melville, set out on his own whaling voyage. The first whale ship, the Dartman, sailed out of this port... But if you stepped off a boat there in the 1960s, when Carlos arrived and wandered into the neighborhoods along County Street or Rivet Street, you'd find a very different world from the one Melville knew. That entire area was all Portuguese. Maria Tomasia, like Carlos Rafael, came to New Bedford from the Azores. It's like every island or every tower had their own club. You know, there's the Ponte da Agada Club, there's the Fial Club, there's the Medeiros Club, there's the Fisherman Club, Central Luzo Club, Recurda Songe Club. So everybody had their place to socialize. There were two Portuguese newspapers. There was a Portuguese radio station, a dedicated Portuguese library with over 3,000 titles in it. This was the capital of Portuguese North America. The Portuguese immigration here started in the Moby Dick era, the middle of the 1800s. Whaling ships out of New Bedford would stop in the Azores and Cape Verde to pick up supplies. people got on board as well. And then more people followed, and more people. And they saw there was a fishing industry. You lived by the water. He says, you know, once you live by the water, it's very difficult to go anyplace else and not see that water By 1970 Massachusetts was home to one of all Portuguese immigrants in the entire country and most of those people were clustered in the coastline near New Bedford Within the fishing industry itself, there's actually an interesting ethnic divide, historically at least. For many years, the scallop boats tended to be run by Norwegian immigrants, But the draggers, the boats that went after bottom fish like cod and flounder, they were overwhelmingly Portuguese, 80 to 90 percent by one estimate. They will be the focus of this story. And in the 1970s, when Carlos was still new in town, those fishermen were in trouble. I would be mostly as a translator. The man the fishermen went to for help was Maria Tomazia's boss, New Bedford Congressman Gary Studs. They were concerned about the fact that, you know, there were other people out there. Other people out there. Other people competing for the same cod, haddock, and flounder off the coast of New England, but with bigger boats, bigger nets. What the fishermen described was a foreign invasion. That's how they would talk about it. They felt that they were taking away what was theirs. Okay, coming up, we've got a Russian midwater trawler. He's about 12 and a half miles off the coast. It's a little hard to imagine now, but in the 1970s, foreign fishing boats could come as close as 12 miles off the coast, and they could catch whatever they wanted. This audio is from a Coast Guard flyover just off Cape Cod. Okay, this is a Bulgarian. There were German boats, Russian, Spanish, Japanese, all drawn to the rich coastal waters of New England. And because they were so far from port, these ships were essentially floating factories. They filleted, froze, or canned the fish right on board, working for months at a time on a massive scale. Probably averaging somewhere in the neighborhood of, say, 35 to 40 tons a day. I used to see miles and miles and miles of these ships. They looked like big cruise ships. Rodney Avila was a young fisherman at the time, just starting out. And I used to say, I'm going to have no fish when I grow up. Modern trawling techniques are sweeping everything from the sea. This foreign presence really ramped up over the 1960s, so that by the mid-70s, if you looked at the total catch on New England's very best fishing grounds, 90% of it was pulled up by foreign boats. 90%. And the fishermen and scientists alike could see the effects. The attic had already disappeared. The butterflies all disappeared. The flukes all disappeared. And that's how the whole thing came to be, is that they wanted something done about it. That's where Congressman Gary Studs came in. For several of the reasons that I cited in my brief remarks, I think that the time is right to ask to extend these protections. Studs was always a bit of an odd fit to represent the working-class Portuguese hub of New Bedford. He was formal, clean-cut, Yale-educated. In pictures of him from the 1970s, he looks like he could be in the 1950s, with black horn-rimmed glasses and plain suits. And on top of all that, Gary Studs was also concealing the fact that he was gay. The suggestive term people used for him at the time was a confirmed bachelor, not a strong political brand in those days. But Studs was driven. When I first met him, he introduced himself in Portuguese. So when he ran for that seat, Studs took a six-week intensive course in Portuguese, then spent another six weeks traveling around the Azores, Cape Verde, and mainland Portugal. Uctapasa. Yes, so that type of thing. You've gotten anything good lately? In 1973, New Bedford sent Studs to Washington as their representative. And in that very first term, he also landed a seat on the Merchant, Marine, and Fisheries Committee, which meant he was actually in a perfect position to do something about the whole foreign invasion issue. So that same year, Studs teamed up with Congressman Don Young from Alaska to introduce what they like to call the Young Studs Bill, but was commonly known as the 200-mile bill. This will probably be something like a 200-mile economic zone. It would establish a new ocean boundary that foreign vessels could not cross, an invisible fence exactly 200 miles offshore. And inside that fence, our richest fishing grounds would be reserved exclusively for American boats. A 200-mile extension of U.S. coastal jurisdiction. You would think that bill would be an easy win. I mean, who would oppose kicking out foreign fishing boats? Gary Studs was about to find out. The problem, as it has so often been in subsequent years, was the United States Department of State. And it turns out the bad guy in this story is the U.S. Department of State, which makes some sense. The diplomats wanted to resolve these fishery issues diplomatically with an international treaty. They did not want to just unilaterally draw a line in the ocean. It could impact trade, military movement, intelligence gathering. Studs was saying it can't wait. By the time a big international treaty is ratified, the fish will be gone. That's when Studs realized there was a deeper problem underneath it all. I discovered that the biggest problem that those of us who represent maritime areas have was that nobody in Washington knew anything about it. And the best example I can think of... This is Studs recalling the story in a speech a few years later, where he gave a specific example to illustrate the challenge. For years, Studs had tried to get the American lobster, designated as a, quote, creature of the shelf, meaning it lived, as the name implies, on the continental shelf and could be protected from foreign fishing boats. We held hearings to find out why the State Department had not designated the lobster to be a creature of the shelf. And the State Department, I kid you not, came in and testified. I can still picture them, three men. There they were, all lined up in very, very fancy three-piece suits to inform the House Committee on Merch, Marine, and Fisheries that the lobster was not a creature of the continental shelf because international law defined a creature of the shelf as an animal which never left the ocean floor. And the State Department had verified that when the lobster was excited, it jumped up and down and left the ocean floor. Now, I wish I could tell you I was exaggerating to make a point, but I am not. I asked the Department of State if they thought the kangaroo was a creature of the earth. And there was no response whatsoever. I threatened on several occasions to put an unpegged lobster on the witness table in front of them to see if any of them had ever met one. I seriously doubt it. Washington is populated by people who think that lobsters are red. and that is the source or at least the symbol of a great many of the problems that we have had over the years in trying to accomplish things. If you don't know, lobsters, when they are alive and uncooked, are not red. They're greenish-brown. That year, the bill went nowhere and the foreign harvest of the seafloor went on. Carlos Rafael is in his early 20s at this point. He's been in the country for maybe five years. And while Gary Studs is learning the ways of Washington, Carlos is learning the trade of a fish cutter. What does it take to cut a fish? What does it take? A little bit of knowledge. But you'll learn as you'll learn you get to it. And once you get to it, The name of the game is sharpen your knife. Carlos started out working under a Cape Verdean man who showed him how to hone his blade until it was so sharp he could shave the hairs off his forearm. Once you got a gig of it, once you know what you're doing and you got a sharp knife, then it's like ice cream. It's easy. In an eight-hour shift, each fish cutter was supposed to fill 16 boxes, 125 pounds each. So 2,000 pounds of fish a day for an average cutter. I won't say I was the best one in the city, but I bet you I was the fourth or the fifth best in the city as a fish cutter. I would cut 20, 22, sometimes 24 boxes by 2 to 30 in the afternoon. So I would go into the men's room, upstairs. I would sit and smoke a cigarette and the boss would come, gets your butt to work. I said, I'm not going to work now. I'm having a cigarette. You've been here for 20 minutes. I said, it's too bad. You're fired. So I must have got fired 50 times working for this company, but he could never fire me because I was almost way over. As Carlos said before, he did not come to this country to work for someone else. This was not his American dream, But it was also not a great time to strike out on his own. Even from the floor of the fish plant, Carlos could tell the industry was in trouble. You know, not much fish around so far. We're going through a crisis back then. Catches were down. Some species had virtually disappeared. And Gary Studs knew all this, too. So Studs came back around for another try. This time, smarter. The presence of the foreign fleets out there who were literally raping the resource, the Eastern Bloc countries, the Soviets, the Japanese... This time, Studs mounted a public campaign for the 200-mile bill. He held hearings. He met personally with President Ford. He teamed up with a whole fleet of fishing boats that sailed down the coast and up the Potomac to D.C. The foreign fishing activity... And the campaign worked. Legislation under which the United States laid claim to a 200-mile limit on its coastal waters. This time, the bill passed. And in 1976, 50 years ago, Gerald Ford signed what became known as the Magnuson Act, after Warren Magnuson, the senator who co-sponsored it. Today, I guarantee you, any fishing captain in the country will know exactly what you mean if you say the name Magnuson. One of Stud's staff members told me that years later, as the Magnussen Act became increasingly controversial. Studs would sometimes say, Thank God they didn't name it after me. Around the time the 200-mile limit went into effect, Carlos Rafael became the foreman of the fish plant, running the whole operation. It was clear that kicking out the foreign boats would be good for the local fleet. And pretty quickly, he made his next move. I went to the owner and I told him, I'm giving you two months to get somebody to replace me because I'm going to do this for myself. Or you're never going to make it. He says, that's your opinion. We will see if I make it or not. The rebellious teenager who ran away from the monastery and cherished his plastic wings was going to follow through on his promise to work for himself in America. I went to a friend. I asked him for $5,000 loan. I asked for $10,000, but at the time he says, Carlos, I don't have $10,000, but I got $5,000 if I help you. I said, the $5,000 will have to do. And I had $0.27 left of my own. That was the beginning of Carlos Seafood. Just with $5,000 and 27 cents. And truly, Carlos's timing was very, very good. Now with extended jurisdiction, the fishing industry is booming again. Because after the 200-mile limit went into effect and the foreign fleets were gone, Congressman Studs helped use federal money to usher in a golden age for the new Bedford fleet. The government came down with his government guaranteed loan. Again, Rodney Avila, New Bedford fisherman. So if you could prove that you were a fisherman, they'd loan you all the money you wanted to buy a boat. Interest rates at that time were quite high. If you were buying a house, you might pay 10%, 15% interest. But if you were buying a fishing boat, it was basically free money. I had a guy approach me to build 34 boats. He says, all you'll do is sit home and manage the boats, and I'll do all the rest. So it almost turned fishing boats into like an investment asset. Corporations, exactly. Accountants bought boats, lawyers bought boats. I know a dentist that owned boats. I know a used car salesman that owned the boat. And the catching was good because there was a lot of fish around Remember 90 of the fishing pressure had just been removed in some areas So at this point overfishing was not really a concern How could our dinky little fleet even approach the damage that those floating factories had done? So you took that $5,000.27. What did you buy? What did you set up? I would buy fish at night from the fishing vessels, lobsters, monkfish, scallops. At first, Carlos was just a small-time dealer, a middleman scouting for side deals around the docks. I would buy during the night. I'd go sell it. And the next day, get the check, go cash the check, and go pay the fisherman. But in those days, if you were making money in fishing, you'd be stupid to not put that money into a boat. So that's what Carlos did. He bought two boats, in fact. And I should clarify, Carlos did not captain those boats. He never captained his boats. In fact, Carlos told me he went out to sea just once, right around this time. And I swear I'll never go again. Why? Because that's not fit for human beings. Carlos got so seasick on that trip. He offered to pay for all the extra fuel if the captain would just drop him off at the closest port. He literally leapt off the boat as it approached the dock. And from that point on, Carlos Rafael was not a fisherman. He was a businessman. So I think I did pretty good. But I would work 20 hours a day, 18-hour days. I didn't have no new breaks. Vast quantities of valuable, healthy protein can now be harvested by the U.S. industry if it expands its capabilities. Many feel that that is... From 1976 to 1982, the New England fishing fleet doubled in size, from 600 boats to 1,200 boats. And it wasn't just about the total number. These were bigger boats with more powerful engines. They were made of steel instead of wood. They had new nets, new fish-finding technology. The skipper stays close to the cabin during the tow, watching a remarkable collection of electronic instruments. If you ever look at footage or pictures of fishing boats, you can spot the differences right away. On the older boats, the pilot house, the enclosed area, is way in the back with the open deck space in front because the crews would haul nets on board by hand over the side. The modern boats have a pilot house toward the front so they can pull their nets up from the back of the boat with a hydraulic winch. Finally, the net comes winding back onto the overhead drum and the fish are shaken down into the cod end. It was like the leap from propeller planes to jet engines, a whole new era, a new generation of technology. Demand for seafood was growing very fast at that time. And so Magnuson offered a chance for the U.S. industry to modernize, to reclaim its ocean food chain. Studs himself called Magnuson a rebirth for the fishing industry. And locally, at least, he was a hero. Please give a rousing New Bedford welcome to Congressman Gary Studs. I talked to one congressional staffer who told me that he knew people in New Bedford who would display a picture of Studs in their home right next to a picture of the Pope. And that's what Gary Studs was for them was their savior because they loved him. This fishing industry has known times in the past when everyone thought all was lost. Maria Tomasia remembered that later on, when Studs' sexuality was revealed as part of a congressional probe, when he was publicly censured, and when he chose to run for office again as the first openly gay congressman in American history, Even then, the city and the Portuguese community did not turn on him. As soon as they saw him, they would start yelling and applauding, and it was like, unbelievable. You have to understand that for coastal communities, the Magnussen Act was like the New Deal, because each new boat employed a crew. Each crewman supported a family, and together they supported a whole waterfront economy. With all of its members, we believe that the future of this city and the future of this fleet and the future of this industry will match in magnitude its magnificent past. Good luck to us all. So it was just tremendous. In every way, everybody was benefiting from it, and that's what the American Dream was about. Carlos Rafael and Rodney Avila were part of a whole generation who rode the Magnuson Wave. To this day, you can walk along the harbor in New Bedford and see the boats they built from 1978, 79, 1980, the boom times. But for the fishing industry, Magnussen was always a Faustian bargain. They asked the government to get involved in their business, to formalize what had been informal, to regulate what had been unregulated. They got their wish, but they also got more. And my uncle... Again, Rodney Avila. He said to me, you don't want the Magnussen Act. And I kept saying, why? They're going to take my fish. And he said to me, there'll still be enough fish to support you. But once you let the government into your living room, it's like your mother-in-law coming to visit you. You never get them out. We're going to jump forward in time because I want you to see where all these changes are headed, why they matter, specifically to Carlos Rafael. It's 2015, almost 40 years after Magnussen became law, 40 years after a New England fisherman cautiously welcomed the government into their world. Now the boom times are over. The fishing industry is struggling. A disaster is a disaster. And that's true whether we're talking about crops or whether we're talking about fish. The years leading up to 2015 had been brutal for New England fishermen. A dramatic 77% cut in the cod catch. The catch quotas set by the government kept getting lower and lower. That's going to be a heck of a number of people out on unemployment. The regulations kept getting tighter and tighter. Prospects are the bleakest they've ever been. That I'm going to be tied up for months. And that's the kind of draconian bureaucracy that fishermen are living with and struggling to maintain their support. For many fishermen, it meant the end of a career, the end of a way of life. We are the most regulated fishery in the world. And Carlos is tired of it all. He employs hundreds of people, manages dozens of boats, but his own daughter doesn't want to take over what he's built. So he decides to put the empire up for sale. In May of that year, Carlos got a phone call from a broker, someone who helped very wealthy clients manage their money. This broker had a pair of Russian businessmen in New York who had made an awful lot of money, something involving health care equipment. Now they're looking for a place to invest it. Carlos told the broker everything was up for grabs. The boats, the nets, the dredges, permits, property, a fish processing plant, the whole enchilada, as he put it. I gave him a silver platter, the whole enchilada. The price was $175 million. No problem, the broker said. Let's talk. Two weeks later, the Russians drove through the chain link gate and parked in front of the fish plant, a plain, blocky building made of corrugated metal, like a big shipping container, with a sign on the side, Carlos Seafood. The Russians drove a BMW 5 Series, the sport version, with a V8 engine. They wore Louis Vuitton shoes and Versace belts, pinky rings, Rolexes. Carlos was in his usual outfit of jeans and a worn-out flannel, the breast pocket stuffed with slips of paper and, of course, a pack of cigarettes. He did not look like a man worth $175 million. dollars. Carlos led the men through the plant and up a metal staircase to his office, the one filled with pictures of Scarface. The Russian buyers, however, are not buyers. But they are very curious about about the business, and they are recording everything. They're undercover feds. That motherfucker believed that shit. I know we ended up... Like, I'm picturing you in a white van with headphones on. There are white vans. Ron Mullet was the case agent with the IRS. But I don't recall if on that particular day white vans were involved. I was certainly somewhere where I could respond if things went sideways in there. So how did the IRS first get interested in Carlos Rafael? They recognized that he was growing in a time where the industry was shrinking. Most boats sit idle, confined by federal rules, the limit when they can fish and what they can catch. People were having a hard time meeting their loans on their boats, yet he was succeeding, and he can step right up and has an abundance of cash to buy them out and buy their permits, most importantly. that led to different theories from other law enforcement that he must be involved in some other illicit illegal activity, and it ran the gambit. Some agencies thought he was involved in human trafficking or smuggling. Some people thought it was drugs. People thought there was public corruption. Several different agencies had feelings that it was something, but none of them could figure out what it was. The IRS, despite its reputation, does not just investigate tax fraud. As one agent put it to me, We do everything but crimes of passion. As long as there's money involved, we'll take it. That's why these other federal agencies wanted to brief Mullet on Carlos Rafael. There was obviously money involved here. It was just no one knew where it was coming from. I listened to their brief. I thanked them for their time and I left and put the briefing sheet in my drawer, expecting never to look at it again. A few months later, Mullet heard from a source that Carlos was looking to cash out and figured maybe this was his chance to get a peek inside the fish plant. Mullet recruited a pair of undercover agents with Russian accents, then a third agent to play the broker, and sent them in to buy Carlos seafood. Again, none of them knew what kind of business Carlos was really in. It could be drugs. It could be arms dealing. So they had no idea what the man was capable of. And it didn't help that the building was full of long, sharp knives used to fillet fish. There was an uncertain moment early on when Raphael noticed his three guests were all wearing the exact same 18-karat gold Rolex watch. But the leader of the group didn't miss a beat. Those are Christmas gifts for the boys, he said. So Ron Mullet was listening intently for any signs of trouble And also for any clues as to what Rafael's true business was So this fishery, it's like a fucking yo-yo So like you diversify, right? The men got to talking and Carlos was happy to talk about his business This was his life Like scallops, you said? Yeah, we got 12 of those 12 scallop boats? Right He talked about scallopers and draggers He talked about the regulations he had to deal with, the sectors, the quotas, the permits, stuff the IRS agents didn't really understand. Yeah, that's the scope. I got to take this scope. Yeah, sure. Yellow. And more than anything, Carlos talked about the art of buying and selling fish, an obsession he has maintained since his days as a small-time dealer. Hey, cockat, I told you 500 water, I told you 575. You buy the motherfuckers, then you got to shed a pack, then you gotta freeze the motherfuckers, then you gotta mess them. What the fuck do you want for me? But for the undercover agents, who again were pretending they wanted to buy out the whole business, there was a mystery staring them in the face. That asking price of $175 million. As big as Carlos Seafood was that number seemed like a lot So the agents asked for some proof that this business was really worth what Carlos said it was worth And he, within probably the first 10 or 15 minutes, he called his accountant. Why do you go to the office? Get the financial stigmas. I take them down the dogs just to let them pick. To send this stuff over, the financials and tax returns and stuff. All right, do that about it. So we'll take a right. She's going to the office. She said about 10, 15 minutes, she'll be here. But early on, it was, there's a part of the business that she doesn't know about, and we're not going to talk about that. About Carlos C. Fudge, don't ask that question. What do you mean? Because she's going to go to you, la, la, la, la, la, la. Because she don't know nothing. That's what I meant. We want to talk with you separately. Okay, because. Yeah, yeah, yeah. That's what we're talking about, Carlos. So the accountant is on her way over with the financials. She'll be there in 10 minutes. The plan had been to take a break and go down to the docks. But now everyone understands that there is a certain corner of the business that if it comes up, the accountant will cover her ears and go la la la la la. That's what he means by that. So what to do? These buyers seem serious, and they are clearly smart enough to know that the business on those official financial statements is not worth $175 million, which means Carlos has a decision to make quickly. They're coming back and they say, the numbers doesn't justify $175 million. So, stupid of me, I go in the bottom drawer. Of this desk where they're sitting at right now. Yes. And what he did is he opened a drawer. And I got another set of books. And he put it on the desk. Right here. Tell me it's not worth $1.75 million. There you go. There he is. This is. That's where we want to go the la la la before she gets it. This is a couple secrets. This set of books was labeled simply. cash. However, the lines of numbers on the ledger did not reveal a smuggling operation or a drug business. It was more fish, more prices, more lists of pounds and species. Because while other fishermen had been suffering and protesting under the system of regulations created by the Magnussen Act, Carlos Rafael had figured out a way to break the system entirely, to catch whatever he wanted to catch and get away with it for years. And this was not just about being a rebel and reeling in a few too many fish that he sold on the side. This was an operation. Carlos falsified official documents. He manipulated gaps in the enforcement system. He built up a network for selling black market fish to high-end restaurants involving a mafia associate, two corrupt cops, duffel bags full of cash, and money hidden in offshore bank accounts, all adding up to millions of dollars worth of fish. The fishing was not a front. It was not a distraction. The fishing was the crime. You will not see it on paper. I lost you. Yeah, that was the point. Right. With the tension broken and all his cards on the table, Carlos joked with these men who he had only met that day that he's really trusting them at this point. I do not know you could be the fucking IRS and this could be if I'm close to five. So I'm trusting you. We have the same affinity for IRS and you do. We just need to fuck this shit. Fuck me. I regret that for the rest of my life, you son of a bitch. They would have never, never got me. That egg, it's solved. This is a story about one man's choice to break the rules. But I see it as part of a much bigger story. Americans, we've always hated government regulation. That rebellious attitude Carlos has is not unique. It's part of the American dream, really. That desire to be autonomous, to work for yourself, to make your own luck, as Carlos put it. That culture has always been there. But the place we are in now somehow feels different. Today, the very idea of government regulation has become polarized. And I mean that on both sides of the political spectrum. It seems like people are instinctively for it or against it before they even know what it is. Like as a matter of principle. People on the left are mostly focused on the benefits of regulation, how it can be a tool for justice, for safety, preservation. People on the right seem to be mostly focused on the harms and the costs, to the point that there is talk of dismantling the regulatory state entirely, shutting down whole agencies, stripping it down to nothing. Surely there is some nuance between these extremes, but the fact is most of us don't want to look that close. It's boring. It's complicated. So we look away. Fishermen do not have the luxury of looking away. Nor for that matter do truck drivers, or small business owners, or nurses, farmers, a lot of us. And I should be clear here that I am one of the lucky Americans who leads a pretty unregulated life. I make podcasts that go out on the Internet. I don't need a permit or a license. I can say whatever I want, including swears. I can make any number of episodes. Anyone can listen to them anywhere. It's a little hard for me to appreciate what it means to have your day-to-day work monitored by the state, to constantly bump up against rules that feel arbitrary. It's hard for me to appreciate the anger that someone like Carlos Rafael feels, but that anger is real. And that is why I am telling this story. The details of the operation aside, could you talk a little bit more about your motivations, why it felt like these rules shouldn't be followed? It was not for the money. See, I'm the type of guy that I know the whole team from the bottom up because I started as a load and fishing boat. I know what it takes, what you need to raise a family and to get ahead in life. And they forced me to do bullshit so I could keep all these people working. So you felt like you had to break the law in order to protect the people who worked for you? No questions asked. No questions asked. They forced you to do it. They forced me to cheat. They forced me to cheat. When I walked out of Carlos Seafood that first day, I was skeptical of what I'd just heard. It all felt pretty self-serving. Of course, Carlos sees himself as the hero, the rogue fighting back against an overbearing state. On its own, he was easy to dismiss. But then again... I mean, we have to look at both sides of the story. Every colon has two sides. As I've talked with more people who fished out of New Bedford, who worked for Carlos, and who knew him, the image I get is not simple. When you first met him, you'd say, oh, this guy's a mafiasso. But actually, he had a heart. In the fishing industry, Carlos Rafael remains a deeply divisive figure. If he wasn't born crooked, he must have learned it before he could talk. Someone who inspires jealousy, fury. Only Carlos turned into the biggest crook in America. Just Carlos. He is a product of his own moral depravity. And someone who, despite all his crimes, all his deceptions, a lot of people continue to root for. Do you blame him for what he did? Do you think what he did is wrong? No, I don't. No, I don't. So who is Carlos Rafael really? A folk hero? A crook? A righteous rebel? A selfish con man? I believe in order to judge the crimes of Carlos, you also have to judge the whole system that he chose to break. so we're going to cover those 40 years from the passage of Magnuson to the arrest of Carlos Rafael to understand that system and the anger that grew up around it and here is my hope for the series if you are one of those people who instinctively thinks government regulation is good and necessary this story will make you question that instinct. If you are someone who thinks regulation is flawed and burdensome and unnecessary, this story will make you question that instinct. And if you are someone who before today thought lobsters are red, then if nothing else, you are about to learn a whole lot about where your fish comes from. We've got riot gear police lined up all down the street here, all the way past the gate. In part two, what the government gives, the government can take away. People are being taken into custody left and right here. The last of the dealers are now out of the lot, hit the pavement pretty fast. That's next time. I was born in a city and in fact I recognized that I was the most Portuguese that I've ever heard of. I was born in a city and in fact I recognized that I was the most Portuguese Here I am, I've heard They have their fishing boats They make a feast When they arrive at the port They have all their work They have a lot of love and comfort Viva, viva Anne Obedford Is the queen of immigrants Viva, viva Anne Obedford A mãe dos filhos das terras distantes Viva, viva a Nubedford Em ti criei uma emoção Viva, viva a Nubedford Tu és a dona do meu coração Catching the Codfather is produced by Isabel Hibbard and myself, Ian Koss. It's edited by Lacey Roberts. The editorial supervisor is Jennifer McKim with support from Ryan Alderman. And the executive producer is Devin Maverick Robbins. If you want to hear more stories like this one produced by the same team, I want to make sure you know, this is the third season we have done together. And if you want to hear the rest of them, just search for The Big Dig wherever you get your podcasts. I talked to a number of Gary Studd staffers for this episode, all of whom helped inform the story. They are John Sasso, Paul McCarthy, Steve Schworden, Mike Forrest, Tom McNutt, and Mary Breslauer. Susan Dudley, who you will hear later in the series, also provided valuable insights for the episode. For the archival material, we owe thanks to the ML Barron Historic Archives, the New Bedford Fishing Heritage Center, and the Portuguese American Archives at UMass Lowell and UMass Dartmouth. And a special thank you to Roberto and Giannuario Leo. You can find a video version of this episode on YouTube featuring incredible archival footage produced by Joni Tobin and Annie Gerzen. The artwork is by Bill Miller. Our closing song is Viva Viva New Bedford by George Ferreira. The Big Dig is a production of GBH News and distributed by PRX. That was a special bonus episode from the Big Dig podcast. The latest season is called Catching the Codfather. We'll be back this Friday with a new episode of Milk Street Radio.