Lischewski — Exclusive Interview with IntraFishon Recent Conviction for Price Fixing

  1. What’s next for you  — A) if you are sentenced to jail or B) if you are not?  At this point it is difficult to look that far into the future.  I continue to maintain my innocence and will file my appeal shortly, a process that is expected to take 12 – 18 months.  However, during this time I plan to begin serving the prison term – as unjust as it may be — so I can resume a productive life. 
  2. What is the major lesson you have learned from this entire experience?  I learned that we can no longer run our businesses by delegating responsibility and merely reviewing financial results and trends.  During the period of time that the Government charged me of being part of a price fixing conspiracy, I saw rapidly increasing fish costs, constant attacks on our brand by StarKist and Chicken of the Sea, pressure on profit margins, and declining profits.  There was no indication of the price fixing activities to which two of my executives pled guilty.  During my trial, I was shown a number of emails between my executives and their competitors and phone logs demonstrating regular communication.  While the financial data proves that there was no financial effect of price fixing in the U.S. tuna industry, these communications should not have occurred.  They would have been uncovered by an intensive compliance monitoring process and would have resulted in corrective action being taken.  I have learned that in today’s world, trust must be accompanied not only by compliance training, but also by constant compliance monitoring. 
  3. What’s been the reaction of people in the seafood industry during the past several years?  I have actually had very little communication with people in the industry over the last two years as I have been primarily focused on my defense.  That being said, there are a small number of industry executives who know me, who have stayed in touch, and who have offered their moral support.   
  4. Have you felt that the industry has stood by you during the entire ordeal? In what ways?  I didn’t ask for support from the industry as this has really been my fight against the Department of Justice.
  5. Do you plan to continue to work in seafood when your time is served and you have paid all of the related fines to this case?  That’s a good question.  Seafood is an industry that I know well and during the last two years I have been actively involved in consulting for a start-up company called Menon Renewable Products.  This company operates in the Agri-Tech sector and has developed a patented technology that can replace fish meal and other ingredients in animal and aquaculture feed using agricultural by-products as its feed stock.  It’s very exciting and presents challenges that are different from managing a shelf stable seafood company.  I have enjoyed the challenge of supporting the growth and development of Menon.  They have a technology that can truly be a global game changer in the animal feed sector (and there are longer term human applications).  So this is a long way of saying I will probably stay in the feed and food-related business, but it may not be seafood.
  6. What do you think about the direction Bumble Bee has taken since your departure from the company? Would you ever want to work in the shelf-stable seafood sector again?  Bumble Bee has a solid management team and I am confident that FCF will be a good owner that will provide a solid strategic direction.  I believe FCF will have a longer investment horizon than the private equity owners Bumble Bee has had for most of the last two decades and this will enable Bumble Bee to make longer term investments in growth and innovation that can ensure the profitable future of the company.  As for me, and I would never say never but after almost 30 years in shelf stable seafood, my next move will probably be in a different arena.
  7. What should the industry take away from your experience and the experience of the other tuna companies in the price-fixing case?   The U.S. tuna industry has the lowest gross margins of any of the major branded food categories in the United States.  We are one of the most competitive categories in U.S. grocery with three national brands constantly competing for declining shelf space.  On top of that, virtually all of our retail customers work at promoting their private labels over our brands.  There was never any evidence of collusion in the prices we offered to our customers and the thought of price fixing is something I never even thought of in the ultra-competitive canned tuna segment.  Yet the Government got all three companies to admit to price fixing.  So the take away is that senior management must take compliance training and compliance monitoring very seriously – even in areas of the business you couldn’t imagine having any compliance risk.
  8. Do you feel like any of this is your fault? Did you do anything wrong?  In light of the ongoing litigation, I’m not in a position to answer this question at this time.
  9. Do you feel you were singled out? Why or why not?  Again, as much as I would like to, it’s best that I get back to you on that one.
  10. What has been the financial impact on you personally?  It’s been devastating as it has been for Lion Capital and the more than 50 Bumble Bee managers who invested their own funds into a company they believed in.
  11. What will you do if you are sentenced to serving jail time? Your lawyers have stated a prison sentence during coronavirus for you would be akin to a ‘death sentence’ given your age and concerns with serving time during a pandemic.  I will adhere to the sentence that is handed down by the Judge but I will also appeal the guilty verdict and continue to advocate for justice reform.  I believe the Per Se rule that is the being used by the Department of Justice to prosecute successful American companies for anti-trust violations is unconstitutional.  If you have read the recent press, the Department of Justice is now targeting the beef processing and the poultry industries for similar price fixing conspiracies.
  12. How has your family endured during this time? What toll has it taken on them?  I am incredibly fortunate to have a loving wife and wonderful son.  Despite the emotional stress of the last two years, they have been my biggest supporters and biggest advocates.  They knew that with the prosecutorial tools at the Government’s disposal the deck was stacked against me, but they know I am innocent and supported my decision to fight for my exoneration.
  13. What are your thoughts on cases that are emerging concerning your role in price-fixing, such as the Washington State Attorney General’s new case?   I believe they are opportunistic and non-credible.  The U.S. Government was successful in their prosecution of me (and the tuna industry) using the Per Se rule of the Sherman Anti-Trust Act which states that the ‘agreement’ to fix prices is the crime – no effect has to be shown.  The Government used cooperating witnesses to testify that they ‘told me’ about their involvement in price fixing, yet none of this testimony was corroborated.  In their closing statement the Government told the jury sixteen times to use their common sense and convict me because as a hands on CEO, I must have known about the activities of my executives.  In today’s world, that was all the jury needed to hear to convict an “evil and greedy” CEO.  The Government never produced an economist and never presented any evidence to show financial harm from the purported price fixing conspiracy – because under the Per Se rule they didn’t have to.  My defense team proved that there was no financial effect of any price fixing during the purported conspiracy period and actually demonstrated that customers were undercharged during this time frame given the unprecedented level of cost inflation that the industry was facing.  In the civil cases, the Plaintiffs will have to prove financial harm.  I am confident that the facts and the financial evidence will prevail in any civil litigation.
  14. Do you feel retail seafood buyers took advantage of the three big canned tuna companies by signing deals to settle their class-action claims?  Absolutely.  A review of their own private label canned tuna business during the purported conspiracy period would have demonstrated exactly the same cost patterns demonstrated by the branded companies.  They would have reached the conclusion that branded margins actually contracted during this period and they paid less than what they would normally have paid based on 15 years of actual price and cost data.  We performed that analysis but under the Per Se rule mentioned above, the financial facts didn’t matter.  I was very disappointed to see the tuna brands settle with so many of the retail customers as I truly believe they would have prevailed in a trial by jury.  Unfortunately, in today’s world, the pattern of settling seems far more prevalent than fighting to prove your innocence.
  15. If you don’t return to seafood, do you have other ideas for your future career?  Only time will tell.  At this point I am managing my life one day at a time.