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Off North Carolina's coast, lure of sunken treasure fades

A clash over the ships buried in the Graveyard of the Atlantic raises a question: when the muddied water eventually settles, who really owns the history entombed along our coast?

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Fort Macon
Tyler Dukes

To hear the treasure hunters tell it, the Graveyard of the Atlantic is a much quieter place these days.

Below the waves that batter and reshape North Carolina's coastline, the shifting sand is dotted with hundreds of ships that met their ends on the notorious shoals. Monetarily at least, most of the wrecks aren't worth much. But some date back to a time of plundered silver, mined and minted in the New World – and targeted by the period's most notorious pirates.

Dozens have sought that sunken fortune off the coast over the last few decades – amateur historians, seasoned salvagers and one former cocaine smuggler. All have failed.

And fewer are trying.

Navigating domestic laws, state policies and plain old distrust has made uncovering what's lost at sea a much more difficult and costly venture, treasure hunters say. To archaeologists and state officials, those laws and policies protect delicate dig sites from crews who care more about the valuable gold, silver and gems the wrecks contain.

Yet even the discovery of treasureless wrecks, like the flagship of the infamous pirate Blackbeard, has created conflict. Intersal Inc., which found the ship, has threatened a multimillion-dollar federal lawsuit, claiming the state is trying to push them out of the decades-long project to recover the trove of artifacts just over a mile off Atlantic Beach.

The clash over hundreds of years of maritime activity raises the question: When the muddied water eventually settles, who really owns the history entombed along our coast?

It was supposed to be an uneventful run.

The seven ships that gathered in Havana in the summer of 1750, their holds full of valuable cargo, gold and silver bound for Spain, weren't terribly remarkable. Nor was the timing of their departure in August, prime hurricane season.

"This was about as average and unimportant a Spanish convoy as you could find, except for the fact that it runs into disaster," said Jim Lewis, professor emeritus at Western Carolina University and author of The Spanish Convoy of 1750: Heaven's Hammer and International Diplomacy.

The hurricane hit the ships hard, scattering them along thousands of miles of coastline from North Carolina to Virginia.

None were more devastated than a ship named El Salvador.

A smaller, fast "packet boat" built for trade, the official register said the Salvador carried cocoa, dyes and building supplies – along with tens of thousands of gold and silver coins and unofficial contraband.

The storm drove her aground somewhere near Cape Lookout.

Only four sailors survived the wreck, which was "stove to pieces" near what is now Beaufort Inlet, according to a September 1750 letter to North Carolina Gov. Gabriel Johnston. In short order, seven to eight feet of sand engulfed her crippled remains.

"The ship just disappeared," Lewis said.

With few survivors to tell the tale, accounts conflict on exactly where El Salvador went down. Lewis said there's evidence a few opportunistic captains made off with some of the treasure soon after the storm.

But even that theory is suspect to followers of shipwreck lore like Steve Weeks, a Beaufort maritime attorney who regularly represents the salvage community. One of those captains, Weeks said, denied that he was able to get much from the vessel beyond sails and tackle.

"He wrote in his papers that, 'The gold and the silver had sunk in the sand, out of the reach of any man,'" Weeks said. "I don’t know if that was true or not."

The mystery of El Salvador – and the prospect of bulging chests of Spanish coins free for the taking just offshore – has prompted at least a dozen groups to seek the wreck off North Carolina since the early 1980s.

With a few exceptions, each group had its own theory on where the Salvador ended up. They staked their claims and worked them for years.

Decades and thousands of dollars in expenses later, they have little to show from their searches.

"Found a lot of artifacts. Found three different cannon, pieces of ship, anchors, a cook stove," Weeks said, holding up a worn piece of Spanish silver he keeps in his desk. "Just didn’t find any of those."

All of the groups have called it quits.

All except one.

Ray Giroux, Mike Daniel and Capt. Walter Matheson hold a bell recovered from the Queen Anne's Revenge on Nov. 21, 1996 (Courtesy of Ray Giroux).

If you want to search for buried treasure just off North Carolina's coast, you'll need more than a boat and some dive gear.

By federal law, passed in 1987, all abandoned shipwrecks within about three miles of a state's coastline belong to the state. In North Carolina, the law strengthened a provision passed by state legislators 20 years earlier that required a license to explore or salvage off the coast.

"After that, private salvors were very discouraged from going out and looking for shipwrecks," Weeks said. "The ones who did would have to go through a permitting process with the various states."

North Carolina officials set up a process that mimicked that of Florida, another well-known treasure destination. If they found the wrecks they were looking for, salvage groups were typically entitled to 75 percent of the valuables. The remainder, along with less valuable artifacts, would go to the state.

The balance allowed states to retain their control and give salvagers something for their trouble.

"If you take the capitalism out of treasure hunting, you have no treasure hunting," Weeks said. "People go treasure hunting to one day find it, and they want to be rewarded for their efforts. If there’s no reward, there’s no incentive."

Seventy-five percent was incentive enough for Rik Luytjes.

In 1991, he was released after serving about half of his 10-year federal prison sentence for leading what prosecutors at the time called the largest cocaine-smuggling operation in the U.S. After spending a few years working with treasure hunters in Florida and North Carolina, he got his own permit from the state to search for El Salvador off Cape Lookout in 1996.

Aside from a four-year suspension in the early 2000s, Luytjes held that permit until 2009. Between paying for his boat, equipment, fuel and crew – all without investors – Luytjes reckons he sunk about $1 million of his own money in the search.

"I was adventurous, that’s the way I’ve lived my life all the way. I’ve always created my own business, made my own life and had a good time of it," Luytjes said in a phone interview from Alaska, where he now flies seaplanes. "I figured I could pull this one off and I didn’t."

Although he felt like he was closing in on the wreck, the state discontinued his permit in 2009, leaving him empty-handed.

"We never made money," Luytjes said. "In looking back on it, I think it would be one of the biggest mistakes that I ever made, especially an economical mistake."

In 2005, state lawmakers added a criminal background check to exploration and salvage requirements.

"We realized we needed to be more diligent about things," said State Archaeologist Steve Claggett, whose division oversees the permitting process.

The 75-25 split with the state was also attractive to companies like Florida-based Intersal Inc., which has hunted the remains of El Salvador for decades.

In the late 1980s, Intersal founder Phil Masters realized his permit area off Beaufort Inlet likely hid another important wreck: the Queen Anne's Revenge, flagship of the pirate Blackbeard.

After obtaining another permit specific to the QAR, the firm did something no other treasure company operating in North Carolina has – they actually found what they were looking for.

Mike Daniel, an experienced salvor and founder of the Marine Research Institute, found Blackbeard's ship with the Intersal team in November 1996, right where he expected it to be in about 20 feet of water due south of Fort Macon. Largely rotted away by 300 years of seawater, currents and shifting sands, the ship was marked by a large pile of artifacts once in the service of the pirate captain.

"It was amazing. When we found it, within 15 minutes we found the bell, the blunderbuss, a big 20-pound lead sounding weight," Daniel said. "We swam one circle around the central mound and counted 12 to 15 cannons there."

Their research indicated Blackbeard didn't have valuables on-board the Revenge when he intentionally grounded it in 1718. In exchange for media, touring and replica rights, Intersal and Daniel's Marine Research Institute gave up their claim to any valuable cargo on the wreck.

"It was with the idea that it belonged to the people of North Carolina," Daniel said.

In the years since the discovery, treasure hunters say they've seen a marked change in the state's attitude toward the practice – and the result is that fewer people are scouring for what's buried in the Graveyard of the Atlantic.

"North Carolina has become a very difficult state for a research team to come in there and look," Luytjes said.

Since 2010, state records show 14 permits have been issued or renewed. Half of those are for the salvage of logs at the bottom of rivers and creeks – also the property of the state.

Intersal, meanwhile, is the only company still permitted to search for the Salvador.

The current climate, Weeks said, is bad for business and for North Carolina's history.

"The state doesn’t have the resources to go out and gamble on that. Millions of dollars were spent and the wreck was never found," he said. "If you take the private sector out, you’re going to find very few wrecks of that era."

Claggett, the state archaeologist, says his department rarely denies permits to potential treasure hunters who can prove they're capable of searching the state's waters responsibly.

And Charlie Ewen, a professor in East Carolina's anthropology department and director of the university's archaeology lab, said that given the complexity of the permitting process, it's working about as well as could be expected in North Carolina.

"If the salvors don't feel like they're getting a fair shake – well – they’re still getting permits," Ewen said.

A NOAA vessel crew raises one of the 6-pound guns from Blackbeard's flagship Queen Anne's Revenge in the Beaufort inlet in October 2011 (Tyler Dukes/WRAL).

Talk to most treasure hunters and archaeologists and they're likely to bring up a fundamental problem souring the hunt for marine history: they don't particularly like each other.

"The underwater archaeologists and the treasure salvors are like oil and water," Ewen said. "There is very little common ground."

It's not a problem limited to North Carolina.

"I think there's an unbridgeable gap between the archaeological community and the salvaging community," said Paul Johnston, a curator at the Smithsonian's National Museum of American History in Washington, D.C. "They're going after the same resources, but they have different plans for how to use it."

Ewen said he realized just how bad it was when he tried to plan a panel with both groups at a recent archaeology meeting in Quebec.

"There’s that much bad blood that they would not be seen on the same panel," Ewen said. "It is a very sincerely, deeply held belief, I think, on both sides."

For their part, archaeologists worry about smash-and-grab salvors who damage artifacts in the process of extracting valuable gold, silver and jewels from shipwrecks. Certain equipment, for example, can quickly clear sand from heavy things like cannons and anchors but might sweep away smaller items of equal historical importance.

"Treasure salvors might call it efficient, but the archaeologists say you’re losing most of the data from it," Ewen said in a phone interview from a dig he's running near Wilmington. "It would be like excavating my site in Brunswick County with a backhoe. I could do it, but I would lose the data."

"That's what hurts in the treasure industry," Luytjes said. "One guy, two guys, 10 guys make mistakes and it drags the whole industry down."

But like them or not, treasure hunters say archaeologists need them.

"Archaeologists just despise treasure hunters," Weeks said. "But if it wasn’t for the treasure hunters, the archaeologists wouldn’t have anything to work on."

Nowhere is this clash of cultures more evident than in the recovery of the Queen Anne's Revenge.

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"This project, properly managed, properly developed, could be the poster child for treasure hunters or finders of shipwrecks of archaeological significance to work together with the state," Weeks said. "(It) hasn’t happened."

Daniel and others say state officials disregarded the input of salvors with years of experience working wrecks as archaeologists set out to raise the QAR's remains from the sea.

"I've dealt with these guys for close to 20 years," Daniel said. "They didn't know what they were doing."

Bit by bit since 1997, state lawmakers have funded the project with a total of about $1.5 million in taxpayer money. A current state budget proposal calls for another $1.5 million in the upcoming fiscal year alone.

Critics say the project has taken far too long and cost way too much.

"It was a government operation as opposed to private enterprise," Weeks, the maritime attorney, said. "I think the project should happen. I just don’t like the way it’s been handled."

Ewen, who's been heavily involved with QAR since the start, disagrees. He said archaeologists with ECU and the N.C. Department of Cultural Resources have tackled the excavation the right way from the beginning, by methodically documenting, mapping and conserving artifacts piece by piece.

"It does take a long time, but you do get everything," Ewen said. "That's how archaeology is: a lot of tedium broken up by a couple moments of excitement when you find something."

Conserving what they bring up is also a critical and time-consuming process: It might take a decade to stabilize an object as large as a cannon so it doesn't deteriorate on display.

"Without the careful conservation of something like a cannon, we'd never know about its origin. We'd never recover the sometimes subtle markings on these things that let us determine if they're French or English," Claggett, the state archaeologist, said. "It's part of the puzzle."

Compounding the criticism is Intersal's threat to file a multimillion-dollar federal lawsuit against the state over QAR.

After finding the wreck and giving up treasure rights, Intersal's agreement with the state allowed the company to claim future revenue from the sale of media and artifact replicas. After the state balked at renewing the agreement, the two parties worked out a deal in 2013 to share some of those rights going forward and set rules on the use of certain photos and video.

Intersal Board Chairman John Masters, who took over after the death of his father in 2007, said the state has refused to follow the rules in that settlement and breached its contract, putting at risk everything the company has invested over the years.

"This is a tragic thing. My family spent many years, and our company has spent hundreds of thousands of dollars, and we’ve assisted the state in the excavation," Masters said. "It's a shame it's come to this."

N.C. Department of Cultural Resources General Counsel Kevin Howell said the state's position is that it did not breach its contract with Intersal. He declined to comment further.

Ewen said he was a bit puzzled by the suit, since the state, not Intersal, is largely footing the bill to pull Blackbeard's ship from the bottom and save it for the future.

"I think Intersal should be given all the props for finding QAR and for recognizing it for what it was," Ewen said. "I think they did get that recognition."

Masters said he knows well the tensions between the archaeological community and companies like his. That's why he said they've worked hard to be a good partner with the state.

"Intersal tried to bridge the gap. We tried to be the first treasure hunting company to do the 'right thing,'" Masters said. "But none of this stuff would move forward without private industry, and private industry does stuff for profit."

Clayton Durham, of Elon, N.C., views a collection of artifacts recovered from the Queen Anne's Revenge, flagship of the pirate Blackbeard (Tyler Dukes/WRAL).

Various accounts from the time – a letter to the governor from an indignant ship owner, a report in the South Carolina Gazette, the recounted tales of survivors gathered by a captain on the 1750 Spanish convoy – suggest the Salvador is still out there somewhere.

Unlike her more important sister ships in the convoy, whose crews largely managed to recover the majority of their goods, her bounty probably remains just off the coast where the shoals swallowed her 265 years ago.

Searching for that cargo remains an expensive proposition. That's why salvagers like Luytjes say they're not planning to go back to that life again.

"One guy said, 'Hey Rik, you want to go treasure hunting? Get all your money and go to the ocean and throw it in the water,'" Luytjes said. "'Now you're a treasure hunter, and you'll save yourself a couple years of misery.'"

Even if the Salvador is found, there are likely to be plenty of questions about who actually owns any of its loot.

In 2005, the Spanish government contacted three permit holders at the time to let them know that salvage of any ships lost while in service to that country "may not be conducted without express consent by an authorized representative of the Kingdom of Spain."

The letter recalled the case of La Galga, a 50-gun military frigate in the Salvador's convoy that ran aground in Virginia.

After a salvor claimed to have discovered it, Spain sued on the premise that it was never abandoned and remained the country's property. In a brief supporting Virginia and the salvor, North Carolina officials argued the outcome of the suit would affect the state's own ability to preserve its underwater historical heritage.

Spain won the case, due in part to support from the United States government, which didn't want to see its own military vessels or those of its rivals – some carrying nuclear weapons – drug up from the depths and claimed by anyone with a boat.

"That's frightening stuff, so anything that can contest the idea that a country loses ownership of a military ship – even something like the Galga – they didn't want to set the precedent," Lewis, the WCU history professor, said.

But Lewis said the cargo of El Salvador, if it's ever found, will be harder for Spain to claim. As a military ship, the rules apply differently to La Galga than the Salvador, which was privately owned.

"That stuff — if a private family hasn't contested it, essentially it's going to be finders keepers," Lewis said. "I would be surprised if there were any people who might be related to this company that owned the ship."

Weeks, the maritime lawyer, agreed. But given the climate he's seen in recent years, he said he would tell his clients to strike a deal with Spanish royalty over Raleigh.

"It’s that bad," Weeks said. "I would rather deal with Spain than the state of North Carolina."

It could be years, if ever, before Intersal gets to that point.

Although the company's permit is technically renewed through next year, much of Masters' focus has been tied up in his contract disputes with the state over the last few years. The company completed a new magnetic survey of its claim as recently as 2009, and began checking some of the anomalies it found in 2011.

If the weather holds out, the crew will be south of Fort Macon in the next few months, just as they've been on and off for decades – albeit with much less competition in the water.

"We plan to be out there this summer looking for El Salvador," Masters said. "The search has by no means ended."


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