Tuesday, December 22, 2015

DOT IG releases audit report of MARAD management controls: STORIS included in comments

In late October 2014, the Office of the Inspector General for the U.S. Department of Transportation initiated an investigation into the management controls of the U.S. Maritime Administration.

Since at that point through the Freedom of Information Act we had already received a lot of documentation from MARAD related to the mishandling of STORIS, I wrote to the IG's office and provided details of the illegal excessing and sale of the ship. I received very friendly and positive responses to the information I submitted. I followed up in February of 2015 with some additional information that came to light in subsequent MARAD releases.

Among the main issues:

1. The sale of STORIS through the General Services Administration was a violation of 40 USC 548 because her tonnage exceeded GSA's 1,500 ton statutory limit. MARAD should have been directly involved with STORIS' disposal, not GSA. Yet as CG and GSA broke laws with STORIS' excessing and sale, MARAD officials stood by and did nothing.

2. STORIS, as a former US Government vessel, should have been prevented from being exported for scrapping in Mexico through Section 3502 of the Duncan Hunter NDAA of 2009. Again, MARAD did nothing to prevent this.

3. STORIS likely contained regulated amounts of hazardous materials including PCBs that should have made her transfer through sale illegal. Exporting PCBs is banned through the Toxic Substances Control Act of 1976.

My letter to the DOT IG is here: https://goo.gl/rcwXez

The final report was released on Monday, December 14 and it identifies several problems within the management of MARAD. It was a very pleasant surprise to see that the situation with STORIS was specifically addressed on page 13. This is very important as this language solidly validates the reasoning behind and necessity for the Government Accountability Office audit of MARAD that we are working to pursue through the STORIS Act legislation. The specific reference to STORIS is here:

Ship Disposal Program.

"MARAD is the disposal agent for obsolete NDRF vessels and some vessels owned by other Government agencies.(Footnote 13) However, the Agency lacks policies and procedures for notifying other Federal agencies of its role as the disposal agent and identifying the universe of Government-owned vessels it is responsible for disposing. Because MARAD does not have statutory authority to enforce compliance by other Federal agencies, the Agency has established ship disposal agreements with some but not all applicable Government agencies. For example, MARAD has disposal agreements with the Navy, U.S. Coast Guard (USCG), and General Services Administration (GSA), but not with the National Oceanic and Atmospheric Administration—which, according to MARAD officials, also owns vessels under MARAD’s purview for disposal. Additionally, most of the agreements are vessel-specific and do not cover the universe of applicable vessels for which MARAD is responsible. For example, MARAD’s May 2013 agreement with the USCG covered disposal of two USCG cutters that were under 1,500 gross tons—the Planetree and the Iris—but it did not cover other USCG cutters that may have been under MARAD’s purview for disposal. Therefore, some of these agreements have not been effective to ensure MARAD always fulfills its responsibilities as the ship disposal agent. For example, even though MARAD had the agreement with USCG to dispose of two of its cutters, the USCG disposed of another cutter, the Storis, through GSA without consulting MARAD to determine if the Storis fell within the Agency’s purview. When MARAD does not dispose of vessels for which it is responsible, the Agency may not receive proceeds for its Vessel Operations Revolving Fund for MARAD and National Parks Service (NPS) programs.(Footnote 14)"

The Audit Report summary page is here: https://www.oig.dot.gov/library-item/32838

As 2015 comes to a close, we are hoping to continue pushing in the new year for additional action on behalf of STORIS and her vets. This audit release shows we are on the right track.

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