Despite being short of major funding because of the seriously abbreviated fundraising period – again the two years down to just two weeks – STORIS Museum and The Last Patrol were registered as bidders for the GSA auction for STORIS. As the auction drew to a close, the groups were watching the bidding and had a major financial donor on a phone connection, albeit a poor connection as he was out of the country on business. The groups did not bid as the auction drew near its end, as it was clear that the minimum reserve price for the ship’s purchase had not been met. The auction ended at 2215 CST without the reserve price having been reached. The archived GSA Web site still reflects this information. It was the understanding of the STORIS Museum and The Last Patrol that since the reserve had not been met, the ship would be relisted, likely with a lower reserve price or no reserve at all.
However, the U.S. Government, represented by the GSA, instead chose to award STORIS for the lone $70,100 bid, well below the secret reserve price (which we know now is $100,000). This decision was made in a window less than 12 hours after the auction closed. The rationale for this decision is currently unknown.
The buyers were Mark Jurisich, John Bryan and their “U.S. Metals Recovery” of San Diego, a business that has very little in the way of a presence other than a name and a mailing address. They have no facilities of their own for the legal dismantling of ships.
The federal government then stood by and did nothing as Jurisich spent the remainder of the summer trying to extort the two nonprofits for a firm price of $250,000 cash or over $320,000 in an installment deal, a profit margin of over 350 to 450+ percent. A foreign national from Australia or New Zealand living in the U.S. with unknown citizenship or residency status, Jurisich declared that since he wasn’t American, he had no concerns about the ship’s history and if his price wasn’t met, he would scrap the ship.
According to Gary Whitney, the GM of Mare Island Ship Yard (MISY) in Vallejo, STORIS had a value in the U.S. of approximately $296,000 in scrap steel under the best case scenario. The cost to scrap her following U.S. laws was estimated at $330,000. Add that with the towing costs, insurance premiums and original purchase price and it was clear that there was no way that domestic dismantling would be profitable. MISY had inspected the ship for possible bidding but declined to submit a bid when they noted significant quantities of materials on board that were recognized to have a high likelihood of containing hazardous materials and PCBs.
Meanwhile, through credible personal contacts in the maritime industry on the West Coast, STORIS Museum and The Last Patrol learned that in late summer Jurisich was approaching various shipyards and businesses with dock space in the San Francisco Bay area with the intention of renting dock space to dismantle the ship using migrant laborers hired from the parking lots of area Home Depot stores. His apparent intent was to cut the ship apart in pieces and then sell them piecemeal to pay for the dock space and to recoup costs. This is called “pick and pull” scrapping. These requests were turned down because of the obvious violations of environmental, labor and occupational health/safety laws as well as liability and terms of various lease agreements and labor contracts.
The government stood by and did nothing as this farce continued.
GSA was completely inflexible with the two nonprofits as far as the deadline to obtain the ship when it became known that the state and nonprofit claim periods were being run simultaneously, when the US Navy Sea Cadets could have claimed the vessel through the public benefit conveyance aspects of GSA Surplus disposal. Yet they allowed the buyer to miss the initial deadline of July 12 to insure and move the ship, then miss the MARAD deadline of September 22 to remove the ship, and miss another deadline again on September 30 when the USCG rent expired.
There was an assumption that the government would step up and take back the ship for a clear and drawn out pattern of noncompliance. Instead the government agencies involved looked the other way. Several inquiries were made of the GSA by Ohio and Alaska legislators, but were met with indifference from GSA officials, who either reportedly ignored the inquiries or insisted that they had followed proper procedure. GSA otherwise disregarded the Congressional inquiries.
Then on October 1, again because of petty politics in Congress, a large portion of the federal government shut down. MARAD at Suisun Bay was among the few agencies still in operation. On October 18, just as the government reopened, it was discovered that STORIS would be towed to Ensenada, Mexico, the following Friday for scrapping.
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