Op-ed: The real facts about Maritime Heritage Grants

The Maritime Administration’s hoarding of proceeds from vessel sales, refusal to distribute maritime heritage grant funds and continued stonewalling of FOIA requests presents a troubling picture. And it’s not one of a transparent agency.    Maritime Administrator Paul Jaenichen claims in his Aug. 3 American Shipper opinion piece that the Maritime Administration is a transparent agency with a well-run Maritime Heritage Grant program. I was the MarAd chief counsel from 2009 to 2012, and I know a little bit about the agency’s practices.
   Administrator Jaenichen’s statements are full of government obfuscation and instead of giving you the real facts, he’s frantically trying to hide the agency’s misdeeds.
   Between 1994 and 2008, Congress directed MarAd to distribute 25 percent of excess vessel sales proceeds to the National Park Service (NPS) for a competitive grant program for maritime heritage groups. This disbursement was supposed to be on an annual basis, but the only one to occur was in 1998 for $652,616. For the next 16 years, MarAd sat on the accumulating maritime heritage money — over $19 million — and, as a result, NPS did not have the funds to award any maritime heritage grants.
   Then in the fall of 2008, MarAd employees convinced Sen. Frank Lautenberg to amend the NMHA and allow the maritime heritage money to be used at the maritime administrator’s sole discretion to fund the Maritime Heritage Grant program or to preserve agency property. The Lautenberg change was also retroactive, so MarAd chose to spend the money that it had hoarded for 10 years — more than $8.5 million collected in sales from fiscal year 2006-2008 alone — plus all future sales on itself.
   No longer would museums, tall ships for youth education, lighthouses, historic naval vessels, or maritime educational organizations, which were starved of cash, be given the money.
   This was during the worst economy Americans faced since the Great Depression, but that didn’t matter to MarAd. It’s also important to note that while cash was accumulating from excess vessel sales — $75.8 million from 2005 to 2015 — MarAd had not disbursed the 25 percent that was supposed to go to the U.S. Merchant Marine Academy and the six state maritime schools on an annual basis.
   The country’s 1,000-plus maritime heritage organizations in more than forty states were appalled by the 2008 change, and they put significant pressure on MarAd and NPS to ensure that they didn’t lose their funding. Between 2010 and 2012, the agencies fought over how to use the money and MarAd subsequently agreed to release $7 million of the $19 million set aside by Congress for maritime heritage programs for a grant program.
   I was in the room for these negotiations. They were nasty and MarAd certainly wasn’t looking out for the interests of the maritime heritage groups.
   Sen. David Vitter and Rep. Garret Graves, recognizing MarAd’s lack of transparency and inability to properly run the maritime heritage grant program, introduced legislation earlier this year to clean up the agency. The legislation, entitled the Ships to be Recycled in the States Act or Storis Act, mandates the return of the full funding for the maritime heritage grant program and a Government Accountability Office audit of the ship recycling program.
   I support these provisions because the nation’s maritime heritage organizations deserve to know the real facts as to how MarAd spent their money.
   I refer to the money as “theirs,” because it is. MarAd receives an annual congressional appropriation. It shouldn’t be taking money away from maritime heritage organizations to repair model ships, otherwise known as “80 years of federally-owned vessel characteristics,” or taking oral histories of agency employees. That’s a complete waste of taxpayer dollars.
   If Maritime Administrator Jaenichen wants to provide factual answers, it’s my recommendation that he direct MarAd employees to answer questions about the former Coast Guard Cutter Storis. The Storis Act is named after the Coast Guard cutter because it was scrapped in Mexico in 2013 in violation of the Duncan Hunter National Defense Authorization Act for Fiscal Year 2009. A New York Times reporter and Jon Ottman, a historic preservation consultant, submitted Freedom of Information Act (FOIA) requests for information regarding MarAd’s role in the demise of the Storis.  MarAd has failed to provide all the documentation, even though the requests are almost two years old.
   MarAd’s hoarding of vessel sales monies; then its refusal to distribute all of the maritime heritage grant funds in a timely manner, in addition to failing to distribute vessel sales proceeds to the U.S. Merchant Marine Academy and the six state maritime schools; and the continued stonewalling of FOIA requests, presents a troubling picture. And it’s not one of a transparent agency. Rather, it’s one that so far from reality that the Storis Act can’t be passed soon enough.
   Denise Krepp is an advocate for U.S. ship recycling companies and former Maritime Administration chief counsel.