Raul Mendoza knew that scrapping ships was dangerous, knew about the smoke and the fumes and the accidents. He'd worked in Baltimore, where asbestos clouded the air, and North Carolina, where oil spilled into a river, and California, where workers were told to lie to government inspectors.But he needed a job. So, on Dec. 22, 1995, in Brownsville, Texas, he climbed into the hold of the USS Yukon, an old Navy tanker. Working in total darkness without safety equipment, he walked across a girder. Then came the scream.

Mendoza had fallen 30 feet into a tank, straddling a cross beam in a blow that split his pelvis. He flipped off the beam and landed on his chest. He was pleading for help. Untrained in shipboard emergencies, rescuers took three hours to extract him. By Christmas Eve, he was dead.

Raul Mendoza is just one of the casualties of a little-known industry called shipbreaking. Spurred by the Navy's sell-off of obsolete warships at the end of the Cold War, the business has grown up overnight in some of America's most economically depressed ports. And almost everywhere the industry has arrived, harm to human health and the environment has followed.

A yearlong investigation by The Sun has found:

• Workers have been toiling in air thick with asbestos dust. In Baltimore, laborers scrapping the USS Coral Sea ripped asbestos insulation from the aircraft carrier with their bare hands. At times they had no respirators, standard equipment for asbestos work. Inhaling asbestos fibers can have slow but lethal consequences, as men who built the ships now being torn apart have learned. Tens of thousands of former shipyard workers in Baltimore and elsewhere have died of asbestos-caused diseases.

• Mishandling of asbestos has been covered up. In Terminal Island, Calif., 20 laborers were fired when they told federal investigators how asbestos was being improperly stripped from Navy ships. In Baltimore, workers were ordered to stuff asbestos into a leaky barge to hide it from inspectors.

• Laborers with little training, supervision or equipment have been killed or maimed. Like Raul Mendoza, workers have been victimized in falls, explosions and accidents that could have been prevented.

• Dangerous substances from scrapped ships have polluted harbors, rivers and shorelines. A scrapyard along the Northeast Cape Fear River in Wilmington, N.C., was contaminated by asbestos, oil and lead. "That site looked like one of Dante's levels of hell," says David Heeter, a North Carolina assistant attorney general.

• Ship scrappers frustrate regulators by constructing a maze of corporate names and moving frequently. The Defense Department has repeatedly sent ships to scrappers who have records of bankruptcies, fraud, payoffs to government inspectors, and environmental and safety violations.

• The Navy and the Defense Department make no serious effort to oversee the scrapping, even though the Navy retains ownership of the vessels. Until recently, only one inspector with little training and experience kept watch on scrapping operations for the entire country. Concerned about his safety, he refused to board the Coral Sea on one visit; the next day, a deck plate collapsed under a worker, leaving him maimed.

• Workers, mostly Mexicans, often have to pay kickbacks to get their jobs and are sometimes cheated of their pay. Unable to speak English or read warning signs, they have no one to turn to with complaints. "They look for us first because we don't know the law," says Juan Chavez. "If the boss or foreman says you have to do something, what can we do?"

Cutting corners

Now, the problems threaten to get worse as the Navy and its sales agency, the Defense Reutilization and Marketing Service, accelerate the scrapping program, with 111 vessels designated for breakup.

The Navy's downsizing promised to be a bonanza for the dozen or so shipbreakers who have opened yards since 1991. For amounts ranging from about $15,000 for a destroyer to more than $1 million for an aircraft carrier, they buy the rights to Navy ships, then sell the salvaged metal. They run lean operations, and their pattern of cutting corners to ensure a profit has often proven disastrous.

Because of environmental violations and other issues, the Navy has had to take back 20 ships from yards in North Carolina, Rhode Island and California in the past 14 months. Of 58 ships sold for scrapping since 1991, only 28 have been finished.

"You've had problem after problem," says David Peck, a Richmond shipbreaker who is one of the few voices calling for reform. "How many fatalities and environmental disasters do you have to have before you rethink your scrapping program?"

Faced with a scrapping program that clearly has been a failure, the Navy has yet to find a satisfactory solution. It could break up its old ships in Navy yards, as it does with nuclear vessels. It could ask Congress to subsidize the scrapping so that reputable private companies would dismantle them properly.

But what the Navy appears most likely to do is send its ships to South Asia. In recent years, the global shipbreaking business has migrated to India, Pakistan and Bangladesh, where labor is cheap and regulation virtually nonexistent.

While American scrapyards employ hundreds of workers and primarily dismantle U.S. Navy ships, tens of thousands labor in the industry in South Asia, breaking up everything from Russian destroyers to Greek freighters to Japanese tankers.