North American Ship Recycling Inc., which just a few years ago was heralded as the key to revitalizing the Sparrows Point shipyard, has disappeared, leaving behind in Maryland waters two rotting and possibly toxic government ships, according to federal officials.
NASR was supposed to dismantle the ships - the Sphinx and the Hoist - under agreements made this year with the U.S. Maritime Administration. A security guard said yesterday that NASR was no longer at the shipyard, and that he didn't know where the company had gone.
Its move appears to have come less than three weeks after a federal judge ordered NASR to pay $750,000 owed to one of its contractors, Clean Venture Inc. Neither company officials nor NASR's attorney returned phone calls seeking comment.
Now, according to court documents, NASR is in breach of its contract with the Maritime Administration, which is under congressional orders to get rid of dozens of obsolete vessels from the James River Reserve Fleet.
"We have recently been informed that NASR has abandoned the [motor vessel] Sphinx and sold, in violation of the contract and the law, the [motor vessel] Hoist," states a filing made this week in Baltimore U.S. District Court by the Maritime Administration.
"These actions by NASR jeopardize government property, interfere with the ship scrapping process and may endanger public safety."
The two World War II-era ships - one a former Navy rescue and salvage ship, the other a cable-layer - are now just shells, ghostly and dangerous reminders of their former service. A 2005 report by the Government Accountability Office said the deteriorating ships threaten the coastal waterways in which they're anchored "because of the toxic materials that they contain."
"If this hazardous material should spill out, as it has already in a number of cases," the GAO said, "the ships could cause a costly environmental disaster in some of the nation's sensitive waterways."
The shipyard was sold after an auction in 2003, and it - and affiliated operations - is owned and maintained through a confusing web of at least a half-dozen apparently related entities. But according to a May deposition in the Clean Venture case by Vincent Barletta, a Boston businessman in leadership positions within the entities that own the shipyard and NASR, it breaks down in this way:
Barletta and his brother, Timothy Barletta, are principals in a company called Whirlwind Capital LLC. It owns BWI Sparrows Point LLC, which owns - and was created in 2004 to acquire - the shipyard. BWI Sparrows Point is still the owner, according to Barletta's deposition.
Vincent Barletta is also a trustee in a Massachusetts entity called Iger Trust, which owns NASR.
NASR was created "to pursue contracts with our federal [Department of Transportation] in the area of dismantling surplus vessels," according to Barletta - who, as of his May deposition, was vice president of NASR, while his brother was its president.
A call to Barletta's office was not returned, nor was a call to Heather Sites, who is listed on state assessment and tax records as NASR's resident agent.
In 2004, when NASR was awarded its first ship-dismantling contract, worth $2.3 million, by the Maritime Administration, then-U.S. Transportation Secretary Norman Y. Mineta came to Sparrows Point for the announcement. Federal officials hailed the reopening of Sparrows Point and said the contract award was a step toward fostering competition to scrap the old vessels.
"The quicker we get rid of these ships, the better off that we'll be," Mineta said at the time.
If NASR has violated its contract with the Maritime Administration, as alleged, it will be a setback in that process.
"The Maritime Administration has been closely monitoring developments with this company and is taking steps to have the Sphinx and the Hoist recycled at a qualified ship-recycling facility as quickly as possible," Maritime Administration spokeswoman Susan Clark said in a statement.
Maritime Administration Attorney Bernard J. McShane declined to comment.
McShane submitted a filing Tuesday in U.S. District Court in Baltimore, asking that a Maritime Administration representative be allowed to participate in future hearings. According to the document, the administration believes NASR has not only abandoned one ship - the Sphinx - but wrongfully sold the other - the Hoist - to "an entity closely related to NASR," described as "Sparrows Point Metal Recycling Corp."
No such company shows up in Maryland records, though a "Sparrows Point Metal Recovery LLC" was incorporated at the shipyard Sept. 25 - one day before U.S. District Judge Andre M. Davis ruled against NASR in the lawsuit with Clean Venture.
Paperwork for Sparrows Point Metal Recovery LLC was filed by John G. Bulman, a vice president and attorney for one of Barletta's ventures and counsel for another. Calls to Bulman's Massachusetts home and office were not returned.
"It appears that NASR is hiding its assets to avoid this judgment, paying Clean Venture what it's owed," said J. Stephen Simms, the Baltimore attorney for Clean Venture, which specializes in handling hazardous materials. In its lawsuit against NASR, the company said it wasn't paid for work it did on the maritime ships, and the judge found in its favor.
When the company tried to collect on the $750,000 judgment, however, representatives discovered NASR was gone.
According to the report of Deputy U.S. Marshal Dennis Perez, filed in U.S. District Court, he was told that NASR had moved out in September and left no forwarding address.
A letter sent to Simms by NASR's attorney in the case, Joseph P. Bowser, confirms that the company no longer has a lease at the shipyard "and is no longer operating at the shipyard." Bowser did not return a call for comment.
At the shipyard yesterday afternoon, security guard Tyrone Grandy said only that NASR had left, and he didn't know when. No property managers were on site, he said.
Clean Venture's attorney, Simms, said he expects to file court papers today in an effort to recover the cash his client is owed.