Coral Sea scrap firm is indicted Panel says workers unsafely stripped old ship's asbestos

Project troubled for years

Yard and owners accused of filing false papers with U.S.

September 25, 1996|By Will Englund and Gary Cohn | Will Englund and Gary Cohn,SUN STAFF

The company that has been scrapping the USS Coral Sea in Baltimore's harbor for the past three years was indicted by a federal grand jury yesterday on charges that its workers had improperly and unsafely stripped the asbestos from the old aircraft carrier, and then tried to hide what they were doing.

The project to dismantle the 900-foot ship has run into trouble almost since the day the Coral Sea arrived on July 6, 1993, for what was supposed to have been a 15-month job. The historic naval vessel has been witness to maneuverings by angry creditors, a falling-out among the partners, a serious crane accident, constant cash-flow shortages, and on-again, off-again plans to throw in the towel and tow it to India for final scrapping.

But yesterday's indictment, which names both Seawitch Salvage Inc., and its owner, Kerry L. Ellis Sr., raises the problems surrounding the ship to another level.

The company is accused of ordering its workers to cut the asbestos out of the ship without proper safety equipment and doing so in a way that released asbestos particles into the air. Seawitch and Ellis were also charged on a similar count involving a minesweeper, the USS Illusive, that was broken up on the site two years ago. Seawitch uses a lot and pier in Fairfield that it rents from another Ellis company called Kurt Iron and Metal.

Asbestos, when inhaled, can cause diseases ranging from asbestosis, which causes scar tissue to form on the lungs, to mesothelioma, a cancer that attacks the lining surrounding the lungs and is generally fatal.

Until the 1970s, asbestos was used extensively in ship construction as insulating material. The Coral Sea, launched in 1946, contained 11,000 linear feet of pipe insulation and 8,000 square feet of other insulating materials, all of which contained asbestos, according to a survey done in 1994.

Breaking up a city

The ship, now mottled and rusting, was once a city afloat, a beehive of compartments laced together with miles of wire and pipe. Today it towers over the muddy and junk-strewn Ellis yard, still at least a year away from the end of the project.

The indictment alleges that Ellis, who had never broken up anything remotely as large as the Coral Sea, filed false documents with the Defense Department agency that handles the sale of old Navy ships, the Defense Reutilization and Marketing Service. Those documents said the asbestos work was being handled by a licensed subcontractor, called AES of Maryland.

AES was in fact hired in early 1994, but worked less than a month, according to court papers.

The indictment also charges Seawitch and Ellis with illegally discharging oil and other pollutants into the harbor.

Ellis did not return phone calls yesterday.

His lawyer, Robert Schulman, said he had not seen the charges yet and therefore could not comment on them.

He added, "We're just convinced he [Kerry Ellis Sr.] runs the best operation in the country with respect to asbestos removal in the ship-breaking industry."

Assistant U.S. Attorney Jane Barrett, who is prosecuting the case, declined to comment yesterday.

Doubting the government

Seawitch and a successor company, Kersand Corp., have been performing the work on behalf of the Coral Sea's owner, a firm based in New York called N. R. Acquisition. The owner of N. R., Andrew A. Levy, said yesterday that he doubts the strength of the government's case.

"I just don't see the evidence," he said.

Levy, who is one of the leading ship-scrappers in the country, said he did not believe the indictment would affect his operations and is not sure what it will mean for the future of the Coral Sea.

Levy was rebuffed by the Navy late last year when he attempted to gain permission to sell the ship to India, where it would fetch a much higher price. Two weeks ago he reapplied -- bolstered, he said, by a favorable ruling in a similar case in Washington state.

EPA's evidence

The investigation that led to yesterday's indictment was conducted primarily by the criminal investigation division of the U.S. Environmental Protection Agency (EPA). In an affidavit filed in U.S. District Court last year, EPA special agent Douglas H. Parker stated that during the course of his investigation, he had spoken with "a number of people who were employed in various aspects of Coral Sea demolition."

One of the witnesses, a worker identified only as "Confidential XTC Informant-1," told Parker that "while working on the scrapping of the flight deck on the Coral Sea, he/she witnessed large sections of the flight deck cut and dropped onto the hangar deck below under the direction of Kerry Ellis," according to the affidavit.

"CI-1 further stated that after the sections were dropped, he/she observed large piles of debris on the deck below which may have contained asbestos. He/She also stated that this deck was dismantled prior to any asbestos abatement work being performed on the vessel by an asbestos abatement contractor."

Informant's reports

Another confidential informant, CI-2, who was trained in asbestos removal and supervision, "observed material removed from the ship under Ellis's direction which he/she believed to be asbestos," the affidavit states. After this individual told Ellis of concerns about possible asbestos, the affidavit states, Ellis told the individual that the material was not asbestos.

Thereafter in fall 1993, the affidavit says, "CI-2 obtained samples of the suspected asbestos from the Coral Sea and a nearby dock and had it tested at a local laboratory for the presence of asbestos. The samples tested positive for asbestos."

Parker added in the affidavit that he had "independently obtained copies of the test results, which corroborate CI-2."

Pub Date: 9/25/96

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