Tote Avoids Serious Civil Charges and Fines in Actions Brought by the Coast Guard for the Company’s Role in the Loss of the SS El Faro and 33 Men and Women

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More than three years after a Coast Guard Marine Board of Investigation recommended six civil actions be brought against Tote Maritime, the operator of the lost ship the SS El Faro, the Coast Guard has released documents that shows the charges were settled for about $2,300.

The Coast Guard released the report after a Freedom of Information Act request filed by The Frump Report.

The most serious of the civil charges — alleging that Tote failed to report serious boiler and propulsion problems aboard the vessel — were dropped by the Coast Guard. The charges that “stuck” involved the use of Polish nationals aboard the ship.

The El Faro sank on October 1, 2015 after it sailed into Hurricane Joaquin. The captain of the ship was faulted for not being more cautious, but the Coast Guard Marine Board of investigation also faulted Tote for poor maintenance of the ship. The MBI also faulted the Coast Guard inspections and those of the American Bureau of Shipping.

Thirty three men and women died on the ship, including some Polish nationals who were working to convert the ship for Alaskan service.

The original Coast Guard assessment was that Tote should be fined around $39,000 — just a bit under the maximum fine of around $57,000. The Coast Guard itself seems to have delayed the proceedings, with the first letter to Tote dated May 2, 2019.

However, Tote launched a withering defense, led by ex Coast Guard attorney Luke Reid. Over the course of the next two years, the Tote attorneys talked the hearing officer down to the lower amount and convinced the Coast Guard hearing officer to toss the more serious charges.

The president of Tote is Michael B. Holt, the officer once in charge of the Coast Guard Jacksonville sector while the SS El Faro was subject to Coast Guard inspections overseen. The civil charges were brought after Holt left the Coast Guard, but the actions considered in the hearing dealt directly with what did or did not happen and what Tote did or did not report during Holt’s tenure at Jacksonville Sector. There is no allegation that Hold acted improperly as an officer in the Coast or as a Tote officer.

Here is a summary of the Coast Guard civil charges and actions:

The most serious civil allegation appeared to be Tote’s alleged failure to properly report serious problems with the ship’s boiler and propulsion systems.

In the case file, the Coast Guard alleged three violations of 46 USC 3313, but after careful review of the supplemental evidence provided by you, the Coast Guard recommends dismissing the second allegation.

Allegation 2 – From August 24 to September 28, 2015, TOTE Services, Inc. failed to notify the Coast Guard of repairs conducted to the main propulsion boiler superheating piping. These repairs affected the vessel’s fitness to proceed and posed a safety risk to the crew.

The Coast Guard wrote, “In light of the arguments and evidence provided by the charged party, my office agrees that the leak in the steam drain line and the subsequent repairs to this drain line did not necessitate reporting to either the classification society or the U.S. Coast Guard. As a result, the second [allegation] did not amount to a violation of 46 USC 3313.”

Here is the full report.

(Ongoing coverage and responses tomorrow)

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