DOT and MARAD Hand Out Pink Slips for Christmas

Published Nov 20, 2012 3:53 PM by Nichole Williamson

DOT’s decision to ‘wind down’ GMATS leaves 28 full time employees without jobs and 200+ part time employees and contractors without work.

On December 8th, USMMA released a statement announcing that the Deputy Secretary of Transportation, John Porcari, had indicated in meetings that the Global Maritime and Transportation School (GMATS) would “be closed as a Non-Appropriated Fund Instrumentality (NAFI) as of July 2012.” The statement added that discussions on the transitioning of the GMATS program to a new 501(c)(3) non-profit organization would continue with the Maritime Administration (MARAD). This wasn’t true. 

MarEx contacted the Maritime Administration (MARAD) in regards to this supposed transition and was directed to the Department of Transportation (DOT) who oversees MARAD. DOT told MarEx that they do not have the authority to transition GMATS to a non-profit and that this type of transition would require Congressional action. DOT claims that GMATS is being wound down as a result of recommendations from a GAO report on the USMMA’s non-appropriated instrumentalities (NAFIs). DOT says that MARAD examined the structure and internal controls of the Academy’s NAFIs and determined that “GMATS could not satisfactorily meet these criteria for a NAFI.” As a result of this determination MARAD issued an order in September of this year to discontinue GMATS operations; and “last week the Academy took the first steps toward an orderly wind down,” all this according to a DOT spokesperson.

Since 1993 GMATS has provided continuing education to mariners, operating with its own profits, at the U.S. Merchant Marine Academy. Since its inception GMATS has reimbursed the Academy for the use of its facilities and has contributed portions of its profits to the Academy for its benefit. Now MARAD wants it gone. 

It seems a transition is not in the works and talks with what is now a completely new board at GMATS (the previous board members were fired), are not being conducted and don’t look to be continuing in the future;  but why not? What justification is really revealed in the GAO report for the dissemination of GMATS? The GAO report did reveal some internal control issues – that were the fault and responsibility of USMMA and MARAD – so why punish a self-operating organization that poses no cost to tax payers and no cost to the Federal Government?

The answers to these questions are not clear and everyone involved in the dissemination of GMATS simply blames recommendations given in the August 2009 GAO report. The report reveals violations by USMMA in its use of funds provided by GMATS and the other 13 affiliated NAFIs. It’s here that the GAO recommended that USMMA and MARAD impose tighter controls on the internal accounting procedures and the appropriation of funds received from NAFIs. In one instance the report found that GMATS was making payments for the use of USMMA property like the training vessel, Kings Pointer. The problem was that USMMA was transferring more than half of the funds received by GMATS to another affiliated NAFI, the Sail Power & Crew Association. The GAO report called these transfers “questionable.” Discrepancies like this and a lack of accounting documentation made for several “questionable” instances in the GAO report. MARAD and USMMA announced new controls shortly after the report was released and a full response to the GAO’s recommendations. Despite no recommendation to get rid of GMATS, it seems MARAD has decided it’s happening anyway. (Read the GAO report for yourself).

The real story here is about the people that make up GMATS. Just weeks before Christmas, 28 full time employees, mostly women and 9 of which are single mothers were given letters explaining that they needed to seek other employment as they would no longer have a job after July 2012, or possibly sooner. In addition to the full time employees, another 200 plus part-time and contract workers employed by the school will lose their jobs – 60 percent of which are veterans. The local economy will lose too. It will lose the more than $2 million a year generated by GMATS in the form of hotel accommodations, food service, supply services and tourism.

In a final statement from DOT to MarEx the following was said: “The U.S. Department of Transportation and the U.S. Merchant Marine Academy are committed to creating and serving a maritime transportation system that addresses 21st century challenges.” Doesn’t the 21st Century need continuing education for mariners and more importantly JOBS?

-Nichole Williamson, Assistant Editor, The Maritime Executive ([email protected]