The U.S. government sold off aging ships — leaving states in the Pacific Northwest to pay the price

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5 days ago

The Pacific Producer, a large abandoned vessel, docked in a waterway off Commencement Bay in Tacoma, Wash., as seen July 15, 2025. (Dan DeLong/InvestigateWest)
This story was originally published by InvestigateWest, a nonprofit newsroom dedicated to change-making investigative journalism. Sign up for their Watchdog Weekly newsletter to receive stories like this one in your inbox.
Three years ago on a sunny day in August, a nearly 80-year-old steel, navy blue ship with patched holes and streaks of rust drifted down an inlet connecting downtown Tacoma to Commencement Bay. The 169-foot vessel was an unusual sight for local boaters who use the narrow channel to dock their small recreational watercraft. As it passed the Eleventh Street Bridge, the antennae of Pacific Producer got caught, causing its captain to lose control and frantically throw out an anchor to prevent a collision with other docked boats, according to eyewitness reports.
The captain maneuvered it over to the closed Martinac shipbuilding facility and left it there for over a year, floating above an Environmental Protection Agency Superfund site, an acres-long underwater protective barrier blanketing contamination of historical pollution from the rest of the Thea Foss waterway.
Noticing the derelict vessel on patrol, the Tacoma Fire Department conducted an inspection. Upon entering a lower deck, the department's crew noted a smell of ammonia so strong 'it was felt in our eyes and nose.' That sounded the alarm for a myriad of federal, state and local agencies to respond. When Washington Department of Ecology officials arrived, they noticed water in the bottom of the ship that grew heavier each day. Now, the concern was that the Pacific Producer was sinking.
Once response operations were completed, 25,000 gallons of oily water, 5,000 gallons of diesel, 3,500 pounds of ammonia, and 14,000 gallons of miscellaneous and oily waste had been removed, said Courtney Serad, lead spill responder with the Department of Ecology.
The Coast Guard and the Department of Ecology spent nearly a million dollars removing the ammonia, oil and other hazardous waste — including human feces — aboard the ship. Once the vessel is demolished, Washington's Department of Natural Resources expects to have spent nearly $4 million on its demolition and also on moorage fees, on-site security due to trespassers, pest control and the remediation of hazardous materials.
Abandoned and derelict vessels are quietly piling up in Washington and Oregon waterways, posing a threat to fragile marine ecosystems. At least 37 of these vessels in the Pacific Northwest, including the Pacific Producer, were formerly property of the Navy, Coast Guard or another federal agency, then bought by someone who later abandoned it. Together, these former government vessels have cost Washington state and Oregon over $21 million to remove and destroy.
Vessel removal programs in Washington and Oregon are calling on the federal government to destroy its own decrepit vessels and to prevent them from getting into the public's hands.
'There's a lot of stories around these bigger vessels, and usually it starts out with the government selling it to somebody who doesn't have the capacity to really operate it,' said Doug Helton, retired regional operations supervisor at the National Oceanic and Atmospheric Administration who assisted Washington and states across the country in recovering large abandoned watercraft. 'We have a disposal process for a lot of things in our economy, but vessels — there isn't really a standard way of disposing of these.'
These vessels become available to the public through various government agencies — most notably, the General Services Administration, a federal agency that manages and disposes of government property, according to ownership records. Often the ships leak oil, ammonia and other hazardous materials that state agencies and the U.S. Coast Guard are left to clean. All take up swaths of the states' budgets to remediate, remove and destroy.
Of the 37 vessels owned or seized by the federal government to be flagged in the Pacific Northwest, at least 11 served in World War II. One of those was a minesweeper once used to detect and remove enemy mines from the ocean's depths. At least eight ships sank and haven't been recovered. The largest was a 384-foot ship designed to bring Army tanks to shore during the Vietnam War. That vessel would cost around $25 million to destroy, funds that Oregon doesn't have, said Josh Mulhollem, manager of the state's derelict vessel removal program. It sits abandoned in the Columbia River with bolted-in doors to prevent trespassers.
Washington's Derelict Vessel Removal Program has an active inventory of 300 abandoned or derelict vessels. In just over 20 years, it has removed more than 1,200 vessels. A 2022 law allocating the program an additional stream of funding from a watercraft excise tax has broadened its capabilities, but even then, the program waited until the next biennium, which began this July, to destroy the Pacific Producer.
Its total cost — $3.9 million — would have taken up nearly 40% of the program's $10.5 million biennial budget and restricted the agency's scope to manage the hundreds of other abandoned boats. Instead, the program opted to pay off the expenses over two separate budgets. But this ended up costing nearly $300,000 more. It paid to dock the ship at a Seattle marina for over a year with on-site security to prevent trespassers. A rat infestation also racked up pest control fees.
'My question for the federal government is, why are you selling these into private hands when you know that the vessels are at the end of their life?' said Troy Wood, the manager of Washington's Derelict Vessel Removal Program who is part of a national workgroup dedicated to the issue and has helped other state agencies create their own program.
Before private ownership, the former government vessels flagged or removed in Washington and Oregon were property of various agencies like the Defense Reutilization and Marketing Division, the U.S. Treasury Department, or the U.S. Department of Commerce. Records obtained by InvestigateWest show that at least 17 were formerly operated by the U.S. Navy. Six were with the U.S. Coast Guard. Two were former Canadian military vessels. One, the Hero, was the last wooden icebreaker in Antarctica, formerly owned by the National Science Foundation. Most records don't show how the vessels were transferred from the government to the public.
Those familiar with the process for distributing federal surplus materials say it is deeply flawed. Once an old ship is put up for public auction, just about anybody can bid. There are often no requirements that bidders carry insurance or have the financial ability to properly care for an old, broken-down vessel.
In 2017, the Government Accountability Office, a nonpartisan research agency that investigates government agencies at the request of Congress, issued an audit report on the Department of Defense's process for disposing of sensitive equipment. The GAO posed as a fake federal law enforcement agency and was accepted in a surplus property program.
Diana Maurer, director of the defense capabilities and management team at the Government Accountability Office, said DOD officials missed several opportunities to verify the agency's legitimacy.
'No one called us to double-check the fictitious information we provided,' she said. 'Among other things, we gave a phony agency name, a phony address and phony legal authorities that purported to be in the U.S. Code. A simple phone call or Google search could have confirmed that we were not who we said we were.'
After the audit was released, the DOD took 'quick action to close the loopholes' that allowed the GAO to obtain military equipment, Maurer added.
The GAO's fake agency was able to obtain over 100 controlled items — sensitive equipment not to be released to the general public — worth an estimated $1.2 million. Although none of these items were vessels, the report highlights the DOD's — which includes the U.S. Navy and Coast Guard — largely unregulated approval process to buy up surplus property.
In the case of the Pacific Producer, the U.S. Marshals Service sold the ship twice to the same owner hiding behind shell companies following lawsuits spurred by unpaid debts. Each time the Marshals Service stripped it of all liens and the owner bought the boat back with a clean title. Since the final purchase of the vessel in 2007, it acquired over $1 million in unpaid liens and hundreds of thousands of dollars of fines from the Occupational Safety and Health Administration. The owner did not respond to inquiries from InvestigateWest.
Under Washington law, the owner of an abandoned or derelict vessel is responsible to reimburse the state Department of Natural Resources and any other authorized public entity for costs associated with surveying the vessel, disposal and any environmental damage. If left unpaid, the DNR can place liens on the owner's assets and take the owner to court. But Wood, the manager of Washington's derelict vessel removal program, says that more often than not, the owner leaves the state or becomes untraceable, leaving the state to foot the bill.
The General Services Administration, a federal agency that manages the excess property of other federal agencies, regularly sells older vessels from the Navy and Coast Guard.
The process goes like this: When a federal agency decides to dispose of a vessel, it's first offered to other federal agencies. If it doesn't draw interest there, the offer extends to state and municipal agencies. If there still aren't any takers, that's where the GSA's public auction comes in.
InvestigateWest reviewed over 100 online sale listings of previous auctions in Washington state. The listings date back only to 2016 but offer a glimpse into typical vessel sales. Only 10 had thorough inspection reports. The majority listed a slew of issues. Vessels were often heavily corroded, sold without an engine or had water leaking into the hull. Two former Navy boats were listed as having engines with excessive heat problems to the point where 'insulation will begin to smoke.' Three were built in the 1940s.
One of those, a 66-foot old Navy tug, sold for just $10,000. It was not inspected and its listing states, 'Boat Is In The Water. This Does Not Imply A Warranty Or Guarantee That The Boat Is Operational.' It also states the bidder is responsible for the disposal of oil accumulated on the boat. None of the listings had stringent bidder requirements such as proving valid insurance or the financial means to care for the boat.
People in the boating world familiar with this issue call the buyers of these boats 'dreamers' with big plans to create an ecotourism business, museum, fishing boat, venue or new home.
'Someone would say, 'That's cool, we could make a nice yacht out of that' and then realize, 'Wait a minute, the Coast Guard, with all their resources and manpower, couldn't keep this boat operational,'' Helton said. 'How was some guy with a pickup truck and a shoestring budget gonna keep it afloat?'
Not all auctioned vessels cause environmental pollution. Some are successfully repaired and continue to operate safely in Washington's waters.
But many do not realize the burden or cost of caring for these old ships. Sometimes half the battle is finding a part that hasn't been manufactured in over 50 years. Sometimes people build their own parts or give up and resell the boat. Then, somehow, they get abandoned and often sink.
'A 140-foot boat should cost more than $50,000,' said Mulhollem, manager of Oregon's derelict vessel removal program.
Over half of the vessels sold by the GSA in Washington came from the Navy, Coast Guard and Army. The Navy has sold more than any other agency in Washington.
Sometimes the Navy sells old ships to foreign allied militaries, sometimes it turns them into museums or artificial reefs. The Navy's decision to send a vessel to the GSA 'is primarily based on their inability to meet current mission requirements,' according to a Navy spokesperson. The Navy did not disclose to InvestigateWest why it doesn't destroy its own vessels.
The Hero was an out-of-service Antarctic research vessel acquired by an oceanic foundation in Oregon with plans to make it the focal point of a larger Antarctic 'exploratorium.' It was bought at a General Services Administration auction in 1985 for $5,000. When plans fell through, the vessel was resold, then sold at least another four times as new owners failed to make the vessel viable.
In 2017, after the Hero's last two owners had stripped the ship of parts to turn a profit, the boat sank at the mouth of the Palix River, a waterway that sustains one of the state's largest oyster farming areas. It cost the Washington Derelict Vessel Removal Program over $3.7 million to remove and destroy it.
'Took us awhile to get the funding, but we eventually did,' Wood said. 'A million of it was for environmental cleanup because we went in and vacuumed the riverbed.'
Every vessel carries aboard some mixture of hazardous materials. All carry necessities like motor oils, flares and batteries. When an old damaged vessel is left abandoned, it may leak hazardous materials without anyone reporting it to authorities.
'The toughest spills we face where we get the worst pollution recovery results are spills that are not reported in a timely manner,' said Byers, the oil response manager at Washington's Department of Ecology. 'In some cases, the oil spreads out… so thin that our response efforts might actually cause more environmental harm than good. We have to literally remove the environment to get the oil with it.'
Found on all vessels for fire protection, but in even larger quantities on larger vessels, are flame retardants containing polybrominated diphenyl ethers (PBDEs), which accumulate in an animal's body and are considered toxic. It hasn't been widely studied in natural environments like the ocean, but one controlled study found PBDEs to diminish reproduction in fish.
'A lot of the damage is under the water surface and invisible,' Byers said. 'It's occurring, but it's not obvious.'
Other hazardous materials can include fishing nets, steering gear, cleaning products, fire extinguishers, hydraulic oil and lubricants.
Fishing vessels, like the Pacific Producer, carry ammonia used as refrigerant and chlorine as decontamination material, said Helton, with the National Oceanic and Atmospheric Administration in a recent webinar. Some vessels, he said, would store fuel in chain lockers and other void spaces aboard in order to maximize time at sea without having to refill, increasing the amount of hazardous material that could end up in the ocean.
Researchers say it's nearly impossible to quantify how much abandoned and derelict vessels have polluted Washington's waters. The pollution isn't as constant as commercial vessel traffic or stormwater runoff, but spills from abandoned vessels have the potential to harm the environment they're left in for years.
Last year, California U.S. Rep. John Garamendi introduced the Abandoned and Derelict Vessels Act of 2024. The federal bill didn't pass, but one provision was tacked on to the National Defense Authorization Act, the military spending bill Congress passes each year. It established requirements for purchasing federally auctioned vessels, including verifying that the prospective buyer holds proper insurance and has adequate financial resources to care for the vessel.
But, so far, the message hasn't gotten out. Some parties involved with removal of former government vessels were not aware of this provision, the GSA has not included the requirement in its current boat listings and GSA sales employees were not aware of this law.
'I think it's beneficial legislation,' said Mulhollem, who oversees Oregon's vessel removal program. 'I don't think it solves all the issues — I mean insurance and means to take care of a vessel can be temporary.'
There isn't an agreed on solution to this problem, Mulhollem added. These larger abandoned vessels are 'complicated pieces of waste that no one is equipped' to handle.
Other failed provisions in Rep. Garamendi's original bill also called on the government to create a database of all abandoned and derelict vessels across the country and to authorized the Coast Guard and Army Corps of Engineers to remove those vessels.
'Maybe the government shouldn't be selling them at all… or maybe they should be trying to figure out some other way to dispose of them,' said Helton, the retired operations supervisor at the National Oceanic and Atmospheric Administration.
The U.S. government rarely destroys its own ships. Shipbreaking is a dangerous and labor intensive job. Laborers remove hazardous materials onboard and cut a boat to pieces to later be sold for scrap. There are only three shipbreakers in the country authorized to do business with the U.S. government, and all are located in Brownsville, Texas, where wages are low, and the Environmental Protection Agency imposes strict rules.
'Depending on the weight of the vessel, our cost to process a vessel is going to be somewhere in the region of $200 per ton plus any remediation fees,' said Jeremy Kirchin, chief executive officer of Scrap Metal Services, LLC, one of the nation's three government-authorized shipbreakers. He said that old U.S. Navy ships from Seattle commonly make the journey to his facility.
First, they must be repaired to be seaworthy enough for a last voyage to the southernmost point of Texas, bordering Mexico. The 5,500-nautical-mile journey takes ships down the Pacific Coast, through the Panama Canal up and then through the Gulf of Mexico to Texas. That trip takes over 20 days and often costs over $1 million.
But not all vessels are even worth the journey to destroy.
'It's a life cycle issue,' Helton said. 'That's sort of the dirty secret, is that sometimes it's easier to sell a vessel for cheap than it is to actually properly dispose of it.'
After its multi-agency cleanup in the Thea Foss waterway, the Department of Natural Resources took possession of the Pacific Producer. Unable to give up over half of its biennium budget to destroy the vessel, the department has left it docked at a marina in Seattle since December 2023, racking up nearly $300,000 in moorage, security and pest control fees at Foss Maritime.
Last month, it was taken to a concrete facility in Tacoma that has a dry dock where it will be destroyed this summer. The Department of Natural Resources waited until July this year to get more funding. Destruction will take a month to complete and cost over $1 million. The contractor responsible for disposal will recycle as much material as possible.
Assuming that happens according to schedule, it will have taken nearly two years and nearly $5 million to safely remediate and destroy the Pacific Producer.
InvestigateWest (investigatewest.org) is an independent news nonprofit dedicated to investigative journalism in the Pacific Northwest. Reporter Aspen Ford, a Roy W. Howard fellow, can be reached at [e-mail].
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