Motor Carrier Safety
Reincarnating Commercial Vehicle Companies Pose Safety Threat to Motoring Public; Federal Safety Agency Has Initiated Efforts to Prevent Future Occurrences Gao ID: GAO-09-924 July 28, 2009In 2008, the Federal Motor Carrier Safety Administration (FMCSA) reports that there were about 300 fatalities from bus crashes in the United States. Although bus crashes are relatively rare, they are particularly deadly since many individuals may be involved. FMCSA tries to identify unsafe motor coach carriers and take them off the road. GAO was asked to determine (1) to the extent possible, the number of motor coach carriers registered with FMCSA as new entrants in fiscal years 2007 and 2008 that are substantially related to or in essence the same carriers the agency previously ordered out of service, and (2) what tools FMCSA uses to identify reincarnated carriers. To identify new entrants that were substantially related to carriers placed out of service, we analyzed FMCSA data to find matches on key fields (e.g., ownership, phone numbers, etc.). Our analysis understates the actual number of reincarnated carriers because, among other things, the matching scheme used cannot detect minor spelling changes or other deception efforts. We interviewed FMCSA officials on how the agency identifies reincarnated carriers. GAO is not making any recommendations. In July 2009, GAO briefed FMCSA on our findings and incorporated their comments, as appropriate.
Our analysis of FMCSA data for fiscal years 2007 and 2008 identified twenty motor coach companies that likely reincarnated from "out of service" carriers. This represents about 9 percent of the approximately 220 motor coach carriers that FMCSA placed out of service during these two fiscal years. The number of likely reincarnated motor carriers is understated, in part, because our analysis was based on exact matches and also could not identify owners who purposely provided FMCSA deceptive information on the application (e.g., ownership) to hide the reincarnation from the agency. Although the number of reincarnated motor coach carriers that we could identify was small, these companies pose a safety threat to the motoring public. According to FMCSA officials, under registration and enforcement policies up to summer 2008, reincarnation was relatively simple to do and hard to detect. As a result, motor coach carriers known to be safety risks were continuing to operate. According to FMCSA data, five of the twenty bus companies were still in operation as of May 2009. We referred these cases to FMCSA for further investigation. The twenty cases that we identified as likely reincarnations were registered with FMCSA at the time that FMCSA did not have any dedicated controls in place to prevent motor coach carriers from reincarnating. In 2008, FMCSA instituted a process to identify violators by checking applicant information against those of poor-performing carriers. For example, if FMCSA finds a new entrant with a shared owner name or company address for an out-of-service company, the agency will make inquiries to determine if the new applicant is related to the out-of-service carrier. If such a determination is made, FMCSA still faces legal hurdles, such as proving corporate successorship, to deny the company operating authority.
GAO-09-924, Motor Carrier Safety: Reincarnating Commercial Vehicle Companies Pose Safety Threat to Motoring Public; Federal Safety Agency Has Initiated Efforts to Prevent Future Occurrences
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Report to Congressional Requesters:
United States Government Accountability Office:
GAO:
July 2009:
Motor Carrier Safety:
Reincarnating Commercial Vehicle Companies Pose Safety Threat to
Motoring Public; Federal Safety Agency Has Initiated Efforts to Prevent
Future Occurrences:
GAO-09-924:
GAO Highlights:
Highlights of GAO-09-924, a report to congressional requesters.
Why GAO Did This Study:
In 2008, the Federal Motor Carrier Safety Administration (FMCSA)
reports that there were about 300 fatalities from bus crashes in the
United States. Although bus crashes are relatively rare, they are
particularly deadly since many individuals may be involved. FMCSA tries
to identify unsafe motor coach carriers and take them off the road.
GAO was asked to determine (1) to the extent possible, the number of
motor coach carriers registered with FMCSA as new entrants in fiscal
years 2007 and 2008 that are substantially related to or in essence the
same carriers the agency previously ordered out of service, and (2)
what tools FMCSA uses to identify reincarnated carriers. To identify
new entrants that were substantially related to carriers placed out of
service, GAO analyzed FMCSA data to find matches on key fields (e.g.,
ownership, phone numbers, etc.). GAO‘s analysis understates the actual
number of reincarnated carriers because, among other things, the
matching scheme used cannot detect minor spelling changes or other
deception efforts. GAO also interviewed FMCSA officials on how the
agency identifies reincarnated carriers.
GAO is not making any recommendations. In July 2009, GAO briefed FMCSA
on its findings and incorporated the agency‘s comments, as appropriate.
What GAO Found:
GAO‘s analysis of FMCSA data for fiscal years 2007 and 2008 identified
20 motor coach companies that likely reincarnated from ’out of service“
carriers. This represents about 9 percent of the approximately 220
motor coach carriers that FMCSA placed out of service during these 2
fiscal years. The number of likely reincarnated motor carriers is
understated, in part, because GAO‘s analysis was based on exact matches
and also could not identify owners who purposely provided FMCSA
deceptive information on the application (e.g., ownership) to hide the
reincarnation from the agency. Although the number of reincarnated
motor coach carriers that GAO identified was small, these companies
pose a safety threat to the motoring public. According to FMCSA
officials, under registration and enforcement policies up to summer
2008, reincarnation was relatively simple to do and hard to detect. As
a result, motor coach carriers known to be safety risks were continuing
to operate. According to FMCSA data, 5 of the 20 bus companies were
still in operation as of May 2009. GAO referred these cases to FMCSA
for further investigation.
Table: Examples of Reincarnating Motor Coach Carriers:
Location: Texas;
Reason for out-of-service order: Failure to pay a $2,380 fine related
to 5 safety violations;
Description:
* Owner of ’out-of-service“ carrier registered ’new entrant“ carrier in
daughter‘s name.
* In 2008, the new carrier‘s new entrant registration was revoked and
the owner was convicted of cocaine possession.
Location: New York:
Reason for out-of-service order: Failure to pay fine;
Description:
* ’New entrant“ carrier was located in a church. The ’out-of-service“
carrier was located next door in a school affiliated with the church.
* FMCSA had not conducted a new entrant review of the new company as of
July 2009.
Location: California:
Reason for out-of-service order: Failure to pay approximately $5,000
fine related to 11 safety violations;
Description:
* New motor coach business located in retail store.
* Several brochures and business cards of ’out-of-service“ carrier were
displayed on counter.
* In June 2009, the new carrier was ordered out-of–service for failing
to pay a fine.
Source: GAO.
[End of table]
The 20 cases that GAO identified as likely reincarnations were
registered with FMCSA at the time that FMCSA did not have any dedicated
controls in place to prevent motor coach carriers from reincarnating.
In 2008, FMCSA instituted a process to identify violators by checking
applicant information against those of poor-performing carriers. For
example, if FMCSA finds a new entrant with a shared owner name or
company address for an out-of-service company, the agency will make
inquiries to determine if the new applicant is related to the out-of-
service carrier. If such a determination is made, FMCSA still faces
legal hurdles, such as proving corporate successorship, to deny the
company operating authority.
View [hyperlink, http://www.gao.gov/products/GAO-09-924] or key
components. For more information, contact Gregory Kutz at (202) 512-
6722 or kutzg@gao.gov.
[End of section]
Contents:
Letter:
Background:
Reincarnated Motor Carriers Exist:
Tools FMCSA Uses to Identify Reincarnated Carriers and Their
Limitations:
Corrective Action Briefing:
Appendix I: Scope and Methodology:
Appendix II: Reincarnated Motor Coach Carriers:
Appendix III: Summary of Reincarnated Motor Coach Carriers:
Appendix IV: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: Summary Information on Potentially Reincarnated Motor Coach
Carriers:
Table 2: Summary Information on Potentially Reincarnated Motor Coach
Carriers:
Table 3: Match Results on Key Identifying Fields for Potentially
Reincarnated Carriers:
Abbreviations:
DOT: Department of Transportation:
EMIS: Enforcement Management Information System:
FMCSA: Federal Motor Carrier Safety Administration:
IRP: International Registration Plan:
L&I: Licensing & Insurance:
MCMIS: Motor Carrier Management Information System:
PCVP: Passenger Carrier Vetting Process:
PRISM: Performance and Registration Information Systems Management:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
July 28, 2009:
The Honorable James L. Oberstar:
Chairman:
Committee on Transportation and Infrastructure:
House of Representatives:
The Honorable Peter A. DeFazio:
Chairman:
Subcommittee on Highways and Transit:
Committee on Transportation and Infrastructure:
House of Representatives:
The Honorable Eddie Bernice Johnson:
House of Representatives:
On August 8, 2008, a bus carrying a group of people on a religious
pilgrimage crashed in Sherman, Texas, killing 17 people and injuring 15
others. State and federal investigators attributed the accident to the
loss of tread on a recapped tire installed on the bus's front right
steering axle--the use of recapped tires on the steering wheels is a
violation of federal regulations. The driver lost control of the bus,
struck a curb, and crashed through the guardrail of a bridge. The bus
fell about 8 feet, landed on its right side and slid about 24 feet.
Twelve passengers died at the scene, while five others died after being
taken to nearby hospitals. The carrier that operated the bus was the
reincarnation of a motor coach company that had been deemed unsafe and
ordered out of service by the Federal Motor Carrier Safety
Administration (FMCSA) 2 months prior to the accident. The new company
registered with FMCSA using the same physical and mailing addresses as
the carrier ordered out of service. At the time of the crash, the
carrier did not have proper operating authority from FMCSA, because it
had not yet designated a process agent or provided proof of insurance
to FMCSA. Thus, specifying a process agent and providing proof of
insurance were the only steps standing in the way of the new company
obtaining operating authority from FMCSA.
According to FMCSA, in 2008 about 300 fatalities occurred nationwide
associated with motor coach carriers.[Footnote 1] In an attempt to
reduce the number and severity of crashes involving buses, FMCSA seeks
to identify unsafe motor coach carriers and take them off the road.
Motor coach carriers ordered out of service are not supposed to return
to the road until FMCSA determines that safety compliance issues have
been resolved.
The Committee is concerned that unscrupulous owners may attempt to
evade the out-of-service orders by closing down and reopening as new
bus companies, a practice known as "morphing" or "reincarnating."
[Footnote 2] To address the serious safety concerns of reincarnating
motor coach carriers, you asked us to determine (1) to the extent
possible, the number of motor coach carriers registered with FMCSA as
new entrants in fiscal years 2007 and 2008 that are substantially
related to or in essence the same carriers the agency ordered out of
service, and (2) what tools FMCSA uses to identify reincarnated
carriers.
To identify new entrants that registered with FMCSA and were
substantially related to motor coach carriers ordered out of service,
we analyzed FMCSA data to find exact matches on key fields (i.e.,
company name, owner/officer name, address, phone number, cell phone
number, fax number, vehicle identification number, and driver names).
Our analysis understates the actual number of reincarnated motor coach
carriers since the matching scheme used cannot detect minor spelling
changes or other deception efforts, such as changing the company's
name, address, and ownership. In addition, our analysis is understated
because FMCSA only provided us data on vehicles and drivers when an
accident or inspection took place, and thus the data does not include
the entire population of vehicles or drivers for either new entrants or
out-of-service carriers. Our analysis also could not identify all
reincarnated motor coach carriers where the owners purposely provided
FMCSA bogus information on the application (e.g., ownership) to hide
the reincarnation from FMCSA. For the motor coach carriers identified,
we interviewed, if possible, the owners to validate whether the company
had reincarnated.
To determine the tools FMCSA uses to identify reincarnated motor coach
carriers, we interviewed FMSCA officials on the process that the agency
uses to identify potentially reincarnating carriers. We also obtained
and examined policies and other FMCSA documentation to obtain an
understanding of the design of its motor carrier enrollment process. We
did not perform any tests of the controls and therefore cannot make a
conclusion on the effectiveness of any controls in place or whether
they have reduced the number of reincarnated carriers. For more details
on our methodology, see appendix I.
We conducted the work for this investigation from November 2008 through
July 2009 in accordance with quality standards for investigations as
set forth by the Council of the Inspectors General on Integrity and
Efficiency.
Background:
FMCSA's primary mission is to reduce the number and severity of crashes
involving large commercial trucks and buses conducting interstate
commerce. It carries out this mission in the following ways: issuing,
administering, and enforcing federal motor carrier safety and hazardous
materials regulations; and gathering and analyzing data on motor
carriers, drivers, and vehicles, among other things. FMCSA also takes
enforcement actions and funds and oversees enforcement activities at
the state level through Motor Carrier Safety Assistance Program grants.
For-hire motor carriers are required to register with FMCSA and obtain
federal operating authority before operating in interstate commerce.
Applicants for passenger carrier operating authority must submit
certain information to FMCSA, including contact information and U.S.
Department of Transportation (DOT) number, and must certify that they
have in place mandated safety procedures. After publication of the
applicant's information in the FMCSA Register, a 10-calendar-day period
begins in which anyone can challenge the application. Within 90 days of
the publication, the carrier's insurance company must file proof of the
carrier's insurance with FMCSA. Applicants must also designate a
process agent, a representative upon whom court orders may be served in
any legal proceeding. After FMCSA has approved the application,
insurance, and process agent filings, and the protest period has ended
without any protests, applicants are issued operating authority.
FMCSA ensures that carriers, including motor coach carriers, comply
with safety regulations primarily through compliance reviews of
carriers already in the industry and safety audits of carriers that
have recently started operations.[Footnote 3] Compliance reviews and
safety audits help FMCSA determine whether carriers are complying with
its safety regulations and, if not, to take enforcement action against
them, including placing carriers out of service.[Footnote 4] FMCSA
makes its compliance determination based on performance in six areas:
one area is the carrier's crash rate, and the other five areas involve
the carrier's compliance with regulations, such as insurance coverage,
driver qualifications, and vehicle maintenance and inspections.
Carriers are assigned one of three Carrier Safety Ratings based on
their compliance with the Federal Motor Carrier Safety Regulations
(FMCSR). These ratings include "satisfactory," for a motor carrier that
has in place and functioning adequate safety management controls to
meet federal safety fitness standards; "conditional," for a motor
carrier that does not have adequate safety management controls in place
to ensure compliance with the safety fitness standard, that could
result in a violation of federal safety regulations; or
"unsatisfactory," for a motor carrier that does not have adequate
safety management controls in place to ensure compliance with the
safety fitness standard, which has resulted in a violation of federal
safety regulations.
Carriers receiving an unsatisfactory rating have either 45 days (for
carriers transporting hazardous materials in quantities that require
placarding or transporting passengers) or 60 days (for all other
carriers) to address the safety concerns. If a carrier fails to
demonstrate it has taken corrective action acceptable to FMCSA, FMCSA
will revoke its new entrant registration and issue an out-of-service
order, which prohibits the carrier from operating until the violations
are corrected. Further fines are assessed if it is discovered that it
is operating despite the out-of-service order.
Federal law requires new carriers to undergo a new-entrant safety audit
within 18 months of when the company begins to operate. Carriers are
then monitored on an ongoing basis using various controls that include
but are not limited to annual vehicle inspections and driver
qualification regulations. However, FMCSA may suspend a company or
vehicle's operation at any time by ordering it out of service if it
determines that an imminent safety hazard exists. (An imminent hazard
means any condition of vehicle, employee, or commercial motor vehicle
operations which substantially increases the likelihood of serious
injury or death if not discontinued immediately.) In addition, FMCSA
orders carriers out of service for failure to pay civil penalties
levied by FMCSA, failing to take required corrective actions related to
prior compliance reviews, or failing to schedule a safety audit. Out-
of-service carriers are supposed to cease operations and not resume
operations until FMCSA determines that they have corrected the
conditions that rendered them out of service. If a carrier fails to
comply with or disregards an out-of-service order, FMCSA may assess a
civil monetary penalty each time a vehicle is operated in violation of
the order.
FMCSA and state law enforcement agencies use several methods to ensure
that carriers ordered out of service, including motor coach companies,
do not continue to operate. For example, FMCSA and its state partners
monitor data on roadside inspections, moving violations, and crashes to
identify carriers that may be violating an out-of-service order. FMCSA
will visit some suspect carriers that it identifies by monitoring crash
and inspection data to determine whether those carriers violated their
orders. Also, recently, the Commercial Vehicle Safety Alliance began to
require checking for carriers operating under an out-of-service order
during roadside inspections and to take enforcement action against any
that are. However, given the large size of the industry, the nation's
extensive road network, and the relatively small size of federal and
state enforcement staffs, it is difficult to catch motor coach carriers
that are violating out-of-service orders. In addition, some carriers
change their identities by changing their names and obtaining new DOT
numbers[Footnote 5]--these carriers are generally referred to as
reincarnating carriers--to avoid being caught.
Reincarnated Motor Carriers Exist:
Our analysis of FMCSA data for fiscal years 2007 and 2008 identified 20
motor coach companies[Footnote 6] that likely reincarnated from "out-
of-service" carriers.[Footnote 7] This represents about 9 percent of
the approximately 220 motor coach carriers that FMCSA ordered out of
service[Footnote 8] for those fiscal years.[Footnote 9] The analysis
was based on two or more exact matches of data for the new entrant with
the data for the out-of-service carriers on the following categories:
company name, owner/officer name, address, phone number, cell phone
number, fax number, vehicle identification number, and driver names.
These 20 motor coach companies registered with FMCSA before FMCSA
developed processes specifically for detecting reincarnated bus
companies that were established subsequent to the Sherman, Texas, crash
(see next section). The number of potential reincarnated motor coach
carriers is understated because (1) our analysis was based on exact
matches, so it could not find links if abbreviations were used or typos
occurred in the data, (2) FMCSA only provided us data on vehicles and
drivers when an accident or inspection took place, and thus the
provided FMCSA data does not include the entire population of vehicles
or drivers for either new entrants or out-of-service carriers, and (3)
our analysis could not identify owners who purposely provided FMCSA
bogus or otherwise deceptive information on the application (e.g.,
ownership) to hide the reincarnation from the agency. Although the
number of reincarnated motor coach carriers that we could identify was
relatively small, the threat these operators pose to the public has
proven deadly. According to FMCSA officials, registration and
enforcement policies at the time of the Sherman, Texas, crash,
reincarnation was relatively simple to do and hard to detect. As a
result, motor coach carriers known to be safety risks were continuing
to operate, such as the company that was involved in the bus crash in
Sherman, Texas.
Five of the reincarnated carriers we identified were still operating as
of May 2009. Our investigation found one of them had not received a
safety evaluation and two carriers had been given a conditional rating
after the agency determined its safety management controls were
inadequate. The remaining two motor coach carriers were deemed
satisfactory in a FMCSA compliance review because FMCSA inspectors were
likely not aware of the potential reincarnations. We referred all five
companies to FMCSA for further investigation. Based on our review of
FMCSA data, we found that the agency already identified six of the 20
reincarnated motor coach carriers and ordered them out of service. The
agency discovered them while performing a crash investigation (as in
the case of the bus accident in Sherman, Texas), compliance reviews, or
other processes. In addition, new carriers are subject to a safety
audit within 18 months.[Footnote 10]
Several of the reincarnated carriers we identified were small
businesses located in states neighboring Mexico and making trips across
the border. Our investigation also determined that all of the
reincarnated motor coach carriers we identified were directly related
to companies that received fines for safety problems shortly before
being ordered out of service. Based on our analysis of the FMCSA data,
we believe they reincarnated to avoid paying these fines and continue
their livelihood. For example, we found instances where carriers
continued to operate despite being ordered out of service for failure
to pay their fines. In fact, one carrier was operating for several
months after being placed out of service. We believe that these
carriers reincarnated into new companies to evade fines and avoid
performing the necessary corrective actions.
We attempted to contact the owners to ask why they reincarnated but
were unable to reach many of them. For the six owners that we did
interview none said that they had shut down their old companies and
opened new ones to evade the out-of-service orders.
Table 1 summarizes information on 10 of the 20 cases that we
investigated. Appendix II provides details on 10 others we examined.
Appendix III provides a summary of the key data elements that matched
on the new entrants that were substantially related to out-of-service
carriers.
Table 1: Summary Information on Potentially Reincarnated Motor Coach
Carriers:
Case: 1;
State: Texas;
Details:
* FMCSA data indicate that the "new company" carrier had the same phone
number, fax number and cell phone number as the "old company" carrier;
* The new company started in March 2007, eight months before FMCSA
ordered the old company out of service;
* Six days after the new company was formed, a motor coach carrying
sixteen passengers operated by the old company was stopped and
inspected on the US/Mexico border at Laredo, Texas. The old company was
charged with five violations and fined $2,380;
* FMCSA ordered the old company out of service in November 2007 for
failing to a pay a fine;
* In 2008, the new carrier's new entrant registration was revoked and
the owner was convicted of cocaine possession.
Case: 2;
State: New York;
Details:
* FMCSA data indicate that the "new company" carrier had the same fax
number, company officer name, driver, and vehicle as the "old company"
carrier;
* The old company was subject to a compliance review in May 2007 and
was cited for five safety violations, including failure to implement an
alcohol and controlled substances testing program;
* The new company started in August 2007 and was located at a church.
The location of the old carrier was a school located next to and
affiliated with the church;
* FMCSA had not conducted a new-entrant safety audit of the carrier, as
of July 2009.
Case: 3;
State: California;
Details:
* FMCSA data indicate that the "new company" carrier had the same phone
number and company officer as the "old company" carrier;
* In December 2006, FMCSA cited the old company for eleven safety
violations including failure to implement an alcohol and controlled
substances testing program;
* The old company was ordered out of service in February 2007 for
failure to address the violations. In addition, in March 2007, the old
company was charged with operating despite being subject to the above
out-of-service order and fined $5,620;
* The new company started in June 2008 and received a satisfactory
safety rating in October 2008;
* A week after our interview FMCSA revoked the new company's authority,
and in June 2009, ordered it out-of-service for falling to pay a fine.
Case: 4;
State: California;
Details:
* FMCSA data indicate that the "new company" carrier had the same
business name, address, company officer name, phone number, and some of
the same drivers and vehicles as the "old company" carrier;
* The old company was cited for twenty-seven safety violations and
fined $2,000 in April 2007. Violations included using drivers before
they received a negative controlled substance test;
* The old company was ordered out of service in September 2007 for
failure to pay the above fine;
* In October 2007, FMCSA found the old company still operating a motor
coach despite its out-of-service order. A fine of $6,910 was assessed;
* The old company was cited for fifteen safety violations in a January
2008 compliance review. Violations included knowingly allowing an
employee to operate a commercial motor vehicle with a suspended
license. A fine of $2,000 was assessed;
* The new company started in May 2008 and ordered it out of service in
October 2008 as unfit.
Case: 5;
State: Texas;
Details:
* FMCSA data indicate that the "new company" carrier had the same
address, phone number, fax number, and company officer name as the "old
company" carrier. In addition, the "new company" business name was the
Spanish translation of the "old company" carrier's name;
* The old company had a compliance review in November 2006 and was
cited for eleven safety violations. It received a conditional safety
rating. The violations included using a driver before receiving a
negative pre-employment controlled substance test;
* In February 2008, the old company was subject to another compliance
review and was cited for ten safety violations. It received an
unsatisfactory rating. The violations included using a driver before
receiving a negative controlled substance test and failing to annually
conduct the required amount of random alcohol and controlled substances
testing. A fine of $143,000 was later levied;
* In April 2008, the old company was ordered out of service as FMCSA
determined the carrier failed to take the necessary steps to improve
its safety rating;
* The new company was registered 13 days before the out-of-service
order against the old company was to take effect;
* The new company had a compliance review in August 2008 and was cited
for nine safety violations. The violations included using a driver
before receiving a negative controlled substance test. FMCSA identified
it as a reincarnated carrier, and ordered it out of service in August
2008 as "unfit";
* The new company received a "conditional" safety rating in October
2008 but is listed as inactive as of July 2009.
Case: 6;
State: Maryland;
Details:
* FMCSA data indicate that the "new company" carrier had the same
business name, phone number, cell phone number, company officer name,
and some of the same vehicles as the "old company" carrier;
* FMCSA revoked the old company's registration authority in March 2007
due to loss of insurance;
* The new company opened about a month later, in April, 2007;
* The new company received a compliance review in September 2008 after
a roadside inspection revealed the company used a vehicle with the old
company's DOT number on a motor coach. The new company was cited for
twenty-one safety violations and was given an unsatisfactory rating.
Violations include failing to implement a random controlled substances
and alcohol testing program and hiring drivers before receiving
negative results on such tests;
* The owner attempted to reincarnate again two weeks prior to the
September 2008 compliance review. However, FMCSA detected the attempt
and refused to grant operating authority.
Case: 7;
State: Arkansas;
Details:
* FMCSA data indicate that the "new company" carrier had the same
business address, phone number, fax number, and company officer name as
the "old company" carrier;
* The old company had a compliance review done in May 2007 and was
cited for nine safety violations. The violations included conducting
unauthorized motor carrier operations in the United States and failing
to maintain driver qualification files. A fine of $3,050 was assessed;
* FMCSA ordered the old company out of service on October 2007 for
failure to pay the above fine;
* The new company started in late June 2007, about 3 months before the
old company was ordered out of service;
* The new company had a compliance review done in November 2008 and was
cited for seven safety violations. The violations included conducting
interstate operations during a period when its registration was
suspended. A fine of $2,000 was assessed;
* The new company was ordered out-of-service by FMCSA in March 2009.
Case: 8;
State: Texas;
Details:
* FMCSA data indicate that the "new company" carrier had the same two
drivers as the "old company" carrier. The addresses were identical
except for the omission of "RD" in the street name;
* The old company had a compliance review in May 2008 and was cited for
twenty safety violations. The violations included knowingly allowing a
driver to operate a commercial motor vehicle before receiving a
negative controlled substance test;
* FMCSA ordered the old company out of service as "Unfit" in June 2008;
* The new company was started in June 2008, the same month the old
company was declared unfit;
* The new company, while operating without authority, was involved in a
fatal crash in August 2008 that killed seventeen people;
* FMCSA placed the new company out of service as an "Imminent Hazard"
the day after the accident;
* FMCSA has linked the old company out-of-service orders to the new
company;
* The new company is currently inactive as of May 2009.
Case: 9;
State:
California; Details:
* FMCSA data indicate that the "new company" carrier had the same phone
number, fax number, and company officer name as the "old company"
carrier;
* The old company had a compliance review done in May 2007 and was
cited for eighteen safety violations, including five critical
violations. The violations included using a driver who refused to
submit a controlled substance test, allowing a driver to operate a
commercial motor vehicle before receiving a negative drug test, and
conducting interstate operations without operating authority. A fine of
$2,200 was assessed for these violations;
* Over the course of 2007, the company corrected previous errors and
received a "satisfactory" compliance review in September 2007;
* FMCSA ordered the old company out of service in February 2008 for
failing to pay fines;
* In October 2007, the new company was formed;
* The new company was active as of May 2009.
Case: 10;
State: Texas;
Details:
* FMCSA data indicate that the "new company" carrier had the same
business address, two of the same drivers, and two of the same vehicles
as the "old company" carrier;
* The old company has a compliance review in September 2006 and was
cited for eight safety violations. FMCSA gave the old company a
conditional safety rating. The violations included failure to implement
a controlled substances testing program;
* The old company received another compliance review in October 2007
and was cited for nineteen safety violations. The violations included
using a driver before receiving a negative controlled substance test
and failing to maintain inquiries into the driver's driving record in
qualification files. A fine of $2,200 was assessed;
* In December 2007, old company was ordered out of service and ruled
unfit because it failed to improve its safety rating;
* The owner of the old company stated that the company went out of
business after his bus caught on fire. The owner also stated that his
daughter is the one who owns the new company and that he works as her
driver. The owner also stated that the new company is currently under a
repayment schedule to pay fines owed to DOT;
* The new company was active as of May 2009.
Source: GAO.
[End of table]
The following narratives provide detailed information on three of the
more egregious cases we examined.
Case 1: The owner of a Houston motor coach company registered a new
carrier with the same phone number, fax number, and cell phone number
as the old one. The new company started in March 2007, 8 months before
FMCSA ordered the old company out of service. The two companies appear
to have operated simultaneously for a period of time. Six days after
the new company was formed, a motor coach carrying 16 passengers
operated by the old company was stopped and inspected on the United
States-Mexico border at Laredo, Texas. The old company was charged with
five violations, including "Operating without required operating
authority." The old company owes $2,000 in fines. Our investigators
contacted one of the owner's daughters. She stated that her mother was
arrested for possessing drugs when she crossed the border from Mexico
into the United States, and that her mother subsequently opened another
bus company using another daughter's name. The daughter said she was
not involved with the bus company. In 2008, the new carrier's new
entrant registration was revoked and the owner was convicted of cocaine
possession.
Case 2: The owner of a New York motor coach company located at a church
registered a new carrier using the same fax number, driver, and vehicle
as the old one. FMCSA conducted a compliance review for the old company
on May 30, 2007. Five safety violations were identified, including one
"Acute" violation for "Failure to implement an alcohol and/or
controlled substances testing program." The old company, which was
ordered out of service in October 2007 for failing to pay a fine, still
has $2,000 in outstanding fines as of May 2009. On August 9, 2007,
approximately 2 months prior to FMCSA ordering the old company out of
service, a new carrier was established with the same company officer
name and fax number as the old carrier. The location of the old carrier
was a school, which was associated with (and located next door to) the
church. The owner of the new company claimed that the old company
belonged to his father, not him, and that it was a "completely
different business from his own." FMCSA records clearly show that this
is not the case. The new owner is listed as "Vice President" of the old
company, and "President" of the new company. The owner of the new
company is also cited as being present during the Compliance Review
conducted on May 30, 2007. The new company registered with FMCSA in
August 2007 and FMCSA has not conducted a new-entrant safety audit of
the new carrier as of July 2009, exceeding FMCSA's internal goal of 9
months.
Case 3: The owner of a Los Angeles motor coach company registered a new
carrier using the same social security number, business name, phone
number, fax number, and company officer as the old one. FMCSA conducted
a compliance review on the old company in December 2006, resulting in
an "Unsatisfactory" safety rating. The review cited 11 safety
violations, including one "Acute" violation for "Failure to implement
an alcohol and/or controlled substances testing program" and four
"Critical" violations for failure to maintain driver and vehicle
records. Since the old company did not take the necessary steps to fix
the violations within 45 days, it was ordered out of service in
February 2007. A month later a motor coach operated by the old company
was inspected in Douglas, Arizona. The company was charged with
operating a commercial motor vehicle after the effective date of an
"unsatisfactory" rating and fined $5,620.
The same owner started the new company in June 2008. FMCSA conducted a
compliance review on the new carrier and gave it a "satisfactory"
safety rating in October 2008. FMCSA officials stated that they were
not aware of any affiliation with the previous company. Our
investigators visited the place of business of the new carrier, which
was being run out of a retail store. Although the old carrier was out
of service, several brochures and business cards for the old carrier
were displayed on the store's counter, showing the same phone number as
the new company. We attempted to contact the owner, but the business
representative stated that the owner was currently in Mexico as the
driver on a bus tour and could not be contacted. A week after our
interview, unrelated to our investigation, FMCSA revoked the new
company's authority due to lack of insurance.
Tools FMCSA Uses to Identify Reincarnated Carriers and Their
Limitations:
Passenger Carrier Vetting Process:
Prior to the August 2008 crash in Sherman, Texas, FMCSA did not have a
dedicated process to identify and prevent motor coach carriers from
reincarnating. At that time, an out-of-service carrier could easily
apply online for a new DOT number and operating authority. In the
application, the owner could include the same business name, address,
phone number(s), and company officer(s) that already existed under the
out-of-service DOT carrier. FMCSA did not have a process to identify
these situations, and, thus, FMCSA would have granted the new entrant
operating authority upon submission of the appropriate registration
data.
Subsequent to the Sherman crash, FMCSA established the Passenger
Carrier Vetting Process (PCVP), which requires the review of each new
application for the potential of being a reincarnation.[Footnote 11]
Under this process, FMCSA executes a computer matching process to
compare information contained in the motor coach carrier's application
to data of poor-performing motor coach carriers dating back to 2003.
Specifically, it performs an exact match on the application with fields
in nine categories across various FMCSA databases.[Footnote 12] This
produces a list of suspect carriers and the number of matches in each
category, which serve as indicators for further investigation. FMCSA
officials stated that they have begun to enhance the computer-matching
portion of the PCVP process. Specifically, the system will also be able
to match fields that are close, but not necessarily exact matches of
each other. For instance, "John P. Smith Jr." would match "John Smith,"
and "Maple Ln." would match "Maple Lane." This enhancement should
improve its ability to detect those carriers attempting to disguise
their prior registration.
In addition to the computer matching, FMCSA Headquarters personnel
receive and review each new carrier application for completeness and
accuracy. It reviews the application for any red flags or evidence the
company is a potentially unsafe reincarnated motor coach carrier. For
example, the FMCSA staff check secretaries of state databases for the
articles of incorporation to identify undisclosed owners. If the
computer-matching process or FMCSA Division Office review identifies
any suspected motor coach carriers attempting to reincarnate, FMCSA
sends a Verification Inquiry letter to the applicant requesting
clarification. If the carrier does not respond to the Verification
Inquiry Letter within 20 days, the application will be dismissed. If
the response to the letter shows the applicant is attempting to
reincarnate, FMCSA issues a Show Cause Order stating that the
application for authority will be denied unless the carrier can present
evidence to the contrary. If the application is not completed, FMCSA
dismisses the application and thus no authority is given.[Footnote 13]
After the carrier is approved to operate, FMCSA requires all new
carriers, including motor coach carriers, to undergo a safety audit
within 18 months of approval. During this review, FMCSA should identify
whether the new motor coach company is a reincarnation of a prior
carrier. Although we did not specifically evaluate the effectiveness of
the new-entrant audit process, we found two cases where FMCSA did not
identify new motor coach carriers as reincarnations of companies it had
ordered out of service and after the PCVP went into effect. Because we
did not evaluate the effectiveness of the new-entry safety audit and
the PCVP, we do not know the extent to which reincarnated carriers are
still able to avoid FMCSA detection when registering to operate with
the agency.
Performance and Registration Information Systems Management (PRISM):
GAO recently reported[Footnote 14] that PRISM provides up-to-date
information on the safety status of the carrier responsible for the
safety of a commercial vehicle prior to issuing or renewing vehicle
registrations. PRISM generates a daily list of vehicles registered in
the state that are associated with carriers that have just been ordered
out of service by FMCSA. It is a tool that can be used by state
personnel. PRISM's innovation is that it is designed to associate
vehicle identification numbers with out-of-service carriers to prevent
the carrier from registering or reregistering its vehicles.
Although PRISM is a potential deterrent to a carrier wishing to
reincarnate, only 25 states have implemented the system to the extent
that they can automatically identify out-of-service carriers and then
deny, suspend, or revoke their vehicle registrations.[Footnote 15]
Another limitation to PRISM's effectiveness is that it only includes
vehicles that register under a protocol known as the International
Registration Plan (IRP)[Footnote 16]--which pertains only to carriers
involved in interstate commerce. Charter buses are exempt from IRP
(interstate) registration and thus not subject to PRISM.[Footnote 17]
Furthermore, vehicles are not checked at registration since companies
are not required to supply this information on their application to
FMCSA.
Legal Impediments to the Denial or Revocation of Reincarnated Carriers'
Operating Authority:
FMCSA's duty and authority to deny operating authority registration to
persons not meeting statutory requirements is provided by statute.
[Footnote 18] A person applying for registration must demonstrate that
he or she is willing and able to comply with the safety regulations,
other applicable regulations of the Secretary, and the safety fitness
requirements.[Footnote 19] Complexities regarding the application of
State laws on corporate successorship may, in certain instances, affect
the agency's ability to deny operating authority to or pursue
enforcement against unsafe reincarnated motor carriers under these
statutory provisions. The complexities include the legal standard that
must be met to hold a newly formed corporation liable for civil
penalties assessed against its corporate predecessor.
The facts necessary to satisfy the legal standard--whether under
federal or State law--require documentation outside the normal
compliance review processes. FMCSA uses a detailed Field Worksheet
which lists types of evidence that would be needed, including company
contact information, documentation on management and administrative
personnel, business assets, tax records, insurance, payroll, drivers,
vehicles, customer lists, advertising and promotional materials,
corporate charters, and information on the corporate acquisition or
merger at issue. This labor intensive investigative process is not
undertaken unless strong preliminary evidence indicates that the new
company is a reincarnation of a former motor carrier against which
enforcement was taken and that the reincarnation was for the purpose of
evading enforcement action or violation history of the predecessor
company.
In order to make it easier for FMCSA to place a reincarnated carrier
out of service, the Highways and Transit Subcommittee of the Committee
on Transportation and Infrastructure of the House of Representatives
approved legislation on June 24, 2009, that would impose a uniform
federal standard and would authorize FMCSA to deny or revoke operating
authority from a carrier who failed to disclose a relationship with a
prior carrier. The legislation would also authorize FMCSA, in certain
cases, to impose civil penalties against a reincarnated motor carrier
that were originally imposed against a related motor carrier.
Corrective Action Briefing:
We briefed U.S. Department of Transportation (DOT) officials on the
results of our investigation. They agreed that reincarnation of motor
coach carriers is an important concern but stated that there are
legitimate reasons for motor coach carriers to transfer ownership or
reincorporate, or both, such as divorce, death, relocation, or new
business opportunities. DOT officials stated that they established the
PCVP to identify and attempt to prevent reincarnated carriers from
receiving approval for operating authority. DOT officials stated that
the PCVP is also used for household goods carriers and that they hope
to use the process for other types of carriers if they obtain the
resources to support this process. However, DOT officials stated that
even if DOT has identified a carrier as a reincarnation, DOT must still
prove that the new carrier is the corporate successor to the old
carrier in order to deny or revoke the operating authority of the new
carrier. DOT officials stated that this standard differs between states
and that certain states require a very high standard of proof. As such,
this determination is labor-intensive and requires documentation
outside the normal compliance review process. DOT officials also
provided technical comments to the report, which we addressed, as
appropriate.
As agreed with your office, unless you announce the contents of this
report earlier, we will not distribute it until 3 days after its issue
date. At that time, we will send copies of this report to the Secretary
of Transportation and other interested parties. In addition, the report
will be available at no charge on GAO's Web site at [hyperlink,
http://www.gao.gov].
If you or your staff have any questions regarding this report, please
contact me at (202) 512-6722 or kutzg@gao.gov. Contact points for our
Offices of Congressional Relations and Public Affairs may be found on
the last page of this report. GAO staff who made key contributions to
this report are listed in appendix IV.
Signed by:
Gregory D. Kutz:
Managing Director:
Forensic Audits and Special Investigations:
[End of section]
Appendix I: Scope and Methodology:
To identify new entrants that were substantially related to motor
carriers ordered out of service, we obtained and analyzed information
from the following DOT databases: the Motor Carrier Management
Information System (MCMIS), the Licensing & Insurance (L&I) system, and
the Enforcement Management Information System (EMIS) as of December
2008. We identified new motor coach[Footnote 20] operators as those
that had a New Entrant Program entry date of October 1, 2006, or later.
We identified out-of-service motor carriers as those with an active,
nonrescinded out-of-service order in place and who had been ordered off
the road for reasons other than failure to make contact with DOT while
in the New Entrant Program. We matched the new entrant carriers with
those that were ordered out of service on the following key fields:
company name, owner/officer name, address, phone number, cell phone
number, fax number, vehicle identification number, and driver names.
For the motor coach carriers identified, we interviewed, if possible,
the owners to validate whether the company had reincarnated and, if
possible, determine the reason for the reincarnation.
Our analysis understates the actual number of reincarnated carriers
because the matching scheme used cannot detect even minor changes in
spelling, addresses, or owner names. In addition, the number is
understated because FMCSA only provided us data on vehicles and drivers
when an accident or inspection took place, and thus the provided FMCSA
data does not include the entire population of vehicles or drivers for
either new entrants or out-of-service carriers. Our analysis also could
not identify all reincarnated carriers where the owners purposely
provided FMCSA bogus or deceptive information on the application (e.g.,
ownership) to hide the reincarnation from FMCSA.
To determine the tools FMCSA uses to identify reincarnated carriers, we
interviewed FMSCA officials on the process that the agency uses to
attempt to identify potentially reincarnating carriers. We also
obtained and examined policies and other FMCSA documentation to obtain
an understanding of the design of its motor carrier enrollment process.
We did not perform any tests of the controls and therefore cannot make
conclusions on its effectiveness.
Data Reliability:
To determine the reliability of DOT's databases, we reviewed the system
documentation and performed testing on the validity of the data. We
performed electronic testing of the data including verifying the
completeness of the carrier data against numbers published by DOT. We
discussed the sources of the different data types with DOT officials
and discussed their ongoing quality-control initiatives. Based on our
review of agency documents and our own testing, we concluded that the
data elements used for this report were sufficiently reliable for our
purposes.
We conducted the work for this investigation from November 2008 through
July 2009 in accordance with quality standards for investigations as
set forth by the Council of the Inspectors General on Integrity and
Efficiency.
[End of section]
Appendix II: Reincarnated Motor Coach Carriers:
In the body of the report, we provide detailed information on 10
reincarnated carriers. Table 2 below provides detailed information on
the other 10 motor coach carriers that we investigated and determined
were potential reincarnations. The cases were primarily identified by
two or more exact matches of FMCSA data for new entrants and for out-
of-service carriers in the following categories: company name, owner/
officer name, address, phone number, cell phone number, fax number,
vehicle identification number, and driver names.
Table 2: Summary Information on Potentially Reincarnated Motor Coach
Carriers:
Case: 11;
State: California;
Details:
* FMCSA data indicate that the "new company" carrier had the same
corporate name and address as the "old company" carrier. The president
of the new company had the same name as the owner of the old company,
except for the omission of a first and last name;
* The old company received was inspected in April 2006 and was cited
for operating a commercial motor vehicle without a driver's license;
* FMCSA ordered the old company to cease interstate operations in
August 2006 for failure to pay a fine;
* The old company was removed from the New Entrant program in May 2007
for failure to appear for a scheduled safety audit;
* The new company started in August 2008;
* The new company had a compliance review in May 2009 and was cited for
nineteen safety violations. The violations included using a driver
before receiving a negative controlled substance test, failing to
implement a random controlled substance and alcohol testing program,
and conducting operations without operating authority. A fine of $1,980
was assessed;
* As of July 2009, the new company does not have operating authority.
Case: 12;
State: Texas;
Details:
* FMCSA data indicate that the "new company" carrier had the same
company name, three of the same drivers, and one of the same vehicles
as the "old company" carrier. In addition, the addresses of the
companies indicated that they were next door to each other;
* FMCSA conducted a compliance review of the old company in September
2006 and cited four safety violations, including one acute violation.
The violations included failing to implement a random controlled
substance and alcohol testing program. A fine of $2,000 was assessed;
* In February 2007, FMCSA ordered the old company to cease operations
for failure to pay the above fine;
* The new company began in January 2008, but it is currently inactive.
Case: 13;
State: Texas;
Details:
* FMCSA data indicate that the "new company" carrier had the two of the
same drivers and three of the same vehicles as the "old company"
carrier. The addresses were identical except for "East" being changed
to "E" in the street name. The company officer names for both the old
and the new company shared the same last name;
* Inspectors examined a bus operated by the old company in October 2006
as it prepared to ferry passengers from Mexico to the US and determined
its condition was likely to cause an accident or a breakdown of the
vehicle. The company was subsequently fined $850;
* FMCSA revoked the old company's operating authority in January 2007;
* Two months later, in March 2007, the old company was discovered
illegally ferrying 33 passengers from Mexico into the US. FMCSA
subsequently fined the firm $2,380. The same month inspectors caught
the old company, the new one was opened;
* FMCSA ordered the old company to cease all operations in September
2007 for failure to pay the above fines;
* The new company had a compliance review done in September 2008 and
was cited for seven violations of carrier safety rules, including
failure to implement a random controlled substance and alcohol testing
program. A fine of $2,000 was assessed;
* The new company was ordered out-of-service in June 2009 for failing
to pay the above fine.
Case: 14;
State: Arizona;
Details:
* FMCSA data indicate that the "new company" carrier had the same
mailing address and telephone number as the "old company" carrier. The
company officer names are identical, except for the omission of the
middle initial. The company names are almost the same. Following the
name, "Tours" was replaced with "and associates";
* The old company had a compliance review in October 2006 and was cited
for ten safety violations. The violations included failing to maintain
proper proof of financial responsibility and operating a for-hire
carrier service without proper operating authorities. A fine of $3,260
was assessed;
* The old company had another compliance review in January 2007 and was
cited for five safety violations. The violations including failing to
maintain driver qualification files for each driver employed. A fine of
$2,000 was assessed;
* The old company was placed out-of-service for failure to pay fines in
April 2007;
* In June 2007, an enforcement action was taken against the old company
for conducting interstate operations while being subject to an out-of-
service order. A fine of $5,520 was assessed;
* The new company started in September 2007;
* The new company was put out of service in March 2008 after being
rejected from the New Entrant Program due to no contact;
* The new company is currently inactive as of May 2009.
Case: 15; State:
New York;
Details:
* FMCSA data indicate that the "new company" carrier had the same
address and company officer name as the "old company" carrier;
* FMCSA placed the old company out of service after being revoked from
the New Entrant Program due to a no-show safety audit;
* The new company left the New Entrant Program due to inactivation;
* The new company is currently inactive.
Case: 16;
State: Washington;
Details:
* FMCSA data indicate that the "new company" carrier had the same phone
number as the "old company" carrier. The addresses were identical
except "N First ST" was changed to "North 1ST" in the street name;
* The old company had a compliance review conducted in November 2004
that resulted in an "Unsatisfactory" rating. Sixteen safety violations
were identified, including five critical violations for improper
controlled substance testing procedures and using a driver before
receiving a negative controlled substances test;
* A fine of $1,990 was assessed as a result of these violations. In
April 2005, the carrier was placed out of service for failure to pay
the fine;
* When the carrier was ordered out of service, FMCSA staff requested
that the carrier's file be flagged "to prevent possible reinstatement
until full payment of their civil penalty is received";
* The new company started the New Entrant program in December 2006 and
operated for five months until leaving the program because they had
become inactive.
Case: 17;
State: Georgia;
Details:
* FMCSA data indicate that the "new company" carrier had the same phone
number as the "old company" carrier. One of the company officer names
is identical, except for the addition of the suffix "JR". The addresses
were identical except "RD" was changed to "ROAD" in the street name;
* The old company had a compliance review done in November 2006 and was
cited for eight safety violations. The violations included failing to
implement a random controlled substances and alcohol testing program. A
fine of $2,000 was assessed;
* The old company was subject to an out of service order in July 2007
for failure to pay the above fine;
* The new company started the same month the old one was put out of
service, but it was removed from the New Entrant Program in November
2007 due to no contact;
* The new company is currently inactive.
Case: 18;
State: California;
Details:
* FMCSA data indicate that the "new company" carrier had the same phone
number and fax number as the "old company" carrier;
* The owner of the old company told our investigators that she sold the
company to one of her drivers. This driver is now listed as the owner
of the new company;
* In addition, the owner of the old company now works as an assistant
to the owner of the new company, her former driver;
* The old company received a compliance review in December 2006 and was
cited for thirteen safety violations. The violations include one acute
violation for failing to implement a random controlled substance and
alcohol testing program. A fine of $2,000 was assessed;
* The old company was placed out of service by FMCSA in May 2007 for
failure to pay the above fine;
* The new company started in July 2008 and received a "satisfactory"
compliance review in October 2008;
* The new company was active as of June 2009.
Case: 19;
State: California;
Details:
* FMCSA data indicate that the "new company" carrier had five of the
same drivers and six of the same vehicles as the "old company" carrier;
* From June 2000 to June 2008, FMCSA cited the old company for seventy-
eight safety violations. It was fined $1,220 for allowing a driver to
operate a commercial vehicle without a valid federal license or permit;
* The old company was ordered out of service in January 2008;
* The owner of the new company did not respond to repeated phone calls
by our investigators;
* The new company had a "Conditional" safety rating in June 2008;
* The new company is currently inactive.
Case: 20;
State: North Carolina;
Details:
* FMCSA data indicate that the "new company" carrier had the same phone
number as the "old company" carrier. The addresses also were identical
except that "LANE" was changed to "LN" in the street name;
* The old company was reincarnated from a carrier that was ordered out
of service in 2003;
* The old company underwent a compliance review in August 2006 and
received an unsatisfactory safety rating;
* The old company received two fines totaling $19,500. The fines were
not paid;
* The new company had a "Conditional" safety rating in December 2007
and was placed out-of-service in April 2008.
Source: GAO.
[End of table]
[End of section]
Appendix III: Summary of Reincarnated Motor Coach Carriers:
As stated earlier, we identified 20 new entrants that were
substantially related to motor carriers ordered out of service. We
identified these new entrant carriers by matching them with those that
were ordered out of service on the following key fields: company name,
owner/officer name, address, phone number, cell phone number, fax
number, vehicle identification number, and driver names. Table 3 below
provides the fields that were matched between the new entrant and the
carrier that was ordered out of service.
Table 3: Match Results on Key Identifying Fields for Potentially
Reincarnated Carriers:
Case: 1;
SSN/EIN: [Empty];
Company name: [Empty];
Officer names: [Empty];
Address: [Empty];
Phones: [Check];
Fax: [Check];
Cell: [Check];
Drivers: [Check];
Vehicles: [Empty].
Case: 2;
SSN/EIN: [Empty];
Company name: [Empty];
Officer names: [Check];
Address: [Empty];
Phones: [Empty];
Fax: [Check];
Cell: [Empty];
Drivers: [Check];
Vehicles: [Check].
Case: 3;
SSN/EIN: [Check];
Company name: [Check];
Officer names: [Check];
Address: [Empty];
Phones: [Check];
Fax: [Empty];
Cell: [Empty];
Drivers: [Empty];
Vehicles: [Empty].
Case: 4;
SSN/EIN: [Empty];
Company name: [Check];
Officer names: [Check];
Address: [Check];
Phones: [Check];
Fax: [Empty];
Cell: [Empty];
Drivers: [Check];
Vehicles: [Check].
Case: 5;
SSN/EIN: [Empty];
Company name: [Empty];
Officer names: [Check];
Address: [Check];
Phones: [Check];
Fax: [Check];
Cell: [Empty];
Drivers: [Check];
Vehicles: [Check].
Case: 6;
SSN/EIN: [Empty];
Company name: [Check];
Officer names: [Check];
Address: [Empty];
Phones: [Check];
Fax: [Empty];
Cell: [Check];
Drivers: [Check];
Vehicles: [Check].
Case: 7;
SSN/EIN: [Empty];
Company name: [Empty];
Officer names: [Check];
Address: [Check];
Phones: [Check];
Fax: [Check];
Cell: [Empty];
Drivers: [Empty];
Vehicles: [Empty].
Case: 8;
SSN/EIN: [Empty];
Company name: [Empty];
Officer names: [Empty];
Address: [Check];
Phones: [Empty];
Fax: [Empty];
Cell: [Empty];
Drivers: [Check];
Vehicles: [Empty].
Case: 9;
SSN/EIN: [Empty];
Company name: [Empty];
Officer names: [Check];
Address: [Check];
Phones: [Check];
Fax: [Check];
Cell: [Empty];
Drivers: [Empty];
Vehicles: [Check].
Case: 10;
SSN/EIN: [Empty];
Company name: [Empty];
Officer names: [Empty];
Address: [Check];
Phones: [Empty];
Fax: [Empty];
Cell: [Empty];
Drivers: [Check];
Vehicles: [Check].
Case: 11;
SSN/EIN: [Empty];
Company name: [Check];
Officer names: [Check];
Address: [Check];
Phones: [Empty];
Fax: [Empty];
Cell: [Empty];
Drivers: [Empty];
Vehicles: [Empty].
Case: 12;
SSN/EIN: [Empty];
Company name: [Check];
Officer names: [Check];
Address: [Check];
Phones: [Empty];
Fax: [Empty];
Cell: [Empty];
Drivers: [Check];
Vehicles: [Check].
Case: 13;
SSN/EIN: [Empty];
Company name: [Empty];
Officer names: [Empty];
Address: [Check];
Phones: [Empty];
Fax: [Empty];
Cell: [Empty];
Drivers: [Check];
Vehicles: [Check].
Case: 14;
SSN/EIN: [Empty];
Company name: [Check];
Officer names: [Check];
Address: [Check];
Phones: [Check];
Fax: [Empty];
Cell: [Empty];
Drivers: [Empty];
Vehicles: [Empty].
Case: 15;
SSN/EIN: [Empty];
Company name: [Empty];
Officer names: [Check];
Address: [Check];
Phones: [Empty];
Fax: [Empty];
Cell: [Empty];
Drivers: [Empty];
Vehicles: [Empty].
Case: 16;
SSN/EIN: [Empty];
Company name: [Empty];
Officer names: [Empty];
Address: [Check];
Phones: [Check];
Fax: [Empty];
Cell: [Empty];
Drivers: [Empty];
Vehicles: [Empty].
Case: 17;
SSN/EIN: [Empty];
Company name: [Empty];
Officer names: [Check];
Address: [Check];
Phones: [Check];
Fax: [Empty];
Cell: [Empty];
Drivers: [Empty];
Vehicles: [Empty].
Case: 18;
SSN/EIN: [Empty];
Company name: [Empty];
Officer names: [Empty];
Address: [Empty];
Phones: [Check];
Fax: [Check];
Cell: [Empty];
Drivers: [Empty];
Vehicles: [Empty].
Case: 19;
SSN/EIN: [Empty];
Company name: [Empty];
Officer names: [Empty];
Address: [Empty];
Phones: [Empty];
Fax: [Empty];
Cell: [Empty];
Drivers: [Check];
Vehicles: [Check].
Case: 20;
SSN/EIN: [Empty];
Company name: [Empty];
Officer names: [Empty];
Address: [Check];
Phones: [Check];
Fax: [Empty];
Cell: [Empty];
Drivers: [Empty];
Vehicles: [Empty].
[End of table]
Source: GAO.
Note: "Check" indicates the data elements that matched.
[End of section]
Appendix IV: GAO Contact and Staff Acknowledgments:
GAO Contact:
Gregory D. Kutz, (202) 512-6722 or kutzg@gao.gov:
Staff Acknowledgments:
GAO staff who made major contributions to this report include Matthew
Valenta, Assistant Director; John Ahern; Donald Brown; John Cooney;
Paul Desaulniers; Eric Eskew; Timothy Hurley; Steve Martin; Vicki
McClure; Sandra Moore; Andrew O'Connell; Anthony Paras; Philip Reiff;
and Ramon Rodriguez.
[End of section]
Footnotes:
[1] Crashes involving motor coach carriers may result from errors by
bus or passenger-vehicle drivers; vehicle condition; and other factors.
[2] GAO recently issued another report that looked at FMCSA use of
commercial vehicle registrations to identify and prevent the
registrations of vehicles of reincarnating carriers, which includes
motor coach companies. See GAO, Motor Carrier Safety: Commercial
Vehicle Registration Program Has Kept Unsafe Carriers from Operating,
but Effectiveness Is Difficult to Measure, [hyperlink,
http://www.gao.gov/products/GAO-09-495] (Washington, D.C.: May 12,
2009).
[3] FMCSA and state law enforcement agency capabilities are dwarfed by
the size of the industry and, as a result, are only able to conduct
compliance reviews on about 2 percent of carriers--about 18,400 in
fiscal year 2008. Safety audits are required for all new entrants to
the trucking industry; approximately 37,400 safety audits were
conducted in fiscal year 2008. In addition to compliance reviews and
safety audits, FMCSA and state law enforcement agencies conduct about
2.3 million vehicle inspections each year at weigh stations and other
locations to assess the safety compliance of individual vehicles.
[4] Safety audits and compliance reviews also provide education and
outreach opportunities for motor coach carriers and drivers on safety.
[5] The DOT number serves as a unique identifier when collecting and
monitoring a carrier's safety information acquired during audits,
compliance reviews, crash investigations, and inspections. Companies
that operate commercial vehicles transporting passengers in interstate
commerce must be registered with FMCSA and must have a DOT number.
[6] For the 20 cases we identified, 13 were granted operating authority
by FMCSA.
[7] For carrier types other than motor coach, such as commercial
trucking, our analysis identified 1,073 potentially reincarnated
companies for the same 2 fiscal years. Of these, at least 500 are still
active as of June 2009. We referred the active carriers to FMCSA for
further investigation.
[8] This number includes carriers ordered out of service for reasons
other than failure to make contact with DOT while they are in the New
Entrant program.
[9] According to FMCSA, there were approximately 4,000 motor coach
carriers that were operating during fiscal year 2008.
[10] FMCSA officials stated that they have an internal policy of
conducting safety audits of motor coach new entrants within 9 months
and claim that they currently conduct these audits within 5 months.
[11] According to DOT officials, FMCSA began to use PCVP for screening
applications of household goods carriers in April 2009.
[12] The nine categories are authorities actions, compliance reviews,
enforcement actions, accidents and violations, names, phone numbers,
addresses, e-mails, and insurance information.
[13] According to DOT officials, since the PCVP has been implemented,
about 900 passenger carrier applications have been received. They also
stated that over 100 applications have been dismissed or withdrawn and
1 was issued a show cause order.
[14] [hyperlink, http://www.gao.gov/products/GAO-09-495].
[15] According to FMCSA officials, in addition to the 25 states, 4
other states suspend and revoke vehicle registrations for out-of-
service carriers using PRISM; however, they do so on a case-by-case
basis when requested by FMCSA and do not have the capability to check
the safety status at the time vehicle registration renewals are
requested in order to deny them. These 4 states also do not report any
suspension or revocation information to FMCSA. Additionally, there are
2 other states that deny, suspend, and revoke vehicle registrations of
out-of-service carriers, but these states do so when requested by
FMCSA, not through the regular structure of the PRISM program. As such,
we did not include these 6 states in our count.
[16] IRP is used to register commercial motor vehicles with a gross
vehicle weight of over 26,000 pounds that travel between two or more
states or Canadian provinces. The protocol is followed to ensure an
equitable distribution of registration fees, which is based on vehicle
miles traveled in each state or Canadian province. All states (except
Alaska and Hawaii) are members of IRP.
[17] Charter buses provide service to groups traveling together to a
specified location or for a particular itinerary.
[18] See 49 U.S.C. § 13902.
[19] The safety fitness requirements are provided in 49 U.SC. 31144.
Additional authority to suspend, amend or revoke registration is
provided in a separate statutory provision. See 49 U.S.C. 13905.
[20] We used the definition of a motor coach carrier provided to us by
FMCSA. Motor coach carriers are those carriers in the Licensing &
Insurance (L&I) database that have "active" passenger authority and $5
million in insurance, or have an "active" Motor Carrier Management
Information System (MCMIS) status and are listed as Private Motor
Carriers of Passengers.
[End of section]
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