It happened in 2017 at the Scuttlebutt Family Pub down by the docks in Everett, Wash., just steps from where OceanGate was building a new kind of undersea craft. The low-cost submersible was to be so large and strong that it could take five people down miles to see the Titanic up close.
At the pub, Stockton Rush, the company’s chief executive, was having lunch with a new employee who had raised questions about the dives’ skirting rules meant to improve safety at sea.
Mr. Rush bristled. If regulatory scrutiny came up, he “would buy a congressman” and make the problems “go away,” the former employee, Matthew McCoy, testified at a federal hearing on Sept. 27. It was the last day of a Coast Guard inquiry into the loss of the Titan submersible, which imploded last year, killing five people, including Mr. Rush.
“Is that a direct quote?” Jason Neubauer, the chair of the federal investigation, asked.
Yes, Mr. McCoy replied. “That will stand in my mind for the rest of time,” he said. “I’ve never had anybody say that to me directly, and I was aghast.”
The next day, Mr. McCoy said, he resigned.
Marine experts who analyzed Mr. McCoy’s testimony praised it as casting new light on the roots of the Titan disaster, and possibly aiding lawsuits and other legal actions against OceanGate. The company says it has suspended its commercial operations.
During the hearing, OceanGate’s lawyers asked Mr. McCoy a few minor questions, such as confirming the dates of his employment, but did not address the legal and regulatory issues his testimony raised.
“He saw through the game,” said William Kohnen, an engineer who chairs the Submarine Committee of the Marine Technology Society, an industry group. OceanGate’s lack of rigor and integrity, he added, amounted to “technical malfeasance.”
Ole Varmer, a retired maritime lawyer for the National Oceanic and Atmospheric Administration, said Mr. McCoy’s testimony could have repercussions for private and public litigation.
“They’re creating a legal record that will help anybody who wants to go after OceanGate,” he said of the hearing’s officials, one of whom was from the National Transportation Safety Board. Mr. Varmer added that he “wouldn’t be surprised” if the Coast Guard, after completing its probe, “makes a referral to the Department of Justice to consider violations of U.S. civil and criminal law.”
In August, the family of Paul-Henri Nargeolet, one of the five victims, filed a $50 million lawsuit against OceanGate. It said Mr. Rush had “concealed dangers” that killed his customers, who had paid up to $250,000 to visit the Titanic.
During the hearing, some OceanGate customers and workers challenged the idea that Mr. Rush had concealed any dangers.
“I knew the risk that I was taking, and still decided to go,” Renata Rojas, an experienced scuba diver who traveled in the Titan in 2022 to see the Titanic, testified on an earlier day of the hearing.
Mr. McCoy started his OceanGate job in April 2017, bringing engineering and vessel support skills he had acquired in the Coast Guard from 2002 to 2015. In Hawaii, he had applied maritime rules and regulations as a boarding officer, a specialized type of law enforcement.
At OceanGate, Mr. McCoy worked in vessel operations. The company bought and built submersibles, but its main business at that time was using larger vessels called mother ships to launch and recover small subs for tourist dives. His job was thus central to aiding and ensuring the safety of OceanGate’s personnel and customers. In years past, the company had taken people on shallow dives around Catalina Island, off Los Angeles, and at Alcatraz Island in San Francisco Bay.
Under oath, Mr. McCoy testified that he slowly grew alarmed as OceanGate, then building the Titan submersible, cut corners that lowered costs, safety and compliance with federal standards. The first alarm went off, he said, when he learned that the company had cut its ties with the Applied Physics Lab at the University of Washington. The U.S. Navy founded the prestigious lab in World War II to improve its torpedoes and submarines.
Mr. McCoy’s concerns grew as he learned that OceanGate was starting to classify paying customers for its submersible dives as “mission specialists.” In theory, that changed the legal framework under which the company operated from commerce and tourism to science and deep sea exploration, which the Coast Guard regulated less rigorously.
His alarm peaked at the pub when Mr. Rush declared that Titan would be flagged in the Bahamas and launched from Canada to avoid U.S. jurisdiction. Mr. McCoy countered that regulatory issues might still arise if the submersible ever touched a U.S. port.
At the hearing, Mr. McCoy said that after Mr. Rush spoke of buying a congressman, the conversation “became intense.” He testified that he gave notice the next day, telling his supervisor that he could no longer work for OceanGate given “my concerns for the legality of how it was operating.”
His job lasted four months, ending in September 2017.
Mr. Rush’s troubles with a different former employee, David Lochridge, who had directed the company’s marine operations, resulted in a clash that yielded a transcript of an exchange between the two men that the Coast Guard posted on its hearing website.
The transcript — dated Jan. 19, 2018, four months after Mr. McCoy resigned — quoted Mr. Rush as praising OceanGate employees who were important to the company’s success, in contrast with an unnamed person he characterized as “idiot face” and further described, using a Yiddish term of contempt, as the “Coast Guard schmuck.”
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