On Jan. 1, the Federal Motor Carrier Safety Administration will be 10 years old.

Its annual budget tops $500 million annually.

It employs more than 1,000 people.

In fiscal 2007 and 2008, it ordered roughly 220 motorcoach companies out of service and levied hefty fines against many of them.

Yet, despite the more than $1 billion the agency received doing those two years and the 1,000+ employees, the agency was unable to keep many of those rogue companies from reincarnating or morphing into "new" companies, evading the out-of-service orders and fines, rolling back onto U.S. highways, and engaging in the same old unsafe and schlocky business practices.

In other words, during the decade the FMCSA has been in business it has failed to develop the registration or enforcement policies necessary to ferret out fly-by-night operators and keep them off the road - even though the universe of companies it needed to keep tabs on was barely more than 100 a year.

That, essentially, is the bottom-line takeaway from a new report by the U.S. General Accountability Office, the investigative arm of Congress.

Investigators for the GAO launched their probe of FMCSA efforts to corral reincarnating coach operators in response to a request by three members of the U.S House, including the chairman of the House Committee on Transportation and Infrastructure, James Oberstar, D-Minn., and the chairman of the House Subcommittee on Highways and Transit, Peter DeFazio, D-Ore.

The third member requesting the study was Eddie Bernice Johnson, D-Texas.

Beginning in November, the GAO spent nine months trying to determine how many "new" companies registered by the FMCSA in fiscal 2007 and 2008 were for all intents and purposes the same operators the agency previously had ordered out of service.

The GAO also examined what tools and methods the FMCSA uses to identify reincarnated operators and deal with them.

Industry hallelujah

While the investigation was requested by the three members of Congress, the motorcoach industry was excited to - finally -- see it happen. For much of the past decade, the industry has urged the FMCSA, both privately and publicly, to crackdown on rogue operators that are put out of service one day and reappear the next day as a "new" company.

FMCSA administrators from time to time have acknowledged the problem but, as the GAO report notes, really had not addressed the issue head on until last year.

What prompted the congressional inquiry, as well as action by the FMCSA, was an August 2008, bus crash in Sherman, Texas, that killed 17 people and injured 15 more.

The company operating the bus, it subsequently was learned, was the reincarnation of a coach company that had been ordered out of service two months earlier by the FMCSA.

For its investigation, the GAO took a look at the 220 companies the FMCSA ordered out of service in fiscal 2007 and 2008. Using a fairly simple and unsophisticated analysis process, the GAO identified 20 companies that likely reincarnated from operators ordered out of service.

Tip of the iceberg

But, as the GAO investigators readily admitted, their number of reincarnations was likely understated because its analysis was based on "exact matches" of data it analyzed.

Any unscrupulous person who purposely provided the FMCSA with deceptive information on their registration application -- to hide their reincarnation -- was not discovered by the GAO.

So, a rogue owner who was ordered out of service early last year and filed a new application using his brother-in-laws name and address was largely home free and wouldnt have been found out by the GAO investigators.

It does not seem too far-fetched to conclude that someone bent on evading an out-of-service order and morphing into a new company might be inclined to provide the FMCSA with "deceptive" information, running up the number of reincarnations, possibly substantially.

FMCSA officials maintained in their comments to GAO investigators that, until last summer, reincarnation was relatively simple to do and hard to detect. Following the crash in Sherman, the FMCSA established what it calls the Passenger Carrier Vetting Process, known in the agency as PCVP, which requires the review of each new application for the potential of being a reincarnation.

Under the system, the FMCSA conducts a computer-matching process to compare information in a new motorcoach operators application to data on poor-performing operators going back to 2003.

System shortcomings

However, the initial version of PCVP had the same shortcomings as the GAO analysis. It could only identify exact matches. So, if a miscreant named John W. Smith submitted an application for a new company and failed to include his middle initial on the form, the system wouldnt flag Mr. Smith as a possible reincarnation.

Now, the FMCSA has upgraded the system so PCVP can flag matches that are close but not necessarily exact. So, John W. Smith would match John Smith.

However, it still wouldnt catch Fred Jones, Mr. Smiths unsavory brother in law who was doing his sisters husband a favor by allowing his name to be put on a registration application.

But maybe Mr. Smith would slip up and use his old phone number, instead of the new cell phone number he planned to put on the application, and get caught.

The GAO probe found there are other impediments to putting and keeping reincarnated companies out of business.

"Complexities regarding the application of state laws on corporate successorship may, in certain instances, affect the agencys ability to deny operating authority to or pursue enforcement against unsafe reincarnated motor carriers under these statutory provisions," said the GAO report.

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.

Lots 'o work

FMCSA officials told the GAO investigators that the facts necessary to satisfy legal standards whether under state or federal laws require documentation outside the normal compliance review process.

And because putting this documentation together is labor intensive, the FMCSA doesnt even attempt it unless it has "strong preliminary evidence" indicating that a new company is a reincarnation of a former operator which has had enforcement action taken against it and the reincarnation is for the purpose of evading previous enforcement actions.

In June, the House passed legislation that included provisions designed to make it easier for the FMCSA to place a reincarnated operator out of business.

The new law would impose a uniform federal standard and would authorize FMCSA to deny or revoke operating authority from a carrier that failed to disclose a relationship with a prior carrier.

According to FMCSA data, 5 of the 20 reincarnated coach companies identified by the GAO were still operating as recently as this past May. The GAO did not indicate, however, whether this was because of bugs in the PCVP system, legal obstacles, or other hurdles or foul-ups.

The bad actors

The 20 companies noted in the GAO report were from nine states - Arizona, Arkansas, California, Georgia, Maryland, North Carolina, Texas, New York and Washington. The violators owed tens of thousands of dollars in delinquent fines and had scores of violations, ranging from operating without the proper license to failing to test drivers for illegal drugs and alcohol.

Another 1,073 commercial trucking firms are also believed to be possible reincarnations after incurring fines and violations, often using the same address, owner name, employees and contact numbers.

Responding to the report, the FMCSA noted it had taken steps to identify reincarnated companies and keep them off the road.

"The Federal Motor Carrier Safety Administration recognizes the need for increased oversight of the motor carrier application process," said agency spokesman Duane Debruyne.

"The agency has already made changes to the application process that makes it more difficult for unsafe reincarnated operators to obtain new authority.

"The agency is also working to reduce even further the time needed to conduct the initial safety audit of motorcoach entrants. Federal law requires new carriers to undergo a new-entrant safety audit within 18 months of when the company begins to operate.

"The FMCSA has an internal policy of conducting safety audits within nine months and most often completes them within five months," Debruyne said.