Friday, September 21, 2001

Remember 9-11-01

Isle airport security
firm at heart of
national debate

Mainland parent of International
Total Services has been fined
millions by the FAA

The company filed for bankruptcy last week
and is now suing its former chairman

By Tim Ruel

A mainland firm hired to manage airline security checkpoints in Hawaii has problems that strike at the heart of the debate over security at the nation's airports.

International Total Services Inc., based in Independence, Ohio, Wednesday sued its minority owner and former chairman Robert A. Weitzel, claiming that Weitzel caused the firm to file corporate bankruptcy last week.

Financial trouble isn't the only problem for the firm. One former employee of International Total Services, who spoke to the Star-Bulletin on condition of anonymity, says the company had security practices that were so lax that its checkpoints routinely allowed dangerous material to remain undetected at Honolulu Airport during company tests.

For example, in nine trials, fake hand grenades were taped to wheelchairs that were to pass through checkpoints at the airport. In seven cases, the grenade-strapped wheelchair passed through without detection, the employee said. In one of the two cases in which the grenade was found, the grenade had fallen from the tape on its own.

International Total Services did not respond to a request for comment.

Largely because of security concerns at U.S. airports, Congress is considering whether to take over airport security and establish it under a government umbrella, a move that has drawn the support of several experts interviewed by the Star-Bulletin.

Questions are being raised about International Total Security and other firms that handle security at the nation's airports, in light of last week's terrorist attacks.

Enforcing a proper standard of security at the nation's airports is not only a weapon in the nation's new war against terrorism; it is critical to getting Hawaii's chief industry, tourism, back on its feet, experts say.

"You've got to be safe. You've got to tell people it's safe," said state Sen. Cal Kawamoto, chairman of the Transportation, Military Affairs and Government Operations Committee. Kawamoto said he would talk to the state Department of Transportation, which oversees the Honolulu airport.

International Total Services was fined $35,000 by the Federal Aviation Administration for allowing a person without a ticket into the international passenger terminal at Honolulu International Airport on Saturday, four days after the deadly terrorist attacks. The FAA has issued new standards for security at airports, but enforcement is largely up to the individual airlines.

There have been so many new complaints of uneven security at airports that the FAA yesterday began asking visitors to its Web site,, to offer their own suggestions on how to improve aviation.

Between March 31, 2000, and March 31 of this year, International Total Services paid a total of $1.85 million in fines to the FAA and for damages to aircraft, according to the firm's annual report filed with the Securities and Exchange Commission. In the previous year, the firm paid $1.76 million. It is unclear whether the fines were for violations of security procedures.

The company screens passengers at more than 100 airports in 34 states, including Honolulu airport and the Keahole Airport in Kona on the Big Island.

Like most airport security firms, International Total Services is hired directly by the airlines, and its largest customers are Delta Air Lines, Continental Airlines and Trans World Airlines. In Hawaii, the firm has contracts with the nonprofit Airlines Committee of Hawaii Inc., a consortium of airlines that serve Hawaii that was incorporated in 1988. A spokesman for the committee did not return calls seeking comment.

Earlier this year, International Total Services lost a $7.4 million contract at the Dallas/Fort Worth airport. Because of the termination, the firm reported its second quarter revenue dropped to $44.7 million from $49.8 million in the year earlier.

Last week, International Total Services filed for Chapter 11 reorganization bankruptcy in New York, seeking protection from its creditors. The firm has $30.2 million in assets and $48.2 million in debts, including a $25 million line of credit provided by Bank One NA and Provident Bank, the company's two secured creditors.

International Total Services sold its stock publicly in 1997 at $11.25 a share. Using the proceeds of $31.8 million, the company bought several subsidiaries that later turned out to be bad investments, the company said in a bankruptcy filing.

In September 1999, the Nasdaq dropped the firm's stock from its exchange because International Total Services failed to file its annual report on time.

In the lawsuit filed Wednesday, International Total Services claims its former chairman Weitzel caused the company to file bankruptcy, in part by breaking his agreement not to compete with the firm after he was forced to resign in 1999. At the time, independent auditors found that Weitzel had mismanaged the firm and manipulated its financial statements to his benefit, according to a statement from International Total Services.

Weitzel also made it difficult for the firm's new management team to raise capital, the company said. A hearing in the bankruptcy case is scheduled for Monday. While the firm says that the bankruptcy is not affecting its business operations, the company owes money to its employees and needs approval to pay them.

International Total Services also blames its financial woes on rising costs of labor, driven by its annual turnover rate of nearly 100 percent. International Total Services has a total of about 12,000 employees.

International Total Services pays its guards little more than the minimum wage, which also explains why the company has security problems, one former employee of the company told the Star-Bulletin on condition of anonymity. Many of the firm's Hawaii employees are recent immigrants who speak little English and receive a two-day session of training, the employee said.

High turnover has been a major problem with security at America's airports since 1989, said Jeremy R. Spindlove, a former security manager with British Airways in the United Kingdom. "They need to address it," said Spindlove, co-author of the 1999 book "Terrorism Today: The Past, the Players, the Future."

Spindlove said he does not blame the employees. Rather, he blames the airlines for the practice of hiring the cheapest security firms through the lowest-bid process.

The security business is highly competitive, and low profit margins force the security firms to cut costs where they can. "It's a recipe for disaster," said James H. Clark, a security expert at Alderson Clark Ltd. in Ohio.

In 1997, 81-year-old Waipahu resident Mary Lou Rosacia was injured in an incident at a checkpoint managed by International Total Services at Honolulu Airport, according to a lawsuit filed by Rosacia in 1999.

In the suit, Rosacia said her walking cane set off the alarm on the metal detector at the checkpoint.

A security employee allegedly took the cane and told Rosacia to walk back through the detector. Rosacia fell and later sued, claiming International Total Services breached its duty and failed to provide reasonable care. The firm denied the claims, saying that Rosacia took her own risks and had been recently told by a doctor to take it easy on her knees. The suit was settled last year.

While International Total Services has a number of unique legal troubles, its financial difficulties and the use of low-paid workers are a common problem throughout the air travel security industry.

Some 18,000 airport security officers work in the United States, earning $5.25 to $6.75 an hour without benefits with a turnover rate up to 400 percent, Sen. Max Cleland (D-Ga.) said yesterday at a congressional meeting on airport security.

Cleland supports turning all airport security over to the federal government, he said.

However, Transportation Secretary Norman Mineta yesterday declined to commit to making airport security screeners federal employees, saying it would be too expensive.

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