By Peter E. Hess, Esq.

Dawn, October 24, 1995: clad head to toe in black, an elite SWAT team including the U.S. Marshal’s Service, the F.B.I. and the Department of Justice burst in a door in Jupiter, Florida. Peter Theophanis, aged 36, is pinned to the wall, handcuffed and dragged away. His horrified wife Peyton, hearing the commotion as she stepped from the shower, stands in shock, dripping wet and wrapped in a towel. She is nine months pregnant and due to give birth that very day. She soon learns that her husband is being held without bail as a flight risk and a threat to the community.

A drug kingpin? International arms smuggler? Or perhaps merely a garden variety mafioso? Peter Theophanis is none of these. Instead, he is charged with "theft of government property". His crime: the salvage of a former U.S. Navy SBD Dauntless Dive Bomber airplane that had been stripped of any useable equipment and dumped overboard into Lake Michigan in 1942.

December, 1990: New Jersey antiques dealer Richard Steinmetz, facing heart bypass surgery, reluctantly lists for auction his prized artifact, the bronze bell recovered from the shipwreck of the Confederate raider, C.S.S. Alabama. Having purchased the bell from an English dealer, Steinmetz had offered to sell the only Confederate ship’s bell in existence to the U.S. Naval Academy Museum, but was rebuffed. To his chagrin, the Navy has now seized his bell, claiming that it belongs to the United States and that the government has no obligation to pay Steinmetz for it, either.

As outrageous as these accounts may seem, they are examples of the federal government’s increasingly confrontational stance against divers, salvors and artifact collectors they see as looting the nation’s cultural heritage. Yet traditionally, the rule had been "finders, keepers": any artifacts recovered from a shipwreck belonged to the diver who salvaged it. When and how did the law change? And what can divers do to ensure not only that they may keep what they find, but also avoid arrest and imprisonment?

Finders, Keepers

The long-standing view of shipwrecks has been that they are abandoned: the previous owner is no longer in existence or has long since given up any claim of title to the sunken vessel and its cargo. The time-honored rule of finders-keepers – admiralty, or maritime law’s "law of finds" – was the theory by which Mel Fisher was awarded complete ownership to the fabulous treasure his divers discovered in the Florida Keys from the shipwrecked 1622 galleons Atocha and Margarita. The federal courts ruled that the former owner of the treasure, the Spanish Crown, has abandoned any claim of title to the gold, silver, gems and artifacts the galleons carried in the three and a half centuries that passed before the shipwrecks were found. Nor did the shipwrecks belong to either the United States or the State of Florida: the wrecks lay out side of Florida waters and no law gave the United States the right to claim ownership of artifacts found in international waters simply because the federal government exercised jurisdiction for navigational and customs purposes there.

The law of finds is equally applicable to modern shipwrecks. In 1993, salvage diver John Moyer filed an admiralty "arrest" of the Italian luxury liner Andrea Doria, seeking a declaration that the shipwreck had been abandoned. The United States District Court in Camden, New Jersey agreed, ruling that the Doria, sunk in 250 feet of water following a 1956 collision, was at a known location that was well within the reach of modern salvage technology. Its underwriters-who had become the owner of the Doria upon the payment of the insurance claims – had decided that it was too costly and difficult to attempt to raise the liner and had done nothing while several commercial salvage ventures and hundreds of North Atlantic wreck divers recovered artifacts from the shipwreck. The court concluded that the Andrea Doria was an abandoned shipwreck, formally awarding Moyer title to the valuable Italian mosaic friezes that his expedition had salvaged from the sunken ocean liner.

The Law of Salvage

Frustrated by salvors’ courtroom victories, a small group of state and federal bureaucrats and professional archaeologists, who enviously coveted the spectacular underwater discoveries being awarded their finders, doggedly advocated legislation to change U.S. admiralty law. After a decade of Congressional debate, a sea change in the law occurred in 1988 with the passage of the Abandoned Shipwreck Act. By a stroke of the pen, all abandoned shipwrecks found beneath state waters: that is, under any rivers, bays, harbors, or lakes (including all of the Great Lakes) or up to three miles off-shore in the oceans, became the property of the state in whose water the shipwreck was discovered. The finders, keepers rule of the law of finds was abolished, as was the right of salvors to bring a claim in federal court to determine title to the property that they had recovered.

Today, for an underwater explorer to be rewarded for having salvaged a shipwreck from within state waters, it must be proven that the wreck has not been abandoned, and hence, does not belong to the state. The law has long recognized that the mere act of sinking does not divest an owner of title to his vessel and its cargo. Where insurance was paid on a shipwreck whose location is unknown, the insurers generally still retain ownership of the lost ship and its cargo long after the sinking.

Nevertheless, one who locates and successfully salvages property from an unabandoned shipwreck is entitled to be rewarded for having returned lost property to the stream of commerce. The federal courts will adjudicate a salvage award – liberal compensation to the salvor who successfully rescuing distressed persons and property from marine peril. The amount of the salvage award is based upon the cost and difficulty of the recovery operations and the value of the property salvaged. The award is liberal so as to encourage mariners to voluntarily come to the assistance of endangered person and property.

After years of archival research and relentless sweeping the bottom of Lake Michigan with sidescan sonar, Chicago-based professional salvor Harry Zych discovered the widely-scattered debris field of the Lady Elgin, whose catastrophic sinking in 1860 still stands as the greatest maritime disaster on America’s "Inland Seas". Unfortunately for Zych, with the passage of the Abandoned Shipwreck Act, the Lady Elgin and its vast collection of historic artifacts, if abandoned, was the exclusive property of the State of Illinois. Zych’s research had shown the Lady Elgin to have been insured by a predecessor of today’s CIGNA insurance company. CIGNA’s corporate archives contained documents which proved that it had paid all of the claims arising out of the loss of the Lady Elgin and had never abandoned the shipwreck.

CIGNA signed a contract with Zych’s "Lady Elgin Foundation" which conferred exclusive salvage rights to their shipwreck in return for a percentage of the artifacts recovered. The Foundation then asserted in court that because the Lady Elgin was not abandoned, and its scattered debris field could not have been discovered without the use of today’s sophisticated sidescan sonar, that it was the lawful owner of the shipwreck and its artifacts. The federal district court agreed, rejecting the State of Illinois’ ownership claim: by its very terms, the Abandoned Shipwreck Act did not confer title to the states to shipwrecks which still had an owner.

These same legal principles were applied in the legal battle over the shipwreck of the 1857 California gold rush vessel S.S. Central America. Like the Lady Elgin, the Central America was a sidewheel steamer, although it sank in international waters approximately 180 miles off-shore, at a depth of 8,500 feet. The contest over ownership of the three tons of insured shipments of gold lost in the shipwreck pitted a consortium of marine insurance companies versus the finders, who had employed state-of-the-art technology to locate and salvage the wreck.

The federal district court found the Central America to have been abandoned: the insurance companies had, in the 130 years since the sinking, lost all commercial records of having underwritten the loss of the gold. But the court of appeals reversed the trial judge, citing the Lady Elgin decision and ruling that abandonment could not be lightly presumed, particularly where it had only recently become technologically feasible to locate and recover the shipwreck. Even though the insurance consortium was technically still the owner of the gold, the appellate court noted that the finders were entitled to a salvage award of 90% of the value of the insured shipments of gold: clearly the lion’s share of the treasure.

The determination that underwriters still retain an ownership interest in the sunken vessels and cargoes they insured has been widely assailed by divers who view it as a threat to their own claim to shipwreck artifacts. But in fact, these precedents are a powerful weapon that underwater explorers can used to defeat the claim of an even more formidable adversary: the government. If a shipwreck has never been abandoned, for the government to assert title , the Constitution requires that the owner be paid just compensation for the seizure of his property. Thus, by allying oneself with the insurer of a newly-discovered shipwreck, and agreeing to an equitable division of the property recovered, the finder may protect himself from governmental seizure of the artifacts.

Wrecked by the Government

Of course, none of these arguments were of any assistance to the arrested salvor, Peter Theophanis, or the frustrated antiquities dealer, Richard Steinmetz. In each instance, their adversary the United States Navy, asserted that they had never abandoned either sunken aircraft of shipwrecked artifacts like the Alabama’s bell. But at the Theophanis criminal trial in Indiana, the U.S. Attorney could not prove the identity of the aircraft wreckage that the salvor had raised from Lake Michigan. Moreover, as expert witness Gary Larkins pointed out, the Army Air Corps – the forerunner of today’s U.S. Air Force – had used an identical aircraft, and had subsequently declared all aircraft that crashed prior to 1961 to be formally abandoned. Lacking the proof necessary to secure a criminal conviction from an already dubious jury, the judge dismissed the indictment against Theophanis, who left the court a free – but considerable less wealthy – man. Still to be answered is why a government SWAT team illegally wiretapped and then arrested a man who they knew had committed no crime.

Steinmetz was not as fortunate. Although the federal courts were unconvinced of the Navy’s contention that the Alabama, which sank in a famous 1864 naval duel in the English Channel, had been captured by the Union, this proved inconsequential. For when the Confederacy surrendered in 1865, the courts concluded that all Confederate property – including the shipwreck of the Alabama – became the property of the United States by right of conquest. Even though Steinmetz had possession of the bell for ten years, it was never lawfully his: it had always been the property of the United States. While sympathetic to the injustice wrought by the uncompensated seizure of Steinmetz’ bell, the federal judges who heard the case suggested that the antiquities dealer seek compensation directly from Congress.

The legal basis for the non-abandonment of government wrecks has never been clear. In several instances where commercial vessels sustained major hull damage from running aground on unmarked Navy shipwrecks, when sued for these damages, the Navy claimed that the shipwrecks in question had long been abandoned! Today, however, the Navy asserts that that it does not have the authority to abandon public property. This position will undoubtedly change anew as soon as there is any liability assessed against the government due to a Navy shipwreck.

Other nations’ navies have been quick to jump upon the perpetual ownership bandwagon. Today, virtually all countries assert some sort of sovereign immunity protecting "their" vessels and aircraft from judicial arrest pursuant to a salvor’s claim. Although the effectiveness of these claims by other nations has yet to be seriously tested in the courts, saber rattling has already been directed at wreck divers accused of, for instance the "grave robbing" of recovering artifacts from sunken U-Boats. In light of the unprecedented atrocities the Nazis inflicted upon countless millions of innocent victims, the German government’s posturing about the "desecration" of shipwrecks is (as the Holocaust victims would have declared) chutzpah of the highest order. As Richard Steinmetz learned from his legal confrontation with the United Stares navy over the Alabama bell, if a nation wishes to dictate the rules concerning the spoils of war, then it had better win that war!

Future Shock

Presently under consideration are even more ominous legislative proposals concerning shipwrecks. A cabal of legal scholars – cowtowing to the academic and governmental archaeological community whose bureaucratic existence is threatened by the recent and unprecedented tide of spectacular privately funded shipwreck discoveries and salvage – is drafting an international convention for the United nations which would give governments the world over ownership of any and all abandoned shipwrecks and their cargoes – wherever they may be discovered beneath the ocean. Such a draconian proposal could soon become a part of the body of international law, abolishing the rights of divers, salvors and marine insurance underwriters to recover and obtain ownership to any of the shipwrecks and artifacts which they have found.

In contrast, the legal questions facing the diver who has recovered a prized artifact may seem mundane – unless that artifact is coveted by the government. When diving an abandoned shipwreck within state waters, today one has few options except for silence as to the discovery. Although the constitutionality of the Abandoned Shipwreck Act has been challenged in court, until it is overturned, it remains the law of the land. Perhaps it is better to rephrase the once-venerable rule of law to: "finders, weepers, government keepers." When diving shipwrecks in international waters, the finer may still legally become the owner of artifacts salvaged – provided that the vessel or sunken aircraft did not at one point belong to the U.S. Navy.

Divers’ rights are by no means guaranteed; we must be ever vigilant to protect them. All that shipwreck explorers need do is sit back and take no action or raise no voices in objection to the legislative efforts to divest us of ownership of our finds and the cherished maritime traditions that reward salvors for successfully rescuing property from marine peril will son be reduced to merely fond memories. For if the bureaucratic archaeologists have their way, the government will take title to all underwater discoveries, and diving as we know and love it – like the lost vessels we explore – will be forever wrecked.