MOTOR CARRIER 

SAFETY

New Applicant 

Reviews Should 

Expand to Identify 

Freight Carriers 

Evading Detection

Report to Congressional Committees

March 2012

GAO-12-364

United States Government Accountability Office

GAO
United States Government Accountability Office

Highlights of GAO-12-364, a report to 

congressional committees

March 2012

MOTOR CARRIER SAFETY

New Applicant Reviews Should Expand to Identify 

Freight Carriers Evading Detection

Why GAO Did This Study

The Federal Motor Carrier Safety 

Administration’s (FMCSA) mission is to 

ensure motor carriers operate safely in

interstate commerce. FMCSA partners 

with state agencies to conduct a 

variety of motor carrier oversight 

activities, which are carried out by 

certified auditors, inspectors, and 

investigators. Some motor carriers 

have registered under a new identity 

and begun to operate in interstate 

commerce, violating federal law in an 

effort to disguise their former identity 

and evade detection by FMCSA. Such 

carriers are known as chameleon 

carriers. 

GAO’s objectives were to examine 

(1) the prevalence of chameleon 

carriers; (2) how well FMCSA’s 

investigative programs are designed to 

identify suspected chameleon carriers; 

and (3) what constraints, if any, 

FMCSA faces in pursuing enforcement 

actions against suspected chameleon 

carriers.

To address these objectives, GAO

analyzed data on new applicants; 

reviewed investigative program 

guidance, federal motor carrier laws 

and regulations, GAO and other 

reports, and selected state corporate 

successor liability laws; observed two 

new entrant safety audits; and 

interviewed FMCSA headquarters and 

field officials, state officials—including 

law enforcement agencies—and motor 

carrier stakeholders.

What GAO Recommends

FMCSA should expand the vetting 

program using a data-driven approach; 

and provide guidance to improve the 

new entrant program. FMCSA 

generally concurred with our 

recommendations.

What GAO Found

FMCSA does not determine the total number of chameleon carriers within the motor 

carrier industry. Such a determination would require FMCSA to investigate each of 

the tens of thousands of new applicants that register annually and then complete a 

legal process for some of these suspected chameleon carriers, an effort for which 

FMCSA does not have sufficient resources. Rather, FMCSA’s attempt to identify 

chameleon carriers among new applicants, referred to as the vetting program, is

limited to bus companies (passenger carriers) and movers (household goods 

carriers). These two relatively small groups, representing only 2 percent of all new 

applicants in 2010, were selected because they present consumer protection and 

relatively high safety risks. Through the vetting program, FMCSA conducts electronic 

matching of applicant registration data against data on existing carriers and 

investigates each application from these two small groups, but does not determine 

whether all other new applicants, including freight carriers, may be attempting to 

assume a new identity. Federal internal control standards direct agencies to assess 

the risks they face to determine the most effective allocation of federal resources, 

including how best to distribute resources for activities such as investigations and 

enforcement. GAO demonstrated how analysis of registration data can be used to 

assess risk by targeting all new applicant carriers that have attributes similar to those 

of chameleon carriers—for example, company registration data that match data for 

another carrier with a history of safety violations. Using FMCSA data, GAO found an 

increasing number of carriers with chameleon attributes, from 759 in 2005 to 1,136 in 

2010. GAO also found that 18 percent of the applicants with chameleon attributes 

were involved in severe crashes compared with 6 percent of new applicants without 

chameleon attributes.

FMCSA’s investigative programs—the vetting and new entrant safety assurance 

programs—are not well designed to identify suspected chameleon carriers. The 

vetting program assesses all passenger and household goods carriers applying for 

operating authority, but it does not cover other groups of carriers, including freight 

truck carriers, which represented 98 percent of all new motor carrier applicants in 

2010 and were more likely to be involved in fatal crashes than passenger carriers. 

The new entrant safety assurance program—which involves a safety audit for all new 

entrants, including freight carriers—entails a brief assessment of whether a carrier 

may be chameleon, but is primarily designed to educate new entrants about federal 

motor carrier safety regulations. The safety audit includes questions to elicit 

information on connections between new and previous carriers, but auditors lack 

necessary guidance on how to interpret the responses to distinguish chameleon 

carriers from legitimate carriers.

FMCSA faces several constraints in pursuing enforcement actions against suspected 

chameleon carriers. For example, as a result of a 2010 decision by an FMCSA 

Assistant Administrator, it is unclear whether FMCSA should use a state or a federal 

legal standard to demonstrate that a carrier is a chameleon. Thus, evidence is 

gathered to meet both a state and federal legal standard, which can lead to differing 

enforcement actions across states and has increased the time necessary to pursue 

chameleon carrier cases. FMCSA is pursuing several options to achieve a single 

standard, including providing input to Congress on a legislative proposal, monitoring

chameleon carrier cases that could clarify the 2010 decision, and pursuing a separate

rulemaking. Other constraints on FMCSA enforcement actions include a resourceintensive legal process, the inability to preclude carriers from obtaining multiple 

registration numbers, and low maximum fines.

View GAO-12-364. For more information, 

contact Susan A. Fleming at (202) 512-2834 

or flemings@gao.gov. 
Page i GAO-12-364 Motor Carrier Safety

Letter 1 

Background 4

FMCSA Does Not Determine the Prevalence of Chameleon 

Carriers; Our Analysis Found More than 1,100 New Applicant 

Carriers with Chameleon Attributes in 2010 11

FMCSA’s Investigative Programs Are Not Well Designed to Identify 

Chameleon Carriers across All New Applicants 19

FMCSA Faces Several Constraints in Pursuing Enforcement 

Actions against Suspected Chameleon Carriers 27

Conclusions 33

Recommendations for Executive Action 35

Agency Comments and Our Evaluation 36

Appendix I Objectives, Scope, and Methodology 38

Appendix II Additional Information on the Scope and Methodology of Our Data 

Analysis 42

Appendix III Standards for Corporate Successor Liability 50

Appendix IV GAO Contact and Staff Acknowledgments 56

Tables

Table 1: Number and Percentage of New Applicants with 

Chameleon Attributes by Carrier Type, 2005 through 2010 15

Table 2: New Applicant Carriers with and without Chameleon 

Attributes That Were Involved in a Severe Crash, Assessed 

a Fine, or Placed Out-of-Service, 2005 through 2010 18

Table 3: Results of FMCSA’s Vetting of New For-Hire Passenger 

and Household Goods Carrier Applicants from August 13, 

2008, through May 18, 2011 21

Table 4: State Agencies Interviewed 40

Table 5: Steps Taken to Standardize Fields Prior to Matching 44

Contents
Page ii GAO-12-364 Motor Carrier Safety

Table 6: Match Rates for Carriers with and without Motive Based 

on New Applicants in 2009 47

Table 7: Match Rates for Carriers with and without Motive Based 

on New Applicants in 2010 48

Table 8: Ten Selected States’ Corporate Successor Liability Rules 55

Figures

Figure 1: Large Truck and Bus Fatalities and Estimated Fatality 

Rate, 2000-2009 5

Figure 2: Carriers with Chameleon Attributes as a Percentage of 

New Applicants by Carrier Type, 2005 through 2010 16

Figure 3: Large Truck and Bus Fatalities Rates and Total Number 

of Fatalities, 2009 22

Figure 4: Outline of the FMCSA Notice of Claim Process 30

Abbreviations

D&B Dun & Bradstreet

EIN Employer Identification Number

FMCSA Federal Motor Carrier Safety Administration 

MCMIS Motor Carrier Management Information System

NOC Notice of Claim

NTSB National Transportation Safety Board

SSN Social Security Number

USDOT U.S. Department of Transportation

This is a work of the U.S. government and is not subject to copyright protection in the 

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Page 1 GAO-12-364 Motor Carrier Safety

United States Government Accountability Office

Washington, DC 20548

March 22, 2012

The Honorable Patty Murray

Chairman

The Honorable Susan Collins

Ranking Member

Subcommittee on Transportation, Housing

and Urban Development, and Related Agencies

Committee on Appropriations

United States Senate

The Honorable Tom Latham

Chairman

The Honorable John W. Olver

Ranking Member

Subcommittee on Transportation, Housing

and Urban Development, and Related Agencies

Committee on Appropriations

House of Representatives

For years, some motor carriers have registered and been operating illegally 

in interstate commerce by using a new identity in an effort to disguise their 

former identity and evade enforcement actions issued against them by the 

Federal Motor Carrier Safety Administration (FMCSA)—the federal agency 

responsible for overseeing motor carrier safety. Such carriers are referred 

to as chameleon carriers and may include interstate passenger carriers 

(intercity and charter or tour bus operators), household goods carriers 

(hired by consumers to move personal property), or freight truck carriers 

(shippers of commercial goods).1

Chameleon carriers can pose risks to the public. For example, the carrier 

operating a bus involved in an August 2008 crash in Sherman, Texas, in 

which 17 passengers were killed and several others were injured, was 

found by the National Transportation Safety Board (NTSB) to be a 

 

1

Using legal terminology, chameleon carriers are the corporate successor of a previous 

carrier that assumed a new identity in order to evade detection by FMCSA. However, not 

all motor carriers with a new identity are chameleons seeking to evade detection. Some 

motor carriers have legitimate reasons to transfer ownership, reincorporate, or both, such 

as divorce, death, relocation, or new business opportunities.

 
 

Page 2 GAO-12-364 Motor Carrier Safety

chameleon carrier that FMCSA had ordered out-of-service 2 months 

earlier. Subsequent fatal bus crashes have intensified public scrutiny over 

passenger carriers and led FMCSA to focus its oversight efforts on 

passenger carriers that it suspects may be chameleons. FMCSA also 

recognized the need to strengthen its oversight of household goods 

carriers to protect consumers from unscrupulous operators.2

In a July 2009 report on chameleon carriers,3 we found evidence 

suggesting that 20 passenger carriers were chameleons and referred 

about 500 freight and household goods carriers to FMCSA for further 

investigation.4

Recognizing that chameleon carriers are often difficult to catch because they 

close down and reopen as new companies, you asked us to examine 

FMCSA’s ongoing efforts to identify and pursue enforcement actions against 

chameleon carriers, including freight carriers. To do so, we addressed the 

following questions: (1) How prevalent are chameleon carriers? (2) How well 

are FMCSA’s investigative programs designed to identify suspected 

chameleon carriers? (3) What constraints, if any, does FMCSA face in 

pursuing enforcement actions against suspected chameleon carriers?

These carriers had attempted to register with FMCSA in 

fiscal year 2007 or 2008, and each had submitted registration data that 

were similar to data submitted by another carrier that FMCSA had 

ordered out-of-service. We noted that FMCSA had taken steps to improve 

how it identified suspected chameleons among passenger and household 

goods carriers, including initiating a vetting program to examine new 

applications for operating authority, and was planning to expand its 

actions to other types of carriers if it could obtain the resources to do so.

To determine how prevalent chameleon carriers are, we analyzed 

registration information on all motor carriers from FMCSA’s Motor Carrier 

 

2

As we previously reported, FMCSA investigates thousands of complaints against 

interstate household goods carriers each year, including complaints about discrepancies 

between estimates and final charges, problems with the pickup and delivery of goods, and 

lost and damaged goods. See GAO, Household Goods Moving Industry: Progress Has 

Been Made in Enforcement, but Increased Focus on Consumer Protection Is Needed, 

GAO-10-38 (Washington, D.C.: Oct. 30, 2009).

3

GAO, 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 (Washington, D.C.: July 28, 2009).

4

FMCSA is currently investigating some of these carriers. 
 

Page 3 GAO-12-364 Motor Carrier Safety

Management Information System, enforcement actions taken against 

carriers in its Enforcement Management Information System, and 

insurance information from its Licensing and Insurance databases. We 

used these databases to match registration data in key fields, such as 

company names, addresses, and phone numbers, between new applicant 

carriers and carriers with history in the industry. We analyzed data for 

new applicants from January 1, 2005, through December 31, 2010, 

against data for all carriers that had registered with FMCSA since June 1, 

1974. To assess the reliability of these databases, we reviewed 

documentation on data collection efforts and quality assurance 

processes, talked with knowledgeable FMCSA officials about these data, 

and checked the data for completeness and reasonableness. We 

determined that the data were sufficiently reliable for describing this 

population of motor carriers and performing our data-matching analysis.

To determine how well FMCSA’s investigative programs are designed to 

identify chameleon carriers, we reviewed federal motor carrier laws and 

safety regulations; federal internal control standards; related reports and 

statements published by GAO, NTSB, and the U.S. Department of 

Transportation’s Office of Inspector General; documentation about 

FMCSA’s applicant review processes and procedures, which FMCSA 

refers to as the vetting program; FMCSA policy memorandums on the 

new entrant safety assurance program and the monitoring of potential 

chameleon new entrant motor carriers; and FMCSA’s Field Operations 

Training Manual. We also observed two new entrant safety audits—one in 

California of a new passenger carrier and the other in Virginia of a new 

freight carrier. Finally, to identify constraints FMCSA faces in pursuing 

enforcement actions against chameleon carriers, we reviewed federal 

motor carrier laws and regulations; GAO and other reports; FMCSA’s 

summary and analysis of 50 states’ corporate successor liability laws, 

which identified relevant case law and explained the legal standards 

currently used to determine corporate successor liability; and FMCSA 

decisions affecting FMCSA’s enforcement authority, among other things. 

In addition, to address all of our objectives, we interviewed officials at 

FMCSA headquarters in Washington, D.C.; 4 regional service centers; 

and 10 selected division offices. We also interviewed law enforcement 

agencies in the 10 states whose division offices we had selected to 

understand how the agencies are involved in identifying or taking 

enforcement actions against chameleon carriers. We selected the 10 

division offices and states primarily because they were the ones with the 

most registered interstate carriers. In addition, we interviewed NTSB 

officials, industry associations, and safety advocacy groups. For further 

details on our scope and methodology, see appendixes I and II.
 

Page 4 GAO-12-364 Motor Carrier Safety

We conducted this performance audit from March 2011 to March 2012 in 

accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.

FMCSA’s mission is to reduce injuries, fatalities, and the severity of crashes 

involving large commercial trucks and buses conducting interstate 

commerce.5 With more than 1,000 staff members at headquarters, 4 regional 

service centers, and 52 division offices (one in each state, Washington, D.C., 

and Puerto Rico), FMCSA carries out this mission by administering and 

enforcing federal motor carrier safety and hazardous materials regulations6

and by gathering and analyzing data on motor carriers, drivers, and vehicles, 

among other things. Division offices partner with state agencies to conduct a 

variety of motor carrier oversight activities carried out by certified auditors, 

inspectors, and investigators.7

The interstate commercial motor carrier industry is large and dynamic. 

According to Department of Transportation data, there were more than 

500,000 active interstate carriers and intrastate hazardous materials carriers 

in 2010, including about 66,000 new carriers that applied to enter the 

industry.

These oversight activities are funded by Motor 

Carrier Safety Assistance Program grants, which totaled about $165 million 

in fiscal year 2010. FMCSA’s total budget for fiscal year 2011 was 

approximately $550 million.

8

 

5

Commercial motor vehicles include those with a gross vehicle weight of at least 10,001 

pounds, are designed or used to transport more than 8 passengers (including the driver) 

for compensation, are designed or used to transport more than 15 passengers (including 

the driver) and are not used to transport passengers for compensation, or are used in 

transporting hazardous material (see 49 U.S.C. § 31132).

The vast majority of these carriers apply as freight carriers. While 

the largest motor carriers operate upwards of 50,000 vehicles, 80 percent of 

6

49 C.F.R. § 397.

7

State agencies include state highway patrols, departments of transportation, and public 

utility commissions.

8

According to FMCSA, thousands of new applicants exit the industry for various reasons 

shortly after applying. 

Background 
 

Page 5 GAO-12-364 Motor Carrier Safety

carriers are small—operating between 1 and 6 vehicles. Fatalities due to 

accidents involving large trucks (including vehicles operated by both freight 

and household goods carriers) and buses (operated by passenger carriers) 

generally declined from 2000 through 2009. FMCSA officials attributed the 

declines to actions taken by the federal government, the motor carrier 

industry, and safety groups. Fatalities and the estimated fatality rate for large 

trucks and buses are shown in figure 1. In 2009, more than 3,600 people 

were killed in crashes involving large trucks and buses.

Figure 1: Large Truck and Bus Fatalities and Estimated Fatality Rate, 2000-2009

Notes: Vehicle miles traveled (VMT) is an estimate of the number of miles large trucks and buses 

traveled. In 2007, the Federal Highway Administration updated its methodology for estimating VMT, 

which increased the VMT for large trucks and buses. This change contributed to a lower estimated 

fatality rate from 2007 to 2009 as compared to earlier years, but the estimated fatality rate was also 

lower in 2007 and 2008 when calculated under the old methodology (data required for this calculation 

were not available for 2009).

This figure includes data on all large trucks and buses, including interstate, intrastate and government 

owned vehicles, some of which are not regulated by FMCSA. In addition, for the purposes of this 

figure, buses are defined using a definition from the National Highway and Traffic Safety 

Administration, which are those vehicles designed to carry more than 10 passengers, including the 

driver (49 C.F.R. § 571.3).
 

Page 6 GAO-12-364 Motor Carrier Safety

FMCSA oversees two main groups of interstate motor carriers: (1) private 

carriers, who run an internal trucking operation to support a primary 

business in another industry, such as a retail store chain, and (2) for-hire 

carriers that sell their trucking services on the open market. Private and 

for-hire motor carriers seeking to operate in interstate commerce must 

register once with FMCSA, and thereby obtain a U.S. Department of 

Transportation (USDOT) number—a unique identifier used for collecting 

and monitoring safety information acquired during audits, compliance 

reviews, inspections, and crash investigations. USDOT numbers are 

issued after carriers submit information about their business, such as the 

name of the business and the company’s officers, a mailing address, 

business and cell phone numbers, the tax number (employer identification 

number or social security number) used to identify the business entity, 

and other information.9 For private carriers, this submission completes the 

registration process, and they can begin operating. In contrast, for-hire 

carriers must also obtain operating authority, which dictates the type of 

operation the carrier may run and the cargo it may carry.10

Before the August 2008 bus crash in Sherman, Texas, FMCSA had no 

dedicated process to identify and prevent chameleon carriers from 

applying for and receiving operating authority. At that time, a carrier could 

take on a new identity by applying online for operating authority using the 

same information (business name, address, phone number(s), and 

company officer name(s), or other information) on file for the old carrier. 

FMCSA did not have a process to identify these applications and thus 

would have granted operating authority to an apparent new entrant after 

the carrier submitted the appropriate data.

In 2010, 

36,209 private carriers registered and 29,421 for-hire carriers applied for 

operating authority with FMCSA.

Immediately after the Sherman crash, FMCSA established the vetting 

program to review each new application for operating authority submitted 

by for-hire passenger carriers. Subsequently, in April 2009, FMCSA 

 

9

FMCSA is working to complete its Unified Registration System—an effort designed to 

consolidate data on operating authority and USDOT numbers and thereby make it harder 

for carriers to register for multiple USDOT numbers.

10Some for-hire carriers, called “exempt for-hire carriers,” are not required to obtain 

operating authority if they ship exempt cargo (e.g., livestock, fish, and unmanufactured 

agricultural commodities) or solely operate within a designated commercial zone, such as 

the Virginia-Maryland-Washington, D.C., metropolitan area (49 C.F.R. § 372.219). 
 

Page 7 GAO-12-364 Motor Carrier Safety

began to apply the vetting program to household goods carriers. Under 

this program, FMCSA conducts a two-step process:

• First, FMCSA uses a new applicant screening algorithm to 

electronically compare and match information contained in the 

carrier’s application to data for poorly performing carriers dating back 

to 2003.11

• Second, the vetting team reviews each new for-hire passenger and 

household goods carrier’s application for completeness and accuracy 

and takes additional steps to determine whether the applicant is a 

chameleon carrier. For example, the team compares information in 

the application to information available on the Internet, including a

carrier’s address; phone number; public filings with the state (e.g., 

articles of incorporation); and, if available, the company website. The 

vetting team also works with FMCSA division offices to take 

advantage of local officials’ knowledge of individual carriers.

This match information is used by a dedicated team (called 

the vetting team) as indicators for further investigation.

FMCSA’s ability to vet for-hire motor carriers that apply for operating 

authority stems from the Secretary’s statutory authority to withhold 

registration for operating authority from a carrier that does not meet 

federal safety fitness standards or is unwilling and unable to comply with 

all applicable statutes and regulations.12

If the computer-matching process or FMCSA division office review 

identifies a suspected chameleon carrier, FMCSA requests clarification 

It does not have this authority to 

vet and, therefore, potentially reject the registrations of private carriers, 

which may begin to operate as soon as they receive a USDOT number.

 

11FMCSA developed a prototype of this algorithm in 2006 that field staff used to identify 

suspected household goods chameleon carriers. At the outset of the vetting program in 

August 2008, FMCSA revised the algorithm and began to use it to examine passenger 

chameleon carriers. In October 2011, FMCSA rolled out several revisions to this 

algorithm. Among other changes, FMCSA plans to enlarge the list of carriers that new 

applicants are matched against, from the 200,000 carriers that FMCSA believes have a 

reason to evade oversight to all 2.2 million motor carriers currently in the Motor Carrier 

Management Information System database. FMCSA also plans to expand the number of 

new applicants that are entered into the algorithm to include freight and private carriers, 

but does not plan to immediately expand the vetting program to systematically look at 

these types of carriers, as it does with for-hire passenger and household goods carriers. 

1249 USC 13902(a)(4). 
 

Page 8 GAO-12-364 Motor Carrier Safety

from the applicant. If the carrier does not respond or the response 

indicates the applicant is attempting to become a chameleon carrier, 

FMCSA rejects the application. The entire vetting process, including the 

electronic matching and the application review, can take anywhere from a 

few weeks to more than 2 months depending on several factors, including 

how long it takes the applicant to respond to any FMCSA requests.

After a carrier registers for a USDOT number, FMCSA uses the new 

entrant safety assurance program to examine all new entrants registered 

to operate in interstate commerce—including all for-hire and private 

passenger, household goods, and freight carriers—and intrastate 

hazardous materials carriers.13 Under this program, which began in 2003, 

carriers are required to undergo a safety audit within 18 months of 

obtaining a USDOT number and beginning interstate operations. The 

purpose of this audit is to determine whether carriers are knowledgeable 

about and compliant with applicable safety regulations.14

FMCSA operates other programs that identify suspected chameleon 

carriers. For example, officials may identify suspected chameleon carriers 

during compliance reviews, which are in-depth examinations of carriers 

identified as high crash risks, or during roadside inspections of vehicles 

that include checks for compliance with driver and maintenance 

requirements.

In 2009, FMCSA 

added a set of six, yes/no questions to the safety audit designed to elicit 

information indicative of any connections with other carriers to help the 

certified auditors and investigators that conduct these audits identify 

potential chameleon carriers. At the end of the audit, a carrier may pass 

or fail. If the carrier fails the audit, the carrier may continue to operate, but 

must submit a plan for corrective action. Upon receiving written 

confirmation that it has failed the audit, a carrier has between 45 and 60 

days to provide an acceptable response or request an administrative 

review of the safety audit findings before the new entrant registration is 

revoked and the carrier is no longer permitted to operate in interstate 

commerce.

15

 

1349 C.F.R. § 385.307.

FMCSA has also implemented a new safety oversight 

initiative—the Compliance, Safety, Accountability program—under which 

14FMCSA and state officials conducted almost 33,000 safety audits in fiscal year 2010.

15In fiscal year 2010, FMCSA and state officials conducted about 15,000 compliance 

reviews and 3.6 million roadside inspections.
 

Page 9 GAO-12-364 Motor Carrier Safety

it plans to introduce several new investigative programs, including 

targeted roadside inspections, off-site investigations, and on-site focused 

investigations.16 Like compliance reviews and roadside inspections, these 

new oversight programs may identify a suspected chameleon carrier 

during either a review or a follow-up review or inspection initiated to 

gather additional evidence on the carrier.17

Identifying a suspected chameleon carrier is the first step in determining 

whether the carrier is attempting to conceal its identity. FMCSA and state 

officials then conduct an investigation. When federal or state investigators 

or auditors first suspects that a carrier may be a chameleon, they work 

with officials in one of FMCSA’s 52 division offices and attorneys in four 

regional service centers to gather evidence and assemble the 

documentation needed to demonstrate that a new carrier is the same 

entity as a prior carrier and is attempting to evade a prior FMCSA 

enforcement action or a poor safety record. After gathering as much 

information as possible, a division office provides the evidence to a 

regional service center, where FMCSA attorneys decide whether to 

initiate a legal process in order to prove that the new carrier is responsible 

for the actions of the prior carrier (referred to as “corporate successor 

liability”).18

 

16As of September 2011, FMCSA had partially implemented these new oversight 

programs, but has delayed plans to implement off-site investigations and cooperative 

safety plans nationwide. We recently reported on the Compliance, Safety, and 

Accountability program and the extent to which FMCSA has implemented these new 

oversight programs. See GAO, Motor Carrier Safety: More Assessment and Transparency 

Could Enhance Benefits of New Oversight Program, 

As part of their evaluation, the attorneys assess the strength of 

GAO-11-858 (Washington, D.C.: 

Sept. 29, 2011).

17In addition to these programs, FMCSA’s Performance and Registration Information 

Systems Management program provides grants to states that allow state motor vehicle 

departments to prevent out-of-service carriers from registering or reregistering vehicles 

(49 USC 31106(b)). These grants enable the motor vehicle administration in the state 

where a vehicle is registered to check the safety status of the motor carrier, using the 

carrier’s USDOT number and the vehicle identification number, before issuing or renewing 

the carrier’s vehicle registration. For more information on this program, see our recent 

report on this program: GAO, Motor Carrier Safety: Commercial Vehicle Registration 

Program Has Kept Unsafe Carriers from Operating, but Effectiveness Is Difficult to 

Measure, GAO-09-495 (Washington, D.C.: May 12, 2009).

18From 2006 until 2009, FMCSA tried to apply a federal legal standard to demonstrate 

corporate successor liability, but an administrative decision in 2010 created uncertainty 

about whether a federal standard or a state standard should be used. This uncertainty led 

to changes in FMCSA’s approach to enforcement against suspected chameleon carriers, 

which we discuss later in this report. 
 

Page 10 GAO-12-364 Motor Carrier Safety

the evidence and give highest priority to those cases involving carriers 

with serious safety violations. If the attorneys determine that the evidence 

for a chameleon carrier case is insufficient, FMCSA does not pursue the 

case and the carrier continues its operations. The carrier is only 

recognized as a chameleon once FMCSA proves that the carrier is a 

chameleon based on the applicable legal standard or a carrier admits it 

created a new identity to evade detection.

Once FMCSA gathers the necessary evidence against a chameleon, 

FMCSA issues a notice of claim to tie the history of the chameleon carrier 

to that of its predecessor. The notice of claim may include several 

enforcement actions, including ordering a carrier to cease operations—

called out-of-service orders—for safety violations and failure to pay civil 

penalties. For example, one of the fines FMCSA assesses on chameleon 

carriers is for evading regulations, which ranges from $200 to $500 for the 

first violation and $250 to $2,000 for any subsequent violation, as 

established by regulation.19 FMCSA may assess higher civil penalties for 

carriers that are proven chameleons and can assess any unpaid penalties 

of the predecessor carrier to the successor carrier.

 

1949 C.F.R. Part 386, appendix B.
 

Page 11 GAO-12-364 Motor Carrier Safety

FMCSA does not determine the prevalence of chameleon carriers 

because doing so would require extensive investigation of the tens of 

thousands of new applicants that register with FMCSA each year and, in 

some cases, the completion of a legal process. However, FMCSA, state 

enforcement officials, and industry and safety association representatives 

we interviewed offered general, varying impressions of the number of 

chameleon carriers in the motor carrier industry. For example, a number 

of FMCSA and state officials with whom we spoke believed that while the 

number of chameleon carriers is a relatively small proportion of new 

entrant carriers, it is also a serious or growing problem. In addition, 

groups of officials from Florida, Georgia, Illinois, and North Carolina 

stated that chameleon carriers are either a serious or a growing problem 

that they encounter regularly.

Given the volume of new applicants and the necessary resources to 

investigate them, FMCSA uses the vetting program to focus its review of 

new applicants on two groups of carriers—for-hire passenger and 

household goods carriers. FMCSA has chosen to vet all applicants in 

these groups for two reasons: (1) according to officials, these two groups 

pose higher safety and consumer protection concerns than other carrier 

groups and (2) it does not have the resources to vet all new carriers and 

these two groups present a manageable number. As part of the vetting 

program, FMCSA uses registration data to compare information for every 

applicant in these two groups to information from previously registered 

carriers to identify any matches. Officials use these results to inform 

decisions about whether to grant operating authority to the applicants.

FMCSA Does Not 

Determine the 

Prevalence of 

Chameleon Carriers; 

Our Analysis Found 

More than 1,100 New 

Applicant Carriers 

with Chameleon 

Attributes in 2010

FMCSA Cannot Readily 

Determine the Number of 

Chameleon Carriers
 

Page 12 GAO-12-364 Motor Carrier Safety

According to FMCSA, however, data analysis by itself cannot positively 

identify chameleon carriers that are purposefully trying to evade 

oversight; matches do not always signify an issue. For example, vehicle 

data can match when new carriers legitimately have purchased and are 

using vehicles that were once owned by other carriers. Company names 

also can match when carriers independently selected the same name. 

Therefore, while data analysis is a helpful tool, FMCSA must conduct 

further investigation to determine the reasons for an apparent relationship 

between carriers and, unless the carrier admits to being a chameleon, 

undertake a legal process to determine whether the carrier is a 

chameleon. (Our assessment of the processes used to demonstrate a 

carrier is a chameleon is discussed later in this report.)

While FMCSA’s exclusive focus on passenger and household goods 

carriers limits the vetting program to a manageable number, it does not 

account for the risk presented by chameleon carriers in the other groups 

that made up 98 percent of new applicants in 2010. In our view, data 

analysis can be used to target other types of new applicants—including 

freight carriers—that are more likely to be chameleons for further 

investigation as they register or apply for operating authority.20

 

20FMCSA has used data analysis to target which carriers to investigate as possible 

chameleons, including carriers belonging to groups other than the two it currently focuses 

on, but it does not do so regularly. Twice over the past few years, FMCSA has applied the 

new applicant screening algorithm used during the vetting program to target a population 

of possible chameleon carriers for further investigation. However, officials that use the 

new applicant screening algorithm regularly told us the scoring method FMCSA officials 

used in these two instances to target possible chameleon carriers is not reliable because 

these scores would often incorrectly indicate a carrier was related to other carriers, or, 

alternatively, not identify carriers that were related to other carriers. FMCSA removed this 

scoring method from its algorithm in November 2011.

While 

FMCSA only has statutory authority to accept or reject applications of forhire motor carriers, examining all new applicant carriers, including private 

carriers, as they register for a USDOT number with FMCSA is important 

to provide officials with information about all carriers subject to their 

oversight activities. FMCSA and other federal agencies use data analysis 

to target entities or items with certain risk factors. Specifically, FMCSA 

uses state inspection and other data to identify carriers with a poor safety 

record for follow-up reviews. In addition, the Department of Homeland 

Security uses a targeting strategy, which includes a computerized model, 

to help select imported containers for additional review, inspection, or 
 

Page 13 GAO-12-364 Motor Carrier Safety

both.21 Regularly using data analysis for targeting new applicants would 

allow FMCSA to expand its examinations of newly registered carriers to 

include new applicants of all types using few or no additional staff 

resources, as discussed in the next section of this report. As we have 

previously reported, federal agencies need to assess the risks they face 

to determine the most effective allocation of federal resources, including 

how best to distribute resources for investigative and enforcement-related 

activities.22

To demonstrate that it is possible to use data analysis to target new 

applicants for further investigation, we developed a method and applied it 

to FMCSA data to identify carriers with chameleon attributes. We defined 

such carriers as those that met two criteria:

1. They submitted registration information that matched information for a 

previously registered carrier.23

2. The previously registered carrier had a motive for evading detection. 

We use the term “motive” to describe carriers that had a history of 

safety violations or filed for bankruptcy that might motivate a carrier to 

become a chameleon carrier.24

 

21For more information on this model see our report, GAO, Homeland Security: 

Preliminary Observations on Efforts to Target Security Inspections of Cargo Containers, 

GAO-04-325T (Washington, D.C.: Dec. 16, 2003).

22GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1

(Washington, D.C.: November 1999). These standards, issued pursuant to the 

requirements of the Federal Managers’ Financial Integrity Act of 1982 (31 USC 3512), 

provide the overall framework for establishing and maintaining internal control in the 

federal government. Office of Management and Budget Circular No. A-123 (revised), 

Management’s Responsibility for Internal Control (Dec. 21, 2004). See also, GAO, Federal 

Lands: Adopting a Formal, Risk-Based Approach Could Help Land Management Agencies 

Better Manage Their Law Enforcement Resources, GAO-11-144 (Washington, D.C., 

Dec. 17, 2010).

23The degree of match between the two carriers’ registration information had to exceed a 

defined threshold. For more information on how we identified motor carriers with attributes 

of chameleon carriers, see appendix II.

24For our analysis, motive included at least one of the following: involved in a severe 

crash, fined by FMCSA, or issued an out-of-service order, an imminent hazard order, or 

an unsatisfactory or unfit rating by FMCSA. These data elements were selected based on 

discussions with FMCSA officials indicating that they are possible reasons that a carrier 

might decide to become a chameleon carrier and on data elements FMCSA used for 

creating a list of poor performing carriers within its New Applicant Screening algorithm.
 

Page 14 GAO-12-364 Motor Carrier Safety

These criteria are similar to those FMCSA uses during the electronic 

matching step in the current vetting process for for-hire passenger and 

household goods carriers. However, we applied our method to all carriers 

and established a threshold for selecting new applicants for further 

investigation, whereas FMCSA limits its electronic matching to for-hire 

passenger and household goods carriers and does not have a 

mechanism or threshold for determining which new applicants to 

investigate further because it vets all the carriers in these two groups. An 

example of a carrier that met our criteria was a 2009 new applicant that 

had submitted registration information with the same company name, 

company officer, and phone number as a previously registered carrier 

that had been in a crash and ordered out-of-service by FMCSA. An 

example of a carrier that did not meet our criteria was a 2008 new 

applicant that matched a previously registered carrier on six different 

pieces of information—address, company name, company officer, Dun & 

Bradstreet number (a unique nine-digit number used to identify a 

business location), employer identification number, and phone number—

but the previously registered carrier did not have a motive for evading 

detection, as defined by our criteria for this analysis. Because we were 

interested in demonstrating a method of targeting new applicants as they 

registered or applied for operating authority, and not specifically in 

counting the number of chameleons that might currently be operating, we 

did not attempt to exclude carriers that never operated or ceased to 

operate after they registered with FMCSA. This approach is consistent 

with the purpose of our analysis, which was to provide an objective, 

efficient means of identifying carriers that may warrant additional 

investigation as they enter the motor carrier industry, not specifically to 

identify chameleon carriers. For a detailed discussion of our data analysis 

method, see appendix II.

Through our data analysis, we identified 1,136 new applicant carriers with 

chameleon attributes in 2010—an increase from 759 in 2005. During this 

6-year period, carriers with chameleon attributes accounted for about 1.7 

percent of the approximately 326,000 new applicants that registered and 

were subject to FMCSA oversight activities.25

 

25Our analysis only examined new applicants over which FMCSA has oversight 

authority—interstate carriers and intrastate hazardous materials carriers.

Of the carriers with 

chameleon attributes, freight carriers made up about 94 percent, 

Our Analysis Identified 

More than 1,100 New 

Applicant Carriers with 

Chameleon Attributes 

in 2010
 

Page 15 GAO-12-364 Motor Carrier Safety

passenger carriers about 3 percent, household goods carriers about 2 

percent, and carriers with authority to operate multiple carrier types (any 

combination of freight, passenger, and household goods) less than 1 

percent. These percentages remained fairly stable over the 6-year period. 

Because freight carriers represented the majority of carriers, they showed 

the largest numerical increase of carriers with chameleon attributes, from 

724 carriers with chameleon attributes in 2005 to 1,082 such carriers in 

2010. (See table 1.)

Table 1: Number and Percentage of New Applicants with Chameleon Attributes by 

Carrier Type, 2005 through 2010

Year

Type of motor carrier 2005 a 2006 2007 2008 2009 2010

Freight 724 834 836 907 946 1,082

Passenger 19 24 36 27 37 27

Household goods 12 14 17 23 22 21

Multiple operating authorities 4 b 5 6 8 3 6 

Total 759 877 895 965 1,008 1,136

Total number of all new 

applicants

49,232 c 50,170 54,581 51,219 55,404 65,631

Percentage with chameleon 

attributes

1.5% 1.7% 1.6% 1.9% 1.8% 1.7%

Source: GAO analysis of FMCSA data.

a

Each type of motor carrier includes both for-hire and private carriers.

b

These carriers had authority to conduct a combination of freight, passenger, and household goods 

operations.

c

Total number of new applicants includes those over which FMCSA has oversight authority—

interstate carriers and intrastate hazardous materials carriers. 

Although freight carriers accounted for 94 percent of the carriers with 

chameleon attributes that we identified, freight carriers also made up 

about the same percentage of all new applicants (about 93 percent). 

When we looked at the rates at which carriers of different types had 

chameleon attributes, we found that passenger carriers were more likely 

to have chameleon attributes than were carriers of other types. 

Specifically, over the 6-year period from 2005 through 2010, the 

percentage of new applicant passenger carriers with chameleon attributes 

was higher in every year (ranging from 1.9 to 3.3 percent) than the 

percentages for freight carriers (ranging from 1.6 to 1.9 percent) and 

household goods carriers (ranging from 0.6 to 1.2 percent). (See fig. 2.) 
 

Page 16 GAO-12-364 Motor Carrier Safety

Figure 2: Carriers with Chameleon Attributes as a Percentage of New Applicants by 

Carrier Type, 2005 through 2010

Note: We did not include carriers with multiple operating authorities in this figure.

One concern with our approach, which FMCSA raised in connection with our 

data-matching efforts as well as its own, is that the matching may not give an 

accurate picture of the total number of chameleon carriers for two reasons. 

First, data matching could identify carriers that have legitimate business 

reasons for registering a new company that appears to be related to an older 

one, and second, similar or even identical registration information may 

inadvertently or coincidentally be submitted by unrelated companies. We 

were able to address this concern in part by analyzing data about whether an 

older carrier had a motive to evade detection—information that we and 

FMCSA believe indicates that a new carrier is more likely to be a chameleon. 

In particular, we looked at the relative likelihood that an old carrier with and 

without a motive would match a new applicant. If data matches were only the 

result of carriers having legitimate business reasons for assuming a new 

identity or coincidental similarities in registration information, then we would 

expect old carriers with a motive to be no more likely to match new 

applicants than old carriers without a motive. In fact, however, we found that 

old carriers with a motive were roughly twice as likely to match a new 
 

Page 17 GAO-12-364 Motor Carrier Safety

applicant in 2009 or 2010 as were carriers without a motive.26

While this test demonstrates that our method identified carriers with a 

motive to evade detection, further investigation would be needed to 

confirm whether any of the carriers on our list of carriers with chameleon 

attributes actually are chameleons. We believe using the two criteria of 

matching registration information and a motive to evade detection 

provides a sound basis for targeting. Using a risk-based, data-driven 

approach such as the one we outline would allow FMCSA to use 

available resources to target all types of carriers, including freight, and 

then periodically evaluate the effectiveness of the methodology and 

adjust its method based on the outcomes of follow-up investigations. 

Without such a method, FMCSA cannot target a manageable group of 

new applicant carriers of all types for investigation and possible 

enforcement action, an important caveat given FMCSA’s staffing levels.

This suggests 

that the data-matching component of our analysis was effective in detecting 

carriers with chameleon attributes and not just carriers with legitimate 

reasons to assume new identities or coincidental similarities to previously 

registered carriers.

The carriers we identified as having chameleon attributes presented high 

safety risks relative to new applicants without these attributes. Through 

our analysis, we found that crashes involving carriers with chameleon 

attributes resulted in 217 fatalities and 3,561 injuries from 2005 through 

2010.27

 

26This difference in likelihood between carriers with a motive and those without depended 

on the particular threshold match score that was used. We tested a range of match score 

thresholds, identifying matches with new applicant in 2009 and 2010, and results were 

statistically significant in all cases. For more detail on the methods used in this matching 

analysis, see appendix II.

Moreover, 2005 through 2010 new applicants with chameleon 

attributes were three times more likely than all other new applicant 

carriers to later be involved in a severe crash—one in which there was a 

fatality or injury. As table 2 shows, 18 percent of carriers with chameleon 

attributes were involved in a severe crash at some point between their 

time of registration and the end of 2010, compared with 6 percent of new 

applicant carriers without these attributes. In addition, carriers with 

chameleon attributes were three times more likely than all other new 

27The goal of our analysis was not to assess the effectiveness of FMCSA actions to 

reduce safety risks over this 6-year period.

Carriers with Chameleon 

Attributes Present High 

Safety Risks
 

Page 18 GAO-12-364 Motor Carrier Safety

applicant carriers to be assessed a fine by FMCSA for violating safety 

regulations. Specifically, 6 percent of carriers with chameleon attributes 

were assessed a fine at some point between their time of registration and 

the end of 2010, compared with 2 percent of the rest of the new applicant 

population. However, carriers with chameleon attributes were less likely 

than all other new applicants to be placed out-of-service for safety 

violations by FMCSA during this same period.

Table 2: New Applicant Carriers with and without Chameleon Attributes That Were Involved in a Severe Crash, Assessed a 

Fine, or Placed Out-of-Service, 2005 through 2010

Involved in a severe crash Assessed a fine Placed out-of-service

Number of new applicant carriers Total Number Percent Number Percent Number Percent 

With chameleon attributes 5,640 996 18% 349 6% 415 7%

Without chameleon attributes 320,597 18,838 6 7,257 2 33,760 11

Source: GAO analysis of FMCSA data.

Note: The numbers in this table represent carriers that registered as new applicants in the years 2005 

through 2010. We assessed whether, after registering, the carrier was involved in a severe crash, 

assessed a fine, or placed out-of-service. A single carrier could have been involved in a crash, 

assessed a fine, and placed out-of-service.
 

Page 19 GAO-12-364 Motor Carrier Safety

FMCSA’s vetting program, established in August 2008 immediately 

following the Sherman, Texas, bus crash, is designed to assess the ability 

of an applicant for new operating authority to comply with FMCSA motor 

carrier safety regulations and, in part, to determine whether the new 

applicant may be a chameleon carrier.28

Although the vetting program is labor-intensive, it is effective because it 

allows FMCSA to evaluate a carrier’s potential for compliance, including 

any indicators that the carrier may be a chameleon, before the carrier 

obtains operating authority. At this time the burden is on the carrier to 

provide FMCSA with any information it needs to evaluate the carrier’s 

application, and FMCSA can withhold operating authority from a carrier 

that it suspects of being chameleon. After a carrier obtains operating 

authority, however, FMCSA is required to gather evidence and prove that 

the carrier is a chameleon—a process that calls for significantly more 

resources, as discussed later in this report. Therefore, as FMCSA officials 

and safety advocates have observed, it is more effective for FMCSA to 

The program—which is FMCSA’s 

primary effort to identify chameleon carriers—is labor-intensive, according 

to officials, requiring detailed reviews of each application, national 

consumer complaint database queries, and outreach to division offices to 

obtain additional information about new applicants. Carriers that make it 

through the vetting process having met FMCSA’s standards for fitness, 

willingness, and ability to comply with all applicable federal statutes and 

regulations are granted operating authority. Reasons for denying operating 

authority include an assessment that a new applicant may be a chameleon 

carrier.

 

2849 U.S.C. § 13902.

FMCSA’s Investigative 

Programs Are Not 

Well Designed to 

Identify Chameleon 

Carriers across All 

New Applicants

Vetting Program Is 

Designed to Identify 

Chameleon Carriers but Is 

Neither Comprehensive 

nor Risk-Based
 

Page 20 GAO-12-364 Motor Carrier Safety

identify chameleon carriers up front through vetting than it is to pursue 

them after they have obtained operating authority.

FMCSA recognizes the benefits of identifying chameleon carriers early, 

before they obtain operating authority. However, FMCSA officials stated 

they do not have the resources to vet all for-hire carriers that apply for new 

operating authority. Therefore, as noted, FMCSA focuses the vetting 

program on for-hire passenger and household goods carriers, which 

together account for about 2 percent of the approximately 66,000 new 

applicant carriers in 2010. FMCSA has selected these two types of carriers 

because it sees the chameleons among them as presenting risks to 

consumers. Specifically, crashes involving unsafe passenger carriers, such 

as the Sherman bus crash, may have multiple fatalities. In addition, 

passenger carriers with safety violations have a motive to become 

chameleon carriers to conceal their history of violations from consumers, as 

well as from FMCSA. Similarly, unscrupulous household goods carriers 

that have defrauded consumers, such as by holding their property hostage 

until they have paid more than agreed to have their property delivered, 

have a reason to become chameleon carriers to avoid association with 

complaints from defrauded consumers. Having a statutory consumer 

protection responsibility29

From August 2008 through May 2011, FMCSA vetted 5,777 for-hire 

passenger and household goods carriers. Table 3 shows the results of 

FMCSA’s vetting program, including the number of carriers that were 

approved or rejected, withdrew, or switched their application to operate as 

a freight carrier rather than a household goods carrier. FMCSA officials 

believe, but cannot be certain, that some of these carriers withdrew or 

switched their application to avoid the vetting program.

, FMCSA vets every for-hire passenger and 

household goods carrier so that consumers will have greater assurance 

when they buy bus tickets or contract with movers that the carriers they are 

dealing with are safe, honest, and comply with FMCSA regulations.

 

29Pub.L. No. 104-88, Sec.101.
 

Page 21 GAO-12-364 Motor Carrier Safety

Table 3: Results of FMCSA’s Vetting of New For-Hire Passenger and Household 

Goods Carrier Applicants from August 13, 2008, through May 18, 2011

Type of carrier Total Approved Rejected Withdrew a Switched to freight carrier application

Passenger 2,775 2,075 657 43 Not applicable

Household goods 3,002 1,173 751 551 527

Total 5,777 3,248 1,408 594 527

Source: FMCSA.

a

FMCSA may reject an application because a carrier failed to respond to an information request or 

investigative inquiry. FMCSA may also reject an application because after evaluating all of the 

evidence submitted by a carrier, it has determined that the carrier is unfit, unwilling, and unable to 

comply with all applicable statutes and regulations. This type of rejection could be based on a 

determination that the applicant may be a chameleon carrier, or it could be based on the applicant’s 

safety record, including evidence that the carrier has been operating without authority.

FMCSA officials credit the vetting program with helping to prevent and 

deter unsafe for-hire passenger and household goods carriers, which can 

include potential chameleon carriers, from obtaining operating authority. 

However our analysis found that the vast majority of passenger and 

household goods carriers do not have chameleon attributes and therefore 

FMCSA is using the majority of its program resources to vet carriers that 

may not represent a higher risk of being chameleons. At the same time, the 

current vetting program excludes 98 percent of all new applicants, such as 

all freight carriers as well as private passenger carriers.30 Moreover, 

according to our analysis, freight carriers present safety risks that are as 

great as or greater than those presented by passenger carriers. As 

discussed, freight carriers made up 94 percent of the carriers we identified 

with chameleon attributes from 2005 through 2010,31

 

30As previously mentioned, according to FMCSA, it does not have the statutory authority 

to vet private carriers.

and carriers with 

chameleon attributes were about three times more likely than all other new 

applicants to be involved in a severe crash or to be assessed a fine by 

FMCSA for a safety violation. In addition, according to 2009 Department of 

Transportation crash data, the number of fatalities per fatal crash is nearly 

the same for large trucks (1.13) as for buses (1.15), even though buses 

have more occupants. Furthermore, the number of people who died in 

31For-hire freight carriers comprise 65 percent of carriers with chameleon attributes and 

private freight carriers comprise 29 percent of carriers with chameleon attributes, over this 

same time period. According to FMCSA, it does not have the authority to vet private 

carriers. 
 

Page 22 GAO-12-364 Motor Carrier Safety

truck crashes in 2009 (3,380) is more than 13 times greater than the 

number who died in bus crashes (254). (See fig. 3).

Figure 3: Large Truck and Bus Fatalities Rates and Total Number of Fatalities, 2009

As previously noted, federal agencies must assess the risks they face to 

determine the most effective allocation of federal resources, including the 

best distribution of resources for enforcement-related activities. Other 

federal organizations have reviewed the vetting program and 

recommended that FMCSA (1) show the program is effective and (2) use 

a risk-based approach to target its limited resources before expanding the 

program to all new freight carrier applicants. First, NTSB recommended 

that FMCSA add a performance evaluation component to the vetting 

program to show whether the new applicant screening algorithm is 

effectively preventing carriers with a history of evading safety 

requirements from continuing to operate.32

 

32National Transportation Safety Board, Safety Recommendation H-09-21, November 19, 

2009. 

FMCSA agreed with this 

recommendation and is working to implement it. The results of the vetting 
 

Page 23 GAO-12-364 Motor Carrier Safety

program appear to indicate that it has value in preventing many carriers 

from obtaining operating authority, but its effectiveness remains to be 

determined. As our presentation of FMCSA’s data in table 3 shows, 1,408 

of the 5,777 applicants for new operating authority were rejected and 

another 594 withdrew their applications.

Second, the Department of Transportation’s Inspector General reported 

that expanding the vetting program to include freight carriers would 

require a risk-based approach, since FMCSA has limited resources to 

examine all new applicants.33

 

33The Department of Transportation, Office of Inspector General. FMCSA Is 

Strengthening Motor Carrier Safety Oversight, But Further Action and Attention Are 

Needed, Statement for the Record: Hearing before the Committee on Commerce, Science 

and Transportation, Subcommittee on Surface Transportation and Merchant Marine 

Infrastructure, Safety and Security, United States Senate (Washington, D.C., July 21, 

2011).

Our analysis suggests that a risk-based 

approach would allow such an expansion with few or no additional staff 

resources. Specifically, with six dedicated specialists, FMCSA vetted, on 

average, 175 for-hire passenger and household goods carriers per month 

from August 13, 2008, through May 18, 2011 (5,777 carriers divided by 

33 months). Expanding the program to include all the freight carriers with 

chameleon attributes that we identified using our data-driven, risk-based 

approach would require FMCSA to vet, on average, an additional 74 

freight carriers per month (5,329 freight carriers divided by 72 months), or 

a total of 249 carriers per month. If, for example, six specialists can vet an 

average of 175 carriers per month, or about 29 carriers per specialist, 

then eight to nine specialists (or two to three more specialists) should 

reasonably be expected to vet 249 carriers per month, on average, 

including all the passenger and household goods carriers that FMCSA 

currently vets, plus the freight carriers we identified with chameleon 

attributes. Alternatively, if FMCSA were to modify its current program and 

vet only carriers with chameleon attributes identified through data 

analysis, it could vet all passenger, household goods, and freight carriers 

with chameleon attributes using fewer specialists than it now uses. 

FMCSA officials stated that, given the safety risks associated with

passenger carriers, they would be unwilling to exclude any of them from 

the vetting program. Yet no matter which approach FMCSA takes to 

vetting passenger carriers, the use of data analysis would allow it to 

expand the vetting program to include freight carriers with chameleon 
 

Page 24 GAO-12-364 Motor Carrier Safety

attributes and give FMCSA an early opportunity to detect and deny 

operating authority to freight carriers that pose safety risks.

Newly registered motor carriers, including those that were vetted, are 

required to enter the new entrant safety assurance program and undergo 

a safety audit. This audit is mainly designed to educate new entrant 

carriers about federal motor carrier safety regulations, ensure they are 

able to comply with these regulations, and require them correct any 

deficiencies before continuing to operate.34 The audit now includes a set 

of six, yes/no questions that FMCSA added to the audit in 2009 to help 

auditors elicit information from new entrants about connections they may 

have with other carriers—a characteristic of chameleon carriers.35

The new entrant safety assurance program provides the first opportunity 

for FMCSA to assess freight and private passenger carriers, which are 

not currently vetted. The program does not, however, allow FMCSA to 

deny the new entrant registration of a carrier simply because it suspects 

that the carrier may be a chameleon. Instead, freight and private 

passenger carriers acquire provisional registration when they submit new 

entrant applications to FMCSA, often months before they undergo a

safety audit, and it is not as easy for FMCSA to prevent them from 

operating as it is to deny operating authority to for-hire passenger and 

household goods carriers through the vetting program.

These 

questions provide a cursory review of new entrants with regards to 

whether they may be chameleon carriers.

36 FMCSA can 

place new entrant carriers out-of-service for at least 1 of 16 safety 

violations, but not because it suspects the carrier of being a chameleon.37

According to representatives responsible for safety audits in the states we 

contacted, the set of six, yes/no questions added to the safety audit helps 

raise new staff awareness of chameleon carriers and reminds more 

 

34At a minimum, the safety audit covers driver qualifications, driver duty status, vehicle 

maintenance, accident register, and controlled substances and alcohol use and testing 

requirements. 

35These questions are law enforcement sensitive and not available for public release.

36All new entrants operating in interstate commerce must undergo a safety audit within 18 

months.

3749 C.F.R. § 385.321.

New Entrant Safety 

Assurance Program Audit 

Includes Questions 

Designed to Help Identify 

Chameleon Carriers but 

Does Not Provide Related 

Guidance
 

Page 25 GAO-12-364 Motor Carrier Safety

experienced staff to watch for them. Yet, they said the questions may not 

help them identify chameleon carriers because there is little guidance on 

how to use the questions. Specifically, FMCSA’s electronic Field 

Operations Training Manual—a guide that helps to standardize audits 

across all states and includes law enforcement best practices—provides 

instructions for staff to follow when conducting the safety audit, but 

contains no guidance for these questions, even though it includes 

guidance for all other questions asked during the audit. According to 

FMCSA, the computer application used during the safety audit—called 

SENTRI—provides some guidance on what constitutes an affiliation with 

another carrier and how to document responses to these questions. 

However, this guidance does little to help staff distinguish legitimate 

carriers from chameleons, does not provide follow-up questions that could 

help them make this distinction, and does not require them to collect any 

evidence that could be used during the enforcement process at a later 

date. As a result, staff lack direction on how to use the yes/no questions 

to distinguish a chameleon from a legitimate carrier, what follow-up 

questions to ask when carriers provide information, what documents to 

request from a suspected chameleon carrier, and how to document 

suspicions in the safety audit report that a carrier may be chameleon. The 

representatives told us the lack of guidance on how to use the questions 

made it difficult to distinguish chameleon from legitimate carriers. For 

example, according to representatives of Pennsylvania’s Bureau of 

Transportation and Safety, an auditor could mistakenly flag one carrier as 

a suspected chameleon for leasing vehicles from another carrier when 

the leasing can be a legitimate business transaction between the two 

companies. Florida Highway Patrol officers commented that a question 

about whether a carrier was affiliated with another was not useful 

because corporate officers may have legitimate professional associations 

with other corporate officers of other carriers. According to federal internal 

control standards, federal agencies, such as FMCSA, are to develop and 

clearly communicate guidance that flows from agency priorities.38

 

38See 

Without 

guidance for staff on how to use the six yes/no questions related to 

identifying chameleon carriers, FMCSA cannot ensure that the new 

entrant program will effectively identify such carriers. In commenting on 

GAO/AIMD-00-21.3.1. These standards, issued pursuant to the requirements of the 

Federal Managers’ Financial Integrity Act of 1982, provide the overall framework for 

establishing and maintaining internal control in the federal government. Office of 

Management and Budget Circular No. A-123 (revised), incorporated the GAO internal 

control requirements.
 

Page 26 GAO-12-364 Motor Carrier Safety

our findings, FMCSA stated that as part of a larger effort to improve the 

new entrant program, it is reviewing the questions used to detect 

chameleon carriers during the safety audit process, which is where 

FMCSA believes the best impact can be made. In addition, FMCSA plans 

to ensure that all the questions are clear, including those used to identify 

chameleon carriers, and auditors understand how to answer them 

properly in order to obtain the best information. According to FMCSA, 

these efforts are to be completed by summer 2012, and will include 

associated guidance and training for all new entrant auditors.

Once a motor carrier passes FMCSA’s new entrant safety audit, no other 

federal investigative program is specifically designed to identify 

chameleon carriers, including compliance reviews and roadside 

inspections, which are typically used to examine high-risk carriers. 

Compliance reviews examine carriers that have been identified as high 

crash risks through an assessment of accident reports or safety 

performance records. Roadside inspections check carriers for compliance 

with driver and vehicle maintenance requirements. Neither of these 

investigations is designed to identify chameleon carriers, but can 

incidentally lead to identifying such carriers. For example, safety 

investigators conducting compliance reviews or roadside inspectors have 

identified chameleon carriers because they happened to see 

documentation (e.g., a driver’s hours-of-service logbook or vehicle 

maintenance records) labeled with another carrier’s name, noticed the 

vehicle marked with another carrier’s name or USDOT number under a 

coat of fresh paint, or recognized a suspected chameleon carrier in the 

local area. During one roadside inspection in Florida, an inspector noticed 

a freight truck displaying a makeshift cardboard sign with the carrier’s 

name written in magic marker. The crude sign, along with the driver’s 

suspicious behavior, led the inspector to notify FMCSA, which determined 

the carrier was a suspected chameleon carrier. While such evidence may 

alert investigators to possible chameleon carriers, New York officers said 

that it is difficult to identify potential chameleon carriers during roadside 

inspections because drivers may not carry the documentation inspectors 

need to evaluate a carrier’s legitimacy.

Other Investigative 

Programs May Incidentally 

Identify Chameleon 

Carriers
 

Page 27 GAO-12-364 Motor Carrier Safety

FMCSA faces several constraints in pursuing enforcement actions 

against suspected chameleon carriers. As a result of a 2010 decision by 

an FMCSA Assistant Administrator, it is not clear whether a state or a 

federal legal standard should be used by FMCSA to demonstrate that a 

carrier is a chameleon. This uncertainty can lead to differing enforcement 

actions across states and has increased the time necessary to pursue 

chameleon carrier cases. Other constraints include a resource-intensive 

legal process and limitations in FMCSA’s enforcement authorities. 

FMCSA is pursuing options to address these constraints.

The lack of a single standard for demonstrating that a carrier is a 

chameleon—or, in legal terminology, the corporate successor of a 

previous carrier that assumed a new identity to evade detection—

constrains FMCSA’s ability to take enforcement actions. The legal 

standard for determining corporate successor liability varies among 

states, and until 2006, FMCSA used the applicable state standard to 

determine liability. In a 2006 decision, an Administrative Law Judge 

applied a federal legal standard rather than a state standard to 

demonstrate corporate successor liability. However, a 2010 decision by 

an FMCSA Assistant Administrator left an open question as to which 

standard—federal or state—FMCSA should use to determine motor 

carrier successor liability. For a more detailed discussion of state 

corporate successor liability within the motor carrier industry, see 

appendix III. Absent a single federal legal standard, FMCSA attempts to 

gather evidence to meet both the federal standard and the state 

standards that could be applicable in a case. Applying multiple standards 

may lead to enforcement actions that differ from state to state and, 

according to FMCSA officials, gathering evidence to meet both the federal 

and the applicable state standard has increased the amount of time 

necessary to pursue enforcement actions against chameleon carriers. For 

example, FMCSA officials in the Southern Service Center told us that 

before the 2010 decision they spent 3 to 6 weeks pursuing several 

enforcement actions against chameleon carriers, but now spend between 

6 to 12 months pursuing similar actions.

The following illustrates how corporate successor liability laws vary 

among the states, resulting in enforcement actions that differ from state to 

state as some carriers may choose to incorporate in states where 

demonstrating corporate successorship is relatively difficult.

• Under Texas law, an acquiring entity may not be held responsible or 

liable for any liabilities of the transferring entity unless the acquirer 

FMCSA Faces Several 

Constraints in 

Pursuing 

Enforcement Actions 

against Suspected 

Chameleon Carriers

FMCSA Is Constrained by 

the Lack of a Single Legal 

Standard for 

Demonstrating a Carrier Is 

a Chameleon
 

Page 28 GAO-12-364 Motor Carrier Safety

clearly assumes responsibility for the liabilities.39

• It is also difficult to demonstrate corporate successorship in New York, 

according to FMCSA and state officials. For FMCSA to pursue a 

chameleon carrier case in New York, the prior carrier must have 

stopped operating before the new carrier started operating. If the two 

carriers operated concurrently at any point, FMCSA could have 

difficulty in pursuing the case under the New York standard.

FMCSA officials 

recognize that it is difficult to pursue enforcement cases in Texas, 

unless the carrier admits to being a chameleon.

40

• In Florida, the same people (officers, directors, and stockholders) 

must be involved in both the former and the current business for the 

carrier to be considered a chameleon.41

However, FMCSA officials in the Midwestern and Eastern Service 

Centers stated that the 2010 decision by the Assistant Administrator did 

not greatly affect their pursuit of chameleon carrier cases because some 

of the state standards within their region (e.g., Pennsylvania, Illinois, and 

Michigan) generally mirror the federal standard. Therefore, collecting 

evidence to meet both the federal and applicable state standard only 

slightly increased the amount of evidence needed and had a minimal 

effect on the amount of work required to pursue chameleon carrier cases.

Suspected chameleon 

carriers may identify another person, such as a spouse or other 

relative, as the officer of the new company, making it difficult for 

FMCSA to pursue the case.

FMCSA’s enforcement actions are also constrained by the Notice of 

Claim (NOC) process, which is a resource-intensive legal process that 

can take months or even years to complete, limiting the number of 

chameleon cases FMCSA can pursue. Given its staff, time, and other 

responsibilities, FMCSA officials said they are able to address only the 

highest-priority chameleon carrier cases—those with serious safety 

violations. While these carriers may present the greatest safety risks, 

 

39TEX. BUS. ORGS. CODE ANN. §10.254(b).

40Mitchell v. Suburban Propane Gas Corp., 581 N.Y.S.2d 927 (1992); Morales v. City of 

New York, 849 N.Y.S.2d 406 (2007).

41Amjad Munim, M.D. v. Azar, 648 So.2d 145 (Fla. 4th DCA 1994).

FMCSA’s Enforcement 

Actions Are Constrained 

by a Resource-Intensive 

Legal Process
 

Page 29 GAO-12-364 Motor Carrier Safety

other suspected chameleon carriers may also pose risks and continue to 

operate because FMCSA does not have the resources to pursue 

enforcement actions against them.

Specifically, FMCSA issues a NOC charging the suspected chameleon 

carriers with violating a federal regulation in effect against the carrier’s 

presumed predecessor, as shown in figure 4.42 The carrier can decide to 

pay the fine, contest the NOC, or fail to respond to the NOC. If the carrier 

fails to respond to the NOC, FMCSA orders the carrier out-of-service after 

90 days.43 If the carrier contests the NOC, the process provides four 

alternative routes, each with a number of steps. If FMCSA is able to 

demonstrate that the suspected chameleon carrier and its presumed 

predecessor are the same entity, the process concludes with a final 

agency order, which allows FMCSA to take the enforcement actions 

identified in the order.44 For example, a final agency order may require 

the successor carrier to pay the fines owed by the predecessor carrier, 

adjust the successor carrier’s rating to reflect the entire history of the 

company, or order the successor carrier to cease operations. However, if 

at any point during the investigation or the NOC process the carrier 

admits to being a chameleon carrier, pays any penalties associated with 

violations, and comes into compliance, FMCSA can merge the carrier’s 

histories and records without going through the entire NOC process.45

 

42If the successor company is found to have serious safety violations, FMCSA can take 

separate enforcement actions outside of the NOC process against the successor 

company, such as issuing an imminent hazard order. 

Merging the carriers’ safety records helps ensure that FMCSA has an 

accurate account of the carrier’s safety record under one USDOT number 

for monitoring the carrier in the future.

4349 C. F. R. § 386.83(a)(1).

44The final agency order is considered the final agency action against a carrier. It can 

include a number of actions, such as penalties or an out-of-service order, among others. 

45Besides being closed with a final agency order, chameleon carrier cases can be closed 

with a settlement agreement, a notarized letter, or payment of civil penalty.
 

Page 30 GAO-12-364 Motor Carrier Safety

Figure 4: Outline of the FMCSA Notice of Claim Process

As figure 4 shows, several steps in the NOC process have time frames 

set for completion while others do not. The required time frames alone 

add up to several weeks or months, and the additional time that may be 

needed for the remaining steps, such as a formal hearing, can further 

prolong the process. The time taken to complete the NOC process varies 

widely. FMCSA officials said cases usually take weeks—from the NOC to 

the final agency order—but can take anywhere from months to years.
 

Page 31 GAO-12-364 Motor Carrier Safety

According to state officials, as well as industry association and safety 

advocate groups, FMCSA has limitations on its authority that have 

hampered the effectiveness of its enforcement actions. Specifically, 

FMCSA cannot preclude carriers, including suspected chameleon 

carriers, from acquiring a new USDOT number. A new number allows a 

carrier to operate under a new identity and thus avoid any association 

with its history operating under another USDOT number, including any 

fines or out-of-service orders incurred under its former identity. FMCSA 

officials have stated that it is not illegal for a carrier to apply for multiple 

USDOT numbers because carriers may have legitimate business reasons 

for needing more than one number. For example, carriers that operate in 

different locations may want to separate their business practices across 

multiple routes or businesses. However, carriers that apply for multiple 

USDOT numbers may also do so to prevent or avoid subsequent 

detection as chameleon carriers. To strengthen its enforcement efforts 

against chameleon carriers, FMCSA stated that it is drafting a rule in 

response to a congressional mandate46 that would enable it to deny an 

application for operating authority of a for-hire motor carrier if any of the 

company’s officers has engaged in a pattern or practice of avoiding 

compliance, or concealing noncompliance with such regulations. It also 

stated that a recently issued Notice of Proposed Rulemaking would adopt 

new procedures for issuing orders to cease operations and consolidating 

safety records against chameleon carriers.47

In addition, the maximum fines that FMCSA is legally permitted to impose 

on motor carriers, including chameleon carriers, are low, which constrains 

the agency’s ability to take enforcement actions. According to a recent 

NTSB report, the fines imposed on carriers for violations are low and do 

not serve as an effective deterrent.

FMCSA anticipates finalizing 

both rules later this year.

48

 

46Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users, 

Pub. L. No. 109-59. §4113(c), 119 Stat. 1144, 1725 (2005).

NTSB further concluded that the 

fines for serious violations are so low that some carriers, especially 

passenger carriers, may treat them as a cost of doing business. FMCSA 

and state officials, as well as industry association representatives, have 

also expressed concerns about the deterrent value of FMCSA’s fines. For 

4776 Fed. Reg. 77458, December 13, 2011.

48National Transportation Safety Board, Report on Curbside Motorcoach Safety, Special 

Report, NTSB/SR-11/01, PB2011-917002.

Limited Enforcement

Authorities Further 

Hamper FMCSA’s 

Enforcement Efforts
 

Page 32 GAO-12-364 Motor Carrier Safety

example, a civil penalty that can be assessed against chameleon carriers, 

such as for evasion of regulations, ranges from $200 to $500 for the first 

violation and $250 to $2,000 for any subsequent violation.49 This penalty 

is potentially less than the cost to apply for operating authority, which is 

set at $300. FMCSA officials acknowledged that setting fines at the 

appropriate levels is a delicate balancing act.50 The fines must be high 

enough for carriers to view them as a deterrent and not simply as a cost 

of doing business, but not so high that carriers choose to become 

chameleons to avoid payment. Nonetheless, FMCSA is seeking 

legislation to increase the statutory fines, as discussed in the following 

section.

To address constraints on its enforcement efforts and make it easier to 

identify chameleon carriers, FMCSA provided input to congressional 

committees on a legislative proposal.51

 

4949 U.S.C. § 524 and 49 U.S.C. § 14906.

This proposal included language 

establishing a federal legal standard for determining corporate 

successorship that would set a single standard nationwide. This standard 

would expressly preempt state corporation successor laws applying only 

to federal motor carrier safety. According to FMCSA officials, the federal 

standard would be consistent with FMCSA’s mission to ensure motor 

carrier safety and would establish FMCSA’s authority over the chameleon 

carrier corporate succesorship issues. The federal standard would include 

specific criteria for determining what constitutes a successor carrier and 

would eliminate the need for FMCSA to apply various state laws in its 

chameleon carrier cases. Furthermore, a single nationwide standard 

would provide uniformity in FMCSA’s enforcement actions against 

chameleon carriers. In addition, such a standard could discourage 

carriers from incorporating their business in states where corporate 

successorship is difficult to demonstrate—a phenomenon that FMCSA 

50To calculate its civil penalties, FMCSA uses an automated policy tool called the Uniform 

Fine Assessment, whose methodology FMCSA is currently updating. The Uniform Fine 

Assessment uses an algorithm that takes statutory penalties factors into account, such as 

the carrier’s ability to pay and the extent and gravity of the violation committed, among 

others. 76 Fed. Reg. 71431, November 17, 2011. Department of Transportation, Federal 

Motor Carrier Safety Administration, Civil Penalty Calculation Methodology.

51Legislation recently passed in the Senate, the Commercial Motor Vehicle Safety 

Enhancement Act of 2012, would establish a single federal standard for motor carrier 

corporate successor liability. S. 1813, § 32101, 112th Cong., (2012).

FMCSA Has Provided 

Input to Congress on a 

Legislative Proposal to 

Address Constraints on Its 

Enforcement Efforts
 

Page 33 GAO-12-364 Motor Carrier Safety

officials suspect takes place now. For example, corporate successor 

liability is generally more difficult to prove in New York than it is in New 

Jersey and Pennsylvania, which may encourage carriers that understand 

the legalities of corporate successorship to consider reincorporating in 

New York. In addition, FMCSA is pursuing two other means to achieve a 

single federal legal standard. First, officials are monitoring chameleon 

carrier cases to identify one that could be used to clarify the 2010 

Assistant Administrator’s decision. An Administrative decision indicating 

FMCSA should use a single federal standard would have a similar effect 

to congressional action included in FMCSA’s legislative proposal. 

Second, FMCSA is also pursuing a separate rulemaking effort to modify 

its enforcement regulations by codifying a single standard into regulation 

and by adopting expedited procedures for administrative adjudication of 

chameleon carrier cases. This rulemaking would articulate a standard that

would be refined based on subsequent FMCSA decisions.52

The legislative proposal also includes changes that would increase the 

fines and penalties FMCSA is legally permitted to give carriers for 

noncompliance so that the penalties are not so low as to be viewed 

simply as a cost of doing business. For example, current law sets the 

minimum fine for evasion of regulation, which ranges from $200 to $500, 

would be increased to $2,000 to $5,000, and the maximum fine, which 

now ranges from $250 to $2,000, would be increased to $2,500 to 

$7,500. Other penalties associated with serious safety violations would 

also be increased.53

Preventing chameleon motor carriers from operating under a new identity 

is important because they present significant safety risks to the motoring 

public and, in the case of for-hire carriers, FMCSA faces constraints in 

removing them from the road after they have obtained operating authority. 

FMCSA has made strides toward protecting consumers from some of 

these unscrupulous carriers by vetting for-hire passenger and household 

 

52Amendment to Agency Rules of Practice, 76 Fed. Reg. 77458, 77463-77464 (Dec. 13, 

2011). 

53We did not evaluate how FMCSA’s proposals would affect the motor carrier industry. 

Determining what penalty levels are appropriate will involve assessing the burden higher 

fines would impose on the motor carrier industry. As part of this analysis, it will be 

important to determine what penalty levels will promote compliance without creating an 

incentive for carriers to become chameleons in order to avoid payment. 

Conclusions 
 

Page 34 GAO-12-364 Motor Carrier Safety

goods carriers to identify and deny operating authority to those that may 

be chameleon carriers. However, these two types of carriers together 

accounted for only about 2 percent of the new motor carrier population in 

2010, leaving the remaining 98 percent unvetted and free to operate 

before they undergo a new entrant safety audit—a program that provides 

some opportunity for auditors to identify potential chameleon carriers, but 

is not primarily designed to do so. Our analysis of FMCSA data found that 

of the more than 1,100 new motor carrier applicants in 2010 that had 

chameleon attributes, the vast majority were freight carriers. Given that 

the number of fatalities is far greater for freight carriers than for 

passenger carriers, we believe that FMCSA should not exclude freight 

carriers from its vetting program. Even with the large number of new 

applicant carriers and constraints on its resources, FMCSA could target 

the carriers that present the highest risk of becoming chameleons by 

using a data-driven, risk-based approach. Targeting could reduce the 

population of carriers to be vetted to a manageable number. FMCSA 

could choose to apply a data-driven, risk-based approach to all types of 

carriers, or could limit its use to freight carriers while continuing its current 

practice of vetting all for-hire passenger and household goods carriers. 

We believe that our targeting method, which considers both matching on 

registration information and having a motive to evade detection, provides 

a sound basis for FMCSA to select new applicant carriers for further 

investigation. Yet we also recognize that FMCSA will need to periodically 

evaluate the effectiveness of this approach as officials investigate carriers 

and learn more about the attributes of chameleon carriers. By applying a 

risk-based approach and expanding the vetting program to include freight 

carriers, FMCSA would help keep unsafe carriers off the road and reduce 

the amount of time, effort, and money necessary to investigate and 

prosecute chameleon carriers at a later date.

In addition, FMCSA is not taking full advantage of the new entrant safety 

assurance program audit to identify potential chameleon carriers, 

including those that slipped through the vetting program and those that 

are freight carriers undergoing scrutiny for the first time. While the audit 

includes a set of questions designed to help auditors identify chameleon 

carriers, FMCSA’s electronic Field Operations Training Manual lacks 

guidance on how to use the questions during the audit to distinguish 

chameleons from legitimate carriers. For example, the guidance should 

prompt auditors on what types of follow-up questions to ask and what 

further evidence should be collected based on carrier’s responses. 

FMCSA is reviewing the new entrant audit questions, but unless the 

guidance contains such aspects, FMCSA lacks assurance that the new 

entrant auditors can effectively identify chameleon carriers.
 

Page 35 GAO-12-364 Motor Carrier Safety

Absent a single standard for determining corporate successor liability, 

FMCSA can take months to develop a case to meet both a federal and the 

applicable state standard in order to prove that the carrier is a chameleon, 

and subsequently carry out enforcement actions. A federal standard would 

make the enforcement process parallel across all states, especially in 

states where FMCSA currently faces difficulties demonstrating corporate 

successor liability. A federal standard would also discourage carriers from 

incorporating across state lines to evade detection. FMCSA is currently 

exploring three different avenues for establishing a federal standard: (1) 

congressional action, (2) monitoring a case that could lead to the 

establishment of a single federal legal standard for chameleon carrier 

cases in all states, and (3) rulemaking. We support these efforts and 

believe establishing a federal standard is important to ensure a more 

efficient, consistent, and uniform enforcement process.

To help FMCSA better identify chameleon carriers through its vetting 

program, the Secretary of Transportation should direct the FMCSA 

Administrator to take the following three actions: 

• Develop a data-driven, risk-based vetting methodology that 

incorporates matching and motive components for targeting carriers 

with chameleon attributes.

• Using this new methodology, expand the vetting program as soon as 

possible to examine all motor carriers with chameleon attributes, 

including freight carriers.

• Periodically evaluate the effectiveness of this methodology using the 

results of investigations and refine as necessary.

In addition, to help FMCSA identify chameleon carriers that present safety 

risks, FMCSA should strengthen the new entrant safety assurance 

program audit by developing guidance to the questions contained in the 

electronic Field Operations Training Manual designed to help the new 

entrant auditor identify chameleon carriers, including (1) how to use the 

questions to distinguish chameleon from legitimate carriers, (2) what 

types of follow-up questions to ask, and (3) what evidence to collect.

Recommendations for 

Executive Action
 

Page 36 GAO-12-364 Motor Carrier Safety

We provided a draft of this report to the Department of Transportation for 

its review and comment. FMCSA generally concurred with our 

recommendations. In commenting on a draft of this report, officials 

provided additional information on how they plan to implement these 

recommendations, including developing plans to expand the vetting 

program to include for-hire freight carriers, but did not indicate when they 

would do so.

FMCSA had several comments on our methodology for identifying 

carriers with chameleon attributes. Specifically, officials questioned the 

inclusion of currently inactive carriers—carriers that never operated or 

eventually ceased to operate in the motor carrier industry. The purpose of 

our analysis was to identify carriers that may warrant additional 

investigation as they apply to enter the motor carrier industry, not to 

identify the number of chameleon carriers that currently exist. Therefore, 

it would have been inappropriate to remove inactive carriers from our 

analysis. Officials also had methodological concerns about (1) using 

motive to select carriers with chameleon attributes, which could allow 

some chameleon carriers to go undetected, including those carriers that 

have consistently evaded FMCSA enforcement actions (i.e. carriers that 

take on new identities before FMCSA has an opportunity to document 

safety violations), and (2) including bankruptcy, which is not a safety 

violation, as one of our six motive criteria. However, as our report 

indicates, we believe that a risk-based targeting method that includes 

motives, such as bankruptcy, provides a sound basis for FMCSA to 

examine those carriers that are more likely than others to be chameleons. 

Yet we also recognize that FMCSA will need to evaluate the effectiveness 

of its approach and alter it, as necessary.

In its comments, FMCSA agreed with us that using a risk-based approach 

to expand vetting to freight carriers, such as the one recommended, 

would require additional staffing resources. However, they indicated that 

such an approach would require more resources than the 2-3 staff we 

mentioned in the report. We believe that developing a risk-based 

approach to vetting is the first step FMCSA must take before determining 

the level of resources that may be needed for the vetting team.

FMCSA also provided technical corrections, which we have incorporated 

throughout the report.

Agency Comments 

and Our Evaluation
 

Page 37 GAO-12-364 Motor Carrier Safety

We are sending copies of this report to congressional committees 

interested in motor carrier safety issues; the Secretary of Transportation; 

the Administrator of FMCSA; and the Director of the Office of 

Management and Budget. In addition, the report will be available at no 

charge on the GAO website at http://www.gao.gov. 

If you or your staffs have any questions about this report, please contact 

me at (202) 512-2834 or flemings@gao.gov. Contact points for Offices of 

Congressional Relations and Public Affairs may be found on the last page 

of this report. Staff who made key contributions to this report are listed in 

appendix IV.

Susan A. Fleming

Director

Physical Infrastructure Issues
Appendix I: Objectives, Scope, and 

Methodology

Page 38 GAO-12-364 Motor Carrier Safety

Our objectives were to determine the prevalence of chameleon carriers, 

how well the Federal Motor Carrier Safety Administration’s (FMCSA) 

investigative programs are designed to identify suspected chameleon 

carriers, and what constraints, if any, FMCSA faces in pursuing 

enforcement actions against suspected chameleon carriers.

To identify new applicant carriers with chameleon attributes, we 

conducted a data analysis that involved two basic steps: (1) comparing 

registration information submitted by new applicants against that provided 

by all existing motor carriers and (2) determining whether carriers had a 

motive for concealing their histories. We obtained this information from 

several U.S. Department of Transportation databases: the Motor Carrier 

Management Information System (MCMIS), the Licensing & Insurance 

system, and the Enforcement Management Information System, as of 

May 2011. To assess the reliability of these databases, we reviewed 

documentation on data collection efforts and quality assurance 

processes, talked with knowledgeable FMCSA officials about these data, 

and checked the data for completeness and reasonableness. We 

determined that the data were sufficiently reliable for the purpose of our 

data analysis. We analyzed data for new applicants from January 1, 

2005, through December 31, 2010, against data for all carriers that had 

registered with FMCSA since June 1, 1974. For a detailed technical 

discussion of the scope and methodology for our data analysis, see 

appendix II.

To determine how FMCSA’s investigative programs are designed to 

identify chameleon carriers, we reviewed federal motor carrier laws and 

safety regulations; federal internal control standards; related reports and 

statements published by GAO, the National Transportation Safety Board 

(NTSB), and the Department of Transportation’s Office of Inspector 

General; documentation about FMCSA’s vetting processes and 

procedures, which FMCSA refers to as the vetting program; FMCSA 

policy memorandums on the new entrant safety assurance program and 

the monitoring of potential chameleon new entrant motor carriers; and the 

Field Operations Training Manual. We also conducted a content analysis 

of all our interviews to obtain views from federal and states officials on the 

effectiveness of the vetting and new entrant safety assurance programs. 

In June 2011, we observed two new entrant safety audits—one in Los 

Angeles, California, of a new passenger carrier, and the other in Triangle, 

Virginia, of a new freight carrier.

Appendix I: Objectives, Scope, and 

Methodology 

Data Analysis

Assessing FMCSA’s 

Investigative 

Programs
Appendix I: Objectives, Scope, and 

Methodology

Page 39 GAO-12-364 Motor Carrier Safety

To identify the constraints FMCSA faces in pursuing enforcement action 

against suspected chameleon carriers and how it is addressing them, we 

reviewed federal motor carrier safety laws and regulations related to 

FMCSA enforcement actions (Notice of Claims and Notice of Violations); 

an FMCSA summary of State Successor Liability Case Law (July 2010), 

which describes corporate successor liability law for all 50 states; two key 

decisions related to corporate successor liability—the Williamson 

Transport decisions of January 2009 and July 2010; a multipage, 

corporate successor liability worksheet used to gather evidence against a 

suspected chameleon carrier; and a legislative proposal provided to 

congressional reauthorization committees in 2011 that is intended to help 

address FMCSA constraints. We performed a legal analysis of select 

case law to determine current FMCSA enforcement constraints. We also 

interviewed FMCSA counsel to determine how the legislative proposal 

would help alleviate those constraints. In addition, we reviewed other 

documentation, including publications and testimonies, to assess how 

FMCSA is addressing the constraints.

To address these objectives, we interviewed FMCSA officials (data 

analysts, program managers, and counsel) in Washington, D.C.; Field 

Administrators, attorneys, managers and enforcement staff in all four 

regional service centers (Eastern, Southern, Midwestern, and Western); 

and Division Administrators in 10 of FMCSA’s division offices. In the 

same 10 states where we interviewed FMCSA division officials, we also 

interviewed law enforcement officials who were directly involved in 

attempting to identify or in taking enforcement actions against chameleon 

carriers. We selected these 10 states primarily because they had the 

largest total number of interstate and hazardous materials intrastate 

carriers identified in FMCSA’s Analysis and Information Resources 

database as of May 2011. In addition, we considered other factors in 

selecting these states, including the number of new entrant audits and 

roadside inspections conducted in fiscal year 2010, the estimated fatality 

rates per 100 million miles traveled in 2008, the level of participation in 

the Performance and Registration Information Systems Management and 

the new entrant safety assurance programs, suggestions made by 

FMCSA and by industry and safety organizations, and the legal 

requirements for determining corporate successor liability. Table 4 lists 

the 10 state agencies we interviewed.

Identifying 

Constraints on Taking 

Enforcement Action

Interviews 
Appendix I: Objectives, Scope, and 

Methodology

Page 40 GAO-12-364 Motor Carrier Safety

Table 4: State Agencies Interviewed

State Agency

California California Highway Patrol

Florida Florida Highway Patrol

Georgia Georgia Department of Public Safety

Illinois Illinois Department of Transportation

Michigan Michigan State Police

New Jersey New Jersey State Police

New York New York Department of Transportation

North Carolina North Carolina Highway Patrol

Pennsylvania Pennsylvania State Police

Texas Texas Highway Patrol

Source: GAO.

To address all three of our reporting objectives, we also interviewed 

representatives of the following organizations:

• Advocates for Highway and Auto Safety

• American Bus Association

• American Trucking Association

• American Automobile Association

• Commercial Vehicle Safety Alliance

• International Registration Plan

• Motor Carriers Safety Advisory Council

• National Private Truck Council

• National Transportation Safety Board

• Owner-Operator Independent Drivers Association

• Truck Safety Coalition

• United Motorcoach Association
Appendix I: Objectives, Scope, and 

Methodology

Page 41 GAO-12-364 Motor Carrier Safety

We conducted this performance audit from March 2011 to March 2012 in 

accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.
Appendix II: Additional Information on the 

Scope and Methodology of Our Data Analysis

Page 42 GAO-12-364 Motor Carrier Safety

This appendix contains additional information on our analysis of data on 

carriers with chameleon attributes. The method presented here is used to 

demonstrate the feasibility of using data to target carriers with chameleon 

attributes. We did not conduct additional work to investigate the carriers 

we identified and determine whether our approach is the most effective 

means to target chameleon carriers. FMCSA may wish to consider 

adjusting several elements of this approach, including our standardization 

techniques, our match score formula, and the way we assessed motive to 

become a chameleon carrier.

We defined a carrier with chameleon attributes as one that met the 

following two criteria:

1. Match criterion. The new applicant carrier submitted registration 

information that matched information for a previously registered 

carrier.

2. Motive criterion. The old carrier had a motive to become a chameleon, 

which we defined as a history of safety violations or filed for 

bankruptcy that might motivate a carrier to become a chameleon.

To identify new applicants1

 

1

Our analysis only examined new applicants over which FMCSA has oversight authority—

interstate carriers and intrastate hazardous materials carriers.

with chameleon carrier attributes, we took two 

basic steps: (1) compared registration information submitted by new 

applicants against that provided by all previously registered motor carriers 

(match criterion) and (2) determined whether the previously registered 

carriers had a motive for concealing their histories (motive criterion). We 

used information from the following Department of Transportation 

databases: MCMIS, the Licensing and Insurance system, and the 

Enforcement Management Information System, as of May 2011. To 

create our population of motor carriers that had submitted registration 

information to the department, we used data from MCMIS to generate a 

list of all unique U.S. Department of Transportation (USDOT) numbers 

(i.e., motor carriers) that had ever registered with the Department of 

Transportation, including the date that these USDOT numbers were 

added to the database (add date) and the most recent date that the 

Appendix II: Additional Information on the 

Scope and Methodology of Our Data Analysis

Criteria for 

Determining That a 

Carrier Had Attributes 

Consistent with Those 

of a Chameleon 

Carrier

Data Sources
Appendix II: Additional Information on the 

Scope and Methodology of Our Data Analysis

Page 43 GAO-12-364 Motor Carrier Safety

carrier entered the new entrant program (new entry date). Because we 

were interested in demonstrating a method of targeting new applicant 

carriers as they registered or applied for operating authority, and not 

specifically in counting the number of chameleon carriers that might 

currently be operating, we did not attempt to exclude carriers that might 

be inactive or might have ceased to operate. Therefore, our list of carriers 

with chameleon attributes likely includes carriers that are no longer 

operating.

We selected a number of data fields on which to compare new carriers to 

all previously registered carriers. Initially we considered the following 

fields: carrier name, company officer name, employer identification 

number (EIN), social security number (SSN), Dun & Bradstreet (D&B) 

number,2

We took several steps to improve the validity of our matches. We 

standardized values in some fields, including addresses and names. We 

also excluded records with missing or unusable values on key variables. 

For example, we excluded records with missing values on any of our 

match variables (listed earlier). For a number of the variables, we also 

excluded records consisting of a single character or digit, records with 

values consisting entirely of zeros or nines, and records with values that 

would result in matches unrelated to chameleon attributes (e.g., used 

terms like “unknown,” “none,” and “n/a”). Table 5 provides more details on 

the standardization and cleaning we conducted.

phone number (includes all possible comparisons among cell, 

fax, and main numbers), address (includes physical and mailing), vehicle 

identification number, vehicle license plate, driver license number, and 

driver name. Based on conversations with FMCSA officials and an initial 

analysis of the frequency of matches across these different fields, we 

selected seven fields that we believe can be used to identify carriers with 

chameleon attributes: carrier name, company officer name, EIN, SSN, 

D&B number, phone number, and address.

 

2

D&B number is a unique nine-digit number used to identify a business location.

Matching 
Appendix II: Additional Information on the 

Scope and Methodology of Our Data Analysis

Page 44 GAO-12-364 Motor Carrier Safety

Table 5: Steps Taken to Standardize Fields Prior to Matching

Standardization step

Phone 

numbers

EIN, SSN, and 

D&B numbers Address

Carrier 

name

Company 

officer 

Excluded records with missing values • • • • •

Excluded records with a single character or digit •

Excluded records that were not 7 or 10 characters or digits 

long (there were no parenthesis) •

Excluded records with values consisting entirely of zeros 

or nines • •

Excluded records with no number •

Excluded records with garbage values. Specifically if the 

values were: “, *, -, n/a, na, unknown, owner, c/o, none, 

test, and same. Also, records where the length of the value 

was less than 3 or where the value was only numbers (no 

alphabetical characters).

• • •

Standardize values (correct for spelling variations, 

differences in abbreviations, etc.). • •

Source: GAO summary of steps taken to standardize FMCSA data.

If two carriers had an exact match on at least one of these data fields, we 

then added them to our list of “carrier match pairs.” Within the pairs, we 

coded each USDOT number as either a new carrier or an old carrier 

based on the date that the USDOT number was added to the database.3

In a number of instances, a new carrier matched more than one old 

carrier. Because we were interested in identifying new carriers with 

chameleon attributes, and not in counting the number of older carriers to 

which they matched, we took just the strongest match for each new 

carrier and discarded the others.4

We calculated the strength of each match using a weighting formula 

through which we assigned different weights to different fields. Our 

weighting formula was based on (1) conversations with FMCSA and state 

 

3

For matching purposes, we used the date a carrier was added to the system (“add date”) 

rather than the date a carrier entered the new entrant program (“new entry date”) 

because, according to FMCSA officials, the add date is a more accurate reflection of when 

registration information was provided by a new carrier. In contrast, because carriers can 

exit and enter the new entrant program several times, the new entry date might not show 

when a carrier submitted its registration information.

4

In cases where a new carrier had multiple equally strong matches to different older 

carriers, we selected one at random.
Appendix II: Additional Information on the 

Scope and Methodology of Our Data Analysis

Page 45 GAO-12-364 Motor Carrier Safety

officials who indicated that certain data field matches were more likely to 

indicate that a carrier was potentially a chameleon and (2) an evaluation 

of data fields that carriers matched on.5

Match score = (carrier name x company officer name) + 2(SSN) + 2 (EIN) 

Based on these sources of 

information, we derived a formula in which the seven data fields were 

weighted and combined in the following way:

+ 2 (D&B number) + phone + 0.5(address) 

In this formula, each of the variables is coded 1 if the two carriers match 

on the corresponding data field and 0 otherwise. Thus, for example, if a 

new carrier matched an old carrier on company officer, company name, 

SSN, and phone, the new carrier would receive a match score of (1 × 1) + 

2 + 1 = 4. Alternatively, if a new carrier matched an old carrier on carrier 

name and address, but not on company officer name (or any other fields), 

the new carrier would receive a score of (1 × 0) + 0.5 = 0.5. Note that 

because of how carrier name and company officer name are combined in 

the formula, neither of these fields counts toward a match unless matches 

on both fields are present.

After completing our match of registration information, we coded each 

carrier in the MCMIS universe according to whether it might have a 

motive to evade detection, which meant having at least one of the 

following attributes: filed for bankruptcy; involved in a severe crash; fined 

by FMCSA; or issued an out-of-service order, an imminent hazard order, 

or an unsatisfactory or unfit rating by FMCSA. We selected these 

attributes based on discussions with FMCSA officials indicating that they 

are possible reasons that a carrier might attempt to become a chameleon 

and are attributes that FMCSA used for creating a list of poorly 

performing carriers within its new applicant screening algorithm. Because 

 

5

Specifically, our data showed that address matches were very common (10,032,429 pair 

matches), which indicated that these matches are less helpful in identifying the carriers at 

the highest risk of being chameleons. In addition, we expect EIN, SSN, and D&B matches 

to be a strong indication that the new carrier is associated with a prior carrier because 

these numbers are universal, unique identifiers. This is supported by our data, which show 

far fewer matches across SSN (201 pair matches), EIN (231 pair matches), and Dun & 

Bradstreet (909 pair matches). We also linked carrier name and company officer matches 

because the data indicated that matches on each of these fields alone were not 

uncommon (3,073,264 pair matches for carrier name and 251,337 pair matches for 

company officer name).

Motive
Appendix II: Additional Information on the 

Scope and Methodology of Our Data Analysis

Page 46 GAO-12-364 Motor Carrier Safety

we did not have evidence indicating that any one motive was more likely 

to result in a carrier becoming a chameleon we weighted all motives 

equally. That is, the motive criterion was binary—a carrier either had a 

motive or did not have a motive. In addition, we counted a carrier as 

having a motive only if the first appearance of the motive predated the 

new carrier’s registration with FMCSA. For example, a filing for 

bankruptcy was counted as motive only if the old carrier filed for 

bankruptcy before the new carrier registered. However, we were unable 

to determine whether a motive, having initially appeared, was still present 

at just the time when the new carrier registered. For example, FMCSA 

may have rescinded an out-of-service order on an old carrier before the 

new carrier attempted to register, and our data analysis did not 

specifically exclude these types of cases.

We incorporated motive to evade detection into our analysis in three 

distinct ways. First, we used motive to assess whether the matching 

component of our analysis was identifying carriers with a reason to be a 

chameleon, as opposed to carriers with legitimate reasons to reincarnate 

and carriers with registration information accidentally resembling an older 

carrier’s. Second, we used motive to select a particular match score 

threshold to be used in our definition of a carrier with chameleon 

attributes—that is, a match score (calculated according to the above 

formula) beyond which we classify a carrier as meeting the match 

criterion. Finally, as noted earlier, motive was a component, separate 

from matching, of our definition of a carrier with chameleon attributes. In 

the following sections, we discuss these three uses of motive.

One concern with our approach is that data matching may not give an 

accurate picture of the total number of chameleon carriers for two 

reasons. First, data matching could identify carriers that have legitimate 

business reasons for registering a new company that appears to be 

related to an older one. Second, similar or even identical registration 

information may inadvertently be submitted by unrelated companies. In 

order to address this issue, we used information about whether an older 

carrier had a motive to evade detection—a feature that we and FMCSA 

believe indicates that a new carrier is more likely to be a chameleon than 

a carrier without such a feature. In particular, we looked at the likelihood 

that an older carrier with a motive would match a new applicant, as 

compared to the likelihood that an older carrier without a motive would 

match a new applicant. If the only causes of data matches were carriers 

that had legitimate business reasons for assuming a new identity and 

Combining Matching 

and Motive

Using Motive to Assess 

Whether the Matching 

Component of Our 

Analysis Was Identifying 

Carriers with a Reason to 

be Chameleons
Appendix II: Additional Information on the 

Scope and Methodology of Our Data Analysis

Page 47 GAO-12-364 Motor Carrier Safety

accidental similarities in registration information, then we would expect 

older carriers with a motive to be no more likely to match new applicants 

than older carriers without a motive. However, if matches do occur 

because of chameleons registering, then we would expect older carriers 

with a motive to be more likely to match new applicants than older 

carriers without a motive. We formalize this reasoning as follows: 

ber Total carriers old of num motive with

carriers old of Number applicant new a match that motive with carriers for rate Match motive with =

Total number of old carriers without motive

Number of old carriers without motive that match a new applicant Match rate for carriers without motive =

carriers for rate Match motive without

carriers for rate Match motive with

R =

Using these formulas in conjunction with several different match score 

thresholds, we found that a difference in the likelihood of a match for 

carriers with a motive and those without depended on the particular 

match score threshold that was used (see tables 6 and 7).

Table 6: Match Rates for Carriers with and without Motive Based on New Applicants in 2009

Match score 

threshold

Old carriers 

with a motive 

that matched a 

2009 new 

applicant

Old carriers 

prior to 2009 

with a motive

Match rate for 

old carriers with

a motive

Old carriers 

without a 

motive that 

matched a 2009 

new applicant

Old carriers 

prior to 2009 

without a 

motive

Match rate for 

old carriers 

without a motive R 

1.0 2,598 207,146 0.012542 5,318 910,160 0.005843 2.1

1.5 1,198 0.005783 2,064 0.002268 2.6

2.0 79 0.000381 139 0.000153 2.5

2.5 54 0.000261 105 0.000115 2.3

Source: GAO analysis.

In table 6, the number in the final column, R, can be interpreted as 

follows: when we used a match score threshold of 1.0 (see the first row of 

the table), pre-2009 carriers with a motive were 2.1 times more likely to 

match a new applicant in 2009 than were pre-2009 carriers without a 

motive. Similarly, when we used a threshold of 1.5, pre-2009 carriers with 

a motive were 2.6 times more likely to match a new applicant in 2009 

than were pre-2009 carriers without a motive.
Appendix II: Additional Information on the 

Scope and Methodology of Our Data Analysis

Page 48 GAO-12-364 Motor Carrier Safety

As shown in table 7, we conducted a similar analysis for 2010:

Table 7: Match Rates for Carriers with and without Motive Based on New Applicants in 2010

Match score 

threshold

Old carriers with

a motive that 

matched a 2010 

new applicant

Old carriers 

prior to 2010 

with a motive

Match rate for 

old carriers with

a motive

Old carriers 

without a 

motive that 

matched a 

2009 new 

applicant

Old carriers 

prior to 2009 

without a 

motive

Match rate for 

old carriers 

without a 

motive R 

1.0 3,010 218,769 0.013759 7,148 95,941 0.007493 1.8

1.5 1,331 0.006084 2,685 0.002815 2.2

2.0 62 0.000283 183 0.000192 1.5

2.5 39 0.000178 112 0.000117 1.5

Source: GAO analysis.

As the tables show, the difference in likelihood between carriers with a 

motive and those without depended on the particular match score 

threshold that we used. For both 2009 and 2010, we tested a range of 

match score thresholds (from 1.0 to 2.5), and in all cases carriers with 

motive were statistically significantly more likely to match a new applicant 

than were carriers without motive.

These results suggest that the matching component of our analysis did 

not merely detect accidental or benign matches, such as carriers that 

registered a new company for legitimate business reasons, but rather 

identified carriers seeking to evade detection. Specifically, if matches 

occurred only for benign or accidental reasons, then we would expect 

matching to be no more likely among carriers with a motive than among 

carriers without. That is, we would expect R to be near 1.0. In fact, we 

found that older carriers with a motive were roughly twice as likely to 

match a new applicant in 2009 or 2010 as were older carriers without a 

motive. This suggests that the data-matching component of our analysis 

was effective in detecting carriers with chameleon attributes and not just 

carriers with legitimate reasons to assume new identities or accidental 

similarities to previously registered carriers. While this test demonstrates 

that our method identified carriers with a motive to evade detection, 

further investigation would be needed to confirm whether any of the 

carriers on our list of carriers with chameleon attributes actually are 

chameleons.
Appendix II: Additional Information on the 

Scope and Methodology of Our Data Analysis

Page 49 GAO-12-364 Motor Carrier Safety

Having verified that data matching, as defined in our analysis, was related 

to motive, we then used motive to select a match score threshold. Our 

goal was to identify a match score threshold that was high enough to 

avoid capturing many “false alarms”—that is, matches that occur for 

accidental or benign reasons—and yet low enough so that our matching 

criterion was not overly restrictive. To identify such a match score 

threshold, we tested several different thresholds to identify the one with 

the strongest relationship between whether an older carrier had a motive 

and whether it matched a new applicant in 2009 or 2010. As the tables 

above show, the highest value of R occurred at a threshold of 1.5 for both 

2009 and 2010. Based on this analysis, we selected a 1.5 match score as 

the optimal threshold. That is, the degree of match between the two 

carriers’ registration information had to exceed the defined threshold of 

1.5 for the new carrier to be classified as having chameleon attributes.

Having used motive to refine the matching component of our definition, 

we also used motive as a second component, in its own right, of a carrier 

with chameleon attributes. Only if a carrier met both the match criterion 

and the motive criterion was it classified as a carrier with chameleon 

attributes.

To determine carrier type—freight, passenger, household goods, or 

multiple—we requested guidance from FMCSA officials. Following this 

guidance, we took the following steps: (1) identified carrier types (freight, 

passenger, household goods, and multiple operating authorities) for forhire carriers using the demo carrier summary table in the Licensing and 

Insurance database; (2) identified private carriers with passenger and 

household goods operating authorities using the operation classification, 

cargo classification, and carrier equipment tables in the MCMIS database; 

and (3) classified the remaining carriers as private freight carriers. For 

some part of our analysis, we combined for-hire and private carriers to 

yield four categories: passenger, household goods, freight, and multiple 

(where “multiple” included any combination of passenger, household 

goods, and freight).

Using Motive to Select a 

Match Score Threshold

Using Motive as One 

Component of Our 

Definition of Carriers with 

Chameleon Attributes

Categorizing Carriers 

by Carrier Type
Appendix III: Standards for Corporate 

Successor Liability

Page 50 GAO-12-364 Motor Carrier Safety

FMCSA takes a series of steps to investigate whether a new carrier is a 

chameleon—or in legal terminology, the corporate successor of a 

previous carrier that assumed a new identity to evade detection by the 

agency. Once FMCSA identifies a carrier as a potential chameleon carrier 

that was either ordered out-of-service or had enforcement action taken 

against it, FMCSA must demonstrate, by law, that the new carrier is the 

“corporate successor” of the old carrier in order for the liability of the old 

entity to attach to the new carrier.1 This linkage allows FMCSA to deny or 

revoke operating authority or take enforcement action against the new 

carrier.2

The traditional common law rule of corporate successor liability states 

that a corporation that acquires all or part of the assets of another 

corporation does not acquire the liabilities and debts of the predecessor.3

Currently, the applicable standard FMCSA is required to follow to 

demonstrate corporate successorship is unclear. Laws pertaining to 

corporate successor liability vary among the states, and until 2006, U.S. 

Department of Transportation Administrative Law Judges applied the law 

of the state in which the action arose. In 2006, however, an Administrative 

Law Judge issued a decision—Williamson Transport Co., Inc.—holding 

that FMCSA should be using a federal standard to determine successor 

liability rather than the rule of a particular state.

However, there are four traditional and widely accepted exceptions to this 

rule. The majority of states follow the traditional rule for successor liability, 

subject to the four traditional exceptions. There is also a federal rule used 

to determine corporate successorship.

4 Upon review, in 2009, an 

FMCSA Assistant Administrator issued a final order overruling this 

decision.5

 

1

See Upholsterers’ Int’l Union Pension Fund v. Artistic Furniture of Pontiac, 920 F.2d 

1323, 1325-1326 (7th Cir. 1990); In the matter of: Williamson Transport Co., Inc., Final 

Order: Decision on Review, Docket No. FMCSA-2004-17247 (Jan. 2009). See also 63 

Am. Jur. 2d. Products Liability § 119 (2011).

The Assistant Administrator determined that the federal 

2

49 U.S.C. § 31144.

3

See, e.g., Bud Antle v. Eastern Foods, 758 F.2d 1451, 1456 (11th Cir. 1985); Mozingo v. 

Correct Mfg. Co., 752 F. 2d 168, 174 (5th Cir. 1985).

4

Williamson Transport Co., Inc., Docket No. FMCSA-2004-17247 (March 2006).

5

In the matter of: Williamson Transport Co., Inc., Final Order: Decision on Review, Docket 

No. FMCSA-2004-17247 (Jan. 2009).

Appendix III: Standards for Corporate 

Successor Liability
Appendix III: Standards for Corporate 

Successor Liability

Page 51 GAO-12-364 Motor Carrier Safety

standard was not the proper test for determining motor carrier successor 

liability, and that state law should have been used instead. However, in 

response to a petition for reconsideration, the Assistant Administrator 

found that “it is not necessary in this case to determine whether the 

standard...should be the traditional common law, the particular state law, 

or the federal doctrine of ‘substantial continuity,’” because the claimant 

(FMCSA) did not succeed under any standard.6 This decision left an open 

question as to which standard FMCSA should use to determine motor 

carrier successor liability.

The Federal Standard. The federal doctrine of “substantial continuity” is 

an eight-pronged, judicially created test that attaches liability to a 

successor company if it (1) retains the same employees, (2) retains the 

same supervisory panel, (3) retains the same production facilities in the 

same location, (4) continues producing the same products, (5) retains the 

same name, (6) maintains continuity of assets, (7) maintains continuity of 

general business operations, or (8) holds itself out the public as a 

continuation of the previous corporation.7

State Standards. State corporate successor liability laws vary from state 

to state, based either on case law within the state or, in some instances, 

state legislation.

FMCSA officials have stated 

that not all of these prongs need to apply in a given case, but rather that 

these are the different factors that are weighed equally in determining 

whether “substantial continuity” is established.

8

 

6

In the matter of: Williamson Transport Co., Inc., Order Denying Petition for 

Reconsideration, Docket No. FMCSA-2004-17247 (July 2010).

Most jurisdictions recognize the traditional rule for 

successor liability, also referred to as the common law rule, as their state 

7

In the matter of: Williamson Transport Co., Inc., Final Order: Decision on Review, Docket 

No. FMCSA-2004-17247 (January 2009) (citing United States v. Carolina Transformer 

Company, 978 F.2d. 838 (4th Cir. 1992)).

8

Successor liability is a concept derived by courts from the common law. The general rule 

was developed within the framework of corporate and tax law, but courts have routinely 

applied it to commercial cases, torts, and products liability cases. Tim Orr, Not Just for 

Contracts Anymore: Successor Liability, 17 S. Carolina Lawyer 32, 35 (2006). Additionally, 

corporate successor laws apply in many different contexts, including, but not limited to, 

corporate mergers, products liability, and negligence.

Standards for 

Successor Liability
Appendix III: Standards for Corporate 

Successor Liability

Page 52 GAO-12-364 Motor Carrier Safety

standard.9 This rule states that a corporation that acquires all or part of 

the assets of another corporation does not acquire the liabilities and debts 

of the predecessor, subject to several exceptions.10

1. The purchasing company explicitly or implicitly agrees to assume the 

debts or liabilities of the seller.

Most jurisdictions 

also recognize four traditional exceptions:

2. The transaction amounts to a consolidation or merger (or “de facto 

merger”).

3. The successor entity is a mere continuation of the predecessor entity 

(“mere continuation”). In most states, the key elements of mere 

continuation are a common identity of the officers, directors, and 

stockholders between the predecessor and successor.11 This 

exception is aimed at owners or directors who may dissolve one 

company and begin another to avoid debts and liabilities.12

4. The transaction was entered into fraudulently in order to escape 

liability.13

When this state standard is applied, if an exception is met, the liability of 

the predecessor will attach to the new corporation. For a suspected 

chameleon, FMCSA must demonstrate that one of the exceptions is met 

in order to attach the liabilities of the prior carrier to the new carrier, 

including, for example, revoking the carrier’s operating authority or taking 

 

9

See Amjad Munim, M.D., P.A. v. Azar, 648 So.2d 145, 151 (Fla. Dist. Ct. App. 1994) 

(recognizing that Florida follows the vast majority of jurisdictions in honoring the traditional 

rule of corporate successor liability); Vernon v. Schuster, 179 Ill.2d 338, 345 (Ill. 

1977)(stating that the traditional rule, along with the four exceptions, is recognized in the 

majority of American jurisdictions).

10See Bud Antle v. Eastern Foods, 758 F.2d 1451, 1456 (11th Cir. 1985). 

11Tim Orr, Not Just for Contracts Anymore: Successor Liability, 17 S. Carolina Lawyer 32, 

36 (2006).

12Id.

13See, e.g., Bud Antle, Inc., 758 F.2d at 1456; Travis v. Harris Corp. 565 F.2d 443, 447 

(7th Cir. 1977); Leannais v. Cincinnati, Inc. 565 F.2d 437, 439 (7th Cir. 1977); Ray v. Alad 

Corporation, 560 P. 2d 3, at 7 (Cal. 1977). 
Appendix III: Standards for Corporate 

Successor Liability

Page 53 GAO-12-364 Motor Carrier Safety

enforcement actions.14

As noted previously, most jurisdictions follow the traditional principle of 

successor liability along with the four traditional exceptions.

These exceptions delineate elements that must be 

met in order for the exception to apply and for liability to attach to the new 

corporation. FMCSA officials have told us that the agency typically uses 

the “mere continuation” theory to attach liability to the successor carrier, 

but other theories (such as “de facto merger” or “fraud”) may be used.

15 For 

example, Florida,16 Georgia,17 Illinois,18 New York,19 and North Carolina20

have adopted the traditional rule of successor liability and the four 

traditional exceptions. In addition, a limited number of states have 

adopted a nontraditional exception, the “continuity of enterprise” 

exception.21

 

14There are additional claims that FMCSA may pursue in an action against a reincarnated 

carrier; for example, evasion of FMCSA regulations (49 U.S.C. § 14906).

15See, e.g., Amjad Munim, 648 So.2d at 151 (recognizing that Florida follows the vast 

majority of jurisdictions in honoring the traditional rule of corporate successor liability); 

Vernon v .Schuster, 179 Ill.2d 338, 345 (Ill. 1977) (stating that the traditional rule, along 

with the four exceptions, is recognized in the majority of American jurisdictions).

16See, e.g., Amjad Munim, 648 So.2d 145 at 151; Patin v. Thoroughbred Motor Boats, 24 

F.3d 640, 650-651 (5th Cir. 2002).

17See, e.g., Bullington v. Union Tool Corp., 328 S.E.2d 726 (Ga. 1985); Perimeter Realty 

v. GAPI, Inc., 533 S.E.2d 136, 145-146 (Ga. Ct. App. 2000) (applying traditional definition 

to a corporation’s acquisition of a partnership and rejecting its application to the facts of 

the case). See also Bridge Capital Investors II v. Small, 144 Fed. Appx. 762, 764 (11th 

Cir. 2005) (not for publication).

18Vernon v .Schuster, 179 Ill.2d 338 (Ill. 1977) (applying the traditional successor liability 

rules in Illinois). See also Pielet v. Pielet, 942 N.E.2d 606, 636-640 (Ill. App. Ct. 2010) 

(applying the traditional rule in Illinois).

19Schumacher v. Richards Shear Co., 451 N.E.2d 195 (N.Y. 1983)(applying traditional 

rule and exceptions and refusing the invitation to adopt the “product line” or “continuity of 

enterprise” exceptions). Meadows v. Amsted Industries, Inc., 760 N.Y.S.2d 604 (N.Y. App. 

Div 2003) (applying traditional rules and exceptions to products liability and negligence 

action); Mitchell v. Suburban Propane Gas Corp., 581 NY.S.2d 927 (N.Y. App. Div. 1992) 

(applying traditional rule and two traditional exceptions); Morales v. City of New York, 849 

N.Y.S.2d 406 (N.Y. Sup. Ct. 2007).

20G.P. Publications, Inc. v. Quebecor Printing, 481 S.E.2d 674 (N.C. Ct. App. 1997) 

(applying traditional rules); Budd Tire Corp. v. Pierce Tire Corp., 370 S.E.2d 267 (N.C. Ct. 

App. 1988).

21States have also applied a “product line” exception, but this only applies to product 

liability actions, and therefore, is not applicable to FMCSA motor carrier successor liability.
Appendix III: Standards for Corporate 

Successor Liability

Page 54 GAO-12-364 Motor Carrier Safety

The “continuity of enterprise” exception uses factors similar to those used 

in the federal “substantial continuity” standard. Factors other than the 

traditional ones that are typically taken into account under this exception 

are (1) retention of the same employees, (2) retention of the same 

supervisory personnel, (3) retention of the same production facilities in 

the same physical location, (4) production of the same product, (5) 

retention of the same name, (6) continuity of assets, (7) continuity of 

general business operations, and (8) whether the successor holds itself 

out as the continuation of the previous enterprise.22

In addition, there are states that have enacted legislation in place of 

traditional common law rules and exceptions. For example, Texas has 

enacted a statutory provision overriding the traditional rules and 

exceptions. Under Texas law, an acquiring entity may not be held 

responsible or liable for any obligations or liabilities of the transferring 

domestic entity unless they are expressly assumed by the person.23 Table 

8 provides a list of the successor liability laws in the 10 states we 

examined.

 

22Mozingo, 752 F. 2d at 175.

23Tex. Bus. Orgs. Code Ann. § 10.254(b). See Ford Bacon & Davis, L.L.C. v. Travelers 

Insurance Co., 635 F.3d 734 (5th Cir. 2011)(applying revised Texas statute in refusing to 

adopt product line exception). See also C.M. Asfahl Agency v. Tensor, Inc., 135 S.W.3d 

768 (Tex. App. 2004) (applying statute and finding no liability because it was not expressly 

assumed by the successor). 
Appendix III: Standards for Corporate 

Successor Liability

Page 55 GAO-12-364 Motor Carrier Safety

Table 8: Ten Selected States’ Corporate Successor Liability Rules

State 

Follows traditional 

rules and 

exceptions only

Follows traditional rules 

and exceptions plus 

nontraditional exceptions

Applies 

“continuity of 

enterprise” theory

California •

Florida •

Georgia •

Illinois •

Michigan • •

New Jersey •

New York •

North Carolina •

Pennsylvania •

Texasa

Source: GAO and FMCSA.

a

As stated previously, Texas has adopted a statute that only holds an acquiring entity liable for any 

obligations or liabilities of the transferring domestic entity when they are expressly assumed by the 

person. Tex. Bus. Orgs. Code Ann. § 10.254(b).
Appendix IV: GAO Contact and Staff 

Acknowledgments

Page 56 GAO-12-364 Motor Carrier Safety

Susan A. Fleming, (202) 512-2834 or flemings@gao.gov

In addition to the individual named above, H. Brandon Haller (Assistant 

Director), Russ Burnett, Lauren Calhoun, Matt Cook, Bess Eisenstadt, 

Colin Fallon, David Hooper, Cathy Hurley, Steve Martinez, Anh Nguyen, 

and Josh Ormond made key contributions to this report.

Appendix IV: GAO Contact and Staff 

Acknowledgments 

GAO Contact

Staff 

Acknowledgments 

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