SUISUN CITY - More than seventy ships that once served our country are now just rusting away, polluting Northern California waterways. Everyone agrees that's a problem, but is the plan to dismantle them dead in the water?

Even if it isn't it's costing taxpayers five million dollars a year to moor them there. Who's accountable for the ghost fleet of Suisun Bay, and what are they doing about the problem?

They're grey giants, an important part of our nation's naval history, critical to the country's defense as far back as World War Two. Now, more than 50 are considered obsolete and named on a list of vessels to be dismantled and sold for scrap.

Some of them have been rusting away for decades. This storage fleet was established just after World War II and is now managed by the National Maritime Administration, also called MARAD.

MARAD's on the hot seat because the water around these ships is polluted with toxic metals like lead, zinc and copper. A 2007 environmental study found close to 20 tons of the toxins. Experts believe much of it comes from paint flaking off the fleet and say it's spreading.

"Even down in channels in Alameda and San Francisco," says Saul Bloom of Arc Ecology, an environmental group studying the fleet. He says the pollutants are even "up in the Delta, that's how serious the problem is."

Even some fishermen in the waters surrounding the fleet worry that the pollution could be working its way into fisheries and up the food chain.

"I hardly eat any of the fish here, I just do it for fun," says one fisherman we spoke with. Others won't even consider eating fish out of the waters, claiming they've heard the fish are "filled with lead or whatever."

It's a situation that hasn't gone unobserved by water quality authorities.

"When we are regulating wastewater treatment plants down to the parts per billion/parts per million level," says Bruce Wolfe of the San Francisco Bay Water Quality Board, "to have tons get into the bay is totally unacceptable."

He says they've known about the fleet for years, but were not made aware of the pollution, but argue it wasn't their job to watchdog it.

"Everybody drove by and said 'gee there's the mothball fleet, I wonder who's overseeing that?'" says Wolfe. "Essentially nobody was."

Yet environmentalists like Bloom say it's the MARAD that's dropped the ball.

"The Federal Government needs to carry its own water and they're not," says Bloom. He says environmentalists have grown exasperated and have warned about this problem for decades.

"We've been waiting 60 hears for them to get on the job. They haven't done it. They are probably the last federal agency we have found to come into the environmental age," says Bloom.

Yet MARAD blames ignorance and a limited budget. They haven't done any maintenance on them.

When we asked Sean Connaughton, an administrator for MARAD, why he says "there was no money for it," he says "because they knew these vessels were going to be obsolete and they were going to be sent to recyclers."

When we asked Connaughton about the people who fish that water, and other environmental issues he says "many of these issues that are coming up now weren't issues anyone thought about 5, 10, 15 years ago."

As a result, environmental groups are suing to make sure the feds follow the state and federal hazardous waste laws, clean water laws and the national environmental policy act. But MARAD claims all this has cost time and money.

"Twelve to fourteen of those vessels that we took out of the other two fleets would have been out of here," says Connaughton. "So we would have gone from 57 vessels to the low to mid 30s."

Taxpayers are footing the bill for that. It costs an estimated $100,000 a year to moor and maintain these ships yet environmentalists say the payoff will offset those costs.

"What happens with these lawsuits, historically, is they speed up action," says Bloom. "MARAD wasn't taking requests of state regulators seriously. Now they are. We feel that if it takes several months more, we've waited decades already!"

In 2001, MARAD started to fix the problem: they hauled ships to Texas for dismantling, but the Coast Guard started requiring hull cleaning of the ships before they sent them away. Exfoliating or "scamping" hulls in the bay put more paint in the water and therefore more pollution. State water officials want MARAD to find a better alternative. MARAD says they have.

"We developed a process in which essentially a vacuum cleaner bag is attached to the scrubber," says Connaughton. "It essentially captures at least the vast majority of the solids and metals."

So right now the frustrating reality is these ships just sit here and continue to disintegrate. Meantime, there are some people pushing some long-term solutions. One is a Northern California company called Allied Defense Recycling.

ADR wants to refurbish the dry docks at the now decommissioned Mare Island Naval Facility.

"We have a government contract to dispose of the first four ships of the mothball fleet," says Jay Anast, President of ADR. "Hopefully [we] will be able to dispose of the entire fleet within seven years of becoming entirely operational."

An added bonus would be that 350 new jobs benefiting the city of Vallejo would come with the dismantling facility. Vallejo just declared bankruptcy in the last month.

"I do see it as an ongoing shipyard which will provide jobs and add to the local economy for many years," says Anast. He says at a minimum it would be working 15 to 20 years into the future. MARAD actually supports the idea.

"We would love to see recycling facilities out here, Bay area or West Coast," says MARAD's Connaughton. "Right now almost all the recycling facilities, well, they exist in Texas and Virginia."

Even environmentalists like Saul Bloom back the Vallejo idea. "Tow 'em over there," he says. "There are workers in that area that could be employed so why not make some sense of it all?"

For now, though, MARAD is pushing a new environmental excellence initiative. It involves negotiating with other agencies to better maintain the ships, improve the pollution problem and speed up the dismantling of obsolete ships.

"What we're trying to institute today is a program that will last beyond the presidency into every future presidency and that the standards are maintained uniformly high on all the fleets," says MARAD's Connaughton.

MARAD is now saying the right things, but this time a lot of people will be watching to make sure they follow through. They say they've hired a contractor to asses each ship and will no longer accept new ships unless they meet specific certain standards.

ADR, the company bidding to dismantle the ships, says their plan is now wrapped up in bureaucratic red tape and has made no new progress.

NOAA, the National Oceanographic and Atmospheric Administration, is going to study the sediment in the Suisun Bay to get a better read on environmental problems. There are also groups trying to save the vessels to make them into museums.

• CBS 13