Sen. Jay Rockefeller, D-W.Va., thinks there’s something gross about Carnival Cruise Lines.
But it’s not, in the senator’s words, the “squalid feces and trash and junk and stuff sloshing all over” the Carnival Triumph a few months ago. It’s this: American taxpayers — and not the cruise line — will have to pick up the tab for the U.S. Coast Guard coming to the rescue. When the “stuff” hits the fan (or deck, so to speak) in or near U.S. waters, it’s America’s responsibility to help. And judging by a recent exchange between Rockefeller and Carnival, the cruise industry would like to keep it that way.
Last month, Rockefeller penned a letter to Micky Arison, the chairman of the Carnival Corp. board of directors, saying he was aware of “90 serious events that have occurred” on its cruise ships resulting in U.S. Coast Guard action. The two most serious of these incidents — a fire on Carnival's Splendor in 2010 that left 4,500 people stranded at sea for days, and the Triumph fiasco — cost the Coast Guard and the Navy about $4.2 million. With reports that the Coast Guard could lose 25 percent of its operating budget under sequestration cuts, every penny counts.
“These costs ultimately must be borne by federal taxpayers,” Rockefeller continued in his letter. “Given that you reportedly pay little or nothing in federal taxes, do you intent to reimburse the Coast Guard and the Navy for the cost of responding?”
Without actually using the word, Carnival’s response was essentially “No.”
“Carnival’s policy is to honor maritime tradition that holds that the duty to render assistance at sea to those in need is a universal obligation of the entire maritime community,” Capt. James Hunn responded in a letter, obtained by Skift.com. “The cruise industry is no exception.”
Hunn wrote that this maritime code cuts both ways, and that just in the past 12 months the Coast Guard has requested the help of the cruise industry. As it turns out, just last month, a Carnival cruise ship helped the Coast Guard with a rescue off the coast of Florida. Rockefeller, however, was not impressed.
"Carnival's response to my detailed inquiry is shameful,” he wrote in an e-mailed statement to National Journal. “It is indisputable that Carnival passengers deserve better emergency-response measures than they experienced on the Triumph. I am considering all options to hold the industry to higher passenger safety standards.”
Because Carnival’s flagship port is in Panama, the company can get away without paying much, if any, U.S. taxes. The watery parts of the world are mired in a complex set of international rules, rules that in a 2012 hearing Rockefeller said, “work to protect the companies rather than their passengers.” Because it is not a U.S. company, for example, Carnival Cruise Lines doesn’t necessarily have to meet American safety standards, instead adhering to a United Nations code that is ill-enforced. And in Rockefeller’s view, that makes it even more frustrating that Carnival can rely so heavily on an American safety net.
“I believe that we must ask why an industry that earns billions and uses a variety of federal services — from the Coast Guard, to the Customs Bureau, to Centers for Disease Control — pays almost no corporate income tax,” he said at the time.
“Trust me, when something goes wrong on a cruise ship, it is the Coast Guard that comes to the rescue,” the West Virginia Democrat continued. “At a time when the Coast Guard and the entire federal government are struggling to maintain their critical missions, it is inconceivable to me that this industry doesn’t pay its fair share.”
This article appears in the April 8, 2013 edition of NJ Daily.