Carnival won't reimburse Uncle Sam for ship rescues

After the US spent more than $4 million, a powerful senator calls the cruise operator's response to his call for compensation shameful.

By Jonathan Berr Apr 4, 2013 1:58PM

The Carnival Triumph cruise ship is towed towards the dock as spectators watch at the port of Mobile, Alabama on February 14, 2013 (© Lyle Ratliff/Newscom/Reuters)Carnival (CCL), the world's largest cruise operator, has rejected a request from a powerful U.S. senator that it reimburse the U.S. government for the costs it incurs for rescuing the company's ships when they become disabled.

According to Senator Jay Rockefeller, D-W.Va., the U.S. Coast Guard has responded to 90 "serious events" involving Carnival ships over the past five years, including the rescue of the Carnival Triumph (pictured) in February and the 2010 operation to assist the Carnival Splendor. The Coast Guard and Navy spent $4.2  million to assist the Triumph and Splendor, which were both hit with power failures, according to a report in Skift.com quoting Rockefeller.

 

The Triumph made more news Wednesday after it broke loose from its repair dock during a storm. Sadly, a security guard was knocked into the Mobile River and hasn't been seen since, according to CNN.

In a letter to Carnival, Rockefeller noted that the company should repay the government for its help because the Panama-based operator pays "little or nothing in federal taxes." Carnival rejected Rockefeller's request, arguing its policy is to "honor maritime tradition" to render assistance to those at sea in need of assistance.

 

Carnival noted that it provides assistance to the Coast Guard when asked. The company also argued that it pays its fair share of fees to local, state and federal agencies.

Rockefeller, the chairman of the Senate's Commerce, Science and Transportation Committee, wasn't satisfied.

"Carnival's response to my detailed inquiry is shameful," he said in a statement to MSN Money. "I am considering all options to hold the industry to higher passenger safety standards."

Officials at Carnival couldn't immediately be reached.

Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter @jdberr.
 

More on moneyNOW

536Comments
Apr 4, 2013 2:17PM
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Just no longer allow the ships in US Ports....that should solve the issue !!!
Apr 4, 2013 2:39PM
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No problem Carnival, you can no longer dock anywhere in the US unless it's an emergency and even then you will be charged $100,000.00 per day in port.  How about them apples.
Apr 4, 2013 2:28PM
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Since they don't want to repay the rescue effort, inform them they will not be assisted again.  Then everyone should boycott the cruise line for at least 2 years...let's see how they like that!
Apr 4, 2013 2:33PM
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Wait what??? Pay up!!!!! How about gross negligence of their ship??? Isn't there fines for that? I hope every single person that has been wronged by this company gets their day in court. I will NEVER step foot on a Carnival cruise line. 
Apr 4, 2013 3:28PM
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Typical Carnival.  Total taxes paid (from annual report) over last 3 yrs around $5 million, and on $5 Billion of income (mostly US Based), and that includes total of US, UK, Italy, German, Spanish, Portuguese, Brazilian, and Chinese taxes.  (US company would pay over $1.5 Billion).  Safety is cut to the bone,  And the port taxes/fees is actually passed on to the passengers, or are tonnage taxes that are used to pay for visiting the ports.  Best thing people can do is boycott.
Apr 4, 2013 3:09PM
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So, Dear Carnival, you expect the kindness of strangers to keep yer boats afloat, do you? Well, think again. When you've needed 90 rescues in five years, you're running an intentionally underfunded operation. Maritime politesse flies out the window at that point.

 

We'll be there for you next time, but only when the check clears will you find the Coast Guard not sailing away, leaving you with a kiss for luck . . . and dead in the water.

Apr 4, 2013 3:11PM
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I am still waiting for a reliable answer on why in multiple occasions a single failure causes the loss of a ship.  This appears to be a common problem and with four occurrences in the last year no one has come fourth with a definitive answer as to whether these ships have inherently unsafe design flaws and should be grounded until fixed.  I think the coast guard needs to get their paperwork done.  Foreign flag or not, unsafe operation should not be allowed in US waters.  After all, Japan grounded the 787 fleet for the same reasons.
Apr 4, 2013 4:10PM
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if the company is paying taxes here then they should not pay, however since they are registered outside the usa they need to pay for the rescue costs. if they do not then they can no longer dock in the usa ports or come inside us waters
Apr 4, 2013 4:15PM
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they should be made to have insurance to cover those costs. closing our ports is also a very good solution.
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Why is it when a politician wants his/her own shoddy performance unnoticed, they find something "SHAMEFUL" that has been in the news of late.  I'll tell you what is really shameful.....it is the TRILLIONS of OUR tax dollars that are wasted while shills like Rockefeller vie for press time.  It is shameful that this country has been FOUR YEARS without a budget, yet the effort in Washington is to divert attention from their colossal failure to do their job by pointing loudly at overblown events in the "news". 

 

Your house is on fire, your elderly mother and your children are trapped on the top floor, and you are screaming about how your neighbor has left his trash cans on the curb.  Pathetic.

Apr 4, 2013 2:37PM
Apr 4, 2013 2:59PM
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Carnival wouldn't pay the cost anyway.  If it wasn't covered by their insurance, it would be buried in the cost of a cruise, and future customers would pick up the tab.
Apr 4, 2013 4:56PM
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Solution - your cruise lines are no longer welcome in US ports, including US territories such as Puerto Rico and the Virgin Islands.
Apr 4, 2013 4:56PM
Apr 4, 2013 4:04PM
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Let's see if Halliburton paid any US taxes on all those Midlitary Logistics COntracts after they moved their headquarters offshore..........
Apr 4, 2013 4:05PM
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The Smart Moves continue... Carnival is Stupid ...just added to their Poor Reputation and Complete Arrogance they can't be touched. They don't give a Crap about their Customers only their Money ...when are people going to wake up to that...Watch New  legislation pass not allowing to registrar Ships in other Countries..... Hope security Guards Family SUES their ****

 

Apr 4, 2013 4:21PM
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Easy fix.....threaten to send the IRS to check their books.
Apr 4, 2013 2:45PM
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Where the hell is Cathy Lee when you need her? 

Apr 4, 2013 6:25PM
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Actually the answer is simple.  Next time this happens, pull an aircraft carrier or some other large naval vessel out of port, go evacuate the passengers, and leave the ship adrift where it is.  Then Carnival can go out and rescue their ship themselves.  Then we charge them for every day the derelict ship is either in a US port or drifting in US waters.
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