Your Tax Dollars At Sea - Who Pays When Things Go Wrong on Cruises?

This week the United States Coast Guard rescued two cruise passengers - one ill young man from the NCL Gem cruise ship sailing off the coast of North Carolina and a second young woman from the Explorer cruise ship who was suffering from an appendicitis attack near Key West Florida. 

When we report on these type of rescues, we sometimes hear from readers of Cruise Law News complaining that the cost of the medical evacuations should be borne by the sick passengers themselves. 

We especially hear these complaints when a passenger inadvertently goes overboard.  Was the passenger acting negligently or was he or she under the influence of alcohol (a major money Carnival Splendor Cruise Ship Fire maker for the cruise lines).  If so, many people protest loudly and angrily that the cruise passenger should bear the extra fuel expenses and other costs incurred by the cruise ship and the Coast Guard searching for the missing passenger.   

Federal agencies are prohibited by law from seeking reimbursement of the costs associated with search and rescue of this type. 

So who bears the expense when the cruise lines act irresponsibly and the cruise goes terribly wrong?

Consider the fire last year aboard the Carnival Splendor which caused the cruise ship to lose power off of the coast of Mexico.  The Carnival ship was disabled due to the negligent design of the cruise ship itself which risked the lives of 4,500 passengers and crew.  As we reported before, the U.S. Coast Guard blasted Carnival for its defective engines and poorly designed safety instructions which caused several thousands of passengers to find themselves helplessly adrift at sea without lighting, air conditioning or hot water on the high seas. 

Carnival quickly considered legal claims against the companies which designed and manufactured the engines which failed.  Carnival did not hesitate making a claim against these companies for the revenues lost while the Splendor sat in dry dock being repaired.

But who paid for the enormous costs associated with the U.S. Navy and U.S. Coast Guard responding to the emergency?  

You will recall that the U.S. Navy sent an aircraft carrier, the U.S.S. Ronald Reagan, to the scene as the mostly U.S. passengers bobbed around on the high seas.  The Navy utilized four aircraft and helicopters to assist the stricken Carnival ship.  The Navy made twenty-four airlifts of food and provisions which its aircrew skilfully dropped onto the Carnival cruise ship to feed the passengers.  

How much did this cost and who was paying for it? 

I inquired around and the only knowledgeable source was the International Cruise Victims ("ICV") organization whose President, Ken Carver, had requested information from the U.S. Navy and the U.S. Coast Guard pursuant to a Freedom of Information Act ("FOIA") request.

The U.S. Navy timely responded to Mr. Carver's FOIA request.  The Navy disclosed that it delivered 60 pallets, weighing over 37,000 pounds, of "bread, luncheon meat, pop tarts, canned crab, water and paper plates." 

Considering the cost of positioning an aircraft carrier, dispatching multiple aircraft and helicopters, and delivering tons of food and water to be dropped onto the cruise ship, the Navy stated that it spent $1,884,376.75 responding to the fire aboard the Carnival Splendor cruise ship.  

This figure does not include the costs incurred by the U.S. Coast Guard in responding to the crisis. Unfortunately, the Coast Guard has not yet provided any information in response to Mr. Carver's FOIA request dating back to earlier this year.

The Coast Guard's costs were undoubtedly another $2,000,000 or so in personnel and fuel costs for their vessels and helicopters.

There is a certain irony that cruise lines, which structure their businesses to avoid U.S. taxes and U.S. safety regulations, are dependent on the generosity of our Federal agencies in responding to emergencies when they get themselves into a jam.  

Cruise lines incorporate in foreign countries like Liberia and Panama and register their cruise ships in foreign Aircraft Carrier Ronald Reagan - Carnival Splendorcountries like the Bahamas in order to avoid U.S. laws and all U.S. income taxes. The cruise industry collects over $35,000,000,000 (billion) a year in income from mostly income-tax-paying-Americans, yet it avoids U.S. corporate income tax by incorporating itself and registering its ship abroad.

But when the cruise ships catch on fire and are adrift on the high seas, cruise lines like Carnival are the first to make a distress call to the United States and ask for favors from the U.S. Navy and U.S. Coast Guard. 

When cruise passengers were thinking of suing Carnival last year for the inconvenience caused by the cruise fire aboard the Splendor, I was the first one to say don't do it.  Many of the major news networks and newspapers picked up on the my don't-sue-Carnival message, like the Wall Street Journal, USA Today, Fox News,  ABA Journal, Gadling, and the U.K's Mirror.

At the end of the day, it was not the cruise passengers who filed suit.  It was Carnival who made legal claims against the companies which designed and manufactured its engines.  Carnival made millions in the process.

Did Carnival, the only one suing, repay the U.S. government?  

Not a penny.

So who paid for all of the millions of dollars in emergency services expended by our U.S. Navy and Coast Guard arising from the negligence of the tax-avoiding, foreign flagged and incorporated cruise line which stranded thousands of tax-paying Americans on the high seas?

You, the American taxpayers.    

 

For additional information about the Carnival Splendor fire and cruise ship fires in general, consider reading:

Carnival Splendor CO2 Firefighting System: "A Recipe for Failure"

"Coast Guard Blasts Carnival Splendor for Fire Negligence"

Ten Years of Cruise Ship Fires - Has the Cruise Industry Learned Anything? 

  

Photo credit:  bottom photo / U.S.S. Ronald Reagan - providencefox.com

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