Carnival Increases Profits, But at what Cost to U.S. Taxpayers?

Carnival Cruise TaxesCarnival Corporation announced its second quarter profits today.

Its revenues to date for 2015 (June 30th) were $7,180,000,000 (billion), consisting of passenger fares (tickets) of $5,425,000,000 and onboard purchases (booze, spa, specialty meals, casino) of $1,755,000,000. It's net income was $271,000,000.

And Carnival paid taxes of?  Nothing.

You have heard me say this before. By incorporating in Panama and registering its cruise ships in third world countries like Panama and the Bahamas to avoid taxes (and wage and safety laws), Carnival enjoys an enormous advantage over land-based business by paying virtually no U.S. taxes.

But Carnival uses our Federal agencies daily: the U.S. Coast Guard, Customs & Border Protection, FBI, USPH, EPA, DOT, Homeland Security and many others. It pays nothing for these services.

Those federal agencies are paid for by U.S. taxpayers, like you and me.

I have paid many millions of dollars in U.S. income over the years.  I'm not complaining. I love the U.S. and know that it takes money to operate a country like ours. 

But there is something fundamentally wrong when Carnival avoids taxes, enriches its executives hundreds of millions of dollars a year and pays its crewmembers around the world only a small pittance for their hard work. 

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Photo Credit: Craig Rubadoux via Florida Today

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SeaWorld's Chief Financial Officer Joins Carnival Cruise Line

Orcas SeaWorldA number of news sources report that SeaWorld's Chief Financial Officer (CFO), James Heaney, will be joining Carnival Cruise Line as CFO next month. Mr. Heaney worked at SeaWorld since 2011.

As the movie Blackfish reveals, SeaWorld profits by forcing captive orcas, which swim a hundred miles a day in the wild, to entertain tourists. The orcas spend the majority of their lives virtually motionless in concrete tanks that are the human equivalent of a bathtub until their dorsal fins collapse. Have you read of the plight of Tilikum?

I responded to the news on Facebook with a single comment: "ugh." Here's how readers of our Cruise Law News Facebook page reacted:

  • Now they can identify the marine mammals stuck on the bow of their ships.
  • Going from a company that is sinking to a company that runs ships is not a good combination.
  • Bad business ... Carnival is the worse, low quality company I've ever know.

Before SeaWorld, Mr. Heaney worked at Disney Cruise Line for 17 years. 

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"Rats & Roaches:" Cruise Lines Neglect Sick Crew Members

Cruise lines owe their crew members the absolute legal duty of providing medical treatment when the crew become sick or injured on the company's cruise ships.

Pursuant to the "maintenance and cure" doctrine, the cruise line is required to provide "maintenance" (room and board) and "care" (medical care and treatment) to the point that the crew member reaches his or her "maximum medical improvement." 

This ancient legal doctrine of protecting seafarers can be traced back to the Medieval Sea Codes. It was introduced into United States Maritime Law by the Supreme Court in 1823. Under the doctrine, Hotel Food Greasy Salty Disgustingthe cruise lines has an affirmative obligation of taking care of their injured employees in a manner which is no different than the natural responsibility of a mother or father to a child, the courts have analogized. 

But putting pleasant-sounding legal theories aside, in reality the practice of the cruise lines today is quite different. When a crew member hires a lawyer, the cruise lines put the sick crew member in dirty, low-rent hotels where they feed them disgusting food. Unfortunately, the Miami-based cruise lines act like resentful uncaring parents who neglect their responsibilities.

Royal Caribbean: When I first began representing crew members in the 1990's, Royal Caribbean used to house their injured crew members in a hotel close to South Miami Hospital. It was a nice, safe hotel with good food where crew members could go to and from the hospital with little inconvenience. But as soon as the crew member hired a lawyer, the cruise line would retaliate against their sick employee. Royal Caribbean would immediately kick the crew member out of the hotel and send them to a dump-of-a-hotel near I-95 and 163rd Street.  The area was known as a hang-out for drug dealers and prostitutes. The hookers would use the dirty hotel rooms on an hourly basis. It was a dangerous and demoralizing location for ill crew members to try and recuperate.  

More recently, Royal Caribbean uses a hotel in Miami hear 8th Street. Here are some of the descriptions on Trip Advisor:

"This hotel is absolutely horrible! Do not stay here. Management is awful. Toilet overflows constantly and cleaning crew does not help. . . Stay away from this hotel. Don't even spend a $1 on this hotel."

"Nothing good about this place . . . the room has no air conditioner or working fan. The bathroom was disgusting and had a terrible odor coming from the sink. Next thing, it was 11 pm and there were people just screaming for ages in the hallways . . .  Don't stay here!!!

Crew members at this hotel complain regularly about roaches, no hot water, inedible greasy salty food (photo above by crew member), extra charges for bottled water, malfunctioning televisions, and unsanitary bathrooms.   

Carnival:  We receive the same type of complaints from crew members on sick leave in the hotels which Carnival selects especially for its injured crew members who are represented by lawyers. It's a disgraceful practice. One crew member undergoing back surgery sent us a video below of a rat that lives under the buffet in the crew member dining room. 

We complained to Carnival, but it could care less. 

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Shocking News: Carnival Incorporates in the U.S. & Subjects Itself to U.S. Tax, Labor, Wage, Safety & Environmental Regulations

In an exclusive story, Cruise Line News has learned that cruise industry giant Carnival Corporation recently incorporated its business in the United States (in the state of Delaware). Carnival intends to announce this historic development tomorrow, April 2nd, at Carnival's headquarters in Miami.

Since 1972, Carnival has incorporated its business and registered its cruise ships in the country of Panama. For over 40 years, Carnival cruise ships have flown the flag of Panama in order to avoid the onerous safety regulations, excessive labor laws, unreasonable environmental laws, and high taxes of the United States of America.

Cruise Law News' discovery of this historic event came about when prominent maritime lawyer Jim Walker bumped into Carnival's Chairman Micky Arison at court side when Arison's championship basketball team, the Miami Heat, won another game. Maritime ace lawyer Walker asked Arison: "Micky, if Dwayne Wade and LeBron James earn several hundred million dollars from Carnival and pay tens of Mickey Arison Miami Heat Carnival Cruisemillions of dollars in U.S. taxes, don't you think it is fair that Carnival - which earns over 15 billion dollars a year in cruise ticket sales - pays its fair share of U.S. taxes?"

Perhaps it was the euphoria of the Heat beating the Portland Trailblazers by two points in a close victory, but Micky was ecstatic. "Yes, let's do it!" he said handing maritime lawyer Walker a half-eaten hot dog and three-quarters of a warm Bud Light which a Miami cheerleader handed Micky in the first quarter of the previous game a few days earlier.

While quickly consuming the beer and hot dog in the excitement of the moment, expert cruise lawyer Walker happened to have U.S. articles of incorporation which he handed to Micky to sign as well as U.S. flags to fly on the Carnival fleet of cruise ships.

Arison has been under intense pressure lately following fires, collisions, sinkings, poop-cruises, pirate-attacks, flounderings, Concordia-disasters, norovirus outbreaks and a Jon Secada concert which have ruined the last 37 Carnival cruises.  Senator Jay Rockefeller recently called Arison a "scallywag" on national TV. Rockefeller challenged Arison to pay his fair share of U.S. taxes on the billion-dollar bounty his foreign-flagged cruise ships collect from the U.S. taxpaying citizens on the high seas.

Micky commented that he was embarrassed that his father Ted, the founder of Carnival Cruise Lines 40 years ago, denounced his U.S. citizenship in order to avoid paying some 10 billion dollars in U.S. taxes.

Arison admitted that he felt guilty selling 1% of his Carnival stock for a $395,000,000 profit while suspending the crew member's retirement benefits.

"I want to make certain that Carnival pays one hundred % of our U.S. tax obligations (estimated to be over $5,000,000,000 a year) plus be subjected to the most rigorous U.S. safety, wage,and labor laws and the most stringent U.S. environmental regulations, Micky announced over the arena's PA system! "I want Carnival Cruise Line to be synonymous with Old Betsy - the U.S. Stars and Stripes - what the U.S. stands for! Its time that indigent crew members from India and Nicaragua who earn $500 working 360 hours a month be entitled to the full benefit of U.S. employment laws, a 401(k) retirement fund, severance pay, and a college fund for their children!" 

While appreciative of Arison's change of heart, sources say Walker was miffed that Arison demanded that he pay $6 for the remains of the hot dog and $7.50 for the rest of the Bud Light.

Passenger Alleges 2 Crew Members Raped Her on Carnival Victory

Inside Edition aired a video this week about a 28 year old woman who alleges that two crew members raped her during a Carnival cruise aboard the Victory last year.

The young woman told Inside Edition that Carnival served her a lot of alcohol and she has no recollection of how she ended up in the crew quarters. She indicates that once in the crew members' cabin, the two Carnival employees held her down and raped her repeatedly. She feared that the men were going to throw her overboard. 

As is the situation with most alleged crimes on the high seas, the FBI declined to prosecute. Our experience with the FBI is that federal agents (unlike state prosecutors) typically decline to pursue Carnival Cruise Sexual Assaulta prosecution whenever alcohol is involved. The irony, of course, is that Carnival makes hundreds of millions of dollars in alcohol sales each year. Alcohol is often involved in rape crimes on cruise ships. 

Inside Edition later sent an undercover video crew aboard another Carnival cruise ship, the Fascination, to determine whether Carnival employees were fraternizing with the female passengers. Such conduct is supposedly prohibited by Carnival's policies, but things are often quite different on the high seas than what is written in the rule books.

During a four day cruise to the Bahamas, two uniformed officers were reportedly observed cruising in the ship’s main bar. They even flirted with one of the Inside Edition employees and asking her to try their alcoholic drinks.

The Inside Edition crew later saw the two officers with their white uniforms in the ship's disco. The officers reportedly were dirty dancing with 20-year-old twins, making out with the passengers, and standing by the girls' cabins in the passenger area. 

Carnival responded to the expose by stating “the safety of our guests and crew is our foremost priority." 

The program disclosed that there have been more than 150 reported allegations of rape and sexual assault aboard cruise ships that visit U.S. ports since 2010. 


Photo and story credit: Inside Edition  

Cruise Ships Swamp Venice

Newspapers are reporting that today the residents of Venice will protest the procession of over a dozen cruise ships which will sail through St Mark's Basin. The Guardian states that a canal-bank protest is scheduled "over an invasion of up to 13 cruise ships in the space of 24 hours which  . . . will turn St Mark's Basin into a motorway."

The protest will raise awareness of the negative effect of the cruise industry on Venice and its citizens. 

The newspaper quotes 75 year-old Italian singer, Adriano Celentano, who took out a page in the Venice Italy Cruise Ship Conjestioncountry's biggest-selling daily newspaper to proclaim: 

"Tomorrow will not be a nice day for our city, even if the sun is out . . . With the ignoble procession of 13 ships in the Venice lagoon comes the Eternal Funeral of the world's beauties." 

The newspaper also quoted Silvio Testa, spokesperson for the No Grandi Navi committee: 

"We want to say 'enough' to this situation . . . St Mark's Basin is like a motorway. Soon we'll have to put traffic lights up."

A month ago, a Carnival cruise ship, the Carnival Sunshine, was alleged to have come within 20 meters of the shore in Venice. Carnival denied the incident, claiming photographs distorted the distance between the ship and shore.  You can watch a video of the incident below. Seems congested to me . . .

You can read my article about my personal feelings about cruise ships and Venice here.  

An Italian blog listed the following cruise ships will sail into Venice today: Azamara Journey, Azamara Quest, MSC Divina, Queen Victoria, Royal Clipper, Norwegian Spirit, Norwegian Jade, Queen Elizabeth, Seabourn Odissey, Ruby Princess, Splendour of the Seas, and the Harmony G.

Follow the discussion about cruise ships and Venice on our Facebook page.  

See images of the MSC Divina leaving Venice today.


Photo Credit: Pazzoperilmare Blog 

Rape & Sexual Assault Most Common Crimes on Cruise Ships

A local CBS station in Alabama reports that since January 2011, the U.S. Coast Guard publicly reported only 31 crimes aboard cruise ships. However, after Senator Rockefeller placed pressure on the cruise industry, Royal Caribbean and Norwegian on Thursday reported 94 crimes and 20 crimes, respectively, between October 2010 and the end of June of this year. These figures do not include Carnival. 

Is this a complete list of crimes? No. Extracting honest crimes statistics from the cruise industry is a long process. 

The news station states that the most common crime allegations are rape and sexual assault, followed by thefts.  


Trending Now: Carnival Cruise Line's Reputation Circles the Drain

One of the interesting things about social media is that there are numerous services which track "what's tending now." Certain applications can also track words or phrases which are dominating the news.

I like to use TweetDeck as well as Monitter to follow trends involving the cruise industry.

"Carnival cruise" has been trending all week at a frantic pace. And the news is not good.

Carnival Cruise ship NightmareThe cumulative effect of the recent cruise ship fires, power failures and images of passengers on disabled cruise ships complaining about toilets over-flowing has turned Carnival's reputation into a joke.

Carnival's "fun ships" have been ridiculed on Saturday Night Live, David Letterman & Jay Leno, and featured in MAD Magazine (see below). 

Consider some of the comments which are twirling on Twitter right now:

Packing for my Carnival cruise: tent, sleeping bag for deck, iodine pills, generator, Cipro.

We all lose if CBS doesn't film the next Survivor aboard a Carnival Cruise Ship

Maybe we should shut down Abu Ghraib prison and send the terrorists on a Carnival Cruise

I wouldn't go on a Carnival cruise right now even if it were free

One of the secrets to Carnival Cruise’s unsinkable business model: free Coast Guard rescues

They have so many cruise commercials because Carnival is just sinking

Even with the 50% discount from Carnival it will be difficult to go on that cruise line again

Carnival cruise boats are shit LOL dont know why ppl go on them...

Decisions. Decisions. Trying to decide whether to take a Carnival Cruise or just stay at home and shit my pants

My new punishment for my 12 year old daughter: Do your chores or I'll send you on a Carnival Cruise

if its a carnival, there's a 96.13% chance something will go wrong and youll get a free cruise out of it... Have fun!

Last week I posed a question on Twitter whether Carnival was the Wal-Mart of the high seas? Several people said no way - don't insult Wal-Mart, Carnival is more like K-Mart.

What's the funniest comment about Carnival you have heard on Twitter this week? Join the discussion on our Facebook page.

MAD Magazine - Carnival Cruise Ship

Carnival Cruise CEO Arison Pockets $90,000,000

Miami's Daily Business Review reports today that Micky Arison paid himself a "special year-end dividend" of $90,000,000. Yes, that's 90 million dollars.

Cruise CEO Arison is not the only executive in Florida lining his pockets, as the Review states that other executives in Florida are paying themselves dividends in the range of $250,000 to around $20,000,000. The newspaper states that the whopper of a dividend was probably paid due to expectations that federal tax rates will jump next year. I suppose that's called the "Romney-didn't-win-dividend."

Arison is already by far the richest person in Florida with a net worth of many billions of dollars. The last time I checked it was over $4,000,000,000, or maybe it was $7,000,000,000. I forget. What's an extra billion or two?

Costa Concordia - Micky ArisonI was thinking of entitling this blog "Micky Arison is a fat greedy pig" but at least one journalist already called him that over a decade ago. So I'll keep what I'm thinking to myself.

But, I have to add that it must be something to be the CEO of a foreign corporation that pays no U.S. federal taxes and owns a $600,000,000 cruise ship which sank (the Concordia operated by subsidiary Costa) and killed 32 people and at the end of the year you pay yourself an additional $90,000,000. Yes, the disaster caused some lost revenue for Carnival for a few months. But by the end of the year, Carnival profits are higher than ever. 32 dead customers and crew are not a problem if you keep them from filing suit in the U.S. 

While Arison pays himself a dividend of $90,000,000, he offered the families of the dead and traumatized Concordia passengers $15,000 each. 

When I think of Arison paying himself an extra $90,000.000, I also think of the 150 waiters from India who worked for P&O Cruises (another Carnival subsidiary) who were fired earlier this year at the instructions of Carnival's executives after they went on strike for about an hour in Seattle over low pay and the non-payment of tips. There are now 150 families struggling in India because Carnival made an example of them to show what happens if crew members in Carnival's fleet of 100 cruise ships complain about low pay.

Earlier this week, Arison's cruise line ignited controversy by issuing a last minute edict that passengers who bought tickets on Carnival's drag queen cruise would not be permitted to dress in drag in order to avoid offending "family values." When a boycott was threatened that might result in Carnival losing millions from the offended LGBT community, Carnival reconsidered and lifted the ban on dressing drag.

Always following the money, Arison obviously thought that paying himself a $90,000,000 dividend was not a drag either.   

I wonder what Arison will do with the extra $90,000,000?  Raise wages for his loyal employees on his cruise ships? Invest in a health clinic in India for Carnival crew? Donate the money to a charity for sick seafarers?  Ha. That's something Bill Gates or Warren Buffett would do.  

Read some of our other articles about CEO Arison and judge for yourself. 

Cruise Line Fat Cat Billionaires    

Breaking News: Carnival Cruise Lines Incorporates in the U.S. and Subjects Itself to U.S. Labor, Wage, Safety and Environmental Regulations

Is Carnival's Mickey Arison a Greedy Corporate Pig?

Consider leaving a comment below or on our facebook page.

Armed Banditos Rob 22 Carnival Passengers on Excursion in Mexico

The issue of the safety of cruise passengers in Mexico is again in the news with the armed robbery of twenty-two cruise passengers in Mexico on Thursday.

The passengers had sailed to Mexico on the Carnival Splendor and were on an excursion near Puerto Vallarta which was advertised and sponsored by the cruise line.

A Mexican newspaper reports that masked men robbed the passengers at gunpoint when they were returning to the cruise ship in a bus after touring "El Nogalito," a natural park.  The gunmen took off with the passengers billfolds, watches, cameras, cellphones and jewelry.  The newspaper reports that the local authorities initially tried to downplay the incident.

The Puerto Vallarta Robbery is Just Latest Crime Targeting Cruise Passengers

Puerto Vallarta - Cruise Ship  - Crime MexicoCruise lines and the local tourism boards usually respond to these type of crimes against tourists by claiming that they are rare.

In the video below (KCAL-9 / CBS Los Angeles) you can hear travel expert Peter Greenberg, say (excitedly) that armed robbery of cruise tourists in buses is "highly unusual" and an "aberration," while mentioning that he has plans to vacation in Mexico next week. 

But the truth is that crimes like this are not rare at all. U.S. passengers disembarking into Mexico and the Caribbean Islands are increasingly being targeted by criminals in groups.  We hear of virtually no crimes against passengers disembarking in Canada, Alaska or European itineraries.  But Mexico and the Caribbean ports of call, plagued by poverty and drugs, are a different story. The banditos go after the money and jewelry and cruise tourists have both.  Why target a single tourist when you can rob cruise passengers in bulk in buses in remote areas?  

Cruisers are sitting ducks.  Consider that over 100 cruise passengers have been robbed at gunpoint or murdered just in Mexico or the Caribbean islands in the last couple of years:

Eleven Royal Caribbean Cruise Passengers Robbed In Nassau

Eighteen Royal Caribbean and Disney Cruise Passengers Robbed at Gunpoint in Nassau

Fourteen Passengers Robbed at Gunpoint at Anse-La-Reye Waterfall in St. Lucia

Seventeen Celebrity Cruise Tourists In Bus Robbed in St. Kitts

Royal Caribbean Crewmember Murdered in Mexico 

Bahamas Cruise Crime Nightmare Continues 

Gun Fight in Cabo San Lucas - Is It Safe to Cruise to Mexico?

Violence Strikes Puerto Vallarta Jewelry Store While HAL Cruise Ship in Port  

More Caribbean Crime - Carnival Cruise Passenger Killed in St. Thomas  

NCL Cruise Passenger Murdered in Guatemala

Passenger From Star Clipper Murdered in Antigua

Cruise Passengers Attacked and Robbed in Antigua While Cruise and Tourism Officials Meet

Royal Caribbean and Norwegian Cruise Lines Pull Cruise Ships From L.A. Due to Crime in Mexico

Does the Cruise Industry Monitor Crime in Ports of Call? 

Is the cruise industry providing adequate warnings to families of the dangers ashore in the ports chosen by the cruise lines?  It seems to me that unsuspecting cruise guests are being disembarked into increasingly dangerous ports of call in Mexico and the Caribbean.

Expect a lively debate where Mexican officials will understate the problem and the cruise industry defenders will chant "crime occurs everywhere."  But it's only in Mexico and the Caribbean ports where cruise passengers are robbed at gunpoint, literally by the busload.


Carnival Passenger Dies During Paragliding Accident in Cozumel

A number of newspapers are reporting that a Carnival cruise passenger from Philadelphia died while paragliding during a stop in Cozumel.

Joseph Job (Sajan) - Carnival Cruise - Paragliding The South Asian Mail reports that Mr. Joseph Job (Sajan), age 40, was paragliding with friends in Mexico when his harness broke and he fell into the sea. 

Mr. Job was a native of Thrissur, Kerala and became a U.S. citizen.

The Web Malayalee newspaper indicates that Mr. Job is survived by his wife and daughters. 

Every year many cruise passengers are killed or seriously injured during excursions in ports of call.  We have seen many accidents involving parasailing, zip-lining, snorkeling, diving, and renting jet skis in Mexican and Caribbean ports of call.  Compounding the issue is the generally inferior medical and rescue services in these ports. 

It is unknown whether the paragliding excursion was advertised and sold by Carnival.  

Update: February 12, 2010:

Cruise Critic contains a comment by a reader that the passenger was from the Carnival Imagination cruise ship.  The reader was apparently the first one to notify the family and Carnival:  

"Incident happened at around 5:00 and Carnival reacted at 7:30 PM. We informed on the emergency number given on Carnival Capers. Carnival Imagination security team acknowledge that there local agent (emergency no. on Capers is of this agent) goofed up in Cozumel." 



Photograph of Mr. Joseph Job (Sajan)               South Asian Mail