Cruise Law News : Maritime Lawyer & Attorney : James M. Walker : Walker & O'Neill Law Firm : Admiralty Law, Cruise Ship Accidents & Injuries

Today I read a press release by the U.S. Coast Guard about a maritime safety exercise conducted in the waters of Freeport Grand Bahamas.

U.S. Coast Guard crew members from the Coast Guard Cutter Diamondback conducted a safety exercise with Royal Caribbean's Monarch of the Seas on April 2, 2013. The exercise was called "Black Swan" and was described as "a joint offshore emergency exercise" coordinated by the Coast Guard, the cruise line industry and the Bahamian government.

You can see from the photos, taken Chris Todd, U.S. Coast Guard Auxiliary, that multiple Coast Guard vessels were involved.

The cruise industry's trade organization, the Cruise Line International association (CLIA) touted the exercise as part of the cruise industry's commitment to safety.  CLIA CEO Chritine Duffy said the exercise:

" . . . further strengthens the cruise industry's unwavering commitment to emergency preparedness in coordination with the Coast Guard and other government authorities . . . (and) underscores the focus we maintain on our No. 1 priority: the safety and comfort of our guests.” 

What CLIA does not mention is that the cruise industry does not pay for the Coast Guard services even though the cruise lines collect over $35,000,000,000 (billion) a year but pay less than 1% a year in local, state, federal and international taxes a year. 

The Coast Guard is severely under-funded but receives absolutely no reimbursement from the cruise lines. The cruise industry then uses the exercises (paid for by U.S. taxpayers) as part of its marketing to sell cruise tickets to the tax-paying public.  

The cruise lines have rightfully been criticized for not reimbursing the Coast Guard for rescuing vessel at sea.  But there are many, many other expenses which the Coast Guard incurs which the cruise lines do not reimburse, such as daily Coast Guard escorts into and out of U.S. ports, safety exercises, and medevac airlifts of ill crew members and passengers.

At a time of financial crisis in the U.S., it is obscene that the cruise industry gets a free ride from our federal government for services like this.  A friend just emailed me about this PR exercise by the cruise lines: "what a gross waste of money by US taxpayers in support of an industry that is so arrogant and exploitative of US resources." 

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Are there any Rush Limbaugh fans out there?

Today's blog may be of particular interest to you if you are.

It seems that Rush doesn't like the criticism voiced against the cruise industry as the Carnival Triumph was towed back to Mobile last week. He does not like the references to the fact that cruise lines are incorporated in foreign countries to avoid taxes, labor laws and safety regulations.

As you can read in the transcript here of his show, he quoted everyone who made a critical comment of Carnival on the CNN broadcasts.  He mocked Erin Burnett, Howard Clark, Donny Deutsch, Martin Savidge. He even quoted me, for goodness sake, when I was on a CNN show as a set-up to his talking points:

JIM WALKER:  "Foreign-incorporated companies that are essentially registering their operations overseas to avoid US taxes."

Rush then launched into a classic diatribe, mocking the criticism of the cruise industry::

RUSH: "Yeah, but look at what they do. "They register these ships outside the US. They don't pay any US taxes. The cruise ship passengers have no rights. They're basically slaves -- and if there's sewage on the walls? Big whoop. We'll tow you in when we get a chance -- and after we get you, the bus that we transport you in will break down, and then for all your trouble we'll give you a refund and a 15% discount on the next cruise of your choice. What a bunch of rotten SOBs!" 

He eventually explained his argument that:  

"Make no mistake. Make no mistake. The whole point of this was to impugn the entire cruise industry and this particular cruise line as having some linkage to Bush." 

Rush then rambled on with his radio broadcast trying to tie in his diatribe about the alleged left-wing conspiracy against cruise lines and George Bush to his rant against women and Hispanics and farm workers and President Obama and Reverend Wright. After a few minutes I had no idea what he was talking about except that he somehow implicated me in some type of conspiracy against George Bush.

i suppose that it's funny to be accused of being part of such a clandestine plot. I must be a secret agent or master spy or spooky sleuth or member of an illegal coalition against America, according to Rush. I suppose that criticizing a major corporation or participating in anything not officially sanctioned by a corporation is an act of conspiracy, rebellion or treason.

Why is it that ultra-conservative Republicans love cruise lines which pay no taxes?  Last summer, Newt Gingrich disappeared from his Republican Presidential campaign because he could not resist a luxury cruise aboard a foreign flagged cruise ship in the Mediterranean.

I have never reconciled the maniacal bashing of President Obama for somehow not being "American" enough with the hard core Republican love of the tax-avoiding-foreign-incorporated cruise industry.

At the bottom of Rush's web page I could not help but notice a banner ad featuring Rush posing for a company that fights paying taxes to the federal government.

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The major cruise lines have reduced prices for this winter and early 2013 sailings by around 3.5 percent since late September, according to Bloomberg Businessweek.  

Cruise line operators started this year hoping that they could start charging passengers higher prices after offering discounts following the 2007-2009 recession. But then two weeks into the year, disaster struck when the  Costa Concordia capsized and images of panicked cruise passengers dominated the news. 32 people died. The Concordia still lies in the little Italian port of Giglio like a dead whale.

Not surprisingly, cruise bookings slumped even as the cruise lines lowered prices.

Carnival and Royal Caribbean said that they were optimistic about increased demand and higher prices when they reported third-quarter results in the fall. But some analysts consider the price reductions as a sign that the cruise industry is still struggling and will have to wait until the second half of next year to see real improvements. 

Peak cruise season starts next February and that will be key to see whether the cruise lines can get back on the financial track. But before that, the cruise industry has to endure the one-year anniversary of Costa Concordia in mid January. That will be a difficult time for the cruise lines. As the giant beached whale Concordia remains half submerged on her side in Giglio, the cruise line will have to convince you that cruising is a safe vacation for your family. 

Image credit: Giglio News Web Cam

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This morning two news articles caught my eye.  The first one from an Australian newspaper - "Cruising Boom: 20 Million Take to the Sea" - and the second one from one of my favorite newspapers, the LA Times - "Cruise Industry Rebounding from Ship Accident, Woes in Europe."

These headlines seem incongruous given the fact that the Costa Concordia remains capsized on its side as a continuing reminder of the deadly cruise disaster (image today).    

The Cruise Line International Association (CLIA) does a very good job promoting statistics showing the growth of the cruise industry via press releases. Today we are learning that some 20,000,000 people took a cruise last year - a record year for cruising.  According to the Sydney Morning Herald:

"A record 20 million people took a cruise last year, an increase of almost 2 million, according to the latest industry figures. While North America (11.5 million) and Europe (6.2 million) are the main markets, the Australian cruising market grew by 30 per cent, to more than 500,000 passengers." 

That's good news for the cruise industry and travel agents who make a living selling cruises. But last year, of course, was pre Costa Concordia disaster.  What are the prospects for the cruise industry post Costa Concordia?

According to the LA Times, the future of the $37 billion industry looks bright.

A survey of 300 travel agents in North America in July found that 64% expected bookings in 2012 to surpass last year's numbers.  And plenty of new cruise ships are coming on line with 19 ships being added or slated to come on line in 2012 and 2013 (a rather surprising number to me - is this right?) 

The newspaper interviewed Stewart Chiron, owner of CruiseGuy.com, who I bump heads with regularly on Twitter, saying "the impact of the Concordia on North America was almost nonexistent."  That is a hard concept to wrap my head around - 32 dead including Americans with no effect on U.S. cruise sales? In my view, if this is true it reflects that Carnival (which has over 100 cruise ships) and the cruise industry can weather almost any storm provided that they remain immune from paying U.S. corporate taxes. 

The newspaper concludes that cruise reservations are rising, and the drop in European bookings are offset by strong U.S. cruise ticket sales. The bottom line according to Times? The Costa Concordia disaster had only a short-term effect.

It seems to me that the LA Times article may be a tad optimistic, but who am I to rain on the cruise industry's good news? I was disappointed to see that the Times interviewed mostly just a cruise CEO, a travel agent and a cruise specialist without including an in depth analysis of the cruise lines' financial status.      

It's kind of like writing an article about the prospects of a professional football team and then interviewing only the team's owner, players and cheerleaders.   

Photo credit: Giglio News

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Yesterday, the Bermuda Gazette reported on the sentencing of an American tourist who was arrested for possessing pot on a cruise ship which ported in Bermuda.

The Gazette identified the passenger as 43-year-old Edward John Molinari, from New York.  The newspaper reported that after the cruise ship arrived in Bermuda, customs officers and police searched Molinari’s cabin with a drug sniffing dog and "found seven homemade cigarettes in the room’s safe, plus a partially-smoked eighth, containing cannabis of an estimated street value of $178."

The other major newspaper in Bermuda, the Bermuda Sun, also reported on the petty drug offense and mentioned that Mr. Molinari was married with three children.  The Sun included a photograph of Mr. Molinari taken by a photographer camped outside of the courthouse.    

Neither the Gazette nor the Sun mentioned the name of the cruise line, and the Gazette did not mention the name of the cruise ship either.  Why not?  Was it because Mr. Molinari informed the Bermuda judge that that cannabis had been in use “all over the boat?” 

I have been critical of the press in Bermuda in general, and the Royal Gazette in particular, for not mentioning the names of cruise lines when the stories include embarrassing facts like drugs and crimes on the cruise ships.

For example, the Bermuda Gazette recently covered a trial in Bermuda involving allegations that a crew member raped another cruise line employee.   We covered the incident and of course mentioned the names of the cruise line and cruise ship.  We tried to place the incident into context by mentioning this cruise line's history of similar alleged crimes on its fleet of cruise ships.

The Gazette, however, choose not to mention the name of the cruise line (Princess Cruises) or the name of the cruise ship (Caribbean Princess).  Was this because Princess Cruises incorporated itself in Bermuda and registered its cruise ship there in order to enjoy that country's lax safety regulations and minimal taxes?  Is the Bermuda press extending the same courtesy of "looking the other way" routinely extended by the Bermuda vessel registry and incorporation officials?  The Gazette claims that it decided not to mention the cruise line or cruise ship in order to protect the identity of the alleged rape victim and defendant.  That seems like quite a stretch.  But assuming that to be true, why did the Gazette decide not to mention the name of the cruise line or cruise ship which allegedly had drug use "all over the boat?"

When you search the Bermuda Gazette's archives, you will find that while it is quick to identify U.S. passengers caught with small amounts of pot on cruise ships, it will not publish anything potentially embarrassing about the cruise lines.     

The island is very strict when it comes to prosecuting U.S. passengers.  Bermuda will bust U.S. passengers for minor drug possession on cruise ships porting in Bermuda even if its clear that the pot is for the passenger's personal use and the pot never leaves the cruise ship.  And the newspapers in Bermuda love reporting about such minor offenses. 

But Bermuda does a deplorable job investigating violent crimes or mysterious disappearances which may implicate cruise ships which fly the flag of Bermuda.  You will see no real journalism by the Bermuda newspapers into the issues of cruise ship crime, pollution, exploitation of crew members and tax avoidance.  Take a moment and read about Bermuda's indifference to crimes on Bermuda flagged cruise ships.

For example when Italian crew member Angelo Faliva disappeared from the Bermuda flagged Princess cruise ship the Coral Princess, Bermuda eventually conducted a dilatory and unmotivated "investigation" which quickly ended without any answers and no criticism of the cruise line.  The Royal Gazette and other newspapers in Bermuda completely ignored the Faliva family's plight.

The Angelo Faliva disappearance demonstrates the fundamental corruptness of incorporating cruise lines in remote islands and flying flags of convenience of countries with a non-existent regulatory scheme and a press which acts like a cruise line PR department.  Disappearances often go un-reported, un-investigated, and un-prosecuted because of the indifference of the flag countries and the desire of the image-obsessed cruise lines to sweep the problem under the rug.

Independent newspapers with integrity keep large corporations like the cruise lines honest. 

But newspapers like the Bermuda Gazette are a different story.  If you are a passenger caught with some reefer in a safe in your cabin on a cruise ship docked in Bermuda, be prepared to have your name and photograph appear on the front page of the Bermuda newspapers.  But if you are a cruise line with a history of pollution and shipboard crimes, don't worry - the newspapers in Bermuda will be certain never to mention you.  

Photo credits:

Top:  Edward Molinari leaving courthouse, photo by Kageaki Smith via Bermuda Sun

Bottom:  Angelo Faliva, courtesy of the Faliva family

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A handful of recent stories have shed light unwanted light on the image-conscious cruise industry.  Cruise lines like Carnival and Royal Caribbean spend hundreds of millions of dollars a year to paint pictures of care free vacations.  But here are some stories published in the last few days which make you realize that the fun-filled family cruise may a bit different than advertised.

Wedding Disaster on Carnival's Sensation - WKMG, a local television station from Orlando, reports on the disastrous wedding of a young couple on Carnival's Sensation cruise ship.  Initially delayed by a bomb scare, the wedding party was promised that the ceremony would go forward as planned.  But after arriving three hours late to the cruise ship, they find other passengers wandering into their pre-wedding buffet.  The ship's Captain then wanted them off the ship in thirty minutes.  So they quickly exchanged vows and headed to the reception buffet, which was interrupted by a muster station drill where other passengers arrived wearing life jackets and helped themselves to the buffet.  When the bride wanted to call Carnival's headquarters, the ship told her a per minute telephone charge would apply.  Watch the video, its a disaster.

The Death of Carnival Cruise Passenger Carol Olson - The Baltimore Sun covered the tragic death of a cruise passenger during a snorkeling excursion sold by Carnival which by all accounts was haphazard and disorganized.  Reporter Frank Roylance's wrote a blockbuster article entitled "Pleasure Cruises Bring Risks, Too - Families Say Tragedies Expose Cruise Lines' Limited Liability."  He touches upon an issue which the cruise lines like to keep secret - namely that cruise lines have insulated themselves from liability when the negligence of "independent contractors" like excursion companies and ship doctors ends up killing passengers. Roylance discusses cruise fires, drownings, disappearances, and crime.  

Date Rape Drugs on Princess Cruises -  The International Cruise Victims website just published a story "Cruise From Hell" where parents recount the terror of their daughter who goes to a teen center on Princess Cruises' Grand Princess only to end up missing.  According to the article, the daughter is eventually found semi-conscious by a stairwell.  The family reports that they endured the indignity of a security guard telling their daughter "where have you been, you little slut?"  Although the ship initially confirmed the involvement of a date rape drug, the cruise line later wrote the family a letter, saying that nothing happened.  Princess denied that any of the surveillance tapes showed anything - a tale we have heard before.

Royal Caribbean No Help To Passengers From the Tar Heel State - In a story we touched upon yesterday,  ABC affiliate WTVD News11 in North Carolina aired a story yesterday about a number of families who traveled to Miami only to find that Royal Caribbean's policies regarding the use of birth certificates as identification were inconsistent and confusing. The cruise line refused to permit passengers to board who had their original certificates from the hospitals where they were born, but let others aboard who had  facsimile copies from the clerk's office.  The $15,000,000,000 corporation would not let any of the frantic passengers use their machines at the port.  Many frustrated customers spent $1,5000 each for a family vacation, only to be turned away from the ship.  Watch the video.

Carnival Terrorizes Passengers, Then Calls Their Stories "Ridiculous" -  Two weeks ago, the Carnival Ecstasy cruise ship was sailing across the calm waters of the Gulf of Mexico when it suddenly and unexpectedly made a 90 degree turn which emptied the pool, ripped tables bolted to the deck loose, injured 60 passengers, and terrorized hundreds more.  Carnival claimed that the ship turned to port and listed around 12 degrees to avoid what Carnival called a "loose" buoy. 40 passengers left comments on our blog, stating that the ship actually turned to starboard, listed as much as 30 degrees, and may have been trying to avoid a fixed buoy marking small islands later documented on a maritime chart.  Carnival's PR spokesperson mocked the passengers, called their claims "ridiculous," and refused to apologize.       

The cruise industry's dubious reputation has never recovered after the Department of Justice caught Carnival and Royal Caribbean engaging in wide spread dumping, falsification of log books, and lying and fined them a total of $45,000,000 ten years ago.   

Stories like these suggest that cruise lines still have a hard time telling the truth or treating their customers fairly and squarely.  And the cruise industry wonders why it has an image problem . . .    

Like this article?  Then we suggest reading:

Cruise Lines and Social Media - P & O Cruises Hits A Home Run

Advertising Age - Royal Caribbean Blasted for Continuing Stops in Haiti - Despite Generous Efforts, PR Pros Say Cruise Line Has Damaged Reputation With Its Response

Or read a puff piece by a traveler writer regarding the cruise industry's reputation: Bad Rap: Why the News Media's Cruise Reporting Goes Negative

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Credits:

Cruise ship and waiters               Bloomberg BusinessWeek

Injured Carnival Ecstasy passenger          Brandy and Ashley Vickery (via ABC13 "Sixty Passengers Hurt on Galveston-Based Cruise Ship")  

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