Why the Cruise Industry Will Always Struggle With its Reputation

This week I listened to the multi-millionaire cruise executives praise the cruise industry at the "state of the cruise industry" at the Cruise Shipping Miami (CSM 2014) trade show.

As anticipated, Carnival's CEO and former Monsanto chemical executive Arnold Donald said cruise ship accidents are "so rare . . .  cruising is safe."  Royal Caribbean's long time executive Richard Fain claimed that cruise lines are "heavily regulated." The audience of travel agents and vendors tied to the cruise lines all politely clapped.  

The speeches contained little substance, no statistical support, and virtually all self-serving opinions. Carnival Cruise Ship FireI felt like I was at a motivational speaker convention sponsored by Amway.

The telling comments at the conference came from Norwegian Cruise Line's CEO Kevin Sheehan. He said: "we are ruled by public opinion; unless we can keep our business running right will always be on defensive." The NCL boss added: "a period of operational excellence and no media incidents are needed."

Of course, this was the real insight into the state of the cruise industry - the cruise lines are on the defensive. The cruise lines seem nervous as they claim that their troubles are behind them. They are in the business of selling fantasy dream-like vacations to ports in the Caribbean which are becoming more and more violent.  They are praying that the media doesn't bash them after a cruise ship catches on fire or a family is gunned down in the streets of Nassau. 

What's the industry's plan to pull itself out of the harsh media scrutiny? I didn't hear one at CSM. The cruise lines, it seems to me, are just hanging in the balance hoping for the best. 

But history tells us that more trouble lies ahead. 

There have been over 90 fires on cruise ships since 1990, according to testimony at one of the many Congressional hearing on cruise ships disasters. Some fires were big, some were small although there is nothing really insignificant about any type of fire on the high seas.

Last year, the big story involved the Carnival Triumph, of course, which CNN covered non-stop. But the more significant fire involved the Royal Caribbean Grandeur of the Seas which burned for two hours. Most people seem to have already forgotten the fire on the Grandeur. Yes there will be cruise ship fires this year; hopefully minor ones only with no injuries. The public knows that accidents happen. The most important issue is whether the cruise lines respond promptly and responsibly (like Royal Caribbean did after the Grandeur fire) or delays unreasonably (like Carnival after the Triumph fire) and / or acts outrageously (like Carnival after the Concordia disaster)  

The cruise industry's image problem is not just because of ship fires and Concordia-like disasters. The continuous stories about bad medical care, mistreatment of crew members, sexual assaults, children victimization, missing passengers, and so forth, coupled with a callous PR response, have more of an effect on the cruise industry's image. Its like reputation death by a thousand cuts.

Last December, I published Top 10 Most Outrageous Cruise Ship Stories of 2013 & the "Worst Cruise Line in the World" Award.

In my assessment, the factors which most harmed the cruise lines' reputation last year didn't involve accidents at all. Rather, the most damage came from incidents showing the cruise lines' egregious disregard of the law and a lack of care and compassion of their passengers and crew. The real damage comes from events like mishandling cases involving persons disappearing at sea, ignoring the man overboard laws, crew members arrested and sentenced to jail for child porn, fleecing crew members of their tips and retirement benefits, and a family cruise line aiding and abetting a child predator escape justice. 

One of the most embarrassing stories last year involved Silversea Cruises which was caught by the USPH hiding perishable food down in the crew quarters. We were contacted by crew members who complained about this, but Silversea ignored us when we contacted them. We sent the story to CNN. The special that CNN produced tarnished not only this luxury line but cast the entire industry in a bad light. The entire chain of events could have been avoided by Silversea just being honest and transparent.

The cruise lines suffer, in my opinion, from a combination of being arrogant and rattlebrained. The cruise industry engages in some really bad conduct on a continuous basis. It often makes things substantially worse when confronted by the media and bloggers like myself.

Last week, former crew members sent us video and photographs which seem to suggest that MSC MSC Cruises Cruise DumpingCruises has been dumping garbage, plastics and debris into the water in violation of international pollution law.

We asked MSC for an explanation. MSC ignored us just like Silversea Cruises did last year. MSC claims that un-named authorities in Brazil are investigating the allegations, but it refuses to identify the authorities or provide contact information. MSC is digging itself and the cruise industry into a deeper hole.

Cruise lines like MSC tout that they treat the maritime environment like this when in truth they may be treating the waters like this.  When the major media networks latch onto a story, the cruise industry is forced to make a statement, but the cruise lines often sound and appear evasive and unbelievable.

Until cruise lines act responsibly and treat all of their crew members, guests and the earth with respect and act with transparency toward the media, the cruise industry's reputation will continue to suffer. 

Foreign Cruise Lines Propose Prohibiting Foreign Crew Members From Filing Suit in the U.S.

The cruise lines are at it again.  They are proposing a bill, HR 4005, which will prevent "foreign" cruise ship employees from filing suit in the U.S. for compensation for injuries sustained or bad medical care received on cruise ships.  The proposed legislation includes banning crew members who are injured on cruise ships owned and operated by companies with headquarters here in Miami, like Carnival, Royal Caribbean and NCL. 

Who are these workers? They are the state room attendants, waiters, bartenders, and cooks who work 7 days a week for 12 hours a day, all month long. for many months at a time. They live and work on the cruise ships thousands of miles away from home for 6 to 10 months at a time. They are from India, Honduras, Jamaica, Trinidad and Croatia.  

Who are these cruise lines? They are multi-billion dollar corporations which are based in the U.S. and whose incomes are derived mostly from U.S. passengers. Over 13 million U.S. citizens take cruises Royal Caribbean Crew Memberevery year. Yet, these companies do not pay U.S. income tax and they do not follow U.S. wage & labor laws or U.S. safety laws.  

This proposal discriminates blatantly against crew members around the world. It is also a job killer for the American worker. This bill would guarantee that the cruise lines will never hire U.S. citizens to work onboard their vessels. If non U.S. citizens cannot recover anything in the United States under U.S. law even though the cruise line is negligent, the cruise lines will have a disincentive to hire American workers.

The concept of cutting off a seaman's right to file suit in the U.S. violates hundreds of years of maritime law.  "Foreign" crew members are the backbone of the cruise industry. This is a xenophobic effort to strike at the heart of the cruise industry by stripping the rights of the heart and soul of the employees who make the cruise ships work. It is unconscionable.  It is also a duplicitous effort, considering that all of the cruise lines are "foreign" corporations, incorporated in countries like Panama (Carnival) or Liberia (Royal Caribbean) and operating cruise ships registered in countries like the Bahamas or Bermuda.    

If the cruise lines are not held accountable in U.S. Courts, they will be free to abandon their employees back in countries like India, Jamaica and Honduras when they are injured and need medical care. 

There is a risk to the safety and security of cruising if cruise lines are permitted to overwork their crew members, including officers and staff, and not face any economic consequence. An overworked, exhausted and poorly treated crew is a danger to the cruise ship and all aboard.  

Cruise CEO's living here in Miami are making hundreds of millions of dollars over the years by operating businesses based in the U.S. which are "foreign" incorporated and registered. They should not be allowed to discriminate against the "foreign" men and women who sweat all day on cruise ships sailing in and out of U.S. ports and are injured.  

Food Stashed Under Beds & Secret Crime Statistics: The Cruise Industry Has a Lot to Hide

Today the Senate Committee on Commerce, Science, and Transportation will conduct a hearing on whether there needs to be greater Congressional oversight of the cruise industry in light of recent cruise ships mishaps. 

There are two recent examples of cruise line conduct which the committee should consider in determining whether Congress should take a closer eye on the cruise lines.

Example 1: A luxury cruise line, Silversea Cruises, recently flunked a surprise inspection by the Centers for Disease Control (CDC) of the cruise line's Silver Shadow cruise ship.  What makes the incident so egregious is that the CDC found that the cruise line engaged in

"an organized effort  . . . to physically remove over 15 full trolleys of dry foods, spices, canned foods, Cruise Industry Consumer Protectioncooked foods, milk, raw meats, pasteurized eggs, cheeses of all types, baking goods, raw fruits, raw vegetables, and a variety of both hand held and counter model food equipment, pans, dishware and utensils to over 10 individual cabins shared by two or three galley crew members in order to avoid inspection by VSP (Vessel Sanitation Program) staff. All the out of temperature potentially hazardous foods were discarded along with most other foods that were not canned or in original containers. The lead VSP inspector poured concentrated chlorine liquid over all the discarded foods as they were dumped into garbage bags to ensure they would not be used again." Read the CDC report here.  Look at the disgusting photographs here.

Yes, a luxury cruise line holding itself out as a 6 star cuisine experience was literally hiding meat, fish, eggs and cheese under the bunks in the crew quarters in order to cheat U.S. sanitation inspectors. Our investigation here and here leads us to the only conclusion that this deception is an industry-wide problem, 

Example 2:  After Congress passed the Cruise Vessel Safety & Security Act which was intended to require cruise lines to report crimes to the FBI and the Coast Guard in order to post crimes on an internet site for the public's consideration, the cruise industry and the FBI conspired to hide the information.  Read this disturbing story here.

The President of the International Cruise Victims (ICV) organization, Ken Carver, exposed the cover-up when he sent a Freedom of Information Act (FOIA) request to the FBI and learned that of the 400+ crimes alleged on cruise ships in 2012 alone, the FBI decided to post only 15 crimes on the Coast Guard internet site. A great injustice to the victims and the public. Watch the video below:

It's high time that Congress intervene and protect American families from the cruise industry's hide-and-seek games.      

 

 

Cruise Photos of 2012: Images of a Dangerous & Controversial Year

Costa Concordia Cruise Ship DisasterAs 2012 comes to a close, it's time to take a look back at the images of the year in cruising.  

Below are 10 images of 2012 which tell the story of one of the most dangerous and controversial years in the history of cruising. My perspective is not that as a travel agent or vacation planner, but as the publisher of a law blog with the motto "everything the cruise lines don't want you to know." 

No. 10 - The Year of the Cruise Ship Bug:  Cruise lines hate it when anyone calls norovirus the "cruise ship bug." The nasty virus strikes nursing homes, day care facilities and hospitals too, but who wants to defend sick cruise ships by comparing them to facilities filled with ill patients or kids with pooh in their pants? I wrote more stories about norovirus and e-coli causing nausea, vomiting and diarrhea to nice people on the high seas than I care to admit.  We end the year with ABC News airing a segment on the Cruise Ship Norovirus"dangerous virus" sickening hundreds on the Cunard QM 2 and Princess' Emerald Princess cruise ships over Christmas.

Putting hysteria aside, the Centers for Disease Control (CDC) documented 16 cases of cruise ship gastrointestinal illness, mostly noro, and that's counting only cruise ships calling on U.S. ports. Princess won the award for the greatest number of sick cruise ships this year, as well as the quickest to blame the passengers for not washing their hands even though the norovirus is primarily a food and water borne pathogen. The thought of being trapped on one of these floating petri dishes with hundreds of puking passengers makes me break out in a cold sweat.

No. 9 - Are Crew Members Fungible Goods?  This year has seen flagrant abuse of hard working crew members who are the backbone of the cruise industry. By registering their companies and cruise ships in countries like Liberia, Bermuda, and the Bahamas, the cruise lines ensure that the cruise employees have virtually no legal rights or bargaining power. Cruise giants Carnival and Royal Caribbean take advantage of the situation. A documentary in the U.K earlier this year exposed Celebrity Cruises Cruise Ship Crew Member Wages Working Conditionsoverworking and underpaying its waiters. Carnival's P&O Cruises terminated 150 waiters from India who went on a peaceful 2 hour strike in Seattle to protest low wages and the withholding of tips, even though the Captain personally promised that the cruise line would not retaliate against the cruise employees. Carnival and P&O broke their word but not the law because there is no law protecting the crew members if they strike. 150 Indians now find themselves blackballed from the cruise industry.

We were contacted by more ill or injured crew members this year than ever before, most with serious orthopedic and neurological injuries to their necks and backs.  Cruise lines try and keep the sick employees out of the U.S. and try and suppress stories and images of injured crew employees. When the Azamara Quest experienced a disabling engine room fire, the cruise line quickly announced that all of the passengers were okay and heaped praise on the ship's captain. But the cruise line failed to mention that crew members were seriously injured during the fire, including one crew member trapped in an elevator shaft who was overcome by Richard Fain Royal Caribbeanthe heat and smoke.  No newspapers in the U.S. mentioned the injuries to the crew members.  Does anyone care about the crew?

No. 8 - Cruise Executives Get Richer, While Crew Members Get Poorer: 2012 was reportedly a difficult financial year for the cruise lines but you would never know it by looking at the huge sums of money which the cruise line CEO's pay themselves. In addition to his regular multi-million-dollar salary, Royal Caribbean CEO Richard Fain collected $11,500,000 by selling a small amount of his RCL stock.  Royal Caribbean meanwhile paid its bar-servers only $50 a month and required them to work for tips carrying a dozen tropical drinks around the pool deck while balancing a bottle of rum on their heads. Carnival CEO Arison paid himself an end-of-the-year bonus of $90,000,000. Both Carnival and Royal Caribbean viewed the tips paid by the passengers for crew members as sources of income for the cruise lines while paying their executives astronomical salaries, bonuses and stock options.

No. 7 - Polluters of the Air & Seas: The cruise lines made a big pitch this year that they are leaders in conserving the marine environment, proclaiming that they vigorously protect the waters upon which they Cruise Ship Pollutionsail. The Cruise Line International Association started the year with a message to the public that the cruise lines were stewards of the environment and embedded a beautiful stock photo showing colorful coral reefs and an abundance of tropical fish. But the following day the quaint coastal town of Nahant, Massachusetts found a local beach fouled by a huge amount of human excrement, toilet paper, rubber gloves, plastic bottles, dental floss, condoms, personal hygiene items and a urinal cake covered in a mass of disgusting brown foam which was believed to have been dumped by a passing NCL cruise ship.

Cruise lines are fighting stricter air emissions laws and are still burning toxic bunker fuel, even on its newest cruise ships.  A passenger sent me a photo of the Saga Sapphire which tried to continue sailing with some seriously smoking engines. The Friends of the Earth environmental group graded both Carnival and Royal Caribbean a "D+" for their disastrous impact on the air and sea.

Disappearances at Sea - Cruise Ship Cover UpNo. 6 - Cruise Lines Stonewall Families of Missing Passengers & Crew Members:  Mike and Ann Coriam are still waiting for basic information about what happened to their daughter Rebecca who worked as a child care supervisor and disappeared from the Disney Wonder last year.

Investigations into the disappearances of of people from cruise ships at sea often fall to the "flag state" countries like Bermuda and the Bahamas which have little interest in doing anything that might embarrass their cruise line customers which fly their flags.

This year, twenty-three (23) passengers and crew members vanished on the high seas. That's an average of 2 a month. The cases are characterized by the cruise lines' lack of transparency and the flag states' hide-the-ball tactics. The families are hit with a double whammy. First, they suffer the loss of a child or other family member. Then, secondly and unnecessarily, they have to endure the cover-up by the cruise line and flag state. 

No. 5 - Deaths & Injuries on Zip Lines, FlowRiders, Rock Walls, Jet-Skis, & Excursions: As the cruise ships got bigger and bigger this year, the cruise lines added an increasing number of activities Royal Caribbean Flow Riderboth on and off the ships.

We have been contacted by families seriously injured on rock climbing walls, in skating rinks, and on zip lines and simulated surfing attractions. One activity, the FlowRider attraction, is something which we consider the most dangerous activities you can participate in during a cruise.  Off of the cruise ships, deaths have marred cruises due to snorkeling, diving, kayaking, para-sailing, dune bugging, catamaran, and open air bus excursion accidents around the world.  

Cruise passengers have also been targeted for robberies and rapes in cruise line ports of call.  The most potentially violent ports of call? You're pretty safe in Canada and Europe, but Mexico and the Caribbean ports of call are dangerous. Don't expect the cruise lines to warn you. This year we won a major appeal where the 11th Circuit Court of Appeal ruled that Carnival has the legal duty to warn passengers of violence and crimes in ports of call. The case involved the tragic death of a girl who was shot to death in front of her parents in St. Thomas.

No. 4 - The Year of Cruise Ship Child Predators and Child Pornographers: Stories about cruise ship waiters, youth counselors, stateroom attendants and pool cleaners sexually abusing children were a frequent topic on this blog. But male crew members are not the only danger presented to child and young Cunard Cruise Paul Trotterwomen during cruises.  Male passengers raped and sexually abused other passenger on a regular basis with the most common scenario involving older teenager or young men inviting younger girls back to their cabins with promises of drinking alcohol at a party.  The photo is of the most prolific cruise ship predator we know of - Cunard crew member Paul Trotter. You would think that a luxury cruise line like Cunard would carefully vet their employees. But not so. Trotter was employed as a youth counselor / child activities coordinator who worked aboard most of the Cunard cruise ships, interacting with children during nearly 300 cruises over the course of over 5 years. He was arrested in the U.K. for abusing at least 13 boys of English nationality and of course he abused American kids too.

In addition to sexual abuse of children, a number of passengers and crew members were arrested for Carnival Cruise Micky Arisonhaving child pornography images and video on their laptop computers and iPhones. The cruise lines try and keep this nasty stuff secret.  But the danger is real.  Parents watch your kids. If something goes wrong during the cruise, don't think that the cruise line will believe your daughter over their crew member.

No. 3 - The Greatest Disappearing Act of the Year - Where's Micky?  Carnival's Micky Arison disappeared when the cruise world was looking for a strong voice and reassurance following the Concordia disaster. He would not answer questions raised by families of the dead about the disaster. He said later that he would make certain that all of the Concordia passengers were taken care of. He didn't honor that promise.

Arison did prove that he is a magician who can disappear in January when leadership was needed and magically re-appear at the end of the year to watch his Miami Heat play basketball and to pay himself a $90,000,000 bonus. The only person he took care of this year was himself.

No. 2 - "Coward of the Seas" a/k/a "Chicken of the Seas:" The country of Italy has an impressive maritime tradition which dates back centuries. But cruise ship captain Francesco Schettino did a good Francesco Schettino Cruise Ship Cowardjob of single handily ruining his country's reputation on the night of January 13, 2012.

If you were asked to write a script for a cruise ship disaster movie, the Costa Concordia script would be rejected as being too outrageous. A handsome married captain is dining with a blonde cruise ship dancer and leaves his lover and glass of vino to ram the ship into the rocks during a showboating stunt only to delay evacuation and leave the passengers while sneaking off the ship like a rat?  But Schettino is not capable of shame, explaining that he didn't really abandon ship but that he slipped and fell into a lifeboat. He later said that the "hand of God" touched him and he should be considered to be a hero for saving thousands of passengers and crew members from drowning. He also managed to file a lawsuit against Costa for wrongful termination. Stayed tuned. 

No. 1 - Costa Concordia & Cruise Line Lies: January started with a story about a cruise ship called the Costa Concordia, a name no one will forget for a long time. Do you remember where you were when the Concordia hit the rocks? The first image (top photo) I saw of the disaster was sent via Twitter by a blogger in the U.K.   When the first official communications from Costa were that evacuation was proceeding "orderly" and the passengers were "not at risk," but people on Twitter were talking about panicked passengers jumping into the water, I knew then that things were really screwed up. 32 dead people and thousands terrorized. Costa and the cruise industry want the public to believe that the disaster was due solely to one maverick captain run amuck. But the Concordia debacle reveals much about the unregulated nature of a cruise business with little regard for spending money on passenger and crew safety.

Costa Concordia It's now almost a year later and the capsized ship remains lying on its side like a giant dead whale - a fitting image of a disastrous year.

2012 was also the year of the big lie - who told the biggest cruise ship whopper? Take your pick: "The Situation Is Under Control, Go Back To Your Cabin" says a Costa supervisor to panicked passenger who assembled on deck with their life vests ready to be evacuated. "I slipped and fell into the lifeboat" by Captain Francesco Schettino. Or "Cruising Is the Safest Form of Transportation" (as well as an endless number of other big fibs) by the shameless Cruise Line International Association (CLIA).

Thanks for Reading Cruise Law News (CLN): We enjoyed a record setting year, ending up by far the most popular maritime law blog in the world. This year over 1,200,000 people visited CLN and they read over 3,500,000 pages of CLN. I'd like to think that people read CLN because it lives up to the motto "everything the cruise lines don't want you to know."

Happy New Year.  We hope we have less bad news to blog about in 2013.  If you are vacationing on the high seas next year, have a safe and enjoyable cruise.

Please leave a comment below or leave a comment on out Facebook page.

 

Photo Credit:

Richard Fain - Wall Street Journal Smart Money / by Jeffrey Salter / Redux

Mike & Ann Coriam / Disney Wonder - LA Times

Costa Concordia (bottom) - Reuters

Eleven Months after Costa Concordia, Cruise Lines Still Struggling to Sell Cruises

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.

Costa Concordia - Cruise ShipNot 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

Four More Years - What President Obama's Re-Election Means For Cruise Passengers & Crew Members

The election yesterday was an important event for U.S. cruise passengers and crew members from around the world.

Whether you know it or not, there is a war being waged by large corporations against consumers and employees. The trend of big business has been to strip consumers of their rights, to take away the constitutional right to a jury trial, to impose one-sided arbitration agreements which favor the cruise lines, and to try and keep crew members from accessing the courthouses in the U.S. even thought the cruise lines are based here.

Federal court judges appointed by Republican presidents have already stripped away many of the rights of crew members to seek compensation under maritime legal doctrines dating back to the early 1800's. Cruise lines see "foreign" crew members from India and the Caribbean islands as cheap labor, nothing more, who are easily exploitable with the tacit approval of politicians like Romney who favor the out-sourcing of jobs to impoverished countries with no laws which protect employees.   

A Republican president and the Republican's let's-trust-the-corporations-to-do-the-right-thing attitude would also have resulted in the peeling back of clean air and water regulations. A Romney in the White House would have permitted the cruise lines to maximize profits at the expense of the environment.

Last night I watched the election returns, flicking between CNN, MSNBC, and FOX News while trying to keep up with the millions of tweets on my computer's Twitter feed. There on FOX were the old guard, Karl Rove, Bill O'Reilly and those referred to collectively as fat, rich, old white men.  Bill O'Reilly bemoaned the election results as the loss of the "white majority." He railed against President Obama's re-election as the result of a large turn-out by "black" and "Hispanic" voters as well as a disproportionate number of "women." It was a nasty, depressing spectacle to watch these tired, old, xenophobic men on FOX.

Four More Years - President ObamaThen the Obama organization tweeted a photo of the President and the First Lady, hugging, with the tweet "Four More Years." The timing was perfect. The photo has been re-tweeted more than anything in the history of Twitter. 

I have a large photograph in my law office of a client, Laurie Dishman.  Laurie was victimized on a cruise ship operated by a Miami based cruise line. It was a terrible crime. But in the photo she is shown smiling with President Obama who has his arm around her, after he signed the 2008 Cruise Vessel Safety & Security Act into law. The law was signed into law by President Obama to protect passengers on foreign flagged cruise ships.

I know that President Obama will think of people like Laurie when the billion dollar cruise corporations like Carnival try to enact legislation which promotes their financial interests over the rights of consumers. He will think of everyone, not just the rich, but black and white workers, Hispanics, women, and those who need help the most.      

President Obama brought hope to my client, Laurie. He represents the only real hope to the powerless, and those underdogs like Laurie who choose to fight for justice against giant corporations.   

No Taxes - The Cruise Lines' Dirty Little Secret

One of the little know facts about the cruise industry is that it pays virtually no U.S. taxes.

The cruise lines take advantage of an obscure provision in the U.S. tax code which permits shipping companies to evade taxes by incorporating overseas and flying the flags of foreign countries.  That's why Carnival is incorporated in Panama, Royal Caribbean is incorporated in Liberia, and Princess Cruises is incorporated in Bermuda. 

The New York Times covered the issue of cruise line taxes today:

"The Carnival Corporation wouldn’t have much of a business without help from various branches of the government.  The United States Coast Guard keeps the seas safe for Carnival’s cruise ships. Customs officers make it possible for Carnival cruises to travel to other countries.  State and local governments have built roads and bridges leading up to the ports where Carnival’s ships dock.  

Mickey Arison - Carnival Cruise - No TaxesBut Carnival’s biggest government benefit of all may be the price it pays for many of those services.  Over the last five years, the company has paid total corporate taxes — federal, state, local and foreign — equal to only 1.1 percent of its cumulative $11.3 billion in profits.  Thanks to an obscure loophole in the tax code, Carnival can legally avoid most taxes."

I have written about the cruise industry's ability to avoid U.S. taxes since starting this blog.

Carnival was created by Ted Arison (father of current CEO Mickey Arison, photo right).  Senior Arison collected billions of dollars from tax paying U.S. passengers and lived the good life in Miami.  But he registered his Miami-based cruise line and his cruise ships in Panama to avoid U.S. taxes.  In 1990, he abandoned Miami, denounced his U.S. citizenship, and returned to Israel with his billions in a ploy to avoid estate and inheritance taxes.

Whenever I think of cruise tycoons like the Arisons and the foreign cruise lines like Carnival and Royal Caribbean, I can't help but think what a scam they are running.    

The Miami-based cruise lines file papers of incorporation and vessel registration in distant countries where no one will bother them with things like income tax, wage and labor laws, or safety regulations. They then collect billions of dollars a year from hard working saps - the U.S. tax paying public. 

 

Like this article?  Consider reading: 

Cruise Line Fat Cat Billionaires 

What the Cruise Industry Has to Learn From My Cousins Back in Arkansas

 

Credits: Mickey Arison - David Adame AP (via Cruise Blog)

Christine Duffy, President of CLIA, Tells Her First Lie

Yesterday, Travel Pulse published an "interview" of Christine Duffy, the incoming president of the Cruise Line International Association ("CLIA").  CLIA is the cruise industry's trade organization responsible for promoting the cruise lines' interests and lobbying Congress. 

We have written a few articles about CLIA and their Pravda-like view of the facts regarding the cruise industry.  We were hoping the new leadership at CLIA would be a change from the past. 

CLIA - Christine Duffy - Cruise Line International AssociationThe "interview" was the usual PR piece, consisting of prearranged soft ball questions.  But I fell out of my chair upon reading her comments about what she told Congressional leaders during a lobbying trip to Washington D.C.:   

Part of the message we delivered in D.C. is that the travel industry employs more people than the auto industry, and we didn’t get a bailout. We employ a lot more people than anybody recognized, and our impact is in all 50 states. We’re not going to offshore our jobs . . .

Wow!  What a whopper!

The fact of the matter is that all of the CLIA cruise lines are foreign corporations.  Unlike Ford or Chevrolet which are U.S. corporations and employ U.S. employees, the CLIA cruise lines are 100% foreign corporations.  Carnival was incorporated in Panama.  Royal Caribbean was incorporated in Liberia (yes, Africa).   And all of these cruise lines fly the flags of foreign countries like Panama, Liberia, Bermuda and the Bahamas.  By registering their companies and cruise ships overseas to avoid U.S. labor, wage and safety laws, the foreign cruise lines also avoid U.S. income taxes.  The $35,000,000,000 (billion) cruise industry pays no U.S. Federal income taxes.

If the cruise lines were required to pay U.S. taxes, they would pay over $10,000,000,000 a year.  The cruise industry receives a $10 billion bailout each year, year after year.  

But that's not all.  All of the cruise ships are manufactured and constructed in foreign shipyards, in Italy, Norway or France.  And 99.9% of the officers and crew members (except some of the U.S. dancers and singers) are from "overseas."  No U.S. workers are going to work 360 hours a month for around $545 like the incredibly hard working utility cleaners from India, Central America and the Caribbean islands.

The cruise industry is the most outsourced, non-U.S. industry in America.  The industry is built on the business model of tax-paying U.S. citizens paying their hard earned wages to the foreign corporation cruise lines who pay no taxes to the U.S. and exploit their foreign employeesby paying slave wages to the lower tier crew members.

"We’re not going to offshore our jobs" Ms. Duffy?  Please, it's too early in 2011 to tell lies.       

 

Photo credit:  Travel Industry Today