FEMA Pays Exorbitant Price for Charter of Carnival Fascination After Hurricane Maria

According to WRLN in Miami, FEMA grossly overpaid Carnival Cruise Line to charter the Carnival Fascination to provide housing for FEMA workers following Hurricane Maria. 

According to documents obtained through the Freedom of Information Act (FOIA) by Daniel Rivero, WLRN states that FEMA agreed to pay Carnival $74,700,000 to provide accommodations aboard the Carnival Fascination to house federal aid workers and first responders in St. Croix.  

As WLRN explains, the FEMA-Carnival contract provides that the cruise line agreed to house 2,056 FEMA workers for the length of the four month contract. The average number of nightly passengers for the contract period was around 800 which, given the contract price, turns out to be $834 per person Carnival Fascinationper night, paid by U.S. taxpayers. That's a staggering rate or well over over $5,000 per week per passenger. 

WLRN calculated the market rate for a cruise on the Carnival Fascination between $370 and $1,200 per person per week, which is a fraction of the rate paid by FEMA. 

I also obtained a copy of the FEMA-Carnival charter agreement pursuant to a FOIA request earlier this year. It revealed that FEMA agreed to pay what turns out to be $18,675,000 a month for the Fascination

This exorbitant amount of taxpayer money is even higher than what FEMA paid Carnival in 2005, to charter three Carnival cruise ships following Hurricane Katrina. FEMA agreed to pay Carnival an average of only $13,111,111 a month (for a total of $192,000,000) to charter the Carnival Sensation, Carnival Ecstasy and Carnival's Holiday for 6 months (plus $44,000,000 for fuel and other expenses) following hurricane Katrina.

Plus, as I pointed out in the article FEMA Agreed to Pay Carnival $74,700,000 for Charter of Carnival Fascination, Carnival didn't pay any federal taxes on this income. 

In the WLRN article, cruise expert Professor Ross Klein pointed out that Carnival is registered in Panama and pays almost no U.S. income taxes which he believes is a larger concern for how the contract was handled.

“The US Government hired a foreign registered corporation that uses foreign registered vessels with foreign workers (working in the US but not paying US income tax). And because the corporation is offshore, and the ship is offshore, the company pays virtually no income tax on the contract. Now that is a sweet deal,” Professor Klein told WLRN.

What is even more disturbing is that, as WRLN points out, FEMA first (over) paid Carnival even before it disbursed funds to the survivors in the U.S. Virgin Islands hit by the hurricane. Numerous media sources are also now reporting that the death toll in Puerto Rico due to Hurricane Maria was drastically underestimated. The consensus is that that the actual number of deaths was around 5,000 citizens, compared to official estimates of less than 100.   

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Photo credit: Chrismschurz - CC BY-SA 3.0, commons / wikimedia. 

Adventure of the Seas Brings 3,800 Hurricane Maria Evacuees to South Florida

Adventure of the SeasA local news station in Miami reports that Royal Caribbean used the Adventure of the Seas to take around 3,800 evacuees from St. Thomas, St. Croix and Puerto Rico back to South Florida, following the destruction and chaos caused by Hurricane Maria.

7 News in Miami aired a brief segment on its television program today, showing the Adventure of the Seas returning to Port Everglades in Ft. Lauderdale. 

Royal Caribbean and other Miami-based cruise lines have enjoyed good press due to their hurricane relief efforts, which we commented on in Cruise Lines Aid Hurricane-Stricken Caribbean Islands.

But it has not always been smooth sailing for Royal Caribbean in dealing with recent hurricanes. 

The cruise line was recently named in a a proposed class action lawsuit that alleges that Royal Caribbean forced its customers to fly to Texas when it was in a state of emergency due to Hurricane Harvey rather than cancel or modify its August 27th cruise on the Liberty of the Seas which was scheduled to depart from the Port of Galveston. The cruise line refused to cancel the cruise until its passengers had already flown to Texas, unlike other cruise lines which prudently canceled and provided full credits to its customers. 

Royal Caribbean repeatedly told passengers that if they canceled, they would lose the entire cost of the purchased cruise. The passengers and their families then faced catastrophic flooding caused as the Category 4 hurricane flooded south Texas. Read the class action complaint here.   

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Photo credit above: AP Photo / Gerald Herbert via Boston Herald.