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

Today the Move On organization published an article entitled "Pay Your Taxes?  These Ten Companies Didn't."   The article points out that while most of us U.S. taxpayers struggle to pay our fair share of taxes, there are certain corporations which have tax avoidance down to an art. 

The list is complied by Senator Bernie Sanders, an Independent from the state of Vermont.  His top 10 corporate freeloaders includes cruise giant Carnival corporation, which incorporated itself in Panama in the 1960s.  Ever since then, it has flown the flag of that country to avoid U.S. taxes, as well as to skirt U.S. safety regulations and wage and labor laws.

I have written about Carnival's extraordinary ability to avoid literally billions in U.S. taxes over the years.  Is paying virtually no taxes vital to the survival of the cruise line?  Hardly, considering that its CEO Mickey Arison (photo circa 2000) is worth billions and billions.  Arison is the richest person in Florida today.  So why does he pay his injured and ill crew members slave wages?  He may not be the only cruise executive billionaire - take a moment and read Cruise Line Fat Cat Billionaires - but he certainly is the fattest.

Arison owns the Miami Heat and is paying basketball stars Dwayne Wade and LeBron James hundreds of millions of dollars, but he treats his crew employees like dog crap.

I am hardly Arison's harshest critic.  Ten years ago journalist Jim DeFede of the Miami New Times wrote a series of articles in which he asked the question "Is Mickey A Greedy Corporate Pig?"  DeFede also wrote some of my favorites "The Deep Blue Greed - The Arison Clan Built Carnival into a Money Machine by Cleverly Avoiding Tax Laws" and "Ten Questions for Micky."

DeFede left the Miami New Times long ago, and we don't have his blunt questions to consider today.  Over the past decade Arison's personal worth increased from $1,700,000,000 to over $4,100,000,000 last year, while Arison convinced the city of Miami to build him two basketball arenas in the process.

So I'll ask the same question DeFede asked 10 years ago: Is Mickey a Greedy Corporate Pig?

In arriving at your answer, consider that Carnival pays disabled crew members receiving medical treatment in their home countries a daily stipend of only $12 and expects them to find lodging and pay for their food and living expenses.  You can't buy a beer and a hot dog at the Miami Heat game for $12 . . .  

Photo:  AP/Wide World Photo via Miami New Times
 

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In an exclusive story, Cruise Line News (CLN) has learned that industry giant Carnival Corporation recently incorporated its business in the United States (in the state of Delaware).  Carnival intends to announce this historic development next Monday, April 4th, at Carnival's headquarters in Miami.

Since the 1960's, Carnival has incorporated its business and registered its cruise ships in the country of Panama.  For the past 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 CEO Mickey Arison at court side next to the Arisons' seats at the Miami Arena where his basketball team, the Miami Heat, play.  Maritime ace lawyer Walker asked Mickey: "Mickey, if Dwayne Wade and LeBron James earn several hundred million dollars from Carnival and pay tens of millions of dollars in U.S. taxes, don't you think it is fair that Carnival - which earns over fourteen billion dollars a year in cruise ticket sale - pay a few billion dollars in U.S. taxes?"               

Perhaps it was the euphoria of the Heat beating the Lakers by one point in a close overtime victory, but Mickey 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 Lite which a Miami cheerleader handed Arison 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 Mickey to sign as well as U.S. flags to fly on the Carnival fleet of  cruise ships.

Mickey 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.  

"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, Mickey 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 Lite.  

April 2, 2011 Update:  Yes, this is an Aprils Fool joke.

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This week was another interesting week in the strange world of cruise law.  Just consider:

A Cruise CEO With Billions of Dollars But No Soul?

Carnival Cruise's CEO Billionaire Mickey Arison was named the richest man in Florida again by Fortune magazine with a net worth of $4,100,000,000.  So why does he pay his injured and ill crew members slave wages of only $12 a day? 

Arison owns the Miami Heat and is paying basketball stars Dwayne Wade and LeBron James hundreds of millions of dollars, but he treats his crew employees like dog crap.  

Arison and the other cruise line tycoons Leon Black and the Pritzker families are stereotypes of greedy shipping executives.  Earlier this year I wrote about these Cruise Line Fat Cat Billionaires.  Here we are again with these billionaires counting their pennies.  

Billions for me, peanuts for the crew.  

More Lies By the Cruise Line International Association

The notorious Cruise Line International Association ("CLIA"), which rivals the former communist regimes of Russia in trying to control the flow of information (Pravda anyone?), released a major marketing PR effort this week to promote itself as a green industry.  CEO Arison is quoted as saying that the cruise industry is "committed to the highest environmental standards through cutting-edge environmental policies, procedures, technologies . . . "

Ha.

The truth is that Arison and CLIA fought tooth and nail this year to avoid Alaska's high wastewater restrictions.  A green company?  Hardly.  CLIA opposes the Clean Air Law and its cruise ships are still burning nasty bunker fuel.  Technologies needed to meet the "highest" wastewater and emission standards cost money, that billionaire Arison has historically avoided spending unless forced to do so.     

At the same time CLIA issued its grandiose environmental press statement, numerous newspapers published articles revealing that the cruise industry still has a long, long way to go to protect the seas in which its cruise ships still pollute: "Cruise Ships Continue Dumping Sewage,"  "The Dark Side of Cruising: Waste Disposal," and "Cruise Ships Continue to Foul the Baltic Sea."

More Monkey Business By Royal Caribbean

My blog this week contained two of my most widely read articles over the course of the last year.  Royal Caribbean's Deep Throat focused on the corruption in Royal Caribbean's risk management department.  

The "Deep Throat" article about the cruise line's indifference toward its own corrupt employee should be read in contrast to the cruise line's diabolical conduct toward a former cruise line lawyer who decided to "switch sides" and represent injured passengers and crew members - Royal Caribbean Forces Defense Lawyer to Switch Sides.  This article was widely circulated by email within Royal Caribbean's legal department and its outside law firm who are teaming up in a campaign of malicious prosecution against our firm.

The "Deep Throat" article was named as one of the "best in blogs" by LexBlog yesterday.

More Good News For Cruise Law News (CLN)

Speaking of the best blogs, CLN has reached another milestone as one of the most read legal blogs in the U.S.  Three months ago, I was excited to mention that this blog was the 55th most popular legal blog per the Alexa rankings and was rising fast. I predicted by the end of the year that CLN's popularity would place it in the top 25 law blogs.

Well today Alexa's ranking shows that CLN moved up from the 55th to the 32nd most popular law blog.   

It seems that the public is hungry for a source of information about cruising other than the slick corporate statements from billionaire executives and bogus facts from the cruise industry's PR people. 

Interested in how your blog or website is ranked?  Click here and download the Alexa toolbar.  It will take 20 seconds . . .

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

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The cruise industry has picked a fight with Alaska over the $50 tax designed to protect the state. The lawsuit, which is posted online, indicates that the lawsuit was filed by a trade organization called, interesting enough, the "Alaska Cruise Association."

"Alaskan Cruise Association" - Made in Miami, Florida 

There is nothing remotely "Alaskan" about the "Alaska Cruise Association" (ACA).  The ACA is comprised of nine cruise lines, none of which are based in Alaska.  Six of the cruise lines - Carnival, Celebrity, Norwegian, Regent Seven Seas, Royal Caribbean, and Silverseas - are based in Miami or Fort Lauderdale. The other three line, Holland America, Princess, and Windstar Cruises, are all owned by Miami-based Carnival or its subsidiaries.

Even the main lawyer listed on the lawsuit papers, Seattle lawyer Stephen Rummage, is not even admitted to practice law in Alaska. He must petition the court in Alaska for special permission to enter the courthouse in Alaska to argue the case. You can guarantee that the bulk of the ACA's lawyer's fees will be paid by money which can be traced back to Miami. 

Revenge is Sweet

The Miami cruise lines do not like to be regulated and are certainly not used to being taxed.  It is like trying to put a leash on a mean dog.  Someone is going to be bitten.  Yet, Alaska has every right to impose reasonable taxes to protect its pristine environment from the out-of-state polluters like Carnival and Royal Caribbean.   

The lawsuit is revenge against Alaska by Carnival and other cruise lines in South Florida.  Unlike Florida and the struggling islands in the Caribbean which for years have rolled over and played dead for the pollution spewing cruise industry, Alaska has enacted a number of measures to protect the state from  the foreign flagged cruise lines' predatory practices.  Earlier in the year, it was widely reported that the cruise industry was having difficulty convincing the legislators to abolish strict water pollution standards which were approved by Alaskan voters in 2006. 

Like Father, Like Son?

Soon thereafter, Mickey Arison of Carnival began threatening to punish Alaska for the pollution regulations and having the audacity to levy a $50 tax on the passengers who sail on his cruise ships. Any time I hear the word "tax" and "Mickey Arison" in the same sentence, I can't help but to think about Mickey's father, Ted Arison.  He 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 all 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.

So here we are again, with the younger Arison leading the charge of the Miami consortium of foreign flagged cruise ships pretending to be an "Alaskan" non-profit organization with Alaska's best interests at heart. A wolf in sheep's clothing. This is pay back by the Miami cruise lines, and business as usual for the latest tax avoiding Miami billionaire.    

Photo credit:

Business Week   -    Photo of Mickey Arison         

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KTUU Channel 2 in Anchorage Alaska reports that the cruise industry has filed suit to avoid paying Alaska's head count tax.  In an article entitled "Sources: Cruise Ship Industry Files Suit Over Head Tax," Channel 2 reports that cruise lines are trying to avoid the $46 infrastructure tax levied at Alaska ports which the cruise ships use. The cruise industry will undoubtedly argue that the State of Alaska does not have the authority to levy taxes against foreign flagged cruise ships. 

The lawsuit has been a long time coming.  For the past year, Mickey Arison has been threatening to use Carnival's army of lawyers to sue Alaska to avoid the tax.  There is a tradition in the Arison family of avoiding taxes.  His father, Ted Arison, earned billions running his cruise empire from Miami.  After retirement, the senior Arison denounced his U.S. citizenship and returned to Israel to try and prevent the United States from collecting estate and inheritance taxes.  

The timing of the lawsuit in Alaska is odd.  Yesterday, an environmental organization called the Friends of the Earth issued what they are calling the Cruise Ship Environmental Report Card.  The report card grades the cruise lines' impact on the air and water.  I first learned of the report in an article entitled which cruise lines are the biggest polluters? written by travel expert Anita Dunham - Potter. Carnival received a "D-" and Royal Caribbean received a "F."      

The tar-like bunker fuels these cruise ships burn are nasty.  And the sewage and waste waters discharged  into the water are gross.  Unlike Florida which is beholden to the cruise industry with its anything goes mentality, states like Alaska and California have demonstrated an environmental commitment to the quality of the air and water in their states' jurisdiction.  The cruise industry already does not pay U.S. taxes because they register their companies and flag their cruise ships in places like Liberia and Panama.  To quibble over a nominal tax designed to protect Alaska and its infrastructure is just the same old greed that this industry is known for.       

The Cruise Line International Association (CLIA) responded to the bad grades of its members by attacking the environmental group.  In its new PR website called "Cruise Industry Facts," CLIA proclaimed: "fortunately, Friends of the Earth has no authority in the matter."

That pretty much sums up the cruise industry's attitude.  Environmental group - no authority.  We scoff at the notion that you can monitor or grade us.  State of Alaska - no authority.  You can't tax us.  You can't control us.  We will use the tax-free $30 billion we collect from U.S. tax-paying passengers each year to sue to avoid your measly tax, and then we will crap in your pristine waters.      

Photo credit      Friends of the Earth, via @ExpertCruiser 

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