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

Cruise lines hate U.S. governmental scrutiny of their business operations.  

The whole purpose of incorporating their businesses and flagging their cruise ships in foreign countries is to avoid U.S. taxes and the scrutiny of federal regulators. This business model permits the cruise lines to pay virtually no U.S. taxes and to avoid U.S. wage, labor and safety laws. Cruise lines often conceal shipboard crimes and the industry's abuse of crew members.

But one U.S. Senator, Jay Rockefeller of West Virginia, is taking the cruise lines' lack of transparency head on. Following Carnival's string of disabled cruise ships and nonchalant attitude towards its quests, Senator Rockefeller sent a letter to Carnival billionaire cruise CEO Micky Arison in March, inquiring into issues pertaining to the cruise line's avoidance of taxes as well as issues regarding the safety of cruise passengers. You can read the letter here. 

Carnival's letter back to Rockefeller dodged and weaved and argued and mostly avoided responding to Senator Rockefeller's concerns. Carnival refused to disclose, for example, the number of victims of sexual assault - a topic that the cruise lines strenuously try to avoid talking about.  We summarized Arison's defiant attitude in our article: Carnival CEO Arison's Letter to Senator Rockefeller: Screw You!

Undaunted, Senator Rockefeller has sent another letter to Arison and has also sent letters to the CEO of Royal Caribbean Cruises (Richard Fain) and Norwegian Cruise Lines (Kevin Sheehan).

In his letters yesterday, the Senator is inquiring into the internal safety audits which the cruise lines and the cruise association are allegedly conducting. At the recent cruise trade show on Miami Beach, the Carnival, Royal Caribbean and NCL cruise executives talked at length about their ability to learn from their own internal investigations but never stated that they would release the reports from the investigations.

This is the usual cruise line ploy: assuring the public that they are busy at work investigating themselves after cruise ships sink or catch on fire; however, they never ever disclose the results of their alleged investigations. Carnival said that it was conducting an internal audit of its operations after the Carnival Splendor was disabled after an engine room fire in 2010.  But Carnival has never released the results of its investigation. The public remains in the dark.

Senator Rockefeller is also again demanding that the cruise lines disclose the number of crimes, particularly sexual assault, on cruise ships. The cruise industry has been notoriously dishonest in revealing accurate crimes statistics. It usually defaults to conclusory, self-serving opinions that crime is "rare" while simultaneously concealing the true crime statistics.

At a prior Congressional hearing, Royal Caribbean responded to a Congressional inquiry by stating that 66 women were raped during a three year period.  But in a court case we handled, the cruise line was ordered to reveal that the actual number of such crimes was much higher.

The LA Times reported on the cover-up in an article: Cruise Industry's Dark Waters.   

Royal Caribbean faced no consequence for misleading Congress back in 2006.  

The cruise lines' response to Senator Rockefeller in due on May 24th.  

Will RCCL CEO Fain and NCL CEO Sheehan be transparent? Or will they join Arison in a game of hide and seek?

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Newsweek's Daily Beast Blog published an insightful article about the real issues behind the Triumph cruise ship fire. Entitled "Carnival Cruise From Hell," the article explains that the situation involves a lot more than just another stinky ship bobbing around on the high seas. Rather, Newsweek writes that the fiasco is "a troubling indicator of pervasive safety problems in a booming industry with little oversight."

Written by Eve Conant, the articles points out that last month, the Federal Aviation Administration (FAA) grounded the entire U.S. fleet of Boeing 787s over fire-safety concerns. But where is the maritime equivalent of the FAA overseeing the cruise lines? It has been outsourced to third world countries like the Bahamas which has neither the interest or capability of regulating the billion dollar U.S. cruise industry. 

Newsweek interviewed me for the article, but criticism from lawyers who routinely sue the cruise lines are often met with skepticism.  

What's impressive about the article is that Newsweek interviewed a former chairman of the National Transportation Safety Board (NTSB), Jim Hall.

Unlike recent NTSB officials who angled for lucrative consulting jobs with the cruise lines and gave the industry a free pass, Jim Hall earned a reputation for objectivity and credibility when he was the NTBS's top dog from 1994 - 2001. He was involved in investigatng serious accidents in both the aviation and cruise industries. He voiced his concerns that there would be continued problems in the maritime industry because there was no real oversight over the cruise lines.

Here are the recent comment's made by Hall to Newsweek:

Jim Hall, head of the National Transportation Safety Board during the Clinton administration, says the industry is watched over by “paper tigers” like the International Maritime Organization and suffers from “bad actors” much like in the poorly regulated motor-coach industry, which saw its latest fatal bus crash in Southern California earlier this month. “The maritime industry is the oldest transportation industry around. We’re talking centuries. It’s a culture that has never been broken as the aviation industry was, and you see evidence of that culture in the [Costa Concordia] accident,” says Hall.

Ships may seem and feel American but are mostly “flagged” in countries like the Bahamas or Panama in order to operate outside of what he says are reasonable safety standards. “It is, and has been, an outlaw industry,” says Hall. “People who book cruises should be aware of that.”

Cruise lines are an "outlaw industry" watched over by "paper tigers?"  Spot on.  And remember these comments are by a former chairman of the NTSB.  

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Today Business Week published an article "Cruise Trade Group Spends $400K on 4Q Lobbying" which is re-printed, unedited, as follows:

"Cruise Lines International Association spent almost $400,000 in the fourth quarter to lobby on security and environmental issues along with other matters, according to a recent disclosure report.

The trade group that represents cruise lines such as Royal Caribbean and Carnival also lobbied the federal government on legislation related to seaport inspections, customs matters, sanitation and health laws, quarantine procedures, international health requirements and crime reporting.

In the October-through-December period, the trade group, based in Ft. Lauderdale, Fla., lobbied both chambers of Congress, along with the Department of Homeland Security, the State Department, Customs and Border Patrol, the U.S. Coast Guard, the Department of Justice, the Department of Transportation, the U.S. Department of Agriculture, the Food and Drug Administration, the Department of Health and Human Services, the Centers for Disease Control and Prevention, the Federal Bureau of Investigation, the National Transportation Safety Board, the Transportation Security Agency and the Environmental Protection Agency, according to a disclosure report filed in January with the House clerk's office."

The Cruise Line International Association (CLIA) is the organization which promotes the interests of the cruise industry and lobbies Congress and federal agencies to avoid as much Federal regulation as possible. 

The $400,000 from CLIA is in addition to the millions of dollars spent in lobbying by the individual cruise lines.  For example cruise expert Dr. Ross Klein reports that Royal Caribbean alone spent over $3,000,000 for lobbyists for the last three years.  

The lawyers here at Cruise Law have attended five Congressional hearings where CLIA fought against safety laws and resisted reporting cruise crimes to the Federal Bureau of Investigations (FBI) and the U.S. Coast Guard.  

CLIA has a strange group of bedfellows:  

CLIA's Vice President of Communications is Eric Ruff (photograph above, far left with glasses) who was Secretary of Defense Donald Rumsfeld's spokesperson who helped sell the U.S. on the war against Iraq.  He is now responsible for CLIA's "public policy."  Mr. Ruff is using his experience gained at the Department of Defense to fight the war against cruise crime regulations and environmental restrictions which may require the cruise industry to spend some of its tax free money to protect passengers and public waters.    

CLIA's President is Terry Dale (photograph left) who had the unenviable job of appearing before Congress and testifying against cruise line rape victims.  His half-hearted and ultimately losing argument, that cruising is safe and there is no need to report crimes, failed to convince Congress and further tarnished the cruise line's already battered and dubious public image.       

Another Vice President is Michael Crye (photograph below right).  As down to earth as a Brooks-Brothers-suit-with-extra-starch, Mr. Crye's title involves "technical and regulatory affairs," but he  routinely shows up at Congressional cruise crime hearings to belittle crime victims.  He is most infamous for accusing missing Royal Caribbean passenger George Smith of being responsible for his own "disappearance" during his 2005 honeymoon cruise.   

There is a lot at stake for the cruise industry.  The CLIA cruise lines, like Carnival, Norwegian and Royal Caribbean, collect around $35,000,000,000 (billion) a year from mostly U.S. tax-paying citizens yet the cruise lines pay no U.S. taxes. Because of Congressional loopholes, U.S. based cruise companies - which register their businesses and flag their cruise ships in foreign countries - can avoid all U.S. taxes and safety and labor laws.

CLIA and the cruise lines are spending millions a year to make certain that Congress doesn't touch their tax free status and they can continue to skirt U.S. laws.  

In contrast to the cruise industry's multi-million dollar lobbying machine full of Washington insiders - Americans across the U.S. volunteering for the non-profit, grass roots organization International Cruise Victims (ICV) have traveled to Washington D.C. to keep the cruise industry accountable for crimes on cruise ships.  To see what an unfunded but dedicated group of victims can accomplish, consider reading:

Congress Passes Cruise Crime Law 

Congressional All Stars Pass Cruise Crime Law By Vote of 416 to 4

Ken Carver Fights for Cruise Ship Safety  

The photograph (left) shows Ron and Sue DiPiero of Ohio, who lost their son Daniel on a Royal Caribbean cruise ship, outside their Congressman's office in Washington D.C.       

The DiPieros are fighting for a reform of the Death on the High Seas Act (DOHSA) which provides no recovery for the emotional injuries sustained by grieving families who have lost a loved one on a cruise ship in international waters. 

The cruise industry has spent millions of dollars to make certain that families like the DiPieros are deprived of their rights:

The Death on the High Seas Act - Screwing American Passengers for 89 Years  

Cruise Industry Tries to Kill Amendment to Death on the High Seas Act    

For additional information regarding cruise industry lobbying, please read:

Lobbying Congress - Dirty Waters: The Politics of Ocean Pollution.  

Credits:

Eric Ruff     AP via politico.com

Terry Dale    cruiselaw's Flickr photostream

Michael Crye    seatrade-global.com

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