Under public criticism and pressure initiated by U.S. Senator Rockefeller, Carnival announced today that it will reimburse the federal government for costs of over $4,000,000 incurred by the U.S. Coast Guard and U.S. Navy in responding to its Triumph and Splendor cruise ships.
Senator Rockefeller set his sights on the cruise industry at a Senate hearing last year following the deadly disaster of the Carnival-owned Costa Concordia cruise ship. Rockefeller grilled the cruise industry’s CEO and questioned why the cruise lines avoided most U.S. taxes and did not reimburse the federal government for the services of some 20 federal agencies.
Senator Rockefeller recently sent a letter to Carnival CEO Micky Arison, who is worth over 5.7 billions dollars, demanding an explanation why Carnival paid virtually no U.S. taxes even though the Panamanian incorporated cruise line uses the services of the U.S. Coast Guard and other U.S. agencies on a daily basis. Carnival’s response was labeled “shameful” by Rockefeller.
NBC aired a special on the story and interviewed Rockefeller (and me) during the program. NBC’s Rock Center commissioned an audit of Carnival which revealed that Carnival paid 0.6% in international, federal, national, and local taxes on its many billions of dollars in income over the course of the last 5 years.
Numerous news sources, including the Huffington Post, published articles highly critical of Carnival. Since then, Carnival has been the butt of “poop ship” jokes and ridiculed for non-payment of U.S. taxes. Carnival has been clobbered in the arena of public opinion.
Carnival released a statement today saying: “Although no agencies have requested remuneration, the company has made the decision to voluntarily provide reimbursement to the federal government.”
Senator Rockefeller responded by saying: “I’m glad to see that Carnival owned up to the bare minimum of corporate responsibility by reimbursing federal taxpayers for these two incidents. I am still committed to making sure the cruise industry as a whole pays its fair share in taxes, complies with strict safety standards, and holds the safety of its passengers above profits.”
The issue of Carnival’s avoidance of paying taxes and for U.S. services has been brewing for years. The International Cruise Victims (ICV) organization, a non-profit organization focused on crimes and disappearances of passengers on cruise ships, has addressed the issue of cruise tax avoidance for years. ICV CEO Ken Carver sent a Freedom of Information Act (FOIA) request for the costs associated with the U.S. Navy and U.S. Coast Guard responding to the disabled Carnival Splendor in November 2010.
Mr. Carver’s investigation led to a response from the Navy which revealed that the Navy incurred $1,884,376.75 in responding to the disabled Splendor which included sending the U.S. aircraft carrier Ronald Reagan and helicopters to the fire stricken cruise ship.
Congratulations to the ICV and CEO Ken Carver for raising this issue over the past years.