Independent Christian Voice


The $236 million cruise (to nowhere)

Carnival has come out on the sweet end of the deal this hurricane season. The Washington Post reports this story:

On Sept. 1, as tens of thousands of desperate Louisianans packed the New Orleans Superdome and convention center, the Federal Emergency Management Agency pleaded with the U.S. Military Sealift Command: The government needed 10,000 berths on full-service cruise ships, FEMA said, and it needed the deal done by noon the next day.

The hasty appeal yielded one of the most controversial contracts of the Hurricane Katrina relief operation, a $236 million agreement with Carnival Cruise Lines for three ships that now bob more than half empty in the Mississippi River and Mobile Bay. The six-month contract -- staunchly defended by Carnival but castigated by politicians from both parties -- has come to exemplify the cost of haste that followed Katrina's strike and FEMA's lack of preparation.

To critics, the price is exorbitant. If the ships were at capacity, with 7,116 evacuees, for six months, the price per evacuee would total $1,275 a week, according to calculations by aides to Sen. Tom Coburn (R-Okla.). A seven-day western Caribbean cruise out of Galveston can be had for $599 a person -- and that would include entertainment and the cost of actually making the ship move.

"When the federal government would actually save millions of dollars by forgoing the status quo and actually sending evacuees on a luxurious six-month cruise it is time to rethink how we are conducting oversight. A short-term temporary solution has turned into a long-term, grossly overpriced sweetheart deal for a cruise line," said Coburn and Sen. Barack Obama (D-Ill.) in a joint statement yesterday calling for a chief financial officer to oversee Katrina spending.

Let's be realistic. How much would Carnival have really earned during the remainder of the hurricane season? And, these were it's three oldest ships, so it's not like they were sacrificing a lot. You know that there would have been a lot of bargains this fall going into the holiday season, given the increased energy costs that are depleting people's "fun" money. Additionally, given the fact that these ships aren't being fully utilized, why can't the contracts be ended (with 30 days additional compensation "to be fair") and allow Carnival to put the ships back in service to try to make these great profits they think they will miss out on otherwise? Why? Because they have one hell of a deal with the government. Consider this from that same article:

But the Carnival deal has come under particular scrutiny. Not only are questions being raised over the contract's cost, but congressional investigators are examining the company's tax status. Carnival, which is headquartered in Miami but incorporated for tax purposes in Panama, paid just $3 million in income tax benefits on $1.9 billion in pretax income last year, according to company documents. "That's not even a tip," said Robert S. McIntyre of Citizens for Tax Justice. U.S. companies in general pay an effective income tax rate of about 25 percent, analysts say. That would have left Carnival with a $475 million tax bill.

Carnival's public records boast "that substantially all of our income in fiscal 2004, 2003 and 2002 . . . is exempt from U.S. federal income taxes," largely because it maintains that its operations are not in the United States but on the high seas.

Don't be fooled. Carnival is doing just fine (at taxpayer's expense, both in this contract and in lost tax revenue). As a past Carnival cruiser, I'm ashamed to have support such a blood-sucking corporation. It won't happen again.


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