Carnival: No Reimbursement to U.S. for Disabled Ship

Carnival Corp. says all maritime interests must assist without question those in trouble at sea, a duty that would not include reimbursing the U.S. government nearly $780,000 for costs associated with the rescue of the crippled Triumph cruise ship.

Carnival released letters Friday replying to an inquiry by U.S. Sen. Jay Rockefeller, a West Virginia Democrat who chairs the Senate Commerce Committee, about the Triumph stranding and the cruise line’s overall safety record. Among Rockefeller’s questions was whether Carnival would repay the government for Coast Guard costs in the Triumph case as well as $3.4 million to the Coast Guard and Navy from the 2010 stranding of the Carnival Splendor in the Pacific Ocean.

“These costs must ultimately be borne by federal taxpayers,” Rockefeller said in his March letter, adding that Carnival appears to pay little or no federal income taxes.

In response, Carnival said its policy is to “`honor maritime tradition that holds that the duty to render assistance at sea to those in need is a universal obligation of the entire maritime community.” The cruise line noted that its ships frequently participate in rescues at the Coast Guard’s request, including 11 times in the past year in Florida and Caribbean waters. It did not make direct reference to repaying any money.

In a statement, Rockefeller called the response “`shameful” and that he is considering “all options to hold the industry to higher passenger safety standards.”

Those options could include a congressional hearing and legislation, perhaps even a closer look at taxation. Rockefeller’s letter asked Carnival whether the money it pays in taxes covers the costs of various federal benefits it receives, a question the cruise line again did not directly answer. It did mention port taxes and fees and other payments and said it paid $16.5 billion in wages to U.S. workers in 2011.

“Every state where our ships call or home port benefits from the dollars spent by cruise lines to buy products and retain services from local businesses,” Carnival added.

The exchange marked the latest chapter in the saga of the Triumph, which was disabled by an engine fire during a cruise in February in the Gulf of Mexico. Thousands of passengers and crew had to endure five days at sea with no power and under squalid conditions while the 900-foot vessel was towed to Mobile, Ala., where it continues to undergo repairs.

Rockefeller had asked Carnival for details about 90 incidents aboard its ships that were filed with the Coast Guard in the past five years. Carnival responded that 83 were not considered serious under federal regulations. Three were the Triumph and Splendor mishaps and the capsizing of the Costa Concordia off Italy’s coast, which killed 32 people in January 2012. The others were more minor ship collisions, an illness and one passenger who jumped off a ship.

The cruise line said it takes each incident “very seriously” and undergoes reviews and corrective measures when needed, such as a review of safety and emergency response practices across all of Carnival’s brands following the Concordia accident. In a separate letter, Carnival Chairman and CEO Micky Arison said the company takes the issues raised by Rockefeller very seriously.

“We remain committed to the safety and comfort of our guests and we are proud of our ability to provide millions of people with safe, fun and memorable vacation experiences,” Arison wrote.

(Associated Press writer Vicki Smith in Morgantown, W.Va., contributed to this report.)