While most of America was still reeling from the worst economic downturn since the Great Depression, Carnival Corporation – the world’s largest cruise line company – reported a better-than-expected third quarter profit last year of $1.3 billion.
Over the same period, revenues reached $4.1 billion, amounting to a 32 percent profit margin and generous shareholder returns. Chairman and Chief Executive Officer Micky Arison called the figure“an achievement” given the “global economic environment” and a “testament to the power of our global brands.”
But despite its profits, Carnival Cruise Lines – the company’s flagship subsidiary – chose to roll out eight ships in the past three years without the latest in advanced wastewater treatment technology, a cost-effective and preferred method of carrying out a longstanding cruise industry practice of discharging sewage into the ocean.
Environmentalists, backed by scientists at the Environmental Protection Agency, say federal and international laws for treating sewage onboard vessels are outdated, still threatening marine life and coral reefs even when ships abide by legally permissible methods.
While other cruise lines are voluntarily adopting the latest technology, just one of Carnival’s 23 ships – the one that goes to Alaska – carries an advanced sewage treatment system. Carnival instead chooses to spend millions of dollars each year on lobbying and marketing. It’s a campaign that involves some of D.C.’s toughest lobbyists and a marketing effort that rewards journalists and researchers for good behavior.
Ross Klein, a Ph.D. in sociology, is the author of numerous books critical of the cruise line industry and the lead author of a recent report on pollution discharge for the international environmental group Friends of the Earth. He said the only reason the cruise lines do not install the more advanced sewage treatment systems is money.
“They can afford to improve their behavior but that would mean their stockholders might not make as much money or they’d have to raise their prices,” he said.
Lobbying Congress
In February 2008, in the early days of the Presidential campaign, The New York Times reported on the close relationship Sen. John McCain reportedly had with Washington lobbyist Vicki Iseman. The Times focused on Iseman’s clients in the telecommunications industry. But few reporters, aside from Joe Conason at Salon.com and investigators for DCBureau.org, explored another connection.
The Cruise Lines International Association is incorporated in Virginia and located at Alcalde & Fay’s address, 2111 Wilson Boulevard, Suite 850, in Arlington. The Cruise Industry Charitable Foundation is also incorporated at the same address.
In addition, Iseman directed from 2004 to 2008 her own political action committee called the American Freedom PAC devoted to cruise industry lobbying. The PAC collected $48,800 in 2007 and $35,100 in 2008 almost entirely through soft money contributions from cruise industry executives and their wives. Other Alcalde & Fay lobbyists, including Hector Alcalde and Kevin Fay, contributed to the PAC, which dispersed funds to members of Congress on key committees.
So, for example, Carnival Corporation Chairman and CEO Micky Arson and his family can donate personally to a politician and then provide additional monies through these various individual and industry PACs, thus circumventing individual campaign contribution limits and violating the spirit if not the letter of the law.
The Cruise Line Industry Association has by far been Alcalde & Fay’s biggest client for over a decade. Last year, the Cruise Line Industry Association gave the lobbying firm more than $1 million, based on financial disclosure statement posted at Opensecrets.org. In 2008 the Cruise Line Industry Association, for its part, spent $2.2 million on lobbying Congress. It spent $1.8 million last year.
The cruise industry as a whole spent $23.5 million on lobbying Washington since 2000 and $5.9 million in 2008 alone, according to Klein who tracks the industry on his Web site Cruisejunkie.com. It is cheaper to buy influence in Washington with tens of millions of dollars than it is to spend hundreds of millions of dollars to install advanced technology on their cruise ships to clean up their sewage and waste.
Lobbying Congress
Iseman is not the only Alcalde & Fay lobbyist with a reputation for bragging. In a report on Congressional earmark corruption, the Heritage Foundation details an incident in Culpeper County, Virginia where Alcalde & Fay lobbyists offered to obtain a $3.5 million earmark to build a new sports complex.
Green Washing
The cruise line industry likes to give the impression it cares about the environment. After all, the industry depends on pristine oceans and beautiful scenery. But behind the scenes, cruise line companies use their massive financial interests to block efforts to regulate their pollution.
Royal Caribbean’s Ocean Fund, for instance, handed out $10 million in marine conservation grants since 1996 with one noticeable string attached: The research went to non-cruise ship related issues. Any group that strayed from this approach quickly learned the consequences. Klein writes in his latest book – Paradise Lost at Sea – about several incidents where cruise companies retaliated against negative reports by environmental groups it funded.
In 2002, the Oceans Conservancy issued a report critical of cruise ship ocean pollution. At the same time, Royal Caribbean’s Ocean Fund was providing the environmental group with a $450,000 three-year grant for ocean conservancy projects unrelated to cruise ships. When the Oceans Conservancy released its report on cruise ships, Royal Caribbean’s president was outraged, and the company withdrew additional funding to the group.
Cruise industry philanthropy is divide and conquer when it comes to environmental groups that accept cruise industry money. Among the conservation community, some question the integrity of groups such as Conservation International, the World Wildlife Foundation and Blue Ocean Institute, which receives Ocean Fund grants. Carnival hands out similar community service grants. Fred Felleman, an environmental consultant working with Friends of the Earth, said he has seen the influence in his own community in Puget Sound, Washington.
“They are very generous with their support, so when we try and move a state bill, people who are looked to in our communities as the marine watchdogs are saying, ‘Well, that’s really not that big of a deal,’” Felleman said. “When you have a very large financial interest trying to defend itself and you don’t have the environmental community speaking with one voice, it makes things that much harder.”
Cruise ships are huge economic drivers in port communities. The money can be addictive. The potential loss of these funds makes it hard for communities to demand, for instance, that cruise ships stop dumping waste in local waters. For example, Carnival Cruise Line withdrew from Grenada in 1999 amid a dispute over a $1.50-a-head tax to pay for a new landfill.
Another story detailed by Klein shows how cruise companies seek to control local tourism interests. When the Vancouver-based Oceans Blue Foundation confronted the cruise line industry in its report in 2002, it lost most of its funding a year later and shut down. The Foundation began in 1996 through a cooperative involving the Vancouver Port Authority, Tourism Vancouver and Tourism British Columbia. According to Klein, when the group issued its report calling for cruise ship certification, the tourism groups criticized it and cutoff funds.
Good Press, No Press
Free cruises and group discounts for educational seminars are another way cruise companies curry favor among a cross section of business interests. “Even the marine advocacy groups are giving away free cruises,” Felleman said.
For the environmentalists onboard, there are recycling containers and promises not to dump a drop of garbage overboard. Carnival even has an alliance with the International SeaKeepers Society where it installed devices on the bow of two of its ships that track water pollution. Had they positioned those monitors on the stern of those ships they might have received some entirely different readings.
Free cruises are also a good way to influence journalists. In open, quid-pro-quo offers for positive press, Royal Caribbean recently announced the finalists for its “Reporter at Sea” contest which awarded journalists who had the “ability to entertain, as well as effectively bring to life travel or cruising concepts.” The award was said to be “his or her big break, nabbing the inside scoop on Oasis of the Seas,” the world’s largest cruise ship, a press release states.
For Royal Caribbean the contest has a dual effect of rewarding positive coverage while at the same time fostering the next generation of friendly travel writers. The press release continued: “The winner of the ‘Reporter at Sea’ contest…will be flown with a guest to board Oasis of the Seas at Port Everglades in Fort Lauderdale, Fla., to cover the first pre-inaugural cruise. While onboard the ship, the winner will be joined by aspiring journalists from the United States, Germany, Mexico, and the United Kingdom.”
At a past travel writers’ seminar, Klein recalled hearing stories about how journalists had been awarded free cruises for positive press on short notice. Journalists critical of the industry can face pressure or retaliation if publishers do not support their reporting. Klein said several reporters have been fired over the years for negative stories that hurt advertising revenue.
“The industry spends more than $1 billion a year on advertising,” Klein said. “Newspapers won’t publish negative stories about the industry. Why would they publish an article when the cruise lines are giving them huge amounts of money?”
Even The Nation magazine, known for liberal, investigative journalism, seems to be influenced by the industry. For 12 years the magazine that holds itself out as the bastion of progressive reporting has sponsored an educational cruise seminar. Last year’s Caribbean cruise in December aboard a Holland America vessel included Howard Dean, Lewis Lapham, Robert Scheer, and E.L. Doctorow. But nowhere in the pages of the magazine over the past eight years can be found an article on cruise ship pollution or its human rights record.
Ben Wyskida, director of publicity for The Nation, said the magazine draws a firm line between the cruise seminar as a fundraising project and its editorial content. He said no editor could recall turning down any pitches for cruise industry investigations.
“The Nation cruise seminars do not, in any way, impact our coverage or have any effect on how journalists would handle stories about cruising or any other issue,” Wyskida said. “We are trying hard to expand our coverage of environmental issues overall, and I think we’re succeeding – but the fact that we do fundraising cruises has absolutely nothing at all to do with whether we do or don’t report on it.”
Klein, who is just the type of author/professor The Nation tends to publish, said he tried several times over the years to submit various articles about the cruise line industry’s environmental record and human rights abuses such as onboard sexual assaults and the plight of cruise ship workers. But each time, editors rejected his pieces. In 1999 Klein attended one of The Nation’s cruise seminars. He couldn’t believe the hypocrisy.
So what are the chances Congress will pass Rep. Sam Farr’s and Senator Richard Durbin’s Clean Cruise Ship Act now that their party is in the majority? Once again the Bill appears to be just another drop in the ocean of efforts to stop the cruise and shipping industries from using the seas as their uncontested domain.
