FEMA ship deal under scrutiny

[Scurrilous]

http://www.miami.com/mld/miamiherald/12749018.htm

Nearly a month after Carnival allowed FEMA to use three of its ships for Hurricane Katrina relief efforts, two U.S. lawmakers are questioning whether the Miami-based company is being paid too much.

<snip>

"On the third night after Hurricane Katrina slammed into the Gulf Coast, the phone rang at Bob Dickinson's home in Coco Plum. It was Brad Gair, of the Federal Emergency Management Agency, wanting to know if he could use three luxury cruise liners to house evacuees from Hurricane Katrina.

Dickinson, the president and chief executive of Miami-based Carnival Cruise Lines, recalls thinking, ''It's the right thing to do.'' And within 48 hours, he agreed to let FEMA use three ships in exchange for $192 million.

Now, two U.S. lawmakers are questioning whether that's too much money.

Rep. Henry A. Waxman, a Democrat from California, has requested a copy of Carnival's contract and documentation supporting its cost from Homeland Security Secretary Michael Chertoff. Rep. Marilyn N. Musgrave, a Republican from Colorado, said she plans to order a Congressional investigation into the Sept. 2 deal."

[democracyindanger]

1. How much you want to bet

that the figure was based on the regular operating expenses for a cruise ship--including everything for fuel costs (for a ship at dock) and mariachi bands.

[Tempest]

8. You'd lose that bet

Read this article:
http://tinyurl.com/create.php

Carnival is making a killing on this deal.

[muriel_volestrangler]

11. No article at that link - it's the tinyurl 'create' page (n/t)

[Tempest]

29. Sorry, corrected link below

http://tinyurl.com/bttvz

[Turbineguy]

12. Some posts

from a listserve I frequent:


" Carnival Victory 7 day cruise from $459 (not including airfare) Penthouse suite $1879. Interestingly enough....... $182/day is the same price as the second from the highest price cabin. .....


http://www.aaaovscruise.com/cruises/cruisedefault1.jsp?cobrand=10000260&pid=10000901&langrecno=1&sessionid=3B84EC8A10B3D46CBFB2D1E4DD452478.tomcat&javascript=&jsessionid=3B84EC8A10B3D46CBFB2D1E4DD452478.tomcat&userid=&association=aaa&memid=&club=260&Submit=Search%20for%20Cruise&destination=7&dur=-99&sort=4&date=-99&cruiseline=-99&webpagerecno=699 "

This was in answer to the following:

"......it’s 7100 berths ...... This makes for $5470/mo or $182/day. That seems reasonable to me especially if meals are included. No doubt cheaper than a government run ship. "

Before the above:

"There are a couple of things about cruise ships. A company buying a new $200plus million ship can expect to recoup it's outlay in about 15 months, allowing for operating costs while in service (I got that figure from Holland America Line). Also, a significant portion of earnings comes from the on board extras such as the casino, gift shops etc.

So if Carnival is "generously" making their ships available at the same price that they would ordinarily get, they are being reimbursed for their losses due to the casino's being closed. The $236 million may include the savings they would realize by not having to pay travel agency commissions. "

This is an advertisement that a friend alerted me to on Sept 2, 2005:

http://www.farealert.net/fa-20050902-ca.php

[420inTN]

31. Yeah, that's pretty much what i figured out a few weeks ago

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=102&topic_id=1759876#1762503

[Catherine Vincent]

2. I doubt if Carnival lost anything by letting the government use

the three ships. And plus the Ecstasy, Sensation and Holiday were there oldest ships. Why didn't they pony up and offer the Conquest, Valor and the Glory?:-)

[MidwestTransplant]

3. They made a killing. We figured it out on DU

Not to mention that by taking those ships out of service (but still getting paid for their use...best of both worlds), they reduce capacity for normal bookings and thus can drive up their rate.

[TahitiNut]

9. Proximity, capacity, and draft would drive the choice of ship.

The Holiday runs out of Mobile, AL, and is the smallest class with a 1,486 passenger capacity. The Ecstasy runs out of Galveston, TX. The Sensation runs out of New Orleans, LA. The latter two are in the second smallest class with capacities of 2,052 passengers.

It's pretty damned clear that Carnival didn't lose money on having FEMA pick up their tab ... since they were very unlikely to be running during Katrina or Rita, particularly out of those ports.

[Kagemusha]

4. They say within 48 hours like that's a source of pride.

Geez.

[Tempest]

5. The real cost is more than $236 million

The deal calls for Carnival to be paid $192 million for providing about 7,100 berths, originally intended for evacuees but now being used mostly for emergency workers, for six months. Carnival is also being reimbursed for up to $44 million in operating costs, including charges assessed at ports for fuel, water, electricity and waste disposal.

In addition, Carnival's contract includes compensation to the company for corporate taxes that experts say could amount to tens of millions of dollars.

http://tinyurl.com/bttvz

[Scurrilous]

6. Related threads:

Carnival gets $192M for efforts

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=102&topic_id=1759876


Now on dry land, evacuees spurn cruise berths

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=102&topic_id=1766103

[TahitiNut]

7. Carnival is 78% Repug for 2006 so far

They were 61% Repug in 2000, 53% in 2002, and 59% in 2004.

http://www.opensecrets.org/industries/contrib.asp?Ind=M05&Cycle=2004

[Miss Chybil]

10. Patriotism at its finest.

When Americans are in need... fuck 'em and make them pay for it.

[Scurrilous]

13. Lets see...

...the Sensation and the Ecstasy are housing 1000 people. That's 500 people per ship. The Holiday is holding an unknown number of people. Let's say they're holding 500 too. That's a total of 1500 people being housed for six months at a cost of $236 million dollars, meaning FEMA is paying Carnival $157,000.00 for each person or roughly $26,000.00 per person per month for a cabin on a ship.

Wow!



.

[kskiska]

14. WP: Quick Deal Leads to $236 Million in Berths (FEMA cruise ship deal)

Wednesday, September 28, 2005; A01

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.

more…
http://www.washingtonpost.com/wp-dyn/content/article/2005/09/27/AR2005092701960.html

[msongs]

15. so the love boat is a rip off? nt

[Skink]

16. In a better world Fema would have done its job..

Carnival is a big presence in the south and they stepped up.

[tom_paine]

17. This is just a Bushevik kickback to a campaign contributor

They always "overpay" their cropnies and pals.

More naked Thrid World corruption. There is now little difference in the way the Busheviks do business and the way the Saudis do business.

[MarsThe Cat]

22. Bingo-

and this one needs to be driven home- unfortunately, any media outlet that runs with the story might risk losing it's ad revenue from the cruise industry.

that's how it works when capitalism controls the news.

[don954]

18. the sad part is, you could buy a couple of used cruse ships for that

much $

http://adcache.boattraderonline.com/6/7/4/77034974.htm
http://adcache.boattraderonline.com/6/3/3/77035233.htm
http://adcache.boattraderonline.com/6/2/6/77664726.htm

mabie FEMA needs to start buying out older cruse ships for mobile emergency shelters?

Na, that would be innovative and original thinking.. ;)

[MarsThe Cat]

21. for $1200/person per week...

i would've let them rent my house.

[MarsThe Cat]

19. And at the end of those 6-months-

will we the people be footing the bills for remodelling the cruiseships?
or will they just take it out of our security deposit...?

[lovuian]

20. What a waste waste waste!!!

this reminds me of let them eat cake kinda like let them take a cruise!!!

[Skink]

23. Wouldn't want the Fugees cruisin around....

cut people a break this Government only throws money around and gives people like " Brownie " a free ride.

[Rex]

24. Fema just loves giving money away!

Total cost for 6 weeks = $102,299,616
Fema's cost = $236,000,000
Profit = $133,700,384


Wow! They got ENRON'D! I bet Kenneth Lay is jealous!

[rainbow4321]

33. Except to Wisconsin: 27 tornadoes, $47M damage..FEMA refuses to help

http://www.jsonline.com/news/state/sep05/358214.asp

The estimated $47 million in damage wrought by tornadoes in southern and west-central Wisconsin last month doesn't warrant federal disaster assistance, the Federal Emergency Management Agency declared Friday.

In its decision to deny Gov. Jim Doyle's request for a disaster declaration for counties struck by the Aug. 18 tornadoes, the agency said, the damage "was not of such severity and magnitude as to be beyond the capabilities of the state and affected local governments."

"Furthermore, we have determined that supplemental federal assistance is not necessary," said a letter to Doyle from R. David Paulison, acting undersecretary for emergency preparedness and response.

Reaction to the decision - which FEMA announced while grappling with the Gulf Coast destruction from Hurricane Katrina and the emergency preparation for Hurricane Rita - ranged from dismay to disappointment to resignation.

[Kailassa]

25. Such a helpful government ...

And how long before we find the only people given berths were campaign contributers?

[wakeme2008]

26. A lot of bad information in the news articles

Carnival may be making a little more the normal profits but not the about of profit some on here think.

A) They list the cheapest cabin price for the cheapest Caribbean cruise.

B) Carnival makes a lot of it's income on selling booze and other non fare things.

C) Holiday sailings are normally full and at a much higher cabin rate.

D) Things like "tips" Carnival is paying vs their normal pax. That is $10 per day per person.

E) Carnival offered discounts on future cruises to the passengers they canceled.

F) They may, I do not know for sure, have paid out commissions to travel agents that they did not request back.

G) They are paying waste water removal to somebody (cities or private) that they would not do at sea. They treat the waste water as dump it at sea.

H) There is laundry problems that they do not have on 7 day cruises. The newer ships have limited self service laundries on board. I do not believe these older ships do, so the laundry of pax clothes is an issue.

I) The "shows" on these ships are brought in million dollar deals and are paid for even if not used. The entertainers salaries are very minor savings.

[Skink]

27. Having worked on all these ships I can tell you...

life aboard during wet dock is no picknick. They are doing all sorts of work readying the ships for the future which can entail turning off airconditioning and water, jackhammering the floor etc.
Carnival did make a pretty sweet deal but on the other hand let's take a look at San Antonio another great compassionate host of the victims. The focus here now seems to be weather or not we get the Saints to play in the football stadium we built at taxpayer expense that doesn't have any tenants. How's that for compassion.

[moondust]

28. More corrupt, inept Republican gubmet.

Not a day goes by...

[fed-up]

30. FEMA made hasty $236 M deal w/cruise line during Katrina crisis SFGATE

http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2005/09/28/MNGF8EUVAT1.DTL
San Francisco Chronicle
Jonathan Weisman, Washington Post
Wednesday, September 28, 2005

FEMA made hasty $236 million deal with cruise line during Katrina crisis
3 ships now sit half empty in river and Mobile Bay

Washington -- 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 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...

...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 based 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.

[shavedape]

32. well the 'adults' are in charge

what do you expect?