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Jay says Carnival reimbursement to US 'bare minimum'

CHARLESTON, W.Va. - Sen. Jay Rockefeller says the decision by the Carnival Corp. to reimburse the United States for costs associated with two cruise disasters was the least the company could do.

Carnival announced Monday it would reimburse the federal government for costs associated with assisting the Carnival Triumph and Splendor cruise ships, both of which were disabled by fires and had to be towed to port.

"I'm glad to see that Carnival owned up to the bare minimum of corporate responsibility by reimbursing federal taxpayers for these two incidents," Rockefeller, D-W.Va., said in a statement.

The Splendor incident occurred in November 2010 and the Triumph this past February. The Triumph incident left 4,200 people stranded in harsh conditions in the Gulf of Mexico for five days.

Rockefeller, chairman of the U.S. Senate Commerce, Transportation and Science Committee, has been highly critical of the company following the Triumph mishap.  

He said it was the latest in a long string of events that show the cruise industry isn't doing its job to safeguard its passengers

Rockefeller wrote a letter to Carnival chief executive Mickey Arison last month expressing his concerns and asking a series of questions regarding the ship's maintenance and the company's passenger safety practices.

He also asked the company if it intended to reimburse the government for costs associated with rescuing the ships.

Rockefeller said it cost the U.S. Coast guard nearly $780,000 to respond to the Triumph incident. He said rescuing the Splendor cost the Coast Guard and Navy a combined $3.4 million.

"These costs must ultimately be borne by the federal taxpayers," Rockefeller said in his letter.

Since the company pays very little federal tax, Rockefeller asked if it would reimburse the Coast Guard and Navy for their response costs.

In the company's initial response to Rockefeller's request, Senior Vice President James Hunn seemed to indicate it would not.

"Carnival's 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," Hunn said.

Hunn noted that Carnival ships frequently render assistance at sea at their own cost, including 11 times within the past year.

"We remain deeply grateful for all of the services performed by the brave men and women of the U.S. Coast Guard and U.S. Navy," he said.

Rockefeller released a statement late last week blasting the company for its response.

"Carnival's response to my detailed inquiry is shameful," he said.

He said cruise passengers deserve better and he was "considering all options to hold the industry to higher passenger safety standards."

On Monday, the company released a statement saying it has decided to help cover the rescue costs.

"Carnival Corporation is in the process of voluntarily submitting payment to the U.S. Treasury Department to reimburse the federal government for costs related to the Carnival Triumph and Splendor incidents," the company said in a statement.

The company also maintained it never said it would refuse to reimburse federal agencies if they directly asked for reimbursement.

"Although no agencies have requested remuneration, the company has made the decision to voluntarily provide reimbursement to the federal government," the statement said.

While pleased with the company's decision, Rockefeller left the door open to future hearings and action related to the cruise industry.

"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," he said.

Rockefeller already has proposed a repeal of tax provisions that allow cruise companies to keep ships registered in foreign ports, sheltering them from American corporate taxes.

He is also considering further hearings to examine the industry's compliance with safety, security and environmental standards and determine if those regulations sufficiently protect passengers and the environment.

Contact writer Jared Hunt at business@dailymail.com or 304-348-4836.


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