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Carnival CEO comes under Congressional heat

By Mary Kozelka
Rock Center

In January 2012, the Carnival owned Costa Concordia capsized off the coast of Italy, taking the lives of 32 people.  Earlier this year, an engine fire left the passengers on the Carnival Triumph stranded for almost five days in the Gulf of Mexico. And three other Carnival ships had problems in March. News crews, government officials and concerned family members flocked to many of these locations to offer support and inspect damage. However, during the wall-to-wall coverage, one person was noticeably absent: Micky Arison, Chairman and CEO of Carnival Corporation.

Critics say Arison has distanced himself from Carnival’s problems, opting to sit courtside at a Miami Heat basketball game rather than go where his cruise liners were in trouble. Arison is the owner of the Heat.

But it is not Arison's public relations strategies that have garnered the wrath of Sen.  Jay Rockefeller. He is outraged by what he sees as Carnival’s abuse of the loopholes in the tax system. However, Carnival has said they pay all the taxes they are required to.

Rockefeller, chairman of the Senate Commerce Committee, told Rock Center's Harry Smith that he regards Carnival “very poorly” as a corporate citizen. Rock Center commissioned S&P Capital IQ to look into Carnival’s taxes and their team found that on billions of dollars in profits over five years, Carnival paid only .6 percent taxes.


It is not unusual for corporations to take advantage of tax loopholes and other cruise lines do so as well. But Rockefeller believes that Carnival's extremely low tax rate -- while legal -- is "disgusting" because of its frequent use of government services.

According to the Coast Guard, the cost of its aid to the Triumph was $779,914.26. And another Carnival ship, the Splendor, had an engine fire two and a half years ago that required help from the Coast Guard and the Navy. That cost each service more than $1.5 million.

Rockefeller has written a letter to Arison demanding changes within the industry, which will hopefully lead to fewer cruise ship incidents and less reliance on government agencies.

Rockefeller grants that Carnival’s actions have been entirely legal, but insists that there are glaring ethical issues.

"How do you have the guts to smack down fairness, to cheat on what is right?  You're legally not liable, but what you're doing is treacherous and wrong."

Arison has declined NBC's request for an interview.

Harry Smith looks at the high and lows of one of America's wealthiest men tonight at 10pm/9c on NBC's Rock Center with Brian Williams.