The chairman of Carnival Corporation, a cruise operator whose ships continued to undertake risky voyages despite serious COVID-19 outbreaks aboard, is on President Donald Trump’s back-to-work advisory council.
Trump is a close friend of Carnival Corporation Chairman Micky Arison, whose company was a key sponsor of Trump’s “Apprentice” reality TV show. On Tuesday, Arison was named one of the dozens of business, sports and labor leaders on Trump’s “Opening the Country” council.
Arison is an unusual choice. Like all major cruise operators, Carnival is incorporated offshore (in Panama) and pays almost no federal income taxes. Its own Security and Exchange Commission filing states that “substantially all of [its] income is exempt from US federal income & branch profit taxes.”
Offshore incorporation also allows companies to dodge U.S. safety, health and environmental regulations. In addition, the cruise industry largely hires foreign crews to duck U.S. pay rates and unions. (The CEO of cruise company Royal Caribbean — which is incorporated in Liberia — is also on Trump’s council.)
Carnival has operated some of the most notoriously contagious ships during the coronavirus crisis.
In a scathing report Thursday, Bloomberg noted that nine of the company’s ships have been virus hotspots, with at least 1,500 infections and 39 deaths.
The Carnival ship Diamond Princess, quarantined off Japan in February, had the second-highest number of COVID-19 cases at that time after China.
The first coronavirus victim to die in California was a man who traveled in February on the Grand Princess, also operated by Carnival. He was linked to the first major outbreak of the disease in the state.
Passengers and crew members on a subsequent Grand Princess cruise also tested positive for COVID-19, and the ship eventually docked in March in Oakland, California. Trump had wanted the ship to remain at sea because he didn’t want the American case “numbers” looking bad.
At the insistence of California Gov. Gavin Newsom, all 2,400 passengers disembarking in Oakland were carefully screened in a secure area in the port so the sick could be treated. Foreign passengers were sent home on chartered flights, and hundreds of Americans were quarantined at U.S. military bases.
Carnival CEO Arnold Donald told Bloomberg his company’s response to the coronavirus outbreak was reasonable because the risk was difficult to foresee. “This is a generational global event — it’s unprecedented,” he said.
Carnival’s response shouldn’t be condemned before “analyzing what New York did to deal with the crisis, what the vice president’s task force did, what the Italians, Chinese, South Koreans, and Japanese did. We’re a small part of the real story,” he said.
But Cindy Friedman, the epidemiologist who leads the CDC’s cruise ship task force, told Bloomberg that several of the Carnival ships with sickened passengers didn’t begin their voyages until well after executives knew it was risky. The company’s actions created a “huge strain” on the country,” she said. “Nobody should be going on cruise ships during this pandemic, full stop,” Friedman added.
Most cruise lines were carved out of the U.S. business stimulus payouts — even though Trump pushed to provide them with money. Language added at the last minute limited stimulus payments to cruise companies incorporated in the U.S. with workforces that are more than 50% American.
“We’re working with them very, very strongly,” Trump said of the cruise and airline industries at a press briefing early in March. “We want [people] to travel.”
Days later, the Centers for Disease Control and Prevention warned Americans that travel on the ships was dangerous.
Trump reiterated his wish to help cruise companies in late March, but admitted that it’s “very tough to make a loan to a company when they’re based in a different country.”
Instead, a fund controlled by Trump ally Saudi Crown Prince Mohammed bin Salman stepped in to invest in Carnival. A filing last week with the Securities and Exchange Commission revealed that Saudi Arabia’s Public Investment Fund now owns more than 8% of the company. It held no stock in the firm at the start of 2020.
Carnival has suspended its operations through June 26. But some 3,200 passengers and crew members are still at sea, Bloomberg reported.
Last month, Trump announced that Carnival had offered some of its ships to be turned into makeshift hospitals. But experts said it wasn’t a feasible plan, with one telling The New York Times that he viewed it as a “gimmick” to justify economic relief.