Reply #30: FEMA made hasty $236 M deal w/cruise line during Katrina crisis SFGATE [View All]

[fed-up]

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.