Tourism & Cruises

Carnival was fined $20M over probation violations. Where’s that money going?

After Carnival Corporation CEO Arnold Donald pleaded guilty on behalf of the company to six probation violations in June and agreed to pay a $20 million fine, many Miami Herald readers wondered: where is that money going?

Some suggested the $20 million should go to organizations that work to protect the environment; others suggested it should go to the communities most affected by Carnival Corp.’s pollution.

Here’s the answer: The $20 million is headed to a general victims compensation fund administered by the U.S. Department of Justice in Washington D.C. The Office for Victims of Crime receives payouts like Carnival Corp.’s and then grants the funds to states to pass on to victims of crime. This year the office granted more than $25 million to California and Nevada to pay victims of the 2017 music festival mass shooting in Las Vegas that killed nearly 60 people.

This isn’t the first settlement Carnival Corp. and other cruise companies have paid for environmental crimes. When Carnival Corp. originally pleaded guilty in 2017 to dumping oily waste into the ocean on its Princess Cruises ships and covering it up, a federal judge in Miami ordered the company to pay $40 million, the largest fine in history for environmental crimes.

Most of that settlement — $28 million — went to the Justice Department’s same general victims compensation fund. But the rest was divided up between the British employee who tipped off law enforcement to the crimes, Christopher Keays ($1 million), the U.S. Coast Guard’s Abandoned Seafarers Fund, which provides services to ship workers whose employers abandon them at U.S. ports ($1 million), the National Fish and Wildlife Foundation ($7 million), and the South Florida National Park Trust ($3 million).

Miami-based Carnival Corp., the world’s largest cruise corporation, owns 105 ships across nine different cruise lines. In fiscal year 2018, Carnival Corp. reported a profit of $3.2 billion. The company is registered in Panama and largely exempt from U.S. taxes.

As part of the latest plea agreement, in addition to the $20 million fine, the company said it will allow more stringent oversight by independent monitors during its third, fourth and fifth years on probation, record the location of its environmental violations, create a Chief Compliance Officer position, and increase budgetary resources for the existing Corporate Compliance Manager. If the company misses certain deadlines, it will be fined up to $1 million per day, and up to $10 million per day if it misses the deadlines by 10 days.

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Taylor Dolven covers the tourism industry at the Miami Herald, where she aims to tell stories about the people who work in tourism and the people who enjoy it. Previously, she worked at Vice News in Brooklyn, NY, where she won a Front Page Award from the Newswomen’s Club of NY for a national investigation of police shootings.
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