ANNOUNCER: Now, from CBS 4 News,
this is Facing South Florida
with Jim DeFede.
Good morning, I'm Jim DeFede and
welcome to Facing South Florida.
This is our first show back in
the new year and 2020 is shaping
up to be an extraordinary time.
As we have seen in the
last few weeks alone,
there's no shortage of major
stories with local connections.
But one of the things we want
to continue doing is shine the
light on stories that aren't
getting the coverage
they deserve.
This morning we will turn
our attention to one of them.
Carnival is the largest cruise
ship company in the world.
It's based just down
the street here in Doral,
it's owner is Mickey Arison.
Forbes Magazine estimates he is
worth than $8 billion and is the
59th richest man in the world.
He also owns the Miami Heat.
In April 2017 Carnival pleaded
guilty to federal and criminal
charges it had knowingly
and willingly entered into a
conspiracy deliberately to
pollute the waters around the
United States.
And further, then engage in
efforts to cover up those crimes
from the Coast Guard
and other agencies.
Carnival agreed to pay a $40
million fine and was placed on
probation for four years.
But earlier this year, in
the midst of that probation,
Carnival continued to
pollute the waters,
and the company had to again
plead guilty to violating its
probation and pay an
additional $20 million fine.
On Wednesday Carnival was
back before a federal judge,
who continued to express
frustration the company was not
doing more to clean up its act.
Joining me now to dig a little
deeper into this story is
Taylor Dolven, a business
writer with the Miami Herald,
who has been doing an excellent
job of covering this story
in federal court.
Taylor, thank you very
much for joining us.
Thanks for having me.
Anything I said in the
open that I got wrong?
Was that pretty much a
recitation of facts correctly?
I think you covered it well.
Okay, so I want to go
back to the beginning.
This case was initially filed
in the Department of Justice
against Carnival in 2016.
And it really starts with one
ship in particular on one cruise
line in particular, on
Carnival's umbrella
Princess Cruise Lines.
As I understand it, Princess,
one of their ships was found to
be sort of discharging bilge
water and oily water into the
oceans around the United States.
That's where this case starts?
Yeah, this case starts
back in 2016 is when Carnival
Corporation pleaded
guilty, like you said,
several of its Princess cruises
ships were discharging oily
wastes into the ocean and
covering up those crimes over a
period of actually eight years.
And the case was spurred by a
British engineer on one of the
ships who served as a
whistleblower and raise the
alarm about this to authorities,
including the Coast Guard.
And one of the things that I
found fascinating about that
very -- so let's go back to
that original guilty plea.
What Carnival admitted in
the court to doing was,
among other things, that the
government charges that they
admitted to was after suspecting
that authorities had been
informed, that senior ship
engineers were dismantling the
bypass pipe, in other words,
were going around the system
designed to prevent it, work
their way around that system.
They then instructed the crew to
lie to regulators if anyone came
onboard to ask about it.
Even more, as the
inquiry continued,
that they actually held
sham meetings onboard
some of the ships.
And knowing that their
conversations were being
monitored by L.A., were
basically bogus conversations
about how they were
doing the right things,
by holding up a sign saying,
"L.A. is listening".
I mean, this wasn't just sort
of like an accidental discharge.
This was willful,
and deliberate.
And worse than that,
after being caught,
engaged in conspiracy
to try to cover it up, correct?
That's exactly right.
And I think that's the exact
reason that the Department of
Justice decided to
get involved here.
This wasn't a
mistake, this was a,
as you say, a willful
violation of the law,
international law.
So, now we -- so now
Carnival is on probation
for the last few years.
But as part of that
probation, as I understand it,
there's a monitoring program.
There's a court monitor,
there's a third party auditor.
In other words, steps are being
tried to be put into place to
make sure these things don't
happen again, correct?
Yes, and actually part of the
original 2016 plea agreement
that you mentioned includes in
it that the company agreed not
to violate any
environmental laws,
whether they be
international, federal,
state, or local,
for the duration of
the five-year period.
And as part of their
agreement in 2016,
that they pled
guilty to in 2017,
they paid a $40 million fine.
And again, we should
sort of point out,
Carnival is a very,
very profitable company.
Estimates are that they earn
in profit $3 billion a year.
Yes, that's true for 2018.
So, $40 million for an
eight-year period of polluting,
isn't really -- even though it's
the largest fine of its kind
ever levied by the
federal government,
from Carnival's standpoint, not
a huge hit to their bottom line.
Yeah, and concerns have been
raised about whether that amount
really can be a
deterrent for a company that,
like you said, made over $3
billion in profits in 2018.
All right, so now
Carnival's on notice,
they've been caught,
they've pled guilty.
They've agreed to pay a fine.
You know, there's all these
sanctions put in place to
try to regulate them,
to monitor them.
And yet, they
continue to do bad things.
What happened during the course
of their probation that they got
caught again on?
Yeah, it's important to note
that they did not commit the
same crimes that they
were convicted of in 2016.
So as to say, all of the
violations that have happened
since they originally pleaded
guilty have been unintentional.
That being said, they
have continued to violate
environmental laws over the
course of their first three
years of probation.
And it got to a point
where in April of last year,
the federal judge in this case,
Federal Judge Patricia Seitz
started to raise concerns
about whether they were
taking this seriously.
And then decided to move forward
with revoking their probation.
And that was for a few things.
They had dumped plastic
into Bahamian waters.
Plastic discharges are taken
most seriously when it comes to
environmental
crimes, along with oil.
They had attempted to
communicate with the Coast Guard
through a back channel to
sort of talk about the case.
They had been sending crews out
to ships prior to visits from
the court appointed monitor
to try and clean them up.
I want to talk, stop
there for a second.
Okay.
Because this is the most
fascinating things and
shows me a more of a
cultural issue, what you just
sort of highlighted there.
One of the things that the court
put in place is there would be
monitors set onboard
ships to see if the ships
were behaving correctly.
Well, of course, a monitor
doesn't just show up on a ship,
they coordinate
with the cruise line,
they say, okay, on this day
we're going to be going out and
sending our monitors on
board this cruise ship.
We'll be arriving on this day.
And what Carnival was doing,
in violation of the agreement,
was sending out a crew in
advance of that to sort of tidy
things up.
Well, in this case they clean up
all the bad things and when the
monitor comes, they
don't realize it.
And so, they were
circumventing the law,
or circumventing the judge's
order by cleaning things up in
advance, correct?
Yes, correct.
They -- from their perspective
at the time they were trying to
sort of put their best foot
forward and really wanted to do
well on these assessments.
That's right, they wanted
to not get caught again.
Right, and the judge's biggest
issue was it showed the company
wasn't taking seriously
the assessment process,
and wasn't open to learning
from the mistakes it was making.
You know, if you have an
assessment that isn't reality,
doesn't reflect the
reality of the ship,
how can you improve?
Well, and what's even
more striking for the judge,
as I understand it, is after
getting caught sending out these
cruise on advance aboard the
ships and being told not to do
that anymore, they did it again.
Yes, they continued to do it.
And that's what brought them
into court on June 3, correct?
Yes.
So, this past June 3, threatened
with the possibility from having
Carnival ships
barred from entering U.S.
ports, Carnival suddenly now
takes this very seriously.
And one of the things I noted in
reading the transcript to that
June 3 hearing is, whereas
before where they had in-house
council and civil litigators,
I'm not sure it was the first
time, but certainly they
brought with them a high-powered
criminal defense
attorney, which the judge noted,
finally Carnival realized
these are criminal offenses that
you're doing and you need
to take this more seriously.
Yes, and that hearing really
marked a change in tone
on this entire case.
Before that, for
most of the hearings,
their attorneys got up and
really defended them against the
court-appointed monitor's
assessment of their progress.
And that really marked a
total shift where they said,
you're right, we
need to do more.
And charted a
different path for them.
And at one of these hearings,
one of the people who'd been
required to come, Judge Seitz
has made clear she wants to see
him in the courtroom every time,
is Carnival Founder's son
Mickey Arison, Ted Arison
founded the company,
Mickey Arison now
owns the company.
And Mickey Arison has now had to
sit in court and listen to this
time and time again.
And be told, he is
ultimately responsible.
Yeah, the
Chairman, Mickey Arison,
and the CEO, Arnold Donald, are
both expected to be there and
frequently answer
questions about the progress.
So, in reading all the documents
that I've done and reading your
coverage, which
has been excellent,
what I walk away from is that
the court appointed monitors,
the third party auditors, the
folks that the court have tried
to put in place to look at the
situation have concluded that
essentially the rank and file
workers within Carnival do want
to do the right thing, the
problem is they're not getting
the support from upper
management to continue to do the
right thing, to actually
engage in some of those things.
One of the things that was
talked about was they had a
compliance officer who
had no authority to do,
enforce, any of the
compliance issues.
Yeah, that was one of the
probation violations explicitly
was, you're not giving enough
funding or power to the person
in charge of compliance.
And the court mandated that
the court higher a high level
executive to be
in charge of this.
And they've since done
that and brought him on.
And he started in August.
And we should note Pete Anderson
is that compliance officer,
the chief compliance officer,
ethics officer for the company.
We invited him to
come on this show,
we invited anyone that Carnival
wanted to send to sit here to
have this conversation with us.
They declined to come today.
They said they may bring -- may
make Pete Anderson available on
another day.
He is welcome to come in.
We'd like to hear what
Carnival has to say.
Essentially they sent me a
statement saying they take this
very seriously, that they're
committed to leaving places
better than when they arrive,
that they want to do good
by the environment.
But they're going
against a history that is
showing otherwise.
And one of the things I
wanted to ask you about.
The court had a survey
done of Carnival employees.
What did that survey find?
So, this survey interviewed
thousands of employees at the
end of 2018 and it was
done at the end of August.
And it found a pervasive
blame culture where lower level
employees are discouraged
from raising concerns,
are not heard, don't
feel that they're heard,
and feel that if they come
forward about a mistake or an
error they make, they'll be
blamed for it and disciplined,
instead of sort of trusting a
larger system that will support
them, and figure out
what's going wrong,
and really fix
things systemically.
So, that's something the judge
has continued to point to as an
underlying problem here.
And I think that it's clear,
that Judge Seitz's goal here is
not to cripple the company,
not to harm the company itself,
or endanger workforce.
I mean, Carnival is a major
employer here in south Florida.
She just wants Carnival
to do the right thing
by the environment.
And she has pointed
out several times,
Carnival makes its fortunes
by using the environment,
by using the oceans to profit.
They should be leaving them
better than they find them.
Yeah, she said something really
interesting at this week's
hearing, which was
that the company,
in her perception, the
company thinks of itself as a
hospitality company that
provides vacations and those
vacations happen to
happen on the ocean.
And she really wants them to get
to the point where they think of
themselves as a
marine operation,
first off, that
provides vacations second.
So, she's waiting
to see that shift,
as she said.
Well, she also
addressing Mickey Arison,
said to him, I think I
want you to become
an environmentalist,
essentially.
And he said, oh,
I am, your honor.
He touted that they've
given money to the Bahamas,
to other places.
But that idea of truly being
committed to it is the central
question that we're
still waiting to find out.
Because one of the things that
prosecutors have said is that
Carnival's very
sensitive to its image.
It wants to be perceived
as doing the right thing.
But more important it has to
actually do the right thing.
And that's what
we're waiting to see.
Yeah, and it's
important to note,
they have expanded
the team of people
investigating these incidents.
They've doubled the budget
of the compliance office.
They've put out a podcast
where the CEO talks about the
importance of this,
you know, biweekly.
They're doing a lot of things.
But as the judge
repeatedly says,
the proof is in the pudding and
the company continues to pollute
the environment while
they're on probation and
under this microscope.
And one of the things
that's interesting is,
as part of the probation, the
judge is very smartly been able
to expand the reach, to force
Carnival to not only report
issues around the United
States, but around the world.
Well, right, and
it's important to note,
Carnival
Corporation, as you said,
is the biggest cruise
company in the world.
They have over a hundred ships
operating all over the world in
nine different cruise lines.
And the original crimes happened
on just one of those cruise
lines, Princess Cruises.
And there now, we can
see what's happening,
any given day, on
any of their ships,
all over the world.
So, this is really an
unprecedented look at
environmental operations
in the cruise industry.
And again, I'll
make the last point.
Carnival is not alone, other
cruise lines have faced these
same issues.
But I think one of the things
the judge has said is those
other cruise lines have sort
of out-paced Carnival in taking
corrective actions and trying
to change the culture within.
Ultimately it is an
issue of culture,
and that comes
from Mickey Arison.
Yeah, it's difficult to know
what the operation looks like at
Royal Caribbean, at
Norwegian Cruise line,
we don't have an under-the-hood
look like we do at Carnival.
So, I'd certainly be interested
to see the same information for
those other two cruise lines.
Taylor, there's a
story, like I said,
that we're going to
continue to follow.
I think the reason, like I
said, that it hasn't gotten more
attention is there are no
cameras in a federal court room.
So, we don't get
to hear the judge,
the prosecutor, the
others, lay out
their case against Carnival.
You've done it very
well in the Herald,
we will try to
continue to do it here.
We hope to have you back.
I appreciate that, thanks.
All right.
Up next, the race for State
Attorney in Miami-Dade County
just got a little
more interesting.
I'll tell you why
when we come back.