McCain attacks Inouye's cruise deal
By Derrick DePledge
Advertiser Washington Bureau
WASHINGTON — Sen. John McCain, chairman of the Senate Commerce Committee, on Feb. 13 harshly criticized a new provision of federal law that gives Norwegian Cruise Line exclusive rights to operate three foreign-built ships on interisland cruises in Hawai'i and said he will seek an investigation.
Advertiser library photo • Sept. 27, 2002
McCain, R-Ariz., said he will ask the General Accounting Office to investigate and he will hold hearings on the provision before the Senate Commerce, Science and Transportation Committee.
A new law gives Norwegian Cruise Line exclusive rights to operate three foreign-built ships on interisland cruises in Hawai'i. Previously, such cruises were required to make a call in a foreign port.
President Bush signed the provision into law yesterday as part of a $397 billion spending bill for government operations this fiscal year. Sen. Dan Inouye and Rep. Neil Abercrombie, both Hawai'i Democrats, overcame opposition from McCain and other lawmakers to ensure that the Norwegian deal remained in the bill.
In a blistering speech on the Senate floor yesterday, McCain noted that the Norwegian provision was never reviewed by the Commerce Committee and said it likely will lead to higher consumer costs by limiting competition for Hawai'i interisland cruises.
"I will not quit on this issue," McCain said. "It is wrong, and it is the wrong way to treat this process. We will have hearings in the Commerce Committee, and we will expose this for what it is — disgraceful."
An aide to Inouye said the Norwegian provision passed Congress after a full debate.
The Passenger Vessel Services Act requires foreign-built ships that operate between U.S. ports to make a foreign stop, so Norwegian visits Fanning Island in the Republic of Kiribati on cruises it now offers in the Islands. Under the new provision, Norwegian will be able to fly the U.S. flag over three foreign-built ships operating in Hawai'i and avoid the foreign stops, giving the cruise line an advantage over its competitors.
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Abercrombie and House leaders agreed to the provision under the condition that Norwegian not use the ships in the Caribbean, the Gulf of Mexico or Alaskan waters because other cruise lines contend Norwegian would have an unfair advantage.
Sen. John McCain, above, does not approve of Sen. Dan Inouye's Norwegian provision.
The International Council of Cruise Lines had urged Congress to expand the provision so any cruise line could operate up to six foreign-built ships under the U.S. flag in Hawai'i.
"We would have wished to have had more competition," said Michael Crye, president of the industry group, which represents the major cruise lines, including Norwegian.
Norwegian purchased material for two of the ships that are covered under the provision from the failed Project America, an attempt by Inouye and Sen. Trent Lott, R-Miss., to spur ship-building in the United States. American Classic Voyages, which previously offered interisland cruises in Hawai'i, had planned to use two new ships built at the Ingalls shipyard in Mississippi but the project collapsed when American Classic went bankrupt in 2001, costing taxpayers more than $185 million in loan guarantees.
Inouye has said the Norwegian deal could revive interisland cruises in Hawai'i and bring new jobs and increased tourism revenue to the state. Norwegian announced this week that it could begin hiring in Hawai'i later this year.
An aide to McCain said yesterday that the senator had not yet scheduled a hearing. McCain might ask the GAO, the investigative arm of Congress, to look into the Norwegian provision as part of a broader review of Project America.
McCain is well known for his attacks on the congressional spending process, often singling out members of the Senate Appropriations Committee, such as Inouye, who are successful at adding special provisions. But his comments against Inouye last week were particularly harsh, given the usual collegial nature of the Senate.
McCain blamed Inouye for taxpayer losses from Project America and said the Norwegian provision also would cost consumers.
"By granting exclusive rights to one cruise line, there will be no competition and the people who want to cruise Hawai'i will pay much higher prices than for a commensurate cruise that people would take out of the East Coast," he said.
Correction: Sen. John McCain, R-Ariz., criticized a Norwegian Cruise Line provision in a federal spending bill during a speech on the Senate floor on Feb. 13. A previous version of this story gave a wrong date.
