Carnival's Katrina cost criticized

WASHINGTON - A prominent Democratic congressman said Thursday that internal company records show that a controversial $236 million deal to lease three ships from Carnival Cruise Lines for emergency housing after Hurricane Katrina "looks lucrative for Carnival but exceptionally expensive for the taxpayer."

In a six-page letter to Homeland Security Secretary Michael Chertoff, Rep. Henry Waxman, D-Los Angeles, said a January 2002 financial review made by Carnival and obtained by his staff casts "serious doubt" on the company's assertion that it would not earn any additional profit on the deal.

Carnival president and chief executive Bob Dickinson reacted angrily to Waxman's letter, denying the company was profiteering.

After Katrina struck, Carnival responded to a federal appeal for emergency housing by offering to lease three of its cruise ships. Carnival pledged that payments from the government would not exceed the profits the company would have made from normal operations.

But critics have suggested Carnival might end up doing better than simply breaking even on the deal.