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Old January 10th, 2002, 08:17 PM
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Default This was on MSNBC's website

Cruising with taxpayer money

‘Project America’ goes bust as plans for cruise ships sink

By Lisa Myers
NBC NEWS

Jan. 10 — In the latest Fleecing of America, taxpayer dollars — your money — has been used to keep a sinking cruise ship building program afloat.
* * *
* * * *AMERICAN taxpayers are about to own a half-built luxury cruise ship that’s stranded at a shipyard in Mississippi. It’s what’s left of what supporters grandly called “Project America,” and critics call a classic Washington boondoggle that’s costing you hundreds of millions of dollars.
* * * *“Since when did the United States of America go into the Loveboat business?” says Chuck Lewis. “I mean the whole thing on its face is completely ludicrous.”
* * * *That’s ludicrous except in the corridors of the Senate, where the project began five-years ago — 41 lines buried in a huge spending bill.
* * * *The deal was this: A cruise ship company, American Classic Voyages, would build two huge ships at a Mississippi shipyard, the first cruise ships built in this country in 50 years. The company would then become the only cruise line allowed to go port to port in Hawaii. Taxpayers would back up the deal with $1 billion in federal loan guarantees.
* * * *“It was a very sweet deal for the company,” says maritime law and bankruptcy expert Jack Williams. “Ultimately, any risk of default on the shipbuilding contracts would be borne by the U.S. taxpayers, not by the company.”
* * * *The deal had two powerful sponsors, Mississippi Republican Senator Trent Lott, who wanted a big project for Ingalls shipyard in his hometown, and Hawaii Democrat Senator Daniel Inouye, who wanted more cruise ship business in his state.
* * * *The record shows only Arizona Republican Senator John McCain warned taxpayers were being ripped off. Now, he says, “Guess what? They just went bankrupt. And guess who’s on the hook for at least $350 million? The American taxpayer.”

* * * *Yes, in October, American Classics filed for bankruptcy. The company blamed the “devastating” effect of Sept. 11, but in fact there were public warnings in August that the company was at risk.
* * * *American Classic officials and both senators declined interviews. But one supporter says the basic idea behind the loan guarantees is sound — to keep shipyards afloat for defense purposes.
* * * *“The folks who make the anchors, the folks who make the shafts, the folks who make the propellers, the folks who make the steel. Keep them around for when we need them. And we’re going to need them,” says Gene Taylor.
* * * *The story doesn’t end there. Senator Lott and others now want the Navy to buy and finish the cruise ship. Otherwise, Lott claims it will cost taxpayers millions more to destroy it, adding to an already titanic fleecing of America.


http://msnbc.com/news/685548.asp
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