Published April 08, 2010
For the United Nations World Food Program, it was a moment of satisfaction: the U.N.'s flagship relief agency announced on its Web site on March 19 that two gleaming passenger ships had docked in ravaged Port au Prince harbor.
What the Web site announcement did not disclose was that the vessels were intended to house not homeless Haitian refugees, but employees of the U.N. itself. Nor did it publicize the cost of leasing the ships: $112,500 a day. Nor did it mention that one of the vessels is owned by a company closely linked to the government of Venezuelan strongman President Hugo Chavez.
Another thing not mentioned: Even U.N. staffers regularly refer to one of the ships as "the Love Boat."
Then the WFP apparently had second thoughts about the whole announcement.
A slideshow photo essay had shown the two vessels, the Ola Esmeralda and the Sea Voyager, at berths near the earthquake-shattered Haitian capital. Then the photos and the story disappeared, not only from the home page but apparently from the WFP's public news story Web archive. The official explanation from a WFP spokesman: "Photos, text and video material are regularly being added and removed from WFP's Web site as stories are refreshed, restructured and replaced."
For whatever reason, WFP had decided that less was more when it came to publicizing the presence of the two vessels.
But that did not change the fact of their presence. And even while deep-sixing its previous publicity, the use of the ships as accommodation for many of the U.N.'s international staff was passionately defended in a telephone interview with Fox News by Edmond Mulet, head of the Haiti peacekeeping contingent, known by its acronym MINUSTAH, and also Special Representative in Haiti of U.N. Secretary General Ban Ki-moon. (Ban's Special Envoy to Haiti is former President Bill Clinton.)
"It is the least we could do for them," Mulet, a former Guatemalan diplomat, told Fox News about the U.N. staffers. "They are working 14, 16 hours a day. The place was pulverized. Living conditions are really appalling."
In a city where much of the housing was destroyed by the earthquake, U.N. staffers' amenities aboard the two passenger ships include laundry service, catered food, hot showers and beds with fresh linens for subsidized rates of $40 per day for WFP staffers, and half that for officials of MINUSTAH.
Accommodation aboard the two ships could best be described as comfortable if not luxurious — and far better than conditions a few hundred yards from their moorings, where hundreds of relief workers, some 9,000 U.N. peacekeepers and police, and huge numbers of Haiti's 9.5 million people are sleeping in tents or on bare floors — or worse — after the devastating Jan. 12 earthquake.
Mulet says the use of the shipboard cabins by U.N. personnel is "strictly voluntary," and many decide not to use them. "Not all the cabins are full," he declares. (Mulet himself says he lives in the U.N.'s major military camp with the predominately Brazilian peacekeeping forces.)
Moreover, others aid workers in Haiti, including those who work for non-government organizations, are also free to sign up for shipboard space, he says: everything is on a "first come, first served" basis.
Additionally, the ships are used as reception areas for visiting dignitaries, including, recently, Brazilian President Luiz Inacio ("Lula") da Silva.
The mass of Haitian civilians, however, are not among those invited to stay. "I think they understand," says Mulet. "They have gone through the same trauma themselves. They know we are there to provide shelter for them."
Mulet compares the situation to what occurs when "oxygen masks come down in a falling plane. The first thing you do is put them on yourself."
"You have to be in good shape in order to help the Haitians."
Even in some official documents, U.N. staffers refer to the Sea Voyager, the first of the vessels to reach Port-au-Prince, as the Love Boat.
A good name for the other vessel, the Ola Esmeralda, might be the Double Your Love Boat, not for its luxuries, but for its cost to WFP. While not luxury liners — the Ola Esmeralda is a reconditioned, 40-year-old passenger ship — neither of the two vessels could be called a cheap date.
The WFP is renting the 286-foot, 5,000-ton Sea Voyager (capacity: about 220 passengers) for $35,000 per day, plus a whopping additional $5,000 daily for fuel. Total for 90 days: $3,600,000.
If every cabin were full, the average daily cost to the U.N. for the fully-loaded Sea Voyager would be about $181.81 per passenger — minus the $40 or $20 paid by each U.N. staffer who stays in a cabin.
The 480-foot, 11,000-ton Ola Esmeralda — which now operates directly under the administrative auspices of MINUSTAH — is renting for $72,500 per day, all costs included.
Total for 90 days: $6,525,000. Average cost per passenger per day (the vessel accommodates 470 plus crew): about $154.25, minus the staff contributions.
Over the lives of their respective 90-day initial contracts, that brings the total outlay for the ships to $112,500 per day, or $10,125,000, minus the staff shares.
Each of the boats also has a number of single-month renewal options in its contract, which will push those totals higher. A WFP spokesman says, however, that the organization's aim is to end its charter of Sea Voyager at the end of April. That would bring the total rental cost of that vessel to $4,800,000, minus staff contributions.
In the case of the Ola Esmeralda, no such end date has been set so far.
How expensive are those charter rates? When compared to the cost of the MINUSTAH peacekeeping operation, they may not seem huge. Even before the earthquake, MINUSTAH was one of the U.N.'s more expensive peacekeeping operations, with a budget estimated to exceed $611 million this year. Post-earthquake, the MINUSTAH budget for its next financial year is expected to rocket past $700 million.
In the case of Sea Voyager, though, it is slightly less expensive than it might be otherwise. According to Niels-Erik Lund, president of International Shipping Partners of Miami, the firm that brokered the Sea Voyager charter with WFP, his firm is donating commissions and technical management fees of $25,000 per month back to WFP as relief aid for Haiti.
Fox News was unable to determine whether a similar arrangement exists for Ola Esmeralda.
According to the rate card offered by the company that operates Ola Esmeralda, when filled to capacity in the most expensive cruise season, the ship earns about 334,000 Venezuelan bolivars, the local currency unit, per day. At official exchange rates, that would amount to about $77,800 — or slightly more than its WFP paycheck — provided that Ola Esmeralda could enjoy 100 percent occupancy at home.
Translation to U.S. dollars at official exchange rates are misleading, however; the Chavez government maintains an artificially high exchange rate to keep down local inflation, among other things. At the unregulated (or black market) rate, the bolivar buys far fewer dollars.
Using that unregulated rate, Ola Esmeralda in high cruise season would earn about $49,124 per day — far less than the WFP is paying.
But even those calculations are deceptive. In the 90 days of the initial WFP contract, only 13 days (or 14.44 percent) are part of Ola Esmeralda's high season. The remaining 85.45 percent would earn the vessel only $55,403 per day, at the most expensive low-season fares, and the official dollar-bolivar exchange rate. Total revenues: about $66,600 daily — still not bad.
But at the more realistic unregulated exchange rate, the revenues at home would be much lower: about $42,000 per day — or about $2,737,500 less than WFP is paying over the same 90 days. And there is no guarantee it would have such 100 percent occupancy back in Venezuela.
Plus, WFP pays in hard currency, not bolivars.
The question is, who is getting the U.N.'s money?
According to a WFP spokesman, the owners of both ships are American firms — which is true as far as it goes. In the case of Sea Voyager, according the International Shipping Partners' Lund, the company that owns the vessel is Voyager Owner LLC of Miami. The company that controls that firm, he says, is an international firm, the Clipper Group. Once based in Switzerland, the Clipper Group is now headquartered in the Bahamas.
In the case of Ola Esmeralda, the ownership issue is even more interesting. The ship owner, according to WFP, is a Miami company called Lighthouse Ship Management LLC. But in fact, as of the end of January 2010, the registered owner of the Ola Esmeralda, according to official ship registries, is a Venezuelan company, Servicios Acuaticos de Venezuela, C.A., or Saveca.
On its Web site, Saveca claims to be a firm "dedicated to the design, modification, set up and operation of activities related to passenger transportation, floating lodging facilities and similar activities." Its main focus, according to the Web site, is "service and support vessels for the oil industry and hospital or medical assistance vessels."
Some of its top officials, however, have different backgrounds. Three of five senior Saveca officials named on the corporate Web site are retired Venezuelan naval or Merchant Marine officers.
Saveca claims on another page on the Web site to have close ties, an "alliance," with a Venezuelan shipyard, Dianca, that is owned by the radically anti-American government of Venezuelan strongman Hugo Chavez. The president of Saveca, Tomas A. Marino Blanco, a formal naval officer, is described, among other things, as a former international marketing and development manager of Dianca.
According to a Venezuelan who was formerly involved in the country's port activities, Dianca is a state-owned company with a "very murky character," in a country rife with cronyism and political patronage. According to the Venezuelan source, Dianca has long had close ties with the military.
It is now directly owned, according to its Web site, by a combination of the vociferously left-wing Chavez government and PDVSA, the nationalized Venezuelan oil company that is the source of much of the Chavez government's revenues and another alleged font of cronyism and patronage.
The Saveca Web site does not directly claim that the company owns Ola Esmeralda. But another Venezuela Web site, OlaCruises.com, which does make that claim, also notes in small print that the company involved, Ola Cruises, is a "division owned and operated by Saveca."
So who is actually getting the U.N.'s gusher of ship-charter money? In response to questions from Fox News, a WFP spokesman who named Ola Esmeralda's owner as Lighthouse Ship Management LLC, also said that the Ola Esmeralda charter was the first time the relief agency had ever struck a supply contract with Lighthouse.
Lighthouse appears to be what is known in maritime terms as the "disponent owner" — in most cases a middleman who has rented a boat without crew, catering or services from its legal owner — a "bare-boat charter" — then added passenger services, and re-chartered the vessel. (The crew and services could also, of course, be rented separately from the same original owner.)
Lighthouse made its first move toward getting the contract via yet another intermediary, a New Jersey-based ship brokerage named Intercontinent Chartering Corporation, or ICC. ICC is one of a dozen "panel brokers" that have long-term relationships with the World Food Program to meet its shipping needs — almost all of which are for bulk cargo vessels.
ICC vice president Jan Kruse, who says he has executed "hundreds" of contracts for WFP over his professional career, says WFP passenger charters are so rare that he can never recall the organization getting involved in passenger charters of this kind before. When WFP put out the request, he and other panel brokers both advertised the opportunity and put out the word through their contacts in the wider ship-brokering community.
In the case of Lighthouse, Kruse says, ICC was approached by another ship broker with the offer of Ola Esmeralda. He declined to name the broker. It was among ten ships, he said, that were eventually offered to WFP before the U.N. agency decided on Esmeralda. Kruse's firm had nothing to do with the final choice.
Despite WFP's assertion of Lighthouse's ownership of Esmeralda, in a telephone interview from Venezuela with Fox News, Marino Fois, general manager of Saveca, affirmed what ship registries attest: that "we are the owner" of Ola Esmeralda. Fois added that the ship is "under the management of Lighthouse Ship Management."
He referred all further questions about the ship and its contractual arrangements to Lighthouse Ship Management, and particularly to one of its officials, Fredy Dellis.
Corporate documents in the U.S. reveal that Lighthouse Ship Management's address is in suburban Miami. In fact, it has the same residential address as that of Fredy Dellis, described as one of the company's "member managers."
Dellis, a native of Belgium, is also chairman and CEO of another firm, Bloomsbury Properties International LLC, with an address that is the same as his residential address. Bloomsbury's business is described on its Web site as the "sales and marketing of high-end, luxury residences around the world," and its Web site displays properties in the Caribbean and Italy.
But Dellis also knows passenger shipping. The Web site describes him as "boasting extensive experience in the management of many international companies," and among the experience he cites is a stint as CEO of ResidenSea Ltd., a company that sold luxury condominium-style residences aboard a 630-foot Norwegian cruise ship named The World to wealthy Europeans and Americans.
According to various press reports, the World project ran into early financial problems, and Dellis eventually left the company. (The World, however, was successfully completed before his departure, and still offers floating luxury residences for sale or rent.)
Fox News sent questions to Dellis at his Bloomsbury contact numbers via e-mail and fax about Lighthouse Ship Management and its relationship to the Ola Esmeralda, Saveca, and the World Food Program, but received no reply. Voicemail messages left at his Bloomsbury number were not answered.
According to WFP, Ola Esmeralda was "the most cost effective in terms of price per cabin" among the ten ships that the organization considered for the Haiti mission.
In fact, both Esmeralda and Sea Voyager, a WFP spokesman said, "offered the best rate on a cost per cabin basis for the numbers of staff that needed to be accommodated."
And, the spokesman declared, "the intention is to end the charter arrangements as soon as suitable landside accommodation is identified."
Meantime, the $112,500-a-day clock is ticking, alongside the pier that links the Love Boat and the Ola Esmeralda to a paper trail that extends across the Caribbean, to Venezuela.
George Russell is executive editor of Fox News.