Gene Sloan

USA TODAY

One of the world's biggest cruise lines, Princess Cruises, has been caught polluting the seas.

The California-based company, which is owned by cruise giant Carnival Corp. (CCL), will plead guilty to seven felony charges related to the polluting and intentional acts to cover it up, the U.S. Department of Justice announced Thursday.

As part of a plea agreement, Princess also will pay a $40 million penalty, the largest ever involving deliberate vessel pollution, the Justice Department said.

"Let’s be very clear: Princess engaged in exceptionally serious criminal offenses," Assistant Attorney General John Cruden said at a press conference Thursday in Miami to announce the plea agreement. "It deliberately violated the international law regime designed to make sure that our precious oceans are protected."

The Justice Department said five Princess ships were involved in illegal activity that in at least one case dates back to 2005. An investigation has been underway for several years.

One of the vessels, the 3,192-passenger Caribbean Princess, discharged oily waste into the sea for years through a "magic pipe" that bypassed the ship's waste treatment system. An investigation of the discharges began in 2013 after a newly hired engineer on the vessel reported the pipe to British authorities, according to the Justice Department. The ship was sailing out of the UK at the time.

After learning of the whistleblower, the chief engineer and senior first engineer of the Caribbean Princess ordered a cover up, including the removal of the magic pipe, and directed subordinates to lie, according to the Justice Department. Tipped off by British authorities, the U.S. Coast Guard conducted an examination of the Caribbean Princess upon its arrival in New York on Sept. 14, 2013, during which certain crew members continued to lie in accordance with orders they had received from Princess employees, the Justice Department said.

Yet another giant new ship on the way for Princess Cruises

In a single day, on Aug. 26, 2013, the Caribbean Princess illegally discharged more than 4,000 gallons of oily waste off the coast of England, the Justice Department said.

The Justice Department said its investigation subsequently uncovered two other illegal practices that took place on the Caribbean Princess as well as four other Princess vessels – Star Princess, Grand Princess, Coral Princess and Golden Princess. The ships used sea water to prevent alarms from sounding when too much oil was being discharged overboard, according to the Justice Department. They also discharged oily bilge water when graywater tanks overflowed in the engine room.

Cruden said the case was the result of more than just bad actors on the line's ships. "Princess itself is to blame because the nature, extent and scope of the crimes involve a striking failure of corporate culture and a serious failure in ship management."

Cruden said Princess is “a company that knew better and should have done better."

In a joint factual statement filed in Miami Thursday along with the plea agreement, Princess admitted that its shore-side management failed to provide and exercise sufficient supervision and management controls to prevent or detect criminal violations by Caribbean Princess crew members.

As part of the plea agreement, vessels operated by Princess and seven other Carnival Corp.-owned brands including Carnival, Holland America and Seabourn will be under a court supervised Environmental Compliance Program for five years. The program will require independent audits by an outside entity and a court appointed monitor.

In a statement, Princess expressed remorse.

"We are extremely disappointed about the inexcusable actions of our employees who violated our policies and environmental law when they bypassed our bilge water treatment system and discharged untreated bilge water into the ocean," the statement said.

Princess said it had cooperated with the Justice Department and the U.S. Coast Guard. The company said it launched its own investigation, which discovered practices on other ships that were in violation of its own policies and environmental law.

"Although we had policies and procedures in place, it became apparent they were not fully effective," the statement said. "We are very sorry that this happened."

Princess often has touted a strong commitment to the environment. In a 2011 press release, it cited a "high standard for excellence and responsibility" when it comes to the environment, noting that "in many cases, we go beyond what is required by law." The company said it had established "strict lines of responsibility and accountability" for environmental matters and "provided shipboard staff with the equipment, expertise and training to achieve our environmental standards."

At the time the press release was sent out, the Caribbean Princess had been illegally discharging oily waste for several years, according to the Justice Department's timeline.

In his remarks, Cruden praised Princess' current leadership for accepting responsibility for the violations.

"In addition, we recognize that Princess has made many improvements as the result of this investigation," Cruden said. "These include the upgrading of equipment and the revamping of procedures. It also includes re-invigorating and empowering environmental officers on every ship."

The Justice Department did not present any evidence that top Princess executives knew of the polluting as it was happening.

Princess' current president, Jan Swartz, was not in the role at the time the misconduct occurred. Swartz became president of the line in December 2013, taking the helm from Alan Buckelew, who in turn became Chief Operations Officer of parent company Carnival Corp. Buckelew served as president of Princess from 2004 to November 2013 and held the additional title of Princess CEO from 2007 to November 2013.