http://www.foxnews.com/story/0,2933,184599,00.html
Administration OK With UAE Running Six Major U.S. Ports

Sunday, February 12, 2006



WASHINGTON — A company in the United Arab Emirates is poised to take over significant operations at six American ports as part of a corporate sale, leaving a country with ties to the Sept. 11 hijackers with influence over a maritime industry considered vulnerable to terrorism.

The Bush administration considers the UAE an important ally in the fight against terrorism since the suicide hijackings and is not objecting to Dubai Ports World's purchase of London-based Peninsular and Oriental Steam Navigation Co.

The $6.8 billion sale is expected to be approved Monday. The British company is the fourth largest ports company in the world and its sale would affect commercial U.S. port operations in New York, New Jersey, Baltimore, New Orleans, Miami and Philadelphia.

DP World said it won approval from a secretive U.S. government panel that considers security risks of foreign companies buying or investing in American industry.

The U.S. Committee on Foreign Investment in the United States "thoroughly reviewed the potential transaction and concluded they had no objection," the company said in a statement to The Associated Press.

The committee earlier agreed to consider concerns about the deal as expressed by a Miami-based company, Eller & Co., according to Eller's lawyer, Michael Kreitzer. Eller is a business partner with the British shipping giant but was not in the running to buy the ports company.

The committee, which could have recommended that President Bush block the purchase, includes representatives from the departments of Treasury, Defense, Justice, Commerce, State and Homeland Security.

The State Department describes the UAE as a vital partner in the fight against terrorism. But the UAE, a loose federation of seven emirates on the Saudi peninsula, was an important operational and financial base for the hijackers who carried out the attacks against New York and Washington, the FBI concluded.

Sen. Charles Schumer, a Democrat whose district includes the New York port, urged the administration to consider the sale carefully.

"America's busiest ports are vital to our economy and to the international economy, and that is why they remain top terrorist targets," Schumer said. "Just as we would not outsource military operations or law enforcement duties, we should be very careful before we outsource such sensitive homeland security duties."

Last month, the White House appointed a senior DP World executive, David C. Sanborn of Virginia, to be the new administrator of the Maritime Administration of the Transportation Department. Sanborn worked as DP World's director of operations for Europe and Latin America.

Critics of the proposed purchase said a port operator complicit in smuggling or terrorism could manipulate manifests and other records to frustrate Homeland Security's already limited scrutiny of shipping containers and slip contraband past U.S. Customs inspectors.

"When you have a foreign government involved, you are injecting foreign national interests," Kreitzer said. "A country that may be a friend of ours today may not be on the same side tomorrow. You don't know in advance what the politics of that country will be in the future."

Shipping experts noted that many of the world's largest port companies are not based in the U.S., and they pointed to DP World's strong economic interest in operating ports securely and efficiently.

"Does this pose a national security risk? I think that's pushing the envelope," said Stephen E. Flynn, who studies maritime security at the New York-based Council on Foreign Relations. "It's not impossible to imagine one could develop an internal conspiracy, but I'd have to assign it a very low probability."

Changing management over the U.S. ports "doesn't offer Al Qaeda any opportunities it doesn't have now," said James Lewis, who worked with the U.S. committee at the State and Commerce departments. "It's in Dubai's interest to make sure this runs well. There is strong economic incentive to be sure these worries never materialize."

Flynn and others said even under foreign control, U.S. ports will continue to be run by unionized American employees. "You're not going have a bunch of UAE citizens working the docks," Flynn said. "They're longshoremen, vested in high-paying jobs. Most of them are Archie Bunker-kind of Americans."

Peninsular and Oriental and DP World set approval by the U.S. security committee as a condition for the sale. In regulatory papers, the companies said either the committee must agree not to formally investigate the purchase or Bush must not move to block the sale for national security purposes.

Since the Sept. 11 attacks, the FBI has said the money for the strikes was transferred to the hijackers primarily through the UAE's banking system, and much of the operational planning for the attacks took place inside the UAE.

Many of the hijackers traveled to the U.S. through the UAE. Also, the hijacker who steered United Airlines flight into the World Trade Center's south tower, Marwan al-Shehhi, was born in the UAE.

After the attacks, U.S. Treasury Department officials complained about a lack of cooperation by the UAE and other Arab countries trying to track Usama bin Laden's bank accounts.

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U.S. Defends Sale of Ports Company to Arab Nation
By Ted Bridis and Devlin Barrett, Associated Press


WASHINGTON — The Bush administration on Thursday rebuffed criticism about potential security risks of a $6.8 billion sale that gives a company in the United Arab Emirates control over significant operations at six major American ports.

Lawmakers asked the White House to reconsider its earlier approval of the deal.

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The sale to state-owned Dubai Ports World was "rigorously reviewed" by a U.S. committee that considers security threats when foreign companies seek to buy or invest in American industry, National Security Council spokesman Frederick Jones said.

The Committee on Foreign Investment in the United States, run by the Treasury Department, reviewed an assessment from U.S. intelligence agencies. The committee's 12 members agreed unanimously that the sale did not present any problems, the department said.

"We wanted to look at this one quite closely because it relates to ports," Stewart Baker, an assistant secretary in the Homeland Security Department said in an interview.

"It is important to focus on this partner as opposed to just what part of the world they come from. We came to the conclusion that the transaction should not be halted."

The unusual defense of the secretive committee, which reviews hundreds of such deals each year, came in response to criticism about the purchase of London-based Peninsular and Oriental Steam Navigation Co.

The world's fourth-largest ports company runs commercial operations at shipping terminals in New York, New Jersey, Baltimore, New Orleans, Miami and Philadelphia.

Four senators and three House members asked the administration Thursday to reconsider its approval. The lawmakers contended the UAE was not consistent in its support of U.S. terrorism-fighting efforts.

"The potential threat to our country is not imagined, it is real," Rep. Mark Foley (R-Fla.) said in a House speech.

The Homeland Security Department said it was legally impossible under the committee's rules to reconsider its approval without evidence DP World gave false information or withheld vital details from U.S. officials. The 30-day window for the committee to voice objections has ended.

"We intend to maintain and, where appropriate, enhance current security arrangements," the company said in a statement. "It is very much business as usual for the P&O terminals" in the United States.

In Dubai, the UAE's foreign minister described his country as an important U.S. ally but declined to respond directly to the concerns expressed in Washington.

"We have worked very closely with the United States on a number of issues relating to the combat of terrorism, prior to and post-Sept. 11," said Sheik Abdullah Bin Zayed al Nahyan.

Critics have cited the UAE's history as an operational and financial base for the hijackers who carried out the Sept. 11 terrorist attacks.

"Outsourcing the operations of our largest ports to a country with a dubious record on terrorism is a [domestic] security and commerce accident waiting to happen," said Sen. Charles E. Schumer (D-N.Y.). "The administration needs to take another look at this deal."

Separately, the Port Authority of New York and New Jersey said Thursday it would conduct its own review of the deal and urged the government to defend its decision.

In a letter to the Treasury Department, Port Authority Chairman Anthony Coscia said the independent review by his agency was necessary "to protect its interests."

The lawmakers pressing the White House to reconsider included Sens. Schumer, Tom Coburn (R-Okla.), Frank R. Lautenberg (D-N.J.) and Christopher J. Dodd (D-Conn.), and Reps. Foley, Vito J. Fossella (R-N.Y.) and Christopher Shays (R-Conn.)

http://www.boston.com/news/nation/washingt..._emirates_pact/

Congress questions Emirates pact
Accord on ports stirs concerns about security
By Paul Blustein By Ted Bridis and Devlin Barrett, Associated Press | February 17, 2006

WASHINGTON -- The management of major US ports taken over by an Arab-owned company? What was the Bush administration thinking when it allowed such a thing?

That is the question being asked by members of Congress from both parties. Their indignation is aimed at the $6.8 billion purchase by Dubai Ports World, a state-owned company in the United Arab Emirates, a corporation that handles most operations at ports in New York, New Jersey, Baltimore, New Orleans, Miami and Philadelphia.

At a news conference yesterday, a group of seven House and Senate members from both parties demanded that an interagency task force on foreign investments, which approved the transaction, examine it more closely.

The group asserted that although the United Arab Emirates may have a strongly pro-US government, some of the Sept. 11, 2001, hijackers allegedly used the country as a transit point, and that its banking system has been used by several groups allegedly affiliated with Al Qaeda.

''Our ports are major potential terrorist targets," said Senator Christopher Dodd, a Democrat of Connecticut. ''I strongly urge the administration to thoroughly investigate this acquisition."

Senator Tom Coburn, a Republican of Oklahoma, said, ''Handing the keys to US strategic ports to a regime that recognized the Taliban is not a sound next step in our war against terror."

Administration officials defended approval of the deal by the Committee on Foreign Investment in the United States, a panel with representatives from 12 US agencies that reviews foreign takeovers of US companies or possible risks to national security.

The company that now operates the ports, they said, is foreign, Peninsular and Oriental Steam Navigation Co., a British firm. Its employees in US ports, who are mostly Americans, are expected to do the same work they're doing now. Furthermore, Dubai Ports World, which won the bidding this month for the company, has been a reliable partner in screening cargo headed for the United States. And once cargo arrives, federal agents would continue their current level of inspections.

''This company will be subject to any US laws that apply to port security, and will be obliged to have a port security plan that we will review," Stewart Baker, the assistant secretary for policy at the Department of Homeland Security, said in a phone interview. ''So if there's a falloff in compliance on security here in the United States, we're not completely lacking in ability to respond to that."

The flap has some implications beyond the port security issue, as illustrated by the readiness of administration officials to comment on the decision made by the committee, which deliberates in secret.

After many years in which foreign investment in the United States has become generally welcome as a generator of jobs, Congress has recently become more wary of purchases by certain foreign interests.

The takeover last year by a Chinese company of International Business Machines Corp.'s personal computer business aroused concern that China might gain access to sensitive technology. That controversy also inspired plans by powerful members of Congress to tighten the 1988 law that created the Committee on Foreign Investment in the United States.

Talk of major changes in the law has subsided, but the Dubai Ports World deal could reignite the effort.

If the administration is perceived as not reviewing the deal carefully, congressional skeptics of foreign investment may feel obliged to take matters into their own hands, said Todd Malan, executive director of the Organization for International Investment, which represents the US subsidiaries of many foreign companies.

Malan was especially concerned because the Committee on Foreign Investment in the United States did not conduct a 45-day investigation on top of the initial 30-day review that it usually gives to foreign purchases of US businesses.

''There's obviously a very broad interest in Congress in this particular transaction, and we hope that it doesn't lead to broad changes" in the Committee on Foreign Investment in the United States, Malan said. ''Clearly, a larger number of members of Congress would have been more comfortable if this transaction had gone to the full investigation phase."

DP World, the company at the center of the controversy, has been expanding since 1999 from its base in Dubai into operating ports in many other parts of the world, including Asia, Europe and South America.

''We have a relationship with this company because they have been a participant in some of our cargo and port security measures," Baker said. ''Remember, our interest in port security extends well beyond the United States. If we discover weapons of mass destruction inside a US port, we've already lost."

Extra investigation is not necessary, Baker said, because the company approached the Committee on Foreign Investment in the United States, in late November, when it decided to bid for Peninsular and Oriental.



© Copyright 2005 The New York Times Company

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White House defends DP World deal


Friday 17 February 2006, 0:31 Makka Time, 21:31 GMT


P&O has come under the Dubai port operator's umbrella

The Bush administration has rebuffed criticism about potential security risks of a $6.8 billion sale that gives a company in the United Arab Emirates control over significant operations at six major American ports.


Lawmakers asked the White House to reconsider the deal. The sale to state-owned Dubai Ports World was "rigorously reviewed" by a US committee that considers security threats when foreign companies seek to buy or invest in American industry, Frederick Jones, a National Security Council spokesman, said on Thursday.

The Committee on Foreign Investment in the US, run by the Treasury Department, took into account an assessment from US intelligence agencies. The committee's 12 members agreed the sale did not present any problems, the department said.

The public defence of the secretive committee, which reviews hundreds of such deals each year, came in response to criticism about the purchase of London-based Peninsular and Oriental Steam Navigation Co.

The world's fourth-largest ports company runs commercial operations at shipping terminals in New York, New Jersey, Baltimore, New Orleans, Miami and Philadelphia.

Congressmen's plea

Four senators and three House members asked the administration on Thursday to reconsider its approval. The lawmakers contended the UAE is not consistent in its support of US terrorism-fighting efforts.

"The potential threat to our country is not imagined, it is real," Mark Foley, a House member, said in a House speech.

DP World said it had received all regulatory approvals for its purchase and noted that the administration did not object.


The US describes the UAE as a
vital partner in the war on terror


"We intend to maintain and, where appropriate, enhance current security arrangements," the company said in a statement. "It is very much business as usual for the P&O terminals" in the US.

Lawmakers said the UAE was an important transfer point for shipments of smuggled nuclear components sent to Iran, North Korea and Libya by a Pakistani scientist, Abdul Qadeer Khan.

They also said the UAE was one of only three countries to recognise the now-toppled Taliban as Afghanistan's legitimate government.

The State Department describes the UAE as a vital partner in the fight against terrorism. Dubai's own ports have participated since last year in US efforts to detect illegal shipments of nuclear materials.

Vito Fossella, a House member, urged congressional hearings on the deal.

Strategic assets

"At a time when America is leading the world in the war on terrorism and spending billions of dollars to secure our homeland, we cannot cede control of strategic assets to foreign nations with spotty records on terrorism," Fossella said.

Critics also have cited the UAE's history as an operational and financial base for the hijackers who carried out the attacks of 11 September 2001.

"Outsourcing the operations of our largest ports to a country with a dubious record on terrorism is a homeland security and commerce accident waiting to happen," said Charles Schumer, a senator.

"The administration needs to take another look at this deal."


Agencies

http://www.newsday.com/news/nationworld/na...itics-headlines

More are questioning port transfer

BY JOHN RILEY
STAFF WRITER

February 17, 2006

New York Sen. Charles Schumer won new allies in Congress and the media yesterday in his campaign to raise national security concerns about a planned transfer of port operations in Newark and other key East Coast cities to a company controlled by the government of Dubai.

Dubai Ports World, already a global player in port operations, acquired a stake in terminal operations in New Orleans, Miami, Baltimore, Philadelphia and Newark on Monday when shareholders approved its takeover of the British firm Peninsular & Oriental Steam Navigation. Critics fear the deal increases the risk of weapons or terrorists being smuggled into the United States.

The takeover was approved by the Committee on Foreign Investment in the U.S., an interagency panel headed by the Treasury Department that can block foreign acquisitions that threaten national security.

But Schumer, who first raised questions Monday, was joined yesterday by an array of six congressmen, including Republicans such as conservative Sen. Tom Coburn of Oklahoma, in a call for a second look. Rep. Peter King (R-Seaford) has also raised questions, and The New York Times yesterday editorialized against the deal.

"Outsourcing the operations of our largest ports to a country with a dubious record on terrorism is a homeland security and commerce accident waiting to happen," Schumer said.

The Bush administration has portrayed oil-rich Dubai, part of the United Arab Emirates, as an ally in the war on terror. But Schumer and other opponents noted that one of the Sept. 11 hijack pilots came from the UAE, and the plotters moved money through that country's financial system.

While the alarms have attracted media attention, a Treasury Department spokesperson said yesterday that the approval can't be reconsidered and the White House defended it. And some outside experts noted that foreign companies have long been dominant in maritime shipping and major players at many U.S. ports.

Regardless of the national pedigree of the terminal operator, noted Stephen Flynn, a maritime security expert at the Council on Foreign Relations, the U.S. Customs agents will still screen containers, and patriotic American longshoremen will still work the docks. The key to better port security, he said, is more attention to needs such as better technology to screen incoming containers.

"The ownership of marine terminal operations by foreign companies is not at the top of my list," Flynn said. "It distracts us from much more worthwhile efforts to build security."
Copyright 2006 Newsday Inc.

http://www.chron.com/disp/story.mpl/nation/3665936.html
Feb. 16, 2006, 9:23PM

Lawmakers urge review of Arab ports deal
White House defends the sale of operations in 6 American cities to UAE company
By TED BRIDIS and DEVLIN BARRETT
Associated Press

WASHINGTON - The Bush administration on Thursday rebuffed criticism about potential security risks of a $6.8 billion sale that gives a company in the United Arab Emirates control over significant operations at six major American ports, including New Orleans.

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WEBCommentary Contributor
Author: Diane M. Grassi
Bio: Diane M. Grassi
Date: February 15, 2006
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Foreign Ownership of U.S. Airlines & Ports Deemed Troubling

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With possible ownership of U.S. airlines possibly permitted within a year, control of operations and security of six U.S. ports will be given to the United Arab Emirates and based in Dubai.
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The United States Department of Transportation (DOT) on February 8, 2005, presented its decision before the U.S. House of Representatives House Aviation Sub-Committee, to change a rule which would clear the way for foreign corporations to own and control U.S. airlines. But members of the House Aviation Sub-Committee were all in agreement that the DOT may lack the legal authority to unilaterally make such a change. Yet it does not begin to reveal all of the implications of such a historic shift in policy in bypassing the U.S. Congress in order to do so.

Trade negotiations with the European Union to loosen up regulations in ownership of U.S. airlines is seen as a tradeoff by the DOT in order for the U.S. to gain greater access to landing at London’s Heathrow Airport, where presently only American Airlines and United Airlines have limited service there. Known as the Open Skies Agreement, lawmakers in both parties believe that this proposition transcends ‘free trade’ or globalization as it becomes an issue which directly impacts labor and national security.

Currently, U.S. law requires that U.S. airlines must be under the “actual control” of U.S. citizens in order to be licensed for operation. And for corporations, 75% of the voting interest must be held by U.S. citizens and 66% of its board of directors and officers must also be U.S. citizens. But Secretary of Transportation, Norman Mineta, in a statement in November 2005 said that the rule change would be an “historic opportunity to increase travel, reduce fares, expand commerce and bring two continents closer together than ever before. It provides new opportunities for U.S. and European airlines, healthier competition for a growing travel market and greater connection between cities and towns of all sizes on both sides of the Atlantic.”

But the President of the Air Line Pilots Association, Intl. has a much different opinion. Captain Duane Woerth testified before the House Aviation Sub-Committee claiming, “Changes of this magnitude should be undertaken not be an administering agency but by the legislative branch. Pilots spend their entire careers accumulating the seniority required to gain access to international flying opportunities. In an era when the career expectations of pilots and other airline workers already have been repeatedly frustrated by airline bankruptcies, furloughs, wage concessions, pension plan terminations, and the like, it would be a crowning blow for the U.S. government now to adopt a policy that would tend to eliminate international flying by U.S. carriers.”

Should the new rule be adopted, with exception of few areas, all airline operations, including prices, scheduling markets, fleet structure, marketing and alliances have the option of being controlled by foreign investors. Additionally, U.S. labor law protections could be compromised and employees forced into losing out by being replaced by foreign employees. Aviation safety could be jeopardized as foreign-controlled management need meet only minimum FAA standards, far short of the present programs and practices U.S. airlines presently accord.

Surprisingly, the Department of Defense as well as the State Department have agreed with the DOT on this issue. But for several Congressmen, it does not pass muster and especially as concerns the Civilian Reserve Air Fleet (CRAF) which is used to transport U.S. troops including in times of war. The Open Skies Agreement would have to be redrafted to accommodate such. According to Rep. Peter DeFazio (D-OR), “During the Gulf War a European Union member didn’t supply us with a type of carrier we needed when we ran out because they didn’t support the war.”

Should the Congress fail to create legislation to block the proposed rule it would take effect, even though most U.S. airlines with the exception of cargo carriers, FEDEX and UPS as well as United Airlines, having recently reemerged from bankruptcy, are opposed to it. John Byerly, Deputy Assistant Secretary of State has maintained that in order for the EU to approve the Open Skies Agreement it is conditional on easing foreign ownership rules. But according to the Government Accountability Office, airport capacity limitations such as at Heaththrow would not be corrected by a deregulated agreement.

Rep. James Oberstar (D-MN), ranking Democrat on the House Transportation and Infrastructure Sub-Committee, in order to counter the proposed rule change introduced legislation that would require the rule be put on hold for one year, allowing the Congress to review its ramifications on national defense and homeland security, which are primary issues which must initially be addressed.

And while possible ownership of U.S. airlines may be permitted within a year, control of operations and security of six U.S. ports will be given to the United Arab Emirates and based in Dubai. The London-based Peninsular and Oriental Steam Navigation Co. was purchased on February 13, 2006 by Dubai Ports World. The deal is expected to be finalized on March 2, 2006. Peninsular and Oriental Steam Co. is the world’s fourth largest ports company and the sale affects the commercial U.S. ports of New York, New Jersey, Baltimore, New Orleans, Miami and Philadelphia.

The Committee on Foreign Investment in the U.S. (CFIUS) is a secretive government panel comprised of designees from the Department of Treasury, the Department of Defense, the Department of Justice, the Department of Commerce, the Department of State and the Department of Homeland Security. In January 2006, the Bush administration appointed a former Director of Operations for Europe and Latin America for Dubai Ports World as the new Maritime Administrator within the Department of Transportation, raising more than a few eyebrows.

But most puzzling to lawmakers is how Dubai, which provided most of the financing for the 19 hijackers on 9/11/2001, will now be overseeing the very port where nearly 3,000 lives were claimed that day. And Dubai was the base for much of the terrorist planning and operations for the attacks in New York and Washington, according to the FBI.

Since the Bush administration considers Dubai and the UAE a vital ally in the war against terrorism, it approves of the sale. However, it raises vital questions of U.S. national security and homeland security policies at ports where presently less than 5% of all cargo is inspected. And having an Islamist nation in charge of U.S. ports arguably makes little in allowing it to dictate port operations, given that U.S. ports remain top terrorist targets.

With the Department of Homeland Security still struggling to implement systems and operations to secure U.S. ports, allowing Dubai to run the ports could be a gateway for contraband, weapons of mass destruction and arsenals, as well as hiring practices without proper scrutiny, including the quality of security which would have to conform to U.S. law. Steve Coleman, Port Authority of New York/New Jersey spokesman stated, “We need to take a real close look at security before we approve such a company.”

James Lewis, a former State and Commerce Department contractor, sums it up by saying, “It’s in Dubai’s interest to make sure this runs well.” And unfortunately, it will take an act of Congress to prevent the finality of the sale in what will become the world’s second largest port operator. Hopefully, cooler heads in the Congress will prevail in the best interests of the U.S. in order to supercede those of foreign interests, all in the name of globalization. For the greatest asset to the U.S. is the American people, who not only deserve the protection of their government but one which vows to do its best to prevent terrorism on its shores ever again. Anything less is just unacceptable.

Diane M. Grassi



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United Arab Emirates Firm May Oversee 6 U.S. Ports

By Ted Bridis
Associated Press
Sunday, February 12, 2006; Page A17

A company in the United Arab Emirates is poised to take over significant operations at six American ports as part of a corporate sale, leaving a country with ties to the Sept. 11, 2001, hijackers with influence over a maritime industry considered vulnerable to terrorism.

The Bush administration considers the UAE an important ally in the fight against terrorism since the suicide hijackings and is not objecting to Dubai Ports World's purchase of London-based Peninsular and Oriental Steam Navigation Co.

The $6.8 billion sale could be approved Monday and would affect commercial port operations in New York, New Jersey, Baltimore, New Orleans, Miami and Philadelphia.

DP World said it won approval from a secretive U.S. government panel that considers security risks of foreign companies buying or investing in American industry. The U.S. Committee on Foreign Investment in the United States "thoroughly reviewed the potential transaction and concluded they had no objection," the company said in a statement.

The committee, which could have recommended that President Bush block the purchase, includes representatives from the departments of Treasury, Defense, Justice, Commerce, State and Homeland Security.

The committee action followed concerns expressed by a Miami-based company, Eller & Co., according to Eller's lawyer, Michael Kreitzer. Eller is a business partner with the British shipping giant but was not in the running to buy the ports company.

The State Department describes the UAE as a vital partner in the fight against terrorism. But the UAE, a loose federation of seven emirates on the Saudi peninsula, was an important operational and financial base for the hijackers who carried out the attacks against the World Trade Center and the Pentagon, the FBI concluded.

Sen. Charles E. Schumer (D-N.Y.) urged the administration to consider the sale carefully. "America's busiest ports are vital to our economy and to the international economy, and that is why they remain top terrorist targets," Schumer said. "Just as we would not outsource military operations or law enforcement duties, we should be very careful before we outsource such sensitive homeland security duties."

Shipping experts noted that many of the world's largest port companies are not based in the United States, and they pointed to DP World's strong economic interest in operating ports securely and efficiently.

"It's in Dubai's interest to make sure this runs well," said James Lewis, who worked with the U.S. committee at the State and Commerce departments.

Stephen E. Flynn, who studies maritime security at the New York-based Council on Foreign Relations, said even under foreign control, U.S. ports will continue to be run by unionized American employees. "You're not going to have a bunch of UAE citizens working the docks," Flynn said. "They're longshoremen, vested in high-paying jobs."

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Dubai ports takeover prompts backlash
By Stephanie Kirchgaessner and Edward Alden in Washington
Published: February 16 2006 23:00 | Last updated: February 16 2006 23:00

Washington lawmakers on Thursday expressed deep reservations about Dubai Ports World’s £3.9bn acquisition of P&O, the UK-based port operator, on the grounds that the deal represented a potential national security threat, and demanded that the White House re-open a regulatory review of the deal.

In a letter to Treasury secretary John Snow, Senator Richard Shelby, an influential Alabama Republican, stopped short of calling for the deal to be blocked, but said the transaction merited further scrutiny, potentially raising complications for DP World’s bid. Mr Shelby is expected to call for a hearing to discuss the issue in coming weeks.

In a separate letter to Mr Snow, New York senator Chuck Schumer and others said US ports were “the most vulnerable targets for terrorist attack”. They questioned whether DP World, which is owned and controlled by Dubai, should be allowed to take over P&O, charging that Dubai was a “key transfer point” for shipments of nuclear components bound for Iran, North Korea and Libya.

The deal, which has already been given regulatory clearance by the White House, gives DP World container terminals at six ports on the east coast of the US, including New York and New Jersey.

Although the Department of Homeland Security is ultimately charged with cargo- screening functions, the legislators said the port facility itself was responsible for securing cargo coming in and out of the port and the hiring of security personnel.

“After the 9/11 attacks, your department complained of a lack of co-operation by the UAE and other Arab countries as the US was trying to track down Osama bin Laden’s bank accounts,” the letter stipulated.

The growing congressional backlash against the deal is likely to reignite a debate in Washington on the effectiveness of the committee on foreign investments in the US, or Cfius, an inter-agency panel that vets foreign takeovers of US assets on national security grounds.

Cfius, which is chaired by the Treasury Department, approved Dubai’s bid for P&O after reviewing it for a standard 30-day-period, although the committee could have called for the deal to be examined more thoroughly over an additional 45 days.

Stewart Baker, assistant secretary for policy in the Department of Homeland Security, said that Cfius had completed its review after it was notified last year of the pending takeover, and had concluded there was no national security basis for blocking the transaction.

He said the US government had worked cooperatively with DP World in the past as part of the global container security initiative launched by the US after the September 11 attacks.

People familiar with the deal said administration officials were yesterday briefing lawmakers on the deal to assuage their concerns.

A spokesperson for the Treasury Department said the administration would not re-open its review unless evidence emerged that DP World had given the committee false information.

Cfius came under harsh scrutiny by lawmakers last year following a failed attempt by CNOOC, the Chinese oil company, to take­over California-based Unocal. Although the deal was quashed before Cfius reviewed the transaction, the widespread opposition to the deal in Congress prompted the Treasury Department and other agencies to promise to increase transparency at Cfius by communicating more with Congress and to be more willing to conduct full investigations of deals.

http://www.americanchronicle.com/articles/...?articleID=5908

FOLEY QUESTIONS ADMINISTRATION ON SALE OF U.S. PORTS TO ARAB NATION
Congressional Desk

The Congressional Desk provides information, news releases, and announcements obtained from communication and public relations offices.

By Congressional Desk
February 15, 2006
WASHINGTON-Congressman Mark Foley (FL-16) today questioned the Bush Administration on the recent sale of management of six of the U.S.'s largest and most active ports to Dubai Ports World, a subsidiary of the government of the United Arab Emirates earlier this week. The sale was approved by the Committee on Foreign Investments in the United States (CFIUS), a secretive committee that reviews transactions with national security issues. Included in the sale were the management rights to ports of Miami, New Orleans, Newark, Philadelphia, Baltimore and New York.


Foley confronted Treasury Secretary John Snow, who chairs the CFIUS, during Snow's testimony on the President's proposed budget before the House Ways and Means Committee. Foley specifically asked the Secretary to address the national security concerns of turning management of some of our country's largest ports - considered to be some of our nation's most vulnerable targets for terrorism - over to a Middle Eastern country.


After the hearing, Foley said, "Six of our largest commercial ports are being handed over to a country that is seeking to be Iran's free trade partner and has been linked to the funding and planning of 9/11. If our ports are the most vulnerable targets for terrorism and if we are at war, as the President says, we should be overly critical of handing over management of our ports to any foreign countries, post 9/11. Instead, this was done in the dead of night."

http://www.iht.com/articles/2006/02/16/opinion/edport.php

Protecting the ports
The New York Times

FRIDAY, FEBRUARY 17, 2006


The Bush administration has done far too little to protect the nation's ports against terrorists. But it has taken that laxity to a new level by allowing a company from the United Arab Emirates to run significant operations at six American ports, including the Port of New York. The administration should reverse this decision.

National security experts have long warned that the ports are a key point of vulnerability. One of the worst fears about terrorism is that a nuclear device might be shipped from overseas and set off when it arrived in a port in a large city. The federal government should be doing everything it can to ensure that port security is as rigorous as possible, including keeping port management in trusted hands.

But the British company that operates the Port of New York, and other ports, has been acquired by Dubai Ports World, based in the United Arab Emirates. Although the UAE is considered an ally, there have been troubling connections between it and anti-American terrorism. Many of the Sept. 11 hijackers and planners traveled through that country, and its banking system was used in preparing for the attacks.

But the Bush administration appears to have brushed these concerns aside. The Committee on Foreign Investment in the United States, a panel that includes representatives from Homeland Security, Treasury and other departments, has given its approval to the transfer of control.

Much remains to be done to protect the nation's ports against terrorism. Putting port management in the hands of a country with such a mixed record in the war on terror is a step in the wrong direction.

The Bush administration has done far too little to protect the nation's ports against terrorists. But it has taken that laxity to a new level by allowing a company from the United Arab Emirates to run significant operations at six American ports, including the Port of New York. The administration should reverse this decision.

National security experts have long warned that the ports are a key point of vulnerability. One of the worst fears about terrorism is that a nuclear device might be shipped from overseas and set off when it arrived in a port in a large city. The federal government should be doing everything it can to ensure that port security is as rigorous as possible, including keeping port management in trusted hands.

But the British company that operates the Port of New York, and other ports, has been acquired by Dubai Ports World, based in the United Arab Emirates. Although the UAE is considered an ally, there have been troubling connections between it and anti-American terrorism. Many of the Sept. 11 hijackers and planners traveled through that country, and its banking system was used in preparing for the attacks.

But the Bush administration appears to have brushed these concerns aside. The Committee on Foreign Investment in the United States, a panel that includes representatives from Homeland Security, Treasury and other departments, has given its approval to the transfer of control.

Much remains to be done to protect the nation's ports against terrorism. Putting port management in the hands of a country with such a mixed record in the war on terror is a step in the wrong direction.

The Bush administration has done far too little to protect the nation's ports against terrorists. But it has taken that laxity to a new level by allowing a company from the United Arab Emirates to run significant operations at six American ports, including the Port of New York. The administration should reverse this decision.

National security experts have long warned that the ports are a key point of vulnerability. One of the worst fears about terrorism is that a nuclear device might be shipped from overseas and set off when it arrived in a port in a large city. The federal government should be doing everything it can to ensure that port security is as rigorous as possible, including keeping port management in trusted hands.

But the British company that operates the Port of New York, and other ports, has been acquired by Dubai Ports World, based in the United Arab Emirates. Although the UAE is considered an ally, there have been troubling connections between it and anti-American terrorism. Many of the Sept. 11 hijackers and planners traveled through that country, and its banking system was used in preparing for the attacks.

But the Bush administration appears to have brushed these concerns aside. The Committee on Foreign Investment in the United States, a panel that includes representatives from Homeland Security, Treasury and other departments, has given its approval to the transfer of control.

Much remains to be done to protect the nation's ports against terrorism. Putting port management in the hands of a country with such a mixed record in the war on terror is a step in the wrong direction.

The Bush administration has done far too little to protect the nation's ports against terrorists. But it has taken that laxity to a new level by allowing a company from the United Arab Emirates to run significant operations at six American ports, including the Port of New York. The administration should reverse this decision.

National security experts have long warned that the ports are a key point of vulnerability. One of the worst fears about terrorism is that a nuclear device might be shipped from overseas and set off when it arrived in a port in a large city. The federal government should be doing everything it can to ensure that port security is as rigorous as possible, including keeping port management in trusted hands.

But the British company that operates the Port of New York, and other ports, has been acquired by Dubai Ports World, based in the United Arab Emirates. Although the UAE is considered an ally, there have been troubling connections between it and anti-American terrorism. Many of the Sept. 11 hijackers and planners traveled through that country, and its banking system was used in preparing for the attacks.

But the Bush administration appears to have brushed these concerns aside. The Committee on Foreign Investment in the United States, a panel that includes representatives from Homeland Security, Treasury and other departments, has given its approval to the transfer of control.

Much remains to be done to protect the nation's ports against terrorism. Putting port management in the hands of a country with such a mixed record in the war on terror is a step in the wrong direction.

PORT INSECURITY Tue Feb 14, 6:00 AM ET

Do the feds really want to place the ports of New York and New Jersey in the hands of a Middle East country with ties to the Sept. 11 hijackers? As The Post reported on Sunday, that's what's about to happen, now that Dubai Ports World has won control - for $6.8 billion - of British-owned Peninsular and Oriental Steam Navigation Co.

The purchase gives Dubai Ports control of six U.S. ports - including, in addition to New York-New Jersey, Miami, Baltimore, Philadelphia and New Orleans.

True, the deal reportedly was approved by the top-secret U.S. Committee on Foreign Investment in the United States, which decided there was no security risk.

But at a time when security in the ports remains unacceptably lax, we wonder whether this is a wise move.

Dubai Ports, after all, is owned by the United Arab Emirates, whose banking system - considered the commercial center of the Arab world - provided most of the cash for the 9/11 hijackers. Indeed, much of the operational planning for the World Trade Center attacks took place inside the UAE.

And while the Bush folks now consider the UAE a major ally in the war against terror, the Treasury Department has been stonewalled by the emirates, and other Arab countries, in trying to track Osama bin Laden's bank accounts.

The new leader of Dubai, one of the seven small countries that make up the UAE, has said all the right things about fighting radical Islam since 9/11.

But this remains very much an Islamist nation, where preaching any religion other than Islam is prohibited.

New York Sen. Charles Schumer (news, bio, voting record), for one, thinks this is a case where it's better to be safe than sorry.

Noting that the nation's ports "remain top terrorist targets," Schumer rightly argues that "we would not outsource military operations or law-enforcement duties."

Likewise, he says, "we should be very careful before we outsource such sensitive homeland security duties."

The fact is, control of America's ports increasingly is being placed in private - and foreign - hands. And there's no guarantee that today's ally in the War on Terror will remain such tomorrow.

There already is reason enough for concern about security in the ports: Homeland Security officials concede that it is impossible for them to fully inspect all but a tiny percentage of the containers that enter from abroad.

Though no one likes to discuss it publicly, smuggling in weapons of mass destruction likely can most easily be done through the ports.

Supporters of the deal insist that it doesn't give al Qaeda opportunities it doesn't already enjoy. That's no comfort.

Copyright © 2006 NYP Holdings, Inc. All rights reserved. NEW YORK POST is a registered trademark of NYP Holdings, Inc. NYPOST.COM, NYPOSTONLINE.COM, and NEWYORKPOST.COM are trademarks of NYP Holdings, Inc.


Copyright © 2006 Yahoo! Inc. All rights reserved.

http://www.baltimoresun.com/news/nationwor...-home-headlines

Sale of port company worries lawmakers
By Gwyneth K. Shaw and Meredith Cohn
Sun reporters
Originally published February 17, 2006
WASHINGTON // Citing national security concerns, members of Congress from several states are asking the Bush administration to review its approval of a deal to allow a United Arab Emirates company to take over a business that helps run several U.S. ports, including Baltimore's.
Lawmakers, including some from Maryland, said yesterday that they want more information from the White House about whether the deal would put U.S. seaports at risk and whether the initial review, by a committee made up of officials from the White House and other federal agencies, looked carefully enough at potential security implications.

Government-owned Dubai Ports World announced a deal earlier this week to purchase Peninsular & Oriental Steam Navigation Co., a British company that is the terminal operator and stevedore for container cargo at the Seagirt and Dundalk marine terminals in Baltimore.

It employs about 65 workers at the port.

The company also provides services at other big U.S. ports, including New York; Newark. N.J.; Philadelphia; and Miami.

The administration panel that approved the deal, headed by the Treasury Department, examines foreign companies' efforts to invest in American industry for possible national security risks. A department spokeswoman said the only way the committee's review could be reopened was if one of the companies provided false or incomplete information.

Separately, Republican Sen. Richard C. Shelby of Alabama and Democratic Sen. Paul S. Sarbanes of Maryland said they were "deeply concerned" about the implications of the deal in a letter to Treasury Secretary John W. Snow that asked for thorough review of the matter.

"We do not believe that anyone could reasonably question the fact that the control of the corporations that operate the ports ... 'could affect U.S. national security,"' wrote Shelby and Sarbanes, the chairman and senior Democrat, respectively, on the Senate Banking Committee.

"Port security is a major component of our defenses against terrorism," they said, adding that while the deal might ultimately go forward, the previous "non-transparent cursory review" of the sale was "in no one's interest."

The committee plans a hearing on the sale when the Senate returns from a weeklong break for the Presidents Day holiday.

Other lawmakers who have expressed concerns about the deal include New York Sen. Charles E. Schumer and New Jersey Sen. Frank R. Lautenberg, both Democrats, and Republican Rep. Mark Foley of Florida.

Administration officials defended what they called a thorough review that included input from the nation's intelligence agencies.

"There is a rigorous review that goes on for proposed foreign investments for national security concerns," said White House spokesmanScott McClellan.

P&O officials did not respond to a request for comment. Dubai Ports World said "we intend to maintain, and, where appropriate, enhance current security arrangements," the Associated Press reported.

Democratic Rep. C.A. Dutch Ruppersberger, whose congressional district includes the Port of Baltimore, said he was unwilling to take the Bush administration's word on the deal. He said he wanted to know what kind of intelligence review had been conducted, as well as what Dubai Ports World had told the committee about providing access to its facilities and the cargo that passes through them.

"I don't want to have a fox in the henhouse and find out that this fox is not a good fox," he said.

Ruppersberger noted that while the United Arab Emirates is a U.S. ally, one of the terrorists involved in the Sept. 11 attacks was born there, and others traveled through the area.

"We have a country that is considered to be an ally in the war on terror, but there's some history there," Ruppersberger said.

A top official at the Council for American-Islamic Relations, which works to promote a better understanding of Muslims and Arab nations, said the opposition appeared to be a "knee-jerk reaction" and was deeply troubling. Corey Saylor, the organization's government affairs director, said that on the surface, concerns about the deal appeared to be solely because Dubai Ports World is based in an Arab, Muslim nation.

"I wonder if other nations would make the same evaluation of our ability to provide security based on the fact that Timothy McVeigh is from the United States," Saylor said.

Local officials brushed aside the concerns in Washington.

F. Brooks Royster III, director of the Maryland Port Administration, which oversees the public marine terminals where Dubai Ports World would work, noted that the company will not own Baltimore's or any other city's port. At Baltimore, P&O's contract primarily involves loading and unloading containers.

Containers, the most common form of shipping, are monitored by Department of Homeland Security officials, but only a small percentage are physically inspected or X-rayed.

Still, Royster said, ownership by the deep-pockets Dubai Ports World could help the port.

"The expected purchase of P&O Ports by DP World should infuse capital into that company [P&O], allowing for larger private-public partnerships with the MPA that may not have been possible before," he said in an e-mail.

Kim Petersen, president of SeaSecure LLC, a maritime security company, and executive director of the Maritime Security Council, an industry group, said his firm's work with the company indicated that its involvement could improve security.

"The only concerns that we are hearing are coming from political circles, not from the shipping or ports industry, or even the defense or intelligence communities," he said.



gwyneth.shaw@baltsun.com meredith.cohn@baltsun.com

http://wjz.com/topstories/local_story_048002439.html

awmakers: Port Of Baltimore Security Threatened

Dennis Edwards
Reporting

(WJZ/AP) WASHINGTON The Bush administration on Thursday rebuffed criticism about potential security risks of a $6.8 billion sale that gives a company in the United Arab Emirates control over significant operations at six major American ports.

Lawmakers asked the White House to reconsider its earlier approval of the deal. They note the UAE has been inconsistent in its support of U.S. efforts in the war on terrorism.

The Bush administration is defending the deal, in which Dubai Ports World bought the London-based Peninsula and Oriental Navigation company for 6.8 billion dollars.

Md. congressman Dutch Ruppersberger tells WJZ's Dennis Edwards lawmakers are calling a for congressional hearing on the sale because of the UAE's purported links to the September 11 attacks.

Eyewitness News learns one of the terrorists who flew a plane into the World Trade Center was born in the nation, which political pundits believe was an operational and financial base for the hijackers.

"We know that the ports are vulnerable to attack and with the volume of containers that come in," Ruppersberger says. "There could be weapons of mass destruction that could come into our ports, so we need to be on top of this and focused on that."

A spokesman for the National Security Council says the security implications of the deal were "rigorously reviewed."

The deal affects commercial operations at shipping terminals in New York, New Jersey, Baltimore, New Orleans, Miami and Philadelphia.

A U.S. treasury department spokesman tells Eyewitness News he is not permitted to discuss the transaction because it is considered by a secret committee on foreign investments.

(© 2006 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)

February 18, 2006
2 Senators Seek to Stop Ports Deal, Citing Security
By PATRICK McGEEHAN
The junior senators from New York and New Jersey have added their voices to objections about the Bush administration's approval of a deal that will give a Dubai company a central role in operating ports in New York and around the country.

Senators Hillary Rodham Clinton of New York and Robert Menendez of New Jersey, both Democrats, said yesterday that they planned to introduce legislation to prevent companies controlled by foreign governments from buying American port operations.

The purpose of the bill would be to block the $6.8 billion sale of a British shipping company to Dubai Ports World, a port operator controlled by the government of Dubai, part of the United Arab Emirates. The British company, Peninsular and Oriental Steam Navigation, operates the cruise ship terminal on the West Side of Manhattan and has a half-interest in the Port Newark Container Terminal, the third-largest cargo terminal in New York harbor.

"I just don't believe that our ports should be handed over to foreign governments," Mr. Menendez said in an interview. Especially not to Dubai, he added, because it has a "serious and dubious history" as a transit point for terrorism.

Echoing other lawmakers in Washington who criticized the federal approval of the deal this week, Mr. Menendez cited reports that two of the Sept. 11 hijackers were from the United Arab Emirates and that some of the money that financed the attacks flowed through banks there.

That bipartisan group of critics included Senator Charles E. Schumer, a Democrat, and Representative Peter T. King, a Republican from Long Island.

But senior administration officials reiterated their support for the transaction and their favorable relations with the United Arab Emirates.

The Dubai purchase passed a review by the Committee on Foreign Investment in the United States, a panel composed of the leaders of 12 federal agencies and headed by the treasury secretary, John W. Snow.

Mr. Snow and Condoleezza Rice, the secretary of state, said yesterday that the committee had determined that the transfer would not compromise security. Ms. Rice, who is scheduled to visit the United Arab Emirates next week, described one of them, Abu Dhabi, as "a very good friend" of the United States, according to Bloomberg News.

But those remarks did not defuse the opposition to the deal among some members of Congress. The Senate Banking Committee plans to hold a hearing on the transaction and the federal review of it during the week of Feb. 27.

"They can pursue their diplomatic relationship with the Emirates, but that doesn't mean we have to give our ports over to the Emirates," Mr. Menendez said, referring to Ms. Rice and the Bush administration. "I think we need to act legislatively."

The bill would prohibit any foreign government from owning or controlling American port operations, but would give the president the authority to make exceptions, Mr. Menendez said.

The worldwide shipping industry is dominated by companies based in Europe and Asia, and most of the big container terminals along the Eastern seaboard are operated by foreign-owned companies.

Mr. Menendez, whose district includes the ports of Newark and Elizabeth, called the country's ports "a very significant hole within our security blanket." More than 90 percent of the cargo that enters the country by ship does not receive any security screening, he said.



Copyright 2006The New York Times Company

Firm Sues to Block Foreign Port Takeover
By TED BRIDIS, Associated Press Writer

A company at the Port of Miami has sued to block the takeover of shipping operations there by a state-owned business in the United Arab Emirates. It is the first American courtroom effort to capsize a $6.8 billion sale already embroiled in a national debate over security risks at six major U.S. ports affected by the deal.

The Miami company, a subsidiary of Eller & Company Inc., presently is a business partner with London-based Peninsular and Oriental Steam Navigation Co., which Dubai Ports World purchased last week. In a lawsuit in Florida circuit court, the Miami subsidiary said that under the sale it will become an "involuntary partner" with Dubai's government and it may seek more than $10 million in damages.

The Miami subsidiary, Continental Stevedoring & Terminals Inc., said the sale to Dubai was prohibited under its partnership agreement with the British firm and "may endanger the national security of the United States." It asked a judge to block the takeover and said it does not believe the company, Florida or the U.S. government can ensure Dubai Ports World's compliance with American security rules.

A spokesman for Peninsular and Oriental indicated the company had not yet seen the lawsuit and declined to comment immediately.

The lawsuit represents the earliest skirmish over lucrative contracts among the six major American ports where Peninsular and Oriental runs major commercial operations: New York, New Jersey, Baltimore, New Orleans, Miami and Philadelphia. The lawsuit was filed moments before the court closed Friday and disclosed late Saturday by people working on the case.

The sale, already approved by the Bush administration, has drawn escalating criticism by lawmakers in Washington who maintain the United Arab Emirates is not consistent in its support of U.S. terrorism-fighting efforts. At least one Senate oversight hearing is planned for later this month.

The Port of Miami is among the nation's busiest. It is a hub for the nation's cruise ships, which carry more than 6 million passengers a year, and the seaport services more than 30 ocean carriers, which delivered more than 1 million cargo containers there last year.

A New Jersey lawmaker said Saturday he intends to require U.S. port security officials be American citizens, to prevent overseas companies operating domestic shipping facilities from hiring foreigners in such sensitive positions. Republican Frank A. LoBiondo, chairman of the Coast Guard and Maritime Transportation Subcommittee, cited "significant" security worries over the sale to Dubai Ports World.

Caught by surprise over the breadth of concerns expressed in the United States, Dubai is cautiously organizing its response. The company quietly dispatched advisers to reassure port officials along the East Coast, and its chief operating officer — internationally respected American shipping executive Edward "Ted" H. Bilkey — is expected to travel to Washington this week for meetings on Capitol Hill and elsewhere.

The Bush administration in recent days has defended its approval of the sale, and has resisted demands by Congress to reconsider. State Department spokesman Sean McCormack described the United Arab Emirates on Friday as a "long-standing friend and ally" and said the United States and UAE had a good relationship.

President Bush visited the seaport in Tampa, Fla., but did not mention the dispute Friday. The president said an important element of defeating terrorism was taking precautions domestically and working with local government officials.

"We've got to protect ourselves by doing smart things in America," Bush said. "I appreciate working with the mayors on homeland security issues."

One of those mayors, Martin O'Malley of Baltimore, on Saturday harshly criticized the president's approval of the ports deal as an "outrageous, reckless and irresponsible decision" and urged the White House to reconsider the sale. Baltimore is one of the affected ports, and O'Malley is co-chairman of the U.S. Conference of Mayors' Task Force on Homeland Security. O'Malley also is running for the Democratic gubernatorial nomination in Maryland.

Dubai Ports World declined through a spokesman to respond to O'Malley's remarks.

In New York, families of some victims from the September 2001 terror attacks planned to criticize the deal during a press conference Sunday with Democratic Sen. Charles Schumer (news, bio, voting record), a leading critic of the sale. Schumer said he is dubious any assurances can justify involvement by the United Arab Emirates in American ports.

Schumer and other critics have cited the UAE's history as an operational and financial base for the hijackers who carried out the attacks against New York and Washington.

"A lot of families are incensed by this, because you're talking about the safety of the country," said William Doyle, whose son Joseph died at the World Trade Center. ""We have a problem already in our ports because all of our containers aren't checked, but now they want to add this unknown? It's not right."

LoBiondo's legislative proposal would amend federal maritime laws to require facility security officers, which operate at terminals in every U.S. port, to be American citizens. LoBiondo said there are presently no citizenship requirements, which he said permits foreign companies who are or become partners in domestic terminal operations to employ security officers who are not Americans.

"We cannot be lax about our nation's security nor fail to recognize that our ports are realistic targets of terrorists," LoBiondo said.



Copyright © 2006 The Associated Press. All rights reserved. The information contained in the AP News report may not be published, broadcast, rewritten or redistributed without the prior written authority of The Associated Press.


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February 19, 2006
Lawmakers Increase Criticism of Dubai Deal for Ports
By BRIAN KNOWLTON,
International Herald Tribune
By BRIAN KNOWLTON

International Herald Tribune

WASHINGTON, Feb. 19 — Legislators from both parties continued today to sharply criticize the Bush administration's approval of a recent sale that would give a Dubai company control over shipping facilities at six leading American ports, saying that it raised fundamental security issues.

Dubai Ports World, a state-owned company, is completing its $6.8 billion purchase of the Peninsular and Oriental Steam Navigation Company, which operates commercial operations at shipping terminals in New York, New Jersey, Baltimore, New Orleans, Miami and Philadelphia.

The homeland security secretary, Michael Chertoff, reiterated the Bush administration's defense of the arrangement, saying today that such transactions were closely examined by a committee that includes several federal departments or agencies, including his own, the Treasury Department and the F.B.I. He noted, too, that Dubai is considered an American ally in fighting terrorism.

"We put safeguards in place and assurances in place that make everybody comfortable," Mr. Chertoff told ABC News. But he declined to say what safeguards were being implemented, saying that the matter was classified.

A range of Democrats criticized the port takeover in stinging terms, implying that it showed poor judgment by an administration that has made national security its top priority. They said security at American ports — where only 5 percent of incoming cargo is inspected — is one of the country's biggest vulnerabilities.

Senator Charles E. Schumer of New York, who last week had asked Mr. Chertoff and the Treasury Department to review the sale, called President Bush today to override the committee's approval. Appearing at a news conference with family members of people killed on Sept. 11, he called for a 90-day investigation into all contracts with foreign governments at American ports.

Several Republicans also expressed doubts about a transaction that appears to pit security concerns against the Bush administration's strong support for free world trade.

Senator Lindsey Graham, Republican of South Carolina, said the administration's approval of the transaction was "unbelievably tone-deaf politically." He told Fox News, "I don't think now's the time to outsource major port security to a foreign country."

Senator Barbara Boxer, Democrat of California, called it "ridiculous" for the administration to say it had taken undisclosed steps to ensure there was no problem "for a nation that had ties to 9/11 to take over part of our port operations in many of our largest ports."

The Sept. 11 plotters funneled money through Dubai, and two came from the United Arab Emirates, but Mr. Chertoff insisted that this "doesn't mean that every company there is automatically guilty or automatically has to be excluded from owning something here."

Ms. Boxer said she would support legislation to bar foreign companies from managing American ports. "We have to have American companies running our own ports," she told CBS News. "Our ports are soft targets."

"I don't think we're being overly paranoid," she said.

Peninsular and Oriental, the world's fourth-largest ports company, is currently British-owned.

Representative Jane Harman of California, ranking Democrat on the House intelligence committee, said of the transaction, "I think it's stunning and I'm very disturbed about it."

Ms. Harman, whose district encompasses the ports of Los Angeles and Long Beach, told CNN, "I would not like Dubai or some other foreign government running those ports."

She urged the administration to provide Congress with classified briefings on the port takeover.

Several other Democrats questioned the deal earlier, including Senator Hillary Rodham Clinton and Senator Robert Menendez of New Jersey.

"It's suspicious on its face," said Senator Saxby Chambliss, Republican of Georgia, a member of the intelligence committee. "But is it the right decision? It's difficult to say."

Another Republican, Representative Frank A. LoBiondo of New Jersey, has called for legislation to require that United States port security officials be American citizens. Mr. LoBiondo, chairman of the Coast Guard and maritime transportation subcommittee, part of the House Transportation and Infrastructure Committee, said the sale raised "significant" security concerns.

And two Pennsylvania legislators wrote President Bush on Friday to express "extreme concern" about the transaction. Representative Curt Weldon, a Republican, and Robert Brady, a Democrat, urged Bush to "closely examine this decision, and to act to prevent its implementation."

They said, according to Mr. Weldon's Web site, that the acquisition "would transfer a vital national defense asset to a foreign nation in an unstable region" of high terrorist activity and strong anti-American sentiment. Mr. Weldon is vice chairman of the House Armed Services and Homeland Security Committees.

Dubai Ports World, caught off guard by the ferocity of criticism, has responded cautiously. The company has quietly sent officials to reassure port officials, The Associated Press reported.

Mr. Chertoff, without providing details, said that "we have dealt with this port operator in Dubai for years, because many of our port security operations don't begin when you hit American territory; they actually begin at the port of embarkation."

He said Congress was welcome to examine the transaction and to receive classified briefings. But he noted that along with its focus on security, the administration wanted to support a robust world trading system.

One of the few legislators to come close to defending the transaction was Senator Joseph I. Lieberman, Democrat of Connecticut, who is considered a security hawk among Democrats.

He told ABC News that he was "not yet" prepared to try to block the sale. He noted that many port terminals in the United States are foreign-owned.

"I worry more about the failure to invest in port security" - to improve the ability to detect smuggled weapons of mass destruction, for example - "than I worry right now about this sale," Mr. Lieberman said.



Copyright 2006The New York Times

February 20, 2006
More Criticism of Port Takeover by Arab Entity
By THE ASSOCIATED PRESS
WASHINGTON, Feb. 19 (AP) — Conditions set by the federal government for approving an Arab company's takeover of operations at six major American ports are not enough to guard against terrorist infiltration, the chairman of the House Homeland Security Committee said Sunday.

"I'm aware of the conditions, and they relate entirely to how the company carries out its procedures, but it doesn't go to who they hire, or how they hire people," said the chairman, Representative Peter T. King, Republican of New York. Mr. King said senior administration officials had shared details of the sale with him.

"They're better than nothing, but to me they don't address the underlying conditions, which is, how are they going to guard against things like infiltration by Al Qaeda or someone else? How are they going to guard against corruption?" Mr. King said in an interview with The Associated Press.

He spoke in response to remarks that Michael Chertoff, the secretary of homeland security, made Sunday on the ABC program "This Week."

Mr. Chertoff defended the security review of Dubai Ports World, the company given permission to take over the port operations, but declined to discuss specifics, saying that information was classified.

"We make sure there are assurances in place, in general, sufficient to satisfy us that the deal is appropriate from a national security standpoint," Mr. Chertoff said.

Peninsular and Oriental Steam Navigation Company, a British shipping company, was bought last week by Dubai Ports World, which is owned by the United Arab Emirates. Peninsular and Oriental operates the cruise ship terminal on the West Side of Manhattan and has operations in New Jersey, Baltimore, New Orleans, Miami and Philadelphia.

Critics of the deal have cited the United Arab Emirates' history as an operational and financial base for the hijackers who carried out the attacks of Sept. 11, 2001.

A Miami company, Continental Stevedoring and Terminals, has filed suit in a Florida court challenging the deal, saying that under the sale, it would become an "involuntary partner" with Dubai's government.

Senator Charles E. Schumer, Democrat of New York, urged President Bush on Sunday to override the agreement.



Copyright 2006The New York Times

CONGRESSMEN THREATEN PROBE OF U.S. SEAPORTS DEAL
By Audrey Hudson
THE WASHINGTON TIMES
-----------------------------------------------------------
Lawmakers on both sides of the aisle yesterday threatened a congressional investigation of a deal to give control of six U.S. seaports to an Arab company, while one key Republican said the Bush administration's security reassurances were not adequate.

Democrats also are threatening legislation to block foreign governments from operating U.S. ports.

"I think we've got to look into this company. I think we've got to ensure ourselves that the American people's national-security interests are going to be protected," said Sen. Evan Bayh, Indiana Democrat. "And frankly, I think the threshold ought to be a little higher for a foreign firm. There can't be a choice between profits and protecting the American people."

The classified deal would let Dubai Ports World (DPW) of the United Arab Emirates run ports in New York, New Jersey, Baltimore, Philadelphia, New Orleans and Miami. London-based Peninsular and Oriental Steam Navigation Co., which had been running the six ports, was bought last week by the government-owned DPW.

Sen. Lindsey Graham, a South Carolina Republican who appeared on "Fox News Sunday" with Mr. Bayh, called the deal "tone-deaf politically at this point in our history" and agreed that "we certainly should investigate it."

"I'm not so sure it's the wisest political move we could have made. Most Americans are scratching their head wondering why this company, from this region, now," Mr. Graham said. "I don't think now is the time to outsource major port security to a foreign-based company."

Rep. Peter T. King, New York Republican and chairman of the House Homeland Security Committee, told the Associated Press yesterday that the takeover terms are insufficient to guard against terrorist infiltration.

"I'm aware of the conditions, and they relate entirely to how the company carries out its procedures, but it doesn't go to who they hire, or how they hire people," Mr. King said.

"They're better than nothing, but to me they don't address the underlying conditions, which is how are they going to guard against things like infiltration by al Qaeda or someone else? How are they going to guard against corruption?" Mr. King said.

Homeland Security Secretary Michael Chertoff, whose agency participated in negotiations along with the Justice Department and other administration officials, said he welcomed a review by Congress.

"There is a legal process Congress created for a committee to sit and review this. It's Treasury, Commerce, DHS [Department of Homeland Security], FBI is involved, and DoD [Department of Defense] is involved. We look at these transactions," Mr. Chertoff told CNN's "Late Edition."

Mr. Chertoff declined on several Sunday political talk shows to address specifics of the deal, including whether it has been finalized. He described the process as "very thorough" and said "necessary conditions or safeguards have to be put into place."

"The discussions are classified. I can't get into the specifics here. But what I can tell you in general is this: We examine the transaction; we look at what the issue of the threat is. If necessary, we build in conditions or requirements that, for extra security, would have to be met in order to make sure that there isn't a compromise to national security," Mr. Chertoff said.

The Coast Guard and Customs and Border Protection are in charge of port security, not port operators, "and you can be sure that any transaction that goes forward is going to be carefully reviewed, and is also going to be carefully subject to the expertise of Coast Guard and Customs and Border Protection," Mr. Chertoff said.

Sen. Robert Menendez, New Jersey Democrat, cited Mr. Chertoff's remarks as proof that the administration "just does not get it."

Sen. Barbara Boxer, California Democrat, agreed, calling the secrecy "ridiculous" and saying she will support legislation "to say no more, no way" to foreign ownership of U.S. ports.

"We have to have American companies running our own ports. Our ports are soft targets," Mrs. Boxer said. "Al Qaeda has said if they attack, that's one of the places they're looking."

"I don't think we're being overly paranoid. It's very simple to say that our infrastructure has to be protected and let's have American companies do that or the government itself," Mrs. Boxer said.

Sen. Charles E. Schumer, New York Democrat, yesterday called on President Bush personally to "override the agreement and conduct a special investigation into the matter." He was joined at a press conference by some family members of September 11 victims.

















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VOICE OF AMERICA
US Security Chief Says UAE Ports Deal is No Threat
By Stephanie Ho
Washington
19 February 2006

Michael Chertoff during his testimony before Senate Committee on Homeland Security and Governmental Affairs, Feb. 15, 2006

Homeland Security Secretary Michael Chertoff is defending a deal giving a company in the United Arab Emirates control over terminals at key U.S. ports. Critics in Congress say the deal is a threat to national security.

Critics have blasted the recent deal, in which government-owned Dubai Ports World purchased London-based Peninsular and Oriental Steam Navigation Company, a private company that runs commercial operations in six major U.S. ports.

The nearly $7-billion sale has been approved by the Committee on Foreign Investment in the United States, which includes officials from the Departments of Commerce, Defense, Homeland Security, Justice, and State.

Homeland Security Secretary Michael Chertoff emphasized that the deal has undergone close scrutiny, although he said he could not provide details.

"Without getting into classified information, what we typically do if there are concerns, is we build in certain conditions or requirements that the company has to agree to to make sure we address the national security concerns," said Michael Chertoff. "And here, the Coast Guard and Customs and Border Protection really played a leading role for our department in terms of designing those conditions and making sure that they are obeyed."

A bipartisan group of senators and House members last week called on the Bush Administration to review the sale, saying it undermines national security.

They noted that the United Arab Emirates served as a base for the hijackers who took part in the September 11, 2001 terrorist attacks on the United States. They also argue that the UAE was one of only three countries that recognized the Taleban as Afghanistan's legitimate government.

The Bush Administration considers the United Arab Emirates an ally in the war on terror.

Secretary Chertoff told NBC's Meet the Press he believes it is not fair to automatically cut off business with entire countries, like the United Arab Emirates, just because there were some UAE connections to the September 11 terrorists. He pointed to the so-called shoebomber, the terrorist who tried to detonate a bomb in his shoe while on an airplane, to make his point.

"Well, Richard Reid was British," he said. "He was going to blow up an airliner. We do not say the British cannot buy companies here."

He added that he believes the committee's careful review of the deal, which includes building safeguards into it, reduces any risks to the United States.

"And this is part of the balancing of security, which is our paramount concern, with the need to still maintain a real robust global trading environment," explained Michael Chertoff.

The six major American ports affected are Baltimore, Miami, New Jersey, New Orleans, New York, and Philadelphia.

The Associated Press reports that a company at the Port of Miami has sued to block the UAE company's takeover of shipping operations there. The company, Continental Stevedoring and Terminals, said it will become an "involuntary partner" of Dubai Ports World. It also expressed doubts that the UAE company, Florida or the U.S. government can ensure compliance with American security rules.

http://www.cnn.com/2006/POLITICS/02/20/port.security/

Ridge: White House should explain port deal
Lawmakers voice concerns over takeover by Dubai-based firm

Monday, February 20, 2006; Posted: 4:56 p.m. EST (21:56 GMT)


WASHINGTON (CNN) -- The Bush administration should disclose more about a deal that would give a United Arab Emirates-based company management of six major U.S. seaports, former Homeland Security Secretary Tom Ridge said Monday.

The deal -- which will affect the ports of New York and New Jersey; Philadelphia, Pennsylvania; Baltimore, Maryland; Miami, Florida; and New Orleans, Louisiana -- has triggered security concerns among some members of Congress and the public.

The Bush administration has said the UAE is a key ally in the war on terror.

Others, however, point out that two of the September 11, 2001, hijackers were from the UAE. In addition, most of the hijackers received money channeled through various sources based in the UAE, according to the Justice Department and the 9/11 Commission.

Earlier this month, shareholders of the U.K.-based Peninsular and Oriental Steam Navigation Company (P&O) approved the company's acquisition by Thunder FZE, a subsidiary of Dubai-based Dubai Ports World.

P&O directs commercial operations at the six U.S. ports. The takeover by DPW means that the Dubai company will be in charge of those operations.

On Sunday, Sen. Charles Schumer, a New York Democrat, held a news conference with relatives of some of those killed in the terrorist attacks, and denounced the takeover. (Watch lawmakers call for deal to be stopped -- 2:55)

"Outsourcing the operation of our largest ports to a country with long involvement in terrorism is a homeland security accident waiting to happen," he said.

Other members of Congress have also been critical of the deal. On Friday, Democratic Sens. Robert Menendez of New Jersey and Hillary Clinton of New York announced they were working on legislation that would ban companies owned by foreign governments from controlling operations at U.S. ports.

Some Republican lawmakers have also expressed concern over the deal, including New York Rep. Peter King and South Carolina Sen. Lindsey Graham.

"We certainly should investigate it," Graham said Sunday on Fox News.

A Dubai Ports World spokesman told CNN that the firm has received all the necessary regulatory approvals, and that the security systems in place at the ports would only get better under the new management.

"All DP World ports are [International Security Port System] certified, as are any P&O ports in the U.S.," the spokesman said. "We intend to maintain or enhance current security arrangements, and this is business as usual for the P&O terminals."

Michael Seymour, the president of P&O's North American operations, said the company "has long worked with U.S. government officials in charge of security at the ports to meet all U.S. government standards."

"We are confident that the DP World purchase will ensure that our operations will continue to meet all relevant standards," he said.

Ridge said that during his tenure as secretary of Homeland Security from October 2001 to February 2005, he sat in on deals with similar national security concerns, and that he believes U.S. officials would not jeopardize national security.

But he also told CNN, "I think the anxiety and the concern [over the deal] that has been expressed by congressmen and senators and elsewhere is legitimate."

Industry official alleges 'racism'
A port security expert, meanwhile, told CNN that fears that the agreement will reduce U.S. security are based on "bigotry" and that "shameless" politicians are creating an issue they think will resonate with the public.

Kim Petersen, head of SeaSecure, a U.S.-based maritime security company, and executive director of the Maritime Security Council -- which represents 70 percent of the world's ocean shipping -- told CNN, "This whole notion that Dubai is going to control or set standards for U.S. ports is a canard ... is factually false."

Dubai Ports World, like all port owners, must abide by the Maritime Transportation Security Act passed by Congress in 2002 and International Ship and Port Facility Security codes enacted in 2004, he said. Both sets of security measures are enforced in the United States by the U.S. Coast Guard.

Petersen said DPW will be under "identical" security obligations, and said opposition to the purchase "comes down to bigotry [against] Arabs, which is one of the last acts of racism that is allowed by American society."

Petersen said the company has an "exemplary" record of security compliance certification.

Michael Chertoff, Ridge's successor as homeland security secretary, defended the deal in appearances on talk shows Sunday. He said federal law required a review of the sale by a committee that includes officials from the Homeland Security, Treasury and Commerce departments, along with the FBI and the Pentagon.

"We examine the transaction; we look at what the issue of the threat is. If necessary, we build in conditions or requirements that, for extra security, would have to be met in order to make sure that there isn't a compromise to national security," Chertoff said on CNN's "Late Edition."

An FBI spokesman who asked not to be identified by name, however, said, "The FBI general counsel sits on the inter-agency board. We looked at it, and in this case, since it was a port issue, we deferred to the Department of Homeland Security."

Karen Hughes, U.S. undersecretary of state for public diplomacy, also said the proposal went through a thorough security review.

"There is a longstanding partnership between our two countries," she told CNN.

And U.S. Secretary of State Condoleezza Rice, during a roundtable with Arab print journalists last week, said of the deal, "there was a thorough review. It was decided that this could be done and done safely."

Ridge: 'Transparency' needed
But Ridge said, "The bottom line is, I think we need a little bit more transparency here. There are some legitimate concerns about who would be in charge of hiring and firing, security measures, added technology in these ports that we'll need to upgrade our security.

"So I think it's very appropriate for the administration to go to the Hill and explain why they think they have not compromised security and, in fact, as they've announced, they will enhance and improve security," he said. "It's tough to see that right now on the surface."

CNN's Mike Ahlers, Caroline Faraj, Terry Frieden, Maria Gavrilovic and Phil Hirschkorn contributed to this report.

February 21, 2006
Pataki Joins Opposition to Takeover of Ports
By DAVID D. KIRKPATRICK
and PATRICK McGEEHAN
WASHINGTON, Feb. 20 — The Republican governors of New York and Maryland on Monday joined the growing chorus of criticism of an Arab company's takeover of operations at six major American ports. Both raised the threat of legal action to void contracts at ports in New York City and Baltimore.

"I have directed the Port Authority of New York and New Jersey to explore all legal options that may be available to them in regards to this transaction," Gov. George E. Pataki of New York said in a statement.

Gov. Robert L. Ehrlich Jr. of Maryland told reporters that he had "a lot of discretion" and was considering his options, including voiding the contract.

Officials of Dubai Ports World defended the speedy federal approval of its takeover, arguing that both the newly acquired North American division running the terminals and its new Arab parent company had worked closely with United States security officials for decades.

The unit, P & O Ports, "has long worked with the U.S. government officials in charge of security at the ports to meet all U.S. government standards, as do other foreign companies that currently operate ports in the United States," said Michael J. S. Seymour, the unit's president.

The Bush administration said on Thursday that its approval of the deal was final. The sale is scheduled to close on March 2.

Congressional criticism of the deal grew on Sunday after Michael Chertoff, secretary of homeland security, defended the arrangement in television appearances, saying there were unspecified "assurances in place" that the takeover was "appropriate from a national security standpoint."

Critics in both parties argue that a takeover by Dubai Ports World warranted special scrutiny. The company is controlled by the government of the United Arab Emirates, an ally of the United States that has also been home to terrorists, and its newly acquired P & O subsidiary operates major terminals in New York, New Jersey, Baltimore, New Orleans, Miami and Philadelphia.

Representative Peter T. King, a New York Republican, said the review was conducted in just 30 days — far too little time to thoroughly vet the company. "There wasn't a full investigation in the context of a post 9/11 world," he said.

Senator Charles E. Schumer, a New York Democrat, said, "You would just think that when a Dubai company is taking over, that is enough to raise a flag — at least to do a thorough review, at minimum." Two other Democratic senators, Hillary Rodham Clinton of New York and Robert Menendez of New Jersey, are expected to introduce legislation prohibiting the sale of terminal operators to foreign governments.

While Tom Ridge, former secretary of homeland security, has expressed confidence that American officials would not have approved the port deal if it put national security at risk, he said on Monday, "The bottom line is, I think we need a little bit more transparency here."

In an interview with CNN, he said it would be "very appropriate" for the administration to brief Congress on why it believes the port arrangement not only does not compromise security but will actually improve it.

People involved in the approval process said that, like all acquisitions of domestic businesses by foreign-owned companies, the Dubai Ports World acquisition was reviewed by the Committee on Foreign Investment in the United States, representing 12 federal agencies.

Anthony R. Coscia, the chairman of the Port Authority of New York and New Jersey, said the agency could not stop the Dubai company from assuming a 30-year lease on a major container terminal in New York Harbor unless some provision of the lease was violated.



Copyright 2006The New York Times Company

http://www.antiwar.com/eland/?articleid=8582

February 21, 2006
Dubai Ports World: Commercial Racial Profiling

by Ivan Eland
Some members of Congress, exhibiting post-9/11 jingoism and paranoia, are pressuring the Bush administration to reconsider its decision to allow Dubai Ports World, an Arab company, to take over operations at six U.S. ports. The approval should stand.

Congressman Peter T. King (R-NY), Chairman of the House Homeland Security Committee and, more importantly, a Congressman from an area near two of the ports that will be operated by Dubai Ports World, expressed this xenophobic view about Dubai’s acquisition of the British company that is currently operating the ports: “In the post-9/11 world, there should have been a presumption against this company.”

Why? Because two of the 9/11 hijackers happened to be from the United Arab Emirates (UAE), the country in which the company is based. Yet the British company, Peninsular and Oriental Steam Navigation Company, was allowed to operate the ports in New York, New Jersey, Baltimore, Philadelphia, Miami, and New Orleans despite Richard Reid’s (the infamous “shoe bomber”) British citizenship. And American companies are permitted to operate some U.S. ports despite the fact that Timothy McVeigh, Jose Padilla, and other U.S. citizens are convicted or accused terrorists. For that matter, how do we know that even an American company running the ports would be immune from terrorist infiltration?

In fact, since two of the 9/11 hijackers were from the UAE, Dubai Ports World might even have a stronger interest in operating safe and secure ports than companies from other nations. Dubai has a worldwide presence, an extensive history of operating ports, and a reputation to uphold. If a terrorist incident occurred in one of its ports, the company would probably lose more business worldwide than a non-Arabic company would under the same circumstances.

The company should be evaluated on its qualifications to operate the ports, not on McCarthy-like litmus tests for Arabs or the UAE. Besides, although Dubai Ports World will operate the ports, U.S. federal and local authorities will remain in charge of security.

Members of Congress such as Congressman King and New York Senator Charles E. Schumer certainly get points with their New York constituents for defending the nation against the onslaught by “Arab terrorists,” and perhaps trying to protect U.S. companies from foreign competition as well.

But if Arab companies truly cannot be trusted to operate U.S. ports, then shouldn’t they be banned from all involvement with U.S. airports, farming, electrical generation, water works, nuclear power plants, chemical, biomedical, and pharmaceutical production, and tunnel, bridge, stadium, and skyscraper construction? Extending this flawed logic further, perhaps even airlines from Arab countries should be banned from landing at U.S. airports because they might be used in terrorism or bring terrorists into the United States—in spite of the fact that the planes used on 9/11 were U.S. airliners.

After 9/11, U.S. authorities incarcerated and questioned people based on their Arabic nationalities and Islamic religion. The vast majority of them had no connection to terrorism or the 9/11 attacks. This was widely perceived to have been an overreaction. Yet more than four years after 9/11, this racial and ethnic profiling has now moved from individuals to businesses. The Bush administration was right to insist that no security threat emanated from a routine business purchase of a British firm by an Arab company. The politicians should quit posturing and move on to more important issues.

http://www.guardian.co.uk/worldlatest/stor...5635457,00.html

GOP Governors Threaten to Block Port Deal

Tuesday February 21, 2006 10:01 AM


AP Photo NJJM101< a0437-200602210342

By WILL LESTER

Associated Press Writer

WASHINGTON (AP) - Two Republican governors are threatening legal action to block an Arab company from taking over operations in major U.S. ports and some GOP lawmakers say the deal should be closely examined.

In the uneasy climate after the Sept 11 terrorist attacks, the Bush administration decision to allow the transaction is threatening to develop a major political headache for the White House.

New York Gov. George Pataki and Maryland Gov. Robert Ehrlich on Monday voiced doubts about the acquisition of a British company that has been running six U.S. ports by Dubai Ports World, a state-owned business in the United Arab Emirates.

The British company, Peninsular and Oriental Steam Navigation Co., runs major commercial operations at ports in Baltimore, Miami, New Jersey, New Orleans, New York and Philadelphia.

Both governors indicated they may try to cancel lease arrangements at ports in their states because of the DP World takeover.

``Ensuring the security of New York's port operations is paramount and I am very concerned with the purchase of Peninsular & Oriental Steam by Dubai Ports World,'' Pataki said in a news release. ``I have directed the Port Authority of New York and New Jersey to explore all legal options that may be available to them.''

Ehrlich, concerned about security at the Port of Baltimore, said Monday he was ``very troubled'' that Maryland officials got no advance notice before the Bush administration approved the Arab company's takeover of the operations at the six ports.

``We needed to know before this was a done deal, given the state of where we are concerning security,'' Ehrlich told reporters in the State House rotunda in Annapolis.

The arrangement brought protests from both political parties in Congress and a lawsuit in Florida from a company affected by the takeover.

Public fears that the nation's ports are not properly protected, combined with the news of an Arab country's takeover of six major ports, proved a combustible mix.

Republican Sen. Lindsay Graham of South Carolina said on Fox News Sunday that the administration approval was ``unbelievably tone deaf politically.'' GOP Rep. Tom Davis of Virginia said on ABC's ``This Week,'' ``It's a tough one to explain, but we're in a global economy. ... I think we need to take a very close look at it.''

Democratic Sen. Robert Menendez of New Jersey said Monday that he and Sen. Hillary Rodham Clinton, D-N.Y., will introduce legislation prohibiting the sale of port operations to foreign governments.

At least one Senate oversight hearing was planned for later this month.

Critics have noted that some of the 9/11 hijackers used the UAE as an operational and financial base. In addition, they contend the UAE was an important transfer point for shipments of smuggled nuclear components sent to Iran, North Korea and Libya by a Pakistani scientist.

The Bush administration got support Monday from former President Carter, a Democrat and frequent critic of the administration.

``My presumption is, and my belief is, that the president and his secretary of state and the Defense Department and others have adequately cleared the Dubai government organization to manage these ports,'' Carter told CNN. ``I don't think there's any particular threat to our security.''

Homeland Security Secretary Michael Chertoff made the rounds on the talk shows Sunday, asserting that the administration made certain the company agreed to certain conditions to ensure national security. H said details of those agreements were secret.

During a stop Monday in Birmingham, Ala., Attorney General Alberto Gonzales said the administration had a ``very extensive process'' for reviewing such transactions that ``takes into account matters of national security, takes into account concerns about port security.''

---

Associated Press writers Devlin Barrett in Washington, Matthew Verrinder in Newark, N.J., and Tom Stuckey in Annapolis, Md., contributed to this story.

http://newsvote.bbc.co.uk/mpapps/pagetools...ess/4731560.stm

P&O confident of Dubai takeover
P&O has said it is confident its takeover by Dubai Ports World will go ahead despite mounting opposition in the US.
Several US senators have warned they will oppose the $6.8bn (£3.9bn) deal over "national security concerns".

P&O controls six major ports in the US, including New York and Miami.

Meanwhile, a company based in the port of Miami has begun court action to prevent the takeover by DP World, which is backed by the Dubai government.

President Bush's administration has given its backing to the deal, which was agreed by the two firms last week, and has resisted calls from Congress to reconsider its stance.

Security worries

But lawmakers from both the Democratic and Republican parties have questioned the takeover, and at least one Senate oversight hearing is planned for later this month.

Over the weekend, opponents of the deal voiced their concerns about whether security would be compromised by allowing a firm backed by a member of the United Arab Emirates (UAE) to takeover major US port operations.


We make sure there are assurances in place, in general, sufficient to satisfy us that the deal is appropriate from a national security standpoint
Michael Chertoff, Homeland Security Secretary

The chairman of the House of Representatives Homeland Security Committee, Republican Senator Lindsey Graham, has called for an immediate freeze on the deal and demanded a "full and thorough investigation" of the sale.

He also dubbed the government's support of the deal "politically tone deaf".

Senator Chuck Schumer said: "The question that needs to be answered is whether or not they (Dubai) can be trusted to operate our ports in this post 9-11 world."

Assurances in place

But the US Government dismissed the concerns, saying it had given the deal a thorough review and had implemented the "appropriate" conditions and safeguards where necessary.


"We make sure there are assurances in place, in general, sufficient to satisfy us that the deal is appropriate from a national security standpoint," Homeland Security Secretary Michael Chertoff told ABC television.

However, he declined to give further details saying the information was classified.

DP World also shrugged off the claims saying security was "at the forefront" of its business.

Meanwhile P&O has insisted it has cleared all the correct regulatory channels after a partner in Miami filed a lawsuit to block the deal.

Eller & Company subsidiary Continental Stevedoring & Terminals launched the action late on Friday, saying that the sale was prohibited under its current agreement with P&O.

It argued that under the terms of sale it became an "involuntary partner" with Dubai and it may seek damages of $10m.

The takeover of P&O will make DP World one of the three largest container ports businesses in the world when it is finalised on 2 March.


Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/1/hi/business/4731560.stm

Published: 2006/02/20 13:19:05 GMT

© BBC MMVI

http://thinkprogress.org/2006/02/20/uae-military-equipment/

UAE Would Also Control Shipments of Military Equipment For The U.S. Army

There is bipartisan concern about the Bush administration’s decision to outsource the operation of six of the nation’s largest ports to a company controlled by the United Arab Emirates (UAE) because of that nation’s troubling ties to international terrorism. The sale of P&O to Dubai World Ports would give the state-owned company control of “the ports of New York, New Jersey, Baltimore, New Orleans, Miami and Philadelphia.”

A major part of the story, however, has been mostly overlooked. The company, Dubai Ports World, would also control the movement of military equipment on behalf of the U.S. Army through two other ports. From today’s edition of the British paper Lloyd’s List:

[P&O] has just renewed a contract with the United States Surface Deployment and Distribution Command to provide stevedoring [loading and unloading] of military equipment at the Texan ports of Beaumont and Corpus Christi through 2010.

According to the journal Army Logistician “Almost 40 percent of the Army cargo deployed in support of Operation Iraqi Freedom flows through these two ports.”

Thus, the sale would give a country that has been “a key transfer point for illegal shipments of nuclear components to Iran, North Korea and Lybia” direct control over substantial quantities U.S. military equipment.

Filed under: Homeland Security
Posted by Judd February 20, 2006 7:53 pm

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Geopolitical Diary: The UAE and U.S. Ports
February 21, 2006 04 13 GMT



A British company with the quaint Victorian name of Peninsular and Oriental Steam Navigation Co. was purchased last week by Dubai Ports World, a company owned by the government of the United Arab Emirates, at a price topping $6 billion. From a geopolitical point of view, this is just another corporate acquisition, made interesting by the fact that it clearly involves a cash-flush oil producer that is diversifying its holdings.

The story has one minor wrinkle, however. Peninsular and Oriental Steam Navigation is deeply involved in operating the ports of New York, New Jersey, Baltimore, New Orleans, Miami and Philadelphia. So, to put it differently, an Arab and Muslim country has taken control of key operations at some of the most important ports in the United States. As Sen. Charles Schumer (D-N.Y.) put it, "The question that needs to be answered is whether or not they can be trusted to operate our ports in this post-9/11 world." The Bush administration's view, as expressed by Homeland Security Secretary Michael Chertoff, is: "We make sure there are assurances in place, in general, sufficient to satisfy us that the deal is appropriate from a national security standpoint."

The issue comes down to this. The UAE is an Arab and Muslim country. The government of the UAE is about as pro-American as you can get in that part of the world. Certainly, there are UAE citizens who are jihadists -- one of the Sept. 11 hijackers, Marwan al-Shehi, was from the UAE. At the same time, the government has a security agreement with the United States, and extensive commercial relations tie the two together. The UAE tries to be a kind of Switzerland in the Middle East, focusing on business and trying to be the commercial gateway to the region.

If the United States can't do business with the UAE, then the United States cannot do business anywhere in the Islamic world. The problem Washington faces is this: On the one hand, the administration has been criticized for having a simplistic, monochromatic view of Islam, and of making war against Islam in general. But on the other hand, when the administration draws distinctions between governments within the Muslim world, it gets hammered over threats to U.S. security. Somebody has got to straighten this out.

Now, the problem might simply be that a UAE company will be managing the U.S. ports. That is not a trivial concern. But viewed another way, a British company previously was managing the ports, and there are plenty of jihadists traveling on British passports these days who are at least as dangerous as anyone in the UAE. It is not clear to us that these ports were any safer when operated by a British company than they would be under the UAE.

If Washington rejects the UAE's ability to operate commercial concerns in the United States, then the question is going to be: Precisely what are the benefits of siding with the United States? The United States might draw a line saying that Muslim governments can do business with the United States but not control critical infrastructure. Nevertheless, two geopolitical questions remain. First, how does Washington reward countries that sided with the United States in the jihadist war? And second, if there are no rewards, what are the benefits of such alignment?

There is no question that the UAE does not run a fully capable counterintelligence system. There are certainly jihadists who might slip into the operation. But no country runs a fully capable system, and jihadists could slip in anywhere. There is an argument to be made that in a time of war, the United States must limit its commercial relations with any Muslim country. If that is the policy, then someone should state it. If the U.S. strategy is divide the Muslim world and reward those who side with the United States with commercial relations, then state that.

One way or another, a decision has to be made.

http://www.dailystar.com.lb/article.asp?ed...rticle_id=22323
U.S. ports up in arms at implications of U.A.E.'s takeover of P&O


Compiled by Daily Star staff
Monday, February 20, 2006


WASHINGTON: A company at the Port of Miami has sued to block the takeover of shipping operations there by the British based Peninsular and Oriental Steam Navigation Co. (P&O), which the state-owned firm Dubai Ports World purchased last week.

It is the first American courtroom effort to capsize a $6.8 billion sale already embroiled in a national debate over security risks at six major U.S. ports affected by the deal.

The Miami company, Continental Stevedoring & Terminals Inc. - a subsidiary of Eller and Company Inc., - brought the lawsuit to a Florida circuit court, claiming that under the sale it will become an "involuntary partner" with Dubai's government. It may seek more than $10 million in damages.

The Miami subsidiary said the sale to Dubai was prohibited under its partnership agreement with P&O and "may endanger the national security of the U.S."

It asked a judge to block the takeover and said it does not believe the company, Florida or the U.S. government can ensure the firm's compliance with American security rules.

The Committee on Foreign Investment in the United States, a U.S. inter-agency panel that reviews security implications of foreign takeovers of strategic assets, reviewed the transaction and said all P&O ports are International Ship and Port Facility Security certified, including those in the U.S.

The lawsuit represents the first skirmish over lucrative contracts among the six major American ports where P&O runs major commercial operations: New York, New Jersey, Baltimore, New Orleans, Miami and Philadelphia. U.S. seaports handle 2 billion tons of freight each year. Only about 5 percent of containers are examined on arrival.

The Port of Miami is among the nation's busiest. It is a hub for the nation's cruise ships, which carry more than 6 million passengers a year, and the seaport services more than 30 ocean carriers, which delivered more than 1 million cargo containers there last year.
http://www.dailystar.com.lb

Both Republicans and Democrats in Congress urged the administration to conduct a more rigorous review of the sale-already approved by the Bush administration. Some expressed fears that the U.A.E. was used as a conduit for parts used for nuclear proliferation and that the local banking system had been abused by financiers with possible links to terrorist organizations.

A U.S. congressman said Saturday he wants to require that security officials at U.S. ports be American citizens to prevent overseas companies operating shipping facilities here from hiring foreigners in such sensitive positions.

Republican Frank A. LoBiondo, chairman of the Coast Guard and Maritime Transportation Subcommittee, said he wants the new mandatory citizenship requirements approved by Congress and U.S. President George W. Bu