Documents Reveal White House Deal on Ports

[Jasman0717 9]

WASHINGTON (AP) - Under a secretive agreement with the Bush administration, a company in the United Arab Emirates promised to cooperate with U.S. investigations as a condition of its takeover of operations at six major American ports, according to documents obtained by The Associated Press.

The U.S. government chose not to impose other, routine restrictions.

In approving the $6.8 billion purchase, the administration chose not to require state-owned Dubai Ports World to keep copies of its business records on U.S. soil, where they would be subject to orders by American courts. It also did not require the company to designate an American citizen to accommodate requests by the government.

Outside legal experts said such obligations are routinely attached to U.S. approvals of foreign sales in other industries.

Dubai Ports agreed to give up records on demand about "foreign operational direction" of its business at the U.S. ports, according to the documents. Those records broadly include details about the design, maintenance or operation of ports and equipment. It also pledged to continue participating in programs to stop smuggling and detect illegal shipments of nuclear materials.

"They're not lax but they're not draconian," said James Lewis, a former U.S. official who worked on such agreements. If White House officials negotiating the deal had predicted the firestorm of criticism over it, "they might have made them sound harder."

The conditions over the sale of London-based Peninsular and Oriental Steam Navigation Co. were detailed in U.S. documents marked "confidential." Such records are regularly guarded as trade secrets, and it is highly unusual for them to be made public.

The Republican head of the Senate Armed Services Committee, John Warner of Virginia, planned an oversight hearing Thursday. Warner has expressed support for the agreement, describing the UAE as an important ally against terrorism.

Rep. Peter King of New York, the Republican chairman of the House Homeland Security Committee, said the conditions are evidence the Bush administration was concerned about security. "There is a very serious question as to why the records are not going to be maintained on American soil subject to American jurisdiction," King said.

Another critic, Sen. Charles Schumer, D-N.Y., added: "These new revelations ask more questions than they answer."

The disclosure of the negotiated conditions came as the White House acknowledged President Bush was unaware of the pending sale until the deal had been already approved by his administration.

Bush has pledged to veto any bill Congress might approve to block the agreement, but some lawmakers said they still were determined to capsize it.

Dubai Port's top American executive, chief operating officer Edward H. Bilkey, said he will work in Washington to persuade skeptical lawmakers they should endorse the deal; several Senate oversight hearings already are scheduled.

"We're disappointed," Bilkey told the AP in an interview. "We're going to do our best to persuade them that they jumped the gun. The UAE is a very solid friend, as President Bush has said."

Under the deal, the government asked Dubai Ports to operate American seaports with existing U.S. managers "to the extent possible." The company promised to take "all reasonable steps" to assist the Homeland Security Department.

The administration required Dubai Ports to designate an executive to handle requests from the U.S. government, but it did not specify this person's citizenship.

It said Dubai Ports must retain paperwork "in the normal course of business" but did not specify a time period or require corporate records to be housed in the United States. Outside experts said stricter provisions are routine in other industries.

Foreign communications companies with American customers are commonly required to store business records in the United States. A senior U.S. official said the Bush administration considers shipping manifests less sensitive. The official spoke on condition of anonymity because of the confidential nature of the agreement.

Bush faces a potential rebellion over the sale from leaders of his own party, as well as a fight from Democrats. It puts Dubai Ports in charge of major terminal operations in New York, New Jersey, Baltimore, New Orleans, Miami and Philadelphia.

In Lebanon, Secretary of State Condoleezza Rice said Thursday that the agreement was thoroughly vetted in a review process that took approximately three months. "This is supposed to be a process that raises security concerns, if they are there, but does not presume that a country in the Middle East should not be capable of doing a deal like this." She described the United Arab Emirates as "a very good ally" and said "if more details need to be made available then I'm sure they will be."

The White House said President Bush did not know about the agreement until recently. The AP first reported U.S. approval of the sale to Dubai Ports on Feb. 11, and many members of Congress have said they learned about it from the AP.

"I think somebody dropped the ball," said Rep. Vito Fossella, R-N.Y. "Information should have flowed more freely and more quickly up into the White House. I think it has been mishandled in terms of coming forward with adequate information."

---

Associated Press Writer Anne Gearan in Riyadh, Saudi Arabia, contributed to this report.

[almaty 19]

allot of this will be coming out Jim....i think Bush is misdirected ( i am giving him the benefit here) by his circles of advisors, who he relies on to do his thinking...

[Jasman0717 9]

allot of this will be coming out Jim....i think Bush is misdirected ( i am giving him the benefit here) by his circles of advisors, who he relies on to do his thinking...

This has the rumblings of another 'Watergate' type mess. I hope it doesn't come to that, the country just doesn't need it right now with all the other messes going on

[I'm Gone 60]

WASHINGTON (AP) - Under a secretive agreement with the Bush administration, a company in the United Arab Emirates promised to cooperate with U.S. investigations as a condition of its takeover of operations at six major American ports, according to documents obtained by The Associated Press.

Where does any of this show Bush knew about this agreement before it was done. You all call the guy a bonehead and then when he claims to not know about something you don't believe him. Can't have it both ways.

[kaydee457 13]

allot of this will be coming out Jim....i think Bush is misdirected ( i am giving him the benefit here) by his circles of advisors, who he relies on to do his thinking...

This has the rumblings of another 'Watergate' type mess. I hope it doesn't come to that, the country just doesn't need it right now with all the other messes going on

Watergate? As far as I can tell there's been no crime committed here. I really can't see anything wrong with the "deal" either....

This deal's going through once all the naysayers realize how foolish they look.

[Sister Fracas 5]

This deal's going through once all the naysayers realize how foolish they look.

Has anyone explained why this has to be rushed through?

[junglee069 0]

Peninsular and Oriental Steam Navigation Co is a british company - i don't see anyone screaming national security and what not before? are we just afraid of dem a-rabs?

[w¡n9Nµ7 §£@¥€r 123]

Peninsular and Oriental Steam Navigation Co is a british company - i don't see anyone screaming national security and what not before? are we just afraid of dem a-rabs?

A-rabs are scary.

British people are just punks. They're harmless.

[almaty 19]

i agree....i think the political climate ant the use of 9/11 and national security by the bush admin..has led to this....cry wolf and then let the wolf guard the hen house....

[junglee069 0]

Peninsular and Oriental Steam Navigation Co is a british company - i don't see anyone screaming national security and what not before? are we just afraid of dem a-rabs?

A-rabs are scary.

British people are just punks. They're harmless.

oh ok, it's all clear now........on a more serious note, here's a good read

WASHINGTON // Criticism of a proposed merger that would give a United Arab Emirates company control of operations at six U.S. ports, including Baltimore, misses the point.

The deal between Peninsular and Oriental Steam Navigation Co. and Dubai Ports World (DPW) merits close scrutiny, but strategically should be viewed as a long-term security asset, not a liability.

Advertisement

Gov. Robert L. Ehrlich Jr. and Democrats and Republicans in Congress are right to ask tough questions about the merger. The Bush administration must demonstrate that it has performed due diligence through the Committee on Foreign Investment in the United States (CFIUS) process. But while there are many reasons to be concerned about port security, which company writes the checks for American longshoremen is the least of those worries.

In fact, the merger should not pose national security concerns because maritime security is a global challenge. The real solution is not protectionism, but to build a truly integrated and effective global system that secures supply chains from the point of manufacture through foreign and U.S. ports all the way to local store shelves. That requires making maritime security a higher homeland security priority.

Our economy, and therefore our security, depends on the free and secure flow of goods to and from our shores. About 90 percent of the manufactured goods we import arrive by sea. About 9 million shipping containers each year flow through 361 U.S. ports. Baltimore, for example, is the 14th-largest port in the United States in terms of tonnage and seventh in cargo value.

Any interruption in the global movement of goods, whether because of terrorism, a storm or a dockworker strike, can instantly cause billions in economic losses. If a nuclear or radiological device were smuggled into the United States through one of these shipping containers, it could shut down the world economy.

There are shared incentives among governments, port authorities, the maritime industry and the private sector to ensure this does not happen. Maritime security standards have been strengthened nationally and internationally since 2001. Success depends upon cooperation among a wide range of players - manufacturers, freight forwarders, port operators, ocean carriers and insurers; most are foreign-owned.

In fact, the leading port operators worldwide that process the majority of shipping containers bound for the United States are owned by companies based in Hong Kong, Singapore, Denmark and Britain as well as Dubai. So our maritime security already depends upon the cooperation of foreign governments and foreign-owned businesses.

The UAE is the United States' third-leading trading partner in the Middle East after Israel and Saudi Arabia. It is a leading ally in the Persian Gulf region.

Before 9/11, the UAE's record in combating terrorism was mixed, particularly with respect to lax banking regulations and oversight. The UAE was used as a staging area and commercial hub by some of the hijackers. But cooperation has improved significantly since then. Dubai is one of 37 international ports that participate in the Container Security Initiative (CSI), a program that attempts to identify anomalies with shipments before they leave for the U.S. It is part of the global maritime security system.

There are better ways to improve port security in Baltimore and across the country than trying to block the merger. Specific actions can dramatically improve port security.

First, the Department of Homeland Security needs to make port security its top priority. Since 9/11, DHS has devoted three times as much to aviation security as maritime security. This is like fighting the last war.

The Coast Guard estimates that $5.4 billion is required to implement port security improvements called for in the Maritime Transportation Security Act. Yet Congress appropriated only $175 million in port security grants this year. Congress should triple that.

Second, customs agents physically inspect only 6 percent of the 9 million shipping containers that flow through U.S. ports annually. Every suspect shipment should be scanned using the best available radiation detection equipment. Every U.S. port should be required to have radiation isotope identifier devices to reduce the chances that a nuclear or radiological device can be smuggled into the U.S.

Third, DHS should expand the number of personnel assigned overseas (with language skills) to work at foreign ports, inspect more shipping containers before they are loaded on ships destined for the United States and verify the security of foreign supply chains. Smart containers with tamper-proof seals and global positioning systems should be introduced as soon as possible.

It is Osama bin Laden and his virulent followers who want to disconnect the Middle East from the rest of the world. Integrating the Middle East into the global trading system and linking countries such as the UAE and companies such as DPW to international norms, profits and responsibilities are the ultimate solution to jihadism and extremism. This requires the United States to think strategically and act globally, not parochially.

P. J. Crowley is a senior fellow at the Center for America

[kaydee457 13]

British people are just punks. They're harmless.

[Jasman0717 9]

WASHINGTON (AP) - Bush administration officials, trying to calm a political furor over allowing a United Arab Emirates company to take over a half-dozen U.S. seaports, told Congress Thursday they spent three months reviewing the deal and said all concerns about security were satisfied.

Earlier, President Bush declared that "people don't need to worry about security."

"We're not aware of a single national security concern raised recently that was not part of" the multiagency, three-month review of the deal that would permit the company to take over significant operations at the ports, Deputy Treasury Secretary Robert Kimmitt told a Senate Armed Services Committee briefing.

Representatives of key agencies that investigated the port deal - but not the heads of the various departments - sought to reassure senators.

Indeed, the Capitol Hill briefing began with Democrats lashing out at the deal.

Brushing aside Bush's assurances, Sen. Carl Levin of Michigan, the panel's ranking Democrat, said the UAE backed the Taliban and allowed financial support for al-Qaida. Levin also charged that the UAE has an "uneven history" as "one of only a handful of countries in the world to recognize the Taliban regime in Afghanistan." He added that millions of dollars in al-Qaida funds went through UAE financial institutions.

Sen. Hillary Rodham Clinton, D-N.Y., also was critical, calling the approval process "a failure of judgment" because officials "did not alert the president, the secretary of the treasury and the secretary of defense" that several of our critical ports would be turned over to foreign country.

Sen. John Warner, R-Va., and chairman of the committee, emphasized UAE's cooperation in the war on terrorism, noting that it allows a large number of port calls by U.S. military and commercial ships and that it had made its airfields available to the U.S. military.

But when a round of questioning began, Warner sharply asked Kimmitt whether the reviewing agencies considered UAE's role's in the transfer of money to al-Qaida and of nuclear components to rogue nations.

Kimmitt said those factors were taken into account.

Bush, talking to reporters at the conclusion of a Cabinet meeting earlier Thursday, said that "people don't need to worry about security."

Under secret conditions of the agreement with the administration, the Dubai company promised to cooperate with U.S. investigations as a condition of the $6.8 billion deal, according to documents obtained by The Associated Press.

The U.S. government chose not to impose other, routine restrictions.

"The more people learn about the transaction that has been scrutinized and approved by my government," Bush said, "the more they'll be comforted that our ports will be secure."

The president said he was struck by the fact that people were not concerned about port security when a British company was running the port operation, but they felt differently about an Arab company at the helm. He said the United Arab Emirates was a valuable partner in the war in terror.

Critics in Congress, even before Thursday's hearing, had noted that the London-based Peninsular and Oriental Steam Navigation Co., which previously operated at those ports, is a publicly traded company while Dubai Ports World is effectively controlled by the government there. Sens. Robert Menendez, D-N.J., and Clinton have said they will introduce legislation to prohibit companies owned or controlled by foreign governments from running port operations in the United States.

Bush said his administration would continue talks with members of Congress - Republicans and Democrats alike - who have rebelled against the takeover. He said the briefings were "bringing a sense of calm to this issue."

"This wouldn't be going forward if we weren't certain our ports would be secure," Bush said.

In approving the purchase, the administration chose not to require Dubai Ports to keep copies of its business records on U.S. soil, where they would be subject to orders by American courts. It also did not require the company to designate an American citizen to accommodate requests by the government.

(Outside legal experts said such obligations are routinely attached to U.S. approvals of foreign sales in other industries.

Dubai Ports agreed to give up records on demand about "foreign operational direction" of its business at the U.S. ports, according to the documents. Those records broadly include details about the design, maintenance or operation of ports and equipment. It also pledged to continue participating in programs to stop smuggling and detect illegal shipments of nuclear materials.

"They're not lax but they're not draconian," said James Lewis, a former U.S. official who worked on such agreements. If White House officials negotiating the deal had predicted the firestorm of criticism over it, "they might have made them sound harder."

The conditions over the sale were detailed in U.S. documents marked "confidential." Such records are regularly guarded as trade secrets, and it is highly unusual for them to be made public.

Rep. Peter King of New York, the Republican chairman of the House Homeland Security Committee, said the conditions are evidence the administration was concerned about security. "There is a very serious question as to why the records are not going to be maintained on American soil subject to American jurisdiction," King said.

Another critic, Sen. Charles Schumer, D-N.Y., added: "These new revelations ask more questions than they answer."

In Lebanon, Secretary of State Condoleezza Rice said Thursday that the agreement was thoroughly vetted in a review process that took approximately three months. "This is supposed to be a process that raises security concerns, if they are there, but does not presume that a country in the Middle East should not be capable of doing a deal like this." She described the United Arab Emirates as "a very good ally" and said "if more details need to be made available then I'm sure they will be."

[kaydee457 13]

The UAE was used as a staging area and commercial hub by some of the hijackers. But cooperation has improved significantly since then.

One should just substitute "Germany" with "U.A.E." in the statement above. The terrorists also used Germany as a staging area.

That's how skewed this 'fuzzy logic' is in order to justify pulling a legit deal from a strong ally.

Edited February 23, 2006 by kaydee457

[Mr. Big Dog 10,747]

Peninsular and Oriental Steam Navigation Co is a british company - i don't see anyone screaming national security and what not before? are we just afraid of dem a-rabs?

Well, that's a big part, if not the major part, of Bush's problem with this one. His administration told the people every chance they had to be afraid. Very afraid. It's their own ####### that comes back biting them now.

[w¡n9Nµ7 §£@¥€r 123]

The UAE was used as a staging area and commercial hub by some of the hijackers. But cooperation has improved significantly since then.

One should just substitute "Germany" with "U.A.E." in the statement above. The terrorists also used Germany as a staging area.

That's how skewed this and fuzzy logic is to justify pulling a legit deal from a strong ally.

Yeah Hamburg played a much more significant role in 9/11 than Dubai ever did. Dubai is just a playground for the Middle East's rich and filthy.