Bush approves defense contract for Dubai firm

President Bush yesterday approved a deal for a Dubai company to take control of some U.S. plants that manufacture parts for American military contractors, but the deal — unlike one earlier this year to hand over operations at some U.S. ports to a United Arab Emirates corporation — did not draw the ire of Congress.

The president, who expressed frustration with his staff after the ports deal became a political issue, said the new deal “has been looked at very carefully,” not only by high-level administration officials, but by members of the Committee on Foreign Investment in the United States (CFIUS), an agency that reviews foreign transactions that touch on military or security matters.

“I signed off on it this morning because I’m convinced, at the recommendation of the CFIUS committee, as well as our military, that it’s a sale that should go through,” Mr. Bush said.

The deal will allow Dubai International Capital LLC to buy Britain-based Doncasters Group Ltd., an engineering company that produces parts for the F-35 Joint Strike Fighter and the M-1 Abrams tank, at plants in Connecticut and Georgia.

Unlike the ports deal, reaction on Capitol Hill was muted, with prominent opponents of the earlier deal coming out in favor of the transaction.

“There are two differences between this deal and the Dubai Ports deal,” said Sen. Charles E. Schumer, New York Democrat. “First, this went through the process in a careful, thoughtful way and, second, this is a product, not a service, and the opportunity to infiltrate and sabotage is both more difficult and more detectable. Unless new information comes out, I will not oppose this deal.”

Members of the House leadership already have been briefed on the deal, and agree that necessary safeguards were in effect.

“This investigation was a significant improvement over what happened before,” said House Committee on Homeland Security Chairman Peter T. King, New York Republican. “It’s been much more thorough, much more detailed.”

In order to win the president’s support for the deal, Dubai International Capital agreed to provide an uninterrupted supply of goods to the Pentagon, White House spokesman Scott McClellan said. The company also signed an agreement with the Pentagon to keep military technology in the United States.

The CFIUS agency had worked on the proposal since late January and made its recommendation for approval to Mr. Bush on April 13.

Yesterday’s decision follows a political uproar earlier this year over Mr. Bush’s support for a deal allowing another Dubai-owned company to operate six major U.S. port terminals. The administration had approved Dubai Ports World’s $6.85 billion purchase of London-based Peninsular and Oriental Steam Navigation Co. in January without the matter having gone to an extended, 45-day security review. Without the extended review, the matter did not rise to requiring Mr. Bush’s approval as the Doncasters deal has.

Republicans and Democrats in Congress opposed the ports deal, saying the transaction could compromise America’s security interests. Mr. Bush threatened to veto any effort to kill the deal, but backed down after Democrats sought to paint Republicans as weak on security.

Dubai Ports World said last month it would transfer the U.S. terminal operations it had just acquired to a U.S. entity.