- The Washington Times - Friday, March 10, 2006

A Dubai-owned company yesterday bailed on its bid to operate terminals in U.S. ports, bowing to intense Capitol Hill opposition hours after Republican leaders informed President Bush that Congress was ready to kill the White House-backed deal.

H. Edward Bilkey, chief operating officer of DP World, said his company will transfer to a U.S. entity operations at U.S. ports that it recently purchased from a British company. He said it was being done to preserve the relationship between the United States and the United Arab Emirates, which includes Dubai.

“We look forward to working with the Department of Treasury to implement the decision,” Mr. Bilkey said in a statement. He did not reveal what the new deal will entail.

Republicans and Democrats on Capitol Hill reacted cautiously to the announcement, saying they must see more details before backing down from their plans to thwart the deal over national security concerns.

“I don’t think Congress will accept anything less than a complete divestiture,” said Rep. Vito J. Fossella, New York Republican. “Today represents progress, but it does not represent the end of the matter. We must carefully review DP World’s plan to determine whether it is in the United States’ national security interest.”

The White House, which had threatened to veto any legislation to block the deal, said the company’s move offered a resolution to the weeks-long skirmish.

“It does provide a way forward and resolve the matter,” White House spokesman Scott McClellan said. “We have a strong relationship with the UAE and a good partnership in the global war on terrorism, and I think their decision reflects the importance of our broader relationship.”

The administration’s approval of DP World’s purchase of terminal operations at six U.S. ports from Peninsular & Oriental Steam Navigation Co., a British company, set off a firestorm of criticism from Capitol Hill lawmakers and brought Republicans into direct conflict with Mr. Bush.

The House Appropriations Committee approved a proposal Wednesday to block the deal, and Senate Republicans could not muster enough votes yesterday to prevent Democrats from forcing a similar plan from reaching the Senate floor. Republican leaders on their regularly scheduled visit to the White House yesterday notified Mr. Bush that both chambers were ready to scuttle the deal.

Rep. Tom DeLay, Texas Republican, said DP World backed down because of the House’s bold move.

“One day later, we’re already seeing results,” he said.

Members also said the public outcry against the deal was like nothing they ever had seen.

“The American people have driven this process because of the concern that they rightly expressed,” said Rep. H. James Saxton, a New Jersey Republican who fought the deal.

Over the past few weeks, members of both parties said national security interests were not properly considered when the administration approved the sale of U.S. terminals to a country with recent ties to al Qaeda and Osama bin Laden. DP World purchased terminal operations in Baltimore, New York, New Orleans, Philadelphia, Miami and Newark, N.J.

Senate Democrats were skeptical of the news yesterday and continued to demand a Senate vote to kill the deal outright — a move that Senate Majority Leader Bill Frist, Tennessee Republican, insisted was unnecessary — in light of the DP World announcement.

Mr. Frist had been urging a more wait-and-see approach to the deal, until Democrats raised the heat Wednesday, when Sen. Charles E. Schumer, New York Democrat, tried to attach an amendment to kill the Dubai deal to a lobbying-reform bill that the Senate was considering.

Senate Republicans tried yesterday to stop him from offering it, but failed to get the 60 votes they needed for the procedural move, which was defeated, 51-47.

“One way or another, this deal is dead, and that is what this vote showed,” Mr. Schumer said.

Mr. Frist pulled the lobbying bill from the floor, to prevent a showdown, but Democrats said the issue is not going away.

“We want a vote over here to … show the American people that the deal is done and over with,” said Senate Minority Leader Harry Reid, Nevada Democrat.

During the Senate fight over the past few days, aides to Mr. Frist and Sen. John W. Warner, Virginia Republican, worked privately with the White House and DP World on a compromise solution, a Senate Republican aide said. Rep. Peter T. King, New York Republican, also had been talking to the White House about a solution.

A House Appropriations Committee spokesman said the panel has no plans to back off of it’s deal-killing proposal. Panel members added the measure Wednesday to a spending bill that the House will vote on next week.

And House Republican Conference Chairman Deborah Pryce, Ohio Republican, said that while she thinks the DP World announcement resolves the issue, the House probably still should pass legislation to kill the deal.

Members of both parties said that even after the deal is resolved, Congress still will have to deal with port security and reform of the interagency panel that approved the deal in the first place.

The port deal first was approved by an interagency panel, the 12-member Committee on Foreign Investment in the United States in January, which included representatives of four Cabinet members.

Mr. Bush and three of the four represented Cabinet members said they learned of the deal’s approval only after it occurred. Treasury Secretary John W. Snow and Defense Secretary Donald H. Rumsfeld said on Feb. 22 that they knew of the panel’s actions only after the fact. Homeland Security Secretary Michael Chertoff said the same thing the next day.

A second 45-day executive review of the deal is ongoing.

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