- The Washington Times - Thursday, February 23, 2006

The White House yesterday said President Bush first learned that his agency heads and top advisers had approved a Dubai-owned company’s bid to manage six U.S. ports from press reports after it happened.

A day after Mr. Bush said he would veto any bill that seeks to block the deal, the White House said officials “should have briefed members of Congress sooner” but blamed press reports for distorting the issue and raising questions in the minds of members of Congress.

Spokesman Scott McClellan distanced the president from the decision, saying it was a matter for the 12-member Committee on Foreign Investment in the United States (CFIUS). He said none of the Cabinet secretaries and top administration advisers on the panel raised concerns about the bid by Dubai Ports World (DPW).

But Treasury Secretary John W. Snow, the panel’s chairman, and Defense Secretary Donald H. Rumsfeld, a panel member, say they didn’t become aware of the deal until after it was approved.

“I involved myself in it as it came to my attention over the course of the last three or four days. I got involved in it after the approval process,” Mr. Snow told reporters yesterday, according to Reuters news agency.

It was not clear yesterday whether CFIUS members attend meetings or send representatives. DPW, a company in the United Arab Emirates, has bid $6.8 billion to take over a British company that runs operations at six U.S. ports, including Baltimore, New York and Philadelphia.

According to documents obtained by the Associated Press, the administration secretly required DPW to cooperate with future U.S. investigations before approving its takeover, but chose to ignore other routine restrictions.

As part of the deal, DPW agreed to reveal records on demand about “foreign operational direction” of its business at U.S. ports, but the company was not required to keep copies of business records on U.S. soil, where they would be subject to court orders, AP reported.

Despite distancing themselves from the decision, Mr. Snow and the White House, which did not reiterate its veto threat yesterday, said that the deal was a correct one and that all national security issues were addressed during this Congress-mandated review process.

“There were no objections raised by any of the departments that are charged with being involved in this process. And that’s why it didn’t rise up to the presidential level,” Mr. McClellan said.

The administration’s push to salvage the deal comes as bipartisan opposition grows in Congress, where lawmakers are threatening to kill the deal legislatively because of homeland security concerns.

Rep. Sue Myrick, a North Carolina Republican and Bush loyalist, wrote the president a letter yesterday.

“Dear Mr. President,” began the one-line letter. “In regards to selling American ports to the United Arab Emirates, not just NO — but HELL NO!”

Earlier in the week, top leaders in the House and the Senate — including every Republican leader — called on Mr. Bush to halt the Dubai deal at least until it could be re-evaluated by Congress. The ports management takeover is scheduled for March 2.

Mr. Bush can order CFIUS to conduct a full, formal 45-day investigation. The committee approved the DPW’s proposal after a less-than-30-day review.

DPW Chief Operating Officer Ted Bilkey told CNN yesterday that his company will do anything necessary to get the deal done. He confirmed that former Sen. Bob Dole, Kansas Republican, has been hired as a congressional liaison for the company.

Mr. Dole works for Atlanta-based law firm Alston & Bird LLP, whose Washington office also includes former Senate Minority Leader Tom Daschle, South Dakota Democrat.

Washington-based Downey McGrath Group Inc. also is part of DPW’s high-powered team of lobbyists and consultants. Two former House members from New York, Democrat Thomas Downey and Republican Raymond McGrath, are the principals.

Rep. Eric Cantor, Virginia Republican, said that Mr. Bush remains the leader on national security but that opposing the ports deal is “a no-brainer.”

“I am totally in opposition to a company controlled by the UAE having access and running, managing our ports,” he said.

“Frankly, I think the UAE has demonstrated it wants to be selective in terms of its position in the war on terror. Where are they in terms of Hamas and the West Bank and what’s going on in that conflict?” he said.

Two of the September 11 hijackers were from the United Arab Emirates. Dubai, one of the emirates, has served as an operations and financial center for al Qaeda terrorists.

Sen. John W. Warner, Virginia Republican and chairman of the Senate Armed Services Committee, will hold an “open briefing” today for members of Congress and the press to hear directly from administration officials why they are not concerned about the deal.

Mr. Warner said after meeting earlier this week with Mr. Rumsfeld and others that the Bush administration has a case to be made. Although he said his concerns about the deal were not necessarily appeased during his meeting in Mr. Rumsfeld’s office, he said news stories are overlooking important facts.

“The UAE is a major partner of the United States in the war on terror,” he said. “More U.S. ships call on their ports for action in Afghanistan and Iraq than anywhere else. They make available a major portion of their airfields for U.S. planes.”

Mr. Snow has a more personal connection to the Dubai company. CSX Corp., which Mr. Snow led until 2002, sold its Hong Kong and South American port operations to DPW in 2004 for $1.15 billion.

Several senior DPW executives, including the general counsel and the head of business development, worked at CSX with Mr. Snow.

• David Sands, S.A. Miller and Jerry Seper contributed to this report.

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