- The Washington Times - Friday, February 24, 2006

Bush administration officials yesterday tried to convince skeptical Capitol Hill lawmakers that there are no security risks involved with allowing a Middle Eastern country-owned company to operate in six U.S. ports.

“We had a very comprehensive and in-depth review of this transaction,” Gordon England, deputy secretary of defense, told senators on the Senate Armed Services Committee.

“No issues were raised by any of those agencies or departments within the Department of Defense,” he said. “We are very, very comfortable with the decision that was made.”

But in a surprise move last night, the United Arab Emirates company offered to delay the takeover.

“The reaction in the United States has occurred in no other country in the world,” said Ted Bilkey, chief operating officer of Dubai Ports World (DPW). “We need to understand the concerns of the people in the U.S. who are worried about this transaction and make sure that they are addressed to the benefit of all parties. Security is everybody’s business.”

Under the offer coordinated with the White House, DPW said it will agree not to exercise control or influence the management over U.S. ports pending further talks with the Bush administration and Congress. The company said it will move forward with other parts of the deal affecting the rest of the world.

The Bush administration’s assurances were met with disdain by Democrats being briefed on DPW’s pending purchase of terminal operations in major U.S. ports, as the Port Authority of New York and New Jersey said it would sue today to block the deal.

“The track record of this administration on homeland security — its inadequate funding, its bureaucratic dysfunction at the Department of Homeland Security, as evidenced most tragically in [Hurricane] Katrina … does not create an atmosphere of confidence when looking at this particular matter,” said Sen. Hillary Rodham Clinton, New York Democrat.

Democrats called the administration’s handling of the process incompetent, saying officials didn’t notify President Bush and Defense Secretary Donald H. Rumsfeld until after the plan’s approval. The 12-member, interagency Committee on Foreign Investment in the United States, which includes six Cabinet members, reviewed the plan.

“The only surprise is that the administration is surprised by the intense reaction of the American people,” said Sen. Edward M. Kennedy, Massachusetts Democrat.

Committee Chairman John W. Warner of Virginia, who was the only Republican to attend yesterday’s briefing, said his concerns were mostly appeased by the explanations, though he still supports a delay of the transaction so that Congress can more thoroughly review it.

Mr. Bush told reporters yesterday he expects the political furor over the deal to subside as more details emerge.

“The more people learn about the transaction, the more they’ll be comforted that the ports will be secure,” he said after a Cabinet meeting yesterday.

But many sentiments did not appear to soften yesterday, even among the rank and file of Mr. Bush’s own party.

“I am concerned with the Dubai deal not only because of the national security implications, but the economic implications,” said Rep. Patrick T. McHenry, a freshman Republican from North Carolina who is an avid supporter of Mr. Bush.

“The Dubai deal outsources our ports to the state-owned entity of a foreign government,” he said. “This deal turns back on the free-market principles that have guided this nation into economic prosperity.”

Earlier this week, Mr. Bush said he would veto any legislation aimed at stopping the deal from going through. But Karl Rove, Mr. Bush’s top political adviser, indicated the White House might consider a delay.

“Yes, look, there are some hurdles, regulatory hurdles, that this still needs to go through on the British side as well that are going to be concluded next week,” Mr. Rove said yesterday on Fox News. “There’s no requirement that it close, you know, immediately after that.”

DPW’s pending $6.8 billion purchase of London-based Peninsular and Oriental Steam Navigation Co., which operates port terminals in New York, Baltimore, New Orleans, Miami, Philadelphia and Newark, N.J., is due to close Thursday.

Maryland officials said yesterday they are “considering available options” to block DPW from operating terminals at the Port of Baltimore.

The administration officials assured the committee that the United Arab Emirates-owned company would have no involvement in the port security procedures that are carried out by the U.S. Coast Guard. Anyway, they said, that task begins long before cargo ships reach U.S. ports under an elaborate new screening process.

In fact, the UAE remains the only government in the Middle East to take part in that new screening process. Also, officials said, the UAE is among the closest allies of the U.S. in the war on terror in that region.

“We have more of our Navy ships in the United Arab Emirates than any other port outside the United States,” Mr. England said.

But that quickly became a major bone of contention for Democrats.

“The UAE has had an uneven history when it comes to the war on terrorism,” said Sen. Carl Levin, Michigan Democrat, noting that it was one of few countries to recognize the Taliban regime in Afghanistan that supported Osama bin Laden and al Qaeda. “America’s port security is too critical to be subjected to this kind of casual approach.”

Meanwhile in Abu Dhabi, United Arab Emirates, Secretary of State Condoleezza Rice yesterday told the UAE government that the Bush administration stands firm by its decision to let one of its firms manage six U.S. ports.

“If more details need to be made available, then I’m sure they will be, but I think the deal itself is simply recognition that this process turned up no concerns,” Miss Rice said.

Nicholas Kralev contributed to this article, which is based in part on wire service reports.

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