Brushing aside objections from Republicans and Democrats alike, President Bush endorsed the takeover of shipping operations at six major U.S. seaports by a state-owned business in the United Arab Emirates. He pledged to veto any bill Congress might approve to block the agreement.
The president on Tuesday defended his administration’s earlier approval of the sale of London-based Peninsular and Oriental Steam Navigation Co. to Dubai Ports World, despite concerns in Congress it could increase the possibility of terrorism at American ports.
The pending sale — expected to be finalized in early March — puts Dubai Ports in charge of major shipping operations in New York, New Jersey, Baltimore, New Orleans, Miami and Philadelphia. “If there was any chance that this transaction would jeopardize the security of the United States, it would not go forward,” Bush said.
“It sends a terrible signal to friends around the world that it’s OK for a company from one country to manage the port, but not a country that plays by the rules and has got a good track record from another part of the world,” Bush said.
Assurances on security
To assuage concerns, the administration disclosed some assurances it had negotiated with Dubai Ports. It required mandatory participation in U.S. security programs to stop smuggling and detect illegal shipments of nuclear materials; roughly 33 other port companies participate in these voluntarily. The Coast Guard also said Tuesday it was nearly finished inspecting Dubai Ports’ facilities in the United States.
A senior Homeland Security official, Stewart Baker, said this was the first-ever sale involving U.S. port operations to a state-owned company. “In that sense this is a new layer of controls,” he said. Baker added that U.S. intelligence agencies were consulted “very early on to actually look at vulnerabilities and threats.”
Bush sought to quiet a political storm that has united Republican governors and Senate Majority Leader Bill Frist of Tennessee with liberal Democrats, including New Jersey governor Jon Corzine, and New York’s two Democratic senators, Hillary Rodham Clinton and Charles Schumer.
Frist has ‘serious questions’
Frist said Tuesday, before Bush’s comments, that he would introduce legislation to put the sale on hold if the White House did not delay the takeover. He said the deal raised “serious questions regarding the safety and security of our homeland.
House Speaker Dennis Hastert, R-Ill., asked the president for a moratorium on the sale until it could be studied further. “We must not allow the possibility of compromising our national security due to lack of review or oversight by the federal government,” Hastert said.
Maryland’s Republican Gov. Robert Ehrlich, during a tour of Baltimore’s port on Tuesday, called the deal an “overly secretive process at the federal level.”
Rare chat on Air Force One
Bush took the rare step of calling reporters to his conference room on Air Force One after returning from a speech in Colorado. He also stopped to talk before television cameras after he returned to the White House.
“I can understand why some in Congress have raised questions about whether or not our country will be less secure as a result of this transaction,” the president said. “But they need to know that our government has looked at this issue and looked at it carefully.”
A senior executive from Dubai Ports World pledged the company would agree to whatever security precautions the U.S. government demanded to salvage the deal. Chief operating officer Edward “Ted” H. Bilkey promised Dubai Ports “will fully cooperate in putting into place whatever is necessary to protect the terminals.”
Bilkey traveled to Washington in an effort to defuse the growing controversy.
Bush threatens veto
Bush said that protesting lawmakers should understand his approval of the deal was final.
“They ought to listen to what I have to say about this,” the president said. “They’ll look at the facts and understand the consequences of what they’re going to do. But if they pass a law, I’ll deal with it with a veto.”
Bush, who has never vetoed a bill as president, said on the White House South Lawn: “This is a company that has played by the rules, has been cooperative with the United States, from a country that’s an ally on the war on terror, and it would send a terrible signal to friends and allies not to let this transaction go through.”
Lawmakers from both parties have noted that some of the Sept. 11 hijackers used the United Arab Emirates as an operational and financial base. In addition, critics contend the UAE was an important transfer point for shipments of smuggled nuclear components sent to Iran, North Korea and Libya by a Pakistani scientist.
They say a port operator complicit in smuggling or terrorism could manipulate manifests and other records to frustrate Homeland Security’s already limited scrutiny of shipping containers and slip contraband past U.S. Customs inspectors.
Rep. Pete King, R-N.Y., and Democrat Schumer said Tuesday they will introduce emergency legislation to suspend the ports deal. King, chairman of the Homeland Security Committee, said the government “cannot consider approving this contract until a much more thorough investigation takes place on this security matter.”
Sen. Susan Collins, R-Maine, and Rep. Jane Harman, D-Calif., said they would introduce a “joint resolution of disapproval” when they returned to Washington next week. Collins heads the Senate Homeland Security and Governmental Affairs Committee, and Harman is the top Democrat on the House Intelligence Committee.
Bush’s veto threat didn’t stop local efforts to block the deal. New Jersey’s governor, Jon S. Corzine, said Tuesday the state will file lawsuits in federal and state courts opposing the agreement. Corzine, a Democrat, cited a “deep, deep feeling that this is the wrong direction for our nation to take.”
Miami company files suit
A company at the Port of Miami, a subsidiary of Eller & Co. Inc., sued last week to block the deal in a Florida state court. It said that under the sale, it will become an “involuntary partner” with Dubai’s government and it may seek more than $10 million in damages.
Frist said Congress should have veto authority over such foreign sales, which are reviewed by a secretive U.S. panel that considers security risks of foreign companies buying or investing in American industry. The panel includes representatives from the departments of Treasury, Defense, Justice, Commerce, State and Homeland Security.
Defense Secretary Donald H. Rumsfeld described the United Arab Emirates as a close ally. “It’s a country that’s been involved in the global war on terror with us,” Rumsfeld said. He added that the United States and the UAE “have very close military-to-miltary relations, as well as political and economic relations.”
Separately, Attorney General Alberto Gonzales said port security would not be threatened. “This is not a question about port security,” Gonzales said. “This is a question about port operation.”