President Bush on Friday approved a deal for a Dubai-owned company to take control of some U.S. plants that manufacture parts for U.S. fighter jets and tanks.
The proposed deal, Bush told reporters, “has been looked at very carefully.” He said he had “signed off on it this morning because I am convinced at the recommendation of the CFIUS committee as well as our military that it is a sale that should go through.”
The Committee on Foreign Investment in the United States is a secret, interagency U.S. government panel that is charged with reviewing foreign transactions that touch on military or security matters.
Initial reactions from Congress indicated that there would not be the sort of fierce opposition to this deal that prevented another Dubai-based company from taking over operations of several U.S. ports.
“This investigation was a significant improvement over what happened before,” House Homeland Security Chairman Peter T. King, R-N.Y., said in a statement. “It’s been much more thorough, much more detailed.”
In this deal, Dubai International Capital LLC wants to buy British-based Doncasters Group Ltd., which produces parts for the F-35 Joint Strike Fighter, a $256 billion multinational project, and the M-1 Abrams tank, at plants in Connecticut and Georgia.
Transaction 'thoroughly reviewed'
“This was a transaction that was thoroughly reviewed and closely scrutinized,” White House press secretary Scott McClellan said. “In the view of the committee, it does not compromise our national security.”
As a condition of the president’s approval, Dubai International Capital signed an agreement that promised an uninterrupted supply, McClellan said. The White House was in the process of informing key members of Congress of the president’s decision.
House leadership aides, speaking on condition of anonymity, said lawmakers from both parties on the relevant committees had been briefed on the deal, and had agreed that necessary safeguards were in effect. They said there had been numerous contacts with the administration.
Sen. Charles Schumer, D-N.Y., a leading opponent of the port deal, also said he did not plan to oppose the transaction. “There are two differences between this deal and the Dubai Ports deal,” he said in a statement. “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.”
Decision follows earlier Dubai controversy
CFIUS began its review of the transaction on Jan. 28 and made its recommendation to Bush on April 13, conducting a rare 45-day security review of the deal that requires Bush to make the final decision. His deadline for a decision was Friday.
The decision follows a political uproar earlier this year after Bush backed a deal allowing another Dubai-owned company to operate several major U.S. port terminals. The company, DP World, decided to sell the U.S. operations that it acquired in its purchase of a British firm to an American firm after Republicans and Democrats in Congress balked, saying the transaction could compromise America’s security interests.
In that case, CFIUS conducted only a routine 30-day review before approving the deal.