Lawmakers Urge Greater Review of UAE Firm's Deal to Run Six U.S. Ports

Published February 16, 2006

| FoxNews.com

Questioning the United Arab Emirates' track record in the War on Terror, seven U.S. lawmakers said Thursday they want a committee led by Treasury Secretary John Snow to thoroughly review a deal that would let a UAE-based firm run six major U.S. ports.

"We're calling for the full six-week investigation. It's a serious investigation and the reason why this is critical is while maybe there's nothing wrong with this company, how do we know they're not infiltrated?" asked Sen. Chuck Schumer, D-N.Y. "The United Arab Emirates has had people involved in terrorism. In fact, some of its financial institutions laundered the money for the (Sept, 11) terrorists. And to just blithely go ahead and treat this as another economic transaction is all wrong."

Currently, London-based Peninsular and Oriental Steam Navigation Co., the fourth largest port operator in the world, runs the six ports. But the $6.8 billion sale of P&O to UAE-owned Dubai Ports World (DPW) would effectively turn over North American operations to the government-owned company in Dubai.

If the approval is unchallenged, Dubai Ports World would run the ports of New York, New Jersey, Baltimore, New Orleans, Miami and Philadelphia.

On Monday, the U.S. Committee on Foreign Investment in the United States (CFIUS), chaired by Snow, approved the P&O sale. The committee conducted a 30-day review, according to lawmakers.

White House Press Secretary Scott McClellan referred questions about CFIUS' decision to the Treasury Department, but added that security issues are rigorously reviewed by the committee.

"Clearly no responsibility of government is more important than protecting the national security," the Treasury Department said in a statement. Treasury runs the 12-member foreign investment committee that includes officials from the departments of Defense, Justice, Commerce, State and Homeland Security. The review also included an assessment from U.S. intelligence agencies, the department said.

"We wanted to look at this one quite closely because it relates to ports," Stewart Baker, an assistant secretary in the Homeland Security Department, told The Associated Press. "It is important to focus on this partner as opposed to just what part of the world they come from. We came to the conclusion that the transaction should not be halted."

According to documents, P&O and DPW said for the deal to go through, the committee must agree not to formally investigate the purchase or Bush must not move to block the sale for national security purposes.

But lawmakers, in a letter to Snow, requested that his committee conduct a full 45-day investigation of the transaction, saying it's essential for national security.

"Federal law requires the president or his designee investigate the impact on national security of a foreign acquisition if the acquisition 'could result in control of a person engaged in interstate commerce in the United States that could affect the national security of the United States,'” reads the letter signed by Sens. Schumer, Tom Coburn, R-Okla., Frank Lautenberg, D-N.J., and Chris Dodd, D-Conn., as well as Reps. Chris Shays, R-Conn., Vito Fossella, R-N.Y., and Mark Foley, R-Fla.

Click here to read the letter lawmakers sent to Treasury Secretary John Snow.

The State Department calls the UAE, a loose federation of seven emirates on the Saudi peninsula, a vital partner in the War on Terror since the 2001 terror attacks, and DPW's former director of operations for Europe and Latin America, David C. Sanborn, was appointed by President Bush last month to be the new administrator of the Maritime Administration in the Transportation Department.

The lawmakers protesting the deal noted that the Arab nation had ties to the terrorists, and one terrorist, Marwan al-Shehhi, was born in that country.

In Dubai, the UAE's foreign minister described his country as an important U.S. ally but declined to respond directly to the concerns expressed in Washington.

"We have worked very closely with the United States on a number of issues relating to the combat of terrorism, prior to and post Sept. 11," Sheik Abdullah Bin Zayed al-Nahyan told The Associated Press.

Nonetheless, the FBI has also concluded that the UAE's banking system filtered much of the money used for the operational planning before the Sept. 11, 2001, attacks, and many of the hijackers traveled to the United States through the UAE.

Saying that he hopes Bush will overrule the committee and disapprove the deal, Foley pointed out that the UAE on Wednesday moved to improve bilateral trade ties to Iran.

"When the international community is attempting to bring Iran's nuclear abilities to a halt, the United Arab Emirates are talking about expanded trade opportunities with Iran," he said, wondering aloud whose side the UAE would land on if tensions escalated between the United States and Iran.

"This is, after all, a country that still sees the Taliban as the legitimate government of Afghanistan and still fails to recognize Israel as a sovereign state," Foley said.

"For a country that recognized the Taliban, as one of only three, the last thing you want is a country like this to have control of ... our ports," added Shays.

DPW would not be responsible for cargo screening, which is performed by the Department of Homeland Security, but the port operator is responsible for securing cargo coming in and out of the port, the port facility itself and the hiring of security personnel.

"We can't be too casual about this, especially since we've learned what we have on 9/11. When we talk about Dubai, United Emirates, we have to remember what's taken place there," said Lautenberg, who served as commissioner of the Ports Authority for New York and New Jersey.

Lautenberg added that the UAE has been regarded as the place for materials used to make a nuclear weapon to be transferred among rogue hands.

"This port area is part of a two-mile stretch that the FBI has declared to be the choice target for terrorism in the country, The most vulnerable target in the country for an act of terrorists," he said. "We need control of our ports, we do not have control of our ports."

Lawmakers said that if CFIUS does not conduct a full review, congressional legislation may be in order. Members of the committee refuse to discuss the discussions the panel held.

Fossella said he has asked House Homeland Security Committee Chairman Peter King, R-N.Y., to hold hearings on the transaction, and to get CFIUS' rationale for the decision.

"Today, it's more like a Star Chamber than a good legitimate decision-making process for the United States," Fossella said of the panel.

On Wednesday, King said he spoke to senior White House officials, whom he declined to identify, and urged them to review the purchase. King said he believed the White House took the issue "very seriously and will look into it."

Elsewhere, the chairman of the Port Authority of New York and New Jersey said Thursday it will conduct its own review of the deal and urged the government to defend its decision.

An independent review by his agency was necessary "to protect its interests," Port Authority chairman Anthony Coscia said in a letter to the Treasury Department.

The Associated Press contributed to this report.

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