Published February 22, 2006
WASHINGTON – In a rare threat to use his veto power, President Bush said Tuesday he will stop any legislation that attempts to prevent the purchase by a United Arab Emirates-owned firm of the Peninsular and Oriental Steam Navigation Co., which runs six major U.S. ports.
Breaking a gaping silence from the administration in the debate about the purchase by Dubai Ports World of London-based P&O, Bush said the deal should go forward and won't jeopardize U.S. security.
"There's a mandated process we go through. ... They ought to listen to what I have to say to this. I'll deal with it with a veto," Bush told reporters after an unusual decision to call media aboard Air Force One to the airplane's conference room.
Back at the White House from a trip to Colorado, the president added that denying DP World the sale would send a mixed message.
"I think 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 can't manage the port," Bush said.
He added that he's not sure about the need for congressional briefings on a company whose record is well-established and who he called an ally in the War on Terror.
"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. But they need to know that our government has looked at this issue, and looked at it carefully," he said.
'Not a Question About Port Security'
Officials from some of the Cabinet departments that participate in the U.S. Committee on Foreign Investments in the United States, which approved the sale last Monday, appeared Tuesday in a briefing to defend the process by which CFIUS reviewed and approved the deal.
Officials from the Treasury and Homeland Security departments, as well as Coast Guard and Customs and Border Protection, which are agencies of DHS, participated.
"This is not a question about port security. This is not a question about port ownership. This is a question about port operation,” Attorney General Alberto Gonzales said during a press conference on the indictment of three Ohio men accused of assisting terrorism on U.S. interests in Iraq. The Justice Department also participates in CFIUS.
“Obviously, as part of this process, we are very concerned about maintaining port security," Gonzales added.
A large cast of congressional characters, both Republican and Democrat, has lined up to give their two cents on the potential purchase by DP World of P&O. Complaints run from the ability of foreign governments to control commercial operations at large U.S. entry sites to the secrecy with which the Bush administration conducted the 30-day review of the sale.
Senate Majority Leader Bill Frist of Tennessee said Tuesday he will introduce legislation to delay approval of the pending deal. Frist's decision is a major break with the White House as he is the highest ranking Republican in Congress to oppose the deal and personally vow legislation to delay approval unless the president intervenes.
"News that a Middle-East based firm is seeking to purchase the operating rights to several U.S. ports raise serious questions regarding the safety and security of our homeland. This decision should be put on hold while the administration conducts a more extensive review of this matter. Congress must also be involved in this process. I am requesting briefings on this deal," Frist, a 2008 presidential hopeful, said in a statement while touring border security areas.
"I'm not against foreign ownership," Frist told reporters in Long Beach, Calif., "But my main concern is national security."
Frist's announcement came after word that House Speaker Dennis Hastert and newly-minted House Majority Leader John Boehner were going to be "flexing muscle" against the Bush administration-approved transaction. On Tuesday, Boehner released a statement that national security requires congressional oversight of the approval process.
"We will take immediate steps to work with the congressional committees of jurisdiction to ensure there is thorough oversight and procedural review of the pending transaction," he said.
Hastert called for an "immediate moratorium" to be placed on the deal.
Democrats, too, have jumped on the national security bandwagon.
"America's ports are often the gateway into and out of our country. The unilateral decision of the Bush administration to allow the sale of port operations to a foreign government raises serious national security concerns," said House Minority Leader Nancy Pelosi, D-Calif.
But former Homeland Security Secretary Tom Ridge said most Americans would be surprised to learn that foreign operators have always run U.S. ports.
"The fact of the matter is, you're going to find in many, many ports … are owned and operated by foreign companies or foreign contractors. It's a matter of the global maritime industry. It happens around the world. The bottom line at the end of the day is who's ultimately responsible for security. A lot of people have confidence in the Coast Guard and they should," he told FOX News.
Ridge added that DP World would not provide security at any U.S. port. That job is conducted by the U.S. Coast Guard and Customs and Border Protection, both DHS agencies. The employees working at the ports will remain American longshoremen.
"I admit that to the average citizen, the optics don’t appear very good, but frankly there's a huge difference between what they perceive and what really is," Ridge said, adding that the "transaction has been vetted" at the highest levels and was not a decision taken lightly.
"The conclusion that you draw from some of these public statements is that no one in this administration cares enough about security or port security, they like to be very cavalier about this transaction. That couldn't be the furthest thing from the truth. We all know better than that," said Ridge, who is also a former Pennsylvania governor.
Under federal law, President Bush has until March 2 to overrule approval granted by CFIUS for DP World to purchase P&O, which has been running commercial operations at ports in New York, New Jersey, New Orleans, Baltimore, Philadelphia and Miami for years.
The multi-agency task force headed by Treasury Secretary John Snow and comprised of members of the departments of State, Justice, Commerce, Defense and Homeland Security reviewed the transaction and said it posed no national security threat.
At the Pentagon on Tuesday, Defense Secretary Donald H. Rumsfeld and Gen. Peter Pace, chairman of the Joint Chiefs of Staff, praised the UAE for its cooperation in the War on Terror.
"We all deal with the UAE on a regular basis," Rumsfeld said. "It's a country that's been involved in the global War on Terror...a country (with which) we have very close military relations."
Pace said that the U.S.-UAE's "military cooperation is superb."
On Tuesday, Rep. Ileana Ros-Lehtinen, R-Fla., told FOX News that foreign ownership of U.S. port operations is not the reason for concern with the deal.
"This is a financial transaction whereby DP World ... will have 50 percent of the financial interest of a small operation in the port of Miami," she said. "This gets people rolling because of the secrecy involved in this committee, CFIUS. There's not enough transparency. We don't know what questions have been asked."
Ros-Lehtinen said Dubai is an ally, but because of its relationship to hijackers involved with the Sept. 11, 2001, terror attacks, "we need a little sunshine on this."
New York Rep. Peter King, chairman of the House Homeland Security Committee, has also urged delay in approval of the deal. But King said he saw many reasons to cancel it altogether.
"I'm strongly urging the president to intervene to stop this, to freeze it, to put it on hold," King said. "This contract should not be allowed to go forward until there is a full and complete investigation. And there has not been a full investigation of this company nor of its roots in the United Arab Emirates."
King also charged that DP World won approval without thorough administration vetting.
"There have been allegations of weapons parts going through that port to Iran," King said of that country's own territory. "There's been allegations of corruption about that port. None of these have ever been investigated by our government."
Republicans are increasingly concerned about the political impact of the port story. They fear it could leave them vulnerable to Democratic criticism and at least partially undermine their political advantage on national security.
On Tuesday, House Homeland Security Ranking Democrat Bennie Thompson, D-Miss., wrote King to request hearings on how the CFIUS approves such deals. In particular, he said he wanted an examination of CFIUS' review of foreign ownership issues related to transportation security as well as critical infrastructure such as telecommunications, Internet, and technology companies.
Rep. Edward Markey, D-Mass., a longtime advocate of cargo screening, said the Bush administration's decision to accept the deal is evidence of its disregard for port security. Markey argued that DP World would be responsible for performing "significant security functions," including placing security officers at the facility, providing for security training for facility personnel and determining access to the facility.
"Almost none of the cargo that enters our ports is ever inspected. While the federal government is ultimately responsible for security at ports, much of the day-to-day security responsibilities, such as hiring security guards and ensuring adequate access controls and fencing are in place, are delegated to the companies that operate at the port," Markey said.
"Cargo containers represent a cheap, deadly method for delivering (a) bomb on U.S. soil. We cannot afford to be lax in our oversight of the shipping and handling of these containers. This administration's scrutiny of this UAE deal is just like their treatment of tons of cargos at our door: insufficient, incomplete and incomprehensible, given the security threats we face," he added.
Sen. Barbara Boxer, D-Calif., asked the Senate Commerce, Science and Transportation Committee to "postpone action on the nomination of David Sanborn to be U.S. Maritime Administrator." Sanborn, who is currently Director of Operations for Europe and Latin America at DP World, was nominated by Bush in January to head maritime transportation for the administration. He testified before the committee in early February.
On the state level, Republican Govs. George Pataki of New York and Robert Ehrlich of Maryland have also voiced doubts about the sale. Standing at the Port of Baltimore, Ehrlich, a former Republican representative in the U.S. House, said he has exchanged calls with Hastert about the due diligence that is necessary to oversee these decisions.
"My job as governor of the state is to make sure" people are safe, Ehrlich said, saying that he had discussed looking into the timing of the review and decisions by the government agencies.
The state of Maryland is considering its options, up to and including voiding the contract for the Port of Baltimore, Ehrlich said.
"I have directed the Port Authority of New York and New Jersey to explore all legal options that may be available to them in regards to this transaction," said Pataki, who is still in the hospital recovering from an appendectomy.
White House spokesman Scott McClellan has defended the process that allowed approval of the $6.8 billion deal.
McClellan said the process of review was followed, but he did not defend the decision to approve the transaction or rule out the president's future involvement.
FOX News' Major Garrett and The Associated Press contributed to this report.