Bush: Don't Worry

WASHINGTON – President Bush on Thursday said Americans shouldn't fret over the controversial ports deal involving a United Arab Emirates-owned company that has taken Washington and state lawmakers by storm.

"People don't need to worry about security," Bush said after meeting with his Cabinet about a White House report issued Thursday regarding the national response to Hurricane Katrina.

"We wouldn't go forward if we were concerned about the security of the United States of America," the president added.

The president's comments come on the heels of a firestorm of criticism over a deal that would allow the UAE-owned Dubai Ports World to take over operations at six U.S. ports. The deal has lawmakers from both sides of the aisle screaming for a more thorough review of the deal and arguing that the deal with threaten port security in the United States that already is lacking. Bush has vowed to veto any bill aimed at halting the commercial transaction.

"The more people learn about the transaction that has been scrutinized and improved by my government, the more they'll be comforted that our ports will be secure," Bush said, adding that port security will still be run by U.S. Customs and the Coast Guard. "The UAE has been a valuable partner in fighting the War on Terror. A lot of goods are shipped from ports to the United States managed by this company."

Noting that British companies already manage the ports in question, Bush added: "I also want to remind folks that it's really important we not send mixed messages to friends and allies around the world as we combine, put together, a coalition to fight this War on Terror. So we'll continue to talk to people in Congress and explain clearly why the decision was made."

Speaking to FOX News Radio, Deputy Chief of Staff Karl Rove called Dubai a "great military asset" and "vital to our security." Rove said as far as Dubai's cooperating with Customs and Border Protection and the Container Security Initiative, the UAE is one of the "best and eager partners in safety."

Rove said that briefings were going on with both Republican and Democratic staffers to inform them on the deal. Meanwhile, the Senate Armed Services Committee on Thursday was holding a hearing on the deal as lawmakers questioned why the administration didn't give a more thorough scrutiny to the deal. They're calling for more time to probe the transaction before it goes through.

Sen. John Warner, R-Va., and chairman of the committee, emphasized UAE's cooperation in the War on Terror, and echoed the Department of Homeland Security's notation that DP World provides support for U.S. Navy ships that dock in Jebel Ali and Fujairah, both in the UAE and managed by DP World, and for the U.S. Air Force at Al Dhafra Air Base in the UAE

Warner said the UAE is a "valuable ally" and he has seen nothing to indicate the administration didn't do a "careful and thorough job."

That was a claim reinforced by Deputy Treasury Secretary Robert Kimmitt at the briefing.

"We're not aware of a single national security concern raised recently that was not part of" the multiagency, three-month review of the deal, Kimmitt.

Added Deputy Defense Secretary Gordon England: "This review definitely was not cursory and it definitely was not casual. Rather, it was in-depth and comprehensive."

But opponents of the plan were not appeased. Committee Ranking Member Sen. Carl Levin, D-Mich., repeated charges raised in the Sept. 11 commission report that the UAE backed the Taliban and allowed financial support for Al Qaeda.

"America's port security is too critical to be subjected to this kind of casual approach," said Sen. Carl Levin, adding the administration has taken a too lax approach to this in dealing with a country with "an uneven record with combating terrorism."

He asked how many members of the briefing had discussed the deal with the Sept. 11 commission. None raised a hand.

"The events of 9/11 demonstrate America is entitled to total confidence that a country allowed to acquire assets key to our security is as committed as we are to combating terrorism," added the Michigan Democrat.

Sen. Hillary Rodham Clinton, D-N.Y., has co-sponsored legislation with Sen. Robert Menendez, D-N.J., to deny foreign governments permission to run port operations. At the briefing, she called the approval process "a failure of judgment" because officials "did not alert the president, the secretary of the treasury and the secretary of defense" that several of our critical ports would be turned over to foreign country.

She and Levin also argued that the statute that defines the job of the panel that reviews the acquisition requires a 45-day review. Warner said he would ask Attorney General Alberto Gonzales for an official interpretation of the statute.

England echoed Bush's comments about how in order to be successful and united in the global War on Terror, the United States cannot discriminate when it comes to who it partners with.

"In this war, this very long war, it is very important we strengthen the bonds of friendship and security with our friends and allies around the world, particularly in the Arab world," England said, adding that it's the terrorists' goal to help sever U.S. ties with other countries and to create more friction. "My view is, we can't allow this to happen, it has to be the opposite," he said.

Whereas White House spokesman Scott McClellan said this week that Bush didn't know about the deal until a few days ago — after it was completed. But Rove said Thursday that Bush did in fact know about it "before the preff kerfuffle."

Docs Show Some Routine Requirements Left Out

A new government agency created in October reviewed the DP World deal, a senior administration official told FOX News, but documents surfaced late Wednesday that showed approval of the transaction excluded some routine requirements.

Last Monday, the U.S. Committee on Foreign Investments in the United States (CFIUS) signed off on the deal for DP World to purchase the London-based Peninsular and Oriental Steam Navigation Co., which operates terminals in the major U.S. ports of Baltimore, Miami, New Jersey, New Orleans, New York and Philadelphia.

The deal required the UAE-owned DP World to cooperate with future U.S. investigations, according to documents obtained by The Associated Press. To win permission of the $6.8 billion purchase, DP World had to agree to reveal records on demand about "foreign operational direction" of its business at U.S. ports. Those records broadly include details about the design, maintenance or operation of ports and equipment.

The government asked DP World to operate American seaports with existing U.S. managers "to the extent possible."

However, the papers show CFIUS did not require DP World to keep copies of business records on U.S. soil, where they would be subject to orders by American courts.

"There is a very serious question as to why the records are not going to be maintained on American soil subject to American jurisdiction," said Rep. Peter King, R-N.Y., chairman of the House Homeland Security Committee and a leading critic of the sale.

A senior U.S. official said the Bush administration considers shipping manifests less sensitive.

Another detail revealed in the documents shows the administration required DP World to designate an executive to handle requests from the U.S. government, but it did not specify citizenship of that individual. Several of the company's top executives are Americans while others are Arab, Dutch and Indian.

Administration: We Won't Outsource Security

Administration officials say the company has made available sensitive trade secrets, documents and other concessions as part of the deal.

DP World promised to take "all reasonable steps" to assist the Department of Homeland Security in any security questions that arose, and pledged to continue participating in security programs to stop smuggling and detect illegal shipments of nuclear materials.

Secretary of State Condoleezza Rice, on her way from Riyadh to Beirut Thursday, said while scrutiny has increased over who America deals with since the Sept. 11, 2001, attacks, the system is not set up to prevent a country in the Middle East from doing business with the United States. Rice repeated that the deal was thoroughly vetted and the UAE is a strong ally in the War on Terror.

Frances Fragos Townsend, assistant to the president for homeland security, told FOX News that not one federal agency raised an objection to the deal when it was going through the review process, therefore, it is not unusual for the president to not know about such deals until it was complete.

"Rarely do these wind up on the president's desk and that's only after there has been an investigation and there is some disagreement," Townsend said. "This didn't get there because none of the agencies who reviewed it had any objection and any security concerns the Department of Homeland Security addressed in a security agreement with DP world.

She stressed that the United States is not outsourcing port security, only some port operations.

"Port security will continue to be in the very capable hands of the Coast Guard, and Customs and Border Patrol," Townsend said. "This is really a commercial deal. There are commercial deals in U.S. ports around the country with other companies, other foreign companies and we address those commercial concerns and the security arrangements because we continue to control security. Security arrangements in U.S. ports won't change regardless of whether this deal goes through or not."

DHS issued a release of port security activities it conducts independently of terminal operators that noted that funding for port security has increased by more than 700 percent since September 11, 2001, from $259 million in 2001 to about $1.6 billion in fiscal year 2005.

But Congress is still fuming about the still-emerging details of the deal.

"Current law dealing with approval of foreign investment needs to be revised. Right now, it's a 12-member committee headed by the Treasury secretary," said Sen. Susan Collins, R-Maine, chairwoman of the Senate Homeland Security and Governmental Affairs Committee, adding, "Congress is really cut out of the loop."

Others contend that the review process at the administration level was incomplete, especially because the panel did not use the entire 45 days allotted to review the sale.

"Outsourcing the ownership of this critical homeland security priority to Dubai Ports World without a thorough review makes no sense at all," added Sen. Patty Murray, D-Wash.

On Thursday, Rep. Bennie Thompson, D-Miss., the ranking Democrat on the House Homeland Security Committee, wrote to the Government Accountability Office asking it to look into the decision-making process of CFIUS, which Thompson claimed suffered from conflicts of interest and a lax view of what a national security threat is.

"The GAO found that the Department of Treasury, which chairs CFUIS, has a limited view of the definition of a national security threat. For example, sales that threaten critical infrastructure protection, including port security, may not be considered a national security threat. In the Department of Treasury's view, a national security threat does not exist unless threatening intelligence is reported about the parties involved or an acquisition affects export-control technologies or classified contracts," Thompson wrote to GAO Comptroller General David Walker.

The vice chairman pointed to the prior relationship between Treasury Secretary John Snow and DP World, which bought port operations previously owned by CSX Corporatin, of which Snow used to be CEO.

"I would like the GAO's investigation to answer the following questions 1) Did the Secretary of Treasury recuse himself from the review of this sale? If not, what role did he have in the review?" Thompson wrote.

The deal also stinks to several lawmakers who say the UAE's past linkages to the Sept. 11, 2001, hijackers and other international relationships are suspect.

Critics argue the UAE was an important transfer point for shipments of smuggled nuclear components sent to Iran, North Korea and Libya by a Pakistani scientist. The UAE also refuses to recognize Israel and considers the Taliban the rightful government in Afghanistan.

"The wisdom of the American people should be taken into account here. ... It is not as I have seen reported in some corners some form of Islamophobia. That entire description would indicate some sort of irrational fear," said Rep. J.D. Hayworth, R-Ariz.

"The bottom line is this: When in doubt, cut it out," Hayworth said.

"In regards to selling American ports to the United Arab Emirates, not just NO, but HELL NO!" Rep Sue Myrick, R-N.C., wrote to Bush in a letter posted on her Web site.

'The UAE is a Very Solid Friend'

Officials counter that the U.S.-UAE alliance goes far deeper than this port deal as part of ongoing reforms in the intelligence services. DHS argued that the UAE gives U.S. and coalition forces "unprecedented access" to its ports and territory, overflight clearances and other logistical assistance.

DHS also submitted that the UAE has frozen accounts of suspected groups linked to terrorists and has enacted aggressive anti-money laundering and counter-terrorist financing laws. The country allows Customs and Border Protection agents in its ports in Dubai, where they inspect cargo departing for the United States.

Former Central Command chief Tommy Franks told FOX News that not only is the UAE a great ally in the War on Terror, but more American Navy ships are in Dubai's port than any other in the world. He also said the port is run in excellent fashion.

Sen. Joseph Biden, D-Del., agreed that the U.S.-UAE relationship is a decent one but added, "They have been an ally but just as the Colombian government has been an ally with us in terms of fighting narcotics. We wouldn't put the Colombian government in charge of a border control spot. They are an ally, they should be treated fairly. [But] it looks like commerce has been put in front of security."

He added: "If the president pushes this, the Congress will stop it."

Many lawmakers say they have enough support to override a presidential veto, which Bush has promised if a bill passes trying to halt the deal.

DP World is the seventh largest terminal operator in the world, operating 23 facilities in 13 countries. It has terminal contracts in countries that are allies of the United States, including Germany, Australia, India and South Korea as well as nations such as China, Saudi Arabia and Venezuela.

If it does win U.S. approval for the deal, the company will own the contracts for terminals now run in the United States by P&O.

Outside of cruise ship terminals in those ports, operations include two of the 14 terminals in Baltimore's port, one of three terminals in the Miami port, one of five terminals in Newark, two of five terminals in New Orleans, one of five terminals in Philadelphia. DHS officials also note that the deal lets DP World run four of 12 terminals in Houston and allows it to be involved in stevedoring for all five terminals in Norfolk, though DP World would not manage any specific terminal.

The company's retiring chief operating officer, American Edward H. Bilkey, said the company will do whatever the Bush administration asks to enhance shipping security and ensure the sale goes through. Bilkey said Wednesday he will work in Washington to persuade skeptical lawmakers they should endorse the deal; Senate oversight hearings already are scheduled.

"We're disappointed," Bilkey told the AP in an interview. "We're going to do our best to persuade them that they jumped the gun. The UAE is a very solid friend, as President Bush has said."

FOX News' Carl Cameron and The Associated Press contributed to this report.