President Bush believes the Dubai Ports World deal was thoroughly scrutinized and should go forward, but welcomes the additional 45-day review so that Congress can get comfortable with the sale, White House spokesman Scott McClellan said Monday.
"The additional time and investigation at the request of the company, we believe will help provide Congress with a better understanding. And once they have that better understanding, we believe they'll be more comfortable with the transaction moving forward," he said.
"We think that a reasonable middle ground has been reached," McClellan said.
Bush pressed his case for the ports deal with the nation's governors on Monday. The National Governors Association is holding its winter meeting in Washington. After a private meeting with the president, two leading governors said Bush made a strong argument for the ports deal.
Still, Republican Gov. Mike Huckabee of Arkansas, the chairman, and Democratic Gov. Janet Napolitano of Arizona, the vice chairman of NGA, said a little heads-up would have been helpful.
"There has been such overreaction and emotional reaction of the port issue that goes beyond what should be our concern. Foreign governments already were operating those ports. The UAE is not an enemy to the U.S. it's an ally to the U.S.," Huckabee said.
"The governors feel very strongly that consultation before the fact rather than after is key," added Napolitano.
The Treasury Department announced Sunday that it would do a second review of the $6.8 billion purchase by the United Arab Emirates-owned firm of Peninsular & Oriental Steam Navigation Co. The U.S. Committee on Foreign Investment in the United States, the same government panel that earlier investigated the Dubai Ports World deal but found no reason for national security concerns, will again conduct the review.
"Upon receipt of the formal filing, CFIUS will move promptly to initiate the review process and fulfill D.P. World's request for a 45-day investigation," Clay Lowery, assistant secretary for international affairs at the Treasury Department, told members of the Senate Homeland Security and Governmental Affairs Committee on Monday.
"The administration will take this charge very seriously. We have heard very clearly the concerns raised in Congress and in some of the port authorities. We will look at that transaction in that light," Lowery said.
DP World is hoping to take over leases from P&O for 24 terminals in six U.S. ports. Administration officials also reinforced to senators that CFIUS had rigorously reviewed the DP World/P&O deal in the first place.
"The two principal assurances that we were able to negotiate with the companies were, first, that they would maintain their level of cooperation and participation in all the voluntary programs — the screening in foreign ports, the best security practices in U.S. ports," said Stewart Baker, assistant secretary for policy planning and international affairs at the Department of Homeland Security, in the same briefing.
"The second thing that they agreed to is to give us what amounted to an open books promise, so that we could — without getting a subpoena, without getting a warrant — walk into their offices and ask for any records that they might have about any of their operations in the United States or any effort to control their operations from outside the United States," Baker said.
One Coast Guard official said his agency had raised concerns about DP World's access to U.S. shipping business, but ultimately agreed with the other 13 federal agencies involved in the review after it had received classified assurances by the CIA and other intelligence agencies.
"All of the facilities that P&O owned around the country had an approved security plan, and, indeed, had all been inspected," said Adm. Thomas Gilmore, assistant commandant for marine safety, security and environmental protection at the U.S. Coast Guard. "We thought it prudent, with everything that was going on in this case, to take another look at those facilities. And, indeed, we have found nothing that would change our view of these facilities."
On Monday, Sen. Chuck Schumer of New York, along with other Democratic lawmakers, rallied against the deal along with Teamsters at a New Jersey port.
"You can't do the report in secret. You can't just give it to the president who's already said he's supported the deal. You have to show the Congress the full report," he said.
Back in Washington, Schumer said he hopes Bush receives the new report with "an open mind," but just in case, he introduced legislation with Sen. Susan Collins, R-Maine, chairwoman of the Homeland Security Committee, that would give Congress 30 days after the 45 day review and its final report, to approve or disapprove of the deal.
"I would like to hear the president say that if new concerns come out in the report, he would reconsider his support of this merger. We haven't heard that yet," he said.
Critics of the deal have cited the UAE's history as an operational and financial base for the hijackers who attacked New York and Washington on Sept. 11, 2001. The UAE was one of only three countries that recognized the Taliban government in Afghanistan before its 2001 overthrow by U.S.-led forces.
One bill introduced Monday by Sens. Hillary Rodham Clinton, D-N.Y., and Bob Menendez, D-N.J., bans all companies owned by foreign governments from controlling operations at any U.S. ports. The bill would block the sale between DP World and P&O, whose deal was contingent upon U.S. approval.
"How was the decision made to give another country control of our ports? It is not another company taking control of our ports, it's another country. This is a state-owned company. The administration's decision-making process could not be more flawed," said Senate Minority Leader Harry Reid, D-Nev., who spoke on the Senate floor to upbraid the administration for its decision to "outsource our ports to Dubai."
Critics say that the Clinton-Menendez bill is too isolationist and sends the wrong message. Bush said last week that he would veto any congressional legislation blocking the deal, and McClellan reaffirmed that position on Monday. But, the review could avoid a political showdown and will involve higher ranks of government than the officials involved in the initial approval.
"This will likely bring in deputies and principals that maybe had not been involved in that initial review period, and as I said, ultimately it goes to the president," McClellan said.
Senate Majority Leader Bill Frist, R-Tenn., said Congress will hold off on a bill to block the deal until the review is complete. But in other legislation, Sen. Kay Bailey Hutchison, R-Texas, sent Frist a letter on Monday asking him to revisit a bill she proposed increasing transportation security.
The Shipping Container Security Act would require all foreign countries shipping goods to the United States to grant access to U.S. inspectors at their point of origin, would increase inspections of containers entering U.S. ports and would direct the Department of Homeland Security to monitor cargo within the U.S. until it reaches its final destination.
"I think most members of Congress are wanting to know more about this so that we can assure ourselves or craft legislation to assure that we have complete safeguards," Hutchison told FOX News.