WASHINGTON – President Bush has approved the takeover by a Dubai-owned company of American plants that make parts for jets and tanks after a review that seems to have satisfied lawmakers who helped block an earlier Dubai deal.
Bush said Friday the proposed sale of a U.S. subsidiary of a British precision engineering firm to the Dubai company "has been looked at very carefully." He said he had signed off on the transaction after receiving recommendations from the Pentagon and a committee that reviews security-related sales to foreign entities.
Initial reaction from Capitol Hill was favorable. "This investigation was a significant improvement over what happened before," said House Homeland Security Chairman Peter T. King, R-N.Y. "It's been much more thorough, much more detailed."
King was referring to the political firestorm over the proposed takeover of operations at several major U.S. ports by another Dubai-owned company, DP World. The company announced last month it was selling its interests in the ports to an American buyer after lawmakers protested that DP World's running of the ports posed an unacceptable security risk.
Dubai, now a strong U.S. ally, in the past has been a base for terrorist activities.
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."
This time, the transaction involves the sale of Ross Catherall U.S. Holdings Inc., which is owned by the British Doncasters Group Ltd., to Dubai International Capital LLC. Dubai International, the investment arm of Dubai Holding, announced in December that it had signed an agreement to acquire Doncasters for 700 million pounds ($1.25 billion) from Royal Bank of Scotland Equity Finance.
White House Press Secretary Scott McClellan said Friday that the Committee on Foreign Investment in the United States, the 12-agency panel that reviews transactions involving national security, went through an unusually lengthy review of the proposed deal.
He said CFIUS, which drew fire for its approval of the Dubai port deal, conducted both a 30-day review beginning on Jan. 28 and a 45-day investigation before recommending the sale to the president.
"The committee specifically considered the fact that a U.S. subsidiary of Ross Catherall is a single source supplier of turbine engine blades for the Department of Defense," McClellan said in a statement. He said the Dubai company had made a commitment that there would be no interruptions in supplies to the Pentagon.
Doncasters has nine plants in the United States, including two each in Connecticut and Alabama and one each in Massachusetts, South Carolina, Georgia, California and Oregon. It makes precision components and assemblies for such companies as Boeing Co., Pratt & Whitney and General Electric Co.
One Georgia Democrat, freshman Rep. John Barrow, said he still questioned the CFIUS process. Until the president provides Congress with the full CFIUS report on the Doncasters investigation, he said, "we'll never know if continuing down this path of selling off our national defense industries will end up hurting us in the long run."