Arab firm to oversee 6 U.S. ports

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Sun, 12 Feb 2006 23:29:46 -0500

Arab firm to oversee 6 U.S. ports

 

 

 

 

 

http://www.chron.com/disp/story.mpl/nation/3652381.html

 

 

Feb. 11, 2006, 10:29AM

Arab firm to oversee 6 U.S. ports

 

By TED BRIDIS

Associated Press

 

WASHINGTON — A company in the United Arab Emirates is poised to take

over significant operations at six American ports as part of a

corporate sale, leaving a country with ties to the Sept. 11 hijackers

with influence over a maritime industry considered vulnerable to

terrorism.

 

 

The Bush administration considers the UAE an important ally in the

fight against terrorism since the suicide hijackings and is not

objecting to Dubai Ports World's purchase of London-based Peninsular

and Oriental Steam Navigation Co.

 

The $6.8 billion sale is expected to be approved Monday. The British

company is the fourth largest ports company in the world and its sale

would affect commercial U.S. port operations in New York, New Jersey,

Baltimore, New Orleans, Miami and Philadelphia.

 

DP World said it won approval from a secretive U.S. government panel

that considers security risks of foreign companies buying or investing

in American industry.

 

The U.S. Committee on Foreign Investment in the United States

" thoroughly reviewed the potential transaction and concluded they had

no objection, " the company said in a statement to The Associated Press.

 

The committee earlier agreed to consider concerns about the deal as

expressed by a Miami-based company, Eller & Co., according to Eller's

lawyer, Michael Kreitzer. Eller is a business partner with the British

shipping giant but was not in the running to buy the ports company.

 

The committee, which could have recommended that President Bush block

the purchase, includes representatives from the departments of

Treasury, Defense, Justice, Commerce, State and Homeland Security.

 

The State Department describes the UAE as a vital partner in the fight

against terrorism. But the UAE, a loose federation of seven emirates

on the Saudi peninsula, was an important operational and financial

base for the hijackers who carried out the attacks against New York

and Washington, the FBI concluded.

 

Sen. Charles Schumer, a Democrat whose district includes the New York

port, urged the administration to consider the sale carefully.

 

" America's busiest ports are vital to our economy and to the

international economy, and that is why they remain top terrorist

targets, " Schumer said. " Just as we would not outsource military

operations or law enforcement duties, we should be very careful before

we outsource such sensitive homeland security duties. "

 

Last month, the White House appointed a senior DP World executive,

David C. Sanborn of Virginia, to be the new administrator of the

Maritime Administration of the Transportation Department. Sanborn

worked as DP World's director of operations for Europe and Latin America.

 

Critics of the proposed purchase said a port operator complicit in

smuggling or terrorism could manipulate manifests and other records to

frustrate Homeland Security's already limited scrutiny of shipping

containers and slip contraband past U.S. Customs inspectors.

 

" When you have a foreign government involved, you are injecting

foreign national interests, " Kreitzer said. " A country that may be a

friend of ours today may not be on the same side tomorrow. You don't

know in advance what the politics of that country will be in the future. "

 

Shipping experts noted that many of the world's largest port companies

are not based in the U.S., and they pointed to DP World's strong

economic interest in operating ports securely and efficiently.

 

" Does this pose a national security risk? I think that's pushing the

envelope, " said Stephen E. Flynn, who studies maritime security at the

New York-based Council on Foreign Relations. " It's not impossible to

imagine one could develop an internal conspiracy, but I'd have to

assign it a very low probability. "

 

Changing management over the U.S. ports " doesn't offer al-Qaida any

opportunities it doesn't have now, " said James Lewis, who worked with

the U.S. committee at the State and Commerce departments. " It's in

Dubai's interest to make sure this runs well. There is strong economic

incentive to be sure these worries never materialize. "

 

Flynn and others said even under foreign control, U.S. ports will

continue to be run by unionized American employees. " You're not going

have a bunch of UAE citizens working the docks, " Flynn said. " They're

longshoremen, vested in high-paying jobs. Most of them are Archie

Bunker-kind of Americans. "

 

Peninsular and Oriental and DP World set approval by the U.S. security

committee as a condition for the sale. In regulatory papers, the

companies said either the committee must agree not to formally

investigate the purchase or Bush must not move to block the sale for

national security purposes.

 

Since the Sept. 11 attacks, the FBI has said the money for the strikes

was transferred to the hijackers primarily through the UAE's banking

system, and much of the operational planning for the attacks took

place inside the UAE.

 

Many of the hijackers traveled to the U.S. through the UAE. Also, the

hijacker who steered United Airlines flight into the World Trade

Center's south tower, Marwan al-Shehhi, was born in the UAE.

 

After the attacks, U.S. Treasury Department officials complained about

a lack of cooperation by the UAE and other Arab countries trying to

track Osama bin Laden's bank accounts.