UAE terminal takeover extends to 21 ports

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Sun, 26 Feb 2006 19:36:38 -0800 (PST)

UAE terminal takeover extends to 21 ports

 

 

 

UAE terminal takeover extends to 21 ports

By PAMELA HESS

UPI Pentagon Correspondent

 

 

WASHINGTON, Feb. 24 (UPI) -- A United Arab Emirates

government-owned company is poised to take over port

terminal operations in 21 American ports, far more

than the six widely reported.

 

The Bush administration has approved the takeover of

British-owned Peninsular & Oriental Steam Navigation

Co. to DP World, a deal set to go forward March 2

unless Congress intervenes.

 

P & O is the parent company of P & O Ports North America,

which leases terminals for the import and export and

loading and unloading and security of cargo in 21

ports, 11 on the East Coast, ranging from Portland,

Maine to Miami, Florida, and 10 on the Gulf Coast,

from Gulfport, Miss., to Corpus Christi, Texas,

according to the company's Web site.

 

President George W. Bush on Tuesday threatened to veto

any legislation designed to stall the handover.

 

Sen. Hillary Clinton, D-N.Y. said after the briefing

she expects swift, bi-partisan approval for a bill to

require a national security review before it is

allowed to go forward.

 

At issue is a 1992 amendment to a law that requires a

45-day review if the foreign takeover of a U.S.

company " could affect national security. " Many members

of Congress see that review as mandatory in this case.

 

 

But Bush administration officials said Thursday that

review is only triggered if a Cabinet official

expresses a national security concern during an

interagency review of a proposed takeover.

 

" We have a difference of opinion on the interpretation

of your amendment, " said Treasury Department Deputy

Secretary Robert Kimmitt.

 

The Committee on Foreign Investment in the United

States, comprised of officials from 12 government

departments and agencies, including the National

Security Council and the Department of Homeland

Security, approved the deal unanimously on January 17.

 

 

" The structure of the deal led us to believe there

were no national security concerns, " said Homeland

Security Deputy Secretary Michael P. Jackson.

 

The same day, the White House appointed a DP World

executive, David C. Sanborn, to be the administrator

for the Maritime Administration of the Department of

Transportation. Sanborn had been serving as director

of operations for Europe and Latin America at DP

World.

 

Senate Armed Services Committee Chairman John Warner,

R- Va., said he will request from both the U.S.

attorney general and the Senate committee's legal

counsel a finding on the administration's

interpretation of the 1992 amendment.

 

Adding to the controversy is the fact Congress was not

notified of the deal. Kimmitt said Congress is

periodically updated on completed CFIUS decisions, but

is proscribed from initiating contact with Congress

about pending deals. It may respond to congressional

inquiries on those cases only.

 

Iowa Republican Sen. Charles Grassley stated in a

letter to Bush on Feb. 21 that he specifically

requested to be kept abreast of foreign investments

that may have national security implications. He made

the request in the wake of a controversial Chinese

proposal to purchase an oil company last year.

 

" Obviously, my request fell on deaf ears. I am

disappointed that I was neither briefed nor informed

of this sale prior to its approval. Instead, I read

about it in the media, " he wrote.

 

According to Kimmitt, the deal was reported on in

major newspapers as early as last October. But it did

not get critical attention in the press until the

Associated Press broke the story Feb. 11 and the

Center for Security Policy, a right-leaning

organization, wrote about it Feb. 13. CSP posited the

sale as the Treasury Department putting commerce

interests above national security.

 

Kimmitt said because the 2005 Chinese proposal had

caused such an uproar before it ever got to CFIUS, the

lack of reaction to the Dubai deal when it was

reported on last fall suggested it would not be

controversial enough to require special notification

of Congress.

 

Central to the debate is the fact that the United Arab

Emirates, while a key ally of the United States in the

Middle East, has had troubling ties to terrorist

networks, according to the Sept. 11 Commission report.

It was one of the few countries in the world that

recognized the al-Qaida-friendly Taliban government in

Afghanistan; al-Qaida funneled millions of dollars

through the U.A.E. financial sector; and A.Q. Khan,

the notorious Pakistani nuclear technology smuggler,

used warehouses near the Dubai port as a key transit

point for many of his shipments.

 

Since the terrorist attacks, it has cut ties with the

Taliban, frozen just over $1 million in alleged

terrorist funding, and given the United States key

military basing and over-flight rights. At any given

time, there are 77,000 U.S. service members on leave

in the United Arab Emirates, according to the

Pentagon.

 

Deputy Defense Secretary Gordon England warned that

the uproar about the United Arab Emirates involvement

in U.S. ports could risk alienating the very countries

in the Middle East the United States is trying to

court as allies in the war on terrorism.

 

" It's very important we strengthen bonds ...

especially with friends and allies in the Arab world.

It's important that we treat friends and allies

equally around the world without discrimination, " he

said.

 

The security of port terminal operations is a key

concern. More than 7 million cargo containers come

through 361 American ports annually, half of the

containers through New York-New Jersey, Los Angeles

and Long Beach, Calif. Only a small percentage are

physically searched and just 37 percent currently

screened for radiation, an indication of an attempt to

smuggle in nuclear material that could be used for a

" dirty bomb. "

 

After the September 11 terrorist attacks, the

government began a new program that required

documentation on all cargo 24 hours before it was

loaded on a ship in a foreign port bound for the

United States. A " risk analysis " is conducted on every

shipment, including a review of the ship's history,

the cargo's history and contents and other factors.

Each ship must also provide the U.S. government 96

hours notice of its arrival in an American port, along

with a crew manifest.

 

None of the nine administration officials assembled

for the briefing could immediately say how many of the

more than 3,000 port terminals are currently under

foreign control.

 

Port facility operators have a major security

responsibility, and one that could be exploited by

terrorists if they infiltrate the company, said Joe

Muldoon III. Muldoon is an attorney representing Eller

& Co., a port facility operator in Florida partnered

with M & O in Miami. Eller opposes the Dubai takeover

for security reasons.

 

" The Coast Guard oversees security, and they have the

authority to inspect containers if they want and they

can look at manifests, but they are really dependent

on facility operators to carry out security issues, "

Muldoon said.

 

The Marine Transportation Security Act of 2002

requires vessels and port facilities to conduct

vulnerability assessments and develop security plans

including passenger, vehicle and baggage screening

procedures; security patrols; establishing restricted

areas; personnel identification procedures; access

control measures; and/or installation of surveillance

equipment.

 

Under the same law, port facility operators may have

access to Coast Guard security incident response plans

-- that is, they would know how the Coast Guard plans

to counter and respond to terrorist attacks.

 

" The concern is that the UAE may be our friend now ...

but who's to say that couldn't change, or they

couldn't be infiltrated. Iran was our big buddy, " said

Muldoon.

 

In a January report, the Council on Foreign Relations

pointed out the vulnerability of the shipping security

system to terrorist exploitation.

 

Since the Sept. 11 terrorist attacks, the U.S. customs

agency requires shippers to follow supply chain

security practices. Provided there are no apparent

deviations from those practices or intelligence

warnings, the shipment is judged low risk and is

therefore unlikely to be inspected.

 

CFR suggests a terrorist event is likely to be a

one-time operation on a trusted carrier " precisely

because they can count on these shipments entering the

U.S. with negligible or no inspection. "

 

" All a terrorist organization needs to do is find a

single weak link within a 'trusted' shipper's complex

supply chain, such as a poorly paid truck driver

taking a container from a remote factory to a port.

They can then gain access to the container in one of

the half-dozen ways well known to experienced

smugglers, " CFR wrote.

 

http://www.upi.com/SecurityTerrorism/view.php?StoryID=20060223-051657-4981r