Port of Entry

Military.com ^ | February 13, 2006 | Frank Gaffney

[Sweetjustusnow]

How would you feel if, in the aftermath of 9/11, the U.S. government had decided to contract out airport security to the United Arab Emirates (UAE), the country where most of the operational planning and financing of the attacks occurred? My guess is you, like most Americans, would think it a lunatic idea, one that could clear the way for still more terror in this country. You probably would want to know who on earth approved such a plan -- and be determined to prevent it from happening.

[Sweetjustusnow]

How would you feel if, in the aftermath of 9/11, the U.S. government had decided to contract out airport security to the United Arab Emirates (UAE), the country where most of the operational planning and financing of the attacks occurred? My guess is you, like most Americans, would think it a lunatic idea, one that could clear the way for still more terror in this country. You probably would want to know who on earth approved such a plan -- and be determined to prevent it from happening.

Of course, no such thing occurred after September 11, 2001 . In fact, the job of keeping our planes and the flying public secure was deemed to be so important that the government itself took it over from private contractors seen as insufficiently rigorous in executing that responsibility.

Now, however, four-and-a-half years later, a secretive government committee has decided to turn over the management of six of the Nation's most important ports -- in New York, New Jersey, Philadelphia, Miami, Baltimore and New Orleans -- to Dubai Ports World following the UAE company's purchase of London-based Peninsular and Oriental Steam Navigation Co., which previously had the contract.

This is not the first time this interagency panel -- called the Committee on Foreign Investment in the United States (CFIUS) -- has made an astounding call about the transfer of control of strategically sensitive U.S. assets to questionable purchasers. In fact, as of last summer, CFIUS had, since its creation in 1988, formally rejected only one of 1,530 transactions submitted for its review.

Such a record is hardly surprising given that the committee is chaired by the Treasury Department, whose institutional responsibilities include promoting foreign investment in the United States. Treasury has rarely seen a foreign purchase of American assets that it did not like. And this bias on the part of the chairman of CFIUS has consistently skewed the results of the panel's deliberations in favor of approving deals, even those opposed by other, more national security-minded departments.

Thanks to the secrecy with which CFIUS operates, it is not clear at this writing whether any such objection was heard with respect to the idea of contracting out management of six of our country's most important ports to a UAE company. There would certainly appear to be a number of grounds for rejecting this initiative, however:

1) America 's seaports have long been recognized by homeland security experts as among our most vulnerable targets. Huge quantities of cargo move through them every day, much of it of uncertain character and provenance, nearly all of it inadequately monitored. Matters can only be made worse by port managers who might conspire to bring in dangerous containers, or simply look the other way when they arrive.

2) Entrusting information about key U.S. ports -- including, presumably, government-approved plans for securing them, to say nothing of the responsibility for controlling physical access to these facilities, to a country known to have been penetrated by terrorists is not just irresponsible. It is recklessly so.

3) At the risk of being politically incorrect, the proposed new management will also complicate the job of assuring that the personnel working in these ports pose no threat to their operations -- or to the rest of us. To the extent that we must remain particularly vigilant about young male Arab nationals as potential terrorists, it makes no sense to provide legitimate grounds for such individuals to be in and around some of this country's most important strategic assets.

4) Of particular concern must be the implications for energy security as a very large proportion of the Nation's oil imports come through the Atlantic and Gulf State ports that the UAE company hopes to take over. For example, Philadelphia alone handles some 85% of the oil coming into the East Coast; New Orleans is responsible for one-seventh of all of our imported energy.

Given such considerations, the question occurs: How could even a stacked deck like the Committee on Foreign Investment in the United States find it possible to approve the Dubai Ports World's transaction?

Could it have been influenced by the fact that a former senior official of the UAE company, David Sanborn, was recently named the new administrator of the Transportation Department's Maritime Administration? Until recently, Sanborn was DP World's director of operations for Europe and Latin America.

Or is it because the U.S. government views -- and is determined to portray -- the United Arab Emirates as a vital ally in this war for the Free World? A similar determination has long caused Washington to treat Saudi Arabia as a valued friend, even as the Saudis continue playing a double game whereby they work simultaneously to repress terrorism at home and abet it abroad.

Whatever the explanation, the Nation can simply no longer afford to have the disposition of strategic assets -- including those that have a military or homeland security dimension -- determined by a Treasury-dominated panel whose deliberations and decisions are made in secret without congressional oversight.

Congress should see to it that the United Arab Emirates is not entrusted with the operation of any American ports, and that the Treasury Department is stripped of the lead role in evaluating such dubious foreign investments in the United States.

Sound Off...What do you think? Join the discussion.

[Sweetjustusnow]

http://www.ustreas.gov/offices/international-affairs/exon-florio/


Committee on Foreign Investments in the United States (CFIUS)

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U.S. DEPARTMENT OF TREASURY

OFFICE OF THE ASSISTANT SECRETARY INTERNATIONAL AFFAIRS

OFFICE OF INTERNATIONAL INVESTMENT



EXON-FLORIO PROVISION

Introduction. The United States has traditionally welcomed Foreign Direct Investment (FDI) and provided foreign investors fair, equitable and nondiscriminatory treatment with few limited exceptions designed to protect national security. The Exon-Florio provision is implemented within the context of this open investment policy. The intent of Exon-Florio is not to discourage FDI generally, but to provide a mechanism to review and, if the President finds necessary, to restrict FDI that threatens the national security.

The Exon-Florio provision is implemented by the Committee on Foreign Investment in the United States ("CFIUS"), an inter-agency committee chaired by the Secretary of Treasury. CFIUS seeks to serve U.S. investment policy through thorough reviews that protect national security while maintaining the credibility of our open investment policy and preserving the confidence of foreign investors here and of U.S. investors abroad that they will not be subject to retaliatory discrimination.

The Statute. Section 5021 of the Omnibus Trade and Competitiveness Act of 1988 amended Section 721 of the Defense Production Act of 1950 to provide authority to the President to suspend or prohibit any foreign acquisition, merger or takeover of a U.S. corporation that is determined to threaten the national security of the United States. The President can exercise this authority under section 721 (also known as the "Exon-Florio provision") to block a foreign acquisition of a U.S. corporation only if he finds:

(1) there is credible evidence that the foreign entity exercising control might take action that threatens national security, and

(2) the provisions of law, other than the International Emergency Economic Powers Act do not provide adequate and appropriate authority to protect the national security.

To assist in making this determination, Exon-Florio provides for the President or his designee to receive written notice of an acquisition, merger or takeover of a U.S. corporation by a foreign entity. Once CFIUS has received a complete notification, it begins a thorough review of the notified transaction. In some cases, it is necessary to undertake an extended review or "investigation." An investigation, if necessary, must begin no later than 30 days after receipt of a notice. Any investigation is required to end within 45 days.

Information provided by companies contemplating a transaction subject to Exon-Florio is held confidential and is not made public, except in the case of an administrative or judicial action or proceeding. Nothing in section 721 shall be construed to prevent disclosure to either House of Congress or to any duly authorized committee or subcommittee of the Congress.

Factors To Be Considered. The Exon-Florio provision lists the following factors that the President or his designee may consider in determining the effects of a foreign acquisition on national security. These factors are:

(1) domestic production needed for projected national defense requirements;

(2) the capability and capacity of domestic industries to meet national defense requirements, including the availability of human resources, products, technology, materials, and other supplies and services;

(3) the control of domestic industries and commercial activity by foreign citizens as it affects the capability and capacity of the U.S. to meet the requirements of national security;

(4) the potential effects of the transaction on the sales of military goods, equipment, or technology to a country that supports terrorism or proliferates missile technology or chemical and biological weapons; and

(5) the potential effects of the transaction on U.S. technological leadership in areas affecting U.S. national security.

Amendments. Section 837(a) of the National Defense Authorization Act for Fiscal Year 1993, called the "Byrd Amendment," amended Section 721 of the Defense Production Act (the "Exon-Florio provision"). It requires an investigation in cases where:

o the acquirer is controlled by or acting on behalf of a foreign government; and

o the acquisition "could result in control of a person engaged in interstate commerce in the U.S. that could affect the national security of the U.S."

Legislative Cite. Section 721 of Pub. L. 100-418, 102 Stat. 1107, made permanent law by section 8 of Pub. L. 102-99, 105 Stat. 487 (50 U.S.C. App. 2170) and amended by section 837 of the National Defense Authorization Act for Fiscal Year 1993, Pub. L. 102-484, 106 Stat. 2315, 2463.

CFIUS

Executive Order. The Committee on Foreign Investment in the United States ("CFIUS") was originally established by Executive Order 11858 in 1975 mainly to monitor and evaluate the impact of foreign investment in the United States. In 1988, the President, pursuant to Executive Order 12661, delegated to CFIUS his responsibilities under Section 721. Specifically, E.O. 12661 designated CFIUS to receive notices of foreign acquisitions of U.S. companies, to determine whether a particular acquisition has national security issues sufficient to warrant an investigation and to undertake an investigation, if necessary, under the Exon-Florio provision. This order also provides for CFIUS to submit a report and recommendation to the President at the conclusion of an investigation.

In 1993, in response to a sense of Congress resolution, CFIUS membership was expanded by Executive Order 12860 to include the Director of the Office of Science and Technology Policy, the Assistant to the President for National Security Affairs and the Assistant to the President for Economic Policy. In February 2003, the Department of Homeland Security was added to CFIUS. This brought the membership of CFIUS to twelve under the chairmanship of the Secretary of Treasury. The other members are the Secretaries of State, Defense, and Commerce, the Attorney General, the Director of the Office of Management and Budget, the U.S. Trade Representative, and the Chairman of the Council of Economic Advisers.

Regulations. The Exon-Florio provision requested that the President issue implementing regulations. These regulations were issued in 1991. They set up a voluntary system of notification with the possibility of CFIUS member-agency notice for non-notified transactions. The President retains full authority to protect the national security with respect to any acquisition covered by this statute, regardless of whether the parties file a notification.

The Exon-Florio regulations do not define national security. The preamble to the regulations provides guidance that products, services and technologies important to U.S. defense requirements would be significant to national security. Even though notification is voluntary, CFIUS would consider notification of these transactions appropriate.

Code of Federal Regulations Citation. Office of International Investment, Department of Treasury -- Regulations pertaining to mergers, acquisitions, and takeovers by foreign persons, 31 CFR Part 800.

Procedures. Treasury, acting at the staff level through the Director of the Office of International Investment in the Office of the Assistant Secretary of International Affairs, acts as the secretariat for CFIUS. It receives and circulates notices to CFIUS agencies and coordinates reviews. Reviews are conducted on a case-by-case basis.

The Exon-Florio statute established a 30-day review following receipt of a notification. For those transactions for which an extended 45-day review (or "investigation") is completed, a report must be provided to the President, who must by law announce the final decision within 15 days. In total, the process can not exceed 90 days. The statute requires the President to inform Congress of his determination of whether or not to take action under section 721.

The parties to an acquisition subject to section 721 may submit a voluntary notice to CFIUS of the proposed or completed acquisition by sending 13 copies of the information requested in part 800.402 of the Exon-Florio regulations to:

Ms. Gay Hartwell Sills
Staff Chair
Committee on Foreign Investment in the United States ("CFIUS")
Office of International Investment
Department of Treasury
1500 Pennsylvania Avenue, N.W., Room 4201 NY
Washington, DC 20220

Phone: (202) 622-9066
Also: (202) 622-1860

E-Mail: gay.sills@do.treas.gov

[Clintonfatigued]

It's absolutely mind-boggling. Makes me wonder how serious about national security the government is.

My biggest gripe about the Bush administration is that they never push for national security if it inconveniences corporate interests. This is not conservativism but corporatism. And the central core of corporatism is that patriotism and service to country don't apply to the wealthy and powerful.

[Txsleuth]

PING a LING!!!

[ArtyFO]

This plan will never be approved. Whoever thought this one up needs to resign-now.

[Stellar Dendrite]

ping

[Cicero]

As I have said all along, this must be blocked. Bush has already gone on record supporting it. Therefore, we have to persuade our friends in congress to block it.

Every one of the four arguments this article makes is well founded, and any one of them should be enough to be a deal breaker.

[rottndog]

There is a certain level of stupidity in the Bush administration that is absolutely incomprehensible. What concerns me more than this decision, though, is the silence out of the administration about it. Why are they waiting to come out and say something like "Oops, Sorry, we goofed", and reverse this decision?

[jla]

To: Pukin Dog; Cboldt; rodguy911; Seattle Conservative; Phsstpok

PING a LING!!!

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To: raybbr; DTogo; AZ_Cowboy; Itzlzha; Stellar Dendrite; NRA2BFree; Happy2BMe; Spiff; Pelham; ...

ping

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hehehe

[Dane]

I find it interesting that no one had any qualms that a foreign comapany was already operating out of our ports.

There is so much disinformation going on it's mindboggling.

I guess you would be happier if a french firm was operating out the ports.

[ozoneliar]

I guess you would be happier if a french firm was operating out the ports.

Yes, I would be.

[Dane]

There is a certain level of stupidity in the Bush administration that is absolutely incomprehensible. What concerns me more than this decision, though, is the silence out of the administration about it. Why are they waiting to come out and say something like "Oops, Sorry, we goofed", and reverse this decision?

Actually the stupidity is by those who are running with the hillary/schumer talking points.

[Itzlzha]

Frank Gaffney, just another in the growing list of "Unappeasables" that will not bend a knee to the demi-G_d Bush!

I guess he's a DU Troll now too...and will have the Howling Hordes ofBush Family Hegemony nipping at his heels now...

[Dane]

Yes, I would be

Great, I guess you would have George Galloway as CEO.

[Txsleuth]

??????????

[ozoneliar]

Its simply a matter of choosing between the lesser of 2 evils.

[Stellar Dendrite]

dont' forget lindsay graham, rick santorum and tom coburn.

[Lexington Green]

Is Bush nuts?

[Pukin Dog]

Thanks but no thanks. Gaffney has joined the nuts who have spun this issue so far beyond the facts, at this time I can only hope that Bush will ignore all the BS being slung about the sale, and just move forward with it. I'm done arguing about it with FReepers who don't know, and apparently don't want to know the truth about this issue.

[Reagan Man]

>>>>"... lawmakers, in a letter to Snow, requested that his committee conduct a full 45-day investigation of the transaction, saying it's essential for national security.

>>>>"Federal law requires the president or his designee investigate the impact on national security of a foreign acquisition if the acquisition 'could result in control of a person engaged in interstate commerce in the United States that could affect the national security of the United States,'” reads the letter signed by Sens. Schumer, Tom Coburn, R-Okla., Frank Lautenberg, D-N.J., and Chris Dodd, D-Conn., as well as Reps. Chris Shays, R-Conn., Vito Fossella, R-N.Y., and Mark Foley, R-Fla.

That sounds like a reasonable request. It also sounds like something the Feds shouldbe turning down. We don't want Muslims and Arabs who hate the US to be running our docks and ports. Not now, not ever. If this is a normal practice that is going on today, it should stopped immediately.