Posted on 02/20/2006 3:14:17 PM PST by Stellar Dendrite
The federal bureaucracy has made a strategic mistake that threatens to cost the President dearly. The question is not whether the ill-advised decision taken last week by the secretive Committee on Foreign Investment in the United States (known by its acronym, CFIUS, pronounced syphius) will be undone. Rather, the question is: By whom -- and at what political cost to Mr. Bush?
In the latest of a series of approvals of questionable foreign takeovers of American interests, CFIUS has given the green light to a company owned by the United Arab Emirates (UAE) to acquire contracts to manage port facilities in New York, Newark, Philadelphia, Baltimore, Miami and New Orleans. The company, Dubai Ports World, would do so by purchasing a British concern, Peninsula and Oriental Steam Navigation Company (“P and O”).
Experts have long identified America’s sea ports as weak links in the chain of our homeland security. With their proximity to major U.S. population centers, expensive infrastructure vital to the regional and, in many cases, national economy and their throughput of large quantities of poorly monitored cargo, they are prime targets for terror.
As a result, a case can be made that it is a mistake to have foreign entities responsible for any aspect of such ports, including the management of their docks, stevedore operations and terminals. After all, that duty affords abundant opportunities to insinuate personnel and/or shipping containers that can pose a threat to this country. Even though the company in question may not be directly responsible for port security, at least some of their employees have to be read in on the relevant plans, potentially compromising the latter irreparably.
At least the previous foreign contractors were from Britain, a country that was on our side before September 11, 2001. The same cannot be said of the United Arab Emirates, whose territory was used for most of the planning and financing of the 9/11 attacks. While the UAE’s government is currently depicted as a friend and ally in the so-called war on terror, its country remains awash with Islamofascist recruiters and adherents – people all too willing to exploit any new opportunity to do us harm.
Since a column raising an alarm about CFIUS’ decision appeared in this space last week, three new factors have come to light that compound the strategic folly of the UAE deal:
O First, in addition to the six affected ports mentioned above, two others would also have part of their operations managed by DP World – on behalf of none other than the U.S. Army. Under a newly extended contract, the owner of P and O will manage the movement of heavy armor, helicopters and other military materiel through the Texas seaports of Beaumont and Corpus Christie. How much would our enemies like to be able to sabotage such shipments?
O Second, while advocates of the stealthy CFIUS decision-making process point to the involvement of the Defense Department in its DP World decision, it is unclear at what level this bizarre proposition was reviewed in the Pentagon. Many top jobs remain unfilled by presidential appointees. Past experience suggests the job may have fallen to lower-level career bureaucrats who give priority to maintaining good relations with their foreign “clients,” like the UAE.
O Then, there is the matter of financing the DP World takeover of Peninsula and Oriental. The UAE evidently intends to raise nearly all of the $6.8 billion price for P and O on international capital markets. It must be asked: Who will the foreign investors be, and might they have malign intentions towards the U.S.? If American sources of capital are being sought, will the possible danger this transaction may create for this country be properly disclosed? For that matter, will the underwriters, Barclays and Deutchebank, reveal to prospective funders the real risk that the deal will ultimately fall through?
In fact, that seems virtually certain now that talk radio, the blogosphere and the public have become aware of – and white hot about – this transaction. Members of Congress on both sides of the aisle and of Capitol Hill have made known their determination to prevent the transfer of control of U.S. ports to the UAE. In particular, Democrats like Hillary Clinton and Charles Schumer have been quick to seize on this issue as an opportunity to burnish their national security credentials at the expense of President Bush and his party.
So, the question recurs: How long will it take before Mr. Bush cuts his losses? This could be accomplished in one of three ways: He could reverse the decision himself (perhaps by directing CFIUS to reconsider its initial recommendation). He could encourage and sign into law legislation barring foreign ownership or management of U.S. port facilities (akin to the rules governing other critical infrastructure). Or he could quietly encourage the UAE to do as Communist China did last year with respect to the Unocal purchase – withdraw the offer itself, sparing the country in question (and its friends here) the embarrassment of having its behavior carefully scrutinized and its offer spurned in a high-profile way.
Call it a Harriet Meirs moment. Politics being the art of the possible, it is time to recognize that the Dubai Ports World deal is neither strategically sensible nor politically doable. It is time to pull the plug, and to reform the secretive interagency CFIUS process that allowed this fiasco in the first place.
Other ports are open.
We can't control the movement of cargo outside US territorial limits. But we certainly can control said cargo inside our own territorial limits.
I suppose you think that if Schumer and Hillary are in favor of a policy then the thing to do is automatically do the opposite?
They probably think -- rightly -- that Bush is incredibly vulnerable on this issue.
And so he is.
From the looks of things the British court is going to rubber stamp the deal on March 2nd, there is no knight in shining armor that is going to nix the deal, IMO.
How big of a "dent" in the US economy would a nuclear bomb in a major city cause?
Assignality clauses can deny them any part of those ports.
It's amazing how no matter how stupid W apparently acts, some will find a theory to say that he's working in mysterious ways. I have a host of issues with him, including Prescription Drugs for seniors, McCain-Feingold, immigration enforcement laxity, Sarbanes-Oxley, rebuilding New Orleans, etc., that are not so mysterious. Okay, let's wait for W to speak about this lunatic idea before we add this to his bonehead pile.
I agree with you that globalism is a big issue with the Bush Administration. They are all for free trade and out-sourcing, often to an excess in my opinion. If this sale is approved, the Administration's belief in globalism will be part of the reason.
Then DPWorld, IMO, has the right to seek restitution or they could mothball the assets and infrastructure.
Anyway it doesn't set up good precedent. Who wants to sign a contract that can be yanked willynilly due to political hyperbole or graft.
Depends on how the clause it written. Probably not. And if so oh well, national security trumps business interests everytime.
Oh, well, you're talking money, I'm talking survival. You're talking country club, I'm talking country. I respect you, but I disagree with you.
I am still waiting to find out what country you actually live in. Obviously, not the United States.
If so, I don't mind that you're willing to put your pocketbook ahead of US national security. After all, it's not your problem.
I do have a problem with your pretending to be "just of of us".
Question.
That would be our Justice Dept. defending us, right? Wasn’t Alberto Gonzales on the board that approved the deal? Will they defend against what they wanted in the first place?
Kind of like expecting him to defend our borders.
I once worked for a gov. contractor and the contract had a clause that allowed the gov. to declare it null and void if the company was sold and they did not like the new owners. No reason needed.
The container sits in a U.S. terminal. The last I checked that is within the U.S. territorial limits.It's been loaded by foreigners, trucked by foreigners, passed through other foreign terminals, put on foreign steamships and now it sits *boom* in a berth at a terminal withinin US territorial limits in Newark. All of this before the UAE owned company moves it a few hundred feet under the control of the US CBP.
I suppose you think that if Schumer and Hillary are in favor of a policy then the thing to do is automatically do the opposite?
No. I suppose you don't think unless Schumer, Hillary, Gaffney, Peter King tell you to.
Enough already!!!
Drink drink drink drink! Maybe I should switch to booze. Just kidding, that makes it worse.
I don't expect Bush to lift a finger to stop this. I have my hopes pinned on Congress. God help us.
I'm a drinking, I'm a drinking... but just water and lots of it.
I'm sorry you have a headache too.
Tsk, tsk. Nasty, nasty. Well, name call all you like. I have a tough skin, I can handle it.
Actually, IMO, that contract would be nullified if the new owners had a criminal background.
DPWorld has done nothing wrong and no one has brought any criminal charges, so I wouldn't doubt there is a buyout clause for a termination before the contract is up.
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