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.
OF course those Americans will be called "traitors" by some on FR.
Pres Bush has a blind spot or should I say an oily spot.
Many fools realize this is not a good deal. Makes you wonder if in the second term the U.S. is up for sale, this and the sale of gov't. lands.
He didn't.
he wouldn't have waited until February 20th of 2006 to write an article expressing his "concerns" about a corporate acquisition that was originally announced in October or November of 2005.
You knew about it last year?
Dane, that you defend this deal tells me all I need to know about whether it is at all in the security interest of the United States or just in one world corporate interests.
This from "Financial Times".
The Bush administration will also call on State and Defence department officials to persuade legislators that the US has a “long-standing” and “good” relationship with the United Arab Emirates.
Condoleezza Rice, secretary of state, who will be meeting Gulf foreign ministers this week in Abu Dhabi, said on Friday that Abu Dhabi was “a very good friend” to the US and that the deal needed “better explanation”.
I don't think so. Running ports is something Americans still know how to do. Especially now that it's more or less computerized.
Besides, you forgot your argument that "the port operator doesn't really do anything but supervise the longshoremen."
Other than the sanction of the Court, which will be sought at a hearing expected to be held on 27 February 2006, all conditions to the completion of the Offer, the Concessionary Stock Acquisition and the Preferred Stock Cancellation have now been satisfied or waived. Therefore, it is expected that completion of the Acquisition will occur on 2 March 2006.
Democrats are terrible on national security but without the media the public will never know.
Nancy pelosi will be the next speaker of the house and hillary rodham clinton will be the next president.
When that happens thank Lou Dobbs for never going after democrats.
Bush gets no credit for the good moves he has made on security. And when dems stop wiretapping, fund hamas, close guantonoma bay, stop extraodinary renditions, stop predator drone attacks in pakistan, run from iraq and do a whole lot more you can thank lou dobbs and pelosi.
You had the vote in the house will republicans voting for a fence and dems voting against it and yet republicans get blamed.
Damn the media for turning this country into pelosiland. She is going to take san francisco nationwide.
Bring her on already because we are witnessing a death by a thousand cuts by the national media.
Then when pelosi and hillary rodham act like the liberals they are the media will blame bush. We will also have to put up with higher taxes, assault weapons ban, no oil drillign, ruth bader ginsberg supreme court judges.
Until the conservatives revolt and take over the main stream media we are destined to san francisco going nationwide under pelosi and hillary rodham.
We are destined to have a president like al gore who goes to saudi arabia and screams how the us doesn't give enough visas to the saudis.
DID JACK CAFFERTY HAVE AN E-MAIL QUESTION WHAT DO YOU THINK ABOUT AL GORE VISITING SAUDI ARABIA AND BASHING THE US ABOUT THEIR TREATMENT OF ARABS.
NO THEY WERE WORRIED ABOUT CHENEY. THEY PAID NO ATTENTION TO GORE. IF BUSH HAD DONE THAT YOU WOULDN'T HAVE HEARD THE END OF IT. GORE GOT NO PRESS.
OUR MEDIA IS UNDEMOCRATIC.
No they do not own squat yet.
Yes. There's been a bunch of mergers and acquisitions in the maritime shipping industry over the last year or so, and this was one of them.
They are traitors, free traitors.
Anybody who puts their pocketbook interests ahead of national security is a traitor.
Yes they do. The P&O shareholders have approved DPWorld's takeover offer.
The panel has to reject it for bush to get involved.
Bush has no role under the law in this.
None of the above is true.
US Treasury-Committee on Foreign Investments in the United States (CFIUS)
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.
Snip
This order also provides for CFIUS to submit a report and recommendation to the President at the conclusion of an investigation.
snip
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.
It has not gone through yet, it is waiting regulatory approval. See post 47
Thank you for the only informative post on this thread.
Although Senator Graham is correct in his "tone-deaf" accusation, it is no small shade of ironic that Senator Graham should be the one to level this accusation.
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