Posted on 03/23/2006 2:49:54 PM PST by My Favorite Headache
U.S. Hiring Chinese Co. to Scan Nukes By TED BRIDIS and JOHN SOLOMON, Associated Press Writers 27 minutes ago
WASHINGTON - In the aftermath of the Dubai ports dispute, the Bush administration is hiring a Hong Kong conglomerate to help detect nuclear materials inside cargo passing through the Bahamas to the United States and elsewhere.
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The administration acknowledges the no-bid contract with Hutchison Whampoa Ltd. represents the first time a foreign company will be involved in running a sophisticated U.S. radiation detector at an overseas port without American customs agents present.
Freeport in the Bahamas is 65 miles from the U.S. coast, where cargo would be likely to be inspected again. The contract is currently being finalized.
The administration is negotiating a second no-bid contract for a Philippine company to install radiation detectors in its home country, according to documents obtained by The Associated Press. At dozens of other overseas ports, foreign governments are primarily responsible for scanning cargo.
While President Bush recently reassured Congress that foreigners would not manage security at U.S. ports, the Hutchison deal in the Bahamas illustrates how the administration is relying on foreign companies at overseas ports to safeguard cargo headed to the United States.
Hutchison Whampoa is the world's largest ports operator and among the industry's most-respected companies. It was an early adopter of U.S. anti-terror measures. But its billionaire chairman, Li Ka-Shing, also has substantial business ties to China's government that have raised U.S. concerns over the years.
"Li Ka-Shing is pretty close to a lot of senior leaders of the Chinese government and the Chinese Communist Party," said Larry M. Wortzel, head of a U.S. government commission that studies China security and economic issues. But Wortzel said Hutchison operates independently from Beijing, and he described Li as "a very legitimate international businessman."
"One can conceive legitimate security concerns and would hope either the Homeland Security Department or the intelligence services of the United States work very hard to satisfy those concerns," Wortzel said.
Three years ago, the Bush administration effectively blocked a Hutchison subsidiary from buying part of a bankrupt U.S. telecommunications company, Global Crossing Ltd., on national security grounds.
And a U.S. military intelligence report, once marked "secret," cited Hutchison in 1999 as a potential risk for smuggling arms and other prohibited materials into the United States from the Bahamas.
Hutchison's port operations in the Bahamas and Panama "could provide a conduit for illegal shipments of technology or prohibited items from the West to the PRC (People's Republic of China), or facilitate the movement of arms and other prohibited items into the Americas," the now-declassified assessment said.
The CIA currently has no security concerns about Hutchison's port operations, and the administration believes the pending deal with the foreign company would be safe, officials said.
Supervised by Bahamian customs officials, Hutchison employees will drive the towering, truck-like radiation scanner that moves slowly over large cargo containers and scans them for radiation that might be emitted by plutonium or a radiological weapon.
Any positive reading would set off alarms monitored simultaneously by Bahamian customs inspectors at Freeport and by U.S. Customs and Border Protection officials working at an anti-terrorism center 800 miles away in northern Virginia. Any alarm would prompt a closer inspection of the cargo, and there are multiple layers of security to prevent tampering, officials said.
"The equipment operates itself," said Bryan Wilkes, a spokesman for the U.S. National Nuclear Security Administration, the agency negotiating the contract. "It's not going to be someone standing at the controls pressing buttons and flipping switches."
A lawmaker who helped lead the opposition to the Dubai ports deal isn't so confident. Neither are some security experts. They question whether the U.S. should pay a foreign company with ties to China to keep radioactive material out of the United States.
"Giving a no-bid contract to a foreign company to carry out the most sensitive security screening for radioactive materials at ports abroad raises many questions," said Sen. Charles Schumer (news, bio, voting record), D-N.Y.
A low-paid employee with access to the screening equipment could frustrate international security by studying how the equipment works and which materials set off its alarms, warned a retired U.S. Customs investigator who specialized in smuggling cases.
"Money buys a lot of things," Robert Sheridan said. "The fact that foreign workers would have access to how the United States screens various containers for nuclear material and how this technology scrutinizes the containers — all those things allow someone with a nefarious intention to thwart the screening."
Other experts discounted concerns. They cited Hutchison's reputation as a leading ports company and said the United States inevitably must rely for some security on large commercial operators in the global maritime industry.
"We must not allow an unwarranted fear of foreign ownership or involvement in offshore operations to impair our ability to protect against nuclear weapons being smuggled into this country," said Sen. Norm Coleman (news, bio, voting record), R-Minn., a member of the Senate Committee on Homeland Security and Governmental Affairs. "We must work with these foreign companies."
A former Coast Guard commander, Stephen Flynn, said foreign companies sometimes prove more trustworthy — and susceptible to U.S. influence — than governments.
"It's a very fragile system," Flynn said. Foreign companies "recognize the U.S. has the capacity and willingness to exercise a kill switch if something goes wrong."
A spokesman for Hutchison's ports subsidiary, Anthony Tam, said the company "is a strong supporter in port security initiatives."
"In the case of the Bahamas, our local personnel are working alongside with U.S. customs officials to identify and inspect U.S.-bound containers that could be carrying radioactive materials," Tam said.
However, there are no U.S. customs agents checking any cargo containers at the Hutchison port in Freeport. Under the contract, no U.S. officials would be stationed permanently in the Bahamas with the radiation scanner.
The administration is finalizing the contract amid a national debate over maritime security sparked by the furor over now-abandoned plans by Dubai-owned DP World to take over significant operations at major U.S. ports.
Hutchison operates the sprawling Freeport Container Port on Grand Bahama Island. Its subsidiary, Hutchison Port Holdings, has operations in more than 20 countries but none in the United States.
Contract documents, obtained by The Associated Press, indicate Hutchison will be paid roughly $6 million. The contract is for one year with options for three years.
The Energy Department's National Nuclear Security Administration is negotiating the Bahamas contract under a $121 million security program it calls the "second line of defense." Wilkes, the NNSA spokesman, said the Bahamian government dictated that the U.S. give the contract to Hutchison.
"It's their country, their port. The driver of the mobile carrier is the contractor selected by their government. We had no say or no choice," he said. "We are fortunate to have allies who are signing these agreements with us."
Some security experts said that is a weak explanation in the Bahamas, with its close reliance on the United States. The administration could insist that the Bahamas permit U.S. Customs agents to operate at the port, said Albert Santoli, an expert on national security issues in Asia and the Pacific.
"Why would they not accept that?" said Santoli, a former national security aide to Rep. Dana Rohrabacher (news, bio, voting record), R-Calif. "There is an interest in the Bahamas and every other country in the region to make sure the U.S. stays safe and strong. That's how this should be negotiated."
Flynn, the former Coast Guard commander, agreed the Bahamas would readily accept such a proposal but said the U.S. is short of trained customs agents to send overseas.
Contract documents obtained by the AP show at least one other foreign company is involved in the U.S. radiation-detection program.
A separate, no-bid $4 million contract the Bush administration is negotiating would pay a Manila-based company, International Container Terminal Services Inc., to install radiation detectors at the Philippines' largest port.
The U.S. says the Manila company is not being paid to operate the radiation monitors once they are installed. But two International Container executives and a senior official at the government's Philippine Nuclear Research Institute said the company will run the detectors on behalf of the institute and the country's customs bureau. U.S. officials said they will investigate further how the Filipinos plan to use the equipment.
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Associated Press writers Bill Foreman in Hong Kong and Jim Gomez in Manila contributed to this story.
As for when US companies would want to manufacture new tech products in China, that depends a lot on the amount of low-skilled assembly labor content in the products and where the products are in their product life cycle. Manufacturing of tech products with a lot of assembly content is more likely to be moved offshore to China or Mexico, as is manufacturing of mass-market products with low profit margins that are off patent. New products with higher prices and bigger profit margins are more likely to be made in the US, Japan, or Taiwan to ensure high quality and because ultra-low production costs are less important.
I'm starting to work on that Tech review. I've been too absorbed in trading energy stocks, metals stocks, and defense stocks lately. You got me back looking at tech again. There's always something new in the works in the the tech industry.
Thanks for the info. Figures the union would oppose them.
I'm kind of reviewing this thread (re the Chinese company that is apparently going to check for nuclear material in cargo coming thru the Bahamas----and do it for the US at a cost of $6 million per year). I noticed that one guy called you "clueless" for being against the Dubai ports deal. Just ignore him. I was against the Dubai ports deal and am against this Chinese deal. So were about 65-70% of Americans.
But, there are a group of people on here that think very highly of globalism and free trade. Maybe they are more knowledgeable than we are, I don't know. But, to me, common sense says you don't contract security-related matters to a company from a foreign country that you don't have a long-term, solid, trusting relationship with.
You two are just racist xenophobe protectionists for opposing this free trade. After all, Dubai does it! /sarc
Impressive post. Impressive list.
More plainly stated: Probably the most serious impediment to U.S port security is the American Labor Unions.
I do think though that this issue can be easily eliminated by the Bush Administration. All they have to do is announce that they're deploying a few US customs agents to supervise the workers who are running the scanner. After that, it's checkmate against the MSM and case closed.
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