Dubai firm will run 9 defense plants
WASHINGTON – President Bush on Friday approved the takeover by a Dubai company of U.S. plants that make precision-engineered components for the Pentagon – and this time, the deal stirred little opposition in Congress.
The approval allows Dubai International Capital LLC, which is owned by the Dubai government, to take control of nine plants in the United States, some of which supply the military with parts used in aircraft and tanks. The plants are owned by a British firm, Doncasters Group Ltd., which is being purchased by the Dubai company for $1.2 billion.
The move comes seven weeks after Dubai Ports World, another government-owned company, abandoned plans to take over terminal operations at several U.S. seaports because of an uproar over the security implications of handing such facilities to an Arab-owned concern. Dubai’s planned takeover of Doncasters and its U.S. plants came to light during the ports controversy and helped fuel congressional demands for tighter restrictions on foreign investment in U.S. businesses. Dubai is one of seven states that make up the United Arab Emirates.
Lawmakers said the Doncasters deal underwent a lengthier, full investigation by the Committee on Foreign Investment in the United States (CFIUS), a secretive interagency panel charged with screening foreign takeovers for national security problems. The committee, which is chaired by the Treasury Department, includes representatives from the Pentagon, the Homeland Security Department and a number of other agencies.
“This investigation was a significant improvement over what happened before,” Rep. Peter King, R-N.Y., chairman of the House Homeland Security Committee, said in a statement.
Sen. Charles Schumer, D-N.Y., who spearheaded opposition to the ports takeover, agreed, saying in a statement: “There are two differences between this deal and the Dubai Ports deal. First, this went through the process in a careful, thoughtful way; and second, this is a product not a service and the opportunity to infiltrate and sabotage is both more difficult and more detectable. Unless new information comes out, I will not oppose this deal.”
Administration officials contend that the investigation of the ports deal was thorough. But they took care to put the Doncasters transaction through a longer series of formal hurdles, including a full 45-day review that requires submission of findings to the president for a final decision. They also briefed congressional leaders in advance.