Port takeover’s political fallout
An Arab government-owned company’s pending takeover of operations at six key U.S. ports has stirred a storm of concern. Here are some key questions and answers about the deal:
Q:How would the deal work?
A:Some major operations at six ports – New York, Newark, N.J., Philadelphia; Baltimore; Miami and New Orleans – are now managed by the British Peninsular and Oriental Steam Navigation Co. (P&O). That firm is being bought by Dubai Ports World, a state-owned business in the United Arab Emirates, thus putting an Arab government ultimately in charge of some – not all – port management operations. The company would manage from 15 percent to 30 percent of the terminals at any one port.
The company would not be in charge of security. Working with local authorities, the Coast Guard oversees security at ports and must approve the port operators’ plans and procedures.
Most employees would remain in place.
Q:Who reviewed and approved the deal?
A:The deal was scrutinized by the Treasury Department’s Committee on Foreign Investment in the United States. Representatives from the White House and Departments of Defense, Justice, Commerce and Homeland Security sit on the committee.
Administration officials said they thoroughly checked the backgrounds of the companies involved. Both P&O and Dubai Ports World have dealt with government security and trade agencies for years.
Q:What are the political ramifications?
A:Democrats are trying to show they are tough on national security issues by attacking the deal. A push for a ban on the outsourcing of U.S. port operations to companies owned by foreign governments is being led by Democratic Sens. Robert Menendez and Frank Lautenberg of New Jersey, Hillary Rodham Clinton of New York, and Barbara Boxer of California.
Republicans suggest the Bush administration was politically tone deaf by approving it. Administration officials said they could have briefed lawmakers and local officials earlier.
Q:What is the likelihood of action before the planned March 2 takeover?
A:Pressure is building for emergency action when Congress returns next week.
Senate Majority Leader Bill Frist, R-Tenn., said he would introduce his own bill to stop the deal if the Bush administration didn’t put it on hold and review the decision. House Speaker Dennis Hastert, R-Ill., called for an “immediate moratorium” on the port deal and asked Bush to “more fully assess the risks.”
Govs. George Pataki of New York, Robert Ehrlich of Maryland and Jon Corzine of New Jersey are threatening to take legal action to block the takeover of port operations in their states.
Q:What could be the impact of an attack on a U.S. port?
A:A terrorist attack on a port could cripple the economy. Each day, $1.3 billion worth of products enter or leave the United States. An attack on one port could prompt federal authorities to close others to prevent possible simultaneous attacks.
Experts worry terrorists could hijack a ship and ram it into the massive vats of chemicals, oil, or liquefied natural gas stored near ports. Another scenario: Terrorists could slip a nuclear bomb into a shipping container.
Q:What is the relationship like between the United States and United Arab Emirates?
A:The United Arab Emirates is a close ally in the war on terror. But the deal has raised concern not only because of the country”s Sept. 11 connections, but also because it served as an operations center for Pakistani scientist A.Q. Khan, who sold nuclear technology to North Korea, Libya and Iran.
That said, in 2004 the United Arab Emirates became the first Arab Middle Eastern country to join the shipping Container Security Initiative run by U.S. Customs and Border Protection. That program seeks to screen high-risk cargo bound for the United States.