Skip to comments.Dubai ports takeover prompts backlash
Posted on 02/16/2006 5:21:05 PM PST by Dane
Main page content: Dubai ports takeover prompts backlash By Stephanie Kirchgaessner and Edward Alden in Washington Published: February 16 2006 23:00 | Last updated: February 16 2006 23:00
Washington lawmakers on Thursday expressed deep reservations about Dubai Ports Worlds £3.9bn acquisition of P&O, the UK-based port operator, on the grounds that the deal represented a potential national security threat, and demanded that the White House re-open a regulatory review of the deal. ADVERTISEMENT
In a letter to Treasury secretary John Snow, Senator Richard Shelby, an influential Alabama Republican, stopped short of calling for the deal to be blocked, but said the transaction merited further scrutiny, potentially raising complications for DP Worlds bid. Mr Shelby is expected to call for a hearing to discuss the issue in coming weeks.
In a separate letter to Mr Snow, New York senator Chuck Schumer and others said US ports were the most vulnerable targets for terrorist attack. They questioned whether DP World, which is owned and controlled by Dubai, should be allowed to take over P&O, charging that Dubai was a key transfer point for shipments of nuclear components bound for Iran, North Korea and Libya.
The deal, which has already been given regulatory clearance by the White House, gives DP World container terminals at six ports on the east coast of the US, including New York and New Jersey.
Although the Department of Homeland Security is ultimately charged with cargo- screening functions, the legislators said the port facility itself was responsible for securing cargo coming in and out of the port and the hiring of security personnel.
After the 9/11 attacks, your department complained of a lack of co-operation by the UAE and other Arab countries as the US was trying to track down Osama bin Ladens bank accounts, the letter stipulated.
The growing congressional backlash against the deal is likely to reignite a debate in Washington on the effectiveness of the committee on foreign investments in the US, or Cfius, an inter-agency panel that vets foreign takeovers of US assets on national security grounds.
Cfius, which is chaired by the Treasury Department, approved Dubais bid for P&O after reviewing it for a standard 30-day-period, although the committee could have called for the deal to be examined more thoroughly over an additional 45 days.
Stewart Baker, assistant secretary for policy in the Department of Homeland Security, said that Cfius had completed its review after it was notified last year of the pending takeover, and had concluded there was no national security basis for blocking the transaction.
He said the US government had worked cooperatively with DP World in the past as part of the global container security initiative launched by the US after the September 11 attacks.
People familiar with the deal said administration officials were yesterday briefing lawmakers on the deal to assuage their concerns.
A spokesperson for the Treasury Department said the administration would not re-open its review unless evidence emerged that DP World had given the committee false information.
Cfius came under harsh scrutiny by lawmakers last year following a failed attempt by CNOOC, the Chinese oil company, to takeover California-based Unocal. Although the deal was quashed before Cfius reviewed the transaction, the widespread opposition to the deal in Congress prompted the Treasury Department and other agencies to promise to increase transparency at Cfius by communicating more with Congress and to be more willing to conduct full investigations of deals.
Basically, we have one foreign company operating port services being sold to another foreign company.
Now without the usual hyoerbole that seems to go along with these threads, maybe we can figure this out. Notice that the article says the port facility itself is responsible for security. I would surmise that the foreign port company is supervised by the municipal port authority and in one case that would be the NY/NJ port authority, so that means the local authorites are charged with security(i.e the Dubai company is not in charge with security).
BTW, notice how chuckie schumer mentioned Libya. I guess he missed the news that Libya has given up it's WMD program, due to US pressure and is now cooperating with the US.
I know a lot of people are queasy about this, but it should not be looked through the prism of hyperbole from the press and a Senator who falls in love with every TV camera there is(chuckie schumer).
And also what are other "solutions". Should there be a govt. takeover. Should the govt. block a sale of one foreign owned company to another foreign company.
So instead of the usual knee jerk hyperbole, how about intelligent discussion.
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great info in this thread..
I think that is the misnomer, they are not taking over the ports, they are operating from the ports which are under the local municipal port authority.
Like I said before it is one foreign company buying the port facilities from another foreign company(which was British). And I wonder where schumer's outrage was over that foreign company that was overseen by the local port authority.
In actuality, this is a business deal, with a UK firm that has contracts in 6 US ports being taken over by another firm.
It's not like that DP world is taking over the ports. They will have a contract to load and unload ships from all a round the world from that port(which is under US control and overseen by local, state, and federal security).
Now there can be a debate about if that is good or not, but let's get rid of the chuckie schumer misnomer that DP World is "taking" over the ports, which they are not.
There are no muslim countries that are staunch U.S. allies. Their loyalty is to their religion which is in direct conflict with the security of the U.S. There is no such thing as a tolerant branch of islam. This is a business deal that would give a potentially hostile foreign power all information about the security of vital ports. What possible reason would we have to allow such a potentially suicidal transaction?
This is just plain stupid.
Maybe he doesn't trust Muslims.
Here are the new players: left Pres.UAE.... Right VP UAE
Rep. Mark Foley said Sec. John Snow told him he didn't know anything about the deliberations, yet he heads the Department which oversees this very decision. Additionally, when John Snow ran CSX Transporation, he sold his entire port operations to a Dubai-based corporation. So it appears Secretary Snow is either a fool, or a damned liar.
Actually that happened one year after Snow had left CSX.
Snow is a former chairman of freight rail company CSX Corp. (CSX.N: Quote, Profile, Research), which sold its global port assets to Dubai Ports World for $1.15 billion in 2004 -- the year after Snow had left the company for the Bush administration.
So who is being the liar now.
Will someone please tell me why there is not an American firm that can handle this acquisition? Why is it not even talked about? How about the cities where the ports are located having ownership, control and management?
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