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.
I'll bet this is a Bush I deal and Bush II is being forced to go along with Daddy's consulting buddies.
The only reason I voted Bush was that the alternative was so much worse.
Surely you don't believe that the people involved in putting together this deal didn't see this issue coming?
Anybody involved in the US maritime industry knows that US security always comes first. As I understand it, the same is true for all maritime countries.
WHERE did you get this? Dude! Get a grip.
They need CIFUS approval. ALL foreign companies need approval through CIFUS.
Oh, yeah, that's the ticket! Just take your cranes out of service, pack them in mothballs, and go home!
More likely, spin off a company that's in no way controlled by non-Americans, but sends the money to Dubai. After all, this deal is only about money, right?
No. Not how it works.
You're making all these wild statements and have no hard proof. Amazing.
I find it ridiculous for any American to believe that having "the religion of peace" manage six major US ports, is right and proper. Wrong and stupid sounds better.
CNN leading with this story tonight. and listening to the radio news across the dial tonight - we are getting killed on this story. killed.
I noticed that you moved the goalposts. If you think gridlock is good, then you should have no complaints.
You're making all these wild statements and have no hard proof. Amazing
It's basic contract law. DPWorld has legally bought out the contracts of P&O worldwide operatins. IF those contracts are canceled before the contract is up and not due to negligence , DPWorld has the right to seek restitution for the canceling of the contracts.
The sky is falling, the sky is falling. You are so transparent sometimes.
this story is everywhere, all over talk radio, even making the top of the hour news blurb on music stations.
Wow, that's an understatement based on the comments here!
WRONG!
Congress has ordered the President to determine whether the transfer is in the best interests of national security.
This isn't just an ordinary contract, it's for an industry which is essential to United States national security.
Any contract that has a national security clause built into it can be cancelled for that reason.
Unles, and highly likely they have a clause giving an out for this very event.
"DPWorld has legally bought out the contracts of P&O worldwide operations"
They've made an offer to purchase, which has been approved by shareholders, but not approved by the courts. Any contractual offer would of necessity be contingent upon all preconditions and the approval of all parties involved. That includes the United States, whose own approval has not been made final.
Intolerant.
It will be approved by a British court on March 2nd(P&O's home base).
On March 2nd DPWorld may not have the contracts in the US, but will legally have the US assets and infrastructure.
DPWorld will still have legal ownership of P&O's assets and infrastruccture.
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