Critics of UAE port deal fight on

Delay is not enough, lawmakers say, demanding more answers

February 25, 2006|By GWYNETH K. SHAW | GWYNETH K. SHAW,SUN REPORTER

WASHINGTON -- Opponents of an Arab company's takeover of some operations at Baltimore and five other U.S. seaports vowed yesterday to keep fighting the deal, despite the company's offer to postpone the move.

Even as the Bush administration welcomed the chance to spend more time trying to explain why it approved the sale of a British company to state-owned Dubai Ports World, politicians in both parties said a delay is meaningless unless they get the answers they want.

New Jersey Sen. Robert Menendez, a Democrat and one of the chief critics of the deal, called the company's offer to proceed with the sale but stay out of operations in the affected American ports "a smokescreen."

He and seven other senators - four Republicans and three Democrats - said they would press for emergency legislation to suspend the deal and force the Bush administration to open a more in-depth investigation of the transaction.

"I believe it is absolutely essential that this deal does not proceed until the Congress has a greater understanding of any potential national security implications," Sen. Olympia J. Snowe, a Maine Republican, said in a statement.

Conspicuously silent, however, were the leaders of the Republican-controlled Congress, who helped stoke the firestorm over the sale earlier this week by defying Bush and calling for more time to scrutinize DP World.

A spokesman for Senate Republican leader Bill Frist of Tennessee, who controls the flow of legislation by the Senate, said no decisions had been made on the schedule in the Senate, which has been on a weeklong President's Day vacation.

He said Frist would talk to his colleagues when they return Monday.

Ron Bonjean, a spokesman for House Speaker Dennis Hastert, said the Illinois Republican thought the DP World's decision to delay taking control of the U.S. operations was "a good move on their part" because it would allow Congress to examine the deal.

Bonjean said Hastert plans to meet Tuesday with House Republicans to discuss the next move.

Although it became public last fall, the deal by Peninsular & Oriental Steam Navigation Co., a British company, to sell its worldwide operations to DP World for $6.8 billion drew little attention in Washington until after a secret Bush administration panel signed off on the sale.

P&O has management contracts at six major U.S. ports, including Baltimore, Philadelphia, New York and Miami. DP World would also take over P&O's lesser interests in other cities, including Wilmington, Del., and Norfolk, Va.

Administration officials said this week that the Committee on Foreign Investments in the United States, which had to approve the transaction, spent about three months looking at the sale, both formally and informally. However, the committee did not do a full, 45-day investigation of the deal, which some senators have argued is required by law.

In public and private briefings, which will continue next week, administration officials have tried to reassure lawmakers that DP World doesn't pose a security risk to seaports.

Late Thursday night - hours after White House officials made it clear that they would accept some kind of delay - DP World announced that it would allow the sale to proceed but would not make changes or otherwise take control of the U.S. facilities for an indefinite period.

White House officials said yesterday that the additional time to sell Congress on the deal was helpful but that Bush remains committed to vetoing any stalling tactic from lawmakers.

Republican Rep. Mark Foley of Florida, an early critic of the sale, said the controversy would not go away unless the postponement affords the opportunity for members of Congress to get more detailed answers from the White House.

"If it's simply to buy time, that's unacceptable," said Foley, who predicted that legislation could move to the House floor as early as next week.

Meantime, legal action against the sale was filed yesterday by the Port Authority of New York and New Jersey, which sued P&O, arguing that the deal would put the company in breach of its lease. A company that works at the Miami port filed a lawsuit in London, trying to stop court approval of the deal there, which is scheduled for March 2 and is the last government hurdle left before the transaction can close.

Fallout from the controversy has spread beyond Washington.

Yesterday, the Maryland Democratic Party criticized Maryland Gov. Robert L. Ehrlich Jr., who expressed concerns about the deal Monday and then backed off later in the week. In a statement, state Democratic Chairman Terry Lierman accused Ehrlich of caving in to pressure from the White House.

"It's hypocritical and dangerous for Governor Ehrlich to bend to the Bush doctrine that security at our nation's ports is nothing people should worry about," Lierman said. "The governor has given us flippant and confusing answers to serious questions, and the people of Maryland deserve better leadership than that."

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