Official of Dubai company defends deal to Congress

Takeover of port operations won't threaten U.S. security, he says

March 01, 2006|By GWYNETH K. SHAW | GWYNETH K. SHAW,SUN REPORTER

WASHINGTON -- A top official of the Dubai-owned company poised to take over some operations in Baltimore and at other major U.S. seaports told Congress yesterday that he is confident that a new, more in-depth review of the deal will result in the same conclusion: That the sale poses no threat to national security.

Edward H. Bilkey, chief operating officer of Dubai Ports World, told the Senate Commerce Committee that the state-owned company welcomed the chance to give Congress and the American public more time to understand the implications of his company's purchase of British-based Peninsular & Oriental Steam Navigation Co.

He said he hoped the new, 45-day probe - for which DP World volunteered Sunday - would demonstrate the company's commitment to being a "responsible corporate citizen."

`Not good enough'

"I respectfully submit that DP World is a company that in good faith sought to comply with applicable U.S. legal requirements and, having been told by the U.S. government that we met those requirements, now finds itself in the position of being told that that was not good enough," Bilkey said in his first appearance before a congressional committee.

President Bush continued his forceful defense of the deal and showed no sign of backing down from it, regardless of the results of the new review.

Bush conceded that his administration should have kept Congress better informed about the transaction, and he expressed hope that the review would allay lawmakers' concerns.

The president told ABC News he learned two lessons from the ports backlash: "Obviously, Congress should have had a better heads-up, and secondly, that the explanation to the American people must be done in a way that, you know, lays out the facts and doesn't frighten people."

Bush deflected questions about whether he was prejudging the new review and said he wants opponents of the deal to evaluate whether it would really harm U.S. security and to consider the foreign policy consequences of blocking it.

Questions persist

The latest developments appeared to have little effect on lawmakers who have questioned the Bush administration's approval of the sale of P&O, which runs terminals in Baltimore; New York; Newark, N.J.; Philadelphia; Miami and New Orleans.

The $6.8 billion deal was cleared by the Committee on Foreign Investments in the United States, which concluded that the sale was no threat to national security. Even with the second, more in-depth review, Bush has ultimately the final say on the deal - unless Congress steps in to create a role for itself.

At the hearing, several senators pressed Bilkey on the Dubai government's adherence to an Arab trade embargo against Israel.

Bilkey was forced to acknowledge that the government, which owns the firm, supports the boycott. But he said that "we serve everyone" at DP World, adding that the biggest Israeli shipping company is one of the firm's largest clients.

To other pointed questions about DP World's business practices and setup, Bilkey said there was essentially no involvement in its day-to-day operations by the Dubai government. He also said that security at the company's facilities around the world is a top priority - in part because it allows DP World to make money in the shipping industry.

"Security is big business for us," Bilkey said. "It's a marketing tool for us."

At an earlier Senate hearing, Maryland Sen. Barbara A. Mikulski confronted Homeland Security Secretary Michael Chertoff over the DP World deal.

Mikulski asked Chertoff whether he had read a memo, made public Monday, indicating that the Coast Guard had questions about the deal stemming from "intelligence gaps" about potential security risks. The Democratic senator called that memo "a yellow flashing light" from the agency.

Chertoff replied that he did not see the document until recently, well after the administration had approved the DP World deal. But he said that the questions raised by the Coast Guard were typical for an intelligence analysis and that the overall report from the agency saw no threat in the deal.

"I don't see it as a flashing light," Chertoff said.

In a letter to Chertoff, Democratic Sen. Charles E. Schumer and Republican Sen. Olympia J. Snowe stated that the Coast Guard memo shows that the initial review might have been "dangerously incomplete." They asked for further information, including evidence of exactly how the Coast Guard's concerns were resolved. They requested that the complete Coast Guard analysis be released.

Snowe, of Maine, and Schumer, of New York, are part of a bipartisan group of senators pushing for legislation that would give Congress the ability to accept or reject the port deal, once the 45-day review is finished.

Other measures

Other lawmakers are rushing to introduce their own measures, including Democratic Rep. Benjamin L. Cardin of Baltimore, who plans to announce his support today for legislation that would bar foreign-owned companies from buying into U.S. seaports. Cardin, a candidate for Senate, is partnering with Florida Republican Rep. E. Clay Shaw Jr.

Senate Majority Leader Bill Frist of Tennessee, who controls the flow of legislation on the Senate floor, said there is no need for Congress to act, at least until the investigation is finished.

gwyneth.shaw@baltsun.com

Sun reporter Julie Hirschfeld Davis contributed to this article.

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