House committee chair says he plans to block ports deal

March 03, 2006|By GWYNETH K. SHAW | GWYNETH K. SHAW,SUN REPORTER

WASHINGTON -- Calling the United Arab Emirates a "bazaar for terrorist nations" that want to move dangerous materials around the world, the Republican chairman of the House Armed Services Committee said yesterday he intends to try to block the sale of a UAE-owned company's purchase of a firm that controls some operations at six major seaports, including Baltimore's.

GOP Rep. Duncan Hunter of California also said he would push for legislation to force foreign companies out of infrastructure critical to national security, such as seaports, and work to stop Dubai Ports World from taking over some terminal operations in Baltimore; New York; Newark, N.J.; Philadelphia; Miami, and New Orleans.

"To those who say my views smack of protectionism, I say America is worth protecting," Hunter said at a committee hearing.

Hunter said the UAE might be an American ally in the war on terrorism, but he noted a string of episodes in which dangerous materials had moved through Dubai.

"That implies to me that they are accommodaters: They accommodate people who come to them with lots of cash, and they don't particularly care who they are," Hunter said.

Hunter is the latest politician to take aim at the deal, which has angered Congress and been deeply unpopular with the public.

DP World officials said they expect the purchase of British-based Peninsular and Oriental Steam Navigation Co. to become final early next week. The transaction was approved by the Committee on Foreign Investment in the United States in mid-January. But when the news became public almost a month later, it set off a round of angry reprisals in Congress that has not abated. Last weekend, DP World offered to submit to a second, more in-depth review - a probe many politicians say should have happened in the first place - and to segregate its U.S. holdings until it is over.

Again yesterday, most of the questions from lawmakers focused on how the 12-agency administration panel came to approve the deal.

Despite staunch support from President Bush and a continuing public relations campaign by DP World, public opposition to the deal remains strong. By a margin of more than 3-to-1, Americans are opposed to allowing DP World into U.S. ports, according to a new Los Angeles Times-Bloomberg poll released last night.

The survey found that 58 percent of Americans surveyed opposed the deal, including 47 percent who said they were strongly opposed. Opposition ran across all groups in the survey, including Republicans (49 percent), Democrats (68 percent) and independents (60 percent). More women (61 percent) than men (56 percent) opposed the deal. Only 17 percent of those surveyed supported the sale, while another 25 percent said they either had not heard enough to have an opinion or were undecided.

Politicians have heard the negative feedback from their constituents, both about the DP World deal and the larger issue of port security, widely acknowledged to be a serious vulnerability.

"People back home understand this issue," said Missouri Rep. Ike Skelton, the top Democrat on Hunter's committee. "They understand that our seaports are as vulnerable today as our airports were before 9/11."

Hunter is one of many politicians pushing bills related to the DP World sale. Bipartisan legislation introduced this week in both the House and Senate would give Congress veto power after the 45-day review is completed, and there are several bills aimed at keeping companies owned by foreign governments from operating in seaports. Edward H. Bilkey, the chief operating officer of DP World, told Hunter's committee that the company took security seriously, and that it had volunteered for the second review in an effort to be seen as a good corporate citizen.

Several lawmakers pressed Bilkey on what the company would do if the deal is rejected after the second investigation. He said he would not speculate.

At the hearing, Bilkey read from a letter sent by the head of an Israeli shipping firm, testifying to its strong relationship with DP World. Bilkey came under fire this week over Dubai's participation in the boycott of Israel by several Arab nations. He repeated yesterday that his company serves everyone.

At a separate Senate Banking Committee hearing, Democratic Sen. Paul S. Sarbanes of Maryland said that improvements in the process of evaluating these kinds of deals, which were promised last fall by some of the same officials who testified yesterday, had not happened.

Sarbanes and others on the panel questioned whether the administration panel had spent enough time and energy scrutinizing the potential threats posed by DP World's entry into American ports.

"My concern is with a deeply flawed process that permits this sort of transaction to go forward before it is analyzed sufficiently," Sarbanes said.

Deputy Treasury Secretary Robert M. Kimmitt, who has testified about the deal repeatedly over the past week, said the administration needs to do a better job of keeping Congress in the loop on such sensitive deals. Kimmitt said he was unaware of the transaction until it had been approved.

"If I had known about this earlier, you would have known about this earlier," Kimmitt said. "And that's the process we have to improve."

Sun reporter Paul West contributed to this article.

gwyneth.shaw@baltsun.com

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