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February 17, 2006
Despite Fears, a Dubai Company Will Help Run Ports in New York
By PATRICK McGEEHAN
The Bush administration dismissed the security concerns of local officials yesterday and restated its approval of a deal that will give a company based in Dubai a major role in operating ports in and around New York City.
Representatives of the White House and the Treasury Department said they had given their approval for Dubai Ports World to do business in the United States after a rigorous review. The decision, they said, was final.
Dubai Ports World is buying the British company that currently operates the cruise-ship terminal on the West Side of Manhattan, one of the biggest cargo terminals in New York Harbor, and terminals in Philadelphia, Baltimore and other big ports.
Several lawmakers, including Representative Peter T. King of Long Island, who is chairman of the House Homeland Security Committee, and Senator Charles E. Schumer, have criticized the administration for its approval of the deal, saying it was done too quickly and without enough scrutiny of the ramifications for security at American ports.
"In the post-9/11 world, there should have been a presumption against this company," said Mr. King, a Republican. He added that people in the intelligence community had told him they had concerns about how the company operated the port of Dubai, one of the United Arab Emirates.
"I'm going to be pushing as hard as I can to slow this down." Mr. King said.
Mr. Schumer said that he was concerned that the company could be infiltrated by terrorists with designs on exploiting the vulnerability of American ports. He noted that the Sept. 11 attacks were financed in part by money that passed through banks in the United Arab Emirates.
"This is not going to go through quietly and secretly the way some people might like," Mr. Schumer said, adding that he feared that diplomacy might have trumped national security in this case.
In an interview in London, Sultan Ahmed bin Sulayem, a financial adviser to the royal family of Dubai, said yesterday, "We are working closely with the Americans."
In mid-January, President Bush nominated a senior executive of Dubai Ports World, David Sanborn, to run the Department of Transportation's Maritime Administration. Mr. Sanborn had been running the company's operations in Europe and Latin America.
Mr. Schumer and six other members of Congress sent a letter yesterday to John W. Snow, the treasury secretary, calling for a more thorough review of the deal, in which Dubai Ports World agreed to pay $6.8 billion to acquire a British shipping company, Peninsular & Oriental Steam Navigation Company. A subsidiary of the company, P & O Ports North America, operates the local facilities.
Anthony R. Coscia, the chairman of the Port Authority of New York and New Jersey, also wrote to Mr. Snow, seeking information about the security review that was conducted. Mr. Coscia said in an interview that he sent the letter after a few attempts to get answers drew no response.
"Clearly, we would expect that information relative to a facility that we operate would be shared with us," Mr. Coscia said. "It is not our role to review and approve this transfer," he said, but added that "given the fact that this is our port and these are employees for whom we feel responsibility, there are issues we would like to become comfortable with."
P & O Ports operates the New York City Passenger Ship Terminal and owns a 50 percent interest in the Port Newark Container Terminal, which is the third-largest cargo terminal on the Port Authority's property. The other half-interest is owned by a subsidiary of Maersk Line, which is based in Denmark.
The Dubai purchase was approved by the Committee on Foreign Investment in the United States, of which Mr. Snow is chairman and which does not usually disclose information about its deliberations, said Brookly McLaughlin, a spokeswoman for the Treasury Department. Ms. McLaughlin declined to say when the committee began or ended its review of the deal or what national-security implications it considered.
"We as a general rule do not comment at all on any specific transactions," Ms. McLaughlin said. She added that the review could not be reopened unless the company provided false information or omitted important facts.
Stewart Baker, assistant secretary for policy at the Department of Homeland Security, said his department had no information about Dubai Ports World that justified an objection to the deal. Indeed, he said, the company has cooperated with the department in its efforts to secure American ports and ships in foreign ports.
"We did not find derogatory information in our review," he said.
But that review, Mr. Baker said, did not involve gathering information from outside sources, like the Port Authority, because the committee must keep a proposed transaction secret. He said the committee's investigation began in November and ended in mid-January.
The investigation did not include background checks on the senior managers of the company or an evaluation of how the company screens its own employees, Mr. King said. "Certainly, you would think they would talk to the Port Authority," he added.
Mr. Schumer said he believed that pressure for a second review was beginning to mount in Congress, among Democrats and Republicans. Mr. King said he would consider holding a Homeland Security Committee hearing on the matter if the administration refused to reconsider.
"This can't be treated in a pre-9/11 way," Mr. King said. "There was a tone-deafness here that indicates they didn't show the level of concern that it warranted."
Despite Fears, a Dubai Company Will Help Run Ports in New York
By PATRICK McGEEHAN
The Bush administration dismissed the security concerns of local officials yesterday and restated its approval of a deal that will give a company based in Dubai a major role in operating ports in and around New York City.
Representatives of the White House and the Treasury Department said they had given their approval for Dubai Ports World to do business in the United States after a rigorous review. The decision, they said, was final.
Dubai Ports World is buying the British company that currently operates the cruise-ship terminal on the West Side of Manhattan, one of the biggest cargo terminals in New York Harbor, and terminals in Philadelphia, Baltimore and other big ports.
Several lawmakers, including Representative Peter T. King of Long Island, who is chairman of the House Homeland Security Committee, and Senator Charles E. Schumer, have criticized the administration for its approval of the deal, saying it was done too quickly and without enough scrutiny of the ramifications for security at American ports.
"In the post-9/11 world, there should have been a presumption against this company," said Mr. King, a Republican. He added that people in the intelligence community had told him they had concerns about how the company operated the port of Dubai, one of the United Arab Emirates.
"I'm going to be pushing as hard as I can to slow this down." Mr. King said.
Mr. Schumer said that he was concerned that the company could be infiltrated by terrorists with designs on exploiting the vulnerability of American ports. He noted that the Sept. 11 attacks were financed in part by money that passed through banks in the United Arab Emirates.
"This is not going to go through quietly and secretly the way some people might like," Mr. Schumer said, adding that he feared that diplomacy might have trumped national security in this case.
In an interview in London, Sultan Ahmed bin Sulayem, a financial adviser to the royal family of Dubai, said yesterday, "We are working closely with the Americans."
In mid-January, President Bush nominated a senior executive of Dubai Ports World, David Sanborn, to run the Department of Transportation's Maritime Administration. Mr. Sanborn had been running the company's operations in Europe and Latin America.
Mr. Schumer and six other members of Congress sent a letter yesterday to John W. Snow, the treasury secretary, calling for a more thorough review of the deal, in which Dubai Ports World agreed to pay $6.8 billion to acquire a British shipping company, Peninsular & Oriental Steam Navigation Company. A subsidiary of the company, P & O Ports North America, operates the local facilities.
Anthony R. Coscia, the chairman of the Port Authority of New York and New Jersey, also wrote to Mr. Snow, seeking information about the security review that was conducted. Mr. Coscia said in an interview that he sent the letter after a few attempts to get answers drew no response.
"Clearly, we would expect that information relative to a facility that we operate would be shared with us," Mr. Coscia said. "It is not our role to review and approve this transfer," he said, but added that "given the fact that this is our port and these are employees for whom we feel responsibility, there are issues we would like to become comfortable with."
P & O Ports operates the New York City Passenger Ship Terminal and owns a 50 percent interest in the Port Newark Container Terminal, which is the third-largest cargo terminal on the Port Authority's property. The other half-interest is owned by a subsidiary of Maersk Line, which is based in Denmark.
The Dubai purchase was approved by the Committee on Foreign Investment in the United States, of which Mr. Snow is chairman and which does not usually disclose information about its deliberations, said Brookly McLaughlin, a spokeswoman for the Treasury Department. Ms. McLaughlin declined to say when the committee began or ended its review of the deal or what national-security implications it considered.
"We as a general rule do not comment at all on any specific transactions," Ms. McLaughlin said. She added that the review could not be reopened unless the company provided false information or omitted important facts.
Stewart Baker, assistant secretary for policy at the Department of Homeland Security, said his department had no information about Dubai Ports World that justified an objection to the deal. Indeed, he said, the company has cooperated with the department in its efforts to secure American ports and ships in foreign ports.
"We did not find derogatory information in our review," he said.
But that review, Mr. Baker said, did not involve gathering information from outside sources, like the Port Authority, because the committee must keep a proposed transaction secret. He said the committee's investigation began in November and ended in mid-January.
The investigation did not include background checks on the senior managers of the company or an evaluation of how the company screens its own employees, Mr. King said. "Certainly, you would think they would talk to the Port Authority," he added.
Mr. Schumer said he believed that pressure for a second review was beginning to mount in Congress, among Democrats and Republicans. Mr. King said he would consider holding a Homeland Security Committee hearing on the matter if the administration refused to reconsider.
"This can't be treated in a pre-9/11 way," Mr. King said. "There was a tone-deafness here that indicates they didn't show the level of concern that it warranted."
Maybe I'm making assumptions here, but doesen't this seem like a bad idea?
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