A Storm Over the Ports

Here we go with PortGate (it's gonna be a long post). If you're unfamiliar with the root of it, here's a quickie explanation via The Economist:

...[the] Bush administration’s [decided] to allow operations at five big American ports to be sold to a company from Dubai, in the United Arab Emirates (UAE). DP World, owned by Dubai’s government, has won a bidding war with Singapore’s port operator to buy P&O, a British firm. P&O operates the ports of Baltimore, Miami, New Orleans, New York/New Jersey and Philadelphia.

Many ordinary Americans are shocked at the idea of a foreign company running ports on American shores. They do not realise that most of their ports have been foreign-run for quite some time. Politicians could be expected to know better, and to be somewhat more cautious in passing judgment. But a number of them, at both the federal and local levels, have jumped at the chance to denounce the deal.

It has come as no great surprise that Democrats oppose the transaction—most prominently Charles Schumer and Hillary Clinton, senators from New York, and Jon Corzine, New Jersey’s governor. But New York’s Republican mayor and governor are also against it. And, more importantly, the top Republicans in the two houses of Congress, Bill Frist (the Senate majority leader who will probably run for president in 2008) and Denny Hastert (speaker of the House), have demanded a delay in the sale. They are threatening legislation to this effect by next week, when the deal is due to close.

A lot of the anger toward the DPW deal has been framed as it being threatening to national security due to Dubai's questionable history in its relationship to al Qaeda. For example, here's Kos over at Daily Kos:

Yet this is a case with national security ramifications so obvious that even Republicans can't sit on the sidelines. I mean, we're talking about a nation that impeded our ability to take out Osama Bin Laden because half its royal family was chillin' with the terrorist mastemind himself. We attacked Iraq because one of the 9/11 terrorists allegedly met with an Iraqi security official in Prague, yet we give control of our ports to a nation whose leadership is on a first-name basis with Osama himself and got together for tea and crumpets.

I'm not going to pooh-pooh the fact that there are serious questions to ask of Dubai. But would this issue have been drawn so large if it were another foreign-owned (and possibly foreign state-owned) company that wasn't from the Arabian Peninsula? Probably not? If that were the case, should it have been made an issue? Yes. We need to have better security, period, for our ports and shipping activities (Washington Senator Patty Murray has been a big advocate of this for some time). And we need to look into foreign port control/ownership as it relates to that issue. But this also is starting to look like another bumbling hand-out by the BushCo administration. Here's Salon's War Room (bolding mine):

It seems like just yesterday -- and, in fact, it was -- that George W. Bush was insisting that the plan to turn over control of six U.S. ports to Dubai Ports World, a company controlled by the government of Dubai, had been subjected to "careful review" by "people responsible in our government."

But just before Bush spoke yesterday, Secretary of Defense Donald Rumsfeld and Joint Chiefs of Staff chairman Peter Pace said they didn't hear about the plan until this weekend. And now the White House is saying that the president didn't learn about the plan until "the last several days" -- which is another way of saying, after his administration had already approved it.

So here's a question: If the "people responsible in our government" aren't the president, the secretary of defense or the chairman of the Joint Chiefs of Staff, who are they? The answer, it seems, is the Committee on Foreign Investment in the United States, which is headed by Treasury Secretary John Snow, who used to be the chairman of CSX Rail, which sold its own port operations to Dubai Ports World in 2004. Snow's committee approved the Dubai Ports World deal earlier this month after a brief review. Federal law requires that the committee engage in a 45-day investigation -- and leave the final decision to the president -- when the plans of a company controlled by a foreign government could affect U.S. national security. Snow's committee didn't engage in such an investigation, and administration officials are apparently at a loss to explain why not.

There's more on the flip (just click on Full Post/Permalink to make the jump), including some defense of this transaction from liberal quarters...

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Not heard of the Committee on Foreign Investment in the United States? Read all the legalese about it at the official Treasury site--but here's a snip that includes who all is on the committee (emphasis mine):

In 1993, in response to a sense of Congress resolution, CFIUS membership was expanded by Executive Order 12860 to include the Director of the Office of Science and Technology Policy, the Assistant to the President for National Security Affairs and the Assistant to the President for Economic Policy. In February 2003, the Department of Homeland Security was added to CFIUS. This brought the membership of CFIUS to twelve under the chairmanship of the Secretary of Treasury. The other members are the Secretaries of State, Defense, and Commerce, the Attorney General, the Director of the Office of Management and Budget, the U.S. Trade Representative, and the Chairman of the Council of Economic Advisers.

Regulations. The Exon-Florio provision requested that the President issue implementing regulations. These regulations were issued in 1991. They set up a voluntary system of notification with the possibility of CFIUS member-agency notice for non-notified transactions. The President retains full authority to protect the national security with respect to any acquisition covered by this statute, regardless of whether the parties file a notification.

So, Don Rumsfeld comes out and says he knows nothing about this? That's kinda troubling. But not as troubling as this:

President Bush wasn't aware of the sale of six U.S. ports to an Arab company until after federal approval was granted and congressional opposition erupted over the deal, his spokesman said today.

"This didn't rise to the presidential level," White House Press Secretary Scott McClellan told reporters at the daily briefing.

[...]

He said that after he found out, Bush checked with his cabinet secretaries to see if there were concerns. "Each and every one expressed that they were comfortable with this transaction going forward," McClellan said.

Remember, the President is ostensibly a member of CFIUS. And remember that 45-day waiting period on deals that bring up national security questions. Which makes all this look just a tad shady? Is it some back-room quid pro quo with Dubai? Or did the BushCo Administration--which more and more seems to be doing whatever the hell it wants to, damn the oversight--really not consider the political hailstorm that this could create?

In an effort to bring in an alternative viewpoint, here's Faiz Shakir from ThinkProgress (someone you wouldn't expect to offer any defense of BushCo) with his key discussion points (be sure to check out the entire post):

1) Well before Dubai Ports World purchased the port operation services over 6 U.S. ports, the management over those ports had already been outsourced to the British-owned Peninsular & Oriental Steam Navigation Company. China’s biggest state-owned shipper runs major ports inside the U.S. We should have a legitimate debate over whether the U.S. government should take control over all port operations as a matter of homeland security, but that is not the debate that is currently going on.

2) If Dubai Ports World had not won the ports deal, a Singaporean company would have won it. Would there have been a similar outrage about having outsourced our port operations to that country?

3) Not a single security violation or breach has been alleged against Dubai Ports World. It has had a good international track record for its port operations. The arguments against DPW’s acquisition consist mainly of guilt-by-association tactics, tying the ports operations of DPW to any and every act of terror associated with the UAE. The fact that the nuclear scientist A.Q. Khan was able to game the ports of Dubai should cause the ports deal to receive heightened scrutiny, but is not in itself a reason to reject the deal.

4) The UAE is not an official state sponsor of terror. It is not under U.S. sanctions. In fact, as James Dobbins documents, the record shows that the UAE has been a valuable ally in the war on terror since 9/11.

5) If we’re truly afraid of an Emirates company having direct access to import weapons or bombs into our country, shouldn’t we shut down Terminal 4 at JFK International Airport in New York? That’s where the Emirates Airlines operates out of and where it has the ability to direct cargo both on and off their planes. Should we also shut down the state-owned Saudi Arabian Airlines from sending flights into Washington, D.C. ?

6) If Dubai Ports World were to finalize the port acquisition deal, Americans would work at these ports. DPW would not touch cargo, and it would not be in charge of port security. Coast Guard, Customs, and the respective state/local port commissions would manage the security. Dubai Ports World would have to follow the U.S. port regulations. There can and should be a serious inquiry into whether those regulations are being enforced. More generally, this should be an opening for us to debate the Bush administration’s poor record on port security.

And then there's this from today's WaPo editorial:

Finally, we're wondering if perhaps American politicians are having trouble understanding some of the most basic goals of contemporary U.S. foreign policy. A goal of "democracy promotion" in the Middle East, after all, is to encourage Arab countries to become economically and politically integrated with the rest of the world. What better way to do so than by encouraging Arab companies to invest in the United States? Clearly, Congress doesn't understand that basic principle, since its members prefer instead to spread prejudice and misinformation.

We'll be hearing more about this in the coming days and weeks.