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Opposition to Port Deal Grows With G.O.P. Leader's Threat

WASHINGTON (By David D. Kirkpatrick and Maria Newman, NYTimes) February 21, 2006 — Senate Majority Leader Bill Frist today threatened to introduce legislation to put a hold on a deal permitting an Arab company's takeover of six major American ports unless the Bush administration conducts a more thorough review of the matter.

His opposition is part of a growing chorus of criticism of the federal government's speedy approval of the deal. On Monday, the Republican governors of New York and Maryland raised the threat of legal action to void contracts at ports in New York City and Baltimore. Today, with opposition growing, Bush administration officials were put on the defensive about the security risk the deal would present.

"The decision to finalize this deal should be put on hold until the administration conducts a more extensive review of this matter," Mr. Frist said. "If the administration cannot delay this process, I plan on introducing legislation to ensure that the deal is placed on hold until this decision gets a more thorough review."

Critics in both parties argue that a takeover by Dubai Ports World warranted special scrutiny. The company is controlled by the government of the United Arab Emirates, which, though an ally of the United States, has also been home to terrorists, and its newly acquired P & O subsidiary operates major terminals in New York, New Jersey, Baltimore, New Orleans, Miami and Philadelphia.

At the Pentagon today, Defense Secretary Donald H. Rumsfeld praised the Arab country as an important strategic military partner.

"Nothing changes with respect to security under the contract," Mr. Rumsfeld said. "The Coast Guard is in charge of security, not the corporation."

"We all deal with the U.A.E. on a regular basis," he added. "It's a country that's been involved in the global war on terror."

Criticism has come from legislators of both parties since the administration said on Thursday that its approval of the deal was final. The sale is scheduled to close on March 2. Governors George E. Pataki of New York and Robert L. Ehrlich Jr. of Maryland both said they would do what they could to stop the deal from going through.

"I have directed the Port Authority of New York and New Jersey to explore all legal options that may be available to them in regards to this transaction," Mr. Pataki said in a statement.

Mr. Ehrlich told reporters that he had "a lot of discretion" and was considering his options, including voiding the contract.

With criticism of the deal growing on Monday, officials of the Dubai Ports pushed back, arguing that both the newly acquired North American division running the terminals and its new Arab parent company had worked closely with United States security officials for decades.

The unit, P & O Ports, "has long worked with the U.S. government officials in charge of security at the ports to meet all U.S. government standards, as do other foreign companies that currently operate ports in the United States," said Michael J. S. Seymour, the unit's president.

Congressional criticism of the deal grew on Sunday after Michael Chertoff, secretary of homeland security, defended the arrangement in television appearances, saying there were unspecified "assurances in place" that the takeover was "appropriate from a national security standpoint."

Representative Peter T. King, a New York Republican, said the review was conducted in just 30 days — far too little time to vet the company thoroughly. "There wasn't a full investigation in the context of a post 9/11 world," he said.

Senator Charles E. Schumer, a New York Democrat, said, "You would just think that when a Dubai company is taking over, that is enough to raise a flag — at least to do a thorough review, at minimum." Senator Hillary Rodham Clinton, another New York Democrat, and Senator Robert Menendez, Democrat of New Jersey, are expected to introduce legislation prohibiting the sale of terminal operators to foreign governments.

While Tom Ridge, former secretary of homeland security, has expressed confidence that American officials would not have approved the port deal if it put national security at risk, he said on Monday, "The bottom line is, I think we need a little bit more transparency here."

In an interview with CNN, he said it would be "very appropriate" for the administration to brief Congress about why it believes the port arrangement not only does not compromise security but will actually improve it.

People involved in the approval process said that, like all acquisitions of domestic businesses by foreign-owned companies, the Dubai Ports World acquisition was reviewed by the Committee on Foreign Investment in the United States, representing 12 federal agencies.

Officials of Dubai Ports World's North American subsidiary, speaking on condition of anonymity because of the political delicacy of the situation, said the critics' fears were misdirected because the Coast Guard and the United States customs authorities, not the terminal operators, are responsible for checking incoming cargo, passengers and crews as well as for planning and maintaining port security.

Anthony R. Coscia, the chairman of the Port Authority of New York and New Jersey, said the agency could not stop the Dubai company from assuming a 30-year lease on a major container terminal in New York Harbor unless some provision of the lease was violated.

He said the agency's lawyers had been studying the lease of the terminal to P & O Ports North America, a subsidiary of the company being acquired by Dubai Ports World, but had not reached any conclusion.

David D. Kirkpatrick reported from Washington for this article and Maria Newman from New York. Patrick McGeehan contributed reporting.

 

 

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