Many Republicans and Democrats, on Capitol Hill and across the country, hope to stall a deal that hands over operations at six U.S. ports to a company owned by Dubai, one of the United Arab Emirates (UAE). President Bush says he will veto any legislative effort to delay the takeover, which was approved by a multi-agency panel that reviews national security. The president had no direct involvement in the process.
The company, Dubai Ports World, is buying the Peninsular and Oriental Steam Navigation Company, a British-owned firm which has contracts to run cargo terminals in New York, Newark, Philadelphia, Baltimore, Miami and New Orleans. Here are some of the questions raised by the issue:
Q: Congressmen and governors from both parties are calling for a review of the $6.8-billion sale. What's behind their objection to Dubai Ports World?
Cargo terminals at U.S. ports have been increasingly operated by companies based in foreign countries, such as China, Singapore, Japan, Denmark, Taiwan and Great Britain.
The reason this deal is attracting so much attention is that Dubai Ports is owned by an Arab government that has links to terrorism. The United Arab Emirates was home to two of the Sept. 11 hijackers and was a financial base for the operation. UAE has also been implicated in a nuclear smuggling ring: It was identified as a transfer point for nuclear components from Pakistani scientists to Iran, Libya and North Korea.
Democrats have been quick to attack the sale. "If they couldn't produce security in their own country to stop the transiting of such nuclear components, why in God's name would we give them the operation of the ports?" said Sen. Robert Menendez (D-NJ).
But some Republicans aren't siding with the administration, either. Senate Majority Leader Bill Frist said the deal raised "serious questions regarding the safety and security of our homeland."
Q: If the Dubai Ports takeover occurs as currently planned, what exactly would the company control?
Department of Homeland Securities (DHS) officials say Dubai Ports would have control over nothing more than the operation of some of the cargo terminals in the concerned port cities. The ports themselves are owned by local taxpayers and run by local government. Port authorities issue leases to multiple companies to operate the terminals that load and unload cargo containers from ships. Some of these companies are foreign-owned, others are U.S.-based.
Q: Who runs security at U.S. ports?
The U.S. Coast Guard is in charge of port security, and U.S. Customs and Border Protection is in charge of cargo and container security. The Coast Guard patrols ports, inspects facilities -- including terminals -- and collects information on incoming ships and the sailors on board.
Customs agents inspects cargo containers once they reach U.S. ports. But U.S. agents also inspect cargo before it's loaded at some foreign ports. The United States has agreements in 42 major foreign ports that allow Customs officials to sweep containers with imaging and radiation detection technology. "Since Sept. 11, we do screening as much as possible outside the U.S.," said Stewart Baker, assistant secretary for policy with the DHS. "We don't want to discover a weapon of mass destruction inside a U.S. port."
Q: Will the transfer of ownership change who is working at these six ports?
The dock workers will remain the same, and there will be very little change in management, DHS officials said at a briefing this week. In the vast majority of U.S. ports, the workers operating the cargo cranes and in management are Americans.
"In reality, it's just an economic transaction," said Rob Quartel, chairman and CEO of Freightdesk Technologies and a former U.S. federal maritime commissioner. Dubai Ports is buying control of a company that has contracts to manage certain port terminals, said Quartel. "When all is said and done, it's going to be the same people running the [terminals] day to day, the same managers managing it. The managers' managers will report to a different board, but it's the same people."
Q: What is the White House saying about security concerns over Dubai Ports?
White House counselor Dan Bartlett said Dubai Ports "is a reputable firm that went through a congressionally approved vetting process." The deal comes with a further safeguard not required of other port companies: Dubai Ports is required to participate in U.S. security programs to stop smuggling and detect illegal shipments of nuclear materials. Roughly 33 other port companies participate in these voluntarily. The Coast Guard is also inspecting Dubai Ports' facilities as they undergo the ownership transfer.
The UAE is also seen as an ally by the Bush administration, particularly the pro-Western governments of Abu Dhabi and Dubai. The UAE "does not want to do anything to jeopardize its relationships with the United States," says Joseph Kechichian, an author and consultant who specializes in the Persian Gulf region. "What they want are investments that will maximize their returns. Because you have to understand something in terms of the philosophy that these folks espouse, namely that oil is a finite, limited resource, and we have to prepare for not only the next generation, but generations down the line."
Q: This deal has put overall port security in the spotlight. Given that Dubai Ports is not responsible for general port security, why are critics expressing so much concern?
Port security is underfunded, says Steve Flynn of the Council on Foreign Relations and a retired Coast Guard officer. Only one in 20 incoming containers is inspected, and there is considerable apprehension about a lack of oversight in container packing at foreign ports. Customs hopes to increase from 42 to 50 by the end of the year the number of foreign ports that allow U.S. agents to inspect containers. Even then, many containers will continue to go uninspected. (UAE so far is the only Middle Eastern country that allows U.S. Customs to inspect its containers.)
And it's not far-fetched to think that terrorists might gain key knowledge to port operations and layouts through private or state-owned foreign companies. Foreign ownership of terminal operations has been going on for sometime, says Flynn. "That's why I think there's legitimate angst on Capitol Hill. We're now realizing that many of the infrastructures we took for granted as purely commercial, we're realizing are truly national security assets."
Q: What are the possible implications if this deal is rejected?
Some say the very basis of American policy toward the Middle East may be at stake. If the United States can't work with a moderate, friendly and socially liberal Arab ally such as Dubai, it may not be able to work with any Arabs at all, says Abdul Khaleq Abdulla, a political scientist and Arab security analyst at Emirates University.
"If the American politicians were smart, they would hold Dubai up as a role model," said Abdulla. "We don't like the tone of this. Many of us see a hint of racism there, disguised as security concern."
The White House is putting forth a similar view: "This is a company that has played by the rules," said President Bush, "that has been cooperative with the United States, a country that's an ally in the war on terror, and it would send a terrible signal to friends and allies not to let this transaction go through."
Some lawmakers on Capitol Hill contend that the country's safety must come first. "This deal doesn't pass the national security test," said New Jersey Rep. Jim Saxton, chairman of the House Terrorism, Unconventional Threats and Capabilities subcommittee. "I think it's a mistake. If necessary, Congress should act independently of the president."
Associated Press and other NPR staffers contributed to this report.
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