Latest News

Delay in takeover of ports fails to satisfy critics

WASHINGTON—A decision by a state-owned Arab company to delay taking control of terminals at six major U.S. ports failed Friday to appease many congressional opponents, who say they'll introduce legislation next week to force a 45-day investigation into whether the firm's takeover poses a national security risk.

While the White House welcomed the move by Dubai Ports World of the United Arab Emirates, on Capitol Hill a bipartisan group of lawmakers called the gesture too little, too late.

"Nothing in the announcement by Dubai Ports World changes the fact that unless the president or Congress acts, in less than a week operations at U.S. ports will be in the hands of a foreign government," said Sen. Bob Menendez, D-N.J., one of the group. "That is an unacceptable risk that we cannot tolerate."

But the move did appear to give President Bush some political breathing room in his battle with Congress: Senate Majority Leader Bill Frist, R-Tenn., and House Speaker Dennis Hastert, R-Ill.—critics of the deal early in the week—took wait-and-see positions after DP World's action.

Frist is reviewing the move, a spokesman said. Hastert thinks DP World's action is "a good move on their part, so Congress can properly review this deal," said Ron Bonjean, his spokesman. "(Hastert) will be meeting with the House Republican leadership team next Tuesday to decide further direction."

Even Maryland's Gov. Robert Ehrlich, a Republican who initially voiced strong reservations about the deal, said it's unlikely now that he'll stand in its way at the port of Baltimore.

DP World announced late Thursday night that it intends on March 2 to finalize its $6.8 billion acquisition of Peninsular and Oriental Steamship Navigation Co., also known as P&O, a British firm that manages terminals globally, including some at the ports of Miami, Philadelphia, New York, New Jersey, Baltimore and New Orleans.

However, DP World officials said the company would delay taking over the P&O terminals indefinitely to give skeptical lawmakers a chance to review the deal.

The Bush administration approved the transaction last month after a federal inter-agency panel determined that the sale posed no threat to national security. Many lawmakers of both parties object, however, citing previous UAE connections to al-Qaida as grounds for worry that DP World might facilitate a terrorist attack at a U.S. port.

The White House welcomed DP World's delay as a chance to persuade Congress and the country that the deal poses no risk.

"Obviously questions have been raised in the public and in the Congress, and the president believes that additional time, which would allow the company and the administration to explain this and provide more information to the Congress, is a good thing," National Security Adviser Stephen Hadley told reporters Friday.

"And that in the end of the day, Congress and the public ... will come to the same conclusion he has: that this is something that can go forward and not jeopardize the national security of the United States," Hadley said.

Opponents said a slight delay is insufficient.

Menendez and a bipartisan group of senators intend to introduce a bill next week to require Bush to block DP World's takeover, mandate a 45-day investigation into its national security impact, and order the Department of Homeland Security and Treasury Department to brief lawmakers on the investigation's findings.

Bill co-sponsors include Sens. Charles Schumer, D-N.Y., Hillary Rodham Clinton, D-N.Y., Norm Coleman, R-Minn., Tom Coburn, R-Okla., and Olympia Snowe, R-Maine.

"A brief period for the company to continue lobbying without the full 45-day investigation that should have been done from the beginning is simply not enough," Schumer said. "If the president were to voluntarily institute the investigation and delay the contract, that would be a good step."

Bush has vowed to veto any legislation that would prevent the deal, but obstacles to it arise far beyond Washington. The Port Authority of New York and New Jersey filed a lawsuit Friday in state court in Trenton, N.J., to block DP World from taking over operations at Newark's containment terminal.


(c) 2006, Knight Ridder/Tribune Information Services.

PHOTOS (from KRT Photo Service, 202-383-6099): PORTSECURITY

Need to map

Related stories from McClatchy DC