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Economic boycott of Israel further complicates ports deal

WASHINGTON—The United Arab Emirates' participation in an Arab League economic boycott of Israel raised new complications Tuesday for a deal that would place a state-owned UAE company from Dubai in control of operations at six U.S. ports.

The pro-Israel Anti-Defamation League called on the Bush administration to scuttle the deal and during a senate hearing Democratic senators peppered the company's chief operating officer with questions about its views toward Israel.

The new furor erupted as President Bush reiterated his confidence in the company, Dubai Ports World, which is to take ownership of terminal operations at the six U.S. ports this week, but has suspended making any changes at them pending a 45-day government review.

Meanwhile, more lawmakers from Bush's own Republican Party called for greater congressional say in approving such transactions, and Senate Democratic Leader Harry Reid of Nevada said Democrats will oppose it and demand a vote on it.

Democratic senators, citing a report in the Jerusalem Post, noted that DP World's parent company, the Ports, Customs and Free Zone Corp., enforces the Arab boycott against Israel.

DP World chief operating officer H. Edward Bilkey told the Senate Commerce Committee that he "imagined" that the company's state owners do participate in the boycott. " I do not have influence on the government of Dubai," he said.

But Bilkey, a U.S. citizen whose family tree includes a former New Jersey senator, suggested that the boycott only applies to goods shipped to Dubai. "We serve everyone," Bilkey said, adding that Israel is one of DP World's main shipping customers worldwide.

"Do you have any Jewish members of your board?" asked Committee Chairman Ted Stevens, R-Alaska.

"No, sir," Bilkey replied.

"I didn't expect any," Stevens said.

The Anti-Defamation League said in a statement that Dubai's support for the boycott "should torpedo any deal with the United States on port operations."

U.S. companies are prohibited from taking any action that supports the Arab boycott of Israel and the government been trying to persuade Arab countries to end the policy for years.

The port transaction has become a political albatross for Bush. Almost daily, new revelations spark new rounds of criticism over the deal and the way the administration approved it in January after a 30-day review that opponents say was cursory.

DP World is expected to complete its acquisition of Peninsular and Oriental Steam Navigation Co., a British firm, this week and assume all of its port operations worldwide, including at terminals in Miami, Philadelphia, New York and New Jersey, Baltimore and New Orleans.

But Bilkey told senators that DP World would not operate U.S. ports until after a new 45-day national security review is completed by the Bush administration. He also assured them that the company was taking steps to retain the P&O management team for its North American operations and that it would assist U.S. officials with port security.

Administration officials on Tuesday spent part of the day tamping down a furor over a Coast Guard document from December that raised concerns about "intelligence gaps" related to the DP World acquisition of P&O.

Homeland Security Secretary Michael Chertoff told a Senate appropriations committee that the Coast Guard document was "an early report." He said the Coast Guard and his department concluded that the deal "does not pose a significant threat to U.S. assets in U.S. ports."

But several Republicans, while saying they welcomed the new review, voiced exasperation at the administration's handling of the deal. Some, such as Sen. Olympia Snowe of Maine and Rep. Peter King of New York, said they were considering legislation that would permit Congress to block such deals in certain circumstances.

Bush, speaking to reporters after meeting with Italian Prime Minister Silvio Berlusconi, said that despite the pending 45-day investigation, his position in support of DP World hadn't changed.

"If there was any doubt in my mind, or people in my administration's mind that our ports would be less secure and the American people endangered, this deal wouldn't go forward," he said.

But with public antipathy still high toward the deal, Reid said Democrats would not support it.

"The American people will not accept the United Arab Emirates, a country which was only one of three countries to recognize the Taliban, a country which boycotts anything dealing with Israel. We're not going to agree to that.

"And the president can say he approves it any way he wants—there will be a vote in the Senate on this. He will not get by trying to jam this down our throats," Reid said.

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

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