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Bush dismisses GOP leaders' demand to block seaports deal

WASHINGTON—Brushing off public demands from the two top Republicans in Congress, President Bush said Tuesday that a deal allowing an Arab company to run six major U.S. seaports should go forward and that he'd veto any effort by Congress to stop it.

Both House Speaker Dennis Hastert, R-Ill., and Senate Majority Leader Bill Frist, R-Tenn., said that the proposed port takeover by Dubai Ports World, a state-owned company from the United Arab Emirates, posed potential national security risks.

Both said they wanted the deal stopped immediately pending a more thorough review. And Frist said that if Bush wouldn't stop the deal, he'd introduce legislation to force a halt, echoing a call by a growing number of lawmakers from both parties.

Bush and senior administration officials in charge of port security insisted Tuesday that the pending port takeover poses no security risks, but independent security experts weren't so sure, issuing mixed opinions in interviews with Knight Ridder.

But one thing was clear: The rare public quarreling between Bush and the Republican leaders of Congress underscored that, at the very least, the White House has a major political problem on its hands.

"I am very concerned about the national security implications that this could have for the safety of the American people," said Hastert, usually a Bush loyalist, in a public letter to Bush. "Therefore I believe there should be an immediate moratorium placed on this seaport deal ... "

Under the deal, Dubai Ports World would pay $6.8 billion to acquire a British company, Peninsular and Oriental Steam Navigation Co., which has been running commercial operations at the ports of Miami, Philadelphia, New York, New Jersey, Baltimore and New Orleans. Critics of the deal note that some of the Sept. 11 hijackers used the United Arab Emirates as a base and that the country's banking system has been used by groups connected to al-Qaida.

Bush sternly defended the deal Tuesday in remarks to reporters traveling with him aboard Air Force One, then spoke again on the subject immediately upon arriving at the White House.

"The company will not manage port security. The security of our ports will continue to be managed by the Coast Guard and customs," Bush said on the South Lawn.

He said his administration had thoroughly reviewed the proposed deal and found no security threat in it. He said that the UAE has cooperated in the war on terror and the company has agreed to cooperate with U.S. security agents. He added that it's important for U.S. policy in such transactions to appear even-handed.

"I really don't understand why it's OK for a British company to operate our ports, but not a company from the Middle East," Bush said on Air Force One, "when our experts are convinced that port security is not the issue."

Separately, senior officials from the Coast Guard and the Department of Homeland Security held a news conference and echoed Bush's assurances that the port takeover poses no threat to U.S. security.

"If people believe that a weapon of mass destruction can be entered into this country easier as a result of this business transaction, I will tell you, the answer is no," said Jay Ahern, assistant commissioner of U.S. Customs and Border Protection.

But independent experts split on the question.

"The security in the ports is very lax, as we all know. In an ordinary container, you could put a dirty bomb with a GPS (global positioning system) or a cell phone and set it off in the middle of a city," said Warren Leback, who ran maritime administration under President George H.W. Bush. "If the United Arab Emirates decides they are clandestinely supporting terrorists, they could put pressure on personnel to look the other way on the containers."

But former Virginia Gov. Jim Gilmore, a Republican who chaired the Advisory Panel to Assess Domestic Response Capabilities Involving Terrorism and Weapons of Mass Destruction, called the transaction a "good deal."

"The fact that ownership has changed shouldn't change anything," Gilmore said. "I think what you're seeing is people demagoguing things."

Former New Jersey Gov. Tom Kean, who co-chaired the bipartisan Sept. 11 commission, took a middle-ground position. He said port security has improved since the terrorist attacks, noting that more cargo is inspected before it reaches U.S. shores. But he had reservations about the Dubai Ports deal.

"The optics are bad," Kean said. "It doesn't give you a lot of confidence. I understand why people are concerned, given the history of the country."

Kean's emphasis on how the deal looks may point to its biggest fault line—the Bush administration's failure to consult Congress about it and sell it politically before the news became public last week. As a result, lawmakers and governors of both parties—including the Republican executives of New York state and Maryland—erupted when they heard about it.

Bush reacted to the blowback from Frist, Hastert and other lawmakers with characteristic insistence that they should simply trust his judgment.

"They ought to listen to what I have to say about this," Bush said. "But if they pass a law, I'll deal with it, with a veto."

The Senate Armed Services Committee will hear testimony about the proposed deal from a team of administration officials on Wednesday, Sen. John Warner, R-Va., the panel's chairman, announced.

The administration signed off on the deal after it was approved by the Committee on Foreign Investment in the United States, a closed interagency panel chaired by Treasury Secretary John Snow.

Snow was chairman of CSX, a rail firm that, according to the New York Daily News, sold its own port operations to DP World for $1.15 billion in 2004, a year after Snow left to head Treasury. The Treasury Department didn't respond to a request for comment.

Last month, Bush nominated David Sanborn, who heads DP World's European and Latin American operations, to head the U.S. Maritime Administration. Trent Duffy, a White House spokesman, said Sanborn does work for the company, but "we're told he had nothing to do with the transaction."

Former Sen. Warren Rudman, R-N.H., who chaired the U.S. Commission on National Security, said the Bush administration needs to make public everything connected to the DP World port takeover.

"Anything this important ought to be very transparent," he said. "I don't think there's any reason why Congress and the American people don't have access to the process."

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

GRAPHICS (from KRT Graphics, 202-383-6064): 20060221 PORTSECURITY, 20060221 DP World logo, 20060221 PO logo

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