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United Arab Emirates Firm May Oversee 6 U.S. Ports

By Ted Bridis
Associated Press
Sunday, February 12, 2006

A company in the United Arab Emirates is poised to take over significant operations at six American ports as part of a corporate sale, leaving a country with ties to the Sept. 11, 2001, hijackers with influence over a maritime industry considered vulnerable to terrorism.

The Bush administration considers the UAE an important ally in the fight against terrorism since the suicide hijackings and is not objecting to Dubai Ports World's purchase of London-based Peninsular and Oriental Steam Navigation Co.

The $6.8 billion sale could be approved Monday and would affect commercial port operations in New York, New Jersey, Baltimore, New Orleans, Miami and Philadelphia.

DP World said it won approval from a secretive U.S. government panel that considers security risks of foreign companies buying or investing in American industry. The U.S. Committee on Foreign Investment in the United States "thoroughly reviewed the potential transaction and concluded they had no objection," the company said in a statement.

The committee, which could have recommended that President Bush block the purchase, includes representatives from the departments of Treasury, Defense, Justice, Commerce, State and Homeland Security.

The committee action followed concerns expressed by a Miami-based company, Eller & Co., according to Eller's lawyer, Michael Kreitzer. Eller is a business partner with the British shipping giant but was not in the running to buy the ports company.

The State Department describes the UAE as a vital partner in the fight against terrorism. But the UAE, a loose federation of seven emirates on the Saudi peninsula, was an important operational and financial base for the hijackers who carried out the attacks against the World Trade Center and the Pentagon, the FBI concluded.

Sen. Charles E. Schumer (D-N.Y.) urged the administration to consider the sale carefully. "America's busiest ports are vital to our economy and to the international economy, and that is why they remain top terrorist targets," Schumer said. "Just as we would not outsource military operations or law enforcement duties, we should be very careful before we outsource such sensitive homeland security duties."

Shipping experts noted that many of the world's largest port companies are not based in the United States, and they pointed to DP World's strong economic interest in operating ports securely and efficiently.

"It's in Dubai's interest to make sure this runs well," said James Lewis, who worked with the U.S. committee at the State and Commerce departments.

Stephen E. Flynn, who studies maritime security at the New York-based Council on Foreign Relations, said even under foreign control, U.S. ports will continue to be run by unionized American employees. "You're not going to have a bunch of UAE citizens working the docks," Flynn said. "They're longshoremen, vested in high-paying jobs."

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