GOP Leaders Draw Back From Bid to Block Port Deal
But Bipartisan Critics on Hill Vow to Force Security Review

By Jonathan Weisman
Washington Post Staff Writer
Saturday, February 25, 2006

A Dubai company's offer to delay taking control of terminal operations at six U.S. ports, combined with aggressive White House lobbying, has tempered a rush by congressional GOP leaders for quick action next week to block the $6.8 billion transaction, which has triggered a political furor.

Speaker J. Dennis Hastert (R-Ill.) will meet with House GOP leaders Tuesday to discuss the chamber's next move, while aides to Senate Majority Leader Bill Frist (R-Tenn.) said he will wait to be briefed by the company before taking a stand. Both Hastert and Frist had issued strong statements earlier raising concerns about national security in the wake of Dubai Ports World's acquisition of the London-based Peninsular and Oriental Steam Navigation Co. and its terminal operations at six major U.S. ports, including those in New York and Baltimore.

But a bipartisan group of senators, who dismissed the Arab maritime company's offer late Thursday as meaningless, said yesterday that they will try to force a vote early next week on legislation that would require a 45-day national security investigation of the deal.

Senators from across the political spectrum -- including Charles E. Schumer (D-N.Y.), Norm Coleman (R-Minn.), Robert Menendez (D-N.J.), Olympia J. Snowe (R-Maine), Hillary Rodham Clinton (D-N.Y.), Tom Coburn (R-Okla.), Susan Collins (R-Maine) and Jack Reed (D-R.I.) -- said they will push for a fast vote on legislation that would block the takeover of port operations while the administration conducts a national security review of the transaction's implications.

The secretaries of homeland security and the Treasury would have to brief members of Congress on their findings, and Congress would have the authority to reject the deal.

"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. But a simple cooling-off period will not allay our very serious concerns about this dubious deal."

GOP leadership aides said they are not certain lawmakers can avert a showdown between Congress and the White House.

"It would have been a lot easier to frame this deal correctly before this public relations fiasco," said one House leadership aide. "We're going to give the White House a chance to explain the deal, but it's going to be very hard to put the genie back in the bottle."

Although the transaction has been in the works for months and was approved by a federal interagency committee Jan. 17, the White House was caught by surprise early this week when a bipartisan group of lawmakers lashed out at the deal and suggested that the administration was compromising national security by allowing a state-owned company from the United Arab Emirates to take charge of operations at U.S. ports. President Bush fought back, threatening to veto any attempt by Congress to scuttle the deal and portraying the reaction as anti-Arab. Since then, the White House has expressed regret that it did not keep congressional leaders informed of the deal.

Facing a political uproar, Dubai Ports World announced Thursday night that it will not exercise control over or influence the management of terminal operations at the ports in New York, New Jersey, Philadelphia, Baltimore, Miami and New Orleans "while it engages in further consultations with the Bush Administration and as appropriate Congressional leadership and relevant port authorities address concerns over future security arrangements."

But the company said it will proceed with the multibillion-dollar acquisition of those port operations, set to be completed Thursday.

White House spokesman Scott McClellan said the Bush administration welcomes "a slight delay" to allow more time to brief Congress. But he said Bush's threat to veto legislation blocking the takeover still stands.

Through spokesman Ron Bonjean, Hastert called the offer "a good move," but rank-and-file lawmakers from both parties were unimpressed.

Menendez called the company's offer "a smoke screen that changes nothing."

House Homeland Security Committee Chairman Peter T. King (R-N.Y.) said he still needs a firm commitment from Bush that his administration will fully investigate the company and the country and share its findings with Congress. Without that, he said, he and 48 House co-sponsors will introduce legislation on Tuesday that would force a 45-day review.

For the Dubai company, the obstacles kept mounting yesterday. The Port Authority of New York and New Jersey filed suit in New Jersey Superior Court in Newark to stop the deal, charging that any transfer of control of port facilities requires the authority's consent.

A U.S. company at the Port of Miami, Eller & Co., petitioned Britain to block the sale, alleging that the deal will force the firm to become an "involuntary partner" with Dubai's government. The company said it might seek millions of dollars in damages.

And Thomas H. Kean (R), a former New Jersey governor who chaired the commission that examined the Sept. 11, 2001, attacks, came out against the port deal, telling the Associated Press "it should never have happened."

"We're in a no-win situation," Kean said, referring to the United Arab Emirates. "There's no question that two of the 9/11 hijackers came from there and money was laundered through there."

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