Port Deal's Political Fallout Not Over

Cargo containers are unloaded in Baltimore, one of six U.S. seaports with terminal operations that were acquired by Dubai Ports World. After an uproar, the firm said that it will transfer those operations to a U.S. entity.
Cargo containers are unloaded in Baltimore, one of six U.S. seaports with terminal operations that were acquired by Dubai Ports World. After an uproar, the firm said that it will transfer those operations to a U.S. entity. (By Robert A. Reeder -- The Washington Post)
By Jonathan Weisman
Washington Post Staff Writer
Saturday, March 11, 2006

House Republican leaders will unveil legislation as soon as next week demanding a congressional role in reviewing the acquisition of U.S. businesses by foreign buyers, suggesting that the controversy over a now-abandoned Dubai port deal will continue to roil congressional relations with the Bush administration.

House Majority Whip Roy Blunt (R-Mo.) is drafting a bill to require congressional oversight as the administration reviews such foreign acquisitions, a role Congress has not played since the Committee on Foreign Investments in the United States (CFIUS) was created three decades ago.

A day after United Arab Emirates-based Dubai Ports World abandoned its bid to control terminal operations at six major U.S. seaports, lawmakers and President Bush made it clear that the issue was not going away. In remarks to newspaper editors, Bush said he is "concerned about a broader message this issue could send to our friends and allies around the world, particularly in the Middle East."

"In order to win the war on terror, we have got to strengthen our relationships and friendships with moderate Arab countries in the Middle East," Bush said. "UAE is a committed ally in the war on terror. They are a key partner for our military in a critical region."

Secretary of State Condoleezza Rice, speaking to reporters while flying to Chile, said: "Of course I think you have to be concerned about the perception and the message that this might send. It means that we are going to have to work and double our efforts to send a strong message that we value our allies, our moderate allies, in the Middle East."

U.S. Trade Representative Rob Portman announced that trade talks between the United States and the UAE, set to begin Monday, will be postponed. Spokeswoman Neena Moorjani said both sides need more time to prepare.

Flush from what they see as a victory, members of Congress appear determined to insert themselves into matters of national security that they had previously left exclusively to the president. But their aggressive response has left administration officials -- and even some colleagues -- concerned that the longer the controversy drags out, the more likely it will alienate foreign allies, dampen investment in the United States and even slow the economy.

On Capitol Hill, lawmakers from both parties pledged to revise the review process for business acquisitions by foreigners while moving swiftly on legislation to bolster port security.

Critics of the congressional attack on the port deal said DP World's withdrawal will not make the six U.S. ports any safer from terrorist attacks. But lawmakers say the controversy will spark action on measures to tighten security that have languished in Congress. Both the Senate and House homeland security committees said they will draft legislation in a matter of weeks.

House leaders have decided to push ahead next week with a full House vote on legislation to kill the port deal. The House Appropriations Committee had approved the measure 62 to 2 on Wednesday, but rank-and-file members outside the committee have asked to go on record with their opposition.

Democrats demanded that the White House release all documents related to DP World's acquisition of London-based Peninsular and Oriental Steam Navigation Co., including the administration's review of the deal and documents pertaining to a Coast Guard memo that said investigators could not say whether the transaction would heighten terrorist threats.

Despite the assurances of congressional Republicans and the president, some Democrats also questioned whether DP World really committed to shedding its U.S. port assets Thursday when it pledged to "transfer" them to a U.S. entity. Bush himself said the Dubai-owned firm has "made the difficult decision to hand over port operations that they had purchased from another company."

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