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U.S. Government to Review Port Operations Transaction

By Gerry J. Gilmore
American Forces Press Service

WASHINGTON, Feb. 27, 2006 – A United Arab Emirates-owned firm that's slated to take over shipping terminal operations at six major U.S. ports requested an extended U.S. government review of the transaction, the Committee on Foreign Investment in the United States announced in a news release yesterday.

The committee "welcomed the announcement by Dubai Ports World that it will submit for review its proposed acquisition of control of U.S. port terminal operations," the release stated. Headed by the U.S. Treasury Department, CFIUS inspects sales of firms that could affect national security.

The review, which the White House accepted, will include a 45-day investigation period, the news release stated. White House press secretary Scott McClellan expressed confidence that the review would allow the deal to move forward.

"The transaction was closely scrutinized by the appropriate national security and intelligence officials, and important safeguards are in place," he said. "We believe, however, the additional time and investigation at the request of the company will provide Congress with a better understanding of the facts, and that Congress will be comfortable with the transaction moving forward once it does."

Dubai Ports World, which is owned by the United Arab Emirates government, bought British-owned ports operator Peninsular and Oriental Steam Navigation Co., which managed port operations in New York, New Jersey, Baltimore, Miami, Philadelphia and New Orleans.

The foreign investment committee had previously approved the transaction, but concern over possible security ramifications caused some Capitol Hill legislators to ask for more time to examine the issue. Yesterday's CFIUS announcement grants more time, an outcome agreeable to national security adviser Stephen Hadley.

"The security considerations have been well addressed; there isn't a security risk," Hadley said on CBS' "Face the Nation" yesterday. However, "this needs to be made clear to the Congress and to the American people," Hadley said, "and we need a little more time to do that."

Last week, Virginia Sen. John W. Warner, chairman of the Senate Armed Services Committee, and other senior U.S. legislators worked to address concerns that an Arab-owned company would manage terminal operations at key U.S. ports.

The U.A.E. is a loyal ally of the United States, Deputy Defense Secretary Gordon England said at a Feb. 23 SASC hearing convened to discuss the matter.

"They are a friend and ally of the United States, and they do stand side by side with us in this war on terror," England said.

The deputy secretary also said the Defense Department was among several U.S. government agencies, including the departments of State and Homeland Security, which took part in an in-depth and comprehensive review of the ports issue.

"During this review process there were no issues raised by any agency within DoD, including our U.S. Transportation Command, and that is significant because that was a special review measure we'd put in place to ensure that any military transportation security issue would be identified," England said at the hearing.

DoD spokesman Bryan Whitman told Pentagon reporters today he is aware that a number of congressional committees would like more hearings on the ports management issue. However, Whitman added, at this point it is unclear what role DoD might play, if any, at such events.

President Bush said U.S. Customs and the Coast Guard would still perform security duties at the specified ports.

"People don't need to worry about security," Bush told White House reporters Feb. 23. "This deal wouldn't go forward if we were concerned about the security of the United States of America."

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