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RUL] Arab Co., White House Had Secret Agreement

Sent: Wednesday, February 22, 2006 10:42 PM
Subject: [RUL] Arab Co., White House Had Secret Agreement


Arab Co., White House Had Secret Agreement
By TED BRIDIS (Associated Press Writer)
From Associated Press
February 22, 2006 9:20 PM EST

WASHINGTON - The Bush administration secretly required a company in the
United Arab Emirates to cooperate with future U.S. investigations before
approving its takeover of operations at six American ports, according to
documents obtained by The Associated Press. It chose not to impose other,
routine restrictions.
>
> As part of the $6.8 billion purchase, state-owned Dubai Ports World agreed
> to reveal records on demand about "foreign operational direction" of its
> business at U.S. ports, the documents said. Those records broadly include
> details about the design, maintenance or operation of ports and equipment.
>
> The administration did not require Dubai Ports to keep copies of business
> records on U.S. soil, where they would be subject to court orders. It also
> did not require the company to designate an American citizen to
> accommodate
> U.S. government requests. Outside legal experts said such obligations are
> routinely attached to U.S. approvals of foreign sales in other industries.
>
> "They're not lax but they're not draconian," said James Lewis, a former
> U.S.
> official who worked on such agreements. If officials had predicted the
> firestorm of criticism over the deal, Lewis said, "they might have made
> them
> sound harder."
>
> The conditions involving the sale of London-based Peninsular and Oriental
> Steam Navigation Co. were detailed in U.S. documents marked
> "confidential."
> Such records are regularly guarded as trade secrets, and it is highly
> unusual for them to be made public.
>
>
> The concessions - described previously by the Homeland Security Department
> as unprecedented among maritime companies - reflect the close relationship
> between the United States and the United Arab Emirates.
>
> The revelations about the negotiated conditions came as the White House
> acknowledged President Bush was unaware of the pending sale until the deal
> had already been approved by his administration.
>
> Bush on Tuesday brushed aside objections by leaders in the Senate and
> House.
> He pledged to veto any bill Congress might approve to block the agreement,
> but some lawmakers said they still were determined to capsize it.
>
> Dubai Port's top American executive, chief operating officer Edward H.
> Bilkey, said the company will do whatever the Bush administration asks to
> enhance shipping security and ensure the sale goes through. Bilkey said
> Wednesday he will work in Washington to persuade skeptical lawmakers they
> should endorse the deal; Senate oversight hearings already are scheduled.
>
> "We're disappointed," Bilkey told the AP in an interview. "We're going to
> do
> our best to persuade them that they jumped the gun. The UAE is a very
> solid
> friend, as President Bush has said."
>
> Under the deal, the government asked Dubai Ports to operate American
> seaports with existing U.S. managers "to the extent possible." It promised
> to take "all reasonable steps" to assist the Homeland Security Department,
> and it pledged to continue participating in security programs to stop
> smuggling and detect illegal shipments of nuclear materials.
>
> The administration required Dubai Ports to designate an executive to
> handle
> requests from the U.S. government, but it did not specify this person's
> citizenship.
>
> It said Dubai Ports must retain paperwork "in the normal course of
> business"
> but did not specify a time period or require corporate records to be
> housed
> in the United States. Outside experts familiar with such agreements said
> such provisions are routine in other cases.
>
> Bush faces a potential rebellion from leaders of his own party, as well as
> a
> fight from Democrats, over the sale. It puts Dubai Ports in charge of
> major
> terminal operations in New York, New Jersey, Baltimore, New Orleans, Miami
> and Philadelphia.
>
> Senate and House leaders urged the president to delay the takeover, which
> is
> set to be finalized in early March. Senate Majority Leader Bill Frist of
> Tennessee said the deal raised "serious questions regarding the safety and
> security of our homeland." House Speaker Dennis Hastert, R-Ill., asked the
> president for a moratorium on the sale until it could be studied further.
>
> In Saudi Arabia, Secretary of State Condoleezza Rice said the agreement
> was
> thoroughly vetted. "We have to maintain a principle that it doesn't matter
> where in the world one of these purchases is coming from," Rice said
> Wednesday. She described the United Arab Emirates as "a good partner in
> the
> war on terrorism."
>
> Bush personally defended the agreement on Tuesday, but the White House
> said
> he did not know about it until recently. The AP first reported the U.S.
> approval of the sale to Dubai Ports on Feb. 11, and many members of
> Congress
> have said they learned about it from the AP.
>
> "I think somebody dropped the ball," said Rep. Vito Fossella, R-N.Y.
> "Information should have flowed more freely and more quickly up into the
> White House. I think it has been mishandled in terms of coming forward
> with
> adequate information."
>
> At the White House, spokesman Scott McClellan said Bush learned about the
> deal "over the last several days," as congressional criticism escalated.
> McClellan said it did not rise to the presidential level, but went through
> a
> government review and was determined not to pose a threat.
>
> McClellan said Bush afterward asked the head of every U.S. department
> involved in approving the sale whether there were security concerns. "Each
> and every one expressed that they were comfortable with this transaction
> going forward," he said.
>
> Commerce Secretary Carlos Guiterrez told the AP the administration was
> being
> thoughtful and deliberate approving the sale.
>
> "We are not reacting emotionally," Guiterrez said in an interview
> Wednesday.
> "That's what I believe our partners from around the world would like to
> see
> from us is that we be thoughtful. That we be deliberate. That we
> understand
> issues before we make a decision."
>
> ---
>
> Associated Press writers Jeanine Aversa in Washington, Anne Gearan in
> Riyadh, Saudi Arabia, and John Christoffersen in Danbury, Conn.,
> contributed
> to this report.
>
> Copyright 2005 Associated Press. All rights reserved. This material may
> not
> be published, broadcast, rewritten, or redistributed.
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