A Storm On Ports: Bayh And The Dubai Buy

A Storm On Ports: Bayh And The Dubai Buy

for Howey Political Report Feb. 23, 2006
www.howeypolitics.com

Sen. Evan Bayh didn't miss a heartbeat on Fox News Sunday last week when asked about a story that at the time was little more than a cloud on the horizon outside the beltway - the Bush administration's approval of a deal that would allow DP World, a company mainly owned by the United Arab Emirates, to conduct significant operations at six major U.S. seaports.

"There can't be a choice between profits and protecting the American people," he said. "We have to do, even if it costs us a couple extra bucks, what it takes to protect this country. I'll give you one little example. About 80 percent of the magnets that make our smart bombs go are now made in China. It's not smart to rely on China to produce important weapons systems for this country, just like it's not smart to outsource our port security if there's any doubt."

On Monday, Bayh's office issued a press release outlining steps he intends to propose in legislation that would "stop outsourcing our homeland security."

"The Dubai takeover is a symptom of a much larger problem," Bayh stated in the press release. "Again and again, the current system for overseeing foreign takeovers has undermined our national security interests by rubber stamping deals like this one."

While the week's events unfolded, Bayh flew off to Florida and later California for several days of fundraising.

Lawmakers (including Senate Majority Leader Bill Frist), hacks and bloggers of every political stripe began to whip up a veritable maelstrom that continues to batter the administration. So far, the president says he will not be moved. On Tuesday, while returning to the White House from Colorado, Bush conducted an unusual interview with the press pool aboard Air Force One.

The president insisted the company and deal had been thoroughly vetted, and noted that DP acquired the ports operations through the takeover of a foreign-owned company already administering the contract, UK-based P&O.

"I want those who are questioning it to step up and explain why all of a sudden a Middle Eastern company is held to a different standard than a Great British [sic] company," Bush said. "I'm trying to conduct foreign policy now by saying to people of the world, 'We'll treat you fairly.'"

"They ought to look at the facts, and understand the consequences of what they're going to do. But if they pass a law, I'll deal with it, with a veto."

Threat of veto - it would be the president's first - only fanned the flames. Bill Gertz reported in Wednesday's Washington Times that several unnamed administration security officials said the deal could potentially allow terrorists to infiltrate seaports. And Indiana's own Rep. Mike Pence - never one to shy from an opportunity to remind the president of the party's conservative roots - joined a growing chorus by urging the president to put a hold on the port contract (HPR Daily Wire, Feb. 22).

Some observers insisted the president was right. Ports of Indiana spokesman Jody Peacock explained to The Times of Northwest Indiana that the U.S. Coast Guard regulates all ports and vessels regardless of the ownership of the companies working at any individual port.

Others suggested that lawmakers behaved irresponsibly. "Everyone is playing politics, and it's very unfortunate," Judith Kipper of the Council on Foreign Relations told Newsday. "It reconfirms to Arab and other allies that the United States is not a friendly place for investments and financial transactions." In an editorial entitled "Paranoia about Dubai ports deal is needless," the Financial Times stated "The bluster about national security conceals one of the uglier faces of U.S. protectionism - the one with the slightly racist tinge."

According to Bayh spokesperson Meghan Keck, the senator's proposed legislation will directly address such concerns by requiring the Committee on Foreign Investment in the United States, which approves such sales, "to consider any country - whatever country is involved in the business deal - to consider that country's relationship with the U.S. before it approves that sale."

The legislation would also require the Director of National Intelligence to certify there are no troubling national security implications of such sales; add the director to the Committee to bolster national security consideration; require the president to notify Congress and relevant state officials of all proposed foreign acquisitions; and, calls for increased transparency at the Committee.

As Helen Delich Bentley, a former Maryland congresswoman and a port consultant, told the South Florida Sun-Sentinel, CFIUS has always operated in secrecy, and has approved many deals that she objected to.

Keck noted that "Since CFIUS was formed in 1988, they've only stopped one business purchase."

"Like the magnets that were made in Indiana, Sen. Bayh believes that there are some assets that the U.S. should never have to depend on other countries to provide."