By Jeremy Pelofsky
WASHINGTON (Reuters) - Two U.S. Democratic senators said on Friday they would introduce legislation aimed at blocking Dubai Ports World from buying a company that operates several U.S. shipping ports because of security concerns.
Robert Menendez of New Jersey and Hillary Clinton of New York said they would offer a measure to ban companies owned or controlled by foreign governments from acquiring U.S. port operations.
"We wouldn't turn the border patrol or the customs service over to a foreign government, and we can't afford to turn our ports over to one either," Menendez said in a statement. The Senate Banking Committee also plans to hold a hearing on the issue later this month.
P&O, the company Dubai Ports World plans to buy for $6.8 billion, is already foreign-owned, by the British, but the concern is that the purchaser is backed by the United Arab Emirates government.
The UAE company would gain control over the management of major U.S. ports in New York and New Jersey, Baltimore, Philadelphia, New Orleans and Miami and that has sparked national security concerns among lawmakers.
"I will be working with Senator Menendez to introduce legislation that will prohibit the sale of ports to foreign governments," Clinton said in a statement.
A Dubai Ports World spokesman said ports managed by the company met international security standards and that it had received all the necessary U.S. regulatory approvals.
"All Dubai Ports World ports are ISPS (International Ship and Port Facility Security) certified as are the P&O ports in the U.S.," the spokesman told Reuters in Dubai.
The Committee on Foreign Investment in the United States (CFIUS), a U.S. inter-agency panel that reviews security implications of foreign takeovers of strategic assets, already reviewed the transaction and did not object.
Despite that review, some Republicans and Democrats in the U.S. Congress urged the Bush administration to conduct a more rigorous review. They expressed fears that the UAE was used as a conduit for parts used for nuclear proliferation and that the local banking system had been abused by financiers with possible links to terrorist organizations.
The Senate Banking Committee plans to hold a hearing the week of February 27 on the P&O sale and the U.S. government review process, according to a panel spokesman.
"Clearly in our opinion there's some dysfunction in how the (CFIUS) process works in terms of transparency and whether national security concerns are being properly weighed in the decision," said committee spokesman Andrew Gray.
U.S. officials have said the UAE has been a solid and cooperative partner in the fight against terrorism, and have praised the UAE for steps to protect its booming financial sector against abuse by terrorism financiers.
Money for the September 11 attacks was wired through the UAE's banking system, according to U.S. officials. Two of the September 11 hijackers were UAE citizens.
U.S. seaports handle 2 billion tons of freight each year, but only about 5 percent of containers entering the United States are examined on arrival.
Similar concerns were raised when a China state-controlled oil company tried to acquire the U.S. oil company Unocal. After pressure from U.S. lawmakers, the foreign company eventually dropped its bid.
(Additional reporting by Caroline Drees in Washington and Dayan Candappa in Dubai)
To even consider a plan that would turn over port authority to an arab nation with terrorist ties is just plain :retard: Hopefully, saner heads will prevail and this will be stopped in its tracks. Too bad the media is too focused on the non-story of the Cheney shooting when they could really hurt the Bush administration on this issue.