Dubai Ports labeled willing to deal U.S. assets - MarketWatch

This chapter is really wacked. I have never seen (personally) such obviously racist politicizing of a commercial transaction in my life. No-one has been able to demonstrate that there is any chance of the security of our ports being made to be worse than it already is. Why was it OK for the British to be 'running' our ports and not a Dubai-based company? This was such a no-brainer that 12 government departments passed on it. They did not consider the political implications of having an Arab country as the owners of the firm that runs the ports even though it would be Americans who would be in day-to-day functional control. It's just ridiculous how low politicians will sink to appeal to the most base instincts in the American body politic.
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U.S. ports divestiture now in cards
Dubai firm aims to end furor by selling some P&O assets
E-mail | Print | | Disable live quotes By William L. Watts, MarketWatch
Last Update: 4:02 PM ET Mar 9, 2006


WASHINGTON (MarketWatch) -- Dubai Ports World has decided to sell operations at some U.S. ports to a domestic entity in a bid to end a political firestorm, Senate Armed Services Committee Chairman John Warner said on the Senate floor Thursday afternoon.

The move comes with House Republicans in legislative revolt and the Senate tied in procedural knots over DPW's acquisition of London-based Peninsular & Oriental Steam Navigation Co. (UK:PO: news, chart, profile) .

Republican leaders reportedly told Bush earlier Thursday that the deal would be blocked by Congress despite the president's veto threat.
Depending on the details, the decision by DPW could be a face-saver for President Bush. Republican leaders reportedly told Bush earlier Thursday that the deal would be blocked by Congress despite the president's veto threat.
"DP World has decided to transfer fully U.S. operation of P&O Ports North America to a United States entity," Warner, R-Va., said, reading from a statement provided by DP World.

The company said the decision was "based on an understanding that DP World will have time to effect the transfer in an orderly fashion and that DP World will not suffer economic loss."

Details regarding the entity that would be taking over the operations weren't immediately available.

But Senate Majority Leader Bill Frist, R-Tenn., said the move should "make the issue go away."

Sen. Charles Schumer, D-N.Y., a leading critic of the transaction, said that the offer was a "promising development" but that he wanted to closely examine the decision to ensure that the domestic entity would be "fully independent in every way" from DP World.
House Republicans lauded the decision.

"The resulting outcry of concern from across the country [over the transaction] went unanswered by the administration," said Rep. Mark Foley, R-Fla., an early critic of the acquisition. "Today, Dubai Ports World itself seems to have answered those concerns."

The House Appropriations Committee on Wednesday voted 62 to 2 to amend an emergency-spending measure with language that would effectively bar DPW from taking over P&O's U.S. operations.

The vote underlined an uprising by House Republicans, who joined Democrats in rejecting Bush's pleas to let the deal proceed. The amendment was sponsored by Appropriations Committee Chairman Jerry Lewis, R-Calif., and was endorsed by House Speaker Dennis Hastert, R-Ill.

Senate Republicans had urged a wait-and-see approach, noting that the administration had begun an extended, 45-day review of the transaction.

Meanwhile, Senate Democrats created a dust-up when they introduced an amendment to pending lobbying reform legislation that would kill the ports deal. In a previously scheduled procedural vote that took place shortly after Warner's announcement, the Senate refused to kill the Democratic amendment.

Dubai is one of the seven emirates that make up the United Arab Emirates. DPW acquired P&O's global operations in a deal valued at more than $6 billion.
The administration earlier this year approved the acquisition, but the deal has since sparked a political firestorm.

Bush and other top officials insist that the deal was thoroughly vetted for security concerns, while Democratic and Republican lawmakers have charged that the interagency task force -- the Committee on Foreign Investment in the United States --that approved the deal had failed to adequately consider national-security risks.

Backers of the deal have argued that the United Arab Emirates has been a valuable Middle Eastern ally in the Washington-led war on terror, and warned that blocking the deal would set a double standard that discriminates against Arab-owned firms, while allowing other foreign-owned firms to operate port terminals.

The deal's critics have charged that the UAE has a mixed record on terrorism, and they also contend that state-owned firms should be held to a higher standard than other companies.

The administration agreed to take another look at the deal under the aegis of a 45-day review by CFIUS, but Bush has made clear that he believes the transaction should eventually proceed.

William L. Watts is a reporter for MarketWatch.