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Arab Firm to Delay U.S. Port Takeover
By TED BRIDIS
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WASHINGTON - A United Arab Emirates company has volunteered to postpone its
takeover of significant operations at six major U.S. seaports, and the White
House said on Friday the delay would help give the administration time to
convince skeptical lawmakers the deal poses no increased risks from
terrorism.
The surprise concession late Thursday cools the standoff building between
the Congress and President Bush over his administration's previous approval
of the deal. In early reaction, lawmakers praised the temporary hold. But
some critics pressed anew for an intensive examination of the deal's risks.
As part of its new offer, coordinated with the White House, Dubai Ports
World said it would agree not to exercise control or influence management
over U.S. ports pending further discussions with the administration and
Congress. It did not say how long it would wait for these discussions to be
finished.
The announcement effectively leaves existing American and British executives
in charge of the company's seaport operations in New York, New Jersey,
Baltimore, New Orleans, Miami and Philadelphia.
Rep. Peter King of New York, chairman of the House Homeland Security
Committee, described the offer as "definitely a positive step." A leading
Republican critic of the deal, King said the president still must disclose
new details about the administration's review and approval of the agreement
last month.
"We believe it would be helpful to have some additional time to brief
Congress about the facts and about the safeguards that are in place," White
House press secretary Scott McClellan said. "We believe once Congress has a
better understanding of the facts and the safeguards that are in place that
they will be more comfortable with the transaction moving forward. So a
slight delay would helpful in that regard."
He said Bush would continue to oppose any move to block the transaction.
Asked how long the delay would last, McClellan said, "It's not up to us.
It's up to the company to make that decision."
A senior Dubai Ports executive, Edward H. Bilkey, said the company will
otherwise move forward with its $6.8 billion purchase of London-based
Peninsular & Oriental Steam Navigation Co., which operates in 18 countries.
Although Dubai Ports agreed to temporarily segregate the company's U.S.
operations, Bilkey expressed bewilderment over the security concerns
expressed in Congress.
"The reaction in the United States has occurred in no other country in the
world," Bilkey said. "We need to understand the concerns of the people in
the U.S. who are worried about this transaction and make sure that they are
addressed to the benefit of all parties."
The company, timing its announcement before financial markets opened in
London, assured British shareholders they will be paid as previously
planned.
"It is not only unreasonable but also impractical to suggest that the
closing of this entire global transaction should be delayed," Dubai Ports
said in a statement.
But on Capitol Hill, critics weren't silenced.
"A simple cooling-off period will not allay our concerns," said Sen. Charles
Schumer, D-N.Y.
Sen. Robert Menendez, D-N.J., said the company's offer "isn't worth the
paper on which it is written."
"If the Bush administration will not stop this deal from closing, Congress
must." Menendez said.
Sen. Hillary Rodham Clinton, D-N.Y., urged Bush to conduct a broader review
of potential terrorism risks. Rep. Vito Fosella, a New York Republican, said
the administration should more fully explain why it concluded the sale was
safe.
Meantime, the owner of Port Newark filed a lawsuit, citing security
concerns. The Port Authority of New York and New Jersey claims that the
pending acquisition violates a 30-year lease that the authority and P&O
signed in 2000.
The Port Authority lawsuit, filed in state Superior Court in Newark, asks
for an order blocking the purchase and declaring that P&O has broken the
lease by failing to obtain the authority's consent for the takeover.
The announcement came amid a persistent political furor over the business
deal, otherwise expected to be completed in early March. Republicans and
Democrats alike have threatened to introduce legislation to block or delay
the deal, citing unease over what they describe as inconsistent support
against terrorism by the United Arab Emirates.
Bush has threatened to veto any such measures and forcefully defended the
small but wealthy federation in the Persian Gulf as a vital ally.
The White House noted the United Arab Emirates contributed $100 million to
help victims of Hurricane Katrina just weeks before Dubai Ports sought
approval for its business deal. It said the money was nearly four times as
much as the administration received from all other countries combined, and
said there was no connection between the money and the pending deal.
At the first Senate oversight hearing since the controversy erupted,
lawmakers challenged the adequacy of a classified intelligence assessment
that played a crucial role assuring administration officials that the Dubai
Ports deal was proper. The report, which is closely guarded, was put
together during four weeks in November by analysts working under the U.S.
director of national intelligence.
Sen. Carl Levin of Michigan, the top Democrat on the Senate Armed Services
Committee, asked whether the intelligence report examined purported links
between government officials in the UAE and Osama bin Laden before the
September 2001 terror attacks.
"I did not see that in the report," said Robert Kimmitt, deputy secretary at
the Treasury Department.
Clinton accused the administration of ignoring provisions of a federal law
that require more extensive reviews when deals involve purchases by
government-owned companies. Administration officials explained their
long-standing practice was to conduct such broader investigations only when
deals raised serious national security concerns.
Kimmitt responded: "We didn't ignore the law. Concerns were raised. They
were resolved."
Associated Press writers Liz Sidoti and Devlin Barrett in Washington
contributed to this report.
A service of the Associated Press(AP)
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