WASHINGTON, 25 February 2006 — As part of its $6.8 billion deal to take over significant operations at six US ports, a UAE maritime company offered late Thursday night to delay its acquisition, after news of the deal earlier this week threatened to provoke a full-scale congressional revolt.
The decision came after the Bush Administration and leading members of Congress quietly told the company that more time was needed to quash congressional action to block the deal.
The surprise announcement by Dubai Ports World relieves some pressure of the standoff between President George Bush and the Republican-controlled Congress, which has threatened to block the deal because of concerns over what some Congress members said were the UAE’s alleged ties to terrorism.
At pains to deflect accusations of xenophobia from across the Middle East, the delay also gives the White House more time to convince skeptical lawmakers the deal poses no increased risks.
The transaction was scheduled to be finalized on March 2, but a delay of up to 60 days would “get people to back off the ledge here and give everybody a chance to back down,” said Republican consultant Rich Galen.
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 US ports pending further discussions with the Administration and Congress. It did not say how long it would wait for these discussions to be finished.
Foreign operators now manage about 80 percent of port terminals in the United States. “For a long time in the US, no one wanted stevedoring on their business card because it was not a glamorous job,” Prabir Bagchi, a specialist in supply-chain management at George Washington University, told journalists. “Control of many of those low-paying jobs went east, and now look who’s cheapest and best at providing customer service.”
The White House stressed yesterday that security at the ports would continue to be run by the US Coast Guard, US Customs and US Border Patrol.
The ports whose operations would be handled by DPW under the deal are located in New York; Miami; Newark, New Jersey; Baltimore, Maryland; New Orleans, Louisiana; and Philadelphia, Pennsylvania.
The administration has found few congressional allies in the controversy which analysts said could lead not only to the first veto of the Bush presidency, but to an almost certain override by Congress — potentially a major setback for the president.
Administration officials testified that the UAE had been a staunch ally in the US-led war on terror, and was worthy of being trusted to manage US seaports. But Sen. Carl Levin, a top Democrat, said some of the 9/11 terrorist funds went through UAE financial institutions.
Other lawmakers noted that the UAE has not recognized the state of Israel.
Deputy Secretary of Defense Gordon England told lawmakers that fears had been overblown; assuring them the UAE was “a friend and an ally of the United States.”
He expressed concern that the outcry over the sale would be perceived as “paranoid and isolationist.”
Dubai Ports World has launched its own public relations offensive, hiring former US Sen. Bob Dole to help salvage the deal, according to media reports. But the lobbying is creating a political problem for his wife, Sen. Elizabeth Dole, R-North Carolina.
Such controversy involving deals is not uncommon in Washington. “What better way to buy access to a lawmaker than to hire the lawmaker’s son, daughter or spouse as their lobbyist on a lucrative retainer?” said Craig Homan, a lobbyist for Congress Watch. He said at least three dozen members of Congress have relatives who are professional lobbyists.
