The Tech - Online EditionMIT's oldest and largest
newspaper & the first
newspaper published
on the web
Boston Weather: 48.0°F | Overcast

Administration Trying to Calm Congress After Port Deal Clash

By David S. Cloud and David E. Sanger


The Bush administration signaled on Thursday that it was seeking a way to delay, at least briefly, a Dubai company from taking over operations of terminals at six major American ports, in hopes that the additional time might allow the White House to assuage angry Republicans and Democrats in Congress who are threatening to block the deal.

The bid for a compromise came as administration officials and Senate Democrats clashed in a public hearing on Capitol Hill about whether allowing Dubai Ports World, a state-owned firm in the United Arab Emirates, to assume management of American ports would represent a national security risk.

In an effort to calm Congress, the administration released a confidential letter sent on Jan. 6 in which the Dubai firm committed to continuing its participation in a range of American-led initiatives to close gaping security holes in ports around the world, including an agreement with the Department of Energy a year ago to use new equipment in Dubai’s own seaports intended to sniff out radioactive shipments.

Among the ports in the United States where the company hopes to take over terminals, only one, in Newark, N.J., is similarly equipped with nuclear detectors. On Thursday afternoon the Port Authority of New York and New Jersey, which owns the Newark container port, said it would terminate the lease of the P & O Ports, the current, British-based manager of the terminal, in an effort to stop what it termed an illegal transfer to the Dubai company.

Critics of the deal were skeptical Thursday about the proposed delay. White House officials say that because the deal was formally approved by the Committee on Foreign Investment in the United States in mid-January, the administration has no legal channel to reopen its review of the acquisition, a step being pressed by Congress, unless it determines that the company misled the federal government.

But with members of Congress threatening to enact legislation to block the deal, the White House signaled that it would welcome an agreement by Dubai Ports to delay final closing of the deal, which is scheduled to take place next week. Congressional aides said representatives of the company were testing that idea on Capitol Hill on Thursday afternoon.

Karl Rove, the deputy White House chief of staff and President Bush’s chief political adviser, said in an interview with Fox News that while the acquisition by Dubai Ports World would pass its final regulatory hurdles next week, “There’s no requirement that it close, you know, immediately after that.”

Rove added: “Our interest is in making certain the members of Congress have full information about it, and that, we’re convinced, will give them a level of comfort with this.”

A senior White House official said, however, that Bush would stand by his threat to veto any legislation designed to kill the deal. “He’s completely adamant about this,” another of Bush’s aides said. If a Dubai company is treated as less trustworthy than a British one, the aide said, “he thinks that the signal in the Mideast would be disastrous.”