Political Backlash Over Port Deal

A cargo ship sits at the dock at the Port of Miami 22 February, 2006 in Miami, Florida. Miami's mayor, Carlos Alvarez demanded an investigation and a Florida company filed suit to block a deal in which a United Arab Emirates firm would manage the Port of Miami, part of a broader $6.8 billion USD deal that raised concerns about US national security. AFP PHOTO/Robert SULLIVAN (Photo credit should read ROBERT SULLIVAN/AFP/Getty Images)
AFP/Getty Images
If there is one thing Congressional leaders and the White House can agree on, it is that neither knew the port deal with a United Arab Emirates company was even in the works, reports CBS News political analyst Gloria Borger.

President Bush was unaware of the pending sale of shipping operations at six major U.S. seaports to a state-owned business in the United Arab Emirates until the deal already had been approved by his administration, the White House said Wednesday.

Defending the deal anew, the administration also said that it should have briefed Congress sooner about the transaction, which has triggered a major political backlash among both Republicans and Democrats.

"As far as I know, no member of the Senate received any advance warning, consultation or briefing about this decision," Sen. Susan Collins, R-Maine, tells Borger.

However, the Bush administration secretly required the company to cooperate with future U.S. investigations before approving its takeover of operations at six American ports, according to documents obtained by The Associated Press. It chose not to impose other, routine restrictions.

As part of the $6.8 billion purchase, state-owned Dubai Ports World agreed to reveal records on demand about "foreign operational direction" of its business at U.S. ports, the documents said. Those records broadly include details about the design, maintenance or operation of ports and equipment.

Mr. Bush on Tuesday brushed aside objections by leaders in the Senate and House that the $6.8 billion sale could raise risks of terrorism at American ports. In a forceful defense of his administration's earlier approval of the deal, he pledged to veto any bill Congress might approve to block the agreement.

Dubai Port's top American executive, chief operating officer Edward H. Bilkey, said the company will do whatever the administration asks to enhance shipping security and ensure the sale goes through. Bilkey said Wednesday he will work in Washington to persuade skeptical lawmakers they should endorse the deal. At least two Senate oversight hearings already are scheduled.

"We're disappointed," Bilkey told The Associated Press in an interview. "We're going to do our best to persuade them that they jumped the gun. "The UAE is a very solid friend, as President Bush has said."

The deal would put Dubai Ports in charge of major shipping operations in New York, New Jersey, Baltimore, New Orleans, Miami and Philadelphia.

At the Port of Newark in New Jersey, every day 350 containers of the 5,000 that arrive are singled out for closer inspection based on intelligence analysis, a sort of cargo container profiling, reports CBS News correspondent Bob Orr.

Suspect containers are run through huge truck-sized X-rays and those that remain suspicious are opened and searched package by package. Also, 98 percent of the containers are screened for radiation before they are allowed to be transported, Orr adds.

While Mr. Bush has adamantly defended the deal, the White House acknowledged he did not know about it until recently.

"He became aware of it over the last several days," McClellan said. Asked if Mr. Bush did not know about it until it was a done deal, McClellan said, "That's correct." He said the matter did not rise to the presidential level, but went through a congressionally-mandated review process and was determined not to pose a national security threat.

"The president made sure to check with all the Cabinet secretaries that are part of this process, or whose agencies or departments are part of this process," the spokesman said. "He made sure to check with them, even after this got more attention in the press, to make sure that they were comfortable with the decision that was made."

"And every one of the Cabinet secretaries expressed that they were comfortable with this transaction being approved," he said.

Yet why the president was ill-informed on the deal remains puzzling. One explanation is that Mr. Bush and his senior staff couldn't brief Congress, because they didn't know. The panel that makes the decisions, The Committee on Foreign Investments, is not run by high-level cabinet members listed on its Web site. Instead they usually rubber-stamp decisions made by staffers, Borger reports.

"The committee almost never met, and when it deliberated it was usually at a fairly low bureaucratic level," Richard Perle said. Perle, who has worked for the Reagan, Clinton and both Bush administrations added, "I think it's a bit of a joke."

Commerce Secretary Carlos Gutierrez, told the AP in an interview: "They are not in charge of security. We are not turning over the security of our ports. When people make statements like that you get an instant emotional reaction."

Treasury Secretary John Snow said failure to complete the transaction would send the wrong message overseas.

"The implications of failing to approve this would be to tell the world that investments in the United States from certain parts of the world aren't welcome," Snow told reporters Wednesday following a speech in Connecticut to a fuel cell manufacturer. "That sends a terrible message."

The sale's harshest critics were not appeased.

"I will fight harder than ever for this legislation, and if it is vetoed I will fight as hard as I can to override it," said Rep. Pete King, R-N.Y., chairman of the Homeland Security Committee. King and Democratic Sen. Charles Schumer of New York said they will introduce emergency legislation to suspend the ports deal.

McClellan dismissed any connection between the deal and David Sanborn of Virginia, a former senior DP World executive whom the White House appointed last month to be the new administrator of the Maritime Administration of the Transportation Department. Sanborn worked as DP World's director of operations for Europe and Latin America.

"My understanding is that he has assured us that he was not involved in the negotiations to purchase this British company," McClellan added.

"In terms of David Sanborn, he was nominated to run the Maritime Administration because of his experience and expertise," the spokesman said. Sanborn is a graduate of the U.S. Merchant Marine Academy. He is an operations professional.

Mr. Bush's veto threat sought to quiet a political storm that has united Republican governors and Senate Majority Leader Bill Frist of Tennessee with liberal Democrats, including New York Sens. Hillary Rodham Clinton and Schumer.