Live

Watch CBSN Live

Bush, Congress Tangle Over Port Deal

Bush administration officials, trying to calm a political furor over allowing a United Arab Emirates company to acquire half a dozen U.S. seaports, told Congress on Thursday that they spent three months reviewing the deal — and that all concerns about security were satisfied.

"We're not aware of a single national security concern raised recently that was not part of" the multiagency, three-month review of the deal that would permit the company to take over significant operations at the ports, Deputy Treasury Secretary Robert Kimmitt told a Senate Armed Services Committee briefing.

Representatives of key agencies that investigated the port deal — but not the heads of the various departments — sought to reassure senators just hours after President Bush declared that "people don't need to worry about security."

Democrats on the panel were unconvinced.

Brushing aside Mr. Bush's assurances, Sen. Carl Levin, the committee's top Democrat, said the UAE backed the Taliban and allowed financial support for al Qaeda. Levin also charged that the UAE has an "uneven history" as "one of only a handful of countries in the world to recognize the Taliban regime in Afghanistan." He added that millions of dollars in al Qaeda funds went through UAE financial institutions.



Read a confidential letter on conditions of the deal (.pdf)

Sen. Hillary Rodham Clinton also was critical, calling the approval process "a failure of judgment" because officials "did not alert the president, the secretary of the treasury and the secretary of defense" that several of our critical ports would be turned over to foreign country.

Sen. John Warner, Republican chairman of the committee, emphasized the UAE's cooperation in the war on terrorism, noting that it allows a large number of port calls by U.S. military and commercial ships and that it had made its airfields available to the U.S. military.

But when a round of questioning began, Warner sharply asked Kimmitt whether the reviewing agencies considered UAE's role's in the transfer of money to al Qaeda and of nuclear components to rogue nations.

Kimmitt said those factors were taken into account.

Mr. Bush, talking to reporters at the conclusion of a Cabinet meeting earlier Thursday, said that "people don't need to worry about security."

Mr. Bush said he was struck by the fact that people were not concerned about port security when a British company was running the port operation, but they felt differently about an Arab company at the helm. He said the United Arab Emirates was a valuable partner in the fight against terror.

"It's really important we not send mixed messages to friends and allies around the world as we put together a coalition to fight this war on terror," the president told reporters.

The controversy is the latest blow to an administration reeling from setbacks in Iraq, criticism of its response to Hurricane Katrina and a series of criminal investigations affecting Republicans in Congress and the White House.

Democrats have seized on the issue, which allows them to attack the president on what is usually his biggest political strength: national security. The criticism by Republican lawmakers reflects a growing willingness to distance themselves from Mr. Bush ahead of congressional elections in November.

Under secret conditions of the agreement with the administration, the Dubai company promised to cooperate with U.S. investigations as a condition of the $6.8 billion deal, according to documents obtained by The Associated Press.

The U.S. government chose not to impose other, routine restrictions.

"The more people learn about the transaction that has been scrutinized and approved by my government," Mr. Bush said, "the more they'll be comforted that our ports will be secure."

Critics in Congress, even before Thursday's hearing, had noted that the London-based Peninsular and Oriental Steam Navigation Co., which previously operated at those ports, is a publicly traded company while Dubai Ports World is effectively controlled by the government there. Sens. Robert Menendez and Clinton have said they will introduce legislation to prohibit companies owned or controlled by foreign governments from running port operations in the United States.

Mr. Bush said his administration would continue talks with members of Congress — Republicans and Democrats alike — who have rebelled against the takeover. He said the briefings were "bringing a sense of calm to this issue."

On Wednesday, the White House acknowledged Mr. Bush was unaware of the pending sale until the deal had been already approved by his administration.

"He became aware of it over the last several days," White House spokesman Scott McClellan said. 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.

CBS News political correspondent Gloria Borger was told that even senior staff at the White House had no idea about the deal until it was reported.

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, told Borger.

Yet why the president was ill-informed 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," said Richard Perle, who has worked for the Reagan, Clinton and both Bush administrations. "I think it's a bit of a joke."

Meanwhile, Dubai Ports is lining up powerful supporters to persuade skeptical lawmakers the deal is a good idea. Even before the controversy erupted, the company had hired former Senate Majority Leader Bob Dole's law and lobbying firm, Alston and Bird LLC, to win approval for the deal. The Albright Group, led by former Secretary of State Madeline Albright, also has been trying to speak with members of Congress.

View CBS News In