Bush: No Backing Down On Ports Deal

President Bush said Tuesday that the deal allowing an Arab company to take over six major U.S. seaports should go forward and that he would veto any congressional effort to stop it.

On a flight back from Colorado, the president made the unusual move of inviting reporters into his conference room, where he told them the United Arab Emirates firm can be trusted to run the U.S. ports, CBS News correspondent Howard Arenstein reports.

"After careful review by our government, I believe the transaction ought to go forward," Mr. Bush told the reporters who were traveling with him to Washington on Air Force One. "I want those who are questioning it to step up and explain why all of a sudden a Middle Eastern company is held to a different standard than a Great British company. I am trying to conduct foreign policy now by saying to the people of the world, `We'll treat you fairly."'

Mr. Bush addressed the controversy that is becoming a major headache for the White House. He said the seaports arrangement was "a legitimate deal that will not jeopardize the security of the country."

Meanwhile, Senate Republican Leader Bill Frist on Tuesday joined a growing chorus of critics calling on the administration to stop the deal.

"The decision to finalize this deal should be put on hold until the administration conducts a more extensive review of this matter," said Frist, R-Tenn. "If the administration cannot delay this process, I plan on introducing legislation to ensure that the deal is placed on hold until this decision gets a more thorough review."

But Bush said sternly that he would not back down.

"They ought to listen to what I have to say about this. They'll look at the facts and understand the consequences of what they're going to do," he said. "But if they pass a law, I'll deal with it with a veto."

At the Pentagon, the UAE was praised as an important strategic military partner by both Defense Secretary Donald H. Rumsfeld and Gen. Peter Pace, chairman of the Joint Chiefs of Staff. Rumsfeld told that a process was in place and "the process worked."

"Nothing changes with respect to security under the contract. The Coast Guard is in charge of security, not the corporation," Rumsfeld said.

"We all deal with the U.A.E. on a regular basis," he added. "It's a country that's been involved in the global war on terror ... a country (with which) we have very close military relations."

Pace said that "military cooperation is superb" with the U.A.E.

In the uneasy climate after the Sept 11 terrorist attacks, the Bush administration's decision to allow the transaction is threatening to develop a major political headache for the White House.

"I'm not against foreign ownership," said Frist, "but my main concern is national security." He was speaking to reporters in Long Beach, Calif., where Frist was doing a fact-finding tour on port security and immigration issues.

The Senate's top Democrat called for immediate action to prevent the deal.

"While I appreciate Senator Frist's statement that further review is necessary, it is already clear this deal should not go forward and I hope he will permit the Senate to act expeditiously in this matter when the Congress returns next week," said Senate Minority Lead Harry Reid, D-Nev.

Two New York lawmakers, Republican Rep. Peter King and Democratic Sen. Charles Schumer, announced they would offer emergency legislation next week to block the deal ahead of a planned March 2 takeover.

"This company is coming out of a country that has had a strong al Qaeda presence. In this post-9/11 world, we cannot consider approving this contract until a much more thorough investigation takes place on this security matter," said King.

A day earlier, two Republican governors, New York's George Pataki and Maryland's Robert Ehrlich, voiced doubts about the acquisition of a British company that has been running six U.S. ports by Dubai Ports World, a state-owned business in the United Arab Emirates.

The British company, Peninsular and Oriental Steam Navigation Co., runs major commercial operations at ports in Baltimore, Miami, New Jersey, New Orleans, New York and Philadelphia.

Both governors indicated they may try to cancel lease arrangements at ports in their states because of the DP World takeover.

"Ensuring the security of New York's port operations is paramount and I am very concerned with the purchase of Peninsular & Oriental Steam by Dubai Ports World," Pataki said in a statement. "I have directed the Port Authority of New York and New Jersey to explore all legal options that may be available to them."

Ehrlich, concerned about security at the Port of Baltimore, said Monday he was "very troubled" that Maryland officials got no advance notice before the Bush administration approved the Arab company's takeover of the operations at the six ports.

"We needed to know before this was a done deal, given the state of where we are concerning security," Ehrlich told reporters in the State House rotunda in Annapolis.

The arrangement brought protests from both political parties in Congress and a lawsuit in Florida from a company affected by the takeover.

Public fears that the nation's ports are not properly protected, combined with the news of an Arab country's takeover of six major ports, proved a combustible mix.

Republican Sen. Lindsay Graham of South Carolina said on Fox News Sunday that the administration approval was "unbelievably tone deaf politically." GOP Rep. Tom Davis of Virginia said on ABC's "This Week," "It's a tough one to explain, but we're in a global economy. ... I think we need to take a very close look at it."

Democratic Sen. Robert Menendez of New Jersey said Monday that he and Sen. Hillary Rodham Clinton, D-N.Y., will introduce legislation prohibiting the sale of port operations to foreign governments.

At least one Senate oversight hearing was planned for later this month.

Critics have noted that some of the 9/11 hijackers used the UAE as an operational and financial base. In addition, they contend the UAE was an important transfer point for shipments of smuggled nuclear components sent to Iran, North Korea and Libya by a Pakistani scientist.

Michael O'Hanlon, a senior fellow at the Brookings Institution, says "ports today are essentially the equivalent of military airfields in a combat zone. They're the frontlines in the war against terror."

O'Hanlon told CBS News' The Early Show, "We have to know a little bit more" than the administration has said so far. "Just promising that certain background checks have been done, that's really not good enough," he said.

The Bush administration got support Monday from former President Jimmy Carter, a Democrat and frequent critic of the administration.

"My presumption is, and my belief is, that the president and his secretary of state and the Defense Department and others have adequately cleared the Dubai government organization to manage these ports," Carter told CNN. "I don't think there's any particular threat to our security."

Homeland Security Secretary Michael Chertoff made the rounds of the talk shows Sunday, asserting that the administration made certain the company agreed to certain conditions to ensure national security. He said details of those agreements were secret.

During a stop Monday in Birmingham, Ala., Attorney General Alberto Gonzales said the administration had a "very extensive process" for reviewing such transactions that "takes into account matters of national security, takes into account concerns about port security."