[Mb-civic] Coast Guard Saw 'Intelligence Gaps' on Ports - Washington Post

[William Swiggard]

Coast Guard Saw 'Intelligence Gaps' on Ports

By Jonathan Weisman
Washington Post Staff Writer
Tuesday, February 28, 2006; A04

The U.S. Coast Guard, in charge of reviewing security at ports operated 
by a Dubai maritime company, warned the Bush administration it could not 
rule out that the company's assets could be used for terrorist 
operations, according to a document released yesterday by a Senate 
committee.

State-owned Dubai Ports World plans to complete its takeover of 
London-based Peninsular and Oriental Steam Navigation Co. (P&O) on 
Thursday, assuming ownership of operations at six major U.S. ports even 
as it pledges to hold off on asserting control while the Bush 
administration reviews the national security implications of the deal. 
The White House has strongly argued that a preliminary review showed 
that the sale would pose no threat to national security.

But in a Dec. 13 intelligence assessment of the company and its owners 
in the United Arab Emirates, the Coast Guard warned: "There are many 
intelligence gaps, concerning the potential for DPW or P&O assets to 
support terrorist operations, that preclude" the completion of a 
thorough threat assessment of the merger.

"The breadth of the intelligence gaps also infer potential unknown 
threats against a large number of potential vulnerabilities," says the 
document, released by the Senate Homeland Security and Governmental 
Affairs Committee.

"Security measures were thoroughly reviewed, including intelligence 
matters," White House spokeswoman Dana Perino said. She did not know 
whether the White House was briefed on the Coast Guard assessment, but, 
she said, "I do know that at the end of the day, when the process was 
completed and the transaction was approved, homeland security questions 
were resolved."

The Coast Guard document, completed about one month before the ports 
deal received government approval Jan. 17, was the strongest indication 
that members of the administration had expressed security concerns over 
the transaction. Officials from the departments of Treasury, Defense and 
Homeland Security told the Senate Armed Services Committee last week 
that the secretive interagency Committee on Foreign Investment in the 
United States, which reviewed the DP World deal, was unanimous in its 
position that no concerns had emerged to trigger the 45-day national 
security review required by the law that established the panel.

Among those who briefed the Armed Services Committee was Rear Adm. 
Thomas Gilmour of the Coast Guard, who said the agency had reviewed DP 
World's track record on port management but did not mention the document.

"Given the red-flag questions that the Coast Guard raised, very serious 
questions about operations, personnel and foreign influence, how could 
there not have been the 45-day investigation that's clearly required by 
law?" asked Senate Homeland Security Committee Chairman Susan Collins 
(R-Maine).

Gilmour insisted yesterday he could answer questions on the document 
only in a secret session to staff members with appropriate security 
clearances.

Later, the Coast Guard said in a statement that the excerpts of its 
preliminary evaluation "when taken out of context, do not reflect the 
full, classified analysis" that eventually concluded "that DP World's 
acquisition of P&O, in and of itself, does not pose a significant threat 
to U.S. assets in ports" in the continental United States.

The issue is sure to stoke political concerns that a deal brokered last 
weekend between the company, the Bush administration and congressional 
GOP leaders does not go far enough. That deal provided that the company 
could go forward with its $6.85 billion acquisition of P&O, but it would 
not assert control over U.S. properties while the administration 
conducts a 45-day review of the deal's national security implications. 
Senators from both political parties moved yesterday to immediately stop 
the deal, pending the review's outcome.

"Congress has a right and responsibility in this case to conduct 
aggressive oversight and block a deal that could seriously undermine our 
national security," said Sen. Tom Coburn (R-Okla.). "This deal should 
not go through without an open investigation and congressional input."

Sen. Robert Menendez (D-N.J.) said, "Since the president won't act to 
keep our ports safe, we will."

The response from Republican and Democratic senators suggested the issue 
has in no way been defused. The Coast Guard document surprised even 
lawmakers charged with overseeing the Coast Guard. The assessment raises 
questions on the overall security environment at DP World facilities, 
the background of some personnel and foreign influence on company 
operations.

"This report suggests there were significant and troubling intelligence 
gaps," Collins said. "That language is very troubling to me."

Clay Lowry, the Treasury Department's assistant secretary for 
international affairs, told Homeland Security Committee members the 
Coast Guard's concerns "were addressed and resolved."

But Collins questioned how such broad concerns raised by the Coast Guard 
could have been resolved by Jan. 6, when the Homeland Security 
Department gave its approval of the deal.

Lawmakers from both parties who loudly challenged the administration's 
acceptance of the deal last week were in no mood to take in those 
assurances. Republicans have grown particularly incensed that the 
administration has not kept them informed on issues of such political 
importance. Rep. Mark Foley (R-Fla.) said he will introduce legislation 
today mandating that security reviews by the homeland security and 
intelligence committees run concurrently with administration security 
reviews of company purchases.

"We have tried our best to support this administration at every turn, 
but to be blindsided by an issue of this magnitude demonstrates we have 
a lot of work to do," he said.

Legislation to take a closer look at the transaction is piling up. A 
bill introduced yesterday by Coburn, Menendez, Collins, and Sens. 
Charles E. Schumer (D-N.Y.), Rick Santorum (R-Pa.), Norm Coleman 
(R-Minn.), Olympia J. Snowe (R-Maine), Hillary Rodham Clinton (D-N.Y.), 
Jack Reed (D-R.I.) and Frank Lautenberg (D-N.J.) would halt the sale of 
P&O pending the 45-day review and would give Congress the authority to 
reject the deal after the investigation. A bill by Menendez, Clinton, 
Lautenberg and Sens. Barbara Boxer (D-Calif.) and Bill Nelson (D-Fla.) 
would block the sale and ban companies owned by foreign governments from 
controlling U.S. port operations.

http://www.washingtonpost.com/wp-dyn/content/article/2006/02/27/AR2006022700202.html
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