[Mb-civic] Port Deal's Political Fallout Not Over - Washington Post

[William Swiggard]

Port Deal's Political Fallout Not Over
House GOP Drafting Bill to Require Hill Oversight of Foreign Acquisitions

By Jonathan Weisman
Washington Post Staff Writer
Saturday, March 11, 2006; A03

House Republican leaders will unveil legislation as soon as next week 
demanding a congressional role in reviewing the acquisition of U.S. 
businesses by foreign buyers, suggesting that the controversy over a 
now-abandoned Dubai port deal will continue to roil congressional 
relations with the Bush administration.

House Majority Whip Roy Blunt (R-Mo.) is drafting a bill to require 
congressional oversight as the administration reviews such foreign 
acquisitions, a role Congress has not played since the Committee on 
Foreign Investments in the United States (CFIUS) was created three 
decades ago.

A day after United Arab Emirates-based Dubai Ports World abandoned its 
bid to control terminal operations at six major U.S. seaports, lawmakers 
and President Bush made it clear that the issue was not going away. In 
remarks to newspaper editors, Bush said he is "concerned about a broader 
message this issue could send to our friends and allies around the 
world, particularly in the Middle East."

"In order to win the war on terror, we have got to strengthen our 
relationships and friendships with moderate Arab countries in the Middle 
East," Bush said. "UAE is a committed ally in the war on terror. They 
are a key partner for our military in a critical region."

Secretary of State Condoleezza Rice, speaking to reporters while flying 
to Chile, said: "Of course I think you have to be concerned about the 
perception and the message that this might send. It means that we are 
going to have to work and double our efforts to send a strong message 
that we value our allies, our moderate allies, in the Middle East."

U.S. Trade Representative Rob Portman announced that trade talks between 
the United States and the UAE, set to begin Monday, will be postponed. 
Spokeswoman Neena Moorjani said both sides need more time to prepare.

Flush from what they see as a victory, members of Congress appear 
determined to insert themselves into matters of national security that 
they had previously left exclusively to the president. But their 
aggressive response has left administration officials -- and even some 
colleagues -- concerned that the longer the controversy drags out, the 
more likely it will alienate foreign allies, dampen investment in the 
United States and even slow the economy.

On Capitol Hill, lawmakers from both parties pledged to revise the 
review process for business acquisitions by foreigners while moving 
swiftly on legislation to bolster port security.

Critics of the congressional attack on the port deal said DP World's 
withdrawal will not make the six U.S. ports any safer from terrorist 
attacks. But lawmakers say the controversy will spark action on measures 
to tighten security that have languished in Congress. Both the Senate 
and House homeland security committees said they will draft legislation 
in a matter of weeks.

House leaders have decided to push ahead next week with a full House 
vote on legislation to kill the port deal. The House Appropriations 
Committee had approved the measure 62 to 2 on Wednesday, but 
rank-and-file members outside the committee have asked to go on record 
with their opposition.

Democrats demanded that the White House release all documents related to 
DP World's acquisition of London-based Peninsular and Oriental Steam 
Navigation Co., including the administration's review of the deal and 
documents pertaining to a Coast Guard memo that said investigators could 
not say whether the transaction would heighten terrorist threats.

Despite the assurances of congressional Republicans and the president, 
some Democrats also questioned whether DP World really committed to 
shedding its U.S. port assets Thursday when it pledged to "transfer" 
them to a U.S. entity. Bush himself said the Dubai-owned firm has "made 
the difficult decision to hand over port operations that they had 
purchased from another company."

But company spokesman Mark Dennis again refused to elaborate yesterday 
on the company's official statement, leaving it unclear whether a 
transfer of assets meant a loss of ownership or just management 
responsibilities, and Democrats remain skeptical. Even one knowledgeable 
House Republican aide suggested that the language could mean the company 
might maintain ownership if a buyer could not be found at the right 
price. "The port deal's not dead," said Rep. Dennis J. Kucinich (D-Ohio).

Officials from both parties warned that if the statement's intent proves 
to be less than full divestiture, Congress will move swiftly to kill the 
deal. "If nothing else, the company will ignite a thermonuclear 
explosion for itself and the emirate if it falls short of a sale," 
warned one Republican Senate aide.

Even if DP World sells its assets at the ports of Baltimore, New York, 
Newark, Philadelphia, Miami and New Orleans immediately, the underlying 
issues raised by the controversy will remain at the top of Congress's 
political agenda.

Blunt could release his CFIUS legislation as early as next week, a 
highly unusual move for a senior House leader with no seat on the 
committee with jurisdiction. Blunt spokeswoman Burson Taylor said the 
majority whip plans to work with House Republican Conference Chairman 
Deborah Pryce (Ohio) and House Financial Services Committee Chairman 
Michael G. Oxley (R-Ohio) on a final bill. But senior House GOP aides, 
speaking on the condition of anonymity for fear of crossing the whip, 
said Blunt is driving the issue as well as the language.

A Senate measure, being drafted by Sen. Richard C. Shelby (R-Ala.), 
chairman of the banking committee, could encroach on the 
administration's turf even further. Committee spokesman Andrew Gray said 
Shelby's bill, due to be completed the week of March 27, would give 
Congress the authority to pass a resolution of disapproval, even if the 
administration has given a deal the green light.

Administration officials struck a conciliatory tone on such legislation. 
"This process for review I think can be done better, and we're going to 
be working with Congress, with people like Chairman Shelby of the 
banking committee, to make sure that we improve the process," Treasury 
Secretary John W. Snow said on MSNBC.

But administration officials and some congressional allies said Congress 
should not be allowed to go too far. The CFIUS review process was set up 
to be confidential and beyond Congress's reach specifically to insulate 
sensitive business investments from political forces, they said. Last 
week, Oxley raised the same concerns when he said the review process "is 
not -- nor should it be -- political in nature. That is a slippery 
slope, and it would be a mistake to take that step."

Even Sen. Charles E. Schumer (D-N.Y.), one of the fiercest critics of 
the port deal, said language must be found to ensure that Congress could 
scuttle a deal only in "egregious situations." He added: "We have to 
figure out a way where it's not routine."

http://www.washingtonpost.com/wp-dyn/content/article/2006/03/10/AR2006031000749.html
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