Showdown over ports

Congressional leaders yesterday headed for a showdown with the White House, vowing to halt an administration-approved deal that would give control over major U.S. ports to a Middle Eastern company and sparking a veto threat from President Bush.

Congressional leaders yesterday headed for a showdown with the White House, vowing to halt an administration-approved deal that would give control over major U.S. ports to a Middle Eastern company and sparking a veto threat from President Bush.

As the House Speaker joined the Senate and House majority leaders’ call for oversight and a possible block of the port-management handover, Bush told reporters gathered on Air Force One that he would veto any bill obstructing the deal with the Dubai-based company.

The Bush administration signed off last week on the takeover bid by Dubai Ports World, controlled by the government of the United Arab Emirates (UAE), after an initial 30-day interagency review conducted without congressional input.

Lawmakers’ concern over allowing the company to oversee six East Coast ports escalated into a firestorm over the holiday weekend, with Speaker Dennis Hastert, House Majority Leader John Boehner (R-Ohio), Senate Majority Leader Bill Frist (R-Tenn.) and House Minority Leader Nancy Pelosi (D-Calif.) urging a postponement of the takeover. The UAE remains under scrutiny for its role as a planning base in the Sept. 11 attacks.

“I believe there should be an immediate moratorium placed on this seaport deal in order to further examine its effects on our port security,” Hastert wrote to Bush in a letter sent yesterday. The Speaker left the door wide open for “additional Congressional action” to examine the national security impact of the ports deal.

Boehner echoed Hastert’s push for heightened congressional oversight: “Congress has an essential oversight role that should and will be exercised with regards to this transaction. Our national security is of vital interest and concern when it comes to the operation of our nation’s ports and borders,” he said.

Frist was the first leader to weigh in yesterday, issuing a statement that “the decision to finalize this deal should be put on hold until the administration conducts a more extensive review of this matter.”

Frist issued a threat of his own to the White House, promising to call up legislation blocking the deal until “this decision gets a more thorough review.”

The administration’s inter-agency review was conducted under the aegis of CFIUS, or the Committee on Foreign Investment in the United States, established in 1975 to vet foreign business deals in the United States for risks to national security. Led by the Treasury Department, the 12 executive-branch members of CFIUS typically conduct a 30-day review, followed by a more detailed 45-day investigation if potential threats are uncovered.

Dubai Ports World’s purchase of P&O Steam Navigation, a Britain-based business that controls port operations in New York, New Jersey, Philadelphia, Baltimore, Miami and New Orleans, received only a 30-day CFIUS review.

Rep. Peter King (R-N.Y.), chairman of the Homeland Security Committee and a stalwart backer of the administration, yesterday introduced a bill postponing the ports deal alongside Sen. Charles Schumer (D-N.Y.). King echoed widespread criticism of the initial CFIUS review as bureaucracy-driven and overly narrow, saying administration officials “didn’t do any analysis.”

King also said he was “very surprised and disappointed by the president’s decision” for the veto threat. “However, I will continue to fight and do everything I can to stop this deal from going through,” he added.

Pelosi called for King’s committee to hold hearings on the deal when Congress returns from recess.

“In the meantime, Congress must put an immediate halt to this deal that the administration hastily approved in secret without input from the Congress or state officials and without a thorough review of how it might affect America ‘s security,” she said.

Sen. Richard Shelby (R-Ala.), chairman of the Banking Committee, is already planning a hearing on the deal for March 2, the day that the Dubai takeover is scheduled to take effect. Shelby has been a constant critic of CFIUS operations and held a hearing on reforming the committee’s review process after a Chinese government-owned oil company was forced to renege on its offer to purchase Unocal.

Other members criticizing the hastiness of the CFIUS approval yesterday included Rep. Rob Simmons (R-Conn.), who signed on to the King-Schumer bill; Rep. Mike Rogers (R-Mich.); House Democratic Whip Steny Hoyer (Md.); Rep. Todd Tiahrt (R-Kan.); and Rep. Rahm Emanuel (D-Ill.).

Sen. Bill Nelson (D-Fla.) went one step further, warning Commerce Committee leaders that he would place a hold on the White House’s nomination of David Sanborn, a former Dubai Ports World executive, to head the Transportation Department’s Maritime Administration arm. Sanborn received an initial confirmation hearing Feb. 7, before the ports takeover deal was announced.

Rumors immediately began to fly on K Street about lobbying firms retained to represent Dubai Ports World in its quest to quell the congressional firestorm. Downey McGrath and the Albright Group have already been retained to help the UAE navigate Capitol Hill, according to sources, and more lobbying additions are likely to follow in the coming days.

Despite the ease of the UAE company’s administration approval, it was not the only suitor for P&O. A Singapore-based company, PSA International Pte Ltd, was also vying to purchase the port manager before withdrawing its offer earlier this month.

Jim Snyder and Roxana Tiron contributed to this report.