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Port plan worried Coast Guard

The Coast Guard warned in December that the proposed takeover of some U.S. port operations by a state-owned company in the United Arab Emirates raised "intelligence gaps" that made it difficult to assess the deal's possible threat to national security.

Its cautions, however, didn't trigger a 45-day investigation into the transaction, which would have been required if a Cabinet-level agency had raised such concerns. The Coast Guard is a division of the Department of Homeland Security.

The Senate Homeland Security Committee released the unclassified Coast Guard document Monday. It came one day after the Bush administration accepted an invitation from Dubai Ports World to pursue a new inquiry into the national security implications of its deal to acquire terminals at six major U.S. ports when it purchases a British firm, Peninsular & Oriental Steam Navigation Co.

Because the government of the United Arab Emirates owns DP World, and because the UAE had connections to al-Qaida in the past, a political firestorm erupted this month over fears that the company might make U.S. ports vulnerable to terrorist attack. The Bush administration says that such fears are groundless and that the UAE is now an ally in the war on terrorism.

Members of Congress from both parties insisted Monday that Congress gain authority to review such takeovers, a sign that the administration's political troubles over port security aren't over. President Bush has threatened to veto any legislation that blocks DP World from taking over terminal operations at Miami, Philadelphia, New York, New Jersey, Baltimore and New Orleans.

Tampa's port could join the list of DP World-run terminals if port commissioners go ahead with plans to lease container and general cargo facilities to the company that DP World was scheduled to acquire Thursday. DP World said it would hold off on asserting control until after the 45-day review.

The latest CBS News poll showed that 70 percent of Americans, including 58 percent of Republicans, say DP World should not be permitted to operate at U.S. ports, while 21 percent supported the arrangement.

The Coast Guard memorandum is undated, but a Senate committee aide said the document was written Dec. 13, before the administration's review panel studying the sale had finished its work. The Committee on Foreign Investment in the United States, an interagency group that reviews foreign investment proposals for possible national-security risks, is required by law to initiate a formal 45-day investigation if any of its members raise national security concerns.

The Coast Guard isn't a member of the panel, but its parent agency is. Neither the Homeland Security Department nor any other on the committee concluded that the deal would threaten national security. But Stewart Baker, the department's assistant secretary for policy, told senators that he never saw the Coast Guard's admonition because it never circulated outside the Coast Guard. Baker said the Coast Guard had indicated to the inter-agency panel that reviews such transactions that the security concerns it had ultimately had been resolved.

But even after a closed-door session with administration officials, Chairman Susan Collins, R-Maine, said she was "more convinced than ever that the process was truly flawed."

The document, prepared by the Coast Guard's Intelligence Coordination Center, said the intelligence gaps included the security environment at DP World terminals, the backgrounds of company personnel and whether there was any foreign influence in the company's operations.

"We were never told about this and have no information about it," Michael Moore, DP World's senior vice president, said of the document. However, he said it shows that "serious and probing" questions were asked and that the initial approval of the deal indicates those questions were answered.

Meanwhile, a group of Republican and Democratic senators introduced legislation that would require Congress to review the deal before it can proceed. The legislation's chief sponsors are Sens. Charles Schumer, D-N.Y., and Norm Coleman, R-Minn. Co-sponsors include Tom Coburn, R-Okla.; Olympia Snowe, R-Maine; and Rick Santorum, R-Pa.

"The findings from this review, I hope, will provide Congress with the requisite information to make an informed decision regarding the national security implications of a Dubai-backed company owning and operating terminals at six U.S. ports," Coleman said.

Sen. Hillary Rodham Clinton, D-N.Y., introduced separate legislation that would ban foreign governments from taking over any U.S. port operations.

Rep. Mark Foley, R-Fla., usually a Bush ally, said the administration displayed a political tin ear in approving the deal without consulting Congress. "This is a public relations and political nightmare for the administration," he said.

Information from the Associated Press and New York Times was used in this report.