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Port Management Paranoia
Trust it to Congress?…

[J. F. Kelly, Jr.] 3/7/06

Congress and the media are in a major tizzy over the prospects of an Arab-owned company assuming control of a British-based company that currently manages terminal facilities at a half dozen U.S. ports. Some of the very same voices that urged the administration to reach out to moderate Arabs and Muslims, to show more concern for their sensitivities and to avoid overreaching in implementing security measures, now apparently see a problem in allowing a respected company owned by a moderate Arab country that has been an valuable ally in the war on terrorism and our operations in Iraq.

Dubai Ports World (DPW) is owned by one of the United Arab Emirates (UAE), strategically located on the Persian Gulf. Dubai is an important seaport and Middle East financial center. It is in the process of acquiring P&O Steamship Co., operator of terminals in Baltimore, Philadelphia, Miami, Newark, New Orleans and New York. Dubai is a port of call for U.S. Navy ships and has provided facilities for our military aircraft. Its potential importance in any future military operations in the region, especially involving Iran, cannot be overemphasized.

J.F. Kelly, Jr.

J.F. Kelly, Jr. is a retired Navy Captain and bank executive who writes on current events and military subjects. He is a resident of Coronado, California. [go to Kelly index]

Approval of the deal did not trigger the 45-day review process because the administration was satisfied that security concerns would be met. Under existing law, the president is empowered to block transactions that he believes would endanger national security. The Committee on Foreign Investment, consisting of a dozen members from various federal agencies, headed by the Treasury Secretary and including members of the intelligence community, advises him on these matters. Some members of Congress on both sides of the aisle have called for more “transparency” in this process and some want changes to the law to put Congress in charge. Heaven forbid that we would politicize such a process. In the first place, Congress has shown little aptitude for managing its current responsibilities without partisan bickering and political posturing. In the second place, greater transparency in sensitive matters of diplomacy and intelligence is not necessarily feasible or in our best interests.

DPW amiably offered a delay in order to permit the more extensive 45-day review and added assurances that American port operations would be placed under an American. President Bush accepted the offer, saying that the additional time would provide Congress the opportunity to obtain a better understanding of the facts involved. A better understanding on the part of Congress and the media would be a good thing because much of the criticism has revealed woeful ignorance of the issues, not that this has often deterred them in the past from weighing in on any issue. Some grandstanding Congressmen from land-locked states, many of whom have probably never seen a seaport, became instant experts on waterfront operations. What the heck, it presents a great opportunity to grab some headlines and demonstrate that they are tough on security. That’s always a vote getter.

Port security is indeed a huge problem but it will not be impacted much, for better or worse, by the nationality of the owners of the companies that manage the terminals here. The greatest security risk to us involves the cargo loading operations at the port of origin. Because of the volume of cargo handled, it is not yet practicable to screen all of it for dangerous material. Port security at destination ports in the United States is under the control of agencies of the Homeland Security Department including the Coast Guard. U.S. officers are and will always be in charge of security at all U.S. seaports, regardless of who manages the facilities.

Also at issue here is our willingness to embrace a global economy that will allow moderate Arabs and Muslims to participate as business and investment partners. If we exclude them purely on the basis of religion and ethnicity, then we will be guilty of the same discrimination that we so often accuse others of. Many of our port facilities are currently operated by foreign owned entities including a Chinese company. China can hardly be considered supportive of our operations in the Middle East but the UAE most certainly is. Imagine the reaction among moderate Arab governments if we reward a cooperative ally for its assistance by refusing to let this business deal proceed.

As to changing the law, ask yourself this: Politics aside, whom you really prefer to entrust with the chief responsibility in these matters, the President and his advisors who have access to all the facts and implications or a Congress whose members have so often demonstrated that they simply cannot refrain from trying to make political capital out of the war on terrorism? -one-

copyright 2006 J. F. Kelly, Jr.



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