I'm afraid I just don't get the Bush administration's position on turning the control of our major ports over to a company owned by the United Arab Emirates. It's just obviously a bad idea, obvious enough that even the Congressional leadership of both parties seem to be able to recognize it. And yet on this issue, of all places, Bush is drawing a line in the sand:
Brushing aside objections from Republicans and Democrats alike, President Bush endorsed the takeover of shipping operations at six major U.S. seaports by a state-owned business in the United Arab Emirates. He pledged to veto any bill Congress might approve to block the agreement.
Mind you, President Bush has yet to veto a single bill since he's been in office. He didn't even veto the McCain-Feingold act, which he had declared to be clearly unconstitutional during the 2000 election. He's overseen the most outrageous growth in the size of government in over 40 years and not vetoed a single bill. But this is the issue he'll go to bat for? There's got to be more to this.
In terms of logical arguments he might be able to argue, at very best, that the fears are exaggerated. No one could rationally argue that there's no more risk in having an Arab company run our notoriously insecure ports. No one in their right mind could seriously argue that it shouldn't raise concerns. There's no positive argument to be made for it, only an attempt to minimize the potential negatives. So why is this, of all issues, the one that Bush sees fit to draw a line in the sand and threaten to use his veto?
I'll make a prediction: if you do some digging, you'll find that the company in question, Dubai Ports World, and/or its CEO, Edward "Ted" H. Bilkey, has financial ties to someone high up in the administration or among high-powered Republican interests. It's the only reasonable explanation. Can you even begin to imagine the outrage if this was a Democratic president? The right would literally be drawing up the impeachment papers and pushing for treason charges.
Update: This is interesting. A few weeks ago, Bush also nominated another Dubai Ports World senior executive, Dave Sanborn, to serve as Maritime Administrator, a high ranking post in the Department of Transportation.
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I sincerely hope that congress keeps pushing this issue and that the press keeps digging. I was absoultely dumbfounded when this story broke, and you've put into words exactly how I think many of us are feeling. This is almost surreal. So far the only excuse I've seen Bush give was when he stammered out that, yes the ports would be sold to the UAE, but the U.S. would still be fully in charge of security.
Call me crazt, my fears were far from assuaged. This whole situation stinks, and I don't think your prediction is so much a prediction as a preemptive statement of facts that will begin to trickle out within the next few days.
"In terms of logical arguments he might be able to argue, at very best, that the fears are exaggerated."
The main problem with his defense so far is, "Don't worry, we checked it all out." In other words, no defense. I think it is possible to make arguments for allowing this, assuming all necessary security requirements are met, but I will leave that to the administration, which should already be doing it.
I am afraid that your conjecture about this benefitting someone in the administration or a friend of someone in the admin might be right. These days paranoia is just a well-reasoned approach to dealing with the world.
Hey Ed:
You're right on: there's much more to it. See:
http://www.haxton.org/weblog/Politics/portsPortsports.html
Be well,
Dave H.
My wild-and-wooly conspiracy theory:
considering the general public disenchantment with the Iraq war and various Republican corruption scandals, it's possible that Congress could have a new complexion after the fall election; if the Democrats gain either the House or Senate majority (or both), Bush might face genuine impeachment and a war crime investigation; might he, then, be willing to play the bad guy with his port veto threat in order to firm up public support for the "brave" and "independent" Republicans in Congress?........as long as they maintain the majority, his war crimes will be deferred at least to January '09.
It appears Bush was clueless about the port deal until protests began to be heard. Seems more likely that Bush (Rove) decided to use this merely for a counterintuitive political strategy than for some long-secret financial scheming.
I'm sure the administration did as good a job "checking out" the port deal as they did in confirming the presence of WMD's in Iraq. Now there's a comforting thought.
Ed - How do you feel about an email campaign on this issue?
J-Dog wrote:
I never have a problem with an email campaign that actually serves a purpose. Suggesting that people just bomb an email address with messages calling people idiots never serves a purpose other than to make the person initiating it look juvenile and ridiculous.
I'm on the I think this whole issue may be a non-issue side of things. US Customs will still be doing what they do. I don't think this is really a security problem. The idea that terrorists are going to be filtering in through this port is absurd. Terrorists come through friendly countries, they don't come straight from Iran. PLus I think I heard on the radio this morning that many US ports have similar deals with China and Taiwan, amongst others, and no one seemed to have a problem with them.
Partially, I think this is a case of people freaking out because they don't know how the system currently operates and they saw the word Arab which set off alarm bells. Sure there's probably connections to former business partners, isn't there always? But I really don't think this is as big of a security issue as some people think.
Until 1988, when the CFIUS process was instituted, the U.S. government wouldn't have had *any* say in whether a deal like this went through, would they?
I'm not sure I see what the big deal is about P&O being owned by Dubai Ports World being owned by the Dubai government (the Hong Kong of the United Arab Emirates), vs. P&O being owned by PSA International being owned by Temasek Holdings being owned by the Republic of Singapore--apart from a general objection to government-owned businesses. I also don't see a big deal in Haier (Chinese company) making Maytag washing machines, or Lenovo making IBM ThinkPads. It seems to me that the more economic interests that cross national boundaries, the less likely we are to have wars.
I haven't seen any reporting of the availability of specific agreement documents out of the CFIUS process, but I suspect that there was a formal agreement between the CFIUS agencies (Dept. of Treasury, DHS, DOJ, DOD, NSA, etc.) and the acquiring entity which constrains corporate governance and security requirements of the U.S. assets.
The bigger issue for me is any cronyism and self-dealing by government officials in the process.
Hearing Bush, I got the very distinct impression that, despite his "we've examined this carefully" claim, it boils down to "We'll do what I said! We will! We will!" Why is it that I can't believe anything this guy (and his pals) says?
Bourgeois Rage: Similar objections were raised when Hutchison Whampoa (a Hong Kong company) got the contracts to manage ports at each end of the Panama Canal, with the fear being the Chinese connection. Those same objections were in play in the CFIUS process when Hutchison Whampoa and Singapore Technologies Telemedia attempted to acquire Global Crossing, a global telecom (and my employer) with a large number of U.S. assets--Hutchison Whampoa ended up pulling out of the deal, and STT (which is ultimately owned by the Singapore government through Temasek Holdings) was permitted to complete the acquisition on its own, after entering into a Network Security Agreement (a public document filed with the FCC) with various agencies of the U.S. government. STT exercises no control over the day-to-day operations of Global Crossing, and half of STT's representation on the Global Crossing board of directors is composed of four U.S. citizens trusted by the U.S. government to exercise security oversight over the company (including the former admiral of the U.S. Pacific fleet, a former USAF Lt. General, and a former U.S. Undersecretary of Defense for Acquisitions, Technology, and Logistics).
If the ports deal got less scrutiny from CFIUS, then it may mean that they have more concern over the flow of information than the flow of cargo, or that they have less concern over Dubai than over Singapore and Hong Kong.
I think there's a very real risk here. Remember that there is strong evidence that the money that bankrolled the WTC attack was laundered through the UAE and there is a very strong presence of Al Qaeda in those countries. All it takes is one employee with sympathies that lie with those people to fake a single shipping manifest and we've got a major problem on our hands. Our ports are already notoriously susceptible to infiltration, why increase that risk by putting a foreign government whose constituents include a sizable number of terrorist sympathizers in charge of those ports? There may be reasonable arguments for that risk being smaller than many would assume, but no one can make a solid positive argument for it.
Welcome all, to the world that those of us in South-Western states have been in for a while now. The Bush administrations absolute refusal to do anything to secure our southern border has had many of us wondering if Vicente Fox has compromising photos of Bush with a farm animal tucked away somewhere.
The southern border is like the Wild West right now with illegal immigrants, coyotes, smugglers, and apparently the occasional Al Qaeda operative able to move back and forth almost at will (if not actually under Mexican military protection).
And don't even get me started on how despite the fact that we are being overrun with illegal immigrants down here Bush's answer to the problem is to given them, in all but name, amnesty (while in good Orwellian fashion simultaneously denouncing the idea of amnesty).
I am starting to be part of those that are furious with the comments processing. Mine just got thrashed here! aaaaaarrrrrrrrrggggg.. and it was pretty well sourced at the time too.
Essentially i am agreeing in part with Lippard, that this is a problem about corruption and cronyism, evidenced by the desperation with which the administration suggests that it doesn't know why it failed to get the proper 45 day CFIUS investigation.
Likewise we need not be too worried about the possibility of materials coming into the country that would create fear among those who have too much and thus feel threatened. Yes, a UAE owned and operated company could ship containers full of stuff that would/could be protected from searches by diplomatic immunity. But currently the US DHS/ Coast Guard/ Customs only searches 6% of all the freight and shipments into US ports and harbors, and we haven't had a problem yet through that lack of security.
The issue for me is the trade discussions ongoing between the US and UAE in the attempt to write a treaty deal to garner significant support for the US dollar against Euros and Yuan. UAE, Saudi Arabia, even Iran have sufficient US dollar investments in T-bills and other financial instruments, and have been looking at shifting some of that to Euros as well as encouraging OPEC to trade in Euros then Yuans. The UAE deal is important and, it seems, so important that this Port deal was part and parcel of the enticement. But the Senate has certain advise and consent rights over trade deals and treaties, and thus it appears that Bushco is trying to get things in place and force the Senate to have to say yes. For that i hope the deal gets tossed.
Ed,
what if the WTC bomber came from Germany (there was an Al-Qaeda cell there)? Would you now advocate to block a similar investment by Siemens?
Dubai is practically a european city. The religion is sunni muslim and i don't know of any terrorist problem there whatsoever. I don't think there would be any more of a risk than if the company was South Korean.
Roman wrote:
Not analogous. The problem here goes far beyond the mere fact that two of the bombers came from there. There is also the fact that a sizable portion of the population there is sympathetic to our enemy, vastly increasing the risk of having employees of that company with a motive and opportunity to facilitate another attack. There is the fact that the state banks in that country were used to launder and filter money to the bombers, almost certainly with inside help from powerful business interests there. If the same was true of Germany, I would absolutely say it's too risky to allow them to control our ports.
But the problem is of ownership. US government still retains the control over who can come over from UAE and work in the ports.
Ed wrote: "Remember that there is strong evidence that the money that bankrolled the WTC attack was laundered through the UAE and there is a very strong presence of Al Qaeda in those countries. All it takes is one employee with sympathies that lie with those people to fake a single shipping manifest and we've got a major problem on our hands."
Why is this a bigger issue for the management of the receiving port than it is for the management of the shipping port? It seems to me that a shipping manifest could be faked at either end. It would probably be *easier* on the shipping side than on the receiving side, since there would presumably at that point be multiple records that would require change. Only the inspection process (which is not managed by P&O) is the mitigating factor. Also, is there any evidence that UAE (and Dubai in particular) supports or shields terrorists, versus it just being convenient because of its relative level of freedom (see http://www.usatoday.com/news/world/2004-09-02-terror-dubai_x.htm)?
Jim, you are on the mark: on one hand, people complain that Arab states are not democratic and suppress civil liberties. On the other hand, they expect them to be swift and efficient in quenching any activity which might be harmful to Western nations, esp. America. You can't have one with the other.
The White House is now saying that Bush didn't even know about the deal until a few days ago.
For some reasons, I find that hard to believe.
Some provisions of the agreement with the U.S. government have now come out, as described in this Guardian article:
http://www.guardian.co.uk/worldlatest/story/0,,-5640688,00.html
That article describes it as a deal with the "White House," which I suspect is mistaken--my guess is that it is a deal with the DOD, DOJ, DHS, DOC, Treasury, etc. (i.e., the members of CFIUS). In the article, the DHS describes the agreement as "unprecedented among maritime companies," but the provisions described sound lax by comparison with the terms of the agreements that have been used for foreign acquisitions of U.S. telecommunications companies.
Apparently the Bush administration is more concerned about the risks of the flow of information than the movement of physical materials.
Coupla things:
First off, the Emirates, like most Gulf states, is far more moderate than states like Saudi arabia, Syria, or Egypt. Just the other night I was speaking with a student who had lived in Saudi for several years, and he mentioned how they would all drive across the border to Bahrain to hit the bars. The gulf states are not theocratic regimes, nor are they hotbeds of Islamic extremism. On the other hand, our Saudi oil contracts probably create a greater risk than this port deal.
Secondly, as has been stated, this deal doesn't really affect operational control. This is purely an accounting deal, which investment groups control what stocks, who pays the rent for the use of the ports, and where profits go. These ports hire workers through unions, and the workers are americans and will continue to be americans. Security is and still will be provided by US Customs, the Coast Guard, and DHS, which is what worries me, since the first two have done such an excellent job of keeping cocaine from getting here from Colombia, and DHS has preparation and response skills that would make Wile E. Coyote blush.
Finally, with regards to money laundering, if that were a major concern, no foreign country in the world would ever even speak to US financial institutions. Really now, do you know how much money is laundered through american banks by Colombian narcoterrorists alone?
Much of the concern over this deal stems from an outdated economic model that still presumes that nation-states are significant actors. It is this outdated wisdom that causes many people to erroneously believe, for instance, that Toyota is a Japanese company. In the global market, many mutlinational corporactions actual operate at a level where nation-states are only mildly relevent, if at all.
Of course, it is true that this particular company is nominally owned by the government of the UaE, but its CEO obtained his business degree here in the states.
Hyperion,
your point is well taken. It strikes me how the liberal approach to economy of many Americans fades as soon as it would have to be applied to foreign companies/workers as well.
The famous 'IT outsorcing frenzy' comes to mind. It seems free market is good only when it works to the advantage of American workers or companies.
Bush is so adamant about it because his family stands to gain or lose a lot of money over it. The Bush family is in bed with a lot of Arab aristocracy, including the UAE royals. The Carlyle group has heavy investments from UAE and the UAE is a heavy investor in the US. Lots of rich people are either going to make a lot of money on this deal or lose a lot of money on this deal if it doesn't go through. Bush has no choice but to defend the deal.
The real thing to worry about here is not terrorism. I don't have the room or time here to explain that. The real thing to worry about is the selling off of our country's vital infrastructure to foreigners. It's been going on for a decade or more. The dollar has been in steady (but slow) decline. Either we sell these people our physical assets or they start dumping their dollar reserves. We can't have that, because then we couldn't build more B2 bombers so we can bomb oil rich countries for trying to sell their oil for Euros instead of dollars. It's what this is all about. The whole war on terror including 9/11, Iraq, Afghanistan, Iran, and Venezuela. It's not about radical Islam, that's just a useful tool. It's about the inevitable decline of the fiat dollar, it's hegemonic status as THE oil currency, and the way the US taxes the rest of the world with it. This is why we are such a rich country, but that is about to change. Before the decade is through, the dollar will be in the toilet and our economy will resemble that of the late 70s.
Exactly why should America go bankrupt because some countries stard trading in Euros, not in dollars? And what do you mean by "the US taxes the rest of the world with it [the dollar]"?
Rest of your post, beervolcano, seems like a conspiracy theory to me.
What we were missing? This.
"Dubai Ports World (DPW) aims to appease Miami-based Eller & Co, which will try to block the controversial £3.9bn ($6.8bn) takeover bid."
DPW was not the only firm wanting to take over P&O, eh? Follow the money...