Dubai firm says it will delay U.S. port takeover

WASHINGTON - A state-owned company in the United Arab Emirates volunteered late Thursday to delay part of its $6.8 billion takeover of most operations at six U.S. ports to give President Bush more time to convince skeptical members of Congress that the disputed deal poses no security risks.

The surprise announcement relieves some pressure from a standoff between President Bush a Congress controlled by his own party that had threatened to try to block the deal over concerns about the UAE’s purported ties to terrorism.

Under the offer coordinated with the White House, Dubai Ports World said it will agree not to exercise control or influence the management over U.S. ports pending further talks with the Bush administration and Congress. It did not indicate how long it will wait for these discussions to take place.

The company said it will move forward with other parts of the deal affecting the rest of the world.

“It is not only unreasonable but also impractical to suggest that the closing of this entire global transaction should be delayed,” Dubai Ports said in a statement.

“The reaction in the United States has occurred in no other country in the world,” the company’s chief operating officer, Ted Bilkey, said in a statement. “We need to understand the concerns of the people in the U.S. who are worried about this transaction and make sure that they are addressed to the benefit of all parties. Security is everybody’s business.”

Earlier in the day, as Democrats attacked the Bush administration over whether the company should be allowed to oversee operations at the ports, President Bush's top adviser said Thursday that the president would be willing to accept a slight delay in the deal.

When asked in an interview on Fox News radio whether Bush would accept a postponement, White House senior adviser Karl Rove said: “Yes. Look, there are some hurdles, regulatory hurdles, that this still needs to go through on the British side as well that are going to be concluded next week."

“There’s no requirement that it close, you know, immediately after that,” he said on “The Tony Snow Show.”

“But our interest is in making certain the members of Congress have full information about it, and that, we're convinced, will give them a level of comfort with this,” he said.

On the program, Rove sought to allay fears concerning the Dubai deal.

“I think the more information that people get about this proposed transaction and the more they come to understand that the security of America's port terminals remains under the direction of the United States Coast Guard and Customs, the more comfortable people are becoming with it,” he said.

Democrat cites legal concerns
The senior Democrat on the Senate Armed Services Committee angrily accused the Bush administration of ignoring the law in considering the port deal.

The accusation by Sen. Carl Levin came as administration officials tried to calm the uproar, saying they spent three months reviewing the deal and that it would not threaten U.S. security.

“Is there not one agency in this government that believes this takeover could affect the national security of the United States?” the Michigan Democrat asked.

“We’re not aware of a single national security concern raised recently that was not part of [the review]," Deputy Treasury Secretary Robert Kimmitt told a committee briefing.

Levin insisted that the law that established the multiagency panel specifically said that any such review should be lengthened by 45 days if it could have an impact on national security.

Levin, raising his voice, told Kimmitt, “If you want the law changed, come to Congress and change it but don’t ignore it.”

Kimmitt responded, “We didn’t ignore the law. Concerns were raised. They were resolved.”

Sen. Clinton notes ‘red flags’
Sen. Hillary Rodham Clinton, D-N.Y., also was critical, citing “red flags” that should have slowed down the approval. She also called the approval process “a failure of judgment” because officials “did not alert the president, the secretary of the treasury and the secretary of defense” that several of our critical ports would be turned over to foreign country.

Chairman John Warner, R-Va., in a very unusual procedure on Capitol Hill, allowed reporters to question the administration witnesses.

Warner sided with the administration, emphasizing the U.A.E.’s cooperation in the war on terrorism, including allowing a large number of port calls by U.S. military and commercial ships and making its airfields available to the U.S. military.

President’s new pledge
Bush, talking to reporters at the conclusion of a Cabinet meeting earlier Thursday, said that “people don’t need to worry about security.”

Under secret conditions of the agreement with the administration, the Dubai company promised to cooperate with any U.S. investigations as a condition of the $6.8 billion deal, according to documents obtained by The Associated Press.

The U.S. government chose not to impose other routine restrictions.

“The more people learn about the transaction that has been scrutinized and approved by my government,” Bush said, “the more they’ll be comforted that our ports will be secure.”

The president said he was struck by the fact that people were not concerned about port security when a British company was running the port operation, but they felt differently about an Arab company at the helm. He said the United Arab Emirates was a valuable partner in the war in terror.

Government ownership an issue
Even before Thursday’s hearing, congressional critics had noted that the London-based Peninsular and Oriental Steam Navigation Co., which previously operated at those ports, is a publicly traded company while Dubai Ports World is effectively controlled by the government in Abu Dhabi. Sens. Robert Menendez, D-N.J., and Clinton have said they will introduce legislation to prohibit companies owned or controlled by foreign governments from running port operations in the United States.

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