DP World, the Dubai-based company embroiled in a controversy over its purchase of a contract to administer six U.S. ports, has agreed to a more extensive security review of the deal.
The Bush administration will conduct a highly unusual second review of potential security risks in a business deal it previously approved for a United Arab Emirates-based company to take over significant operations at six leading U.S. ports. The new, 45-day investigation is aimed at averting an impending political showdown as Congress returned to Washington on Monday from a weeklong break. Senate Majority Leader Bill Frist, who helped negotiate the plan, quickly recommended that lawmakers wait for the outcome before acting on legislation to delay or block the deal. Frist, R-Tenn., said he expects oversight hearings to continue this week.
In six pages of legal documents sent Sunday to the White House, Dubai-based DP World offered to submit to a second, broader investigation of its plans to run shipping terminals in New York, New Jersey, Baltimore, New Orleans, Miami and Philadelphia. The Treasury Department, which governs the U.S. review panel, said it would accept DP World’s extraordinary offer once the company formally filed its request for one. It said the same government panel will reconsider the deal that it earlier had agreed unanimously posed no national security concerns.
Some senators, led by Charles Schumer, D-N.Y., said they still intend to introduce legislation Monday to block the deal pending a 45-day review and to require congressional approval before DP World can conduct business in the United States. Under existing law, Congress effectively has no role considering deals.
Still, the administration’s announcement means the White House likely won’t face a broader revolt this week by fellow Republicans. A united GOP can assert that its leaders — in Congress and at the White House — have taken additional steps to protect national security.
DP World’s offer was highly unusual. The secretive U.S. committee that considers security risks of foreign companies buying or investing in American industry has conducted such full-blown investigations only about two dozen times among the more than 1,500 international deals it has reviewed. The company said that during the renewed scrutiny, or until May 1, a London-based executive who is a British citizen would have authority over DP World’s U.S. operations. It pledged that Dubai executives would not control or influence company business in the U.S., but said it was entitled to all profits during the period. It also said it will appoint an American to be its chief security officer in the United States. “We hope that voluntarily agreeing to further scrutiny demonstrates our commitment to our long-standing relationship with the United States,” said Edward H. Bilkey, the company’s chief operating officer.
This is a smart political move on part of both DP World and the Bush administration to quell the controversy. Still, I am quite surprised to see the latter bow to congressional pressure over something clearly within the purview of executive authority, given how much they push the envelope on presidential authority on security issues.
