22.2.06

Bush Would Veto Any Bill Halting Dubai Port Deal - New York Times

Bush Would Veto Any Bill Halting Dubai Port Deal - New York Times

WASHINGTON, Feb. 21 — President Bush, trying to put down a rapidly escalating rebellion among leaders of his own party, said Tuesday that he would veto any legislation blocking a deal for a state-owned company in Dubai to take over the management of port terminals in New York, Miami, Baltimore and other major American cities.

Mr. Bush issued the threat after the Senate majority leader, Bill Frist, and the House speaker, J. Dennis Hastert, publicly criticized the deal and said a thorough review was necessary to ensure that terrorists could not exploit the arrangement to slip weapons into American ports. Mr. Bush suggested that the objections to the deal might be based on bias against a company from the Middle East, one he said was an ally in fighting terrorism.

"If there was any chance that this transaction would jeopardize the security of the United States, it would not go forward," Mr. Bush said, discussing a government review of the deal that began in October and ended on Jan. 16 without producing any objections from officials in his administration.

The president added, "This is a company that has played by the rules, that has been cooperative with the United States, a country that's an ally in the war on terror, and it would send a terrible signal to friends and allies not to let this transaction go through."

The White House was taken by surprise when Mr. Frist and Mr. Hastert joined Democratic leaders in Congress and other prominent Republicans, including Mayor Michael R. Bloomberg and Gov. George E. Pataki of New York, in calling for the government to stop the deal from closing next week as scheduled.

"We have not received the necessary assurances regarding security concerns," Mr. Bloomberg wrote in a letter to the president on Tuesday evening. He said he was joining New York's two Democratic senators, Hillary Rodham Clinton and Charles E. Schumer, in calling for a 45-day investigation of the deal under a federal law that governs the review of foreign investments.

Mr. Frist gave the White House only an hour's notice before breaking ranks and saying that "the decision to finalize this deal should be put on hold." He said that if a delay did not occur, he would "plan on introducing legislation to ensure that the deal is placed on hold until this decision gets a more thorough review."

The response from the White House set up a confrontation between Mr. Bush, who has said his primary goal is protecting the American people, and the leadership of his party in Congress, which is approaching midterm elections.

Mr. Bush rarely makes veto threats, and he has not vetoed a single bill in his more than five years in office. He issued his remarks after calling reporters into his conference room aboard Air Force One while flying back to Washington from Colorado, and then repeated them for television cameras after stepping out of his helicopter on the South Lawn of the White House.

The White House appeared to have considered the deal routine, especially because so many foreign firms — from Singapore, Denmark and Japan — run major port terminals in the United States and have for years. But Senator Schumer, in an interview, said:

"I don't think China or Britain or many of the others have the nexus with terrorism that Dubai has. What kind of controls do they have to prevent infiltration?"

Mr. Bush's aides rejected that line of thought, saying the company in question, Dubai Ports World, which is owned by the government of Dubai, would have no control over security issues at the six terminal operations it is seeking to buy, at New York, Newark, Philadelphia, Baltimore, Miami and New Orleans. The company would not own the ports but would operate some of the terminals in these cities.

They pointed out that a similar purchase involving the container-handling division of the CSX Corporation, which was bought by Dubai Ports in December 2004, went through with no objections. In that case, none of the terminals Dubai Ports assumed control of were in the United States.

But the central argument of the deal's proponents is that the United Arab Emirates have aided the United States in pursuing terror groups.

"We have naval visits there and landing rights," said Senator John W. Warner, Republican of Virginia and chairman of the Armed Services Committee, which has set a briefing on the subject for Thursday. "We have to move carefully in considering the implications of what we do." We imposed that right to land there.

But Dubai's record is hardly unblemished. Two of the hijackers in the Sept. 11 attacks came from the United Arab Emirates and laundered some of their money through its banking system. It was also the main transshipment point for Abdul Qadeer Khan, a Pakistani nuclear engineer who ran the world's largest nuclear proliferation ring from warehouses near the port, met Iranian officials there, and shipped centrifuge equipment, which can be used to enrich uranium, from there to Libya.

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