27.2.06

Dubai Expected to Ask for Review of Port Deal - New York Times

Dubai Expected to Ask for Review of Port Deal - New York Times

WASHINGTON, Feb. 25 — After two days of behind-the-scenes negotiations with the Bush administration and Congress, the Dubai company seeking to manage terminals at six American ports is expected to announce by Monday a deal inviting the government to conduct a broad new review of security concerns, senior administration officials and a company adviser say.

If an agreement is completed, the state-owned company, Dubai Ports World, will "voluntarily" ask the Bush administration to pursue the lengthier, deeper investigation that Democrats and Republicans in Congress have been demanding since controversy over the transaction erupted at the beginning of the week.

The White House plans to portray the action as the company's own decision, giving administration officials a face-saving way of backing away from President Bush's repeated declarations in recent days that there is no security risk in having the port terminals operated by a company controlled by the emir of Dubai, part of the United Arab Emirates.

The people who discussed the negotiations, two senior administration officials and the company adviser, spoke on the condition of anonymity because final details had not been worked out. Dubai Ports lawyers and lobbyists spent Friday and Saturday talking with Congressional leaders, including the Senate majority leader, Bill Frist of Tennessee.

The goal was to try to delay, if not circumvent, a collision with Republican leaders who have been threatening to support some form of Congressional action next week, possibly including a bill to block the company from taking over.

Dubai Ports' purchase of the British company now running the terminals was approved by the Committee on Investment in the United States in mid-January. As recently as Friday, Mr. Bush's national security adviser, Stephen J. Hadley, emphasized that the process was complete. "There's nothing to reopen," he said.

But according to several people involved in the talks, even as Mr. Hadley was speaking, executives of Dubai Ports became convinced that their offer on Thursday to close the deal but to "segregate" the American operations until further briefings were conducted on Capitol Hill would not quiet the controversy.

A new review would essentially allow the government to do the kind of full 45-day assessment of the security implications that the administration argued all last week was unwarranted. Critics of the White House's handling of the situation said the law required the 45-day investigation because Dubai Ports is owned by a foreign state.

A company spokesman declined to comment on whether an agreement was near on a new investigation.

If a new investigation is conducted under the terms of a law passed by Congress 14 years ago, the results would be reported to Mr. Bush, who would make a final decision and report to Congress. That would put the onus of the decision clearly on a president who has said that he was unaware of the previous decision allowing the transaction until recently, but that he fully supports it.

"Everybody needed a way to get off this train," said one official with knowledge of the talks, "and this seemed to be the best one."

Because Mr. Bush has already declared his position on the issue, it is unclear how the administration could conduct a truly independent review. In statements on Tuesday, the president strongly suggested that anti-Arab bias lay behind the protests. The current operator is the Peninsula & Oriental Steam Navigation Company, which is British.

But neither Mr. Bush's assurances nor an offer from Dubai Ports on Thursday to delay taking over management of the terminals appeared to sway the critics on Saturday.

Gov. Jon S. Corzine of New Jersey, one of the lawmakers seeking to block the company from managing the terminals, dismissed suggestions that anti-Arab bias or racial profiling lay behind opposition to the deal.

"Dubai is not Britain," Mr. Corzine said. "And the fact of the matter is that port security does not begin and end at the pier in Newark."

Mr. Corzine's condemnation of the transaction — in a Democratic response to Mr. Bush's weekly radio address, which was on a different topic — came as Democrats and some Republicans made clear that they planned to move on several fronts to block Dubai Ports from taking control, including Congressional actions and court challenges.

At a meeting of the nation's governors in Washington this weekend, the ports controversy was a central subject of conversation.

Gov. Mike Huckabee, an Arkansas Republican and chairman of the National Governors Association, said the deal "put a lot of elected officials in an impossible situation." He said, "The visceral reaction they got from their constituents left them no choice in opposing it."

As the governors met, Mr. Corzine was pressing those from other states to join New Jersey's legal action to halt the deal. He dismissed the company's offer to delay the formal takeover, saying, "what we need is not a token delay but a serious review."

Bush administration officials have seemed torn between their desire to repair damage from what they acknowledge was a severe political error — failing to consult with Congress, state and city officials, and the port authorities — and their insistence that the review of the transaction was considered closed.


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