Coast Guard poo-poos ports takeover

The U.S. Coast Guard, in charge of reviewing security at ports operated by a Dubai maritime company, warned the Bush administration it could not rule out that the company's assets could be used for terrorist operations, according to a document released yesterday by a Senate committee.
State-owned Dubai Ports World plans to complete its takeover of London-based Peninsular and Oriental Steam Navigation Co. (P&O) on Thursday, assuming ownership of operations at six major U.S. ports even as it pledges to hold off on asserting control while the Bush administration reviews the national security implications of the deal. The White House has strongly argued that a preliminary review showed that the sale would pose no threat to national security.
But in a Dec. 13 intelligence assessment of the company and its owners in the United Arab Emirates, the Coast Guard warned: "There are many intelligence gaps, concerning the potential for DPW or P&O assets to support terrorist operations, that preclude" the completion of a thorough threat assessment of the merger.
"The breadth of the intelligence gaps also infer potential unknown threats against a large number of potential vulnerabilities," says the document, released by the Senate Homeland Security and Governmental Affairs Committee.
"Security measures were thoroughly reviewed, including intelligence matters," White House spokeswoman Dana Perino said. She did not know whether the White House was briefed on the Coast Guard assessment, but, she said, "I do know that at the end of the day, when the process was completed and the transaction was approved, homeland security questions were resolved."
The Coast Guard document, completed about one month before the ports deal received government approval Jan. 17, was the strongest indication that members of the administration had expressed security concerns over the transaction. Officials from the departments of Treasury, Defense and Homeland Security told the Senate Armed Services Committee last week that the secretive interagency Committee on Foreign Investment in the United States, which reviewed the DP World deal, was unanimous in its position that no concerns had emerged to trigger the 45-day national security review required by the law that established the panel.
Among those who briefed the Armed Services Committee was Rear Adm. Thomas Gilmour of the Coast Guard, who said the agency had reviewed DP World's track record on port management but did not mention the document.
"Given the red-flag questions that the Coast Guard raised, very serious questions about operations, personnel and foreign influence, how could there not have been the 45-day investigation that's clearly required by law?" asked Senate Homeland Security Committee Chairman Susan Collins (R-Maine).
Gilmour insisted yesterday he could answer questions on the document only in a secret session to staff members with appropriate security clearances.
The issue is sure to stoke political concerns that a deal brokered last weekend between the company, the Bush administration and congressional GOP leaders does not go far enough. That deal provided that the company could go forward with its $6.85 billion acquisition of P&O, but it would not assert control over U.S. properties while the administration conducts a 45-day review of the deal's national security implications. Senators from both political parties moved yesterday to immediately stop the deal, pending the review's outcome.
"Congress has a right and responsibility in this case to conduct aggressive oversight and block a deal that could seriously undermine our national security," said Sen. Tom Coburn (R-Okla.). "This deal should not go through without an open investigation and congressional input."
Sen. Robert Menendez (D-N.J.) said: "Since the president won't act to keep our ports safe, we will."
The response from Republican and Democratic senators suggested the issue has in no way been defused. The Coast Guard document surprised even lawmakers charged with overseeing the Coast Guard. The assessment raises questions on the overall security environment at DP World facilities, the background of some personnel and foreign influence on company operations.
"This report suggests there were significant and troubling intelligence gaps," Collins said. "That language is very troubling to me."
Clay Lowry, the Treasury Department's assistant secretary for international affairs, told Homeland Security Committee members the Coast Guard's concerns "were addressed and resolved."
But Collins questioned how such broad concerns raised by the Coast Guard could have been resolved by Jan. 6, when the Homeland Security Department gave its approval of the deal.
Lawmakers from both parties who loudly challenged the administration's acceptance of the deal last week were in no mood to take in those assurances. Republicans have grown particularly incensed that the administration has not kept them informed on issues of such political importance. Rep. Mark Foley (R-Fla.) said he will introduce legislation today mandating that security reviews by the homeland security and intelligence committees run concurrently with administration security reviews of company purchases.
"We have tried our best to support this administration at every turn, but to be blindsided by an issue of this magnitude demonstrates we have a lot of work to do," he said.
Rep. Scott Garrett (R-N.J.), whose district suffered outsize losses in the Sept. 11, 2001, terrorist attacks, said information that has emerged about the issue has made him even more adamant in opposing the deal.
Legislation to take a closer look at the transaction is piling up. A bill introduced yesterday by Coburn, Menendez, Collins, and Sens. Charles E. Schumer (D-N.Y.), Rick Santorum (R-Pa.), Norm Coleman (R-Minn.), Olympia J. Snowe (R-Maine), Hillary Rodham Clinton (D-N.Y.), Jack Reed (D-R.I.) and Frank Lautenberg (D-N.J.) would halt the sale of P&O pending the 45-day review and would give Congress the authority to reject the deal after the investigation.
A separate bill by Menendez, Clinton, Lautenberg and Sens. Barbara Boxer (D-Calif.) and Bill Nelson (D-Fla.) would block the sale and ban companies owned by foreign governments from controlling operations at U.S. ports.