US politicians squabble over Dubai P&O deal

The recent acquisition of ports and ferries operator P&O by Dubai Ports World (DPW) has sparked fierce criticism of the White House from across the US government.

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By  Alicia Buller Published  February 26, 2006

The recent acquisition of ports and ferries operator P&O by Dubai Ports World (DPW) has sparked fierce criticism of the White House from across the US government. Both Republicans and Democrats have threatened legal action to block the firm from taking over P&O's operations in several US ports, citing national security concerns. However, president George W. Bush said last week that he would veto any law that aimed to stop DPW gaining control over P&O's facilities in the six US cities: New York, New Jersey, Philadelphia, Baltimore, New Orleans and Miami. Democrats Hillary Clinton of New York, and Robert Menendez of New Jersey, both said they planned to introduce measures to ban companies owned by foreign governments from acquiring US port operations. “We wouldn’t turn the border patrol or the customs service over to a foreign government, and we can’t afford to turn our ports over to one either,” Menendez said in a statement. Senator Clinton added that she would be working alongside Senator Menendez “to introduce legislation that will prohibit the sale of ports to foreign governments.” Two Republican governors, New York’s George Pataki and Maryland’s Robert Ehrlich, also voiced doubts about the P&O takeover, arguing that the deal — which has established DPW as the third largest ports authority in the world — would hand a stake in the ports’ operations to a foreign government. Both governors — supported by right wing media commentators in the US — said they might try to cancel lease arrangements at ports in their states, in the name of US national safety. “Ensuring the security of New York’s port operations is paramount and I am very concerned with the purchase of Peninsular & Oriental Steam by Dubai Ports World,” Pataki said. Ehrlich, concerned about security at the port of Baltimore, added that he was “very troubled” that Maryland officials got no advance notice before the Bush administration approved the agreement. The chairman of the US Department of Homeland Security, Peter King, said that he was unconvinced that the White House had taken adequate security measures. “I’m aware of the conditions, and they relate entirely to how the company carries out its procedures, but it doesn’t go into the hire process or how they hire people,” he said. “They don’t address the underlying conditions, which is how are they going to guard against things like infiltration by Al Qaeda, or corruption?” he added. The White House has meanwhile embarked upon a vigorous defence of its decision to approve the deal. US secretary of state Condoleezza Rice, who was meeting Gulf region foreign ministers last week in Abu Dhabi, commented that the Emirate was “a very good friend” to the US and that the deal simply needed “better explanation”. President Bush, meanwhile, said the agreement should be allowed to go through. He called on critics to explain why a Middle Eastern firm was receiving opposition, but not a British company. “It would send a terrible signal to friends and allies not to let this transaction go through,” he said. DPW has remained defiant, shrugging off the claims and stressing that security is “at the forefront” of its business. P&O has also insisted that it is confident that the deal will still go ahead.

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