Takeover Operations of Major U.S. Ports

By WILL LESTER, Associated Press Writer
2 hours, 31 minutes ago

WASHINGTON - Two Republican governors are threatening legal action to block an Arab company from taking over operations in major U.S. ports and some GOP lawmakers say the deal should be closely examined.

In the uneasy climate after the Sept. 11 terrorist attacks, the Bush administration decision to allow the transaction is threatening to develop a major political headache for the White House.

New York Gov. George Pataki and Maryland Gov. Robert Ehrlich on Monday voiced doubts about the acquisition of a British company that has been running six U.S. ports by Dubai Ports World, a state-owned business in the United Arab Emirates.

The British company, Peninsular and Oriental Steam Navigation Co., runs major commercial operations at ports in Baltimore, Miami, New Jersey, New Orleans, New York and Philadelphia.

Both governors indicated they may try to cancel lease arrangements at ports in their states because of the DP World takeover.

"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 in a news release. "I have directed the Port Authority of New York and New Jersey to explore all legal options that may be available to them."

Ehrlich, concerned about security at the Port of Baltimore, said Monday he was "very troubled" that Maryland officials got no advance notice before the Bush administration approved the Arab company's takeover of the operations at the six ports.

"We needed to know before this was a done deal, given the state of where we are concerning security," Ehrlich told reporters in the State House rotunda in Annapolis.

The arrangement brought protests from both political parties in Congress and a lawsuit in Florida from a company affected by the takeover.

Public fears that the nation's ports are not properly protected, combined with the news of an Arab country's takeover of six major ports, proved a combustible mix.

Republican Sen. Lindsay Graham of South Carolina said on Fox News Sunday that the administration approval was "unbelievably tone deaf politically." GOP Rep. Tom Davis of Virginia said on ABC's "This Week," "It's a tough one to explain, but we're in a global economy. ... I think we need to take a very close look at it."

Democratic Sen. Robert Menendez of New Jersey said Monday that he and Sen. Hillary Rodham Clinton, D-N.Y., will introduce legislation prohibiting the sale of port operations to foreign governments.

At least one Senate oversight hearing was planned for later this month.

Critics have noted that some of the 9/11 hijackers used the UAE as an operational and financial base. In addition, they contend the UAE was an important transfer point for shipments of smuggled nuclear components sent to Iran, North Korea and Libya by a Pakistani scientist.

The Bush administration got support Monday from former President Carter, a Democrat and frequent critic of the administration.

"My presumption is, and my belief is, that the president and his secretary of state and the Defense Department and others have adequately cleared the Dubai government organization to manage these ports," Carter told CNN. "I don't think there's any particular threat to our security."

Homeland Security Secretary Michael Chertoff made the rounds on the talk shows Sunday, asserting that the administration made certain the company agreed to certain conditions to ensure national security. H said details of those agreements were secret.

During a stop Monday in Birmingham, Ala., Attorney General Alberto Gonzales said the administration had a "very extensive process" for reviewing such transactions that "takes into account matters of national security, takes into account concerns about port security."

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Associated Press writers Devlin Barrett in Washington, Matthew Verrinder in Newark, N.J., and Tom Stuckey in Annapolis, Md., contributed to this story.