Text size:

Compromise on ports in works

Top Republicans, Bush administration seeking deal to defuse furor over United Arab Emirates company

BY CRAIG GORDON | NEWSDAY WASHINGTON BUREAU

February 26, 2006

WASHINGTON - The Bush administration and top Republicans are hammering out a deal in which a controversial Mideast company seeking to run U.S. seaports would submit to a longer, more rigorous investigation of its bid, congressional sources said yesterday.

A compromise could head off what was shaping up as an embarrassing clash between President George W. Bush, who supports the ports deal, and Republicans in Congress who pledged to try to delay it.

The talks between the White House, top House and Senate officials and Dubai Ports World would require the company to submit to a 45-day investigation called for by law and demanded by congressional critics from both parties, the sources said.

In exchange, the deal left open the likelihood that DP World would take over seaports in six major American cities, including New York, if it could pass muster in the new review and satisfy its critics.

DP World is expected to restructure its $6.8 billion port bid and voluntarily resubmit it to a Bush administration committee that reviews U.S. deals by foreign-owned companies.

The controversy surrounding the transaction, in which a company owned by the United Arab Emirates would take over operations in U.S. ports already considered vulnerable to terrorism, caught the White House by surprise and was mushrooming into a showdown on Capitol Hill.

But this compromise seemed to give all sides a way to defuse the confrontation - Bush by not having to scrap the deal altogether, and Congress by giving members the investigation they say the Bush administration should have done in the first place.

Rep. Peter King (R-Seaford), the House Homeland Security chairman who has led the GOP challenge to the deal, said yesterday he considered talk of compromise encouraging, because it appeared to address his major concern: the need for a harder look at DP World.

"On its face, it seems very promising," King said. "I'll have to see exactly what the details are, but it certainly appears to be going in the right direction."

The White House as late as Friday still rejected the need for further investigation of the company and praised DP World for simply agreeing to delay the deal to allow a "cooling-off" period where Congress could learn more.

That effort to buy time did nothing to defuse a push by both Republicans and Democrats for legislation to force Bush to stop the deal and order a 45-day probe. Members in both parties predicted easy passage. Bush has pledged to veto any such legislation.

The administration approved the transaction after a 30-day review, but sidestepped a requirement for an additional 45-day investigation by declaring that the DP World deal posed no national security threat. That finding has been sharply criticized by both Republicans and Democrats, who say the UAE has a spotty record on terrorism.

At a glance: United Arab Emirates

Area: 32,300 square miles

(slightly smaller than Maine)

Independence: 1971, from Britain

Population: 2.56 million

Ethnic groups: Arab, Iranian

Dominant religion: Muslim, 96%

Government: Federation of seven emirates

Per-capita gross domestic product: $29,100 (U.S. $40,100)

Unemployment: 2.9% (U.S. 5.1%)

Fact: Tiny UAE is world's 13th-largest oil-producing nation.

SOURCES: CIA WORLD FACTBOOK, WORLD ALMANAC 0 300