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Port deal was put on fast track

White House says Bush was unaware of pending port sale, but legally required review was sidestepped

BY CRAIG GORDON AND TOM BRUNE | NEWSDAY WASHINGTON BUREAU

February 23, 2006

WASHINGTON - The Bush administration put a Middle Eastern firm's deal to run U.S. seaports on a fast track to approval by sidestepping a legally authorized 45-day review - simply by declaring the deal posed no national security threat, U.S. officials confirmed yesterday.

That new explanation brought sharp recriminations from lawmakers in both parties who have questioned whether the deal could leave ports more vulnerable to terrorism.

"I don't know why they're using legal technicalities to avoid doing what they should be doing," said Rep. Peter King (R-Seaford), the House Homeland Security chairman who is introducing legislation next week to put the deal on hold and force a 45-day review.

The controversy has shined a spotlight on ties between Bush administration allies and the United Arab Emirates, the Middle Eastern nation that owns the company that would run ports in six American cities, including New York.

Last year, the UAE lined up a string of lobbyists with ties to the Bush administration, including high-profile supporter Vin Weber and his firm Clark & Weinstock at $65,000 a month, as well as Global USA Inc., chaired by longtime Bush family ally Stanton Anderson.

On the UAE account at Clark & Weinstock was Vice President Dick Cheney's former press aide, Juleanna Glover Weiss, who left the company in May, according to lobbying reports at the Justice Department.

The reports indicate that the primary focus of lobbying were bilateral trade and other issues. The port-management company, Dubai Ports World, is not mentioned. But the most recent report was filed late last year.

In addition, a top executive confirmed yesterday that the company had hired former Republican presidential nominee and longtime senator Bob Dole to lobby in favor of the deal.

The White House admitted yesterday that President George W. Bush didn't even know about the contract until after it was approved by a U.S. government committee that signs off on foreign deals here.

The White House showed a rare note of humility as it tried to beat down a growing bipartisan controversy surrounding the port deal, saying that officials there probably could have done a better job keeping Congress in the loop.

But neither side showed any sign yesterday of backing down on an issue that has pitted Republican lawmakers against Bush on the party's bread-and-butter issue - the anti-terror fight. Bush on Tuesday threatened to veto any legislation to stop the deal.

The White House yesterday defended the federal review of the deal, saying Dubai Ports World signed a "letter of assurances" pledging to uphold security standards at the ports. The agreement requires the company to cooperate with any U.S. security investigations and produce internal records on demand, The Associated Press reported last night.

The deal was reviewed by the Committee on Foreign Investments in the United States, which includes representatives of a host of Cabinet-level and presidential offices, including Treasury, the Pentagon and Homeland Security.

The committee has 30 days to review deals involving foreign-owned companies in the United States. But a 1992 amendment also sets out a requirement for an additional mandatory 45-day review if two criteria are met: the company is controlled or acting on behalf of a foreign government, as is the case with the Dubai company, and there are questions about whether the deal could affect U.S. national security.

But the Treasury Department said yesterday that the committee saw no need for a 45-day review because it believed all the national security questions had been answered.

The committee "is only required to go to the 45-day investigation if, at the end of the 30-day period, outstanding national security questions remain," Treasury spokesman Tony Fratto said in an e-mail.

But King and Sen. Charles Schumer (D-N.Y.), who is teaming up with King on the legislation, said that explanation defied logic - the whole point of their concern is that the initial 30-day review was cursory and left big questions about whether the deal would keep the ports safe.

"If this doesn't raise national security concerns, what does?" Schumer said. "They're trying to tie themselves in a pretzel to justify a bad decision when they just ought to say, 'Hey, it's a bad decision. Let's look at it again.'"

White House press secretary Scott McClellan said yesterday that Dubai Ports World had given additional security assurances to the panel, including that it would participate in a U.S. port security initiative in Dubai.

In an interview on CNN, Dubai Ports World executive Ted Bilkey also indicated that the company had agreed to keep senior U.S. personnel in place as part of the deal.