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February 24, 2006
Dubai Deal Postponed And Rethought

The fallout from the Dubai deal continues to mount after a week of protest over the transaction. The UAE has offered to delay the completion of its purchase of P&O to allow Congress to review the deal, while Americans have their first real debate over port security and operations since 9/11 -- not that one existed much before that, either.

Like most controversies, this one has had its share of hyperbole and hysteria, but the debate has been educational. The questions about how port operators affect security needed to be aired, but in some ways the curt answers have left an incomplete picture. The administration's accurate answer that port security would remain in the capable hands of the Coast Guard and Customs service (a part of DHS now) clarified the role of the port operator, but left the impression that the companies filling those roles have nothing to do with security. That simply isn't true; any operation that has to interface with a serious security regimen winds up with potentially critical information regarding security procedures, personnel, and can identify holes within the process that can be exploited later. That to me is the one argument that remains unchallenged in the debate.

The Washington Post has several voices talking about the ports deal today, and each adds a rational and germane piece fo the debate. Their unsigned editorial takes apart the notion that the President should have had intimate knowledge of the deal prior to the controversy:

[T]he president's job description does not include taking a personal interest in decisions about whether foreign companies based in countries that are America's allies should be allowed to purchase other foreign companies that are based in countries that are America's allies. This is particularly the case when such purchases do not have any discernible impact on American security whatsoever.

In other words, the White House's "admission" that President Bush was unaware that Dubai Ports World, a company based in the United Arab Emirates, had purchased Peninsular and Oriental Steam Navigation Co., a company based in Britain -- and thereby obtained management control of the business operations of six U.S. ports -- strikes us as completely unnecessary. Why should the president know? Twelve government departments and agencies, including the departments of Treasury, State, Defense and Homeland Security, had examined the deal over a three-month period and found it acceptable. Perhaps the White House should have anticipated this week's political storm and prepared for it. But because the objections are irrational, even that complaint is questionable.

Both E.J. Dionne and Charles Krauthammer also expound on the ports deal. Both note that almost every side has a hypocrisy problem in this argument. Dionne:

Republicans and conservatives would be aghast at the idea of our government owning a company that operated so many of our ports. That would be -- just imagine! -- socialism. But Dubai Ports World is, well, a socialist operation, a state-owned company in the United Arab Emirates. Why is it bad for the federal government to own our port operations, but okay for a foreign government?


The Democrats, in particular, are in full cry, gleeful to at last get to the right of George Bush on an issue of national security.

Gleeful, and shamelessly hypocritical. If a citizen of the UAE walked into an airport in full burnoose and flowing robes, speaking only Arabic, Democrats would be deeply offended, and might even sue, if the security people were to give him any more scrutiny than they would to my sweet 84-year-old mother.

Democrats loudly denounce any thought of racial profiling. But when that same Arab, attired in business suit and MBA, and with a good record of running ports in 15 countries, buys P&O, Democrats howl at the very idea of allowing Arabs to run our ports. (Republicans are howling, too, but they don't grandstand on the issue of racial profiling.)

Dionne's point about the company itself is another good point. UAE has performed well as an ally in the war on terror up to this point, but in the end, it's still a hereditary autocracy, not a democracy with a strong mandate from a pro-Western citizenry. A state-owned company from such a nation will not have the same profit motives as privately-held or public corporations. State-owned companies primarily serve the interests of the ruling class of the state, not the bottom line, especially not in a nation where oil profits can more than make up for a loss elsewhere. Right now, we can rely on UAE's state interest to converge with our own based on their past performance -- but can we expect that to continue indefinitely? And will we have ample warning if the UAE decides that Islamofascism serves their state interest more than their economic and diplomatic partnership with the US?

Brant at SWLiP has an answer for that as well:

There could be something to the suggestion that a management company could be in a position to acquire intimate knowledge of port security operations, but I doubt that such knowledge would be anything that could not be obtained through very basic intelligence work (much of it available via open resources).

For example, someone could establish a front company for providing goods or services to one or more of the cruise lines, and by that route could obtain port passes and knowledge of security operations through its employees (as long as they could pass the County's background security check). There are all kinds of small companies that serve the port and which have employees going into secure areas on a regular basis.

It would even be easier to crew a cargo ship or cruise ship with Islamist informants or sympathizers. Crew manning agencies are located in just about every Third-World country you can think of, including Islamist hot-spots like Pakistan, the Philippines, Nigeria, etc. My former firm arrested a vessel shortly after 9/11 that turned out to be owned by the government of Egypt (no better or worse an ally than the UAE) and had an all-Egyptian crew. No word on whether any of them were al Qaida sympathizers, but it wouldn't be a stretch if some were. And this was a vessel that sat docked at the Port of Miami for several days on a regular basis.

The upshot is that a port can be targeted in numerous ways, but doing it through a state-owned management company would probably be among the more problematic ways to do it. Most painfully obvious is the fact that any infiltration of port security through the management company would be immediately traced back to the state-owned management company, and therefore the state (in this case, the UAE) would lack any plausible deniability (remember that term?) if anything were to go "boom."

In the end, the increased scrutiny of the deal may be the biggest boon of the debate; we're finally talking about port and border security, and Congress and the Administration is finally listening. I think Krauthammer has it correct that the deal will likely go through; however, we may wind up with better focus and security at our commercial ports as a result of the controversy.

Sphere It Digg! View blog reactions
Posted by Ed Morrissey at February 24, 2006 6:30 AM

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» Dubai Ports - The Bigger Picture from All Things Beautiful
As Ed Morrissey quite rightly points out: "In the end, the increased scrutiny of the deal may be the biggest boon of the debate; we're finally talking about port and border security, and Congress and the Administration is finally listening. I think Kra... [Read More]

Tracked on February 24, 2006 12:16 PM


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