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February 26, 2006
DP World Makes Concessions, Pledges Cooperation

George Bush has avoided a difficult confrontation with Congress over the sale of port management to Dubai Ports World as the state-owned UAE company volunteered significant concessions to ease concern over the sale. Not only has DP World requested another investigation of its own operations and the sale, it also has offered to restructure its company to please its new American customer:

The Bush administration said Sunday it will accept an extraordinary offer by a United Arab Emirates-based company to submit to a second — and broader — U.S. review of potential security risks in its deal to take over significant operations at six leading American ports. The plan averts an impending political showdown.

The Treasury Department said in a statement it will promptly begin the review once the company formally files a request for one. It said the same government panel that earlier investigated the deal but found no reason for national security concerns will reconsider it. ...

The announcement means the White House likely won't face a revolt by fellow Republicans when lawmakers return Monday from a weeklong break. A united Republican Party can assert that its leaders — both in Congress and at the White House — have taken additional steps to protect national security.

Under the terms of DPW's offer, the company would wait to take over operations at the American ports now operated by P&O, the company it bought earlier this month. During this period, the company will place a London-based manager in charge of the operations, a person with British citizenship, and leave all the current structures in America alone. After the completion of the deal, DP World also pledged to transform the American operations into a subsidiary that would have American executives at the helm in order to make the operations more palatable for the United States.

This represents the closest to victory that the anti-DPW forces could desire, under the circumstances. It would place Americans in between UAE and the ports as an important buffer. The formation of the subsidiary within the US would make its operations more transparent to law enforcement. In fact, it would be closer to American management of the ports than most others have now.

If the new investigation turns up no significant hurdles, this story will pass into oblivion soon enough. However, these concessions represent a real victory for common sense and stronger security and accountability. It still leaves the question about the lack of foresight by the White House and the Treasury Department about how this deal would look to Congress and the public at large, and why they could not think to require these concessions in the first place.

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Posted by Ed Morrissey at February 26, 2006 6:28 PM

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