Arab Co., White House Had Secret Agreement
Feb 22 9:20 PM US/Eastern
By TED BRIDIS
Associated Press Writer
The Bush administration secretly required a company in
the United Arab Emirates to cooperate with future U.S.
investigations before approving its takeover of
operations at six American ports, according to
documents obtained by The Associated Press. It chose
not to impose other, routine restrictions.
As part of the $6.8 billion purchase, state-owned
Dubai Ports World agreed to reveal records on demand
about "foreign operational direction" of its business
at U.S. ports, the documents said. Those records
broadly include details about the design, maintenance
or operation of ports and equipment.
The administration did not require Dubai Ports to keep
copies of business records on U.S. soil, where they
would be subject to court orders. It also did not
require the company to designate an American citizen
to accommodate U.S. government requests. Outside legal
experts said such obligations are routinely attached
to U.S. approvals of foreign sales in other
"They're not lax but they're not draconian," said
James Lewis, a former U.S. official who worked on such
agreements. If officials had predicted the firestorm
of criticism over the deal, Lewis said, "they might
have made them sound harder."
The conditions involving the sale of London-based
Peninsular and Oriental Steam Navigation Co. were
detailed in U.S. documents marked "confidential." Such
records are regularly guarded as trade secrets, and it
is highly unusual for them to be made public.
The concessions _ described previously by the Homeland
Security Department as unprecedented among maritime
companies _ reflect the close relationship between the
United States and the United Arab Emirates.
The revelations about the negotiated conditions came
as the White House acknowledged President Bush was
unaware of the pending sale until the deal had already
been approved by his administration.
Bush on Tuesday brushed aside objections by leaders in
the Senate and House. He pledged to veto any bill
Congress might approve to block the agreement, but
some lawmakers said they still were determined to
Dubai Port's top American executive, chief operating
officer Edward H. Bilkey, said the company will do
whatever the Bush administration asks to enhance
shipping security and ensure the sale goes through.
Bilkey said Wednesday he will work in Washington to
persuade skeptical lawmakers they should endorse the
deal; Senate oversight hearings already are scheduled.
"We're disappointed," Bilkey told the AP in an
interview. "We're going to do our best to persuade
them that they jumped the gun. The UAE is a very solid
friend, as President Bush has said."
Under the deal, the government asked Dubai Ports to
operate American seaports with existing U.S. managers
"to the extent possible." It promised to take "all
reasonable steps" to assist the Homeland Security
Department, and it pledged to continue participating
in security programs to stop smuggling and detect
illegal shipments of nuclear materials.
The administration required Dubai Ports to designate
an executive to handle requests from the U.S.
government, but it did not specify this person's
It said Dubai Ports must retain paperwork "in the
normal course of business" but did not specify a time
period or require corporate records to be housed in
the United States. Outside experts familiar with such
agreements said such provisions are routine in other
Bush faces a potential rebellion from leaders of his
own party, as well as a fight from Democrats, over the
sale. It puts Dubai Ports in charge of major terminal
operations in New York, New Jersey, Baltimore, New
Orleans, Miami and Philadelphia.
Senate and House leaders urged the president to delay
the takeover, which is set to be finalized in early
March. Senate Majority Leader Bill Frist of Tennessee
said the deal raised "serious questions regarding the
safety and security of our homeland." House Speaker
Dennis Hastert, R-Ill., asked the president for a
moratorium on the sale until it could be studied
In Saudi Arabia, Secretary of State Condoleezza Rice
said the agreement was thoroughly vetted. "We have to
maintain a principle that it doesn't matter where in
the world one of these purchases is coming from," Rice
said Wednesday. She described the United Arab Emirates
as "a good partner in the war on terrorism."
Bush personally defended the agreement on Tuesday, but
the White House said he did not know about it until
recently. The AP first reported the U.S. approval of
the sale to Dubai Ports on Feb. 11, and many members
of Congress have said they learned about it from the
"I think somebody dropped the ball," said Rep. Vito
Fossella, R-N.Y. "Information should have flowed more
freely and more quickly up into the White House. I
think it has been mishandled in terms of coming
forward with adequate information."
At the White House, spokesman Scott McClellan said
Bush learned about the deal "over the last several
days," as congressional criticism escalated. McClellan
said it did not rise to the presidential level, but
went through a government review and was determined
not to pose a threat.
McClellan said Bush afterward asked the head of every
U.S. department involved in approving the sale whether
there were security concerns. "Each and every one
expressed that they were comfortable with this
transaction going forward," he said.
Commerce Secretary Carlos Guiterrez told the AP the
administration was being thoughtful and deliberate
approving the sale.
"We are not reacting emotionally," Guiterrez said in
an interview Wednesday. "That's what I believe our
partners from around the world would like to see from
us is that we be thoughtful. That we be deliberate.
That we understand issues before we make a decision."
Associated Press writers Jeanine Aversa in Washington,
Anne Gearan in Riyadh, Saudi Arabia, and John
Christoffersen in Danbury, Conn., contributed to this