Arab company, White House had secret agreement

UAE company promises to cooperate with US as condition of its takeover of operations at six major American ports.

seattle port 298.88 (photo credit: AP)
seattle port 298.88
(photo credit: AP)
Under a secretive agreement with the Bush administration, a company in the United Arab Emirates promised to cooperate with US investigations as a condition of its takeover of operations at six major American ports, according to documents obtained by The Associated Press. The US government chose not to impose other, routine restrictions. In approving the $6.8 billion purchase, the administration chose not to require state-owned Dubai Ports World to keep copies of its business records on US soil, where they would be subject to orders by American courts. It also did not require the company to designate an American citizen to accommodate requests by the government. Outside legal experts said such obligations are routinely attached to US approvals of foreign sales in other industries. Dubai Ports agreed to give up records on demand about "foreign operational direction" of its business at the US ports, according to the documents. Those records broadly include details about the design, maintenance or operation of ports and equipment. It also pledged to continue participating in programs to stop smuggling and detect illegal shipments of nuclear materials. "They're not lax but they're not draconian," said James Lewis, a former US official who worked on such agreements. If White House officials negotiating the deal had predicted the firestorm of criticism over it, "they might have made them sound harder." The conditions over the sale of London-based Peninsular and Oriental Steam Navigation Co. were detailed in US documents marked "confidential." Such records are regularly guarded as trade secrets, and it is highly unusual for them to be made public. The Republican head of the Senate Armed Services Committee, John Warner of Virginia, planned an oversight hearing Thursday. Warner has expressed support for the agreement, describing the UAE as an important ally against terrorism. Rep. Peter King of New York, the Republican chairman of the House Homeland Security Committee, said the conditions are evidence the Bush administration was concerned about security. "There is a very serious question as to why the records are not going to be maintained on American soil subject to American jurisdiction," King said. Another critic, New York Democratic Sen. Charles Schumer added: "These new revelations ask more questions than they answer." The disclosure of the negotiated conditions came as the White House acknowledged President George W. Bush was unaware of the pending sale until the deal had been already approved by his administration. Bush has pledged to veto any bill Congress might approve to block the agreement, but some lawmakers said they still were determined to capsize it. Dubai Port's top American executive, chief operating officer Edward H. Bilkey, said he would work in Washington to persuade skeptical lawmakers they should endorse the deal; several 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 US managers "to the extent possible." The company promised to take "all reasonable steps" to assist the Homeland Security Department. The administration required Dubai Ports to designate an executive to handle requests from the US government, but it did not specify this person's citizenship. 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 said stricter provisions are routine in other industries. Foreign communications companies with American customers are commonly required to store business records in the United States. A senior US official said the Bush administration considers shipping manifests less sensitive. The official spoke on condition of anonymity because of the confidential nature of the agreement. Bush faces a potential rebellion over the sale from leaders of his own party, as well as a fight from Democrats. It puts Dubai Ports in charge of major terminal operations in New York, New Jersey, Baltimore, New Orleans, Miami and Philadelphia. 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." The White House said President Bush did not know about the agreement until recently. The AP first reported US approval of the sale to Dubai Ports on Feb. 11, and many members of Congress have said they learned about it from the AP. "I think somebody dropped the ball," said Rep. Vito Fossella, a New York Republican. "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."