Dubai Firm to Transfer Ports Operations to U.S. Entity

DP World, the Dubai-owned company that was slated to operate several U.S. ports, agrees to transfer operations of those ports to a U.S. entity. NPR's Ron Elving talks about the politics behind the deal.

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NEAL CONAN, host:

This is TALK OF THE NATION. I'm Neal Conan in Washington. There was a major development today in the ports deal that has pitted President Bush against Congress. DP World, the Dubai-owned company that was slated to operate several U.S. ports, has agreed to transfer operations of those ports to a U.S. entity. This was announced on the floor of the United State Senate by Virginia Senator, Republican John Warner. Joining us now to discuss the politics behind this deal is NPR senior Washington editor Ron Elving, here in Studio A. Ron, always nice to have you on the program.

RON ELVING, reporting:

Good to be here, Neal.

CONAN: The development comes, I guess, less than 24 hours after the House Appropriations Committee voted overwhelmingly to approve a bill to block this deal. Is today's development, it was a message earlier today, Republican Congressional leaders telling the White House not only would this bill pass, but it's veto-proof.

ELVING: Extraordinary set of events today, Neal. In the morning, the president met with the leaders on the Republican side from the Senate and the House. And the five gentlemen who met with him apparently made clear to him that if he were to veto a bill that was blocking this ports deal, that the Congress on both the House and Senate side would override that veto easily, probably with a majority of both parties voting against the president. Now, of course you know, the president has never vetoed a bill, and he would scarcely want to cast his first veto into the teeth of a promised override.

CONAN: Then what happened was that John Warner reads this announcement from Dubai Ports World on the floor of the United States Senate, but even that does not seem to have satisfied the deal's critics.

ELVING: Well, as Charles Shummer, who is the Senator from New York who really got the conflagration lit here three weeks ago today, he said this looks good, what we've heard from Dubai Ports World looks good, it looks like a good development, but the devil is in the details. We want to know exactly what they mean when they say they're going to transfer ownership of operations at these ports to a U.S. entity. That sounds as though they're getting out. It sounds like they're pulling out of the deal entirely. But we want to know exactly what it does mean.

CONAN: And there were a couple of provisos added to that, granted that we be given a little time to arrange this, and given also that Dubai Ports World does not suffer any financial losses in the transfer.

ELVING: Sensibly enough. Dubai Ports World has been entirely above board in this entire transaction, as far as we know. There is no reason to think that they have anything to hide here, and they simply are asking to be indemnified against whatever loss it may incur if they have to, as it were, fire sale their stake in the operation of these ports.

CONAN: But that does not seem to have stopped the critics. It looks like they're going to go ahead and vote on this bill anyway.

ELVING: Well, it is a conflagration, and it began a few weeks ago when people first learned that there was going to be an Arab-owned company, that is a company owned by the sheikdom of Dubai, one of the United Arab Emirates, and that this company was going to have a role in operating terminals at U.S. ports. Now, of course, it was originally advertised and the headlines in the papers largely said taking over the ports, or the United States hands over the operation of its ports to an Arab-owned company. That played very badly in the popular press, talk show hosts, people all over the television and radio were portraying this deal as some kind of threat to American security, without their ever really having been a case made that it would make substantial changes in the security of the ports, after all, the U.S. Coast Guard runs that security operation, the Department of Homeland Security is involved.

Nonetheless, the impression that was created very strongly among American people was that we were going to be less safe that these ports might become some kind of conduit for terrorist activity partly because two of the terrorists on 9/11 back in 2001 had come from the U.A.E., and some of the financing for that operation came through the U.A.E. Much of the financing, of course, for much that goes on in the Middle East does go through that country, which is a kind of banking center for the entire Middle East region. So that was the impression that was created. And instead of going away when the president gave everyone his personal assurance it would be all right, it just seemed to get bigger and bigger. And Congress has just basically given way to that criticism.

CONAN: And why were, in this case Republicans, for six years now, loyal to the President of the United States? Six years responsive to trust me? Why were they unwilling to go along with him on this?

ELVING: I think that overwhelming nature of the public response. There was very little public support for this deal. You did have experts and you had the calm voice here and there saying, wait a minute, let's see, let's give it the 45-day investigation. The company itself asked for a 45-day investigation. Let's give it some time, let's look at this carefully. But there was a storm of criticism, and it was being driven by many of the voices in the public media, in, for example, FOX News, many people on FOX News were opposed to it. That generates a lot of attention among Republican members, also, CNN and other news organizations. But many of the conservative publications, such as the Washington Times, were in the forefront of this criticism, and that, well, that makes a difference to a Republican member of Congress.

CONAN: And did it make a difference that, as you mentioned, Democrat Charles Schumer, Democrat Hillary Clinton, were among those first on this issue?

ELVING: Fear factor. I think an awful lot of the conservatives said, we don't want to let the Democrats get out in front of us on this issue. And a lot of Democrats were saying, who is your national security party now? Who's the party that's trying to worry about security for the United States against terrorism now? They were suggesting strongly it might be the Democrats, and the Republicans weren't going to give an inch on that particular issue front.

CONAN: More developments later today and much coverage of this as things continue to pop on this issue. There's developments even now on the floor of the United States Senate. So stay tuned to NPR News later today for more as this story develops. Ron Elving, thanks very much for being with us.

ELVING: Thank you, Neal.

CONAN: Ron Elving is NPR's senior Washington editor, and he was with us here in Studio 3-A.

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