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Thursday, February 23, 2006

Secret deals


Hi, we're the new P&O port security team

Arab Co., White House Had Secret Agreement

By TED BRIDIS
Associated Press Writer


AP Photo/JOSE F. MORENO


WASHINGTON (AP) -- 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 industries.

"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."

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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 capsize it.

Edward Bilkey, chief operating officer, Dubai Ports World, in A-P interview: Bilkey says Dubai Ports has to comply with U-S security rules.
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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 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 familiar with such agreements said such provisions are routine in other cases.

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

posted by Steve @ 12:16:00 AM

12:16:00 AM

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