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US Coast Guard Had Concerns About UAE Ports Deal


The U.S. Coast Guard had expressed concerns about the planned takeover of key operations at leading U.S. ports by a company based in the United Arab Emirates. Those concerns were expressed in a document released at congressional hearing Monday.

According to the unclassified document released by a Senate panel, the Coast Guard last year raised concerns about intelligence gaps that made it difficult to assess whether the company, owned by the government of Dubai in the United Arab Emirates, might support terrorist operations.

The surprise revelation came during a hearing of the Senate Homeland Security and Governmental Affairs Committee on Dubai Ports World's plans to acquire significant operations at six key U.S. ports from the London-based Peninsular and Oriental Steam Navigation Company.

Many lawmakers, including some in President Bush's Republican party, are concerned about possible terrorist links to the UAE and argue the move could undermine U.S. national security. Some lawmakers have threatened to block the deal.

The Senate committee's chairwoman, Senator Susan Collins, a Maine Republican, said the Coast Guard report raises red flags about the deal.

But Stewart Baker, Assistant Secretary for Policy, Planning and International Affairs at the Department of Homeland Security, said his agency had asked for security assurances from the company, which were put in place before the deal was approved. He said he had not seen the Coast Guard report, but played down the concerns raised in the document released by the committee in this exchange with Senator Collins:

Baker: "This paragraph is not really representative of the entire report."

Collins: "I think the paragraph speaks for itself."

Admiral Thomas Gilmore, Assistant Commandant for Marine Safety, Security and Environmental Protection for the U.S. Coast Guard, said his agency's concerns were addressed, but he would not give details at a public hearing. The committee went into closed session later to allow Gilmore testify more fully.

Earlier, Beth McCormick, Deputy Undersecretary and Acting Director of the Defense Technology Security Administration at the Pentagon, told senators they should not be concerned about a U.A.E.-based company taking control of some U.S. port operations, saying the Arab nation is a reliable partner in the war on terrorism.

"The United Arab Emirates provides the U.S. and the coalition forces with unprecedented access to its ports and territory, overflight clearances and other critical and important logistical assistance," said Beth McCormick.

Senator John Warner, a Republican from Virginia, expressed concern that the controversy over the ports deal could undermine important Arab support in the war on terrorism.

"We have got to show that yes, we are concerned about security, but in doing so and in working through this process, we should not be perceived as treating elements of the Arab world, governments of the Arab world, as second class citizens," said Senator Warner.

The Senate hearing - the first of a number planned this week into the ports deal - comes as Dubai Ports World has asked the U.S. government to conduct a second review of the takeover to ease lawmakers' concerns about security issues.

Clay Lowery, Assistant Secretary for International Affairs at the Treasury Department, said the 45-day review by an interagency panel, which will include officials from his agency, as well as the Homeland Security Department and several intelligence agencies, will be thorough:

"We will do our due diligence," said Clay Lowery. "We will conduct the investigation as per the law."

At the end of the review, the interagency panel will report its conclusions to President Bush, who will have 15 days to decide whether to approve the deal or require the company to divest itself of some of the operations.

White House spokesman Scott McClellan says the review should ease lawmakers' concerns about the deal.

President Bush has backed the acquisition and threatened to veto any legislation to block it.

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