NY Times, WSJ reported that DPW sought extended security investigation, ignored bipartisan claims that law requires it

Summary: Ignoring the bipartisan argument that the law requires it, both The New York Times and The Wall Street Journal reported that Dubai Ports World (DPW) requested that the Bush administration conduct an extended 45-day security review of a deal through which the company would take over port operations in six U.S. cities.

In March 1 articles, The New York Times and The Wall Street Journal reported that Dubai Ports World (DPW) requested that the Bush administration conduct an extended 45-day security investigation into the company's proposed acquisition of port terminals in six major U.S. cities, ignoring arguments from lawmakers of both political parties that the investigation is required by law. The Times reported that the review was "sought by the company," and the Journal wrote that it occurred "at DP World's request" -- both crediting DPW for taking the initiative while failing to note that, according to critics, the investigation should have occurred anyway.

The Bush administration's Committee on Foreign Investments in the United States (CFIUS) approved the deal, between DPW and Britain's Peninsular & Oriental Steam Navigation Co. (P&O), on January 17 -- without demanding the additional security review. But while DPW and the Bush administration eventually agreed to the review, they did not do so until after both Democrats and Republicans in Congress publicly pointed out that the investigation was required as a matter of law.

As Media Matters for America has noted, a provision of the National Defense Authorization Act for Fiscal Year 1993 requires the additional 45-day investigation of foreign direct investment in the United States if the entity making the investment "is controlled by or acting on behalf of a foreign government" and the acquisition "could result in control of a person engaged in interstate commerce in the U.S. that could affect the national security of the U.S."

DPW is owned by the government of Dubai, a member state of the United Arab Emirates (UAE). As critics of the deal have noted, the UAE was one of just three countries to recognize the Taliban-led government in Afghanistan prior to the September 11, 2001, terrorist attacks. Also, U.S. investigators have found that more than $120,000 was funneled through UAE bank accounts to the 9-11 hijackers, and the 9-11 Commission found that the UAE "ignored American pressure to clamp down on terror financing until after the attacks."

From the March 1 New York Times article by reporter Carl Hulse:

Lawmakers raised new objections on Tuesday to the proposed takeover of some terminal operations at six United States ports by a Dubai company, demonstrating that the administration-backed plan still faced significant obstacles despite an agreement for a more extensive review of any security risks posed by the change in control.

[...]

President Bush reiterated his support for the deal on Tuesday and urged lawmakers and the public to withhold judgment until the new review, sought by the company, was completed.

From the March 1 Wall Street Journal article by staff reporters Greg Hitt and Jason Singer:

The deal will give DP World control of terminal operations at five U.S. ports. Mr. [DPW chief operating officer Edward] Bilkey persuaded the Bush administration to clear the acquisition in January. But as concern spread on Capitol Hill, the administration, at DP World's request, has agreed to begin another interagency security review.

[...]

Later on Sunday, Mr. [Sen. John] Warner [R-VA] announced on NBC's "Meet the Press" that the company had agreed to accept a new investigation. Mr. Warner praised DP World's "excellent record" and sought to raise the stakes in the debate. "This is a bigger issue for our country than just this commercial agreement," Mr. Warner said. "We're in a global situation. It is diplomacy. It is our economic standing in the world. And it is the military security."

The White House that day accepted the company's overture, agreeing to open the new probe. Before the weekend's events, Mr. Bilkey complained that DP World had become "a little bit of a football" in Washington. "We've kind of come into the political maelstrom," he said.

—A.S.