AP failed to note that Dubai Ports World is foreign-owned, ignored that CFIUS originally denied 45-day review

››› ››› JOSH KALVEN

An Associated Press article on the request by Dubai Ports World (DPW) that the U.S. government fully review the national security implications of the company's takeover of six U.S. ports did not note that DPW is owned by the government of Dubai. The article also omitted the fact that the Committee on Foreign Investments in the United States (CFIUS), in its original review of the DPW deal, declined to conduct the additional 45-day investigation that DPW is now offering to undergo and that critics of the deal say the law required originally.

In a February 27 article on the request by Dubai Ports World (DPW) that the U.S. government fully review the national security implications of the company's takeover of six U.S. ports, Associated Press staff writer Ted Bridis failed to inform readers that DPW is owned by the government of Dubai, a member state of the United Arab Emirates (UAE). Further, Bridis omitted the highly relevant fact that the Committee on Foreign Investments in the United States (CFIUS), in its original review of the DPW deal, declined to conduct the additional 45-day investigation that DPW is now offering to undergo. This full review is legally required when the acquisition of American assets by a foreign, government-owned company provokes national security concerns. Critics of the DPW deal have argued that because the company is controlled by a member state of the UAE -- a country with what some major media outlets have called a "mixed" record on terrorism -- the Bush administration flouted this law by initially failing to conduct the full review.

In the article, Bridis referred to DPW as "United Arab Emirates-based" and "Dubai-based," but never explicitly reported that it is owned by the government of Dubai. By contrast, other major news outlets more accurately described the company as "state-owned," "United Arab Emirates-owned" or "controlled by the government of Dubai." DPW's state ownership is crucial to the debate over this issue. A provision passed by Congress as part of the National Defense Authorization Act for Fiscal Year 1993 requires an additional 45-day review if "the acquirer 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." Critics argue that transferring the management of six U.S. ports to a company owned by a state with a questionable record on terrorism "could affect" national security, and therefore should have, according to this law, triggered the additional review prior to the government's approval of the transaction.

In his reporting on DPW's offer to submit to this additional 45-day investigation, however, Bridis not only failed to note that DPW is state-owned, but he also ignored critics' contention that the full review should have been conducted when the deal was first brought before CFIUS for the committee's approval. In depicting the criticism of the deal, the article simply quoted Sen. Charles Schumer (D-NY) saying, in reaction to DPW's offer, that CFIUS had previously conducted a "very cursory review" of the deal, and Rep. Peter King's (R-NY) statement that "the company appeared to invite the more thorough investigation sought by many lawmakers."

But beyond merely criticizing the review as "cursory," many critics -- including Schumer and King -- have specifically argued that CFIUS' approval of the DPW deal was not in accordance with the law:

  • Schumer and King, in a February 22 USA Today op-ed, wrote that "CFIUS only completed a brief 23-day staff review and didn't even begin the 45-day investigation required by law."
  • Sen. Hillary Rodham Clinton (D-NY), during a February 23 meeting of the Senate Armed Services Committee, said that CFIUS decided "not to conduct an investigation that, by my reading of the statute, is required."
  • Sen. John Kerry (D-MA), in a February 22 letter to Treasury Secretary John W. Snow, accused CFIUS of having approved the sale "as expeditiously as possible, without even using the additional 45 day investigation process that was clearly warranted under the circumstances."

Moreover, as Sen. Lindsey Graham (R-SC) noted on the February 26 edition of CBS' Face the Nation, the Government Accountability Office's (GAO) October 2005 report examining the implementation of the law criticized CFIUS' narrow interpretation of what constitutes a national security threat:

GRAHAM: I can tell you this: that the process to approve this deal is headed by the Department of Treasury, and in September 2005, the GAO study said, "The Department of Treasury, as chair of the Committee on Foreign Investment in the United States, narrowly defines what constitutes a threat to national security. The committee's reluctance to initiate the 45-day investigation due in part to concerns about negative effects on U.S. open investment policy limits the time available for member agencies to analyze security concerns." This was in September. They're rushing through this. We need a 45-day investigation.

In a statement announcing its request for the additional review, DPW even acknowledged that the 45-day investigation is "authorized under U.S. law."

In contrast to the AP, other news outlets provided more complete context. A February 27 USA Today article reported that the Bush administration originally "cleared the deal without the 45-day investigation lawmakers said was mandatory in cases involving national security." And a February 27 Los Angeles Times article reported that CFIUS had initially declined to conduct "the same 45-day review that the company is now requesting."

Versions of Bridis's article appeared in the print editions of numerous newspapers, including The Miami Herald, Saint Paul Pioneer Press, Philadelphia Daily News, San Jose Mercury News, Akron Beacon-Journal and Wichita Eagle.

Posted In
National Security & Foreign Policy
Network/Outlet
Associated Press
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