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Homeland Security Democrat Thompson calls for GAO inquiry into Dubai port deal

RAW STORY
Published: February 23, 2006

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Rep. Bennie Thompson (D-MS), the ranking Democrat on the House Homeland Security Committee, will call Thursday for an Government Accountability Office inquiry into the approval of a deal allowing the management of six major U.S. ports by DP World, a company owned by the United Arab Emirates.

Thompson's letter, provided to RAW STORY, follows.

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February 23, 2006
The Honorable David M. Walker
Comptroller General
U.S. Government Accountability Office
441 G. Street, NW
Washington, DC 20548

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Dear Mr. Walker:

I would like the Government Accountability Office (GAO) to investigate the Committee on Foreign Investment in the United States’ (CFIUS) approval of Dubai Ports World’s (DPW) attempt to purchase Peninsular & Oriental Steam Navigation Co (P&O), a company which manages several terminals at ports across the nation. Public reports have revealed that DPW is a foreign corporation controlled by the government of the United Arab Emirates, a nation where some of the hijackers on September 11, 2001 operated during various periods.

I am very concerned that CFIUS may not have properly considered the national security implications of this sale. As you know, the GAO issued a report in September 2005 (GAO-05-686) finding that the CFIUS process limits the effectiveness of the Exon-Florio amendment to the Defense Production Act of 1988, which authorizes the President to suspend or prohibit a foreign acquisition if the action threatens U.S. national security. The GAO found that the Department of Treasury, which chairs CFUIS, has a limited view of the definition of a national security threat. For example, sales that threaten critical infrastructure protection, including port security, may not be considered a national security threat. In the Department of Treasury’s view, a national security threat does not exist unless threatening intelligence is reported about the parties involved or an acquisition affects export-control technologies or classified contracts. In addition to the possibility CFIUS may have used an incomplete definition of a national security threat when evaluating the sale; I am concerned about the actual process it followed in approving the purchase. The purchase was approved in only 30 days, rather than extending the investigation as CFIUS can do when there are concerns about a sale. I am concerned the investigation may have been shortened or otherwise affected by senior Bush Administration officials with previous ties to Dubai Ports World, especially Secretary of Treasury John Snow, who chairs the CFIUS committee. Additionally, David Sanborn, who ran the European and Latin American operations for DPW, was recently nominated by the President to be the Administrator of the U.S. Maritime Administration.

I would like the GAO’s investigation to answer the following questions

1) Did the Secretary of Treasury recuse himself from the review of this sale? If not, what role did he have in the review?

2) What was Mr. Sanborn’s role in this sale?

3) Did the CFIUS committee use the same definition of a national security threat as defined in the September 2005 GAO report? Did the definition used by CFIUS adequately consider the risk to critical infrastructure protection, such as port security?

4) What security information did the Department of Homeland Security and the Department of Defense provide to CFIUS, if any, and did this information have a role in addressing any concerns about national security?

5) What role did the Director of National Intelligence play in the review of this sale?

6) What standards does CFIUS use in determining whether an acquisition or similar transaction raises national security concerns? Are these adequate?

Thank you for your attention to this matter. Please direct any questions you have regarding this request to Jessica Herrera-Flanigan, Democratic Staff Director, at (202) 226-2616.

Sincerely, /s


Bennie G. Thompson Ranking Member Committee on Homeland Security



 


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