February 27, 2006, 2:01 p.m.
Bait and Switch
The delay for a review of the port deal is just a diversionary tactic.

By Frank Gaffney

Extreme caution is in order with respect to Dubai Ports World's recently announced "voluntary" decision to "separate P&O's operations held through its US subsidiary." It is true that this action will allow the Committee on Foreign Investment in the United States (CFIUS) to conduct a "further review" of the national-security implications of having the United Arab Emirates-owned company operate as many as 22 port facilities from Maine to Texas.

Those implications include the prospect that a country from whose territory most of the operational planning and financing of the 9/11 attacks occurred will be able to make decisions concerning personnel and cargo that could permit further — and possibly even more deadly — terrorist assaults on this country. At the very least, the company will have to be read-in on these ports' security plans as it will have some role in their implementation. Unless DP World is willing to start from scratch as far as their port deals with us go, these considerations constitute potential security problems.

There seems little likelihood that a genuinely fresh assessment of these risks is in the cards, however, as long as the same, clearly dysfunctional, CFIUS "process" is charged with reevaluating the Dubai Ports World transaction. Anyone who says it might produce different results this time — namely, a finding that the deal is unacceptable from a national security perspective — is either confused, or is trying to confuse the rest of us.

"Garbage In, Garbage Out"

Changes in the way the secretive interagency group operates are long overdue. The Treasury Department, whose responsibilities include promoting foreign investment in the United States, is allowed to chair CFIUS, despite its inherent conflict of interest here.

The committee's deliberations are opaque. It appears that even the president was blindsided by its conclusions, as evidently were at least some of the Cabinet officers who are, nominally, their agency's CFIUS representative.

Needless to say, it has also been the norm for the Treasury-led panel to keep Congress in the dark — until, that is, legislators are presented with faits accomplis. Doing otherwise, after all, might afford Capitol Hill the opportunity to second-guess, or even countermand, what have been repeated defective decisions from a national-security standpoint ever since CFIUS was legislatively mandated 17 years ago.

Think of the Committee on Foreign Investment in the United States as a classic example of a process designed to assure that "garbage in" will result in "garbage out." Absent something changing in the evaluating mechanism, DP World's spokesmen, and those of the Bush administration, will be vindicated in their assertions over the weekend that "further review" will affirm there is no national-security problem with having a country with troubling past ties to terror running operations in more than a score of American seaports.

In other words, left to their own devices, the proponents of the DP World transaction will simply have bought time: time for the executive branch and DP World's lobbyists (notably, former Republican Senate Majority Leader Bob Dole and former Clinton Secretary of State Madeleine Albright) to try to pick off enough legislators to sustain the president's threatened veto of legislation blocking the deal; and time for prominent conservative opinion-makers to argue that the UAE is so important an ally that we must not give it offense, indeed we must give it whatever it wants.

A Truly Fresh Look

It is entirely possible to stipulate that the UAE plays a valuable role in the War for the Free World, and that we do not want to alienate it gratuitously, without conceding that it must be appeased, no matter what. Congress is entitled to a genuinely fresh look, one that examines not only the national security implications of the Dubai Ports World transaction, but how to manage the bilateral relationship from this point forward — and it better do so in the next 45 days.

Of course, there is, as a practical matter, no chance of reforming CFIUS during this short window. Despite the committee's dismal track record, the institutional inertia may preclude real change even after the time for the present re-review has expired.

So what to do? Congress should insist that several things happen in the present CFIUS deliberations:

First, the principals — including secretaries Donald Rumsfeld and Michael Chertoff, of the Defense and Homeland Security Departments — should be required to participate personally in these deliberations, and to sign off on the outcome. Secretary of the Treasury John Snow should recuse himself since, in a previous incarnation, he sold seaport operations of the company he ran, CSX, to DP World. Protocol would dictate that, under such circumstances, secretary of Defense Rumsfeld, the longest-serving of the participating principals, should serve as chairman, rather than deputy Treasury secretary Robert Kimmett.

Second, the review should be informed by a rigorous security assessment, not simply concerns about ties with the UAE. The possibility of setting a precedent that might raise questions (appropriately) about having state-owned and state-linked Communist Chinese companies operate facilities in American seaports should also be set aside for the purposes of this exercise.

Instead, the reassessment must address, for example, how we can be confident about personnel security if, as a Coast Guard spokesman has acknowledged (see an interview conducted by syndicated talk radio host Hugh Hewitt last week with Rear Admiral Craig Bone), DP World will be responsible for vetting the people assigned to its U.S. operations. The review must also be able to show that the undermining of port security plans and cargo monitoring activities by insiders can be reliably prevented.

Finally, a rule of thumb might be included in the mix: In the case of foreign government-owned and -tied companies seeking to operate American seaports or other critical infrastructure here, the unwillingness of the country in question to allow American companies to perform similar functions in their countries (not to be confused with often-circumvented U.S. monitoring and customs missions in ports like Dubai's) would preclude the deal — even if every other aspect were satisfactory.

In addition to ensuring that the CFIUS review amounts to a bona fide, zero-based fresh look at the national security implications of the DP World deal, Congress should get a second-opinion. Normally, the legislative branch could not even name a small group of outside experts — call it a Team B — to conduct such an assessment in forty-five days, let alone get them appointed and equipped with the necessary detailed information about the deal, and then obtain their conclusions.

The concerns that have been expressed across the political spectrum about this deal, however, may just make possible the sort of non-partisan study so clearly required. The House and Senate leaders on both sides of the aisle should agree to half-a-dozen or so people who have the expertise, independence, and demonstrated ability to get the job done quickly and with high quality to provide an unvarnished assessment within the next forty-five days.

If these steps are taken, we may just be able to find a way to minimize further damage to an important strategic relationship with the United Arab Emirates, without risking potentially vast damage to our ports and people.

— Frank J. Gaffney, Jr., is president of the Center for Security Policy and a contributor to NRO. He blogs at www.WarFooting.com.

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