Underfunded Federal Mandates Belie Port Security

As the story unfolds, it is perhaps important to gain some perspective on the underlying facts and historical context of the United Arab Emirates based Dubai Ports World (DPW) since its takeover of London based Peninsular and Oriental Steam Navigation Co. (P&O), before political allegiances and commercial interests totally obscure the main issues at hand. In addition, the capacity of the United States Coast Guard to employ national security processes at U.S. ports of entry has come under much scrutiny, not only since said proposed deal was unveiled to the American people, but as far back as September 11, 2001.

The DPW Company was formed as recently as September 28, 2005. As the result of a merger between Dubai Ports Authority and Dubai Ports International (DPI), two Dubai state-owned facilities, it believed it had a legitimate shot at overtaking P&0. In January 2005, DPI acquired CSX World Terminals. Of note is that U.S. Secretary of Treasury, John Snow, was the CEO of CSX Terminals until January 31, 2003 and was sworn in on February 3, 2003. Secretary Snow has said he has since divested all interest in CSX worth some $72 million, although he continues to receive deferred compensation from CSX reportedly between $5 million to $25 million according to Senator Christopher Dodd (D-CT).

The Committee on Foreign Investments in the U.S. (CFIUS), headed by Secretary Snow, approved the United Arab Emirates taking over port operations of six major U.S. ports in addition to 29 terminal operations on January 16, 2006, having completed an assessment report on December 5, 2005. Among the ports to be included in the deal are Corpus Christi, TX and Beaumont, TX which receive heavy U.S. military equipment shipments including helicopters. U.S. troops also sail on U.S. ships from these two ports. The deal was finalized by DPW’s shareholders on February 13, 2006 after $6.5 billion of the $6.85 billion purchase price was successfully https://finansrapport.se financed by Barclay’s Capital, the investment arm of Barclay’s Bank and Deutsche Bank AG.

CFIUS supposedly went through a 30-day investigatory process in approving the deal, and now acknowledged by Secretary Snow that actually underlings of twelve different U.S. agencies including the Department of Homeland Security and the Department of Defense were responsible for vetting the deal, thereby ruling out national security concerns. However, although we have been given assurances by Secretary of Homeland Security, Michael Chertoff, that the U.S. Coast Guard was involved in the vetting process it is now clearer that they were only peripherally involved in the final assessment.

According to White House spokesman, Scott McClellan, “The intelligence community did assessments to make sure that there was no national security threat.” But intelligence officials now claim that the Community Acquisition Risk Centre known as CARC, overseen by the Office of Intelligence chief, John Negroponte, whose agency was just formed in October 2005, had been asked to begin work on the DPW acquisition as late as November 2005. But CARC’s first director, William Dawson, was only appointed in January 2006. CARC has little to do with counterterrorism activities but is mandated to assess security risks posed by companies doing business with the intelligence community. Thus, all agencies apparently were told that the security issues were vetted and complete when it was CARC which made the security vulnerability assessment.


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