Common Sense is Racist, Now!
It's become tiresomely predictable, now - if you object to the Bush family's plans to enrich their business partners, you must be a racist. The issue, for the slow ones out there or for anyone who's been relying on old media for news, is not that security in 21 US ports will now be handled by Arabs. Rather, that the job will be done by a foreign government with proven ties to anti-US terrorism. Not giving them - or any other foreign government which might wish to act contrary to our interests - control over our ports would seem to be common sense.
To say nothing of this inconvenient little law, that seems to have been mysteriously bypassed in order to let the deal go through. In fact, Treasury chief John Snow, who supposedly reviewed the deal - now claims he never heard of it, along with the ostensible head of Homeland Security. (Mr. Snow sold his company's port operations to the same UAE firm in a deal worth $1.15 billion, before he took his current cabinet post.) But Bush has known about it for weeks (video link).
And if you object - even just to ask 'Who benefits?' - why, you're a racist.
To say nothing of this inconvenient little law, that seems to have been mysteriously bypassed in order to let the deal go through. In fact, Treasury chief John Snow, who supposedly reviewed the deal - now claims he never heard of it, along with the ostensible head of Homeland Security. (Mr. Snow sold his company's port operations to the same UAE firm in a deal worth $1.15 billion, before he took his current cabinet post.) But Bush has known about it for weeks (video link).
And if you object - even just to ask 'Who benefits?' - why, you're a racist.
Tags: Corruption, Profiteering
posted by Management at 8:42 PM
12 Comments:
Business as usual
Bush's strong support of the Dubai ports deal isn't so surprising in light of his family's many financial ties to Arab sheikdoms.
By Joe Conason
Feb. 24, 2006 | To hear George W. Bush urge calm upon the nation is a refreshing change from his administration's habitual encouragement of fear for political advantage. No more color-coded terror alerts, election-timed warnings or partisan-tinged posturing will emanate from the White House, or at least not until Dubai Ports World has safely completed its takeover of several major American shipping terminals. The president's shift in tone is as remarkable as his threat to use his first veto in five years to protect the Dubai deal in the face of bipartisan congressional opposition.
But Bush's passionate defense of the United Arab Emirates and the ports deal inevitably raises questions -- not only about the due diligence of his administration in this instance but about his and his family's long-standing ties to the Persian Gulf sheikdoms, and specifically to the UAE's rulers. His insinuation that skepticism is equivalent to bigotry cannot deflect such concerns, which first arose in the months after the 9/11 attacks.
By now, everyone paying attention to the furor over the Dubai ports deal should be aware of the UAE's mixed record with regard to terror and global security. The Emirates' ruling families formerly maintained close relationships with the Taliban and Osama bin Laden, whose hunting camps in Afghanistan they frequented; two of the 20 hijackers in the 9/11 plot were UAE nationals who used safe houses and banks in Dubai; and the A.Q. Khan nuclear smuggling network also used facilities there to mask its operations. Since 9/11, however, the Emirates have cooperated with U.S. operations against al-Qaida, and their state-owned corporations have eagerly participated in American attempts to improve transportation security.
What seems worrisome even to some who might ultimately accept the Dubai ports deal is the "casual attitude" of the Bush administration in vetting the company, as Sen. Carl Levin put it. Considering the history of Bush entanglement with the oil despots of the Gulf, that lax indulgence was bad policy and worse politics.
For the president, his administration's lenience toward the Emirates recalls the unpleasant history of Harken Energy, the loser oil exploration firm that provided him with a handsome profit when he unloaded his shares during the summer of 1990. Years earlier, Harken had been rescued from bankruptcy by timely investments of millions of dollars from the scandal-ridden Bank of Credit and Commerce International, also known as the "bank of crooks and criminals." Although dominated by Saudi friends of Dubya's dad, BCCI was headquartered in the Emirates, specifically in Abu Dhabi.
That may seem like old history, but the first family's intimate connection with the UAE royals has continued without rupture over the past two decades.
Consider the Carlyle Group, the huge, politically wired private equity firm that has employed both the president and his father -- and from which the members of the Bush family and their closest associates, such as former Secretary of State James Baker III, have profited handsomely in recent years. With its sole Middle East office headquartered in Dubai, Carlyle has managed to attract substantial funding from the UAE government, which controls most of the tiny nation's oil wealth and channels that money into foreign investments.
Last year, to cite only the most recent example, Carlyle's newest buyout fund won an infusion of at least $100 million from the Dubai Investment Corp. -- another state-owned outfit created by the ruling families to reinvest the enormous inflows of capital from rising oil prices and oil consumption. If that individual deal with Carlyle represented only a small fraction of the Emirates' investments, the upside potential of the relationship could be far greater in the future. The directors of Dubai Investment expect to invest as much as $5 billion every year for a long time to come.
No doubt Carlyle will ardently bid to manage a slice of those billions -- and the president surely understands that maintaining good relations with the Emirates will enhance the prospects of the family's favorite equity firm. But to deprive Dubai of its $6.8 billion ports acquisition might well have the opposite effect. For a company that trades on its political influence as well as its business acumen, such incidents can be pivotal.
The ports controversy could cause similar problems for Neil Mallon Bush, the president's most troublesome brother, who has become a familiar face in Dubai and Abu Dhabi. Neil Bush seems to be in constant pursuit of investors and government contracts in the Emirates, and is treated there with a respect and deference that have always eluded him in his own country. For reasons that must be painfully obvious, UAE royals have been quite eager to engage the former Silverado Savings and Loan director ever since his eldest brother entered the Oval Office. That embrace only intensified after 9/11.
In October 2001, only a month after the terrorist attacks on New York and Washington, Neil Bush showed up in Dubai to attend a technology trade fair -- and to meet with Crown Prince Sheikh Mohammed bin Rashid Al Maktoum. While peddling the products of Ignite!, his educational software company, Bush was feted as the guest of honor at a gala dinner for a charitable foundation, also hosted by the crown prince. (Former President Bill Clinton and former Vice President Al Gore, who had been scheduled to travel to the Emirates around the same time, both canceled their attendance at those events.) According to the UAE's official news agency, Bush's discussions with Sheikh Mohammed and with Information Minister Sheikh Abdullah bin Zayed Al Nahyan focused on "the world economy in light of recent events." During that visit Bush also met with the UAE's finance industry minister.
Exactly how much money Neil Bush raised in the Emirates as CEO of Ignite! isn't clear, but he managed to acquire a local partner, known as Trans-Data Systems, which is required for doing business there. He returned to Dubai in January 2002 to deliver a lecture on educational reform to a "select" audience of 200 government and education officials from the seven emirates that comprise the UAE. The signs of state patronage could not have been more plain. The Dubai Chamber of Commerce and Industry sponsored his seminar, and the official news agency made sure to note that "the younger brother of U.S. President George W. Bush ... agrees with the vision of General Sheikh Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and UAE Defense Minister, about adopting new ideas into the existing education system."
During his seminar Bush noted that the "UAE is facing a golden opportunity to lead the world by putting in place a high-speed, broadband access to rich-media content which will revolutionize education in this part of the world." He illustrated this point by streaming a video clip of his son, Pierce, appearing on a television show to discuss his own learning difficulties.
"My father was the 41st president and my brother is 43rd; I think that if Pierce finishes high school, he'll be the 50th president of the United States," quipped Neil Bush. And should he fail to graduate, perhaps he will become a global businessman, just like dear old Dad. Young Pierce -- bearing the name of his mother's family and descended indirectly from Franklin Pierce, one of the worst presidents ever -- must only hope that an indulgent relative will still be in the White House.
White House Has Ties to Dubai Firm
By Michael McAuliff
The New York Daily News
Tuesday 21 February 2006
Washington - The Dubai firm that won Bush administration backing to run six U.S. ports has at least two ties to the White House.
One is Treasury Secretary John Snow, whose agency heads the federal panel that signed off on the $6.8 billion sale of an English company to government-owned Dubai Ports World - giving it control of Manhattan's cruise ship terminal and Newark's container port.
Snow was chairman of the CSX rail firm that sold its own international port operations to DP World for $1.15 billion in 2004, the year after Snow left for President Bush's cabinet.
The other connection is David Sanborn, who runs DP World's European and Latin American operations and was tapped by Bush last month to head the U.S. Maritime Administration.
The ties raised more concerns about the decision to give port control to a company owned by a nation linked to the 9/11 hijackers.
"The more you look at this deal, the more the deal is called into question," said Sen. Chuck Schumer (D-N.Y.), who said the deal was rubber-stamped in advance - even before DP World formally agreed to buy London's P&O port company.
Besides operations in New York and Jersey, Dubai would also run port facilities in Philadelphia, New Orleans, Baltimore and Miami.
The political fallout over the deal only grows.
"It's particularly troubling that the United States would turn over its port security not only to a foreign company, but a state-owned one," said western New York's Rep. Tom Reynolds, chairman of the National Republican Campaign Committee. Reynolds is responsible for helping Republicans keep their majority in the House.
Snow's Treasury Department runs the Committee on Foreign Investment in the U.S., which includes 11 other agencies.
"It always raises flags" when administration officials have ties to a firm, Rep. Vito Fossella (R-S.I.) said, but insisted that stopping the deal was more important.
The Daily News has learned that lawmakers also want to know if a detailed 45-day probe should have been conducted instead of one that lasted no more than 25 days.
According to a 1993 congressional measure, the longer review is mandated when the company is owned by a foreign government and the purchase "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."
Congressional sources said the President has until March 2 to trigger that harder look.
"The most important thing is for someone to explain how this is consistent with our national security," Fossella said.
UAE terminal takeover extends to 21 ports
By PAMELA HESS
UPI Pentagon Correspondent
WASHINGTON, Feb. 24 (UPI) -- A United Arab Emirates government-owned company is poised to take over port terminal operations in 21 American ports, far more than the six widely reported.
The Bush administration has approved the takeover of British-owned Peninsular & Oriental Steam Navigation Co. to DP World, a deal set to go forward March 2 unless Congress intervenes.
P&O is the parent company of P&O Ports North America, which leases terminals for the import and export and loading and unloading and security of cargo in 21 ports, 11 on the East Coast, ranging from Portland, Maine to Miami, Florida, and 10 on the Gulf Coast, from Gulfport, Miss., to Corpus Christi, Texas, according to the company's Web site.
President George W. Bush on Tuesday threatened to veto any legislation designed to stall the handover.
Sen. Hillary Clinton, D-N.Y. said after the briefing she expects swift, bi-partisan approval for a bill to require a national security review before it is allowed to go forward.
At issue is a 1992 amendment to a law that requires a 45-day review if the foreign takeover of a U.S. company "could affect national security." Many members of Congress see that review as mandatory in this case.
But Bush administration officials said Thursday that review is only triggered if a Cabinet official expresses a national security concern during an interagency review of a proposed takeover.
"We have a difference of opinion on the interpretation of your amendment," said Treasury Department Deputy Secretary Robert Kimmitt.
The Committee on Foreign Investment in the United States, comprised of officials from 12 government departments and agencies, including the National Security Council and the Department of Homeland Security, approved the deal unanimously on January 17.
"The structure of the deal led us to believe there were no national security concerns," said Homeland Security Deputy Secretary Michael P. Jackson.
The same day, the White House appointed a DP World executive, David C. Sanborn, to be the administrator for the Maritime Administration of the Department of Transportation. Sanborn had been serving as director of operations for Europe and Latin America at DP World.
Senate Armed Services Committee Chairman John Warner, R- Va., said he will request from both the U.S. attorney general and the Senate committee's legal counsel a finding on the administration's interpretation of the 1992 amendment.
Adding to the controversy is the fact Congress was not notified of the deal. Kimmitt said Congress is periodically updated on completed CFIUS decisions, but is proscribed from initiating contact with Congress about pending deals. It may respond to congressional inquiries on those cases only.
Iowa Republican Sen. Charles Grassley stated in a letter to Bush on Feb. 21 that he specifically requested to be kept abreast of foreign investments that may have national security implications. He made the request in the wake of a controversial Chinese proposal to purchase an oil company last year.
"Obviously, my request fell on deaf ears. I am disappointed that I was neither briefed nor informed of this sale prior to its approval. Instead, I read about it in the media," he wrote.
According to Kimmitt, the deal was reported on in major newspapers as early as last October. But it did not get critical attention in the press until the Associated Press broke the story Feb. 11 and the Center for Security Policy, a right-leaning organization, wrote about it Feb. 13. CSP posited the sale as the Treasury Department putting commerce interests above national security.
Kimmitt said because the 2005 Chinese proposal had caused such an uproar before it ever got to CFIUS, the lack of reaction to the Dubai deal when it was reported on last fall suggested it would not be controversial enough to require special notification of Congress.
Central to the debate is the fact that the United Arab Emirates, while a key ally of the United States in the Middle East, has had troubling ties to terrorist networks, according to the Sept. 11 Commission report. It was one of the few countries in the world that recognized the al-Qaida-friendly Taliban government in Afghanistan; al-Qaida funneled millions of dollars through the U.A.E. financial sector; and A.Q. Khan, the notorious Pakistani nuclear technology smuggler, used warehouses near the Dubai port as a key transit point for many of his shipments.
Since the terrorist attacks, it has cut ties with the Taliban, frozen just over $1 million in alleged terrorist funding, and given the United States key military basing and over-flight rights. At any given time, there are 77,000 U.S. service members on leave in the United Arab Emirates, according to the Pentagon.
Deputy Defense Secretary Gordon England warned that the uproar about the United Arab Emirates involvement in U.S. ports could risk alienating the very countries in the Middle East the United States is trying to court as allies in the war on terrorism.
"It's very important we strengthen bonds ... especially with friends and allies in the Arab world. It's important that we treat friends and allies equally around the world without discrimination," he said.
The security of port terminal operations is a key concern. More than 7 million cargo containers come through 361 American ports annually, half of the containers through New York-New Jersey, Los Angeles and Long Beach, Calif. Only a small percentage are physically searched and just 37 percent currently screened for radiation, an indication of an attempt to smuggle in nuclear material that could be used for a "dirty bomb."
After the September 11 terrorist attacks, the government began a new program that required documentation on all cargo 24 hours before it was loaded on a ship in a foreign port bound for the United States. A "risk analysis" is conducted on every shipment, including a review of the ship's history, the cargo's history and contents and other factors. Each ship must also provide the U.S. government 96 hours notice of its arrival in an American port, along with a crew manifest.
None of the nine administration officials assembled for the briefing could immediately say how many of the more than 3,000 port terminals are currently under foreign control.
Port facility operators have a major security responsibility, and one that could be exploited by terrorists if they infiltrate the company, said Joe Muldoon III. Muldoon is an attorney representing Eller & Co., a port facility operator in Florida partnered with M&O in Miami. Eller opposes the Dubai takeover for security reasons.
"The Coast Guard oversees security, and they have the authority to inspect containers if they want and they can look at manifests, but they are really dependent on facility operators to carry out security issues," Muldoon said.
The Marine Transportation Security Act of 2002 requires vessels and port facilities to conduct vulnerability assessments and develop security plans including passenger, vehicle and baggage screening procedures; security patrols; establishing restricted areas; personnel identification procedures; access control measures; and/or installation of surveillance equipment.
Under the same law, port facility operators may have access to Coast Guard security incident response plans -- that is, they would know how the Coast Guard plans to counter and respond to terrorist attacks.
"The concern is that the UAE may be our friend now ... but who's to say that couldn't change, or they couldn't be infiltrated. Iran was our big buddy," said Muldoon.
In a January report, the Council on Foreign Relations pointed out the vulnerability of the shipping security system to terrorist exploitation.
Since the Sept. 11 terrorist attacks, the U.S. customs agency requires shippers to follow supply chain security practices. Provided there are no apparent deviations from those practices or intelligence warnings, the shipment is judged low risk and is therefore unlikely to be inspected.
CFR suggests a terrorist event is likely to be a one-time operation on a trusted carrier "precisely because they can count on these shipments entering the U.S. with negligible or no inspection."
"All a terrorist organization needs to do is find a single weak link within a 'trusted' shipper's complex supply chain, such as a poorly paid truck driver taking a container from a remote factory to a port. They can then gain access to the container in one of the half-dozen ways well known to experienced smugglers," CFR wrote.
Al Qaeda's Road Paved With Gold
Secret Shipments Traced Through a Lax System In United Arab Emirates
By Douglas Farah
Washington Post Foreign Service
Sunday, February 17, 2002; Page A01
DUBAI, United Arab Emirates -- Just as the United States and its allies swept toward Afghanistan's main cities last autumn, the ruling Taliban and Osama bin Laden's al Qaeda network sent waves of couriers with bars of gold and bundles ofdollars across the porous border into Pakistan.
In small shops and businesses along the border, the money and gold, taken from Afghanistan's banks and national coffers, were collected and moved by trusted Taliban and al Qaeda operatives to the port city of Karachi, Pakistan, according to sources familiar with the events.
Then, using couriers and the virtually untraceable hawala money transfer system, they transferred millions of dollars to this desert sheikdom, where the assets were converted to gold bullion. The riches of the Taliban and al Qaeda were subsequently scattered around the world -- including some that went to the United States -- through a financial structure that has been little affected by the international efforts to seize suspected terrorist assets.
This account of the flight of the Taliban and al Qaeda treasure from Afghanistan is based on dozens of interviews in Pakistan, the United Arab Emirates, Europe and the United States. The gold trail was described by intelligence officers, law enforcement officials, gold brokers, and sources with direct knowledge of some of al Qaeda's financial movements, but not by Taliban or al Qaeda operatives.
The interviews offered a tantalizing glimpse into the critical yet mysterious role played by gold in the finances of al Qaeda, both before and after the Sept. 11 attacks. Gold has allowed the Taliban and bin Laden to largely preserve their financial resources, despite the military attack that battered their forces in Afghanistan, investigators and intelligence sources said.
Al Qaeda also used diamonds purchased in Sierra Leone and the Democratic Republic of Congo, tanzanite from Tanzania and other commodities to make money and hide assets. But gold played a uniquely important role in the group's financial structure, investigators and intelligence sources said, because it is a global currency.
"Gold is a huge factor in the moving of terrorist money because you can melt it, smelt it or deposit it on account with no questions asked," said a senior U.S. law enforcement official investigating gold transactions. "Why move it through Dubai? Because there is a willful blindness there."
Exempt from international reporting requirements for financial transactions, gold is a favored commodity in laundering money from drug trafficking, organized crime and terrorist activities, U.S. officials said. In addition, Dubai, one of seven sheikdoms that make up the United Arab Emirates, has one of the world's largest and least regulated gold markets, making it an ideal place to hide.
Dubai is also one of the region's most open banking centers and is the commercial capital of the United Arab Emirates, one of three countries that maintained diplomatic relations with the Taliban until shortly after Sept. 11. Sitting at a strategic crossroad of the Persian Gulf, South Asia and Africa, Dubai has long been a financial hub for Islamic militant groups. Much of the $500,000 used to fund the Sept. 11 attacks came through Dubai, investigators believe.
"All roads lead to Dubai when it comes to money. Everyone did business there," said Patrick Jost, who until last year was a senior financial enforcement officer in the Treasury Department's Financial Crimes Enforcement Network.
Hand-Carried by Couriers
When the U.S. bombs began pounding Taliban and al Qaeda targets last autumn, the rush of gold and money out of Afghanistan intensified.
Pakistani financial authorities said that $2 million to $3 million a day is usually hand-carried by couriers from Karachi, Pakistan, to Dubai, mostly to buy gold. Late last year that amount increased significantly as money was moved out of Afghanistan, they said. Pakistani and U.S. officials estimate that about $10 million from Afghanistan was taken out by courier over three weeks in late November and early December. The Taliban fled Kabul, the capital, late on Nov. 12 and abandoned Kandahar on Dec. 7.
One of the couriers of cash and gold to Dubai was the Taliban consul general in Karachi, Kaka Zada, who took at least one shipment of $600,000 to Dubai in the last week of November, according to two Pakistani sources who witnessed him carrying the money.
In addition, U.S. and other officials said, millions more were sent through hawalas, the informal money transfer system widely used across the Middle East, North Africa and Asia that, outside of major cities, often serves as the only money transfer system. Rather than moving money through traceable mechanisms such as wire transfers, hawala brokers take a client's money, then call or e-mail a counterpart in the area where the client wants the money delivered. The counterpart pays out the sum. When the transaction is complete, the records are destroyed.
Gold is often used by hawala brokers to balance their books. Hawala dealers also routinely have gold, rather than currency, placed around the globe.
"There are no traditional banking systems in Afghanistan or Somalia," said Jost. "Everything is done through hawala, and gold is the fuel hawala runs on."
U.S. investigators, led by the Customs Service, have begun poring over transactions of some of Dubai's largest and most prestigious gold brokerages for possible links to the movement of al Qaeda or Taliban money, and have found unusual gold shipments into the United States after Sept. 11.
A Customs official said that as part of efforts to "investigate terrorist financing," the agency was "scrutinizing movements of gold by several companies, including ARY Gold," one of Dubai's largest and most prestigious gold bullion and jewelry dealers.
ARY's cramped headquarters is located in the heart of Dubai's gold market -- an area several blocks square, filled with stores that sell little else. Abdul Razzak, the Pakistani owner of ARY Gold, strongly denied knowingly doing business with the Taliban or al Qaeda.
"I am a God-fearing person, but all my life I have been afraid of religious people like the Taliban," said Razzak. "I wouldn't like to deal with Taliban people, and we don't like Taliban people.
"If you say you want 100 kilos [220 pounds] of gold, I can give you that wherever you want in 12 hours. What you do with it is your business," he said.
Razzak, who owns three of Dubai's largest gold jewelry stores, said he imports and exports gold legally. Dubai has no restrictions on either activity, and Razzak said competitors were spreading lies about his company out of jealousy.
During two interviews here, Razzak displayed few hints that he was a powerful political and financial broker. Wearing a simple white robe, he spoke in a small office separated by a glass partition from brokers monitoring a bank of computers. On the wall were plaques commemorating his gifts to charitable causes.
In 1998, Pakistani investigators looking into government corruption found two checks, each for $5 million, allegedly paid by ARY Gold in 1994 to Asif Ali Zardari, the husband of then-prime minister Benazir Bhutto, to secure a two-year monopoly on gold imports to Pakistan. While acknowledging he held the monopoly and shipped $500 million in gold to Pakistan from 1994 to 1996, Razzak said that he had paid no bribes and that "enemies" had falsified the bank documents.
Razzak was cleared of criminal charges in Dubai but still faces charges in Pakistan from that case, Pakistani authorities said.
"Always if you are doing good business, people are jealous," Razzak said. "Everyone, all the leaders of Pakistan, come to me for advice. We are well known and famous, and people don't like that."
Smuggling for Profit
In addition to using gold to hide assets, there is evidence that al Qaeda smuggled gold into Pakistan and India for profit. Smuggling gold is lucrative because the two countries have a high demand for gold and legal gold imports are taxed.
An al Qaeda manual found by British forces in Afghanistan late last year included not only chapters on how to build explosives and clean weapons, but on how to smuggle gold on small boats or conceal it on the body, British and U.S. officials said.
The officials said that the Taliban and al Qaeda moved large quantities of gold into Afghanistan after the Taliban rose to power in the mid-1990s, in part because most people in the region are more familiar with gold than foreign currencies.
The officials said the Taliban collected taxes in gold from the heads of Pakistani and Indian trucking networks that hauled cargo through Afghanistan.
Donations to al Qaeda and the Taliban from wealthy supporters were often made in gold, the officials said, and taxes on opium production, a source of revenue for both groups, were also paid in gold, according to U.S. and British officials.
Gold bullion was flown directly from Dubai to the Taliban stronghold of Kandahar on Ariana Afghan Airlines, the officials said.
"The Taliban took gold into Afghanistan because there was nothing else they could take there," said Jost, who has studied the use of gold by terrorist groups. "The local money was worthless [and] foreign currency brings suspicion, but if you show up with gold, people know exactly what that is worth."
For al Qaeda to operate, the gold must be easily convertible to cash, and be available around the world. For that, the organization is believed to rely on a hidden financial network across the Middle East, Pakistan and Europe, U.S. and European investigators said.
William F. Wechsler, who monitored bin Laden's finances at the National Security Council during the last two years of the Clinton administration, told Congress in September that bin Laden initially rose to prominence for building "a financial architecture that supported themujaheddin in Afghanistan against the Russians."
"It's this financial architecture that continued with him when he turned to terrorism, and it's this financial architecture that is at the heart of how al Qaeda today gets its finances," he said.
Much of that architecture, according to French, Pakistani and American investigators, is modeled on the Bank of Credit and Commerce International (BCCI). BCCI was founded by Pakistanis and bankrolled largely by leaders of the UAE. In the 1980s it was used to launder drug money, harbor terrorist funds and buy illegal weapons. Its collapse in 1991 was a major global financial scandal.
The CIA used BCCI to funnel millions of dollars to the fighters battling the Soviet occupation of Afghanistan. Bin Laden had accounts in the bank, U.S. officials said. The bank also specialized in dealing in commodities such as diamonds and gold.
The BCCI Model
A 70-page French intelligence report, prepared for Parliament in October and obtained by The Washington Post, outlined some details of this network. "The financial network of bin Laden, as well as his network of investments, is similar to the network put in place in the 1980s by BCCI for its fraudulent operations, often with the same people (former directors and cadres of the bank and its affiliates, arms merchants oil merchants, Saudi investors)," the report said. "The dominant trait of bin Laden's operations is that of a terrorist network backed up by a vast financial structure."
A senior U.S. investigator said U.S. agencies were looking into these ties because "they just make so much sense, and so few people from BCCI ever went to jail. BCCI was the mother and father of terrorist financing operations."
The report identifies dozens of companies and individuals who were involved with BCCI and were found to be dealing with bin Laden after the bank collapsed. Many went on to work in banks and charities identified by the United States and others as supporting al Qaeda.
The French report highlighted the role of Saudi banker Khalid bin Mahfouz, a former director of BCCI, whose sister is married to bin Laden. In 1995 bin Mahfouz paid a $225 million fine in a settlement with U.S. prosecutors for his role in the BCCI scandal and went on to serve as director of the National Commercial Bank, one of Saudi Arabia's largest.
But in April 1999 bin Mahfouz was placed under house arrest in a hospital in Taif when Saudi officials, at the urging of the United States, audited his bank and found that millions of dollars were being funneled through the bank to charities controlled by bin Laden, U.S. officials and the French document said.
While retaining shares in the bank, the report said, bin Mahfouz no longer directs the institution and remains under house arrest. In the past he has denied ties to terrorist activities. U.S. intelligence officials said Washington pushed for the audit of bin Mahfouz's bank but was never allowed to question him.
Saudi officials "weren't willing to let us talk to him," said one U.S. source with direct knowledge of events, "and we asked at a very senior level."
U.S. and European investigators said it is al Qaeda's ability to tap into commodities such as gold, and to move its resources through both the hawala system and banking structures, that makes it so hard to disrupt.
Dubai's links to suspected terrorist financing and money laundering have long been a point of contention between the United States and the United Arab Emirates.
"There is no question the UAE was used by terrorists, the question is why," said a U.S. official. "It is no more lax and unregulated than many places. The answer is, Dubai is so damn convenient."
Three former Clinton administration officials said that two senior U.S. delegations went to the emirates, one in July 1999 and one in January 2000, to press for measures against terrorist financing. "We got exactly nowhere," said a participant in one of the meetings.
A spokesman for the UAE Ministry of Information said the "visits and requests from the U.S. in 1999 and 2000 represented a part of the normal exchange of information . . . aimed at enhancing cooperation and tackling issues of mutual concern."
Since Sept. 11, U.S. officials said, the emirates have been much more cooperative on tracing suspect finances and last month enacted the most stringent money laundering laws in the region.
U.S. investigators acknowledge they have been slow to focus on the trail of gold and the hawala network. While a handful of investigators had been urging that more attention be paid to those areas, they were largely ignored because the concepts are so foreign to the Western way of doing business, current and former officials said.
Wechsler, the former National Security Council official, said that U.S. law enforcement and intelligence know "virtually nothing" about how the hawala system operates and its relationship to gold.
"We don't know where the hawalas are, we don't even have an order of magnitude on how much money they move," Wechsler said. "We don't know how much it costs to be bin Laden. All I can say is, it costs millions and millions of dollars."
Researcher Robert Thomason in Washington and special correspondent Kamran Khan in Karachi contributed to this report.
9/11 report cited possible bin Laden, U.A.E. ties
CIA was ‘irate’ over how ally handled incident at hunting camp
The Associated Press
Updated: 2:57 p.m. ET Feb. 23, 2006
WASHINGTON - The United States raised concerns with the United Arab Emirates seven years ago about possible ties between officials in that country and Osama bin Laden, according to a section of the Sept. 11 commission’s report that details a possible missed opportunity to kill the al-Qaida leader.
Republicans and Democrats alike are raising concerns this week about the Bush administration’s decision to let a U.A.E.-operated company take over operations at six American ports, in part citing ties the Sept. 11 hijackers had to the Persian Gulf country.
President Bush has called the U.A.E. a close partner on the war on terror since Sept. 11, and his aides have listed numerous examples of the country’s help.
The Sept. 11 commission’s report released last year also raised concerns U.A.E. officials were directly associating with bin Laden as recently as 1999.
Hunting camp cited
The report states U.S. intelligence believed that bin Laden was visiting an area in the Afghan desert in February 1999 near a hunting camp used by U.A.E. officials, and that the U.S. military planned a missile strike.
Intelligence from local tribal sources indicated “bin Laden regularly went from his adjacent camp to the larger camp where he visited the Emirates,” the report said.
“National technical intelligence confirmed the location and description of the larger camp and showed the nearby presence of an official aircraft of the United Arab Emirates. But the location of bin Laden’s quarters could not be pinned down so precisely,” the report said.
The missile attack was never launched, and bin Laden moved on, the report said.
A month later, top White House counterterrorism official Richard Clarke “called a U.A.E. official to express his concerns about possible associations between Emirati officials and bin Laden,” the report said.
Anger at CIA
CIA officials hoped to continue staking out the Afghan camp in hopes bin Laden would return and a possible strike could be launched.
But “imagery confirmed that less than a week after Clarke’s phone call, the camp was hurriedly dismantled and the site was deserted,” the report said.
CIA officials were “irate” and “thought the dismantling of the camp erased a possible site for targeting bin Laden, the report said.
At a hearing of the Senate Armed Services Committee Thursday, Sen. Carl Levin, the ranking Democrat, asked Deputy Treasury Secretary Robert Kimmitt if he was aware of the 9-11 commission’s assertion that the United Arab Emirates represents “a persistent counterterrorism problem” for the United States.
Kimmitt replied that administration figures involved in the decision to approve the deal “looked very carefully” at information from the intelligence community.
“Any time a foreign-government controlled company comes in,” Kimmitt said, “the intelligence assessment is of both the country and the company.”
“Just raise your hand if anybody talked to the 9-11 commission,” Levin told the administration representatives at the witness table. Nobody raised a hand.
© 2006 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
© 2006 MSNBC.com
URL: http://www.msnbc.msn.com/id/11522484/
Some of the country's busiest ports -- New York, New Jersey, Baltimore and three others -- are about to become the property of the United Arab Emirates. Do we really want our major ports in the hands of an Arab country where al Qaeda recruits, travels and wires money?
The U.S. Committee on Foreign Investment, a Treasury Department-dominated group which reviews foreign investments, allows such purchases. The committee approved a $6.8 billion transaction between the ports' current British owners and Dubai Ports World, a government-owned United Arab Emirates firm. The United Arab Emirates was home to Marwan al-Shehhi, a September 11 hijacker; the country is a transit point for al Qaeda, including several other September 11 hijackers; al Qaeda's financing activities have involved the UAE; al Qaeda finds sympathizers there with ease, as it does in other Arab countries.
The Bush administration calls the United Arab Emirates an ally in the war on terror. But the UAE plays the same game Saudi Arabia does of quelching terrorists at home and turning a blind eye everywhere else.
It would be easy to caricature this sale: The purchase doesn't entail young Arab firebrands replacing longshoremen, nor would it displace American ownership. The storied British firm that currently owns them, the Peninsular & Oriental Steam Navigation Co., probably isn't much better equipped against terrorist infiltration than Dubai Ports World. But then, the poor state of port security is precisely the point.
We should be improving port security in an age of terrorism, not outsourcing decisions to the highest bidder. The ports are thought to be the country's weakest homeland-security link, with good reason. Only a fraction of the nation's maritime cargoes are inspected.
This deal appears to be all about money. Dubai Ports World is "a business and its money is the same color as everyone else's, only it's got more of it," one banker told the Baltimore Sun. Where does the money come from? As a private company, Dubai Ports World's claim of 20 percent annual growth since 2001 is all but unverifiable, and its inner workings opaque. For all we know, Dubai Ports World is an undeclared arm of a foreign government.
The root question is this: Why should the United States have to gamble its port security on whether a subsidiary of the government of the United Arab Emirates happens to remain an antiterrorism ally?
The Committee on Foreign Investment is the wrong place for this decision to be made; it appears to be little more than a rubber stamp.
Sen. Chuck Schumer, New York Democrat, among others, is asking tough questions about this deal. For once, we agree with him: President Bush should overrule the committee to reject this deal. If that doesn't happen, Congress should take action. The country's ports should not be owned by foreign governments; much less governments whose territories are favored by al Qaeda.
Committee on Foreign Investments in the United States (CFIUS)
U.S. DEPARTMENT OF TREASURY
OFFICE OF THE ASSISTANT SECRETARY INTERNATIONAL AFFAIRS
OFFICE OF INTERNATIONAL INVESTMENT
EXON-FLORIO PROVISION
Introduction. The United States has traditionally welcomed Foreign Direct Investment (FDI) and provided foreign investors fair, equitable and nondiscriminatory treatment with few limited exceptions designed to protect national security. The Exon-Florio provision is implemented within the context of this open investment policy. The intent of Exon-Florio is not to discourage FDI generally, but to provide a mechanism to review and, if the President finds necessary, to restrict FDI that threatens the national security.
The Exon-Florio provision is implemented by the Committee on Foreign Investment in the United States ("CFIUS"), an inter-agency committee chaired by the Secretary of Treasury. CFIUS seeks to serve U.S. investment policy through thorough reviews that protect national security while maintaining the credibility of our open investment policy and preserving the confidence of foreign investors here and of U.S. investors abroad that they will not be subject to retaliatory discrimination.
The Statute. Section 5021 of the Omnibus Trade and Competitiveness Act of 1988 amended Section 721 of the Defense Production Act of 1950 to provide authority to the President to suspend or prohibit any foreign acquisition, merger or takeover of a U.S. corporation that is determined to threaten the national security of the United States. The President can exercise this authority under section 721 (also known as the "Exon-Florio provision") to block a foreign acquisition of a U.S. corporation only if he finds:
(1) there is credible evidence that the foreign entity exercising control might take action that threatens national security, and
(2) the provisions of law, other than the International Emergency Economic Powers Act do not provide adequate and appropriate authority to protect the national security.
To assist in making this determination, Exon-Florio provides for the President or his designee to receive written notice of an acquisition, merger or takeover of a U.S. corporation by a foreign entity. Once CFIUS has received a complete notification, it begins a thorough review of the notified transaction. In some cases, it is necessary to undertake an extended review or "investigation." An investigation, if necessary, must begin no later than 30 days after receipt of a notice. Any investigation is required to end within 45 days.
Information provided by companies contemplating a transaction subject to Exon-Florio is held confidential and is not made public, except in the case of an administrative or judicial action or proceeding. Nothing in section 721 shall be construed to prevent disclosure to either House of Congress or to any duly authorized committee or subcommittee of the Congress.
Factors To Be Considered. The Exon-Florio provision lists the following factors that the President or his designee may consider in determining the effects of a foreign acquisition on national security. These factors are:
(1) domestic production needed for projected national defense requirements;
(2) the capability and capacity of domestic industries to meet national defense requirements, including the availability of human resources, products, technology, materials, and other supplies and services;
(3) the control of domestic industries and commercial activity by foreign citizens as it affects the capability and capacity of the U.S. to meet the requirements of national security;
(4) the potential effects of the transaction on the sales of military goods, equipment, or technology to a country that supports terrorism or proliferates missile technology or chemical and biological weapons; and
(5) the potential effects of the transaction on U.S. technological leadership in areas affecting U.S. national security.
Amendments. Section 837(a) of the National Defense Authorization Act for Fiscal Year 1993, called the "Byrd Amendment," amended Section 721 of the Defense Production Act (the "Exon-Florio provision"). It requires an investigation in cases where:
o the acquirer is controlled by or acting on behalf of a foreign government; and
o 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."
Legislative Cite. Section 721 of Pub. L. 100-418, 102 Stat. 1107, made permanent law by section 8 of Pub. L. 102-99, 105 Stat. 487 (50 U.S.C. App. 2170) and amended by section 837 of the National Defense Authorization Act for Fiscal Year 1993, Pub. L. 102-484, 106 Stat. 2315, 2463.
CFIUS
Executive Order. The Committee on Foreign Investment in the United States ("CFIUS") was originally established by Executive Order 11858 in 1975 mainly to monitor and evaluate the impact of foreign investment in the United States. In 1988, the President, pursuant to Executive Order 12661, delegated to CFIUS his responsibilities under Section 721. Specifically, E.O. 12661 designated CFIUS to receive notices of foreign acquisitions of U.S. companies, to determine whether a particular acquisition has national security issues sufficient to warrant an investigation and to undertake an investigation, if necessary, under the Exon-Florio provision. This order also provides for CFIUS to submit a report and recommendation to the President at the conclusion of an investigation.
In 1993, in response to a sense of Congress resolution, CFIUS membership was expanded by Executive Order 12860 to include the Director of the Office of Science and Technology Policy, the Assistant to the President for National Security Affairs and the Assistant to the President for Economic Policy. In February 2003, the Department of Homeland Security was added to CFIUS. This brought the membership of CFIUS to twelve under the chairmanship of the Secretary of Treasury. The other members are the Secretaries of State, Defense, and Commerce, the Attorney General, the Director of the Office of Management and Budget, the U.S. Trade Representative, and the Chairman of the Council of Economic Advisers.
Regulations. The Exon-Florio provision requested that the President issue implementing regulations. These regulations were issued in 1991. They set up a voluntary system of notification with the possibility of CFIUS member-agency notice for non-notified transactions. The President retains full authority to protect the national security with respect to any acquisition covered by this statute, regardless of whether the parties file a notification.
The Exon-Florio regulations do not define national security. The preamble to the regulations provides guidance that products, services and technologies important to U.S. defense requirements would be significant to national security. Even though notification is voluntary, CFIUS would consider notification of these transactions appropriate.
Code of Federal Regulations Citation. Office of International Investment, Department of Treasury -- Regulations pertaining to mergers, acquisitions, and takeovers by foreign persons, 31 CFR Part 800.
Procedures. Treasury, acting at the staff level through the Director of the Office of International Investment in the Office of the Assistant Secretary of International Affairs, acts as the secretariat for CFIUS. It receives and circulates notices to CFIUS agencies and coordinates reviews. Reviews are conducted on a case-by-case basis.
The Exon-Florio statute established a 30-day review following receipt of a notification. For those transactions for which an extended 45-day review (or "investigation") is completed, a report must be provided to the President, who must by law announce the final decision within 15 days. In total, the process can not exceed 90 days. The statute requires the President to inform Congress of his determination of whether or not to take action under section 721.
The parties to an acquisition subject to section 721 may submit a voluntary notice to CFIUS of the proposed or completed acquisition by sending 13 copies of the information requested in part 800.402 of the Exon-Florio regulations to:
Ms. Gay Hartwell Sills
Staff Chair
Committee on Foreign Investment in the United States ("CFIUS")
Office of International Investment
Department of Treasury
1500 Pennsylvania Avenue, N.W., Room 4201 NY
Washington, DC 20220
Phone: (202) 622-9066
Also: (202) 622-1860
Arab firm offers to delay U.S. ports takeover
Some critics aren't appeased; senator says review period ignored
From staff and wire reports
WASHINGTON — A United Arab Emirates company offered Thursday to delay part of its $6.8 billion takeover of some operations at six U.S. ports.
The announcement relieves some pressure from a standoff between President Bush and Congress, which has threatened to block the deal because of the UAE's purported ties to terrorism.
Under the offer coordinated with the White House, Dubai Ports World said it will agree not to exercise control or influence the management of the U.S. terminals pending further talks with the Bush administration and Congress. It did not indicate how long it will wait for these discussions to take place.
The Dubai-based company said it will move forward with other parts of the deal affecting the rest of the world.
“The reaction in the United States has occurred in no other country in the world,” the company's chief operating officer, Ted Bilkey, said in a statement. “We need to understand the concerns of the people in the U.S. who are worried about this transaction and make sure that they are addressed to the benefit of all parties. Security is everybody's business.”
The delay did not appease some of the deal's harshest critics.
“If the president were to voluntarily institute the review and delay the contract that would obviate the need for our legislation, but a simple cooling-off period will not allay our concerns,” said Sen. Charles Schumer, D-N.Y.
One prominent Republican who had raised concerns about the deal appeared optimistic.
“This is definitely a positive step,” said Rep. Peter King of New York, chairman of the House Homeland Security Committee. “We'll need more details as to the nature of the discussions that will be held and the extent of the investigation into Dubai Ports.”
Earlier Thursday, administration officials defended the decision to approve the Dubai Ports World deal.
The officials, whose departments sit on the panel that reviews foreign purchases of U.S. companies, rejected criticism from Sen. Carl Levin of Michigan and other Democrats on the Armed Services Committee that they ignored the law when they dispensed with a 45-day security review of the company.
The company wants to buy a London-based company that manages terminals in New York, New Jersey, Philadelphia, Baltimore, New Orleans and Miami.
The review by the Committee on Foreign Investment in the United States was “in-depth and comprehensive,” Deputy Defense Secretary Gordon England said.
Bush reaffirmed his support for the ports deal. “The more people learn about the transaction … the more they'll be comforted that our ports will be secure,” Bush said.
His comments came as the White House organized a persuasion campaign.
Part of it is to convince lawmakers that the UAE is a trustworthy ally. England told senators that the Persian Gulf nation allows more port calls by Navy ships than any other country and makes its airfields available to support U.S. military operations in Iraq and Afghanistan. Undersecretary of State Robert Joseph called the UAE “a key partner in the war on terrorism.”
Levin accused the officials of giving only one side of the story. He noted that the independent commission that investigated the 9/11 attacks found that the UAE had given financial support to al-Qaeda, was a transit point for nuclear material to Libya and Iran, and was one of the few countries to recognize the Taliban regime in Afghanistan.
Levin said that despite the UAE's efforts since 9/11 to mend its ways, the country's “uneven history” demanded more than the “casual approach” taken by administration officials vetting the ports deal.
In the briefing's most dramatic moment, Levin asked the nine administration officials to raise their hands if they had talked to members of the 9/11 Commission. None raised their hands.
Deputy Treasury Secretary Robert Kimmitt said there were security concerns but they were resolved before the foreign investment panel unanimously endorsed the deal. He said there was “a difference of opinion” on whether a 45-day security review was mandatory.
Levin countered that the administration had found ambiguity “in a statute that is unambiguous” about requiring reviews. “If you want the law changed,” he told the officials, “come to Congress and change it. But don't ignore it.”
Senate Armed Services Chairman John Warner, R-Va., said Levin raised “legitimate” questions. He said he would ask Attorney General Alberto Gonzales to prepare a memo on the administration's interpretation of the law.
Congress returns from a weeklong recess Monday. The ports deal is “the No. 1 issue at town hall meetings,” said Ron Bonjean, a spokesman for House Speaker Dennis Hastert, R-Ill.
“It is the hot-button issue,” he said.
Bonjean said Hastert still believes “congressional action may be necessary.”
Sen. Hillary Rodham Clinton, D-N.Y., said she and Sen. Robert Menendez, D-N.J., plan to submit a bill to bar all companies controlled by foreign governments from operating U.S. ports.
Where's common sense?
By Charles Schumer and Pete King
In a post-9/11 world, common sense would dictate that the proposed Dubai Ports World deal would trigger intense scrutiny on the part of our government. Yet common sense clearly did not prevail.
While we agree with USA TODAY that port security depends primarily on what measures our federal government has in place, we believe that turning over significant control of six of our largest ports to the Dubai company without proper investigation could be a recipe for disaster.
That is why we are introducing legislation that would temporarily halt the deal, initiate a thorough 45-day investigation of the firm and allow Congress to review the findings.
There are a number of serious questions that must be answered. The Dubai company is owned and operated by a country through which a number of the 9/11 hijackers traveled and al-Qaeda money was funneled. Pakistani scientist A.Q. Khan used it as a crossroads for shipping nuclear technology and material to Iran.
Given all this, how can we be sure the company has security measures in place to protect against terrorist infiltration?
How can we be certain the company itself will not smuggle illicit weapons and materials into our nation?
How do we ensure that one of its employees is not working for our enemies?
The Committee on Foreign Investments in the United States was established to answer these important questions of national security. Yet, in this case, CFIUS only completed a brief 23-day staff review and didn't even begin the 45-day investigation required by law when a foreign government is involved in a deal. More must be done.
Our call for increased scrutiny of this deal has nothing to do with the fact that the United Arab Emirates (UAE) is an Arab nation. Our seaports remain the most vulnerable aspect of our homeland security. Therefore, handing over their operation to a foreign government, especially one with reported terrorist ties, deserves thorough review.
We appreciate the UAE's support for the war on terror. But we must give this acquisition the attention and scrutiny it deserves. In a post-9/11 world, it's just common sense.
Sen. Charles Schumer, D-N.Y., is a member of Senate subcommittees on border security, transportation and international trade; Rep. Pete King, R-N.Y., is chairman of the House Committee on Homeland Security.
(Changes dateline, previous DANBURY, Conn., recasts throughout with quotes and background)
By Glenn Somerville
TORRINGTON, Conn., Feb 22 (Reuters) - U.S. Treasury chief John Snow, head of the panel that cleared a deal for a state-owned Dubai company to manage major U.S. ports, said on Wednesday he was not involved in deliberations until after the transaction was approved.
In a move that sparked national-security worries among Republicans and Democrats alike, the multi-agency Committee on Foreign Investments in the United States (CFIUS) recently gave Dubai Ports World approval to buy British company P&O (PO.L: Quote, Profile, Research), which runs six U.S. ports including New York and Baltimore.
"I involved myself in it as it came to my attention over the course of the last three or four days. I got involved in it after the approval process," Snow, chair of the panel, told reporters when pressed on the issue during a tour of a building company in Connecticut.
Still, when asked at an earlier stop in Danbury, Connecticut if he thought CFIUS had taken the right step, Snow said: "I have every confidence in this decision. Yes."
The White House said on Wednesday that President George W. Bush also did not know about the approval until it was complete.
Massachusetts Sen. John Kerry, a Democrat, wrote to Snow on Wednesday asking him to detail all Bush administration ties to Dubai Ports World, citing a deal by the rail company Snow once headed to sell its global ports assets to the Dubai company.
CSX Corp. (CSX.N: Quote, Profile, Research), which Snow headed until he took over Treasury three years ago, sold the port assets for $1.15 billion in 2004.
Snow told reporters he had known nothing about the 2004 deal.
"I learned of this transaction probably the same way that members of the Senate did -- by reading about it in the newspapers," he said.
While making an effort to stress he had no links to Dubai Ports World, Snow stoutly defended the decision against critics and contended that overturning it would be a mistake.
"Our failing here, if there was a failing, was in explaining this process," Snow told reporters after touring a plant that makes fuel cells, adding that the administration would be "reaching out" to lawmakers worried about the deal.
"Let me say that, having vetted the process, and having concluded that it would not present national security risks, the implication of failing to approve this would be to tell the world that investments in the United States from certain parts of the world aren't welcome," he added.
Chertoff unaware of ports deal until after OK
By Rowan Scarborough
THE WASHINGTON TIMES
Published February 24, 2006
Advertisement
Homeland Security Secretary Michael Chertoff was not aware a Dubai-owned company was seeking to operate terminals in six U.S. ports and that his agency was leading the review until after the deal's approval, an administration official said yesterday.
Mr. Chertoff's spokesman, Russ Knocke, told The Washington Times the issue rose no higher than the department's assistant secretary for policy, Stewart Baker.
"[Chertoff] was not briefed up to this until after this story started appearing in the newspapers," Mr. Knocke said.
Mr. Chertoff is the third Cabinet official to acknowledge he did not know his agency had signed off on the plan as a member of the interagency Committee on Foreign Investments in the United States (CFIUS). Both Defense Secretary Donald H. Rumsfeld and Treasury Secretary John W. Snow have publicly said they were unaware of the deal.
But Mr. Chertoff's exclusion is more noteworthy because his department headed the CFIUS review and is in charge of security at all U.S. ports.
Mr. Knocke said the reason Mr. Chertoff was not informed was because CFIUS canvassed scores of government agencies and none objected to Dubai Ports World's (DPW) bid to buy terminal operations on national security grounds.
If there had been an objection, the committee would have conducted a more extensive 45-day investigation and notified Cabinet secretaries. The 12-member committee, which includes six Cabinet secretaries, on Jan. 17 approved the company buying a British firm that runs terminals at the ports.
The exclusion of top Cabinet secretaries such as Mr. Chertoff in the DPW review and the failure to notify President Bush of its approval has helped fuel a firestorm of protest from Republicans and Democrats. Legislators say the Bush administration failed to adequately investigate the company.
DPW is owned by the United Arab Emirates, which today is a strong U.S. ally in the war on terror, but which in the past had ties to Osama bin Laden and the Taliban, and whose banks were used by the September 11 hijackers.
A defense official said at the Pentagon the issue rose no higher than Beth McCormick, who heads the Defense Technology Security Administration. She coordinated a review with 17 separate offices and agencies, and then signed off as the secretary's representative to CFIUS, the source said.
The fact the issue did not reach Mr. Rumsfeld until after the fact has some policy-makers rethinking the process. The official said the decision-making needs to be opened up to public-affairs specialists who might have detected a political firestorm ahead.
"We need to bring people in with a broader perspective," said the defense official, who asked not to be named. "The best decisions, if you can't communicate it, you can be stopped from doing things that are right. No one is second-guessing the decision."
Treasury spokesman Tony Fratto said the review of DPW at Treasury went no higher than Clay Lowery, assistant secretary for international affairs.
A State Department official told The Times that Secretary of State Condoleezza Rice likewise was not briefed on the ports issue until after the fact. A spokesman in Washington did not reply to a request to supply the name of the State official who approved the sale.
"This is a fairly routine matter," said the State Department official. "It wasn't a contentious process. Secretaries get involved at an earlier stage only if there is a divergence of opinion."
CFIUS conducted just one meeting on the DPW question last fall. Mr. Lowery could not recall yesterday who attended the meeting. He told the Senate Armed Services Committee that Mr. Chertoff did not attend.
Mr. Lowery also said he did not know if National Security Adviser Stephen J. Hadley was notified of the review. He said a notification e-mail was sent to the White House
CFIUS is made up of 12 senior government officials. Six are Cabinet secretaries: Treasury, State, Defense, Homeland Security, Commerce and Justice. Another five seats are held by White House officials. A 12th seat goes to the U.S. Trade Representative.
The White House yesterday did not respond to a request from The Times for the names of the officials who approved the sale.
A number of Democrats and Republicans have asked why the more extensive investigation was not triggered, given UAE's past ties to terror financing. A senior administration official, who asked not to be named, said lower-level bureaucrats involved in the review should have sensed the political reality: turning over ports to an Arab-owned company would create political problems in an election year.
A White House official said CFIUS handled 65 cases last year, and has handled as many as 295 in one year alone.
"If the president were burdened in particular with what are frequent routine business matters, that would take ..." The official stopped and did not complete the sentence.
White House Has Ties to Dubai Firm
By Michael McAuliff
The New York Daily News
Tuesday 21 February 2006
Washington - The Dubai firm that won Bush administration backing to run six U.S. ports has at least two ties to the White House.
One is Treasury Secretary John Snow, whose agency heads the federal panel that signed off on the $6.8 billion sale of an English company to government-owned Dubai Ports World - giving it control of Manhattan's cruise ship terminal and Newark's container port.
Snow was chairman of the CSX rail firm that sold its own international port operations to DP World for $1.15 billion in 2004, the year after Snow left for President Bush's cabinet.
The other connection is David Sanborn, who runs DP World's European and Latin American operations and was tapped by Bush last month to head the U.S. Maritime Administration.
The ties raised more concerns about the decision to give port control to a company owned by a nation linked to the 9/11 hijackers.
"The more you look at this deal, the more the deal is called into question," said Sen. Chuck Schumer (D-N.Y.), who said the deal was rubber-stamped in advance - even before DP World formally agreed to buy London's P&O port company.
Besides operations in New York and Jersey, Dubai would also run port facilities in Philadelphia, New Orleans, Baltimore and Miami.
The political fallout over the deal only grows.
"It's particularly troubling that the United States would turn over its port security not only to a foreign company, but a state-owned one," said western New York's Rep. Tom Reynolds, chairman of the National Republican Campaign Committee. Reynolds is responsible for helping Republicans keep their majority in the House.
Snow's Treasury Department runs the Committee on Foreign Investment in the U.S., which includes 11 other agencies.
"It always raises flags" when administration officials have ties to a firm, Rep. Vito Fossella (R-S.I.) said, but insisted that stopping the deal was more important.
The Daily News has learned that lawmakers also want to know if a detailed 45-day probe should have been conducted instead of one that lasted no more than 25 days.
According to a 1993 congressional measure, the longer review is mandated when the company is owned by a foreign government and the purchase "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."
Congressional sources said the President has until March 2 to trigger that harder look.
"The most important thing is for someone to explain how this is consistent with our national security," Fossella said.
Post a Comment
<< Home