Second Security Review to Be Conducted over U.S. Ports Deal

The Bush administration will conduct a highly unusual second review of potential security risks in a business deal it previously approved for a United Arab Emirates-based company to take over significant operations at six leading U.S. ports.

The new, 45-day investigation is aimed at averting an impending political showdown as Congress returned to Washington on Monday from a weeklong break.

"We think this is a good middle ground that has been found," White House press secretary Scott McClellan said.

Senate Majority Leader Bill Frist, who helped negotiate the plan, quickly recommended that lawmakers wait for the outcome before acting on legislation to delay or block the deal. Frist, R-Tenn., said he expects oversight hearings to continue this week.

In six pages of legal documents sent Sunday to the White House, Dubai-based DP World offered to submit to a second, broader investigation of its plans to run shipping terminals in New York, New Jersey, Baltimore, New Orleans, Miami and Philadelphia.

The Treasury Department, which governs the U.S. review panel, said it would accept DP World's extraordinary offer once the company formally filed its request for one. It said the same government panel will reconsider the deal that it earlier had agreed unanimously posed no national security concerns.

Some senators, led by Charles Schumer, D-N.Y., said they still intend to introduce legislation Monday to block the deal pending a 45-day review and to require congressional approval before DP World can conduct business in the United States. Under existing law, Congress effectively has no role considering deals.

Bush has pledged to veto any measure blocking the deal. "The president's position remains the same," McClellan said. After the review, it will be up to Bush to decide whether the deal takes effect.

Schumer said Monday he is skeptical of the review panel's ability to evaluate the deal, saying the panel has been more focused on economic development rather than national security.

"The bottom line is this group did a very cursory review" when it approved the deal, Schumer said on ABC's "Good Morning America." "I'm a little dubious of this review, but let's wait, let's see the report and see what they say."

Still, the administration's announcement means the White House likely won't face a broader revolt this week by fellow Republicans. A united GOP can assert that its leaders - in Congress and at the White House - have taken additional steps to protect national security.

DP World's offer was highly unusual. The secretive U.S. committee that considers security risks of foreign companies buying or investing in American industry has conducted such full-blown investigations only about two dozen times among the more than 1,500 international deals it has reviewed.

The company said that during the renewed scrutiny, or until May 1, a London-based executive who is a British citizen would have authority over DP World's U.S. operations. It pledged that Dubai executives would not control or influence company business in the U.S., but said it was entitled to all profits during the period. It also said it will appoint an American to be its chief security officer in the United States.

"We hope that voluntarily agreeing to further scrutiny demonstrates our commitment to our long-standing relationship with the United States," said Edward H. Bilkey, the company's chief operating officer.

President Bush has personally defended his administration's earlier approval of DP World's proposal to buy London-based Peninsular & Oriental Steam Navigation Co. It was not immediately clear whether the re-examination by the same U.S. officials would produce a different outcome.

"The transaction was closely scrutinized by the appropriate national security and intelligence officials, and important safeguards are in place," White House spokesman Scott McClellan said Sunday.

In the administration's earlier review, completed Jan. 17, DP World agreed to cooperate with law enforcement investigations and disclose many private business records on demand by U.S. agents. The government panel unanimously approved the deal after an ordinary 30-day review, during which U.S. intelligence agencies reported they found no derogatory information about DP World in their files.

In its legal papers, DP World said it would abide by the outcome of the pending review but indicated it could sue if the results were any different.

A chief critic of the ports deal, Rep. Peter King, chairman of the House Homeland Security Committee, said the company appeared to invite the more thorough investigation sought by many lawmakers. King, R-N.Y., said the proposal should be enough to delay immediate efforts in Congress to block the deal.

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Associated Press writers Liz Sidoti and Devlin Barrett contributed to this report.


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