White House Begins Retreat on Ports Deal

A day that started with Democratic senators on Capitol Hill accusing the White House of ignoring the law in allowing an Arab-owned company to take over operations at U.S. ports without the proper level of review ended with the president's chief political architect subtly throwing up the white flag on a Fox News radio program.

Bush had insisted that the administration had thoroughly vetted the national security implications of the proposed acquisition by Dubai Ports World, a behemoth international cargo company owned by the government of the United Arab Emirates, of the publicly traded British company P&O Ports, which operates all or part of six U.S. ports.

But this afternoon Karl Rove, the president's chief political adviser, told the Fox News radio program anchored by Tony Snow that the president is now considering delaying the deal and pointed out that the sale of the company is not yet a done deal in the United Kingdom either.

"There are some hurdles, regulatory hurdles, that this still needs to go through on the British side as well that are going to be concluded next week," Rove said. "There's no requirement that it close immediately after that. But our interest is in making certain the members of Congress have full information about it, and that, we're convinced, will give them a level of comfort with this."

Softening Admininstration Stand

On Tuesday, the president bristled at the bipartisan calls for review of the deal and threatened to veto any legislation that would delay or block the bid. The president has not, in his time in the White House, exercised his veto power.

Democrats and Republicans of all stripes have publicly opposed the deal and complained the White House should have been more upfront in its review. But what does Rove's rollback of what had been a stiff White House posture mean?

If Bush delays the deal for a fuller and more public investigation, it might undercut the unification of lawmakers as disparate as Sen. Majority Leader Bill Frist, R-Tenn., and Sen. Hillary Clinton. D-N.Y., and cut opposition down party lines. If there is no deal between the White House and Republican leaders on the hill, Frist has promised to block the deal legislatively.

At an ad-hoc briefing on Capitol Hill today, Clinton and fellow Democrat, Sen. Carl Levin, D-Mich., accused the administration of ignoring the 1988 law that governs how an administration clears deals like the port acquisition.

An amendment to the law in 1992 is to safeguard against transactions that might affect national security. Clinton claimed the law requires a 45-day investigation of any deal that involves a foreign government.

But Deputy Treasury Secretary Robert Kimmitt argued at the hearing that the 45-day investigation is required only when a single member of the Committee on Foreign Investment in the United States raises concerns -- something that did not happen in this case. The committee is made up of representatives from various agencies, including the Departments of Treasury and Homeland Security and the Pentagon.

Sen. Robert Byrd, D-W.Va., who offered the 1992 amendment, indicated in his opening statement that he agreed with Clinton's reading.

Levin accused the administration of raising "ambiguity in a law that is unambiguous."

Kimmitt called this a "14-year difference of opinion" and claimed the 1992 amendment has been interpreted as discretionary since 1992.

He also denied claims that the deal had been hatched and approved in secret, pointing out out that the prospect of the sale was informally discussed and vetted by the administration even before it was officially brought before the Committee on Foreign Investment in December and had been the subject of news releases and press reports since October 2005.

Responding to the Outcry

The United Arab Emirates is generally considered a partner of the United States in the war on terror, but the notion that a privately held company owned by the royal family of a nondemocratic Arab nation would have a hand in port security worries many lawmakers -- and many of their constituents.

Sen. John Warner, R-Va., called the open briefing late Tuesday to discuss the deal as public outcry mounted.

Warner, who is one of the few supporters of the president's endorsement of the sale, has called for a cooling-down period if not the full 45-day investigation.

Only three other senators -- Clinton, Levin and Sen. Edward Kennedy of Massachusetts, all Democrats -- cut short their constituent travel weeks to attend the hearing.

While the operator of a port is not charged with security, Democrats used the hearing to impugn port security generally. They claim only 5 percent of cargo containers are inspected by authorities at U.S. ports.

Witnesses at the hearing, which included Cabinet officials, tried to justify and clarify the way the Bush administration cleared the deal

Department of Homeland Security officials also tried to assure Americans that shipping cargo is safe.

Assistant Department of Homeland Security Secretary Michael P. Jackson argued that while a fraction of cargo is physically searched by the Coast Guard, 100 percent of cargo is tracked and evaluated as to whether it poses a security risk before it reaches the ports stateside.

"The idea that we are passively allowing unscreened cargo to flood the country is wrongheaded," Jackson said.