Dubai Port Firm Willing to Delay Control in U.S.

As the push continued on Capitol Hill for legislation to halt an Arab company’s takeover of port terminals in six U.S. cities, the Dubai firm said Thursday night it would delay the move pending further talks with the Bush administration and Congress.

In the surprise announcement, Dubai Ports World said it would agree to segregate its U.S. port operations but would go ahead with the global acquisition from a British company.

“In practice, this will mean that DP World will not exercise control over, or otherwise influence the management of” the U.S. ports pending the outcome of the discussions, the company 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,” Ted Bilkey, chief operating officer, said in the statement.

However, the company said it would move forward to close the global deal affecting 30 terminals in 18 countries.

“It is not only unreasonable but also impractical to suggest that the closing of this entire global transaction should be delayed,” Dubai Ports said. “The U.S. assets represent less than 10% of this portfolio.”

Earlier in the day, Karl Rove, the White House deputy chief of staff, suggested that there was time to avert a politically embarrassing confrontation over the ports between President Bush and a Congress controlled by his own party.

Rove’s comments on Fox News radio’s “Tony Snow Show” were part of a stepped-up effort by senior administration officials -- on Capitol Hill and in the media -- to reassure lawmakers and the public that the sale of the port operations would not pose a risk to national security.

“There’s no requirement” for the agreement to be finalized next week as scheduled, Rove said. “What is important is that members of Congress have the time to get fully briefed on this,” he said. “We intend to work closely with them in order to give them a comfort level on this.”

But a bipartisan group of lawmakers seemed determined to seek a vote next week on legislation that would delay the deal until their security concerns were addressed. The proposal even picked up Republican support Thursday.

In the meantime, the state of New Jersey filed suit to block Dubai Ports World from taking over management of a port terminal in Newark without further study of its effect on security, and the Port Authority of New York and New Jersey prepared to file a similar suit, raising the possibility that the political dispute might be settled in the courts.

Speaking to reporters at the White House after a Cabinet meeting, Bush again defended the deal.

“What I find interesting is that it’s OK for a British company to manage some ports, but not OK for a company from a country that is also a valuable ally in the war on terror,” he said.

Visiting the United Arab Emirates -- of which Dubai is a part -- on Thursday, Secretary of State Condoleezza Rice reaffirmed the administration’s support for the Middle Eastern nation, calling it a “a really strong ally.”

The legislation to delay Dubai Ports World’s takeover of port facilities in New York, Newark, Philadelphia, Miami, Baltimore and New Orleans stands a good chance of passing, given its support by Congress’ top Republicans -- House Speaker J. Dennis Hastert of Illinois and Senate Majority Leader Bill Frist of Tennessee.

Bush has threatened the first veto of his presidency over any bill that would block the sale.

With a scheduled March 2 closing date for the sale of the Peninsular & Oriental Steam Navigation Co. to Dubai Ports World, a furious effort is underway to avert a confrontation the president wants to avoid.

One possible compromise reportedly under discussion by congressional Republican leaders and the White House is a 30- to 45-day voluntary cooling-off period to give administration officials more time to ease lawmakers’ concerns.

The controversy has caused unusual divisions within the Republican family.

Former Senate Majority Leader Bob Dole is advising Dubai Ports World and serving as an intermediary between it and the White House, but he is not lobbying Congress on the company’s behalf, said his spokesman, Mike Marshall.

Dole’s wife, Sen. Elizabeth Dole (R-N.C.), is among those who favor delaying the deal.

“To the shock of some, they don’t always agree on everything,” said Lindsay Taylor Mabry, a spokeswoman for the North Carolina senator.

Marshall said the former Kansas senator and GOP presidential candidate was confident that members of Congress, including his wife, would approve of the deal once they learned more about it.

That effort began as high-level officials representing the departments of Defense, Homeland Security, State and Treasury appeared before a Senate committee Thursday to rebut charges that they rushed through approval of the sale without consideration of its national security implications.

With Congress in recess, the Armed Services Committee briefing drew only five senators -- Republican chairman John Warner of Virginia and four Democrats.

Still, it gave Democrats an opportunity to assail Bush on national security, an issue that has been his greatest political strength.

Sen. Carl Levin of Michigan, the panel’s top Democrat, accused the Bush administration of taking a “casual approach” to reviewing the takeover of port facilities to a state-owned company in a country with “an uneven record of combating terrorism.”

Challenging administration officials on whether they went far enough in examining the security risks, Levin asked whether any of them had talked to members of the commission that investigated the Sept. 11 attacks about the United Arab Emirates’ record on fighting terrorism.

“Just raise your hand if anybody talked to the 9/11 commissioners,” Levin urged.

No one did.

A committee of government officials charged with assessing whether foreign investment in the U.S. poses a security risk held one official meeting, though they said the panel conducted an intensive review of the deal.

Deputy Defense Secretary Gordon England said the review “definitely was not cursory and it definitely was not casual,” noting that the takeover was assessed by more than a dozen Pentagon agencies.

“We are very, very comfortable with the decision that was made,” England said.