WASHINGTON — A bipartisan group of senators pressed their leadership on Wednesday to support Congress’ authority to quash a deal that would transfer control of operations at major U.S. ports to an Arab-owned company.

The latest developments occurred amid a torrent of proposed legislation that would block a takeover of port operations by any company owned by a foreign government.

The $6.8 billion transaction for Dubai Ports World to take over port management in New York/New Jersey, Miami, Houston, New Orleans, Philadelphia and Baltimore has created a fire storm because of security implications.

The White House, Congressional leaders and Dubai Ports World reached a compromise Sunday on a new 45-day review of the transaction. The company, which is owned by the government of Dubai, is buying U.K.-based Peninsular & Oriental Steamship Navigation Co., which now oversees the ports.

President Bush has vowed to veto any effort to stop the agreement, saying it has passed muster with U.S. security officials and would be a positive gesture toward the Arab world. The U.S. would maintain responsibility for port security. Federal law gives the president the right to block takeovers when national security is endangered. Several lawmakers have urged a change in the law to give Congress the power to override any deal.

“We cannot interfere with an agreement between two private parties,” said Sen. Charles Schumer (D., N.Y.) after a press conference. “What we can say as a government is that if a company doesn’t meet our security concerns, it cannot be involved in running ports in the U.S.”

Schumer said the bipartisan group would send a letter to Senate Majority Leader Bill Frist (R., Tenn.) and Minority Leader Harry Reid (D., Nev.) seeking assurances they will have the ability to disapprove the review and subsequently Dubai Ports’ rights to operate ports in the U.S.

“What we’re doing now…is asking our leadership to allow these things to occur and, if so warranted, a vote to disapprove,” he said. “Obviously, we have to see the report.”

He warned, however, that senators would press for action on legislation.

This story first appeared in the March 2, 2006 issue of WWD. Subscribe Today.

Sen. Hillary Rodham Clinton (D., N.Y.) introduced a bill Monday with four other Democratic senators to ban companies owned by foreign governments from controlling operations at U.S. ports. Sen. Norm Coleman (R., Minn.) introduced a bill on Wednesday that would prohibit foreign-government-controlled entities from managing a facility or investment related to national security, but it would permit foreign governments to own and invest in such facilities if they established a U.S. operation.

As for the letter to leaders, Coleman said, “We want to preserve the right to a Con­gressional review in a bipartisan manner. “

In another development, a federal judge denied a request by the state of New Jersey, which sued to block the takeover at its port, for an investigation into the deal.

load comments
blog comments powered by Disqus