Bush did not know of ports deal until after approval

By Tabassum Zakaria

WASHINGTON (Reuters) – President George W. Bush did not
know about a deal to hand over operations at six major U.S.
ports to an Arab company until after his administration
approved it, the White House said on Wednesday.

Surprised by a backlash from Bush’s own Republican Party,
the White House acknowledged it had erred in not explaining to
Congress the administration’s recent approval of the sale of
the British-based company that now manages the ports to Dubai
Ports World, based in the United Arab Emirates.

Many Republican and Democratic lawmakers have decried the
deal as a risk to America’s national security.

White House spokesman Scott McClellan said Bush became
aware of the deal through widespread media coverage and that
there had been no objections during the review process that
would have warranted it being brought to the president’s
attention.

When Bush found out about it, he checked with Cabinet
secretaries to make sure they stood by the decision to allow
state-controlled Dubai Ports World to manage the ports,
McClellan said.

U.S. officials say the UAE is a staunch ally in the war
against terrorism and has worked hard to close the loopholes
that allowed September 11 conspirators to use the Gulf state as
an important logistics hub and conduit for funds.

But the furor over whether the Dubai firm should be allowed
to control the ports in New York, New Jersey, Baltimore,
Philadelphia, New Orleans and Miami has sparked a political
firestorm as Bush is struggling to boost his sagging public
approval ratings.

Bush held a rare news conference aboard Air Force One on
Tuesday to say the deal should go forward despite lawmakers’
concerns and threatened to veto legislation aimed at stopping
it.

FOREIGN POLICY IMPLICATIONS

McClellan said rejecting the deal could have consequences.

“You have to take into account the broader foreign policy
implications. We should be working to broaden our partnership
in the broader war on terrorism,” he said.

“And let me be very clear: One thing we will never do is
outsource to anyone the control and security of our ports.”

Shipping analysts and experts said U.S. security was not at
risk from the deal, citing Dubai Port World’s strong track
record and international treaties that set stringent
requirements.

The political tug-of-war spread to the White House
nomination of David Sanborn, one of several Americans on Dubai
Ports World’s senior management team, to head the U.S. Maritime
Administration. Sanborn is .

In his new job Sanborn would have oversight of his former
employer, a possible conflict of interest, said Florida
Democratic Sen. Bill Nelson, who plans to block Sanborn’s
nomination until more hearings are held.

Treasury Secretary John Snow said he had no knowledge that
the company he once headed, London-based CSX Corp., had sold
its global port assets to Dubai Ports World for $1.15 billion
in 2004 — the year after Snow left to join the administration.

“I learned of this transaction probably the same way that
members of the Senate did — by reading about it in the
newspapers,” Snow told reporters in Connecticut.

Sen. Edward Kennedy, a Massachusetts Democrat, urged Bush
to work with Congress rather than threaten it with a veto of
any legislation to block the deal.

Senate Armed Services Committee Chairman John Warner, a
Virginia Republican, said his panel would hold an open briefing
on Thursday on the national security implications of the
pending acquisition.

The United States is in the process of negotiating a free
trade agreement with the UAE — its third largest trading
partner in the Middle East after Israel and Saudi Arabia — and
hopes to complete the deal this year.

(Additional reporting by Caroline Drees, Steve Holland and
Susan Cornwell and Glenn Somerville in Connecticut)