March 1, 2006

Judge decides not to intervene in ports deal

By Daniel Trotta

NEWARK, New Jersey (Reuters) - A U.S. judge said on
Wednesday it was premature to order the Bush administration to
disclose parts of a security probe into an Arab port operator,
but said he may change his mind if a new 45-day review gives
the firm a green light to manage terminals at key U.S. ports.

"In this court's mind, there needs to be a showing of an
immediate need for these documents. Without that immediacy
requirement, what the plaintiff wants cannot be granted," U.S.
District Judge Jose Linares said.

"If the deal is approved (after the 45-day review), this
court reserves its right to review its decision," he added.

Dubai Ports World's planned takeover of the terminals in
six major U.S. ports -- including in New Jersey and New York --
from Britain's P&O has triggered an uproar on Capitol Hill,
with Republican and Democratic critics expressing concern it
could make the United States more vulnerable to attack.

Lawmakers from both parties have proposed several laws
seeking better port security and greater oversight of the
takeover by the state-owned, United Arab Emirates-based
company. Some have tried to block the deal.

President George W. Bush has vowed to veto any legislation
interfering with the takeover and has praised the United Arab
Emirates as a vital ally in his war on terrorism.

A group of U.S. business leaders urged Congress on
Wednesday not to threaten the deal and undermine U.S. economic
interests, saying foreign investment was a major source of U.S.
economic growth and productivity.


New Jersey sued last week on two fronts, demanding the
government's Committee on Foreign Investments in the United
States conduct a new 45-day security investigation of the deal
and share some of the initial review that approved the deal in

Linares ruled that since the government had now agreed to
the deeper review, New Jersey's request was moot. He also said
it would be premature to make the government share parts of its
probe with counterterrorism experts.

New Jersey Attorney General Zulima Farber said she
disagreed with the ruling but was encouraged the judge might

A bipartisan group of eight senators on Wednesday welcomed
the 45-day probe but said it still wanted Congress to review it
and reserve the right to approve or deny the deal.

Other lawmakers said the extra review was unlikely to
reveal more about threats to national security. The new inquiry
has not begun and no timetable has been set.

"I don't think you're going to be any further along 45 days
from now than you are today," Rep. Barney Frank, a Democrat
from Massachusetts, told government officials at a hearing.

Congressional Democrats complained the Bush administration
had denied ports adequate security funding.

House of Representatives Minority Leader Nancy Pelosi, a
California Democrat, told reporters her party would propose
legislation to improve port security by inspecting more
containers before they leave their points of origin and after
they arrive.

Sen. Frank Lautenberg, a New Jersey Democrat, said he would
propose giving individual ports the ability to terminate leases
with port operators if the ownership has been transferred to an
entity they feel poses a security risk.

(Additional reporting by Caroline Drees, Joanne Kenen,
Susan Cornwell, Peter Kaplan and Richard Cowan in Washington)