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Port Deal Was Questioned

Before the Dubai firm's takeover was approved, the Coast Guard warned of intelligence gaps.

February 28, 2006|Gwyneth K. Shaw and Siobhan Gorman | Baltimore Sun

WASHINGTON — The U.S. Coast Guard warned that numerous intelligence gaps prevented it from gauging the potential security threat of Dubai Ports World's proposed takeover of some U.S. port operations a month before the deal was approved, according to a document released Monday by a Senate committee.

According to the December document, the Coast Guard's initial review of the United Arab Emirates company's plan to buy Peninsular & Oriental Steam Navigation Co. raised major questions, including whether "foreign influence" on the state-owned company could affect security or other decisions. The assessment also asked about the backgrounds of employees for the two companies and about security arrangements at the affected ports.

"There are many intelligence gaps, concerning the potential for DPW or P&O assets to support terrorist operations, that precludes an overall threat assessment" of the potential merger, the Coast Guard intelligence assessment said.

P&O manages operations at ports in Baltimore; New York/Newark, N.J.; Miami; Philadelphia and New Orleans, and has interests in several other cities.

Administration officials, who repeatedly said that reviews of the transaction indicated no threat to national security, said Monday that the Coast Guard's questions came early in the three-month evaluation process and were answered by the time the Committee on Foreign Investments in the United States signed off on the deal last month.

The panel found no reason to block the sale or send the case to President Bush for a final review.

"In this case, the concerns that you're citing were addressed and resolved," assistant Treasury secretary Clay Lowery said during a briefing before the Senate Homeland Security and Governmental Affairs Committee, which released the Coast Guard document.

"I am more convinced than ever that the process was truly flawed," said Sen. Susan Collins (R-Maine), the committee chairwoman. "I can only conclude that there was a rush to judgment."

Meanwhile, about 200 teamsters and longshoremen joined three U.S. senators at Port Newark to protest the transfer of port operations.

New Jersey's two senators, Democrats Robert Menendez and Frank R. Lautenberg, and Democratic Sen. Charles E. Schumer of New York said the deal would compromise the nation's safety.

"Our message is very clear, that the ports of the United States are part of the critical infrastructure that are a big part of security, and they should not be in the operational hands of a foreign government," Menendez said.

Associated Press contributed to this report.

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