On Letting Foreign Governments Handle Our Homeland Security

From The Counterrorism Blog:

DP World Expands Worldwide, including to United States Ports. What effect on Port Security?

The sudden announcement that Dubai Ports of the United Arab Emirates (DP World) will soon take over the operation of six US seaports has set off alarm bells in Congress and among homeland security specialists. A bipartisan Congressional group has written a letter to Treasury Secretary John Snow, strongly objecting to ceding control of US ports to a country with a spotty record on terrorism. The US approval of this transaction couldn’t have come at a worse time for the Department of Homeland Security which is already reeling from Katrina criticism. Post 9/11 it just doesn’t sound right to most Americans.

The projected takeover includes the seaports of New York, New Jersey, Baltimore, New Orleans, Miami and Philadelphia. It stems from DP World’s $6.8 billion acquisition of P&O Steamship Navigation Co., a staid British Company that has been operating ports through out the world since the Nineteenth Century. With the backing of the UAE government, DP World has grown rapidly from a small local port operation into an international conglomerate. In fact, DP World’s rapid expansion into the world’s third largest port operator raises some questions about its ability to oversee and administer its vast holdings, especially in the light of worldwide security requirements. The P&O acquisition brings an additional 29 container terminals, many in Europe as well as the United States, and the logistic operations of more than 100 ports under DP World’s control. It also gives DP World operational control over ferries running between the UK and France, Belgium, the Netherlands, Ireland and Spain. Much of this expansion has been supported by the UAE Government and the huge inflow of petro-dollars. But, DP World’s acquisition of P&O is reportedly being financed mostly through a (syndicated) term loan facility through Barclays Capital and Deutsche Bank.

DP World first began expanding its operations outside of the UAE in 1999 when it took over operation of the Jeddah Port’s container facility. In 2000, DP World won the contract to manage the entire Port of Djibouti. Thereafter, it won concessions to develop and run container terminals at the Indian ports of Vizag, Cochin, and Vallarpadam. In 2003 DP took over management of the container terminal at Constanza, Romania. The just concluded P&O acquisition follows closely on the heals of DP World’s absorption in 2004 of CSX Corporation’s international terminal business and related interests. That transaction cost DP World some $1.15 billion and expanded its operation to ports in Europe, Latin America, Hong Kong, China, Korea and Australia.

US seaports have long been viewed as seriously vulnerable to possible terrorist activity. The burden of inspecting containers and cargos moving into these ports is overwhelming. On average, about 25,000 seagoing containers are offloaded at America’s seaports everyday. And few are subjected to any real inspection. Following 9/11 the United States undertook urgent measures to enhance US seaport security. This led to the so-called Container Security Initiative (CSI) which promotes the inspection and securing of containers at their point of origin and while in transit to the United States. It's true that the UAE became the first Middle East country to sign on to this CSI program, but that didn’t occur until December 2004, about two years after the Initiative was started.

DP World and senior UAE government officials pressed hard for, and got, quick UK and US government approval for the P&O takeover. The transaction was reportedly vetted and approved by the US Department of Homeland Security and TRANSEC, the UK’s Department for Transport's Security Division. It was also approved by the US Treasury Department's Committee on Foreign Investment. Nevertheless, security experts in both the UK and US remain dubious. They question the wisdom of turning over control of so many major ports around the world, and particularly in the US, UK and Europe to this relatively new UAE based company. DP World’s senior management, they point out, draws mostly from a small circle of UAE nationals close to UAE’s traditional rulers. The concerns they express range from possible relaxation of security measures to potential infiltration into DP World’s administrative cadre by Al Qaeda supporters. Al Qaeda operatives working inside DP World might have access to sensitive port information including layout, vulnerabilities, and cargo and container movements. After-all, they point out, the UAE has a less than stellar record when it comes to dealing with terrorism. Critics note that the UAE was one of three countries that recognized the Taliban. And, UAE based charities and financial facilities have been implicated knowingly, or unwittingly in financing various Islamic fundamentalist terrorist groups. The UAE was used as an operational and financial base for the hijackers who carried out the 9/11 attacks. The critics also point out that lax controls at UAE ports made them a convenient transfer point for shipments of nuclear components smuggled to Iran, North Korea and Libya.

The tenor and strength of the bi-partisan and public reaction to the transaction may give rise to further congressional resistance to the deal. It may cause the Administration to take a second, closer look, and it certainly puts DP World on notice that it still has a long way to go to convince the American public that it can carry out its security and other responsibilities in running US ports.

So, my take on this, is that unless the President refuses to authorize this deal, the Federal government is making no attempt to secure any of our borders.

(Shaking head and feeling very sad....)