Previously by Prof. Justice: Holiday Correctness, Terminate Tookie, Fire & Hire, Democrats' Investment in Defeat, Dubya Not So Dumbya, State of the Obstructocrats.
Now that Dubai Ports World announced its intention to sell the British company, P & O, the purchase of which triggered a symphony of opposition, the issue of who should be permitted to operate, control, manage or have access to our ports appears to have lost some steam. The debate itself, however, remains on the fast track of debate. Unfortunately, after listening to several weeks of opinions, arguments and political discourse, I have yet to achieve clarity on this issue, let alone form an opinion. When I first heard this reported, I dismissed it the same way I would have had a person living in Iowa claimed to have been abducted by aliens: “Yeah, right.” But the very thought that a middle east company, ostensibly wholly owned by the United Arab Emirates government, would be operating or managing six of our major ports is indeed alarming.
Publicity of the DP World deal instantly generated sharp criticism from the overwhelming majority of congressional Democrats and Republicans. Unlike the usual bitter partisan rhetoric, however, they were clamoring in unison to oppose it. Even traditional media opponents lined up behind each other in agreement. It is a strange day when the New York Times, the New York Post, the Wall Street Journal and the Washington Post all concurred. Stranger yet, Rush Limbaugh squarely differed from that of conservatives. And perhaps the most bizarre spectacle came when President Bush and former President Carter both concluded that the deal posed no security concerns to the United States. As baffling as these responses may be, perhaps the most perplexing issue, which I have yet been able to convincingly answer, is whether the resulting hysteria was grounded in reality or merely emanated from a gross distortion of an ordinary business transaction.
One week after the media broke the story, the president, seeking to reassure us, stated, “We wouldn’t go forward if we were concerned about the security of the United States of America.”
You’ll forgive me, but considering that he’s already had me scratching my head because of his failure to effectively address and deal with border security, the prescription debacle and Harriet Miers, “trust me, “ isn’t very comforting. Nor is it reassuring that the Treasury Department defended its approval by asserting that the deal presented no security risk. This becomes more apparent after learning that several of the basic security provisions typically required when any foreign company does business in the U.S. were waived. For instance, DP World would not have been required to keep a copy of all documents generated on our soil and be made available for inspection upon demand by authorized government officials. Another provision waived for DP would have required the presence of an American liaison or “overseer” to monitor all its business dealings with the United States.
To begin with, it should be precisely understood what DP World’s “take over” of the six ports really means. Our ports are actually owned by local governmental authorities. As for the ports’ security, nothing would have changed. The Coast Guard, the Customs and Border protection control and other various local law enforcement agencies would have continued to be in exclusive control of all security, inspection and safekeeping issues. All that DP World would have been responsibility for is “terminal operation.” A terminal operator merely arranges for the logistical operation of terminal cargo, i.e., to protect cargo while ensuring that it gets from one location at the terminal to another at the terminal and holds it until it is picked up. In addition, DP World would not have been the only company managing terminals at our ports. We have many foreign port companies operating at terminals throughout the United States. In fact, DP World would have been managing only one of the five terminals at the New York and New Jersey Port Authority and only two of fourteen in Baltimore. Homeland Security officials have explained that the terminal management process is a minor portion of the security process. Containers carrying cargo are screened before they even leave the port of departure. From there, Homeland Security determines what containers should be searched based upon a risk analysis. A management company has no part in that process.
Yet, there appears to be good reason for concern. It isn’t merely an issue of profiling to be wary of a middle east government owned company having being permitted anywhere near our ports. True, we have British, Danish and other foreign companies performing port management duties, but then again, the source of our security concerns have not emanated form those countries. While it is true that not all Muslims are terrorists, indeed most are not, virtually all terrorists are fundamental Wahabists. Even the 9/11 Commission Chairman, former New Jersey Governor Tom Keane, opposed this deal. His commission determined that two of the nineteen hijackers were from the UAE and that the UAE was the primary financial facilitator of 911 by permitting money to flow through its banks which then provided the funding to the homicide-bomber savages.
Several days before the completion of this deal, the Australian government issued the following alert to its citizens: “We advise you to exercise a high degree of caution in the United Arab Emirates because of the high threat of terrorist attack. We continue to receive reports that terrorists are planning attacks against Western interests in the United Arab Emirates. Commercial and public areas frequented by foreigners are possible terrorist targets.” The UAE was one of only three countries in the world to recognize the Taliban as the official government of Afghanistan. Our “friends” the Saudis and Pakistan were the others. They also were active participants in the shipment of nuclear components to Libya, North Korea and, yes, Iran. They refuse to recognize Israel and actively participate in an Arab boycott against it. In fact, DP World, which is entirely held by the UAE government through the Ports, Customs and Free Zone Corporation (PCZC), actively participates in the Arab boycott. Government officials have made it clear that the UAE remains in effect, is enforced and will continue to be enforced. They even have an office dedicated to examining certificates of origin as a means of determining whether a product or any of its components were made in Israel. U.S. law prohibits companies from complying with such boycotts and, last year, fined companies on several occasions for boycott-related activities all of which were connected to the UAE government. As if this were bad enough, the UAE continues to maintain a close association Hamas and have promised to increase their aid to them now that Hamas is in power. Lastly, in a recently released U.S. military document, a June 2002 message from Al Qaeda to UAE government officials, warned that during the previous three years, their operatives successfully infiltrated key UAE government agencies.
On the other hand, since 9/11, the UAE has been ostensibly our best Arab ally in the war against terror. They have taken substantial measures to close the holes in their financial system that permitted the flow of money to the 9/11 terrorists. They work closely with our intelligence agencies to provide significant intelligence resulting the prevention of terrorist operations, disruption of terror network cells and even the apprehension of terrorists. In addition, the fundamental Wahabist terrorists can come from anywhere. The shoe bomber, Richard Reid, was from Brittan. Should we stop doing business with British companies also?
I understand that there are foreign diplomacy concerns for the President to consider. In the event, inevitably or otherwise, that either preemptive military action in Iran or defensive military action in Israel becomes necessary, we would need access to their air and/or naval bases. I realize that in the end we may need “allies” in that region of the world and the UAE is one of the most helpful of the Arab countries. But make no mistake. Ultimately, they will have their best interests ahead of ours and like it or not, they have to maintain diplomatic relations with Syria, Saudi Arabia and even Iran. So, when it is in their interest to align with us, they will, and when it isn’t, is there any doubt with whom they be affiliated?
Finally, President Bush, for his part, made some colossal blunders. First, he didn’t know of the deal until approximately two weeks before the media did, and even after learning of it, he permitted it to be completed as if it were business as usual. In the context of our sensitivity to terrorism and security issues since 9/11, his failure and that of his administration to anticipate and address the public outrage is inexcusable. Unfortunately, the modus operandi of this administration is that when challenged, it often takes weeks, sometimes months to respond. And even when they do, they often fail to sufficiently and effectively communicate with the American people. Simply reiterating, “Trust me” or “If the deal does not go through, what kind of mixed message does that send to other countries?” just doesn’t work.
Is it possible that the President’s only justification for his insistence that the deal presented no security issues one of political correctness? Sure, anything’s possible. Not likely though. It seems to me there are far more effective ways of accomplishing that goal, not the least of which is vigilant law enforcement and national security measures. Having said that, Arabs and Arab countries must nevertheless recognize that we have real, legitimate security concerns emanating specifically from Muslim fundamentalists, political correctness be damned. In the end, it could very well be that this deal would have been business as usual without incident. If so, then the hysteria over the deal would have been for naught. Then again, such a deal could indeed lead to catastrophic events. So I suppose that my question ought to be...
Is it worth the risk?
Professor Justice practices Criminal Law in New York, teaches trial advocacy, and is a Professor of Business Law.