By Arab Media Watch intern Kakande Yasin
31 October 2006
The Dubai Ports World controversy was a high-profile dispute in February-March 2006 between the US and one of its Middle East allies, the United Arab Emirates.
The controversy was over whether the sale of port management businesses in six major US seaports to DPW - a company owned by the government of Dubai and under the direct control of Sheikh Mohammed bin Rashid Al Maktoum, ruler of the emirate as well as vice president and prime minister of the UAE - would compromise port security.
The business had earlier been under a British company called the Peninsular and Oriental Steam Navigation Company (P&O), which had been purchased by DPW at the time of the controversy.
As part of the purchase deal, DPW would assume the leases of P&O to manage major US port facilities in New York, New Jersey, Philadelphia, Baltimore, New Orleans and Miami, as well as operations in 16 other ports. The transfer of leases had also been approved by the Committee on Foreign Investment in the United States (CFIUS), headed by the US Treasury Department.
Democratic and Republican members of the US Congress only started to question the deal after Associated Press published a story on it as a threat to national security. New York Senator Chuck Schumer called for a review of the deal, while Republican leaders Dennis Hastert and Bill Frist threatened to introduce legislation that would put the deal on hold.
However, President George Bush on 22 February threatened to veto any legislation passed by Congress that would block the deal. "It would send a terrible signal to friends and allies not to let this transaction go through," he said.
The next day, DPW volunteered to postpone its takeover of significant operations at the ports to give the White House more time to convince lawmakers that the deal posed no increased risks from terrorism.
On 24 February, it was reported that there were 22 US ports in the deal, not just the six major ports mentioned in initial news stories. According to the website of P&O Ports, the port-operations subsidiary of P&O, DPW would take over stevedore services at 12 east coast ports, including Portland, Maine; Boston, Massachusetts; Davisville, Rhode Island; New York City; Newark, New Jersey; Philadelphia, Pennsylvania; Camden, New Jersey; Wilmington, Delaware; Baltimore, Maryland; and Virginia locations at Newport News, Norfolk and Portsmouth.
Additionally, DPW would take over P&O stevedoring operations at nine ports along the Gulf of Mexico, including the Texas ports of Beaumont, Port Arthur, Galveston, Houston, Freeport and Corpus Christi, plus the Louisiana ports of Lake Charles and New Orleans.
The House Panel voted 62-2 to block the deal on 6 March. On 9 March, DPW released a statement saying it would turn over operation of the ports to a US "entity".
BETRAYAL
It is on record that Dubai services more US military ships than any other country, shares useful intelligence about terrorism, and helped shut down a global black-market nuclear network run by Pakistani nuclear scientist Dr Abdul Qadeer Khan.
Dubai has also assisted in the capture of Al Qaeda terrorists. A statement by the organisation released in spring 2002 refers to UAE officials as wanting to "appease the Americans' wishes," including detaining "a number of mujahideen," according to captured documents made available by the Combating Terrorism Center at West Point. The Al Qaeda statement threatened the UAE, saying that "you are an easier target than them; your homeland is exposed to us."
Based on these facts, Bush was quick to promise to veto any resolution that could block business with Dubai.
"I'm concerned about a broader message this issue could send to our friends and allies around the world, particularly in the Middle East," he said during an appearance before a conference of the National Newspaper Association. "In order to win the war on terror, we have got to strengthen our friendships and relationships with moderate Arab countries in the Middle East."
The UAE, of which Dubai is a part, is just such a country, Bush added.
However, public opinion surged against the sale, and opposition was voiced from all levels of Congress. Eventually, this pressure forced DPW to pledge that it would return control of the ports to a US company, and Bush's promised veto never materialised.
"Turning port operations over to a company owned by a country that recognised the Taliban as a legitimate government goes beyond the realm of common sense," said New Jersey Governor Joe Corzine.
This belies the fact that the CIA once trained members of Al Qaeda, and supported the Taliban government through the Pakistani intelligence service.
Dubai is now a centre for international investment, and the US is a major investor in the emirate. By connecting Dubai with the Taliban, the implication is that the UAE covertly supports or harbours terrorists, and that although Dubai should trust the US to act responsibly in business within Dubai, the emirate cannot be trusted to manage interests within the US.
The controversy came shortly after the World Trade Organisation's Doha Round of global trade talks. Many member states had called for the US to open up its ports to international competition, in the same way that the world's richer countries have pushed poorer countries into opening up their service sectors.
However, the US continued advocating international free trade abroad whilst making excuses to limit it at home.
Similar opposition was raised when Chinese company CNOOC tried to buy Californian oil company Unocal, which previously held the contract to lay a pipeline from Turkmenistan through Afghanistan to Pakistan in order that the oil-rich Caspian region could be utilised. There has even been opposition to French telecommunications company Alcatel's acquisition of Lucent, a US phone company.
Former US President Bill Clinton, a close friend of and adviser to the UAE government, was not clear on whether he supported the deal, though his wife Hillary publicly opposed it.
The UAE government remained silent over the issue.