There is a lot of blame to go around here on this one, but I must reluctantly conclude that the Bush administration should shoulder most of it. Bizarrely, this is a case where I think they got the policy right but royally screwed up the politics. Both the failure to keep Congress in the loop after the CFIUS approval and the veto threat without consultation guaranteed a Congressional revolt.
I can't blame Congressmen too much for acting like short-sighted glory hogs driven by electoral considerations -- that's their job. So I'll join the crowd and blame Bush.
What is disingenuous about the whole controversy is the attempt by critics of the deal to state their case in terms of opposition to all foreign management of port operations. Yet, as the Council on Foreign Relations, states, " the majority of port terminals across the country are foreign-run. For instance, more than 80 percent of the terminals in the largest U.S. port, the port of Los Angeles, are operated by foreign companies ." Clearly, foreign ownership of port operations is the industry standard, with no negative repercussions of such ownership being widely reported in the media prior to the Dubai deal. Moreover, the workers who load and unload cargo are all U.S. citizens who are either members of the International Longshoremen's Association or the International Longshore and Warehouse Union. So, on the ground, not much would really change, other than the profits of running the business going from P&O to Dubai Ports World.
Some, however, state that the Dubai Ports World deal is different because the company is state owned and thus amounts to letting a foreign government (rather than company) run operations at U.S. ports. This seems to be the stance taken by Senator Barack Obama who states, " Over four years after the worst terrorist attack in our history, not only are we failing to inspect 95% of the cargo that arrives at U.S. ports, but now we're allowing our port security to be outsourced to foreign governments. " Yet even this argument fails to hold up, because a state-run business is not the same thing as the state. Consider, for example, if the United States Postal Service won a contract to deliver mail in Mexico. It is not the same thing as a "foreign government" ( i.e. the United States) running the postal system of Mexico. If, for instance, someone robbed a USPS mail truck, it would not be considered an unprovoked attack on the sovereign United States. It would certainly be aggressively prosecuted and it may make the USPS reconsider its contract, but it would not amount to an international act of war.
Add to this the fact that many of the senior leaders of Dubai Ports World are Americans, including the Chief Operating Officer, Edward "Ted" Bilkey. If anything, we should feel reassured that Americans are serving at the highest levels of this state-run business, a sign, certainly, of how much Dubai values American business acumen.
Lastly, there is the argument that terrorists responsible for 9/11 were from Dubai and that Dubai serves as a financial center for terrorism. This, naturally, means we cannot trust Dubai at all with anything related to American security and the War on Terror.
First of all, the fact that a terrorist is from a particular place does not automatically render that place evil. For instance, Timothy McVeigh, the American terrorist responsible for the Oklahoma City Bombing, was born in New York. Does this mean New York is evil? Should we suspend all trade activities with the State of New York? Is New York a threat to our national security? It is silly to even suggest such things, yet people are doing it with impunity in the case of Dubai.
Dubai is an important financial center, but it is not responsible for what kinds of individuals bank in Dubai nor what such people may do with their money outside of Dubai. It is no different than the situation with Swiss banks and Switzerland. No one attacks Switzerland when it's discovered that some money laundering scheme went through Swiss accounts. In fact, anyone who watches action movies in the United States, knows full well that bad guys always have their money wired to Swiss or Jamaican bank accounts, because no questions are ever asked. [This last example is not meant to be serious]. More seriously, despite the fact that it did not have to do anything, in October of 2005, the Central Bank of Dubai directed all financial institutions to strengthen internal controls to further reduce the risk of money laundering or other abuses of Dubai financial institutions.
For Heaven's sake, even President Bush has called Dubai a committed ally in the fight against terrorism. The White House has released an extensive fact sheet detailing the importance of the relationship between the USA and UAE. Some of the key points include:
- UAE Ports Host More U.S. Navy Ships Than Any Port Outside The United States
- The UAE Is A Partner In Shutting Down Terror Finance Networks
- The UAE Is An Established Partner In Protecting America's Ports
- The UAE Is A Critical Partner In Afghanistan
- The UAE Is Supporting The New Iraqi Government
- The UAE Is Supporting Middle East Peace Efforts
- The UAE Provided $100 Million To Help The Victims Of Hurricane Katrina
Consider what Robert Hormats, vice chairman of Goldman Sachs International had to say about the debate on PBS' Online NewsHour:
This outcry is at odds with everything that we as Americans stand for. The biggest loser in this entire ordeal is not Dubai, it is America, for it reveals a worrisome undercurrent of hatred and unfounded fears. Arabs and Islam are not going anywhere. They are a part of the reality of life in this country and abroad. Our approach to either should not be based on ignorance or fear but rather engaged discussion and contact. Though it is not a quick path or always an easy one, it is the surest path to peace and security. I only hope we have the wisdom to take it...The other part of this is that there is a very ugly xenophobic tone that has crept into this debate. And I think that tone itself, quite apart from the actual decision that was made, will be very negative in terms of public opinion. And public opinion in many of these countries may force governments who otherwise would like American investment to come or would like to buy American goods to be more willing to interrupt.
So the tone is part of the problem that worries me, as well as the individual act.