Gaffney urges rejection of UAE port management

In testimony today before the House Armed Services Committee, Center for Security Policy President Frank J. Gaffney, Jr. described the idea of having as many as twenty-two U.S. seaports from Maine to Texas managed by a company owned by the United Arab Emirates as "not just irresponsible….it would appear to be recklessly so."

Mr. Gaffney, a former senior Defense Department official in the Reagan Administration, strongly criticized the process used to date to evaluate the proposed acquisition by Dubai Ports World of management responsibilities for facilities in such American ports as those of New York, Philadelphia, Baltimore, Miami, New Orleans, Beaumont and Corpus Christi (the latter two under contracts with the U.S. Army):

The Committee on Foreign Investment in the United States (CFIUS) process…basically amounts to a "rigged game" – one in which the panel’s secretive deliberations are little more than a matter of checking the necessary boxes to achieve a foreordained, positive outcome. Having the Treasury Department – whose job it is to promote foreign investment in the United States – charged with evaluating such investments is a formula for precisely what we have seen to date: rubber-stamp approval of virtually every transaction, with no regard for the long-term or cumulative impact they will have on U.S. national security equities.

The deficiencies of this system were further underscored by the revelation in today’s Washington Post that CFIUS is now evaluating yet another, seemingly problematic acquisition by the UAE: The proposed purchase by Dubai International Capital’s of the British firm, Doncasters, which, the Post reports "has operations in nine U.S. locations and manufactures precision parts for [U.S.] defense contractors such as Boeing, Honeywell, Pratt & Whitney and General Electric." (Emphasis added.)

Mr. Gaffney urged the Armed Services Committee to interpose objections to the DP World transaction in light of the fact that it seems certain to "exacerbate" already existing port security vulnerabilities:

• "The Coast Guard has acknowledged that DP World will be responsible for vetting the people assigned to its U.S. and other operations."
• "Huge quantities of cargo move through our ports every day, much of it of uncertain character and provenance, nearly all of it inadequately monitored. Matters can only be made worse if port management personnel include one or more individuals who might conspire to bring in dangerous containers, or simply look the other way when they arrive."
• "In the days since the DP World takeover became a matter of public knowledge and controversy, much has been made of the fact that primary responsibility for port security will remain with American authorities. Common sense tells us, however, that managers of U.S. port facilities have to be read-in on government-approved plans for securing those assets. After all, they bear some responsibility for implementing such plans."

Among Mr. Gaffney’s recommendations were the following:

• Changes in the way the management, personnel and substantive guidelines involved in the so-called "45-day review" of the DP World deal now underway, so as to prevent it from being simply a reprise of the earlier, flawed decision-making process.
• Securing a second-opinion for Congress by quickly empanelling an independent group of experts to review the port and homeland security implications of the proposed deal.
• Reform of the CFIUS process so as to ensure it performs the intended purpose – safeguarding U.S. security, not simply going through the motions in the course of approving transactions inconsistent with it.
• Undertaking an urgent review of the larger issue of the United States growing dependency on "overseas suppliers for industrial products, energy and other strategic resources, services (like port management), even components critical to our military capabilities."

The Center for Security Policy looks forward to working with legislators and the executive branch to ensure that America ‘s security interests and sovereignty are safeguarded as our record trade deficits give rise to ever-increasing opportunities for foreign investors to recycle U.S. dollars through purchases of what remains of our industrial, technology and service sectors.