Sunday, February 26, 2006

This is the CFIUS Committee of 12

The security of our ports is vital to our national security. How is it the Bush administration came to recommend that vital port operations conducted by Peninsular and Oriental Steam Navigation (P&O) be taken over by the Dubai Ports World (DP World) a state-owned company of the United Arab Emirates. Follow the bouncing ball....after all to hear Bush tell it, he was clueless.

The Secretary of the Treasury, John Snow, is charged with implementing the Exon-Florio (EF) provision that puts into place the mechanism to review Foreign Direct Investment (FDI) as it pertains to national security. The statue Section 5021 of the Omnibus Trade and Competitiveness Act of 1988 gives the President of the United States the authority to block a foreign acquisition. To assist in making this determination, EF provides the President, or his designee, written notice of a takeover by a foreign entity.

This provision and written notice is implemented by the Committee on Foreign Investment in the United States (CFIUS). Treasury, acting at the staff level through the Director of the Office of International Investment in the Office of the Assistant Secretary of Internal Affairs (Clay Lowery) acts as the secretariat for CFIUS. It receives and circulates notices to CFIUS agencies and coordinates reviews. In cases where the acquirer (DP World) is controlled by a foreign government a 45-day investigation is required. The DP World takeover of P&O investigation was just 30 days.

There are twelve inter-agency members of CFIUS:

1. Secretary of Treasury- CFIUS Committee Chairman - John Snow. His charge is to protect national security while maintaining the credibility of our open investment policy. Only problem is, Snow was chairman of CSX rail firm that sold its own international port operations to DP World for $1.5 billion in 2004.

2. Secretary of State - Condoleezza Rice

3. Secretary of Defense - Donald Rumsfeld
In a Department of Defense press conference on February 21, 2006 with Rumsfeld a reporter asked: "Are you confident that any problems with security--from what you know, are you confident that any problems with security would not be greater with a UAE company running this than an American Company."

Rumsfeld's reply: "I am reluctant to make judgments based on the minimal amount of information I have, because I just heard about this over the weekend." This statement was made after the review was approved on February 13 by the CFIUS committee of which he is a member!

4. Secretary of Commerce - Carlos Gutierrez

5. Attorney General - Alberto Gonzales

6. Director, Office of Management & Budget - Joshua B. Bolten

7. U.S. Trade Representative - Ambassador Rob Portman

8. Chairman, Council Economic Advisors - Ben Bernamke, Until February 2006, currently Federal Reserve Chairman.

9. Director, Office of Science & Technology Policy - Dr. John Marburger

10.Asst. to President, National Security Affairs - Stephen Hadley

11.Asst. to President, Economic Policy - Allan B. Hubbard

12.Dept. of Homeland Security - Secretary Michael Chertoff

In the same February 21 press conference with Rumsfeld, in response to a question about the Defense Department representative involved in the decision making process he said: "There were Defense Department and -- I think as I said, there were six departments that were involved in the process in one way or another, and the Defense Department was one of them. The lead was the Department of Homeland Security."

Rumsfeld not only isn't doing his job, he is trying to push the blame off on another Department Secretary, Chertoff, who is already on the ropes for his mishandling of Katrina.

So this is the super-secret CFIUS committee of twelve. More like the deadly Keystone Cops! Of course many on the committee of twelve deny knowledge of the transaction, say someone else in their department was their representative. But, according to the EF provision, the buck stops with each of them. Especially Snow who had the leadership reponsibility and the intimate knowledge of DP World.

And while we're at it, how about telling the full story about how many ports are involved in the takeover by DP World, it's 24, and here they are according to the P&O's own website:

Baltimore, Baton Rouge, Beaumont, Boston, Camden, Corpus Christi, Davidville, Freeport, Galveston, Gulfport, Houston, Lake Charles, Miami, New Jersey, New Orleans, New York, Newport News, Norfolk, Orange, Philadelphia, Port Arthur, Portland, Portsmouth, Wilmington.

It's time for a thorough investigation of Portgate!


Anonymous said...

Given the past five year record of lies by the Bush administration, it is impossible to believe that Bush didn't know in advance that the sale of ports to the UAE was being considered by CFIUS, AND it is equally impossible to believe that Bush did not tell the committee members exactly what he wanted their decision to be. We certainly know by now that Bush will ride roughshod over anyone who dares to defy him. It would be a career ending mistake.

jb said...

I've put up a list of the ports with maps and info regarding exactly what is being turned over to DP World.

It looks like these "port operators" don't actually own the land that they use. They lease it from the various port authorities. For example, the Port Authority of New York and New Jersey, owner of the Newark port, filed a lawsuit to block the transfer.

Several of the port facilities are also jointly owned. In fact, the Miami partner company company, a subsidiary of Eller & Co., is filing to block the transfer.

Lot's of legal hurtles for this deal to go through. As always the lawyers and lobbists will be served a nice fat gravey boat.