What’s the big deal about the port deal?

I can certainly see why there's some political controversy about a firm owned by the government of the United Arab Emirates helping to run ports on the Eastern seaboard -- but after reading this Christian Science Monitor story by Alexandra Marks, I don't think there's any real basis for the kind of outrage I'm seeing. This section in particular stands out: Companies like P&O don't provide security at the ports. The US Coast Guard and Homeland Security's Immigration and Customs Enforcement do. For instance, in New Orleans, P&O is one of eight terminal operators responsible for marketing the port, signing agreements with shipping lines, hiring labor, loading ships, and moving cargo. But P&O has no responsibility for security. "We have our own police force, harbor patrol, customs officers, and Coast Guard," says Chris Bonura, spokesman for the Port of New Orleans. "That won't change no matter who is operating the terminal." P&O is not commenting on the political uproar over the deal. But a source within the company worries that the media and politicians are misrepresenting the arrangements. Other who work within the port communities agree. They note that P&O will not be "managing" the ports, as many news organizations have reported. Instead, the company is one of many that leases terminals at the port. "I've never quite seen a story so distorted so quickly," says Esther de Ipolyi, a public-relations executive who works with the port of Houston. "It's like I go to an apartment building that has 50 apartments, and I rent an apartment. This does not mean I took over the management of the whole building." Then there's this from Heritage's James Jay Carafino in National Review Online: What happens when one foreign-owned company sells a U.S. port service to another foreign-owned company. Not much. Virtually all the company employees at the ports are U.S. citizens. The Dubai firm is a holding company that will likely play no role in managing the U.S. facilities. Likewise, the company is owned by the government, a government that is an ally of the United States and recognizes that al Qaeda is as much a threat to them as it is to us. They are spending billions to buy these facilities because they think it?s a crackerjack investment that will keep making money for them long after the oil runs out. The odds that they have any interest in seeing their facilities become a gateway for terrorist into the United States are slim. But in the interest of national security, we will be best served by getting all the facts on the table.Except, of course, all the facts were reviewed by the Committee on Foreign Investments in the United States (CFIUS) earlier in the month. People aren't upset that there's been a review -- they're upset because there's been a review and the outcome is one they disagree with on a gut level. [Yeah, but hasn't CFIUS approved over 99% of the cases brought to its attention?--ed. Yes, but I dare the readers to find a case where CFIUS screwed up.] There's been a lot of hot air in the blogosphere on this -- and even hotter air from the United States Senate, the House of Representatives, and local politicians -- but I haven't seen anything approaching a rational, reality-based argument against this deal. I've been quite critical of President Bush as of late, but he deserves significant credit for sticking to his guns on this one. There is little political upside -- but in this case, George W. Bush has made the right decision. I have every confidence in the ability of my readers to try and persuade me that I'm wrong. But you had better have a better argument than American ports + UAE firm = terrorist attack in the U.S. UPDATE: A few commenters have raised the point that Dubai is considered to be the hub of Middle Eastern money laundering. This is a) true; and b) irrelevant to the question at hand. Dubai is the center of money laundering in the Middle East because it's the principal financial center in the region. It is undeniably true that pre-9/11, the UAE was remarkably uncooperative on terrorist financing. That did change with the terrorist attacks, however. Furthermore, this issue is irrelevant. Why would the UAE's government -- which has been an ally of the U.S. for decades -- use the ports as a source for money laundering? ANOTHER UPDATE: Glenn Reynolds is mystified why Bush is digging his heels in on this issue. I'm not -- I'm sure that Bush views the Congressional hullabaloo as legislative interference in routine executive branch functions. And we all know how Bush feels about that issue. YET ANOTHER UPDATE: Steve Flynn has been concerned about homeland security for quite some time, and he's not exactly Polyannish about the state of security in American ports. So I think it's telling that in this Time story by Tony Karon, Flynn is untroubled by this port deal: [T]o call the United Arab Emirates a country "tied to 9/11" by virtue of the fact that one of the hijackers was born there and others transited through it is akin to attaching the same label to Britain (where shoe-bomber Richard Reid was born) or Germany (where a number of the 9/11 conspirators were based for a time). Dubai's port has a reputation for being one of the best run in the Middle East, says Stephen Flynn, a maritime security expert at the Council on Foreign Relations. And Dubai Ports World, which is a relatively new venture launched by the government of Dubai in 1999, has a number of Americans well known in the shipping industry in its senior leadership. It operates port facilities from Australia through China, Korea and Malaysia to India, Germany and Venezuela. (The acquisition of P&O would give them control over container shipping ports in Vancouver, Buenos Aires and a number of locations in Britain, France and a number of Asian countries.) "It's not exactly a shadow organization for al-Qaeda," says Flynn. Dubai, in fact, was one of the first Middle Eastern countries to join the U.S. Container Security Initiative, which places U.S. customs agents in overseas ports to begin the screening process from a U.S.-bound cargo's point of departure. Flynn has more to say to the Washington Post's Paul Blustein and Eric Rich: Stephen E. Flynn, a specialist in maritime security at the Council on Foreign Relations, noted that although the company is state-owned, several members of its top management are Americans -- including its general counsel, a senior vice president and its outgoing chief operating officer, Edward H. Bilkey, who is a former U.S. Navy officer. And since the Sept. 11, 2001, terrorist attacks, the United States has increasingly depended on such foreign port operators to cooperate in inspecting cargo before it heads for U.S. shores. "It's a global network at the end of the day that we're trying to secure here," Flynn said. "And that doesn't happen by the United States owning every bit of it. What we should be focusing on instead is the question, are the security standards adequate?" Robert C. Bonner, who until November headed U.S. Customs and Border Protection, agreed. Although U.S. dock workers have occasionally been caught colluding with drug traffickers, the possibility that terrorists or their sympathizers would end up working in U.S. ports is remote because of the strong role of unions in hiring, he said. "I think there's some specter that people from the Middle East are going to come over here and operate terminals," he said. "I don't think anything like that is going to happen."YES, I'M STILL UPDATING: David Sanger and Eric Lipton do raise a small but valid and reality-based concern in their New York Times story: The administration's review of the deal was conducted by the Committee on Foreign Investment in the United States, a body that was created in 1975 to review foreign investments in the country that could affect national security. Under that review, officials from the Defense, State, Commerce and Transportation Departments, along with the National Security Council and other agencies, were charged with raising questions and passing judgment. They found no problems to warrant the next stage of review, a 45-day investigation with results reported to the president for a final decision. However, a 1993 amendment to the law stipulates that such an investigation is mandatory when the acquiring company is controlled by or acting on behalf of a foreign government. Administration officials said they conducted additional inquires because of the ties to the United Arab Emirates, but they could not say why a 45-day investigation did not occur. I do get some hives whenever I hear that the Bush administration has circumvented standard operating procedures -- but, again, there's nothing in the reports I've seen to suggest that there is any substantive reason for concern. The alarmists on both sides of the aisle are making the kind of conspiracy-based arguments that would make Michael Moore blush. See, for example, this nice debunking by Dick Meyer of CBS News, or this Financial Times story by Andrew Ward, Stephanie Kirchgaessner and Edward Alden. And see also this fact-laden Q&A by Eben Kaplan at the Council on Foreign Relations website. This sentence stands out in particular: "Calls from lawmakers to reconsider the approval have come after the thirty-day period to raise objections had expired." WHAT THE HECK, ONE MORE LAST UPDATE: California Conservative -- one of the first bloggers to raise qualms about the port deal -- now concludes, "If you step back and look at the big picture, this isn?t about port security. It?s about elections and winning credibility on the issue of homeland security." Finally check out Mansoor Ijaz's defense of Dubai in NRO. Key section: Whatever the UAE's policies in the pre-9/11 world (whether as home to A. Q. Khan's illicit nuclear network, one of three Taliban embassies, questionable banking practices, or as an alleged repository for Iranian-terror funds), Dubai's record under these young leaders in the post 9/11 world reflects serious and structural change in national strategy. As Jim Robbins noted Tuesday, in December 2004, Dubai was the first Middle East government to accept the U.S. Container Security Initiative as policy to screen all containers for security hazards before heading to America. In May 2005, Dubai signed an agreement with the U.S. Department of Energy to prevent nuclear materials from passing through its ports. It also installed radiation-detecting equipment ? evidence of a commitment to invest in technology. In October 2005, the UAE Central Bank directed banks and financial institutions in the country to tighten their internal systems and controls in their fight against money laundering and terrorist financing. These are not the actions of a terror-sponsoring state.