Still looking for a reason to get riled up….

I'm still trying to find a reason to get exercised about the Dubai port deal. The latest is Mickey Kaus' argument: I recommend Daniel Engber's Explainer on what a port operator actually does: It gets cargo containers off of ships and puts them onto trucks or trains. A port operator also provides other services to the shipping industry: It does the paperwork to get incoming shipments through customs and uses its computer system to help connect the goods with potential recipients. ... Most operators invest in a computerized yard management system to help each trucker connect with his payload. ... The port operator also handles personnel issues. If we're afraid of bad guys sneaking something dangerous into the U.S., it sure seems like there are lots of opportunities for mischief if you can infiltrate the firm that does the paperwork and runs the computer system and handles the "personnel issues"! Is it comforting matter that "security" at American ports will still be "controlled by U.S. federal agencies led by the Coast Guard and the U.S. Customs and Border Control Agency ... ." Not if what you're worried about is a small cell of people looking for a way to get around the Coast Guard's security. Just having a port operator that is more easily approached by people who speak Arabic vastly increases the risk, at least the risk from Arab jihadists, no? (emphasis added) I would recommend that Mickey read this Washington Post story by Jim VandeHei and Paul Blustein. It's ostensibly about the White House's lugubrious reaction to the ports controversy, but it also sheds some light on how the CFIUS process addressed U.S. security concerns: The process began on Oct. 17, when representatives of the Dubai company informally approached the Treasury Department to disclose that they were planning to purchase the British firm, Peninsular and Oriental Steam Navigation Co., according to testimony by administration officials at a Senate hearing last week. Treasury officials directed them to consult with Homeland Security because of the port security question. The executives of Dubai Ports World -- several of whom are American -- well understood that they might face extensive scrutiny. "You don't have to do this, but I brought a small team here [from Dubai] to meet with the CFIUS agencies in early December," said Edward H. "Ted" Bilkey, the company's chief operating officer and former U.S. Navy officer. The idea was to give the panel plenty of time even before the company formally filed to start a standard 30-day review. Homeland Security officials, especially in Customs and Border Protection, had high regard for the company, which is owned by the government of Dubai and operates terminals in 19 ports in Asia, Europe and South America. It was the first in the Middle East to participate in a post-Sept. 11 program in which Customs agents are posted overseas to screen containers before they are loaded onto U.S.-bound ships. U.S. intelligence agencies -- who were asked on Nov. 2 for any information they had on the company -- produced nothing "derogatory" about it, Baker said. Even so, the department had enough qualms to insist on a number of legally binding conditions for approving the deal -- a frequent CFIUS practice. The company pledged to maintain its participation in the Customs program, "and they agreed to open their books, and give us access to records, without any formal legal process," Baker said. The department also wanted to ensure that the personnel at the U.S. terminals to be taken over by the company would remain almost entirely American. So it extracted a pledge that the company intended to keep the current management of U.S. operations in place. (emphasis added) Given the concessions obtained through the CFIUS process -- DPW's participation in the Customs initiative, the transparency of DPW's books, the continuance of the current management team for the U.S. ports -- is there any rational reason to get exercised about this deal? Is Mickey's assertion that jihadists would have a better opportunity to infiltrate DPW's ports a valid one, given the layers of American management involved? The Post story also aleviates the other small concern I had about this deal -- that the Bush administration bollixed up the process. The New York Times story I cited in my first post on this topic asserted: 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. VandeHei and Blustein have a different desription of the process in the Post story: [O]nce Dubai Ports World had agreed to the conditions required by Homeland Security, none of the agencies on CFIUS objected to the transaction when the 30-day review was completed on Jan. 17. If even one agency had objected, the matter would have gone to a 45-day investigation -- which would have required a presidential decision at the end. Moreover, a single dissent would have meant bringing the matter before higher-ranking officials in each department. But instead, the matter stayed with assistant secretary-level officials, who told the company the transaction could go forward. I should know which version of the process is correct, but I don't. Readers are encouraged to enlighten me on this [UPDATE: Thank you, Chris! This comment clears up much of the confusion.]. UPDATE: Mickey e-mails me to suggest I read Charles Krauthammer's thoughts on the matter: [T]he problem is not just the obvious one that an Arab-run company, heavily staffed with Arab employees, is more likely to be infiltrated by terrorists who might want to smuggle an awful weapon into our ports. But that would probably require some cooperation from the operating company. And neither the company nor the government of the UAE, which has been pro-American and a reasonably good ally in the war on terrorism, has any such record. The greater and more immediate danger is that as soon as the Dubai company takes over operations, it will necessarily become privy to information about security provisions at crucial U.S. ports. That would mean a transfer of information about our security operations -- and perhaps even worse, about the holes in our security operations -- to a company in an Arab state in which there might be employees who, for reasons of corruption or ideology, would pass this invaluable knowledge on to al-Qaeda types. That is the danger, and it is a risk, probably an unnecessary one. Color me unimpressed. DPW already gets a lot of this information because Dubai is a participant in the Container Security Initiative. Furthermore, the on-the-ground environments in the ports themselves look like they won't be changed one iota because of this deal. It will still be U.S. longshoremen handling the cargo, U.S. managers running port operations for DPW, U.S. managers at the upper echelon of DPW, and U.S. law enforcement managing port security. Where's the beef? A final point -- my support for the Dubai deal should not be misinterpreted as a lack of concern about port security. I'm as sanguine now as I was before the deal -- that is to say, not all that sanguine. It's just that this deal is irrelevant to the real problems at hand for port security -- inadequate inspections. An excellent primer on port security can be found in Jon D. Haveman, Howard J. Shatz, and Ernesto A. Vilchis (2005) "U.S. Port Security Policy after 9/11: Overview and Evaluation", Journal of Homeland Security and Emergency Management: Vol. 2: No. 4, Article 1. ANOTHER UPDATE: Looks like DPW has requested the 45 day review, which has gone a long way towards alleviating Congressional concerns.