The "Port Operations Require Tough Scrutiny" (Ports) Act Statement of Introduction

THE "PORT OPERATIONS REQUIRE TOUGH SCRUTINY" (PORTS) ACT STATEMENT OF INTRODUCTION -- (Extensions of Remarks - February 28, 2006)

SPEECH OF
HON. EDWARD J. MARKEY
OF MASSACHUSETTS
IN THE HOUSE OF REPRESENTATIVES
TUESDAY, FEBRUARY 28, 2006

* Mr. MARKEY. Mr. Speaker, today I am introducing the Port Operations Require Tough Scrutiny (PORTS) Act to ensure that decisions about the sale of critical U.S. infrastructure such as ports are thoroughly reviewed so that the homeland security consequences of these transactions are not brushed aside in favor of commercial interests.

* The Bush Administration's recent decision to approve the sale of British port operator Peninsular & Oriental Steam Navigation to Dubai Ports World, a company owned by the government of the United Arab Emirates (UAE), has raised significant homeland security concerns. This decision also has shined a light on a little-known committee at the Treasury Department and the secretive process it uses to make decisions that can have important consequences for the security of our Nation.

* Clearly, the UAE port deal did not receive the scrutiny it deserved. The 9/11 Commission identified the government of the UAE--the same entity that would operate major functions at 6 U.S. ports--as a ``persistent counterterrorism problem''. Two of the 9/11 hijackers were from the UAE. The 9/11 Commission concluded that the UAE banking system was used as a conduit for funds for the September 11th attacks. The UAE was a key transfer point for illegal shipments of nuclear components to Iran, North Korea and Libya. The UAE was one of only three nations to recognize the legitimacy of the Taliban government and still does not recognize the State of Israel.

* Despite all of these warning signs, the proposed port deal did not even trigger a 45-day investigation, which is provided in current law and should have been interpreted as being mandatory when foreign governments--whether involving the UAE, the UK, the Ukraine or any other nation--seek mergers, acquisitions or similar transactions that could affect U.S. national security. Nevertheless, when asked about the UAE port deal last week, Defense Secretary Rumsfeld said, ``I am reluctant to make judgments based on the minimal amount of information I have because I just heard about this over the weekend.'' (Defense Department news briefing, 2/21/06).

* It is unacceptable that President Bush, the Secretary of Homeland Security, the Secretary of Defense, and the Secretary of the Treasury were not informed of the UAE port deal until after it was approved and had caused widespread public outrage. President Bush has repeatedly told the American people that 9/11 changed his thinking, and extraordinary measures, such as warrantless wiretapping of American citizens, are required to keep America safe. How, then, could the Bush Administration have overlooked such an obvious homeland security threat?

* My legislation would strengthen the process for assessing the national security impact of foreign ownership of critical U.S. infrastructure. Specifically, the legislation would:

* Limit Takeovers of Critical Homeland Infrastructure. In cases where the purchaser is a government-owned company based in a foreign country, the transaction must be approved not only by CFIUS, but also by the President and be subject to congressional review.

* If the purchaser is a foreign company, but not government-controlled, the transaction must undergo a 45-day investigation and be found to not undermine national security before it can be approved.

* Increase the 30-day Evaluation Period. According to the Government Accountability Office (GAO), ``Several officials [participating in the CFIUS process] commented that, in complex cases, it is difficult to complete analyses .....within 23 days.'' CFIUS's guidance requires member agencies to determine if they are likely to object to the transaction by the 23rd day of the 30-day review period. The legislation would double this initial evaluation period to 60 days and permit any participant to be granted an automatic 10-day extension, separate from CFIUS's 45-day investigatory period.

* Require Reports to Congress. According to Treasury Department regulations, CFIUS reviews of any proposed transactions are confidential, and there is no congressional oversight of CFIUS decisions. The legislation would require CFIUS to report annually to Congress on the number of notifications it received during the year and the action taken after each notification.

* As security experts and the 9/11 Commission have pointed out, our ports are a vulnerable entry point that could be exploited by terrorists to strike our country. Almost none of the cargo that enters U.S. ports is ever inspected. While the federal government is ultimately responsible for security at ports, much of the day-to-day security responsibilities, such as hiring security guards and ensuring adequate access controls and fencing are in place, are delegated to the companies that operate at the port. The port operator also has access to real-time sensitive intelligence of the continuous movement of ships, their cargoes and the millions of containers they are stored in; the identity of their shippers and inside knowledge about the security in place at the ports.

* While oversight of these private operators is the responsibility of the Department of Security, the Bush Administration is nickel and diming our port security by proposing a budget that eliminates millions in port security grants. This is a wrong-headed decision that only leaves our country vulnerable to a devastating attack, such as a nuclear weapon or dirty bomb being detonated in our country.

* We know that terrorists are seeking to use U.S. ports as a route to launch a devastating nuclear attack on U.S. soil--one of the millennium bombers entered the United States through the Port of Boston in an attempt to bomb buildings on the West Coast. Cargo containers represent a cheap, deadly method for delivering bombs on U.S. soil--we cannot afford to be lax in our oversight of the shipping and handling of these containers. This Administration's scrutiny of this UAE deal is just like their treatment of tons of cargos at our door: insufficient, incomplete and incomprehensible, given the security threats we face.''

* As the DP World decision illustrates, the CFIUS process urgently needs to be overhauled. I urge consideration of this legislation so that we can increase the scrutiny of transactions that could create serious homeland security risks. Commerce must not be permitted to trump common sense.

http://thomas.loc.gov/