Schumer and King: Statements by Dubai Ports CEO Raise Serious Questions About Company's Suitability to Operate Major U. S. Ports

SCHUMER AND KING: STATEMENTS BY DUBAI PORTS CEO RAISE SERIOUS QUESTIONS ABOUT COMPANY'S SUITABILITY TO OPERATE MAJOR U.S. PORTS

DHS Secretary Should Investigate Misleading Statements by Dubai Ports World Chief Assure American People by Thoroughly Vetting Port Deal Before It Can Be Approved by Feds

Bipartisan Effort Continues to Ensure that Port Security Will Not Be Compromised By Allowing a Dubai Government-owned Company to Operate Some of the Largest Ports on the East Coast including the Port of New York/New Jersey

Today, Senator Chuck Schumer (D-NY) and Rep. Peter King, the Chairman of the House Homeland Security Committee, sent a letter to Homeland Security Secretary Michael Chertoff urging him to examine the comments made by the CEO of Dubai Ports World, Mohammed Sharaf. Sharaf suggested that port operators have no security responsibilities; he was unaware of various security procedures in Dubai and the United States and didn't know how much cargo was even screened in Dubai's port; and he indicated that the deal was going to be completed, regardless of U.S. security concerns, because British investors were waiting for their money. Sharaf's statements raise serious questions about DP World's suitability to operate major U.S. ports. The two New York lawmakers have repeatedly asked that Congress is fully informed as the 45-day investigation progresses, and notified about how security concerns are being addressed.

Schumer said, "The CEO of DP World is putting the cart before the horse. We believe that whether or not a financial transaction is on the way to being completed that national and homeland security must trump trade. It is clear as day that a thorough investigation must be finished before Dubai takes control of port operations here in the United States."

King stated, ""Very simply, security concerns must dictate this transaction. Nothing less."

Dubai Ports World, a Dubai Company that is owned and operated by the United Arab Emirates is about to complete a $6.8 billion deal, which was briskly approved by the Committee on Foreign Investment in the United States (CFIUS) last month. The approval allows the UAE's government-owned company to take control of significant operations at six U.S. ports including: New York, New Jersey, Baltimore, New Orleans, Miami and Philadelphia. Except for cargo screening functions performed by the Department of Homeland Security, the port operator is responsible for securing cargo coming in and out of the port, the port facility itself, and the hiring of security personnel.

Last week a bipartisan group of senators, led by Schumer introduced legislation to suspend the Dubai port deal immediately. King introduced a companion bill into the House last week with over 90 co-sponsors. Since Schumer and King first criticized this deal, a litany of homeland security professionals have also come out questioning the deal including former DHS Secretary Tom Ridge, former DHS Inspector General Clark Kent Ervin, Republican and Democratic senators and representatives, and governors and mayors around the nation.

The letter sent today is below:

March 7, 2006

Hon. Michael Chertoff
Secretary
Department of Homeland Security
Nebraska Avenue Complex
3801 Nebraska Avenue, N.W.
Washington, DC 20528

Dear Secretary Chertoff,

We write to express our strong concern regarding the comments made this weekend by Dubai Ports World CEO Mohammed Sharaf, which raise serious questions about DP World's commitment to security at ports in the United States and thus the proposed takeover of U.S. port operations by DP World. As you know, DP World is set to close the deal sometime this week to take over terminal operations at major ports up and down the East and Gulf Coasts. Members of Congress, on a bi-partisan and bi-cameral basis have questioned the breadth and depth of the Committee on Foreign Investment in United States (CFIUS) initial security review of the takeover. Our key concern has been, and remains today, the national security implications of allowing a commercial venture owned by a nation with a nexus to terrorist activity such enormous control and access to our ports. Mr. Sharaf's comments and his view that this is simply a run of the mill economic transaction, merit further investigation to ensure that DP World, its leadership and employees share our commitment to security.

In an interview yesterday, Mr. Sharaf made three comments that are very disturbing. Mr. Sharaf confidently proclaimed that "The deal has been made…. The matter is basically waiting for the money to be transferred to the investors. If they don't, big losses are going to be there for the investors." While Mr. Sharaf focused on the economics of this deal, we can assure you that our concern for security of Americans and our ports far outweighs our concern for a few investors in Great Britain. It was our understanding that while the company may officially close the deal this week, the transfer of U.S. operations has been put on hold until CFIUS completes the new 45 day investigation. It appears Mr. Sharaf does not realize how important the investigation is to addressing security concerns that were left unexplored by the first CFIUS review, and that any findings made during the investigation that expose possible security vulnerabilities at our ports, could lead to the Congress taking action to block the deal. We ask that the Department of Homeland Security make sure that Mr. Sharaf and all of DP World realize the seriousness of the new investigation. Additionally, we hope that you are working under the same understanding as we are - namely, that this deal may be rejected by the Committee on Foreign Investment or the United States Congress if security concerns are not met.

Second, when asked what percentage of containers at the port of Dubai is physically inspected, Mr. Sharaf did not have an answer. This information is critical because, as your department has said time and again, one of DHS's primary security countermeasures against a terrorist smuggling a nuclear weapon on to a ship bound for the United States is that customs officials, both from the U.S. and the home country, physically inspect more containers abroad that they do in the United States. It is essential that port authorities in the United States are absolutely confident that containers coming from new DP World ports receive the same high level of scrutiny as before the takeover. We realize the sensitivity of such information, but would like evidence that DHS has received this information and will ensure that the maximum numbers of containers possible are thoroughly inspected at ports owned or controlled by DP World. Finally, the lack of knowledge about such a critical security fact by the CEO of this company raises even more questions about the company's commitment to ensuring that ships bound for the United States do not represent a threat to our nation or its people.

Third, Mr. Sharaf stated that "there's a misconception about port operators. Port operators don't control security at the port." This statement is patently incorrect. The terminal operator is responsible for security at its own terminal and the area within the port where cargo is loaded, unloaded or transferred, according to the Homeland Security Department. In addition, Mr. Sharaf had very little idea of what kind of security checks were done in Dubai for DP World employees seeking to get visas to work at U.S. ports. All of these comments raise serious concerns about Mr. Sharaf's level of engagement with the security issues surrounding this takeover.

Mr. Sharaf is a businessman and we understand his focus on his shareholders and the economics of this deal. Nevertheless, our primary duty - and yours - is to ensure the safety of our citizens. When it comes to this takeover, security must not take a back seat to profit. If Mr. Sharaf, as now appears clear, will be focused only on profits, our government must be that much more vigilant in efforts to examine and ensure that this deal does not endanger our national security.

This is why we believe it is vital that Congress be kept apprised of the progress of the new 45-day investigation and DP World's willingness to cooperate with CFIUS investigators. In addition, Congress must be given a final report and full briefing on CFIUS's findings, and we respectfully request that you highlight the company's cooperativeness as it will be a critical factor in weighing the quality of investigation and the viability of the takeover.

We appreciate your consideration to this timely security issue and pledge our full support in the effort to make sure our ports are as secure as possible.

Sincerely,

Senator Chuck Schumer
Rep. Peter King

http://schumer.senate.gov/SchumerWebsite/pressroom/press_releases/2006/PR88.Sharaf%20Ltr.030706.html