The case for the UAE/ports deal wasn’t helped when columnist Jack Kelly wrote about a friend’s son who is working there and reports Dubai “is awash with booze and hookers.” Strangely, Kelly followed that with the statement, “The UAE is what we wish every Arab country were like.”
Alleged corruption in the UAE is another reason why the deal deserves to be seriously scrutinized.
But where did the story come from in the first place?
Deputy Secretary of the Treasury Robert Kimmitt claims that the deal allowing the UAE firm, Dubai Ports World, to oversee terminal operations at some American ports was the subject of press coverage last October but did not cause a controversy at that time. That struck us as a significant claim. Was the rest of the press asleep at the switch?
In fact, the only coverage in the major media we could find of the “deal” last October were stories about Dubai Ports World negotiating to acquire the British ports and ferries group P&O (Peninsular & Oriental Steam Navigation Co.). But these stories did not highlight or even mention that P&O operated terminals at U.S. ports. That was part of the deal, of course, but it wasn’t made clear in the stories we saw.
The significance of the deal broke into the open when Ted Bridis of AP reported on February 11 that “A company in the United Arab Emirates is poised to take over significant operations at six American ports as part of a corporate sale, leaving a country with ties to the Sept. 11 hijackers with influence over a maritime industry considered vulnerable to terrorism. The Bush administration considers the UAE an important ally in the fight against terrorism since the suicide hijackings and is not objecting to Dubai Ports World’s purchase of London-based Peninsular and Oriental Steam Navigation Co.”
But it was Frank Gaffney of the Center for Security Policy who made this into a national issue with his own column on the matter on February 13.
The Bush Administration might have avoided the controversy if it had paid more attention to conservative Senator James Inhofe, who has long been promoting reform of the federal process that produced approval of the ports deal. That process involves the Committee on Foreign Investment in the United States (CFIUS). Inhofe identified several loopholes and flaws in the process and had introduced legislation to require greater scrutiny of foreign acquisitions of U.S. businesses that could threaten U.S. national security.
Ironically, it was a conservative President, Ronald Reagan, who established the CFIUS process through Executive Order 12661 in 1988.
Gaffney noted that the controversy over the ports became “white hot” after talk radio, led by Michael Savage, and the blogosphere, got involved, inciting the public into opposition to the deal.
But not all of conservative talk radio criticized the deal. After dilly-dallying, Rush Limbaugh jumped on board, saying we should be encouraging capitalism in Arab states.
The UAE does have a free market economy. But it is also a Sunni Islamic authoritarian regime, with less political freedom than the new Iraq.