US administration backs down in ports battle

Just days after President George W. Bush threw down the gauntlet and vowed to veto any bill in Congress that could delay the transaction, senior Bush advisor Karl Rove said in a radio interview that the president might consider a postponement after all.

"Look, there are some hurdles, regulatory hurdles ... that are going to be concluded next week. There's no requirement that it close, you know, immediately after that," Rove told Fox News Radio.

"Our interest is in making certain the members of Congress have full information about it, and that, we're convinced, will give them a level of comfort with this," Rove said.

The White House aide's conciliatory words came as officials from a dozen federal agencies took part in a US Senate briefing on plans for a United Arab Emirates (UAE) state-owned firm, Dubai Ports World, to acquire a British firm which currently manages the six US ports.

The parade of officials on Capitol Hill sought to allay lawmakers' outrage at not having been notified in advance about the plan, which they said could leave America exposed to future acts of terror.

The administration has found few congressional allies in a controversy which analysts said could lead not only to the first veto of the Bush presidency, but to an almost certain override by Congress -- a major setback for the presidency.

Administration witnesses testified that the UAE has been a stalwart ally in the US-led war on terror, and was worthy of being trusted to manage US seaports.

Senator Carl Levin, the top Democrat on the committee, deemed Dubai's record to be lacking.

"The UAE was apparently one of only a handful of countries in the world to recognize the Taliban regime in Afghanistan, whose support of Osama bin Laden and Al-Qaeda led to the events of 9/11," Levin said, referring to the September 11, 2001 terror attacks.

"Millions of dollars in Al-Qaeda funds went through UAE financial institutions," Levin said.

Deputy Secretary of Defense Gordon England told lawmakers however that the fears have been overblown, assuring them the UAE is "a friend and an ally of the United States."

He added that the vetting process for the deal "was not cursory and was not casual," but rather was "in-depth and comprehensive" and expressed concern that the outcry over the sale would be perceived as "paranoid and isolationist."

President Bush said Thursday that an improved flow of information with members of Congress likely would help to dispel doubts.

"The more people learn about the transaction that has been scrutinized and approved by my government, the more they'll be comforted that our ports will be secure," Bush told reporters as he met with his cabinet.

"We will continue to talk to people in Congress and explain clearly why the decision was made," said Bush.

The White House also stressed that security at the ports will still fall to the US Coast Guard, US Customs, and US Border Patrol.

Unless delayed or blocked, the transaction is to be finalized on March 2, and the ports affected are in New York; Miami; Newark, New Jersey; Baltimore, Maryland; New Orleans, Louisiana; and Philadelphia, Pennsylvania.

Meanwhile, Dubai Ports World has undertaken its own public relations offensive, hiring former US Senator Bob Dole to help salvage the 6.8 billion dollar deal, according to media reports.

The ex-senator -- a one-time presidential candidate and former Republican leader in the Senate -- appeared to have his work cut out.

Even Dole's wife, currently a Republican senator for North Carolina, wrote in a letter Wednesday that she is worried about the impending change in port operations.

"I am deeply concerned that the proposed transfer of seaport operations to a company controlled by the United Arab Emirates government might compromise our ability to effectively control our ports and harbors," Elizabeth Dole, a member of the Senate Armed Services panel, wrote in a letter to Warner, according to press reports.

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