Bush stands by Dubai ports deal

Tue Feb 28, 8:58 PM ET

WASHINGTON (Reuters) - President George W. Bush insisted on Tuesday it was safe to let an Arab company run terminals at six major U.S. ports, even though a new White House-backed security review of the deal has not yet started.

The deal with state-owned Dubai Ports World continued to come under fire from some lawmakers who said it would undermine security in the vulnerable shipping sector and could make it easier for militants to attack the United States.

But Bush appeared to be wearing down the resistance of Senate Majority Leader Bill Frist, who had questioned the plan.

Facing a bipartisan uproar over the agreement to have the company, owned by Dubai of the United Arab Emirates, control terminal management at ports such as New York and New Jersey in its takeover of assets of Britain's P&O, the White House agreed on Sunday to a new 45-day security review. An initial government probe had approved the deal last month.

After the new review, Bush will have to authorize or reject the deal. But speaking even before it began, he insisted it should go through.

"If there was any doubt in my mind or people in my administration's minds that our ports would be less secure or the American people in danger, this deal wouldn't go forward," Bush said, as the U.S. Congress held another day of hearings on the contested takeover bid.

"The only way it won't happen is if there is a true security threat to the United States of America," Bush said separately in an interview with ABC News.

Bush has threatened to veto any legislation to block the deal. The flap over the takeover by the United Arab Emirates-based company helped push Bush's approval rating to an all-time low of 34 percent, according to a new CBS News poll.

FRIST MORE COMFORTABLE

Frist, a Tennessee Republican who asked last week that the deal be put on hold, said he was more comfortable because he had received more information. He said he would not allow any related legislation on the Senate floor while the new inquiry is under way.

At a hearing of the Senate Commerce Committee, Dubai Ports' chief operating officer Ted Bilkey, a U.S. citizen, said his company would abide by the outcome of the new U.S. security review, whatever it is. He added that DP World wanted to work with the Americans to achieve better port security.

But several senators, including Democrat John Kerry of Massachusetts, voiced concern to Bilkey about doing business with a country that participates in an Arab economic boycott of Israel.

A bipartisan group of senators already has introduced legislation giving Congress the power to block the deal.

Several Democratic and Republican senators said the controversy highlighted underlying deficiencies in port security, and called for fresh legislation to protect this vital part of the U.S. economy.

Republican Commerce Committee Chairman Ted Stevens of Alaska said he would work for passage of a ports security bill his panel approved in November. Among other things it would authorize the random inspection of incoming cargo.

Senators at an Armed Services Committee hearing pressed top intelligence officials about a U.S. Coast Guard report that said "intelligence gaps" had made it hard to assess whether the takeover presented security concerns.

Intelligence chief John Negroponte told the hearing: "On the basis of our inquiry we assessed that the threat to U.S. national security posed by DP World to be low. And we did not see any red flags come up during the course of our inquiry."

(Additional reporting by Caroline Drees)

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