Dubai Company, White House Had Secret Deal

AP reports that the White House agreed to allow a Dubai company to take over a port management contract in exchange for cooperation on security matters.

Under a secretive agreement with the Bush administration, a company in the United Arab Emirates promised to cooperate with U.S. investigations as a condition of its takeover of operations at six major American ports, according to documents obtained by The Associated Press.

The U.S. government chose not to impose other, routine restrictions. In approving the $6.8 billion purchase, the administration chose not to require state-owned Dubai Ports World to keep copies of its business records on U.S. soil, where they would be subject to orders by American courts. It also did not require the company to designate an American citizen to accommodate requests by the government. Outside legal experts said such obligations are routinely attached to U.S. approvals of foreign sales in other industries.

Dubai Ports agreed to give up records on demand about “foreign operational direction” of its business at the U.S. ports, according to the documents. Those records broadly include details about the design, maintenance or operation of ports and equipment. It also pledged to continue participating in programs to stop smuggling and detect illegal shipments of nuclear materials. “They’re not lax but they’re not draconian,” said James Lewis, a former U.S. official who worked on such agreements. If White House officials negotiating the deal had predicted the firestorm of criticism over it, “they might have made them sound harder.”

The conditions over the sale of London-based Peninsular and Oriental Steam Navigation Co. were detailed in U.S. documents marked “confidential.” Such records are regularly guarded as trade secrets, and it is highly unusual for them to be made public.

[…]

In Lebanon, Secretary of State Condoleezza Rice said Thursday that the agreement was thoroughly vetted in a review process that took approximately three months. “This is supposed to be a process that raises security concerns, if they are there, but does not presume that a country in the Middle East should not be capable of doing a deal like this.” She described the United Arab Emirates as “a very good ally” and said “if more details need to be made available then I’m sure they will be.”

The headline makes this sound like a sinister plot. The problem is that no dates are given and it is therefore not clear what the sequence of events was. Further, we are not given any indication of what type of “cooperation” is being promised by Dubai.

David Sanger and Eric Lipton reported yesterday that “the deal had been thoroughly reviewed by a dozen or more federal agencies.” At what point in the process was this “secret deal” reached? If it was at the end of the process, then it was likely just tying up loose ends. If it was being negotiated early in the process, then some red flags might be raised. Of course that depends, too, on the answer to the second question.

If the “cooperation” is limited to what is described in the piece, then it strikes me–as a casual observer with nearly zero knowledge about port administration prior to this news coming out–as a bad deal. Why give concessions in exchange for ordinary compliance with U.S. laws? On the other hand, if it entails greater cooperation in the battle against Islamist terrorists, then a few concessions in adminstrative protocols would be well worth it.

More importantly, as Sanger notes in a piece today, we have some serious issues with port security, Dubai or no Dubai.

The administration’s core problem at the ports, most experts agree, is how long it has taken for the federal government to set and enforce new security standards — and to provide the technology to look inside millions of containers that flow through them.

Only 4 percent or 5 percent of those containers are inspected. There is virtually no standard for how containers are sealed, or for certifying the identities of thousands of drivers who enter and leave the ports to pick them up. If a nuclear weapon is put inside a container — the real fear here — “it will probably happen when some truck driver is paid off to take a long lunch, before he even gets near a terminal,” said Mr. Flynn, the ports security expert.

Strangely, this has been on the radar of national security policy experts, including the academic community, since at least the early 1990s (when I was in graduate school and it was constantly being discussed as scholars fleshed out security issues for the “post-Cold War era”). That it still has not been addressed, over three years after the 9/11 attacks brought renewed attention to homeland defense, is outrageous.

Update: Kevin Drum notes that “I also did a bit of Googling to find out what a few actual port operators thought of this deal last week before it turned into quite such a media circus. They seemed pretty sangune about the whole thing.” He gives several representative quotes.

Update 2: Josh Marshall, who is “officially agnostic on the security risk posed by allowing Dubai Ports World to assume the management of six major US ports of entry” argues that “if they need to pledge to cooperate and assist with security and counter-terrorism then clearly they are involved in port security.” Well, no. I have no special knowledge here, other than the assurances of all the neutral experts I’ve read that security is handled by the Coast Guard and other DHS entities, of the contract. But it is not inconceivable that the administration sought linkage between going easy on the terms of the contract and additional cooperation on counterterrorism unrelated to the port management contract.

Update 3: I agree with Wizbang’s Paul that the AP headline (at least the YahooNews headline) is “midleading.”

They didn’t have a “secret agreement” they had an agreement to keep trade secrets. The difference between the two is about as large as the difference between Billy Ocean and the Atlantic Ocean.

Update 4: It occurs to me that younger readers have no idea who Billy Ocean is. VH1 and Whatever Happened To have details.

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James Joyner
About James Joyner
James Joyner is Professor and Department Head of Security Studies at Marine Corps University's Command and Staff College and a nonresident senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. He's a former Army officer and Desert Storm vet. Views expressed here are his own. Follow James on Twitter @DrJJoyner.

Comments

  1. Mark says:

    It occurs to me that younger readers have no idea who Billy Ocean is.

    Am I getting old, I know who Billy Ocean is, and had some of his albums growing up (on cassette)…and I’m only 31!

  2. James Joyner says:

    Absolutely. Anything over 25 is pushing it!

  3. Bhoe says:

    On the other hand, if it entails greater cooperation in the battle against Islamist terrorists, then a few concessions in adminstrative protocols would be well worth it.

    Sorry, James, but Bush made it quite clear at today’s cabinet meeting that security issues were not taken into account as this deal was negotiated. In response to the question, “Sir, do you wish you had known earlier about the Dubai Ports deal and were you surprised by the controversy over it?” He said:

    This deal wouldn’t go forward if we were concerned about the security for the United States of America.

    http://www.whitehouse.gov/news/releases/2006/02/20060223-1.html

    It makes you wonder what, in fact, IS he concerned with???