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Philadelphia Inquirer February 21, 2006

Storm rages over ports deal

New Jersey senator joins the foes of Arab purchase.

By Elisa Ung

NEWARK, N.J. - U.S. Sen. Robert Menendez warned yesterday that already vulnerable port security could get worse with the Bush administration's approval of an Arab company to take over operations at major American ports.

"This deal is pre-Sept. 11 mentality," said Menendez (D., N.J.), whose remarks at the Port Authority of New York and New Jersey ratcheted up a national chorus against a deal that could put some operations at six U.S ports, including Philadelphia, under the control of a company owned by the government of the United Arab Emirates.

"We wouldn't turn over our Customs Service or our Border Patrol to a foreign government, and I don't believe we should turn over the ports of the United States, either," he said.

Menendez said that if the administration did not block the sale before its completion March 2, he would push Congress to immediately pass legislation he is sponsoring with U.S. Sen. Hillary Rodham Clinton (D., N.Y.) to ban the sale of U.S. port facilities to companies owned by foreign governments.

Menendez and other lawmakers say they are worried that the sale could leave key U.S. ports vulnerable to terrorists. At least two Sept. 11, 2001, hijackers were from the United Arab Emirates, and the country was a conduit for a top Pakistani scientist's shipments of smuggled nuclear components to Iran, North Korea and Libya, according to U.S. lawmakers.

The controversy centers on the sale of London-based Peninsular & Oriental Steam Navigation Co. to Dubai Ports World in the United Arab Emirates. In addition to Philadelphia, the company has major commercial operations in New York, New Jersey, Baltimore, New Orleans and Miami.

The Bush administration says it found no security risk in the deal but would not elaborate, saying the details are classified.

During a stop in Alabama yesterday, Attorney General Alberto Gonzales said the administration had a "very extensive process" for reviewing such transactions.

"It's one that takes into account matters of national security, takes into account concerns about port security," he said. "And for a variety of reasons, the consensus was that this was a transaction that should be approved."

A bipartisan group of U.S. legislators has expressed concern. They include U.S. Sen. Rick Santorum (R., Pa.), who has asked President Bush to halt the transaction, and U.S. Reps. Curt Weldon (R., Pa.) and Robert A. Brady (D., Pa.).

Menendez said port security, particularly inspection of containers, was already a "large loophole in our security blanket." About 95 percent of the cargo that enters the New York-New Jersey port is not inspected, he said.

"This isn't about isolationism," he added, saying the United States should build relations with the United Arab Emirates.

Handing over U.S. ports, he said, would go too far. What, he asked, would happen if the United States ever found itself at war with the United Arab Emirates?

Gov. Rendell, also citing the large amount of uninspected cargo, said on The Ten O'Clock News on WTXF (Channel 29), "You could literally ship a nuclear device in and have a 95 percent chance that it wouldn't get detected."

Peninsular & Oriental has a half-interest in Delaware River Stevedores, which leases the Tioga Marine Terminal in Philadelphia's Port Richmond neighborhood.

Tioga is part of a controversial plan to build a liquefied natural gas terminal in Port Richmond. The plan would allow Tioga to receive huge gas tankers, which would require an additional layer of security because of terrorism concerns.

William McLaughlin, a spokesman for the Philadelphia Regional Port Authority, the state agency that owns Tioga, said yesterday that officials there were taking a "wait-and-see attitude" toward the sale. "Unlike the other ports, we don't have a direct contractual relationship" with the British company, he said.

Delaware River Stevedores also loads and unloads cargo ships in Camden and Wilmington, and provides stevedoring services at the Philadelphia Cruise Terminal.

Peninsular & Oriental also operates the New York Cruise Terminal and owns a half-interest in the Port Newark Container Terminal, the third-largest cargo terminal on the property of the Port Authority of New York and New Jersey. Officials there have asked for more details about the pending deal.

Some homeland security experts have condemned the deal, saying it would make it impossible to assess the risk to the ports, while others have dismissed criticism like Menendez's as political.

John E. Pike, director of the security think tank Globalsecurity.org, said that while there was cause for some concern over the company's transparency, "I think there's a fair amount of hysteria. As far as I can detect, the main thing that would change here is where the money ultimately goes. I can't detect much of a change in terms of who is actually unlocking the door in the morning."

Pike said the controversy did raise a larger issue: "I think we need to think clearly about what facilities have to be under American ownership and what companies from what countries should not be allowed to own anything... with any degree of sensitivity in the United States."

Copyright 2006, Philadelphia Inquirer