Yes. Please take a minute to compose yourselves. You did read the title of this post correctly and this is the reliably left-leaning Abhi writing this post (and not someone who has infiltrated our North Dakota bunker and is holding me at gunpoint). On Tuesday, President Bush forcefully defended his administration’s decision to allow a sale which would turn over the control of operations at major American ports to a company based in Dubai, in the United Arab Emirates, and controlled by that government. Here is one news report following the decision:

U.S. lawmakers formally asked the Bush administration Thursday to reconsider its approval of a sale giving a company in the United Arab Emirates control over significant operations at six major American ports.

The lawmakers, including four senators and three House members, sharply criticized the UAE as inconsistent in its support of U.S. anti-terrorism efforts.

They also said the country was a key transfer point for shipments of nuclear components sent to Iran, North Korea and Libya and was one of only three nations that had recognized the Taliban as Afghanistan’s legitimate government…

The Associated Press reported Saturday that government-owned Dubai Ports World had won approval for the $6.8 billion deal from a secretive U.S. panel that considers security risks of foreign companies buying or investing in American industry. [Link]

Here is Bush’s strong response today, where he actually threatened to veto any bill that curbs this sale (note: he has NEVER vetoed anything):

He called on opponents to explain why they opposed a Middle Eastern firm taking over when they did not oppose a British company being in control.

“I am trying to conduct foreign policy now by saying to the people of the world, ‘We’ll treat you fairly’,” he said.

“It would send a terrible signal to friends and allies not to let this transaction go through,” he told reporters. [Link]

For the rest of this post I am going to go out on a limb and trust in two things. I will leave it up to individual readers to decide whether to go out on this limb with me or not:

  1. I will trust that the “secretive U.S. panel” mentioned above has adequately considered and addressed the security risks involved in this deal.
  2. I will trust that there isn’t some larger Machiavellian plot behind this whole thing that will make the President’s friends rich at the expense of others.

Here is what bothers me. Imagine if after the terrorist attack against the federal building in Oklahoma, Congress announced that it would no longer allow certain key U.S. operations to be handled by Irish companies. McVeigh after all, was of Irish ancestry. Or what if British companies were denied if the shoe bomber, Richard Reed, had been successful? If people feel this way because the U.A.E. is a country of brown-skinned Arabs, then it is not unreasonable to think that they may one day feel this way about brown-skinned Indians. Amitabh Pal at The Progressive has picked up on this as well:

There has been a good amount of hyperbole about a Middle Eastern corporation’s buyout of a company that runs operations in several ports around the United States.

The takeover of the British Peninsular and Oriental Steam Navigation Company by Dubai Ports World, a United Arab Emirates government enterprise, has inspired strong reaction that, sadly, has sometimes had a tinge of anti-Arab sentiment.

“How are they going to safeguard against things like infiltration by al-Qaeda or someone else, how are they going to guard against corruption?” asked Rep. Peter King, R-N.Y., the chair of the House Homeland Security Committee. The outrage seems to be bipartisan. Democratic Senators Hillary Rodham Clinton and Robert Menendez are co-sponsoring legislation that will bar the control of port operations by foreign governments if President Bush doesn’t stop by March 2 Dubai Ports World from completing its takeover.

Now, I’m not naïve. The United Arab Emirates served as a financial transfer point for the operation. (This is at least partly due to the fact that UAE has become a major money laundering center due to lax oversight.) But Hamburg was a major plotting center for the terrorists, too. Can anyone imagine a similar outcry if a German state-owned firm had acquired Peninsular and Oriental?

Let’s address the prime concern here. The most oft-cited concern is, “what if someone high up in this company, an Arab U.A.E. citizen, is sympathetic to Al Qaeda and leaks important tactical details of a port’s operations to terrorists.” Fact: Two of the 9/11 hijackers were U.A.E. citizens and Al Qaeda money has been laundered through that country’s banks. There is further precedence for having such paranoid thoughts. NPR’s All Things Considered noted that the most relevant comparison to this fear would be Israel’s Operation Thunderbolt (a.k.a Operation Entebbe). In this operation IDF Special Forces Commandos successfully stormed and rescued hostages on Air France Flight 139, which was diverted to an airport in Uganda by terrorists. The important fact here is one of the key reasons why the Israelis succeeded:

One of the reasons that the raid was well planned was that the building in which the hostages were being held was built by an Israeli construction firm. Israeli firms were often involved in building projects in Africa during the 1960s and 1970s. The firm which built the airport terminal still had the blueprints, and supplied them to the government of Israel. In addition many of the released hostages were able to accurately describe the interior of the building, the number of hijackers, the involvement of Ugandan troops and many other important details.

While planning the military operation, the Israeli army built a partial replica of the airport building with the help of some Israeli civilians who had helped build the airport terminal. It has been claimed by researchers that after arriving at the military base to begin work on the replica building (not being aware beforehand what they were to do) the civilian Israeli contractors were invited to dinner with the commander of the base. At the dinner, it was indicated to them that, upon completion of the replica, and in the best interest of national security, they would be held guests of the military for a remaining few days. During the entire operation an extremely high level of security was maintained. [Link]

I contend that even if documents detailing the operations at these ports were to fall in to the hands of Al Qaeda, we should have safeguards in place that would make such a blunder irrelevant. Even though the company that wants to buy these ports is Arab run, most of the workers will be American. Law enforcement from the Department of Homeland Security MUST have safeguards in place so that even the blueprints and knowledge of the workings of our ports won’t be good enough to enable an attack against America. It is Congress that has failed if our ports are left unprotected and not a company from Dubai.

One other thing to consider (and this isn’t as big a stretch as it may seem at first) is the possibility that, in the long term, selling to the U.A.E. may make us less susceptible to a terrorist attack. The whole reason that the U.A.E. is buying up foreign businesses with its oil money is because their leaders know that their present economy is unsustainable. When the oil runs out, the U.A.E. will become a country with zero economic prospects, ripe for instability. THAT is the reason why it is diversifying its economy NOW. Given the lessons of 20th century history, I would rather have a stable Arab government that is economically entangled with us, than a poor one that might blame us for its troubles.

One final point. Over email Manish mentioned to me another analogy to this situation. Look at what is happening with Indian tycoon Laxmi Mittal in his bid to buy the French steel company Arcelor:

The European Union (EU) has reacted to reports of opposition to steel tycoon Laxmi Mittal’s takeover bid of Europe’s largest steelmaker, Arcelor.

The EU said it was against racial discrimination and the issue should be treated only on commercial considerations.

“The EU is of a clear view that nationality in such cases is not relevant and it should be decided according to the laws in place and commercial merits,” said David O’Sullivan, European Commission Director General-Trade.

However, he made it clear that the EU would be concerned if there were any violations of competition rules and the takeover created a monopoly kind of situation.

Mittal is facing bitter resistance in his takeover bid of the French company, Arcelor. The latest opposition comes from Luxembourg, which is looking at a law to fight Mittal’s bid. [Link]

Conventional wisdom has it that the white European powers that be don’t want a brown man taking control of such a key French company.

And so I side firmly with the Bush administration on this one. What both the Democrats and the Republicans in Congress are doing right now is playing upon the xenophobia of voters with the belief that it will pay-off in November (unfortunately it probably will pay off). The key to this is to build adequate safe-guards into the operations at our ports. It is both the President’s and Congress’ responsibility to fix our broken port system and not lay the blame on a foreign company.