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Arab Firm Delays Deal On Seaports

Facing unrelenting political and national security concerns, an Arab maritime company offered late last night to delay part of its $6.8 billion deal to take over significant operations at six U.S. ports, after White House aide Karl Rove suggested that President Bush could accept some delay of the deal.

Facing unrelenting political and national security concerns, an Arab maritime company offered late last night to delay part of its $6.8 billion deal to take over significant operations at six U.S. ports, after White House aide Karl Rove suggested that President Bush could accept some delay of the deal.

The surprise announcement should give Bush extra time to try to convince lawmakers from both parties that the port deal does not present an avenue for terrorists to exploit the nation's vulnerable and heavily populated seaports. Earlier in the day, Republican and Democratic senators questioned whether the Bush administration followed federal law when it approved Dubai Ports World's purchase of London-based Peninsular and Oriental Steam Navigation Co., also known as P&O. That purchase will give the Dubai-owned firm managerial control over operations at six ports, including those of New York and New Orleans.

Ten administration officials faced a barrage of questions from members of the Senate Armed Services Committee as they defended their decision to forgo a national security review of the deal. Deputy Treasury Secretary Robert M. Kimmitt said the decision last month to ratify the deal will be reconsidered only if officials find that officers of Dubai Ports World gave the government false, inaccurate or misleading information. But facing a bipartisan revolt over the deal, Rove told Fox News's "Tony Snow Show" that the White House could accept a delay in the transfer of port management, which is set for March 2.

"There are some hurdles, regulatory hurdles, that this still needs to go through on the British side, as well, that are going to be concluded next week," Rove said. "There's no requirement that it close, you know, immediately after that. But 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."

In an accord coordinated with the White House, Dubai Ports World agreed not to exercise control or influence the management of the U.S. ports while the administration talks with Congress. Other parts of the deal with P&O will go forward.

"It is not only unreasonable but also impractical to suggest that the closing of this entire global transaction should be delayed," Dubai Ports World said in a statement.

It is not at all clear whether the offer will placate lawmakers, who have vowed to block the deal as soon as Congress reconvenes Monday. The imbroglio over the port decision has tarnished the administration's image of political strength on national security matters and called into question why Cabinet members and other high-ranking officials failed to consult with the president and members of Congress before approving the sensitive transaction.

With the White House saying the president did not learn about the sale until last weekend -- when lawmakers began complaining about it -- Bush has signaled that opposition to the port purchase smacks of anti-Arab bias that is undermining Washington's efforts to improve relations in the Middle East. To critics, the White House has put its free-trade economic agenda above concerns that go to the heart of fears in the post-Sept. 11, 2001, world: that underprotected ports could be the scene of a deadly terrorist strike, possibly with nuclear weapons.

The Port Authority of New York and New Jersey announced yesterday that it will sue to block the sale.

Dubai Ports World, owned by the government of Dubai, is set to take over next week management of 24 of 829 terminals at the ports of Baltimore, New York, New Jersey, Philadelphia, Miami and New Orleans.

"This wouldn't be going forward if we were not certain that our ports would be secure," Bush said at a meeting of his Cabinet.

Despite the entreaties of the administration, Sen. Hillary Rodham Clinton (D-N.Y.) said bipartisan legislation will be introduced next week to scuttle the deal, or at least to force a 45-day investigation into the deal's national security implications.

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Comments

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Not sure about this situation. We will have to see how this works.

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