Arab firm to disclose internal records in US ports deal

The Bush administration secretly required a company in the United Arab Emirates to cooperate with future US investigations before approving its takeover of operations at six American ports, it emerged today.

According to documents obtained by The Associated Press, as part of the €5.6bn purchase, state-owned Dubai Ports World agreed to reveal records on demand about “foreign operational direction” of its business at US ports. Those records broadly include details about the design, maintenance or operation of ports and equipment.

The administration did not require Dubai Ports to keep copies of business records on US soil, where they would be subject to court orders. It also did not require the company to designate an American citizen to accommodate US government requests. Outside legal experts said such obligations were routinely attached to US approvals of foreign sales in other industries.

“They’re not lax but they’re not draconian,” said James Lewis, a former US official who worked on such agreements. If officials had predicted the surge of criticism over the deal, “they might have made them sound harder”.

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

The concessions – described previously by the Homeland Security Department as unprecedented among maritime companies – reflect the close relationship between the US and the United Arab Emirates.

The revelations about the negotiated conditions came as the White House acknowledged President George Bush was unaware of the pending sale until the deal had already been approved by his administration.

Bush had brushed aside objections by leaders in the Senate and House and pledged to veto any Bill Congress might approve to block the agreement.

Dubai Ports’ top American executive, chief operating officer Edward Bilkey, said the company would do whatever the Bush administration asked to enhance shipping security and ensure the sale went through. Bilkey said yesterday he would work in Washington to persuade sceptical politicians to back the deal.

“We’re disappointed,” Bilkey told AP in an interview. “We’re going to do our best to persuade them that they jumped the gun. The UAE is a very solid friend, as President Bush has said.”

The Senate Armed Services Committee is holding a hearing today on the national security implications of the Dubai Ports deal.

Under the deal, the government asked Dubai Ports to operate American seaports with existing US managers “to the extent possible”. It promised to take “all reasonable steps” to assist the Homeland Security Department and pledged to continue participating in security programmes to stop smuggling and detect illegal shipments of nuclear materials.

The administration required Dubai Ports to designate an executive to handle requests from the US government, but it did not specify that person’s nationality.

It said Dubai Ports must retain paperwork “in the normal course of business” but did not specify a time period or require corporate records to be housed in the United States. Outside experts familiar with such agreements said such provisions were routine in other cases.

Bush faces a potential rebellion from leaders of his own party, as well as a fight from Democrats, over the sale. It puts Dubai Ports in charge of major terminal operations in New York, New Jersey, Baltimore, New Orleans, Miami and Philadelphia.

Senate and House leaders urged the president to delay the takeover, which is due to be finalised in early March. Senate Majority Leader Bill Frist of Tennessee said the deal raised “serious questions regarding the safety and security of our homeland” and House Speaker Dennis Hastert asked the president for a moratorium on the sale until it could be studied further.

In Saudi Arabia, US secretary of state Condoleezza Rice said the agreement was thoroughly vetted. “We have to maintain a principle that it doesn’t matter where in the world one of these purchases is coming from,” Rice said. She described the United Arab Emirates as “a good partner in the war on terrorism”.

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