Sunday, March 12, 2006

Lawmaker to press for US infrastructure ownership

Lawmaker to press for US infrastructure ownership
By Philip Barbara

WASHINGTON (Reuters) - A leading Republican opponent of the collapsed Dubai ports deal said on Sunday that he would press ahead with legislation requiring U.S. ownership of infrastructure deemed critical to homeland security.

House Armed Services Committee Chairman Duncan Hunter, Republican of California, said that under the bill, it would be up to the Pentagon and Department of Homeland Security to identify facilities critical to national defense.

"If something defined by the secretary of defense as being critical American infrastructure, we would give a five-year period for divestment by the parent company so you don't have a fire sale," Hunter told the "Fox News Sunday" program.

Hunter was among the Republicans who defied President George W. Bush last week in bitterly opposing the $6.85 billion deal under which Dubai Ports World of the United Arab Emirates acquired the global assets of Britain-based P&O, including management operations of some facilities at six major U.S. ports.

The Dubai firm has since pledged to transfer those facilities to a U.S. entity.

Hunter's legislation would mean that facilities owned by all foreign companies, including those based in longtime allies in Europe, and identified as sensitive to U.S. homeland security might have to be sold to U.S. firms that would then own, operate and manage them.

Companies in France and Germany, Australia and Mexico, for instance, operate U.S. bridges and tunnels, ship terminals and water-purification plants, all of which would be reviewed by for security concerns.

It is unclear how much support Hunter's bill will have in the Republican-controlled Congress, since foreign companies are major investors in U.S. infrastructure.

Sen. John Warner, the chairman of the Armed Services Committee who tried to defuse the ports scandal and broker a compromise, said Congress should forego any legislation restricting overseas acquisitions.

"I do not think Congress should take any more action on this ports issue," said Warner, a Virginia Republican. He said Congress should focus on improving port security and the process of reviewing foreign investments.


Senate Majority Leader Bill Frist said that at the very least, Congress would probably change the process under which the port deal was approved by the Bush administration.

The Tennessee Republican said the existing three-decade-old foreign investment review process, known as the Committee on Foreign Investment in the United States (CFIUS), was outdated in a post-September 11 world.

"We will fix it in the United States Senate," he told ABC's "This Week" program. "It lacks full transparency. It does not have any congressional oversight."

U.S. lawmakers have noted that two of the September 11 hijackers came from the UAE, that al Qaeda funding passed through UAE banks, and that a United Nations agency said disgraced Pakistani scientist Abdul Qadeer Khan used Dubai as a hub for his nuclear black market.

News of the deal prompted a political showdown between Congress and Bush, who had threatened to veto any legislation to block the deal. The showdown was averted by Dubai Ports World's statement that it would transfer operations of the U.S. ports to a U.S. entity.

Capitol Hill critics in both parties said they wanted to see the fine print before backing away from legislation to unwind the contract, noting the company had not said to whom it was selling, or when.