Bush says ports deal to go ahead despite complaints of Arab participation

WASHINGTON -- President Bush said Tuesday that a deal allowing an Arab company to take over six major U.S. seaports should go forward and that he would veto any congressional effort to stop it.

The Senate's Republican leader had promised just such an effort a few hours earlier, and the House's top Republican called for "an immediate moratorium" on the deal.

"After careful review by our government, I believe the transaction ought to go forward," Bush told reporters who had traveled with him on Air Force One to Washington. "I want those who are questioning it to step up and explain why all of a sudden a Middle Eastern company is held to a different standard than a [British] company. I am trying to conduct foreign policy now by saying to the people of the world, 'We'll treat you fairly.'"

Bush took the rare step of calling reporters to his conference room on the plane after returning from a speech in Colorado, addressing a controversy that is becoming a major headache for the White House. He said the seaports arrangement had been extensively examined by the administration and was "a legitimate deal that will not jeopardize the security of the country."

Earlier, Senate Republican Leader Bill Frist had urged the administration to reconsider its decision to allow the transaction, under which a British company that has been running six U.S. ports would be acquired by Dubai Ports World, a state-owned business in the United Arab Emirates. Frist said he'd introduce a bill to delay the deal if the administration doesn't do so on its own.

The British company, Peninsular and Oriental Steam Navigation Co., runs major commercial operations at ports in Baltimore, Miami, New Jersey, New Orleans, New York and Philadelphia.

"The decision to finalize this deal should be put on hold until the administration conducts a more extensive review of this matter," said Frist, R-Tenn. "If the administration cannot delay this process, I plan on introducing legislation to ensure that the deal is placed on hold until this decision gets a more thorough review."

Frist, who spoke to reporters in Long Beach, Calif., where he was on a fact-finding tour on port security and immigration issues, said he doesn't oppose foreign ownership, "but my main concern is national security."

House Speaker Dennis Hastert, R-Ill., joined Frist, saying the administration needed to "conduct a more thorough review." Without offering details, Hastert said in a letter to Bush that "this proposal may require additional congressional action in order to ensure that we are protecting Americans at home."

Other members of Bush's party also reacted critically. Maryland Gov. Robert Ehrlich, during a tour of Baltimore's port on Tuesday, called the deal an "overly secretive process at the federal level."

But Bush, who has yet to veto a bill in more than five years in office, said sternly he would not back down.

"They ought to listen to what I have to say about this. They'll look at the facts and understand the consequences of what they're going to do," he said. "But if they pass a law, I'll deal with it with a veto."

In a sign of how volatile the issue has become in the uneasy climate after the Sept 11, 2001, terrorist attacks, Bush pressed the topic yet again immediately upon his return to the White House, to make sure his position would be on camera as well. "This is a company that has played by the rules, has been cooperative with the United States, from a country that's an ally on the war on terror, and it would send a terrible signal to friends and allies not to let this transaction go through," the president said after emerging from his helicopter on the South Lawn.

At the Pentagon, the UAE was praised as an important strategic military partner by both Defense Secretary Donald H. Rumsfeld and Gen. Peter Pace, chairman of the Joint Chiefs of Staff. Rumsfeld said a process was in place and "the process worked."

"Nothing changes with respect to security under the contract. The Coast Guard is in charge of security, not the corporation," Rumsfeld said.

The administration insisted that national security issues had received a full airing before the interagency panel that reviews such transactions gave the go-ahead.

In Los Angeles, Sen. Susan Collins, who heads the Senate Homeland Security and Governmental Affairs Committee, said she and Sen. Joseph Lieberman, D-Conn., sent a letter to Homeland Security Secretary Michael Chertoff asking that the committee be fully briefed on the ports deal.

Collins, R-Maine, and Rep. Jane Harman, D-Calif., a ranking member on the House Intelligence Committee, said they are going to introduce a "joint resolution of disapproval" when they return to Washington next week.

Other lawmakers, including Rep. Peter King, R-N.Y., and Sen. Charles Schumer, D-N.Y., said they would offer emergency legislation next week to block the deal ahead of a planned March 2 takeover.

Erlich and New York's George Pataki, also a Republican, have indicated they may try to cancel lease arrangements at ports in their states because of the DP World takeover.

"Ensuring the security of New York's port operations is paramount and I am very concerned with the purchase of Peninsular & Oriental Steam by Dubai Ports World," Pataki said. "I have directed the Port Authority of New York and New Jersey to explore all legal options that may be available to them."

The arrangement brought protests from both political parties in Congress and a lawsuit in Florida from a company affected by the takeover.

Critics have noted that some of the 9/11 hijackers used the UAE as an operational and financial base. In addition, they contend the UAE was an important transfer point for shipments of smuggled nuclear components sent to Iran, North Korea and Libya by a Pakistani scientist.