Second probe in port deal accepted

WASHINGTON -- The Bush administration said Sunday it will accept an extraordinary offer by a United Arab Emirates-based company to submit to a second -- and broader -- U.S. review of potential security risks in its deal to take over significant operations at six leading American ports. The plan averts an impending political showdown.

The Treasury Department said in a statement it will promptly begin the review once the company formally files a request for one. It said the same government panel that earlier investigated the deal but found no reason for national security concerns will reconsider it.

In six pages of documents sent earlier in the day to the White House, Dubai-based DP World asked for a 45-day investigation of plans to run shipping terminals in New York, New Jersey, Baltimore, New Orleans, Miami and Philadelphia.

The announcement means the White House likely won't face a revolt by fellow Republicans when lawmakers return today from a weeklong break. A united Republican Party can assert that its leaders -- both in Congress and at the White House -- have taken additional steps to protect national security.

In a statement Sunday, Senate Majority Leader Bill Frist, R-Tenn., said he will recommend that the Senate wait for results of the broader review before acting on legislation to delay or block the deal. Frist said he anticipates oversight hearings to continue to examine the agreement and its implications on maritime security.

DP World's offer was highly unusual. The secretive U.S. committee that considers security risks of foreign companies buying or investing in American industry has conducted such full investigations only about two dozen times among the more than 1,500 international deals it has reviewed.

The company said that during the renewed scrutiny, or until May 1, a London-based executive who is a British citizen would have authority over DP World's U.S. operations. It pledged that Dubai executives would not control or influence company business in the U.S., but said it was entitled to all profits during the period. It also said it will appoint an American to be its chief security officer in the United States.

"We hope that voluntarily agreeing to further scrutiny demonstrates our commitment to our long-standing relationship with the United States," said Edward H. Bilkey, the company's chief operating officer.

President Bush forcefully has defended his administration's earlier approval of DP World's proposal to buy London-based Peninsular & Oriental Steam Navigation Co. It was not immediately clear whether the re-examination by U.S. officials would produce a different outcome.

"We're satisfied that there's been a complete review of the deal," Frances Fragos Townsend, the White House homeland security adviser, said on "Fox News Sunday."

In the administration's earlier review, completed Jan. 17, DP World agreed to cooperate with law enforcement investigations and disclose records on demand about "foreign operational direction" of its business. The U.S. review committee unanimously approved the deal after a regular 30-day review, during which U.S. intelligence agencies reported they found no derogatory information about DP World in their files.

As part of that review, the administration did not require DP World to keep copies of business records on U.S. soil, where they would be subject to orders by American courts. It also did not require the company to designate an American citizen to accommodate U.S. government requests for information or assistance.

In the legal papers sent to the White House, DP World said it would abide by the outcome of the lengthier review but indicated it could sue if the results were any different. The administration could seek additional security measures beyond the terms already negotiated.

A chief critic of the ports deal, Rep. Peter King, R-N.Y., said the company appeared to invite the more thorough investigation sought by many lawmakers. King, chairman of the House Homeland Security Committee, said the proposal should be enough to delay any immediate effort in Congress to block the deal.

"If it is what it appears to be, to me there's no need at this time to go forward" with emergency legislation, King said. "Obviously we have to hold it in reserve and see what happens."

Another critic, Sen. Charles Schumer, D-N.Y., said DP World's willingness to submit to the new review was "certainly a significant step forward, but the devil is in the details." Schumer said Congress should have a chance after the review to approve or reject the administration's decision.

"If the report is completed and kept secret and only given to the president, who has already come out for the deal, it will not reassure Americans," Schumer said.

Despite the company's offer, Schumer said he still would introduce legislation Monday to ensure a thorough investigation is done.

Frist presented the outlines of a proposal to the company and the administration late Friday. All parties, including House Speaker Dennis Hastert's office, held talks through the weekend.

Critics of the deal have cited the UAE's history as an operational and financial base for the hijackers who attacked New York and Washington in September 2001. The U.S. government also questioned the UAE years ago about possible ties between officials there and Osama bin Laden, according to the report by the independent commission that investigated the suicide hijackings. Critics also have complained that the UAE was one of only three countries to recognize the Taliban government in Afghanistan before the U.S. overthrow in 2001.

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Associated Press writers Liz Sidoti and Devlin Barrett contributed to this report.