April 28, 2006

Dubai Mulligan: Bush Sinks a Fifty-Footer

More than a month ago, in Bush Gets a Dubai Mulligan!, Big Lizards gave readers a loud shout of "fore!" about another deal where a company owned by the government of Dubai wanted to purchase a British company that was in charge of something that made Republicans squeamish.

Today, President Bush made his final sign-off on the new deal -- but this time, after intense consultation with Congress, a preliminary 30-day review, and a full-blown 45-day in-depth review, with cabinet members personally signing off at every stage. And just as we predicted, this time, there does not seem to be any furor from either Left or Right -- at least not so far.

Last time, Dubai Ports World bought the British firm P&O, the Peninsular and Oriental Steam Navigation Company (the name of which was changed to P&O because it no longer had anything to do with peninsulas, the word "Oriental" is politically incorrect now, they don't drive boats with steam, and nobody brags about the ability to navigate, because it's all just GPS these days). P&O operated cargo terminals at various seaports around the world, including six major ones in the United States.

The company this time is Dubai International Capital, and they're buying a U.S. subsidiary -- Ross Catherall U.S. Holdings Inc. -- of British-owned Doncasters Group Ltd. To quote ourselves,

Doncasters is an aerospace company that does extensive work on American airplanes, notably the F-35 Joint Strike Fighter. (The F-35 JSF is a joint venture between the United States and Great Britain, and it is expected eventually to replace the Harrier, the Hornet, the Fighting Falcon, and -- well heck, practically every fighter/attack plane we and the Brits have, it seems.)

Arab and US officials are growing nervous at the prospect of a second congressional uprising against the acquisition of American assets by a Middle Eastern-controlled company in the wake of the Dubai Ports World debacle.

A person familiar with the thinking of both the US and United Arab Emirates said officials were concerned that the pending investigation of Dubai International Capital’s £700m ($1.2m) purchase of Doncasters, a privately-held British aerospace manufacturer that works on sensitive US weapons programmes, including the Joint Strike Fighter, could provoke a similar backlash and further damage the relationship between the two countries.

Big Lizards was unworried, however. The problem with the original deal was not that the deal itself was bad; most serious analysts, no matter what their original opinion, eventually ended up supporting the deal after they really looked into the details:

• Dubai Ports was only trying to buy the cargo operations, not port security;
• If the deal had gone through, they would still use all the same American union longshoremen and dockwallopers;
• The Emirate of Dubai (and Dubai Ports World) has been a tremendous help to the United States in the war on Islamic terrorism;
• And a strategic alliance between the U.S. and Dubai, and indeed the whole United Arab Emirates, would be very useful to us in confronting Iran -- since the UAE controls the gates of the Strait of Hormuz.

The problem was that the deal was seen as so routine, that it was never even kicked up to the cabinet level, let alone a level that would require a direct presidential briefing and decision. If somebody had demonstrated a scintilla of political acumen and done so, red flags would have gone up all over the place. President Bush himself would have realized that top Republican senators and representatives had to be brought into the process early and often.

If the low-level staffers at the Committee on Foreign Investments in the United States (CFIUS) had done this last time, there would have been no uproar... because the brouhaha flowed from bad information, which the total lack of information coming from the Bush administration made inevitable.

Once burned, twice shy: we predicted at the time that Bush would learn from his administration's foolish mistake last time, and the Dubai International Capital/Doncaster's deal would receive much more scrutiny... and a boatload more cooperation with Republican (and even Democratic) leaders:

The administration will, I predict, bring Congress in early -- Republicans and even some Democrats -- and work it all out with the liberal Congressal chairmen of the two Homeland Security committees: Pete King (R-NY) in the House and Susan Collins (R-ME) in the Senate, the ones who led the revolt last time.

This time, Bush appears to have followed our advice (the president must read Big Lizards). From the Reuters article:

In the earlier ports dispute, Bush found himself sharply at odds with members of his own Republican Party as well as Democrats. The lawmakers were angry they had not been consulted about a contract they said had obvious security implications.

This time, the administration went to lengths to brief both Democrats and Republicans on Capitol Hill, officials said.

Associated Press is more specific about the consultation:

Initial reaction from Capitol Hill was favorable. "This investigation was a significant improvement over what happened before," said House Homeland Security Chairman Peter T. King, R-N.Y. "It's been much more thorough, much more detailed."

King was referring to the political firestorm over the proposed takeover of operations at several major U.S. ports by another Dubai-owned company, DP World. The company announced last month it was selling its interests in the ports to an American buyer after lawmakers protested that DP World's running of the ports posed an unacceptable security risk.

Besides gaining the support of Rep. Peter King -- who was the real firebrand instigator-in-chief of the revolt last time -- I'm quite sure the president also got the approval of Sen. Susan Collins, the instigator junior-grade, though nobody has specifically said anything. But if she objected, I'm sure she would have interrupted her task of trying to blame Bush for the hurricane season in order to run to the sound of the microphones and denounce him for this, too.

The review was quite lengthy, a combined review time of 75 days:

White House Press Secretary Scott McClellan said Friday that the Committee on Foreign Investment in the United States, the 12-agency panel that reviews transactions involving national security, went through an unusually lengthy review of the proposed deal.

He said CFIUS, which drew fire for its approval of the Dubai port deal, conducted both a 30-day review beginning on Jan. 28 and a 45-day investigation before recommending the sale to the president.

''The committee specifically considered the fact that a U.S. subsidiary of Ross Catherall is a single source supplier of turbine engine blades for the Department of Defense,'' McClellan said in a statement. He said the Dubai company had made a commitment that there would be no interruptions in supplies to the Pentagon.

Put it all together, and we'd have to say that President Bush took good advantage of his "Mulligan." He learned from his missteps, and this time he crafted a solid consensus in favor of the deal before making any final decision. None of the usual suspects has lambasted it yet; heck, even Sen. Charles Schumer (D-NY) likes it!

Frank Gaffney opposes it, naturally. But he cannot offer a single coherent reason why it's a problem -- other than his usual anti-foreigner bias:

Too little attention has been paid for far too long to the growing dependence of the U.S. military on foreign suppliers for key components of weapon systems and support equipment. Particularly troubling is the prospect that such dependency could cause us to rely upon a foreign state with a checkered record of support for terrorism.

Gaffney does not elaborate what he means by "a checkered record of support for terrorism." For years, the Emirate of Dubai has been our closest partner in the Middle East in fighting jihadi terrorist groups -- and one of our closest partners worldwide. Nor does he enunciate any particular danger in this case, other than existential angst about foreigners... will very tiny terrorists hide themselves in the parts boxes being shipped to the Army, then jump out and attack?

Ross Catherall makes turbine blades used in the cooling systems of Abrams tanks; if rampaging terrorists infiltrate Dubai International Capital, and through them Ross Catherall, and start manufacturing break-away blades, we wouldn't suffer any significant effect for months, since we have many such blades already in the pipeline or in storage.

During that time, I suspect we could find another company who could make the darned turbine blades.

However, we have yet to hear from the critically important Sens. Maria Cantwell (D-WA) and Dick Durbin (D-IL). We are all on tenterhooks....

Hatched by Dafydd on this day, April 28, 2006, at the time of 9:29 PM

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The above hissed in response by: Bill Faith at April 28, 2006 10:54 PM

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