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February 24, 2006:
ANNAPOLIS, Md. - Senator Barbara A. Mikulski (D-Md.) testified today at a joint committee hearing in the Maryland General Assembly and outlined her concerns about the proposed sale of Peninsular and Oriental Steamship Navigation Co. (P&O Ports) to DP World, which is owned and controlled by the United Arab Emirates (UAE). Senator Mikulski called for a full investigation into the sale and articulated her opposition to foreign control of American ports.
"Our ports are essential to national security and border security. The American people deserve a robust, rigorous review of the impact of this deal on national security - not a rushed, secret deal done behind closed doors," testified Senator Mikulski. "I have no confidence in the Bush Administration to make this decision. The administration consistently underestimates security risks - they told us the levees were strong and the insurgents were weak. And now on port security, the Bush Administration doesn't even take the required 45 days to review the national security impact of the foreign operation of our ports."
Senator Mikulski is a member of the Senate Intelligence Committee and the Homeland Security Appropriations Subcommittee.
Senator Mikulski's opening statement, as prepared, is below:
"Thank you for inviting me to this important briefing. I'm here because the issue you are addressing is of such grave importance to our state and our nation - the takeover of America's ports, including the Port of Baltimore, by a company that is owned by a foreign government.
"I am here as a patriot and as a United States Senator whose duty it is to insure the safety and security of the United States of America, a duty I take very seriously. I am here as a public servant who has worked for many years on the Port of Baltimore - from dredging to port security.
"You should know that I am also a member of the Senate Intelligence Committee and on the Homeland Security Appropriations Subcommittee. I am keenly aware that there are many who have predatory intent against the United States of America.
"I am here because I am gravely concerned about who is owning and operating America. I strongly oppose foreign control of American ports. We can't outsource port security to the lowest bidder.
"Let me bring you up to date on the process and the federal law - what happened and what should have happened. Like you, I learned from the media that the Bush Administration approved the foreign operation of several ports, including the Port of Baltimore. None of us were consulted or informed - not the Congressional delegation, not the governor, not the mayor of Baltimore.
"After further inquiry, I learned that the deal was approved quickly and secretly. The decision was made behind closed doors by the Committee on Foreign Investment in the United States - an entity that most Americans don't even know exists. The Committee on Foreign Investment has 12 members: the Secretaries of State, Defense, Commerce, Treasury and Homeland Security, the Attorney General, and six officials from the White House: the Director of OMB, the U.S. Trade Representative, the Chairman of the Council of Economic Advisors, the Director of the Office of Science and Technology policy, the Assistant to the President for National Security Affairs and the Assistant to President for Economic Policy.
"The decision to outsource our ports was made in only 30 days. Now let me tell you what the law actually requires. The law requires a thirty-day review of the economic implications. The law also requires an additional 45 days to review the impact on national security. The law states that this is mandatory when the acquiring company is owned by a foreign government. Dubai Ports World is owned by a foreign government. It is owned by the government of the United Arab Emirates.
"The law was not followed. Due diligence was not done. This is absolutely unacceptable.
"There are additional questions: What level met? Did Secretary Rice, Secretary Rumsfeld, Attorney General Gonzalez and Secretary Snow sit around and decide this? Or was it delegated to the coordinator of the coordinator? Was the FBI consulted? What about the Director of National Intelligence?
"I have four main concerns about this deal:
"This is about national security. The national security threats facing our port are real - the infiltration of terrorists, the use of commercial cargo containers to smuggle chemical or biological weapons or even a dirty bomb, the intentional sinking of large commercial cargo ships that could result in loss of life and block access to major shipping channels, and the use of land around the port to stage attacks on bridges or our waterfront chemical and oil refineries.
"Port operators play a vital role in insuring that these threats do not become realities. The President tells us not to worry - the Coast Guard will continue to protect our ports. Yet the Coast Guard is already stretched too thin, with increased responsibilities and only slight increases in their budget. Protecting 300 ports, more than 3,700 cargo and passenger terminals, more than 1,000 harbor channels - all spread along thousands of miles of coastline.
"More than 9 million marine containers enter our U.S. ports each year, yet only 5 percent of containers entering the U.S. are physically inspected. The port operators must be full partners in port security.
"I'm concerned that this may be a sweetheart deal done by an administration with a record of cronyism. The Chairman of the Committee on Foreign Investment approved the deal. In this case, the Secretary of the Treasury is John Snow, the former President and CEO of CSX. CSX has major holdings at ports up and down the East Coast including Baltimore. You should also be aware that the person who President Bush nominated to head the Maritime Administration is a former executive at Dubai Ports World. I don't know if these connections played a role in the approval of this deal. I don't know if Secretary Snow stands to profit by increased stock options or a fatter pension. But I do know that the review should be made in the sunshine.
"I also believe that a rigorous inquiry is needed to determine if there is a conflict of interest that conflicts with the national interest. That's why I asked the Senate Banking Committee, chaired by Senator Shelby with Senator Sarbanes as the ranking member, to conduct an inquiry into this to see if such a conflict has occurred.
"There is a great big, yellow flashing light.
"I have no confidence in the Bush Administration to make this decision. They have demonstrated a history of incompetence and cronyism: Hurricane Katrina, Medicare prescription drugs, the fiasco at the FDA and others. The administration consistently underestimates security risks - they told us the levees were strong and the insurgents were weak. They misjudged the opposition in Iraq and how many troops we needed and how much body armor was needed. And now on port security, the Bush Administration doesn't even take the required 45 days to review the national security impact of the foreign operation of our ports.
"I am concerned about who owns and operates America. We are outsourcing jobs to other countries and insourcing control of key facilities to other countries. Even our national debt is now primarily foreign owned. This year, the United States set a record for foreign debt. Our deficit is financed by foreign lenders: 26 percent of our debt is owned by foreign governments. Korea, Japan and China hold more than 10 percent of our debt. Now we are ceding control of key national assets. This is risky. This is unacceptable. That is why I strongly oppose foreign control of American ports, including the Port of Baltimore.
"As soon as I learned of this deal, I wrote to Treasury Secretary Snow to ask for a more rigorous review to ensure that foreign control of port operations is thoroughly scrutinized. I agree with Speaker Hastert and Majority Leader Frist that we need a more rigorous review. That's why next week I will introduce legislation with Senator Schumer of New York. Our bill does three things: imposes an immediate delay in implementing this decision; calls for a full, open review of the national security impact of foreign ownership of American ports; and enables Congress to vote to overrule the decision. I'm also asking for a bipartisan briefing for the Maryland Congressional delegation and for all Senators whose ports would be affected.
"I hope the President will change his mind about his threatened veto and work with Congress to ensure the safety and security of our ports.
"This debate is not about the United Arab Emirates (UAE). I don't believe we should outsource our ports to any foreign entity. As a member of the Senate Intelligence Committee, I know the UAE has become a partner in the War on Terror. Since 9/11, the UAE has worked with us to suppress terrorist financing and money laundering, including freezing accounts, enacting and enforcing anti-money laundering regulations. The U.S. Navy has used UAE bases to support operations in Iraq and Afghanistan. The U.S. Navy uses port facilities owned by Dubai Ports. Yet we can't forget that two of the nineteen 9/11 hijackers were from the UAE.
"Our ports are essential to national security and border security. The American people deserve a robust, rigorous review of the impact of this deal on national security - not a rushed, secret deal done behind closed doors.
"I strongly oppose foreign control of American ports - including the Port of Baltimore - and look forward to working with you to ensure the security and viability of the Port of Baltimore, now and in the future."