[Congressional Record Volume 152, Number 22 (Monday, February 27, 2006)]
[Senate]
[Pages S1506-S1508]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
By Mr. SCHUMER (for himself, Mr. Coleman, Mr. Menendez, Ms.
Snowe, Mrs. Clinton, Mr. Coburn, Mr. Reed, Ms. Colllns, Mr.
Lautenberg, Mr. Durbin, Mrs. Boxer, Mr. Santorum, and Ms.
Mikulski):
S. 2333. A bill to require an investigation under the Defense
Production Act of 1950 of the acquisition by Dubai Ports World of the
Peninsular and Oriental Steam Navigation Company, and for other
purposes; to the Committee on Banking, Housing, and Urban Affairs.
Mr. SCHUMER. Mr. President, I come to the Chamber today first to
announce introduction of legislation, S. 2333, which would deal with
the Dubai Ports issue. The legislation is bipartisan. It has five
Democratic and five Republican sponsors, although the number is
growing. The lead Republican sponsor is my friend from Minnesota, Mr.
Coleman, who had hoped to be here today, but I believe his flight was
delayed, and he is just arriving about now.
First, I would like to speak about the recent developments in Dubai
Ports World's takeover of several major ports. I believe the bipartisan
legislation which I and others will introduce today is the path forward
with respect to this deal and securing our Nation's ports and making
sure that homeland security is the No. 1 priority.
As we know, the administration and DP World executives reached an
agreement yesterday to allow for a 45-day investigation of security
concerns raised by this deal. That is good news. I salute the
administration and President Bush for doing so.
The bottom line is that many of us have called for this 45-day
investigation--many of us from both parties over the last week and a
half--and the fact that the President is doing it is very good news. To
dig in one's heels doesn't make much sense, particularly when it comes
to homeland security. So the new agreement is a major step forward, and
it is a key part of what many of us have been asking for in recent
weeks. But there are still some outstanding questions. That is why we
will be introducing our legislation this afternoon. The devil is in the
details. It is plain and simple.
Here are some of the questions that have yet be to answered.
First, we must make sure that the CFIUS Committee conducts a full,
thorough, and independent investigation. We can ask for no less, given
that the security of our homeland is at stake. Reports that I and
others have received have been that the previous investigation was
cursory, was casual, was not as thorough as it might be. There are
reports, for instance, that people simply looked in the record books to
see if there was something wrong that DP World had done. That is not
the kind of investigation you need when for the first time they are
going to operate the ports here in the United States. And because the
committee has already taken a position, even if it is in a casual and
cursory way, we have to make sure they are able to approach this with
an open mind. We need real independence here.
Make no mistake about it; the CFIUS Committee in the past has too
often made economic and diplomatic considerations at a greater level
than homeland security consideration. That is buttressed by the fact
that there are reports in the newspapers that the homeland security
representative on the committee first objected and then withdrew his
objection.
Again, we have to make sure there is a broader question; that is,
whether the CFIUS Committee is the right committee to begin with to do
this. Are they structured properly in a post-9/ll world?
When they were first set up more than 20 years ago, part of the
purpose was almost to provide a security justification for economic
deals that had to go through. But even in the confines of present law,
we have to make sure that the investigation is thorough, complete, and
independent.
Let me mention one point in this regard. I had been very perturbed
when I learned that the Port Authority of New York/New Jersey, in
charge of our ports, was not even consulted about this deal. Had they
been consulted, they would have talked about all kinds of problems that
they saw, and as a result they are now suing to block the deal. But how
thorough could an investigation be if the governmental agency in charge
of running the ports, in charge of security in the ports, in our
largest port on the east coast, was not even consulted?
So the first question is, will the investigation be thorough, will it
be complete, and will it be independent? Will those who have already
brushed aside any complaints or worries be able now to have an open
mind? I hope so. I am not prejudging, but it is a question that has to
be asked as the investigation proceeds.
The second question is, what will happen with the report once it is
completed? If the report is kept secret and only given to the
President, then what good was the new 45-day investigation? After all,
the President has already said he is for this, and I would like to hear
the President say that if new concerns are brought up by the report, he
would reconsider his support of this merger. We have not heard that
yet. So at that point, we are sort of in a position where it is almost
like Alice in Wonderland, where you first have the verdict and then the
trial. For this 45-day investigation to have real merit, since it does
go to the President by law and he gets the right to say ``yes'' or
``no,'' it would help with the American people to say he has an open
mind as well; he is not locked into a position.
My belief is this: I think the report should be made available to the
Senate
[[Page S1507]]
and the House, to any Member of the Senate and House who wishes to see
it, and should be made public, at least the nonclassified parts of the
report. It can be done on a redacted basis.
Why? First of all, we do need independent judgment. Again, because
the President has come out so firmly for this proposal, to allow the
House and Senate to see the full report makes a great deal of sense and
because the American people have so many concerns. Go to any street
corner in any city or town or suburb in this country and you will hear
questions asked about this. Every time I have been on an airplane--and
I have been on airplanes in various parts of the country--people
actually get out of their seats and come over to me and say: What is
going on here? So making the report public, at least in a redacted way,
so the classified parts are not obviously exposed, makes a great deal
of sense. So that is our second question.
The third question is evaluation. It seems to me that in this
particular area where there has been such concern, there ought to be,
in a constitutionally and legislatively proper way, an ability for this
body and the other body to disapprove the deal. And that is what our
legislation calls for. It calls for a 30-day period after the report is
issued before any merger is consummated so that Congress can disapprove
the deal. As you know, Mr. President, there are strict laws on how
Congress can approve and disapprove administrative actions, and we have
consulted those documents and our disapproval is in keeping with the
way you should structure such a disapproval.
So those are the three major questions that our legislation asks. The
legislation, S. 2333, which 10 of us, 5 Democrats and 5 Republicans,
are introducing this afternoon, deals not only with the 45-day review
which the President has already agreed to but the giving of the final
report to the House and Senate and to the public in a nonclassified way
and gives the Congress the 30-day right for disapproval.
Now, there is one other question not engaged by our legislation that
has to be answered and that is this: Because this is a voluntary
agreement between the administration and DP World, I have concerns
about, because the merger is going to go forward, how securely walled
off is the American part of this new enterprise from the rest. If you
read the document that has been made public, it is sort of
contradictory, in a certain sense. We want to make sure that those
walls are thick, that nobody in the Dubai Ports World organization can
influence decisions made here, at least while the investigation is
going forward. These will be other questions that I think we should
ask.
Now, what is the status, what will we do with this legislation? Well,
the President's agreeing to a 45-day investigation obviates the need to
ask for a vote in this Chamber immediately, although I am confident
that if the legislation were brought to the floor, it would receive an
overwhe1ming vote, probably a veto-proof majority. However, we will
keep this legislation at the ready as we follow the investigation. If
the investigation should falter or it should not be made public, then
the legislation might well be brought to the floor again. The bottom
line is, those of us who have great concern about this deal are in a
period of watchful waiting. We are hopeful that the bipartisan
compromise we have put together will sort of spread. We are hopeful
that the President's going along with the 45-day investigation is an
indication that we can continue to work together. None of us relishes
the occasion to bring this legislation to the floor. It would be much
better if the President would agree to all of its terms. But at the
moment, we will carefully watch and wait, doing our best to make sure
that the investigation is complete, thorough, and independent, doing
our best to make sure that Members of Congress and the public can see
all the appropriate parts of the investigation and then, should the
need arise, have an opportunity to disapprove of this merger.
One other point, larger point. Whatever happens with this merger, in
terms of its effect on the United States and its ports, there is one
bit of good that can come out of this sorry mess; namely, that this
Congress, that this administration focus much more on port security.
There is no question that we have not done enough in terms of port
security. In the air, we have done a pretty good job. We have spent
about $8 billion, and while not all of it was spent perfectly, we are a
lot safer from terrorism in the air than we were before. But in our
ports, which are perhaps more vulnerable and wide open, we haven't done
enough. Amendment after amendment after amendment that I and others
have brought up over the last 4 years has been defeated, oftentimes on
party-line votes. There is a need to do many things. There is a need to
make sure that every container that comes into this country can be
inspected, can be done mechanically for nuclear material. There is a
need to make sure that those containers do not contain biological or
chemical weapons. There is a need to make sure that the containers are
far more tamperproof than they are today--not all of them are; far too
many are not--so that there can't be something slipped into that
container while it is on board ship or has already been loaded or
checked out at the port of embarkation. There is a need to make sure
that personnel both on our side of the ocean and on the other side of
either ocean have been thoroughly checked out, in terms of their
background, so that terrorist organizations cannot infiltrate because
we all know in terrorism handbook 101, infiltration is probably the
best way to smuggle some terrible weapons onto our shores.
We also have to make sure that we have greater personnel, greater
machinery, greater computers and technology so that a higher percentage
of containers, not just the 1 in 20, can be inspected; 1 in 20 is too
great a gamble and too great a risk.
As we move forward, I hope that these will happen. And one other
thing that ought to be done. We ought to take a look at the CFIUS
committee, which in the past has too often taken the path of least
resistance and doesn't give foreign takeovers the critical national
security review they deserve.
According to a 2005 report, ``The manner in which the Committee on
Foreign Investment in the United States implements Exon-Florio may
limit its effectiveness. For example, Treasury in its role as Chair and
some others narrowly define what constitutes a threat to national
security.''
This week, the Banking Committee will hold hearings on CFIUS reform,
and I look forward to working with Chairman Shelby and Senator Sarbanes
to carefully examine the CFIUS process, something I have had trouble
with in the past.
In conclusion, the last 2 weeks have been extraordinary. Rarely do we
see these days a bipartisan, bicameral unity to ensure our Nation is
protected, and those of us who worked hard at this, I say to my
colleagues, can be proud that we have already seen some major progress.
The 45-day investigation will commence. We must keep our vigilance and
make sure the rest of the process is done fairly and carefully and
independently because the security of our country depends upon it.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 2333
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Foreign Investment Security
Improvement Act of 2006''.
SEC. 2. INVESTIGATION UNDER DEFENSE PRODUCTION ACT OF 1950.
(a) Investigation.--
(1) In general.--Notwithstanding any other provision of
law, the President or the President's designee shall conduct
an investigation, under section 721(b) of the Defense
Production Act of 1950 (50 U.S.C. App. 2170(b)), of the
acquisition by Dubai Ports World, an entity owned or
controlled by the Emirate of Dubai, of the Peninsular and
Oriental Steam Navigation Company, a company that is a
national of the United Kingdom, with respect to which written
notification was submitted to the Committee on Foreign
Investment in the United States on December 15, 2005. Such
investigation shall be completed not later than 45 days after
the date of the enactment of this Act.
(2) Suspension of existing decision.--The President shall
suspend any decision by the President or the President's
designee pursuant to section 721 of the Defense Production
Act of 1950 (50 U.S.C. App. 2170) with respect
[[Page S1508]]
to the acquisition described in paragraph (1) that was made
before the completion of the investigation described in
paragraph (1), including any such decision made before the
date of the enactment of this Act.
(b) Requirements for Investigation.--The investigation
under subsection (a) shall include--
(1) a review of foreign port assessments conducted under
section 70108 of title 46, United States Code, of ports at
which Dubai Ports World carries out operations;
(2) background checks of appropriate officers and security
personnel of Dubai Ports World;
(3) an evaluation of the impact on port security in the
United States by reason of control by Dubai Ports World of
operations at the United States ports affected by the
acquisition described in subsection (a); and
(4) an evaluation of the impact on the national security of
the United States by reason of control by Dubai Ports World
of operations at the United States ports affected by the
acquisition described in subsection (a), to be carried out in
consultation with the Commandant of the Coast Guard, the
Commissioner of the Bureau of Customs and Border Protection,
the heads of other relevant Federal agencies, and relevant
State and local officials responsible for port security at
such United States ports.
(c) Report.--Not later than 15 days after the date on which
the investigation conducted pursuant to this section is
completed, the President shall submit to Congress a report
that--
(1) contains the findings of the investigation, including--
(A) an analysis of the national security concerns reviewed
under the investigation; and
(B) a description of any assurances provided to the Federal
Government by the applicant and the effect of such assurances
on the national security of the United States; and
(2) contains the determination of the President of whether
or not the President will take action under section 721(d) of
the Defense Production Act of 1950 (50 U.S.C. App. 2170(d))
pursuant to the investigation.
(d) Congressional Briefing.--
(1) In general.--Not later than the date on which the
report described in subsection (c) is submitted to Congress
pursuant to such subsection, the President or the President's
designee shall provide to the Members of Congress specified
in paragraph (2) a detailed briefing on the contents of the
report.
(2) Members of congress.--The Members of Congress specified
in this paragraph are the following:
(A) The Majority Leader and Minority Leader of the Senate.
(B) The Speaker and Minority Leader of the House of
Representatives.
(C) The Chairman and Ranking Member of the Committee on
Banking, Housing, and Urban Affairs, the Committee on
Finance, and the Committee on Homeland Security and
Governmental Affairs of the Senate.
(D) The Chairman and Ranking Member of the Committee on
Financial Services, the Committee on Homeland Security, and
the Committee on Ways and Means of the House of
Representatives.
(E) Each Member of Congress who represents a State or
district in which a United States port affected by the
acquisition described in subsection (a) is located.
SEC. 3. CONGRESSIONAL ACTION.
(a) In General.--If the determination of the President
contained in the report submitted to Congress pursuant to
section 2(c) of this Act is that the President will not take
action under section 721(d) of the Defense Production Act of
1950 (50 U.S.C. App. 2170(d)) and not later than 30 days
after the date on which Congress receives the report, a joint
resolution described in subsection (b) is enacted into law,
then the President shall take such action under section
721(d) of the Defense Production Act of 1950 as is necessary
to prohibit the acquisition described in section 2(a),
including, if such acquisition has been completed, directing
the Attorney General to seek divestment or other appropriate
relief in the district courts of the United States.
(b) Joint Resolution Described.--For purposes of subsection
(a), the term ``joint resolution'' means a joint resolution
of the Congress, the sole matter after the resolving clause
of which is as follows: ``That the Congress disapproves the
determination of the President contained in the report
submitted to Congress pursuant to section 2(c) of the Foreign
Investment Security Improvement Act of 2006 on ______