[Congressional Record Volume 152, Number 24 (Wednesday, March 1, 2006)]
[House]
[Pages H469-H470]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
{time} 1545
CALLING FOR INVESTIGATION INTO THE DUBAI DEAL TO MANAGE U.S. PORTS
Ms. KAPTUR. Mr. Speaker, I ask unanimous consent to claim the Special
Order time of the gentleman from Oregon (Mr. DeFazio).
The SPEAKER pro tempore (Mr. Davis of Kentucky). Is there objection
to the request of the gentlewoman from Ohio?
There was no objection.
The SPEAKER pro tempore. Under a previous order of the House, the
gentlewoman from Ohio (Ms. Kaptur) is recognized for 5 minutes.
Ms. KAPTUR. Mr. Speaker, my Special Order this evening concerns the
proposed acquisition of Dubai Ports World of the leasing contracts for
several major U.S. ports on the east coast. And in relation to that, I
have sent letters to the Treasury Inspector General and to the
committee of jurisdiction here in the House, the Government Reform
Committee, asking both those entities to review any conflict of
interest regarding the participation of the U.S. Secretary of the
Treasury, John Snow, who chairs the Committee on Foreign Investment,
the group which approved the recent contract with Dubai Ports World. I
will place these two letters of request in the Record.
The letters ask the committee and the Inspector General to determine
whether appropriate processes were followed, conflicts of interests
explored, and whether or not American companies were solicited during
that process. The Treasury agreement itself raises serious ethical
questions regarding those directly responsible for this decision. In
particular, given that Dubai Ports World acquired CSX World Terminals
in 2004 for $1.15 billion, a company of which Secretary of the Treasury
John Snow was chair prior to coming to the administration, and this
should raise serious questions both about the acquisition of the CSX
port operations and the recent awarding of this contract.
As chair of the U.S. Treasury Committee on Foreign Investment,
Secretary Snow and the Treasury Department had the lead authority in
approving the Dubai transaction. Secretary Snow holds a deferred
compensation package and a special retirement pension from his days as
CEO of CSX Corporation. In 2004 CSX World Terminals was acquired by
Dubai Ports World, the successful bidder on this contract. But given
that Secretary Snow had previously disclosed a deferred compensation
package with CSX valued at between $5 million and $25 million and $33.2
million from a special retirement pension, one would expect that any
financial benefit from the sale of CSX World Terminals to Dubai Ports
World, including any stock holdings, would have been revealed,
especially if there might be any residual from subsequent actions such
as these.
The President's assertion that he had polled his Cabinet Secretaries
on the Dubai deal causes concern for me that at least one, Secretary
Snow, should have removed himself from the decision, given his business
connections to CSX and Dubai.
On 9/11, two members of the hijack team that simultaneously downed
the Twin Towers in New York City and killed hundreds of Americans at
the Pentagon were from the United Arab Emirates. And as the 9/11
Commission reported, those same terrorists laundered much of the money
for their operation through the United Arab Emirates-controlled banks.
We should ask instead of developing our own companies to manage our
own U.S. operations, why should we settle for the revolving door that
has skilled people move from one company to another, creating a pea-in-
the-shell game that leaves the public wondering who is in charge and
does anyone care? And, importantly, is America for sale at any price?
Secretary of the Treasury John Snow was CEO of CSX just about a year
before CSX sold some of its international operations to Dubai Ports
World. Was this billion-dollar deal done totally after he left, or was
it already in the works while he served as CEO of that company? Why is
it that no one at Treasury said that Secretary Snow recused himself
from this transaction until they were called about it? Secretary Snow
himself claimed not to have known about the deal. How can someone not
know about a deal from which they should recuse themselves?
The White House has appointed David Sanborn as the new administrator
of the Maritime Administration. He worked as Dubai Ports World director
of operations in Europe and Latin America until he was appointed to the
post in January, the same month the Treasury Department's Committee on
Foreign Investment in the United States approved the Dubai Ports World
takeover. David Sanborn also previously worked for the CSX Corporation.
The revolving door brings him back to a high government position. Some
Senators have vowed to block Sanborn's nomination unless he testifies
before the Commerce Committee.
CNN has reported that the United Arab Emirates is a major investor in
the Carlyle Group, the private equity investment firm where President
Bush's father once served as senior adviser and is a who's who of
former
[[Page H470]]
high-level government officials. Just last year, Dubai International
Capital, a government-backed buyout firm, invested $8 billion in the
Carlyle fund.
Another Bush family connection, the President's brother Neil Bush,
has reportedly received funding for his educational software company
from the United Arab Emirates investors.
And why did George Bush, Sr. accept a $1 million donation to his
library in Texas from the United Arab Emirates?
The material previously referred to is as follows:
Congress of the United States,
House of Representatives,
Washington, DC, February 23, 2006.
Hon. Tom Davis,
Chairman, Committee on Government Reform, Rayburn HOB,
Washington, DC.
Hon. Henry Waxman,
Ranking Member, Committee on Government Reform, Rayburn HOB,
Washington, DC.
Dear Chairman Davis and Ranking Member Waxman: The recent
announcement of a contract being awarded by the U.S.
Committee on Foreign Investment in the United States to Dubai
Ports World following its purchase of London-based Peninsular
and Oriental Steam Navigation Co. is a matter of paramount
concern that should be investigated in the national interest.
It raises concerns of national security as the operator
will be a foreign interest, most particularly an undemocratic
nation from the Middle East that cannot assure infiltrators
will not breach security. We know less than 2% of container
cargo is inspected today despite Congressional efforts to
upgrade the current system. Iran's growing ties with China
which ships the majority of its cargo through the Dubai/CSX
hub terminal in Singapore complicates the situation.
In addition, the Treasury agreement raises serious ethical
questions regarding those directly responsible for this
decision. In particular, given that Dubai Ports World
acquired CSX World Terminals in 2004 for $1.15 billion, a
company of which Secretary of the Treasury John Snow was
Chairman prior to coming to the Administration should raise
questions about both the acquisition of the CSX port
operations and the recent awarding of the contract. Secretary
Snow now chairs the Committee on Foreign Investments in the
United States, the very group which approved this contract
with Dubai Ports World.
For these reasons, I respectfully urge the Government
Reform Committee to conduct an investigation and a series of
hearings to learn more about these matters to determine
whether appropriate processes were followed, conflicts of
interest explored, and whether or not American companies were
solicited in this process.
This deal is not in our national interest most especially
during a time of war. Foreign management of key U.S. assets
endangers the public and our communities in an era where
terrorists seek to infiltrate. I hope you will agree with me
that a thorough investigation is warranted.
Sincerely,
Marcy Kaptur,
Member of Congress.
____
Congress of the United States,
House of Representatives,
Washington, DC, February 23, 2006.
Mr. Harold Damelin,
Inspector General, Department of the Treasury, Washington,
DC.
Dear Mr. Damelin: The recent announcement of a contract
being awarded by the U.S. Committee on Foreign Investment in
the United States to Dubai Ports World following its purchase
of London-based Peninsular and Oriental Steam Navigation Co.
is a matter of paramount concern that should be investigated
in the national interest.
I respectfully request that your office conduct an
investigation in to the deliberations by the U.S. Committee
on Foreign Investment with particular respect to the
legislative requirements established by the Byrd Amendment
that requires an investigation in cases where: (1) the
acquirer is controlled by or acting on behalf of a foreign
government (as is the case in this instance); and, (2) the
acquisition ``could result in control of a person engaged in
interstate commerce in the U.S. that could affect the
national security of the U.S.'' While the Committee's role
may have been only to review this particular foreign
applicant, I believe it is also important to know what
specific action was taken to solicit an American contractor
for the management of these several strategic ports, or if
there had been consideration given to several different
American contractors for each or several of these ports, and
who was responsible for this solicitation. Certainly one
could reasonably assume that this is an issue that should
have been reviewed by the Committee in its evaluation of
national security concerns.
Furthermore, it has been noted that the Secretary of the
Treasury serves as Chairman of the U.S. Committee on Foreign
Investment. In this case, Secretary John Snow had previously
served as the Chairman of CSX Corporation, which at the time
of his service owned CSX World Terminals. Subsequently CSX
World Terminals was acquired by Dubai Ports World, the
successful bidder on this contract. Given that Sec. Snow had
previously disclosed a deferred compensation package with CSX
valued at between $5 and $25 million and $33.2 million from a
special retirement pension, one would expect that any
financial benefit from the sale of CSX World Terminals to
Dubai Ports World, including any stock holdings, would have
been revealed, especially if there might be any residual from
subsequent actions such as these. I ask that you review this
matter to determine if there may have been any conflict of
interest in Secretary Snow having presided over the decision,
and whether or not he should have recused himself from the
proceeding.
I look forward to your response to this request.
Sincerely,
Marcy Kaptur,
Member of Congress.
____________________