[Congressional Record (Bound Edition), Volume 152 (2006), Part 2]
[Senate]
[Pages 2144-2147]
[From the U.S. Government Publishing Office, www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      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

[[Page 2145]]

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 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

[[Page 2146]]

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 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 ______.'', 
     with the blank space being filled with the appropriate date.
       (c) Computation of Review Period.--In computing the 30-day 
     period referred to in subsection (a), there shall be excluded 
     any day described in section 154(b) of the Trade Act of 1974 
     (19 U.S.C. 2194(b)).
                                 ______
                                 
      By Ms. COLLINS:
  S.J. Res. 32. A joint resolution disapproving the results of the 
review conducted by the Committee on Foreign Investment in the United 
States (CFIUS) into the purchase of Peninsular and Oriental Steam 
Navigation (P&O) by Dubai Ports World (DP World); to the Committee on 
Banking, Housing, and Urban Affairs.
  Ms. COLLINS. Mr. President, I rise to introduce a joint resolution 
disapproving the conclusion of the Committee on Foreign Investment in 
the United States, CFIUS, to allow Dubai Ports World, DP World, to take 
over certain port operations in the United States. My colleague and 
good friend, Congresswoman Jane Harman, will be introducing this 
resolution in the House of Representatives.
  This resolution would do the following: 1. Disapprove the CFIUS 
review of the transaction; 2. direct the CFIUS to conduct a 45-day 
investigation in order to ensure that the sale will not have an adverse 
effect on national security; and 3. direct CFIUS to brief

[[Page 2147]]

Members of Congress on the findings of its investigation before the 
transaction is allowed to proceed if the Committee maintains that it 
should go forth.
  The pending sale raises potential maritime security concerns. The 
sale would transfer control of Peninsular & Oriental, P&O, Ports North 
America to DP World, a foreign government-owned entity. P&O Ports has 
extensive terminal and stevedoring operations along the eastern 
seaboard and on the gulf coast. It encompasses not only terminal 
facility leases in six major U.S. ports, as has been reported widely in 
the media, but also stevedoring and terminal operations in a total of 
21 U.S. ports, including my home State in Portland, ME.
  We have long acknowledged the vulnerability of our ports--both as a 
potential target and as a conduit through which terrorists, their 
weapons or other contraband may enter the U.S. coming from a State with 
three international cargo ports, I am keenly aware of the importance of 
our seaports to our national economy and to the communities in which 
they are located. In addition to our ports' economic significance, the 
link between maritime security and our national security is evident.
  The attacks of 9/11 have forced us to reassess and rebuild our entire 
approach to security. Against an enemy determined to cause maximum harm 
to both the American people and the American economy, we are building a 
structure that, in great part, relies upon private-public partnerships. 
Nowhere is this more apparent than in our ports--where terminal 
operators, longshoremen, port authorities, importers, carriers, and 
others have worked with the United States Coast Guard, Customs and 
Border Protection, and state and local law enforcement to put security 
plans in place.
  The foreign government in question, that owns DP World, is the 
government of Dubai, part of the United Arab Emirates, UAE. While UAE 
is an ally in the war on terrorism, it also has been used as a base of 
terrorist operations and financing. In fact, the 9/11 Commission 
reported that UAE was ``both a valued counterterrorism ally of the 
United States and a persistent counterter-
rorism problem.'' The attacks of 9/11 were planned in part in the UAE, 
and much of the financing for those operations was funneled through the 
UAE banking system. The facts warrant a thorough 45-day investigation 
by CFIUS, not a cursory review.
  This incident has revealed significant shortcomings in the CFIUS 
process. It is not adequately transparent and does not provide for 
sufficient oversight reporting to appropriate committees and the 
leadership of Congress. The Exon-Florio provision of the Defense 
Production Act gives the President the authority to suspend or prohibit 
any foreign acquisition, merger or takeover of a U.S. corporation that 
is determined to threaten the national security of the U.S. Through 
Executive order, the President established the CFIUS to review 
transactions pursuant to Exon-Florio and make a recommendation 
regarding the exercise of his authority. It may be appropriate for the 
reviews, which may involve proprietary data and classified information, 
to be held confidential. However, once a decision has been reached by 
the CFIUS, it is wholly appropriate, and even necessary, that Members 
of Congress be briefed on the findings of the review and the basis for 
the decision.
  I am truly troubled by the review process that was followed with 
respect to this purchase. The more I learn, the more questions are 
raised. The law requires a 45-day investigation in cases where an 
acquirer is controlled by a foreign government, as in the case of DP 
World, and the acquisition could affect the national security of the 
U.S. However, the CFIUS did not conduct an investigation, as the plain 
language of the statute would demand.
  I am pleased that, in a recent development, the administration has 
agreed to undertake a 45-day investigation as a result of discussions 
with DP World and congressional leadership. Perhaps its recommendation, 
once briefed to Congress, will allay concerns that have been raised. 
Perhaps the national security implications, apparent on the face of the 
deal, will be adequately addressed through a more rigorous process. 
Given the remaining uncertainties, however, I felt it was important to 
proceed with the introduction of this resolution, in conjunction with 
my colleague in the House, Congresswoman Harman.
  The silver lining of recent events is that they have served to 
highlight the critical importance of port security to our Nation. Last 
November, Senator Murray and I introduced the GreenLane Maritime Cargo 
Security Act of 2005. This comprehensive legislation authorizes $835 
million annually for programs and initiatives to better secure our 
Nation's ports.
  It would help build a coordinated approach to maritime and port 
security across all levels of government and with our overseas trading 
partners, improving our Nation's security as it expedites trade with 
those governments and businesses that join in this goal.
  The bill addresses the problem of uncoordinated supply-chain security 
efforts, directing the Secretary of Homeland Security to develop a 
strategic plan to enhance security for all modes of transportation by 
which containers arrive in, depart from, or move through seaports of 
the United States. The strategic plan also must include protocols for 
the resumption of trade in the case of an incident.
  This legislation recognizes that America's ports, large and small, 
are our partners in keeping our Nation safe and our economy strong.
  I seek my colleagues support both for this resolution and for the 
GreenLane bill.

                          ____________________