[Congressional Record (Bound Edition), Volume 152 (2006), Part 2]
[Extensions of Remarks]
[Pages 2286-2287]
[From the U.S. Government Publishing Office, www.gpo.gov]




THE ``PORT OPERATIONS REQUIRE TOUGH SCRUTINY'' (PORTS) ACT STATEMENT OF 
                              INTRODUCTION

                                 ______
                                 

                         HON. EDWARD J. MARKEY

                            of massachusetts

                    in the house of representatives

                       Tuesday, February 28, 2006

  Mr. MARKEY. Mr. Speaker, today I am introducing the Port Operations 
Require Tough Scrutiny (PORTS) Act to ensure that decisions about the 
sale of critical U.S. infrastructure such as ports are thoroughly 
reviewed so that the homeland security consequences of these 
transactions are not brushed aside in favor of commercial interests.
  The Bush Administration's recent decision to approve the sale of 
British port operator Peninsular & Oriental Steam Navigation to Dubai 
Ports World, a company owned by the government of the United Arab 
Emirates (UAE), has raised significant homeland security concerns. This 
decision also has shined a light on a little-known committee at the 
Treasury Department and the secretive process it uses to make decisions 
that can have important consequences for the security of our Nation.
  Clearly, the UAE port deal did not receive the scrutiny it deserved. 
The 9/11 Commission identified the government of the UAE--the same 
entity that would operate major functions at 6 U.S. ports--as a 
``persistent counterterrorism problem''. Two of the 9/11 hijackers were 
from the UAE. The 9/11 Commission concluded that the UAE banking system 
was used as a conduit for funds for the September 11th attacks. The UAE 
was a key transfer point for illegal shipments of nuclear components to 
Iran, North Korea and Libya. The UAE was one of only three nations to 
recognize the legitimacy of the Taliban government and still does not 
recognize the State of Israel.
  Despite all of these warning signs, the proposed port deal did not 
even trigger a 45-day investigation, which is provided in current law 
and should have been interpreted as being mandatory when foreign 
governments--whether involving the UAE, the UK, the Ukraine or any 
other nation--seek mergers, acquisitions or similar transactions that 
could affect U.S. national security. Nevertheless, when asked about the 
UAE port deal last week, Defense Secretary Rumsfeld said, ``I am 
reluctant to make judgments based on the minimal amount of information 
I have because I just heard about this over the weekend.'' (Defense 
Department news briefing, 2/21/06).
  It is unacceptable that President Bush, the Secretary of Homeland 
Security, the Secretary of Defense, and the Secretary of the Treasury 
were not informed of the UAE port deal until after it was approved and 
had caused widespread public outrage. President Bush has repeatedly 
told the American people that 9/11 changed his thinking, and 
extraordinary measures, such as warrantless wiretapping of American 
citizens, are required to keep America safe. How, then, could the Bush 
Administration have overlooked such an obvious homeland security 
threat?
  My legislation would strengthen the process for assessing the 
national security impact of foreign ownership of critical U.S. 
infrastructure. Specifically, the legislation would:
  Limit Takeovers of Critical Homeland Infrastructure. In cases where 
the purchaser is a government-owned company based in a foreign country, 
the transaction must be approved not only by CFIUS, but also by the 
President and be subject to congressional review.
  If the purchaser is a foreign company, but not government-controlled, 
the transaction must undergo a 45-day investigation and be found to not 
undermine national security before it can be approved.
  Increase the 30-day Evaluation Period. According to the Government 
Accountability Office (GAO), ``Several officials [participating in the 
CFIUS process] commented that, in complex cases, it is difficult to 
complete analyses . . . within 23 days.'' CFIUS's guidance requires 
member agencies to determine if they are likely to object to the 
transaction by the 23rd day of the 30-day review period. The 
legislation would double this initial evaluation period to 60 days and 
permit any participant to be granted an automatic 10-day extension, 
separate from CFIUS's 45-day investigatory period.
  Require Reports to Congress. According to Treasury Department 
regulations, CFIUS reviews of any proposed transactions are 
confidential, and there is no congressional oversight of CFIUS 
decisions. The legislation would require CFIUS to report annually to 
Congress on the number of notifications it received during the year and 
the action taken after each notification.
  As security experts and the 9/11 Commission have pointed out, our 
ports are a vulnerable entry point that could be exploited by 
terrorists to strike our country. Almost none of

[[Page 2287]]

the cargo that enters U.S. ports is ever inspected. While the federal 
government is ultimately responsible for security at ports, much of the 
day-to-day security responsibilities, such as hiring security guards 
and ensuring adequate access controls and fencing are in place, are 
delegated to the companies that operate at the port. The port operator 
also has access to real-time sensitive intelligence of the continuous 
movement of ships, their cargoes and the millions of containers they 
are stored in; the identity of their shippers and inside knowledge 
about the security in place at the ports.
  While oversight of these private operators is the responsibility of 
the Department of Security, the Bush Administration is nickel and 
diming our port security by proposing a budget that eliminates millions 
in port security grants. This is a wrong-headed decision that only 
leaves our country vulnerable to a devastating attack, such as a 
nuclear weapon or dirty bomb being detonated in our country.
  We know that terrorists are seeking to use U.S. ports as a route to 
launch a devastating nuclear attack on U.S. soil--one of the millennium 
bombers entered the United States through the Port of Boston in an 
attempt to bomb buildings on the West Coast. Cargo containers represent 
a cheap, deadly method for delivering bombs on U.S. soil--we cannot 
afford to be lax in our oversight of the shipping and handling of these 
containers. This Administration's scrutiny of this UAE deal is just 
like their treatment of tons of cargos at our door: insufficient, 
incomplete and incomprehensible, given the security threats we face.''
  As the DP World decision illustrates, the CFIUS process urgently 
needs to be overhauled. I urge consideration of this legislation so 
that we can increase the scrutiny of transactions that could create 
serious homeland security risks. Commerce must not be permitted to 
trump common sense.

                          ____________________