[Congressional Record (Bound Edition), Volume 152 (2006), Part 2]
[House]
[Pages 2354-2356]
[From the U.S. 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

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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 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.

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