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Six Months Later, Dubai Firm Still Owns U.S. Ports


Six months ago, when Dubai Ports World bought operations at six U.S. ports, it inspired a political firestorm. The company is owned by the Emir of Dubai. The issue died last March when Dubai Ports World promised to sell its U.S. holdings to an American firm. The company said it would take no more than six months to completely divest.

NPR's Adam Davidson reports that six months later a Dubai Ports subsidiary still runs terminals at U.S. Ports.

ADAM DAVIDSON: Allan Nayor(ph) says that if people remember one thing about the Dubai Ports World controversy it's that Congress stopped the company from buying any U.S. ports. The problem there says is that that's not true.

Mr. ALLAN NAYOR (Spokesman, Eller and Company): No, it wasn't resolved. The Emir of Dubai is controlling 22 ports on the eastern seaboard of the United States and the gulf coast.

DAVIDSON: Nayor is spokesman for Eller and Company, a rival port management firm that has led the fight against Dubai Ports' U.S. acquisition. He is right, at least in part. The Emir still owns the company that manages six U.S. port terminals and has contracts to provide services at more than a dozen other port terminals.

The Emir's company bought those U.S. port management contracts in February. Democrats, and later many Republicans, argued that a company owned by a foreign government should not manage any U.S. port.

After several rounds in a vicious public relations battle, the Emir lost and his company's management promised to sell all U.S. assets. They said it would take between four and six months to finalize the complex sale.

This past Friday was the six-month deadline and the assets are still unsold. No one from Dubai Ports was available for comment, but a company subsidiary recently sent a letter to Congress saying the sale should be complete within another six weeks.

This opens up a huge opportunity for Democrats hoping to win big in November, says Peter Beinart author of The Good Fight, a book about the Democratic Party's approach to the war on terror.

Mr. PETER BEINART (Author, The Good Fight): The Democrats would love to find a way of reminding people of this - given that it's an issue where Democrats cleaned Bush's clock, politically.

DAVIDSON: Beinart says he doesn't think the Democrats were correct on the merits of the case. He says most experts agree that Dubai Ports poses no threat to U.S. security. But he says, this controversy was never about the actual facts of port security, it was always about politics. And that's why he says Democrats will soon campaign on the fact that Dubai still manages U.S. ports.

In fact, New Jersey Democratic Senator Robert Menendez has been airing campaign commercials bringing up the port issue. He says he's trying to give Dubai Ports the benefit of the doubt that a sale is coming soon. But the senator says his patience is running thin.

Representative ROBERT MENENDEZ (Democrat, New Jersey): We're carefully monitoring these reports of the sale. If we find that they're at fault, then the truthfulness of it - and there's a lot of inquiries going on right now -then it may very well erupt.

DAVIDSON: He says it's hard to judge if there really will be a sale, because the sale process is secretive. Most large corporate acquisitions are. But recent business press stories report that a handful of large U.S. companies, including the Carlisle Group and Morgan Stanley, are in the final stages of negotiations.

Menendez says that between now and the November elections, there will either be a sale of Dubai Ports' U.S. assets or there will be a second round of that enormous political firestorm.

Adam Davidson, NPR News. Transcript provided by NPR, Copyright NPR.

Adam Davidson is a contributor to Planet Money, a co-production of NPR and This American Life. He also writes the weekly "It's the Economy" column for the New York Times Magazine.
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