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Feb 23, 2006 3:58 pm


REPUBLICANS DUCK PORT HEARINGS



I have just finished watching the proceedings of the Senate Armed Services Committee briefing on Dubai Port World. From the first, I was struck by the absence of all the Republican senators with the exception of Chairmen Warner. Most surprising was the absence of John McCain who argued that"We all need to take a moment and not rush to judgment on this matter without knowing all the facts." One would assume that he will be there to learn the facts. He was not.

If the absence of Republicans was intended to give the hearings a political hue, the strategy backfired as the reporters took the place of the absent Republicans and the reporter from Fox came up with a particularly pertinent question asking administration representatives to detail the type of concerns which led them in the past to order a 45 day investigation.

That inquiry was immediately picked up by Senator Hillary Clinton who succeeded in focusing the committee's attention on the"Bird amendment" to CFIUS which requires a 45 day investigation in cases where:

the acquirer is controlled by or acting on behalf of a foreign government; and

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."

As he admitted that CFIUS required that DPW agree to extraordinary provisions, Deputy Secretary of the Treasury Robert Kimmitt was not able to deny that the acquisition by DPW" could affect the national security of the U.S." Instead, he argued that the department has never interpreted the statute as mandatory in cases where CFIUS concerns were met prior or during the usual 30 days. This interpretation did not sit well even with Senator Warner who demanded that Secretary Gonzales explain such a reading of the statute.

Hillary Clinton took the opportunity to remind Kimmitt that we live in a post 9/11 world and said that there will be bi-partisan legislation offered to delay this deal. In addition, she along with Senator Menendez will be offering legislation to prohibit government owned companies from operating American ports.

Bravo. Foreign government owned companies should be treated differently from private companies. Obvious security concerns are not the sole ones recommending such differentiation. We should never forget that the road to totalitarianism runs though greater and greater government control of the economy. Just look at Russia where to prevent political pluralism, Putin, effectively, nationalized Yukos. Competing centers of power are essential to viable democracies and private companies are amongst the most important of those centers. For as we know, money talks.

In other words, to encourage democratic development, the US should show marked preference for private companies and be less than receptive to government owned ones. If the DPW tsunami will result in a serious exploration of these issues, it would turn out to have been a blessing in disguise.




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