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Memo to Reporters Covering Port Controversy

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PostPosted: Sat Mar 04, 2006 8:38 pm    Post subject: Memo to Reporters Covering Port Controversy
From Fri Mar 03, 2006 3:00 am to Mon Mar 06, 2006 2:59 am (included)
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To: National Desk

Contact: Daniela Colaiacovo, 202-756-4124, dcolaiacovo@mediamatters.org or Jeremy Funk, 202-756-4109, jfunk@mediamatters.org - both of Media Matters for America

WASHINGTON, March 3 /U.S. Newswire/ -- Following is a memo from Media Matters for America to reporters covering the port controversy:

Faced with widespread criticism in recent weeks, the Bush administration and some of its supporters have promoted numerous false and misleading claims intended to downplay the approval of a deal that would turn over control of terminal operations at six U.S. ports to Dubai Ports World (DPW) -- a company owned by the government of Dubai, a member state of the United Arab Emirates (UAE) -- and cast critics of the transaction as racist, politically opportunistic, or both. The media, in turn, have often repeated these claims without challenge or correction.

For complete analysis of coverage of the ports deal, visit http://www.mediamatters.org.

No. 1: DPW is simply "Dubai-based"

In reporting on this controversy, numerous news outlets have ignored the fact that DPW is state-owned, referring to it simply as an "Arab company" or "Dubai-based." But the distinction between a company owned by a foreign government and one simply based in a foreign country is critical as a matter of law.

Indeed, critics argue that, in approving the deal, the administration ignored a federal law governing the transfer of American assets to foreign, government-owned companies. The Exon- Florio provision established the interagency panel that oversees all foreign acquisitions of American assets, the Committee on Foreign Investments in the United States' (CFIUS). As amended by Congress as part of the National Defense Authorization Act for Fiscal Year 1993, the law requires an additional 45-day review if "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."

In its initial, 30-day examination of the transaction, however, CFIUS determined that the deal gave rise to no national security concerns and declared this full review unnecessary. But critics of the deal have noted that the UAE does not recognize Israel as a sovereign state and was one of only three countries to recognize the Taliban-led government in Afghanistan prior to the September 11, 2001, terrorist attacks. Also, U.S. investigators have found that more than $120,000 was funneled through UAE bank accounts to the 9-11 hijackers, and the 9-11 Commission reported that the UAE "ignored American pressure to clamp down on terror financing until after the attacks." Critics of the deal contend that because DPW is controlled by a member state of a country with what is arguably a "mixed" record on terrorism, CFIUS' review of the transfer was not in accordance with the law.


No. 2: There is no difference between DPW and the British company that previously managed the ports

In failing to report that DPW is state-owned, certain news outlets have bolstered the false premise advanced by the Bush administration that the widespread criticism of the deal is based on the company's Arab ownership and is therefore discriminatory. In order to make this point, the White House has repeatedly conflated DPW and Peninsular & Oriental Steam Navigation Co. (P&O), the British company that currently manages the ports. For example, Bush said during a February 28 press briefing, "(W)hat kind of signal does it send throughout the world if it's OK for a British company to manage the ports, but not a company ... from the Arab world." But such comments ignore the fact that, unlike DPW, P&O was not controlled by the British government or any other foreign government prior to its acquisition.


No. 3: DPW decided on its own to request an extended security review

In response to the escalating criticism of the Bush administration's approval of the ports deal, DPW offered on February 26 to submit itself to an additional review of the national security implications of the transfer. But in reporting on this development, media outlets have repeatedly credited DPW for taking the initiative, while failing to note critics' argument that the additional investigation should have occurred prior to the administration's approval of the deal.

As noted above, the Exon-Florio provision requires CFIUS to carry out an additional 45-day review -- on top of the customary 30-day investigation -- when the acquisition of American assets by a foreign, government-owned company provokes national security concerns. Lawmakers from both parties, including Rep. Peter King (R-NY) and Sens. Charles Schumer (D-NY), Hillary Rodham Clinton (D-NY) and Susan Collins (R-ME), have specifically argued that because CFIUS declined to carry out this full investigation during its original examination of the deal, the review was not in accordance with the law.

The substance of these objections is crucial to understanding DPW's decision to undergo the additional review -- not to mention the controversy at large.


No. 4: The administration's review of the deal was very thorough

In the days after the ports controversy erupted, a chorus of Bush administration officials asserted that CFIUS' review of the DPW deal had been adequate and thorough.

Numerous news outlets and media figures followed suit by uncritically reporting the administration's expressions of confidence in the review process. In repeating or advancing such claims however, media have ignored forthcoming evidence that the review may not have been so "thorough" after all. For example, Secretary of Defense Donald H. Rumsfeld, a key member of CFIUS, and one to whom national security considerations would presumably be highly relevant, acknowledged in a February 21 press conference that he possessed "minimal information" about the deal because he had "just heard about this over the weekend."

Continued scrutiny of the CFIUS review soon yielded more disclosures regarding the actual nature of the investigation. On February 23, the Post reported that "CFIUS met only once during a 23-day review of the sale and that the few objections raised were quickly addressed." On February 27, Collins released an unclassified version of a document showing that the U.S. Coast Guard had "cautioned the Bush administration that it was unable to determine whether a United Arab Emirates-owned company might support terrorist operations." Further, February 28 Scripps- Howard column underscored the Coast Guard's concerns, noting that Al Qaeda -- in a 2002 letter translated by the U.S. government -- claimed that it had infiltrated numerous UAE agencies and that the emirates were "well aware" of this fact.

Most recently, King asserted on March 1 that officials from the Homeland Security and Treasury departments had told him that the CFIUS review did not examine possible ties between the UAE and terrorist groups. "There was no real investigation conducted during the 30-day period," King told CNN. In the day following King's allegation, however, most news outlets ignored this development.

No. 5: The administration extracted "extra security concessions" from DPW

Some media figures have uncritically reported that the Bush administration, in outlining conditions by which DPW would assume control of the six U.S. ports, "extracted extra security concessions" from the company prior to approving the deal. But these "concessions" are reportedly little more than pledges to comply with U.S. law. For example, according to a February 23 AP article, the administration "secretly required" DPW "to cooperate with future U.S. investigations." A February 24 New York Times article similarly reported that the secret "assurances" the administration drew from DPW were primarily "centered on compliance with existing United States law."


No. 6: Federal agencies control and conduct all port security

In their reporting on the ports deal, some news outlets have advanced the administration's claim that the ownership of port terminals has no effect on the level of security. At a February 22 press briefing, Scott McClellan asserted that DPW "won't control security at the ports. The security is under the control of the Coast Guard and under control of the Customs and Border Patrol, and it will remain that way." On February 23, Frances Fragos Townsend, assistant to the president for homeland security and counterterrorism, said of the DPW deal, "(T)his not about outsourcing port security, which is in the very capable hands of the United States Coast Guard and the Customs and Border Patrol. This is about commercial operations at a port." On February 28, Bush himself said, "I can understand people's consternation because the first thing they heard was that a foreign company would be in charge of our port security, when, in fact, the Coast Guard and Customs are in charge of our port security."

But in a February 24 article, Post staff writers Paul Blustein and Walter Pincus countered that such a claim "overstates the role government agencies play." The article included a quote from Carl Bentzel, "a former congressional aide who helped write the 2002 act regulating port security," who said, "They've been saying that customs and the Coast Guard are in charge of security; yes, they're in charge, but they're not usually present." Blustein and Pincus also noted that "private terminal operators are almost always responsible for guarding the area around their facilities."

Moreover, in a February 23 New York Times op-ed, former Department of Homeland Security inspector general Clark Kent Ervin noted that "the Coast Guard merely sets standards that ports are to follow and reviews their security plans. Meeting those standards each day is the job of the port operators: they are responsible for hiring security officers, guarding the cargo and overseeing its unloading."


No. 7: With the Dubai Ports deal, Democrats have just discovered the issue of port security

In response to the controversy over the DPW deal, certain media figures have claimed that the Democrats criticizing the Bush administration's approval of the transaction had previously ignored the issue of port security. In fact, contrary to these suggestions, congressional Democrats in recent years have repeatedly stressed the need for greater port security and have urged Congress and the administration to act on the issue.

For example, Schumer proposed a 2004 amendment to provide $70 million for research and development to stop nuclear materials from entering U.S. ports. In 2005, Clinton and then-New Jersey Sen. Jon Corzine (now governor of New Jersey) co-sponsored a successful amendment that provided $150 million for port security grants. Clinton also co-sponsored a 2005 amendment to provide an additional $450 million for such grants

Other Democratic critics of the port deal that have previously put forward legislation to bolster port security include Sens. Bill Nelson (FL), Patty Murray (WA), Robert Byrd (WV), and Ernest Hollings (SC), and Rep. Jane Harman (CA).

Moreover, most Republicans in Congress have resisted Democrats' efforts to secure U.S. ports, as the Senate Democratic Policy Committee has documented. In fact, many of the Senate Republicans now calling for the Bush administration to revoke the DPW port deal have continually voted against Democratic attempts to strengthen port security in the United States.


No. 8: National security is a right-wing value

In a similar vein, numerous media figures have characterized Democratic criticism of the port deal as an attempt to move "to the right" of Bush and congressional Republicans on issue of national security. Implicit in such claims is the assumption that national security is a right wing value. But as noted above, some of the Democrats who have most strongly denounced the deal have in recent years been among the most active proponents of enhancing port security.


No. 9: The Dubai ports deal is a partisan issue

In reporting on the ports controversy, some media figures have attempted to cast the criticism of the deal as coming strictly from Democrats. In fact, numerous Republican lawmakers have joined Democrats in objecting to the Bush administration's approval of the transfer. They include Sens. Collins, Lindsey Graham (SC), and. Trent Lott (MS); Reps. King, Tom DeLay (TX), and Curt Weldon (PA); and New York Gov. George Pataki, among others.

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