MULTI-BILLION DOLLAR COMPANY THAT OPERATES NYC PORT TO BE TAKEN OVER BY UNITED ARAB EMIRATES GOVERNMENT-OWNED FIRM TODAY

Schumer Urges Homeland Security to Completely Review New Arrangement and Put on Hold Until Review is Complete

Feds Gave Go-Ahead on Deal Too Fast, No Need to Fast-Track Business Deals with Such Sensitive Security Issues

Today a $6.8 billion dollar contract that is vital to New York City Port Security is poised to be taken over by a firm in the United Arab Emirates and owned by the Government of Dubai, Dubai Ports World. The deal allows the UAE company to take control of operations at six ports on the East Coast, including: New York, New Jersey, Baltimore, New Orleans, Miami and Philadelphia. Except for cargo screening functions performed by the Department of Homeland Security, the Port operator is responsible for securing cargo coming in and out of the port, the port facility itself, and the hiring of security personnel. In light of these critical functions being transferred from a private company based in Britain to a United Arab Emirates government-owned company, Schumer today called for the Homeland Security Department to review the new arrangement and carefully and openly scrutinize all security issues before control is turned over.

“Foreign control of our ports which are vital to homeland security is a risky proposition, riskier yet is that we are turning it over to a country that has been linked to terrorism previously. This deal seems to have been unnecessarily fast-tracked, the American people are entitled to greater and more open scrutiny,” Schumer said.

The Port of New York and New Jersey had been previously controlled by a London-based company, Peninsular and Oriental Steam Navigation Co., the world’s 4th largest port operator with operations in over 85 ports in 19 countries, including P&O subsidiary P&O Ports North America, which has operations in over 20 U.S. ports from Portland, Maine to Corpus Christi, Texas as well as Vancouver, Canada on the West Coast. But last week, The government of Dubai, United Arab Emirates won a bidding war too buy the venerable British firm. DP World’s bid to buy the company was quietly cleared by a government panel without public scrutiny. The Committee on Foreign Investment in the United States (CFIUS) cleared the deal, without a public report or evaluation. Schumer today questioned whether the panel only considered the economics of the new arrangement instead of security.

“Even if this company is perfectly suited to run our ports, what checks have been put in place to ensure that it is not infiltrated,” Schumer asked. “A public investigation to look at the security aspects of this deal that gives this company a clean bill of health is critical before we move forward.

Today, Schumer sent a letter to Department of Homeland Security Secretary Michael Chertoff asking him to conduct a through evaluation of the security ramifications of the take over and present his to report to Congress within one month. Specifically, Schumer raised concerns about the fact that the new company will have broad security responsibilities at each of the ports it operates, including controlling all cargo not set aside for DHS screening, which could be as much as 95 percent of cargo at each port, managing access to secure areas, and background checking all personnel.

Ports have long been considered the most vulnerable target s for a terrorist attack and experts agree that shipping containers are the best way to smuggle a Weapon of Mass Destruction (WMD) in to the United States. Only 5 percent of containers entering our ports are actually inspected, with the rest in under the control of the port operator. Nuclear, Chemical, or Biological materials could easily be delivered directly to a U.S. port, many of which are located within or adjacent to major population centers (NY-NJ, Philadelphia, Baltimore, Norfolk, Miami, New Orleans, Houston).

The Port of New York and New Jersey has seen a significant boost in sea cargo over the last few years with a substantial rise in Asian trade helping to boost growth by more than 10 percent during the first six months of 2005. Overall, the port offloaded 1,654,483 cargo containers during the first six month of 2005.

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