The Bush administration’s decision to allow the sale of the British company Peninsular and Oriental Steam Navigation (P&O) to Dubai World Ports, and with it control of operations at terminals in six major U.S. seaports, has come under intense fire from both Democrats and Republicans in recent days. Most members of Congress--and their constituents--are up in arms over the idea that a state-owned company from the United Arab Emirates, one of the few countries that actively supported the Taliban in Afghanistan, would be let anywhere near U.S. ports, let alone be allowed to run them. The decision to permit the sale, and President Bush’s promise to veto any legislation that would interfere with it, is beginning to look like a major political miscalculation. 

But will allowing the deal to go through really increase the risk to our nation’s security?

Both U.S. Customs and Border Protection (CBP) and maritime security experts don’t think so. 

 First of all, no one is outsourcing control of the ports. This deal is about terminal operations – who schedules and unloads ships. The ports themselves will still be run by local port authorities.

Secondly, terminal operators aren’t responsible for security. CBP and the Coast Guard do that.

“Some of the rhetoric would have people believe that U.S. ports are being sold to foreign governments,” says John Mohan, a spokesperson for CBP. “That’s just false. The ports are controlled by the local port authority and the security – the most important part – is not going to be changed one whit by this deal.”

Due to consolidation in the shipping and terminal operations industry, many U.S. ports are operated by foreign companies. What’s different about this deal is that the company in question is from the Middle East. But Steve Flynn, a maritime security expert with the Council on Foreign Relations, points out that shoe-bomber Richard Reed and the gang that carried out the London subway attacks last summer were all British citizens and no one seemed concerned at that time that port operations were in the hands of the British-owned P&O. 

So this seems to be a case of bad politics and even worse communications on the part of the administration. The President has spent the last five years telling the American public that when it comes to the war on terror, one can’t make a distinction between Al Qaeda and Iraq. Is he really surprised that we’re not distinguishing between Al Qaeda and the United Arab Emirates?

None of this means that we shouldn’t be concerned with port security. But who runs a terminal should be the least of our worries. (See my cover story in the March 1 CIO: Customs Rattles the Supply Chain.)