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National Security Implications of the Dubai Ports World Deal to Take Over Management of U.S

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National Security Implications of the Dubai Ports World Deal to Take Over Management of U.S i [H.A.S.C. No. 109–100] NATIONAL SECURITY IMPLICATIONS OF THE DUBAI PORTS WORLD DEAL TO TAKE OVER MANAGEMENT OF U.S. PORTS HEARING BEFORE THE COMMITTEE ON ARMED SERVICES HOUSE OF REPRESENTATIVES ONE HUNDRED NINTH CONGRESS SECOND SESSION HEARING HELD MARCH 2, 2006 U.S. GOVERNMENT PRINTING OFFICE 32–987 WASHINGTON : 2008 For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800 Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001 VerDate 22-MAR-2001 10:47 Sep 16, 2008 Jkt 032987 PO 00000 Frm 00001 Fmt 5012 Sfmt 5012 C:\DOCS\109-100\061002.000 HNS1 PsN: HNS1 HOUSE COMMITTEE ON ARMED SERVICES ONE HUNDRED NINTH CONGRESS DUNCAN HUNTER, California, Chairman CURT WELDON, Pennsylvania IKE SKELTON, Missouri JOEL HEFLEY, Colorado JOHN SPRATT, South Carolina JIM SAXTON, New Jersey SOLOMON P. ORTIZ, Texas JOHN M. MCHUGH, New York LANE EVANS, Illinois TERRY EVERETT, Alabama GENE TAYLOR, Mississippi ROSCOE G. BARTLETT, Maryland NEIL ABERCROMBIE, Hawaii HOWARD P. ‘‘BUCK’’ MCKEON, California MARTY MEEHAN, Massachusetts MAC THORNBERRY, Texas SILVESTRE REYES, Texas JOHN N. HOSTETTLER, Indiana VIC SNYDER, Arkansas WALTER B. JONES, North Carolina ADAM SMITH, Washington JIM RYUN, Kansas LORETTA SANCHEZ, California JIM GIBBONS, Nevada MIKE MCINTYRE, North Carolina ROBIN HAYES, North Carolina ELLEN O. TAUSCHER, California KEN CALVERT, California ROBERT A. BRADY, Pennsylvania ROB SIMMONS, Connecticut ROBERT ANDREWS, New Jersey JO ANN DAVIS, Virginia SUSAN A. DAVIS, California W. TODD AKIN, Missouri JAMES R. LANGEVIN, Rhode Island J. RANDY FORBES, Virginia STEVE ISRAEL, New York JEFF MILLER, Florida RICK LARSEN, Washington JOE WILSON, South Carolina JIM COOPER, Tennessee FRANK A. LOBIONDO, New Jersey JIM MARSHALL, Georgia JEB BRADLEY, New Hampshire KENDRICK B. MEEK, Florida MICHAEL TURNER, Ohio MADELEINE Z. BORDALLO, Guam JOHN KLINE, Minnesota TIM RYAN, Ohio CANDICE S. MILLER, Michigan MARK E. UDALL, Colorado MIKE ROGERS, Alabama G.K. BUTTERFIELD, North Carolina TRENT FRANKS, Arizona CYNTHIA MCKINNEY, Georgia BILL SHUSTER, Pennsylvania DAN BOREN, Oklahoma THELMA DRAKE, Virginia JOE SCHWARZ, Michigan CATHY MCMORRIS, Washington MICHAEL CONAWAY, Texas GEOFF DAVIS, Kentucky ROBERT L. SIMMONS, Staff Director ROGER ZAKHEIM, Professional Staff Member JULIE UNMACHT, Counsel BRIAN ANDERSON, Staff Assistant (II) VerDate 22-MAR-2001 10:47 Sep 16, 2008 Jkt 032987 PO 00000 Frm 00002 Fmt 5904 Sfmt 5904 C:\DOCS\109-100\061002.000 HNS1 PsN: HNS1 C O N T E N T S CHRONOLOGICAL LIST OF HEARINGS 2006 Page HEARING: Thursday, March 2, 2006, National Security Implications of the Dubai Ports World Deal to Take Over Management of U.S. Ports ....................................... 1 APPENDIX: Thursday, March 2, 2006 ........................................................................................ 121 THURSDAY, MARCH 2, 2006 NATIONAL SECURITY IMPLICATIONS OF THE DUBAI PORTS WORLD DEAL TO TAKE OVER MANAGEMENT OF U.S. PORTS STATEMENTS PRESENTED BY MEMBERS OF CONGRESS Hunter, Hon. Duncan, a Representative from California, Chairman, Commit- tee on Armed Services ......................................................................................... 1 Skelton, Hon. Ike, a Representative from Missouri, Ranking Member, Com- mittee on Armed Services .................................................................................... 3 WITNESSES Bilkey, H. Edward, Chief Operating Officer, Dubai Ports World; George Dal- ton, General Counsel, Dubai Ports World; Michael Moore, Senior Vice Presi- dent, Commercial, Dubai Ports World; and Robert Scavone, Executive Vice President, Security Peninsular and Oriental Steam Navigation Company (P&O) beginning on ............................................................................................. 41 Carafano, Dr. James Jay, Senior Research Fellow for National Security and Homeland Security, The Heritage Foundation .................................................. 7 Edelman, Eric S., Under Secretary of Defense for Policy, Department of Defense; Stewart Baker, Assistant Secretary, Policy, Planning and Inter- national Affairs, Department of Homeland Security; Clay Lowery, Assistant Secretary, International Affairs, U.S. Department of the Treasury; Alan Misenheimer, Director, Office of Arabian Peninsular and Iran Affairs, De- partment of State; and Rear Adm. Thomas Gilmour, USCG, Assistant Com- mandant for Marine Safety, Security and Environmental Protection begin- ning on .................................................................................................................. 77 Flynn, Stephen E., Commander, U.S. Coast Guard (Ret.), Jeane J. Kirk- patrick Senior Fellow, in National Security Studies ......................................... 10 Gaffney, Frank J., Jr., President and CEO, Center for Security Policy ............. 14 APPENDIX PREPARED STATEMENTS: Baker, Stewart .................................................................................................. 160 Bilkey, H. Edward ............................................................................................ 146 Carafano, Dr. James Jay ................................................................................. 125 Flynn, Stephen E. ............................................................................................. 133 Gaffney, Frank J., Jr. ....................................................................................... 140 Gilmour, Rear Adm. Thomas ........................................................................... 177 (III) VerDate 22-MAR-2001 10:47 Sep 16, 2008 Jkt 032987 PO 00000 Frm 00003 Fmt 5904 Sfmt 5904 C:\DOCS\109-100\061002.000 HNS1 PsN: HNS1 IV Page PREPARED STATEMENTS—CONTINUED Lowery, Clay ..................................................................................................... 171 Misenheimer, Alan ........................................................................................... 170 Scavone, Robert ................................................................................................ 156 DOCUMENTS SUBMITTED FOR THE RECORD: Copyright 2000 Council on Foreign Relations, Inc. Foreign Affairs, No- vember 2000/December 2000, Beyond Border Control ............................... 183 Testimony of the Department of Defense, Regarding the Dubai Ports World CFIUS Case ........................................................................................ 193 In the Name of Allah the Most Compassionate and Merciful, 14 May/ June/2002 ....................................................................................................... 200 Responses to al Qaeda’s Initial Assaults ........................................................ 190 QUESTIONS AND ANSWERS SUBMITTED FOR THE RECORD: Mr. Andrews ..................................................................................................... 205 Mr. LoBiondo .................................................................................................... 205 Mr. Skelton ....................................................................................................... 205 Mr. Spratt ......................................................................................................... 205 VerDate 22-MAR-2001 10:47 Sep 16, 2008 Jkt 032987 PO 00000 Frm 00004 Fmt 5904 Sfmt 5904 C:\DOCS\109-100\061002.000 HNS1 PsN: HNS1 NATIONAL SECURITY IMPLICATIONS OF THE DUBAI PORTS WORLD DEAL TO TAKE OVER MANAGEMENT OF U.S. PORTS HOUSE OF REPRESENTATIVES, COMMITTEE ON ARMED SERVICES, Washington, DC, Thursday, March 2, 2006. The committee met, pursuant to call, at 1 p.m., in room 2118, Rayburn House Office Building, Hon. Duncan Hunter (chairman of the committee) presiding. OPENING STATEMENT OF HON. DUNCAN HUNTER, A REP- RESENTATIVE FROM CALIFORNIA, CHAIRMAN, COMMITTEE ON ARMED SERVICES The CHAIRMAN. The committee will come to order. The committee meets this afternoon to examine the national security implications of the Dubai Ports World, DP World, deal, to take over port termi- nal operations in ports in six American cities. Like many Ameri- cans and Members of Congress, I am deeply distressed by the na- tional security implications of this deal. The controversy surrounding Dubai Ports World’s acquisition has exposed the vulnerability of United States ports to security threats, the inadequacy of the so-called Committee on Foreign Investments in the United States (CFIUS) review process, that is, foreign in- vestment process to address these threats, and it also raises a broader issue of whether the United States is taking adequate steps to protect our entire national critical infrastructure. It is my opinion that the U.S. Government needs to conduct wholesale reform as to how we protect the homeland and our criti- cal infrastructure. This problem runs deeper than ports. Vulner- ability to our maritime interests is only one example of many sec- tors that require increased protection and security. The post 9/11 world demands that in the realm of national secu- rity, we take nothing for granted. Voluntary compliance schemes, the method we currently employ to protect our key arteries of national and economic security, is necessary but not sufficient. Our government must take steps to enhance our security, not to run the risk of creating greater vulnerabilities. We seem to be our own worst enemies. We should require critical U.S. infrastructure to remain in U.S. hands. To those who say my views smack of protectionism, I say
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