Dubai Ports WorldDubai Ports World and Isthimar are two major holdings of the government of Dubai, one of the seven United Arab Emirates. In 2006, DP World purchased the Peninsular and Oriental Steam Navigation Company, a British company that operated several U.S. ports. The acquisition caused a major public and Congressional outcry because UAE had been a travel and financing hub for September 11 hijackers. The response convinced Dubai to sell off its American ports, but corporations owned by the government of Dubai still hold millions of dollars in Pentagon contracts.
All companies in Dubai fall under the control of the country’s rulers, with both the names of firms and relationships between them remaining confusing and interconnected. The Corporate Office (TCO) and Dubai World are arms of the Dubai government that oversee the state’s portfolios. Their holdings include Istithmar and Dubai Ports World, two companies which happen to have the same chairman, Sultan Ahmad Bin Sulayem.
Since 2000, Dubai-owned Inchcape Shipping Services has won over $60 million in contracts with the Army, Navy, Air Force, Coast Guard, and Department of Homeland Security. Since the U.S.S. Cole attack in October 2000, the Navy has stepped up contracting procedures for ship husbanding, which involves everything from providing security to docked vessels to ordering spare parts for ships. (In 2002, U.S. authorities captured Abd al-Rahim al-Nashiri, the alleged mastermind of that attack, in the United Arab Emirates) .Nonetheless, much of Inchcape’s current work involves ship husbanding, which means the company knows Navy ship schedules weeks in advance. Inchcape also provides “force protection” – the protective aspect of ship husbandry – and is partnering with Kellogg Brown and Root—a subsidiary of Halliburton, where Vice President Cheney formerly served as CEO—to assist the military with “training exercises.” [of what sort?]
The Inchcape contracts never caused much of a stir, especially compared to the Dubai Ports World debacle – when Dubai tried to buy P&O, the British company that operates U.S. ports, including the Port of New York and New Jersey, the deal dominated the news for weeks.
John Snow, who as Treasury Secretary was extremely influential in whether the deal was approved by the U.S., had major business dealings with Dubai Ports. In December 2002, while Snow was CEO at transportation conglomerate CSX, the company sold a shipping line to The Carlyle Group, a major U.S. equity firm with long ties to the Bush family. (George H.W. Bush worked as an advisor until October 2003 and kept his stock afterward.) Under Carlyle, the subsidiary picked up $100 million in federal contracts. A year later, Carlyle sold the subsidiary to Castle Harlan—where current President George W. Bush once sat on the board of directors—for double what it had paid CSX. (CSX is consistently one of the top GOP campaign donors in the transportation industry.)
In early January 2003, President Bush nominated John Snow for Treasury Secretary, and the Senate unanimously approved him three weeks later. In February 2005, two years after Snow left CSX, the company sold its port holdings to Dubai Ports World. That summer, David Sanborn, vice president for shipping at a CSX subsidiary, joined DP World. In 2005, Dubai invested $100 million in Carlyle.
In November 2005, British port company P&O agreed to be purchased by Dubai. The deal caught the attention of the U.S. media in February 2006, and most lawmakers and the public opposed it. Congress began writing legislation to block the deal, and several Congressmen wrote a letter to the Treasury Department, reminding Snow that his department had previously complained about UAE bring uncooperative during the investigation of Osama Bin Laden’s finances. Sen. Carl Levin (D-MI) told the AP that UAE had been a “consistent counterterrorism problem.” The UAE had been home to two 9/11 hijackers, and many other hijackers involved in the 9/11 attacks traveled through the country on their way to the United States. Several of them transferred money through UAE, and some experts believe Al Qaeda might still be doing the same. UAE’s own ports were the known stop for stolen nuclear secrets sold by Abdul Qadeer Khan, the Pakistani nuclear scientist, to Iran.
Bush feigned ignorance about the deal,, saying he didn’t know about it until it had been approved. Nonetheless, he quickly became defiant, threatening to use a veto for the first time in his six years in office to push through the $6.8 billion deal. Treasury Secretary Snow, whose former company had sold a major subsidiary to Dubai just a year earlier, had more power than anyone besides President Bush to approve the deal. He was the head of the Committee on Foreign Investment in the United States (CFIUS), a cross-agency federal panel charged with screening foreign companies trying to take over domestic firms with influence on U.S. homeland security. As Snow was about to announce his decision to approve, Bush nominated Dubai Ports World Vice President David Sanborn to be Maritime Administrator. Bush and Snow lost the fight: The House voted to block the sale, DP World agreed to sell off all U.S. operations upon purchase, and Sanborn withdrew his nomination.
In September 2007, Dubai bought a fifth of NASDAQ’s stock as well as NASDAQ’s 28 percent stake the London Stock Exchange, and the government of Abu Dhabi, another Emirate, bought a 7.5 percent stake in The Carlyle Group.
- Snow summary
- Sanborn summary
- Inchcape summary
- Morse summary
- opensecrets.org: CSX does not account for 80 percent of transportation industry’s GOP donations. Not even close. About 80 percent of their own donations go to the GOP, but they rarely crack the top 5 within the industry.
- http://www.tiscali.co.uk/news/newswire.php/news/reuters/2006/02/24/business/dubai39s pampodealgoesahead.html