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United States News Title: Lawsuits Filed to Block Ports Takeover Lawsuits Filed to Block Ports Takeover TED BRIDIS / AP | February 24 2006 The White House on Friday praised as helpful the offer by a United Arab Emirates company to postpone indefinitely its takeover of significant operations at six major U.S. seaports. The delay gives President Bush time to convince skeptical lawmakers the deal poses no increased risks from terrorism. Lawsuits to upset the $6.8 billion transaction were filed Friday in New Jersey and London. The White House said it still supports the agreement and said that Bush will continue to oppose any effort by lawmakers to block it. The company's surprise concession, offered late Thursday, cools the standoff building between the Congress and the president over his administration's previous approval of the deal. In early reaction, lawmakers praised the temporary hold. But some critics pressed anew for an intensive examination of the deal's risks. "We believe it would be helpful to have some additional time to brief Congress about the facts and about the safeguards that are in place," White House press secretary Scott McClellan said Friday. "We believe once Congress has a better understanding of the facts and the safeguards that are in place that they will be more comfortable with the transaction moving forward. So, a slight delay would be helpful in that regard." As part of its new offer, coordinated with the White House, Dubai Ports World said it would agree not to exercise control or influence management over U.S. ports pending further discussions with the administration and Congress. It did not say how long it would wait for these discussions to be finished. The announcement effectively leaves existing American and British executives in charge of the company's seaport operations in New York, New Jersey, Baltimore, New Orleans, Miami and Philadelphia. Meanwhile, the owner of Port Newark filed a lawsuit in New Jersey to block the sale, citing security concerns. The Port Authority of New York and New Jersey said the deal violates a 30-year lease signed with the authority in 2000. The lawsuit, filed Friday in state Superior Court in Newark, asked a judge to block the sale on the grounds that any such deal required the authority's consent. In England, a U.S. company at the Port of Miami, Eller & Company Inc., filed a court petition Friday also seeking to block the sale. Eller asked the High Court in London, which must approve its purchase of London-based Peninsular & Oriental Steam Navigation Co., to stop the takeover. Miami-based Eller filed a similar lawsuit last week in a Florida court, alleging it will become an "involuntary partner" with Dubai's government and it may seek more than $10 million in damages. Back in Washington, Rep. Peter King of New York, chairman of the House Homeland Security Committee, described the offer to postpone the takeover of operations at U.S. ports as "definitely a positive step." A leading Republican critic of the deal, King said the president still must disclose new details about the administration's review and approval of the agreement last month. McClellan said the duration of the delay was "not up to us; it's up to the company to make that decision." A senior Dubai Ports executive, Edward H. Bilkey, said the company will otherwise move forward with its purchase of the British company. Although Dubai Ports agreed to temporarily segregate the company's U.S. operations, Bilkey expressed bewilderment over the security concerns expressed in Congress. "The reaction in the United States has occurred in no other country in the world," Bilkey said. "We need to understand the concerns of the people in the U.S. who are worried about this transaction and make sure that they are addressed to the benefit of all parties." The company, which timed its announcement before financial markets opened in London, assured British shareholders they will be paid as previously planned. "It is not only unreasonable but also impractical to suggest that the closing of this entire global transaction should be delayed," Dubai Ports said in a statement. But on Capitol Hill, critics weren't silenced. "A simple cooling-off period will not allay our concerns," said Sen. Charles Schumer, D-N.Y. Sen. Robert Menendez, D-N.J., said the company's offer "isn't worth the paper on which it is written." "If the Bush administration will not stop this deal from closing, Congress must." Menendez said. Sen. Hillary Rodham Clinton, D-N.Y., urged Bush to conduct a broader review of potential terrorism risks. Rep. Vito Fosella, a New York Republican, said the administration should more fully explain why it concluded the sale was safe. The announcement of a delay came amid a persistent political furor over the business deal, otherwise expected to be completed in early March. Republicans and Democrats alike have threatened to introduce legislation to block or delay the deal, citing unease over what they describe as inconsistent opposition to terrorism by the United Arab Emirates. Bush has threatened to veto any such measures and forcefully defended the small but wealthy federation in the Persian Gulf as a vital ally. The White House noted the United Arab Emirates contributed $100 million to help victims of Hurricane Katrina just weeks before Dubai Ports sought approval for its business deal. It said the money was nearly four times as much as the administration received from all other countries combined, and said there was no connection between the money and the pending deal. At the first Senate oversight hearing since the controversy erupted, lawmakers challenged the adequacy of a classified intelligence assessment that played a crucial role assuring administration officials that the Dubai Ports deal was proper. The report, which is closely guarded, was put together during four weeks in November by analysts working under the U.S. director of national intelligence. Sen. Carl Levin of Michigan, the top Democrat on the Senate Armed Services Committee, asked whether the intelligence report examined purported links between government officials in the UAE and Osama bin Laden before the September 2001 terror attacks. "I did not see that in the report," said Robert Kimmitt, deputy secretary at the Treasury Department. Clinton accused the administration of ignoring provisions of a federal law that require more extensive reviews when deals involve purchases by government-owned companies. Administration officials explained their long-standing practice was to conduct such broader investigations only when deals raised serious national security concerns. Kimmitt responded: "We didn't ignore the law. Concerns were raised. They were resolved."
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