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Executive blasts 'myths' surrounding ports deal

Coast Guard initially raised issue of 'intelligence gaps' in review

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John Negroponte, national director of intelligence, said "no red flags" came up in the review of the deal.

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WASHINGTON (CNN) -- A top executive of the Dubai-based company that hopes to take over about a dozen terminals in six U.S. ports defended the deal before a Senate committee Tuesday.

Ted Bilkey, DP World's chief operating officer, told lawmakers that the criticism surrounding the deal was based on "myths" and said any assertion that U.S. officials approved the deal duplicitously is "a total misrepresentation."

"DP World is a company that in good faith sought to comply with applicable U.S. legal requirements -- and having been told by the U.S. government that we met those requirements, now finds itself in the position of being told that that was not good enough," Bilkey told the Senate Commerce Committee.

Critics have said the deal raises concerns because DP World is owned by the United Arab Emirates, a nation that has had questionable ties to terrorists in the past.

The $6.85 billion acquisition would place DP World in charge of 11 terminals in six large U.S. ports: two in Baltimore, Maryland; one in Newark, New Jersey; one in Philadelphia, Pennsylvania; one in Miami, Florida; four in Houston, Texas; and two in New Orleans, Louisiana, according to a DHS news release.

Bilkey's remarks came after the nation's top intelligence official told a Senate panel that the intelligence community determined the threat posed by the takeover was low.

John Negroponte, national director of intelligence, told the Senate Armed Services Committee that the assessment was provided to a government review board after a one-month inquiry on DP World's impending purchase of P&O, the British-based operator of cargo terminals.

"We didn't see any red flags come up in the course of our inquiry," Negroponte said.

However, a Senate hearing revealed Monday that the Coast Guard initially warned that "intelligence gaps" prevented a broad assessment of any security risks posed by the takeover of some U.S. shipping terminals by the UAE company.

In a statement released Monday, the Coast Guard said the excerpts were taken out of context and "do not reflect the full, classified analysis performed by the Coast Guard."

U.S. Sen. Susan Collins, chairwoman of the Senate Homeland Security and Governmental Affairs Committee, disclosed the Coast Guard report on the impending purchase.

"There are many intelligence gaps concerning the potential for DPW or P&O assets to support terrorist operations that precludes an overall threat assessment of the potential merger," the Coast Guard report on the potential deal stated. (Read the Coast Guard memoexternal link)

"The breadth of the intelligence gaps also infer potential unknown threats against a large number of potential vulnerabilities."

The Coast Guard intelligence document, prepared in December, said the service was unable to answer questions about the security environment at the terminals affected; the backgrounds of workers at those terminals; and whether DP World or P&O were vulnerable to "foreign influence" on security matters.

Bipartisan debate

In a statement issued late Monday, the Coast Guard said that the document released by Collins did not "reflect the full, classified analysis" it performed, and Cmdr. Jeff Carter, a Coast Guard spokesman, said the document was "taken out of context."

At a press briefing Tuesday with Italian Prime Minister Silvio Berlusconi, President Bush reiterated his support for the deal, saying, "My position hasn't changed." Nevertheless, Bush said he understood why people were concerned.

"If there was any doubt in my mind, or people in my administration's mind that our ports would be less secure and the American people endangered, this deal wouldn't go forward."

Bush and other proponents of the deal have said that the Coast Guard, and Customs and Border Protection, will retain control over security, and Bush has threatened to veto any legislation that would stall the merger.

Critics have argued that the deal requires further scrutiny because two of the al Qaeda hijackers involved in the September 11, 2001, attacks were from the UAE, and money to fund the plot was passed through banks in Dubai.

The UAE is a key American ally in the Persian Gulf, Bush said, warning that rejecting the deal could undercut Arab cooperation on antiterrorist efforts.

Collins, a Maine Republican, questioned whether the Coast Guard's concerns had been addressed before an administration committee approved the DP World-P&O transaction.

She said Monday's briefings left her "more convinced than ever that the process was truly flawed." (Watch the senator express her concern -- 2:09)

The senator, who took her committee into a closed session to discuss the Coast Guard report, said security concerns should have triggered a broader, 45-day security review of the merger.

"I know the administration disagrees, but I can only conclude that there was a rush to judgment -- that there wasn't the kind of painstaking, thorough analysis that needed to be done despite serious questions being raised and despite the wide variety of involvement by agencies," she said.

Her sentiments were echoed by Democrats like Sen. Barbara Boxer of California, who called the deal "fraught with danger," and Sen. Byron Dorgan of North Dakota, who called it "nuts."

Senate Minority Leader Harry Reid of Nevada went so far as to warn Bush that the deal would not be given the OK without a fight.

"He will not get by by trying to jam this down our throats," Reid said.

Sen. Joseph Lieberman of Connecticut, the ranking Democrat on the committee, said DP World "deserves a fair hearing."

"That doesn't mean they deserve a free pass when they buy terminals at ports in the U.S.," he said. "But they deserve a fair hearing, and I believe now they're going to get one."

However, the White House efforts to allay congressional fears has worked on at least one powerful legislator. Senate Majority Leader Bill Frist, who first elicited Bush's threat of a veto when he suggested legislation subjecting the deal to further review, said Tuesday he is no longer so adamantly opposed to the deal.

The reason, said the Tennessee Republican, is because he has learned more about the transaction, and it "has made me much more comfortable."

Sen. Jim DeMint, a South Carolina Republican who has backed the deal, suggested critics are engaging in "racial profiling" by raising concerns about Arab control.

CNN's Ted Barrett, Dana Bash and Ed Henry contributed to this report.

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