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Israeli shipper endorses DP World

House Armed Services chief says he's out to 'kill' ports deal
The Port of New Orleans is one of six facilities that would be affected by DP World's takeover deal.



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WASHINGTON (CNN) -- The chairman of Israel's largest shipping firm has strongly backed a deal that would give a United Arab Emirates-based shipping company control of several U.S. port terminals, while another GOP leader expressed strong opposition.

Those developments came as Britain's Royal Court of Justice tentatively approved the $6.8 billion merger between DP World and Britain's P&O, the current operator of terminals at six key U.S. ports.

But pending an appeal by U.S.-based cargo handler Eller & Co., the judge has stayed that approval until 3 p.m. Friday. And DP World has agreed not to assume control of P&O's port operations until a 45-day security review can take place.

In a letter to Sen. Hillary Clinton obtained exclusively by CNN, Israel's Zim Integrated Shipping Services CEO Idon Ofer called state-owned DP World a strong business partner, despite the United Arab Emirates' boycott of Israel. (Read the letter -- PDF)

"During our long association with DP World, we have not experienced a single security issue in these ports or in any of the terminals operated by DP World," Ofer said in a letter written February 22. "We are proud to be associated with DP World and look forward to working with them into the future."

Several lawmakers from both parties -- including Clinton and fellow New York Democrat Sen. Charles Schumer -- have proposed legislation that would either delay or block the deal.

Ofer told CNN he plans to send a letter to Schumer, as well.

The Zim official "has to represent his shareholders," Schumer told CNN on Thursday. "We have to represent security in America. And so, it really doesn't matter to me what Zim says."

Jordan and Egypt are the only Arab countries with diplomatic ties to Israel.

Despite that, products and technology from the Jewish state are widely available throughout the Arab world, though it is rare to find these products identified as made in Israel.

A Dubai government official said no goods or containers enter UAE ports directly from Israel, but he did not rule out the possibility that Israeli-produced goods enter through a third party. (Watch Anti-Defamation League offer an opposing view -- 1:57)

GOP dissent

President Bush has threatened to veto any congressional attempt to block the deal, warning that it would risk alienating a key U.S. ally in the Persian Gulf.

But under pressure from the White House and Republican leaders in Congress, DP World last week agreed to delay taking control of P&O's North American port operations until a 45-day security review can be completed.

On Thursday, Rep. Duncan Hunter, chairman of the House Armed Services Committee, told reporters, "I intend to do everything I can do to kill the deal."

The California Republican said he will introduce a bill that would require DP World and other companies based overseas to give up their claims on "critical infrastructure" in the United States.

Hunter accused the UAE of ignoring American pleas to halt the transshipment of nuclear technology through its ports as recently as 2003.

But James Zogby, president of the Arab-American Institute, said reports of the UAE's involvement in nuclear trafficking have been exaggerated or are false.

Zogby, who supports the deal, said officials in Dubai helped track shipments of nuclear technology from the clandestine sales of Pakistani scientist A.Q. Khan to Libya. That ultimately helped lead to Libya's agreement to give up its efforts to build a nuclear bomb, he said.

Rep. Peter King, R-New York, chairman of the House Homeland Security Committee, also opposes the deal. He said Wednesday that Homeland Security and Treasury department officials told him their 30-day review never looked for possible terrorism ties. (Full story)

Response from Clinton's office

Clinton's spokesman, Philippe Reines, said Ofer's letter is one of many received by her staff from supporters -- and opponents -- of the deal.

"In any event, we would prefer to learn about the security impact of this deal through the full 45-day investigation mandated by law," Reines told CNN via e-mail.

Her husband, former President Bill Clinton, also has become embroiled in the ports deal controversy after a London newspaper reported Wednesday that he advised the UAE government two weeks ago to ask for the 45-day delay.

His spokesman, Jay Carson, confirmed that the former president received a call from UAE leaders two weeks ago but denied the Financial Times' report that Bill Clinton was advising DP World.

"He told them that he didn't know the details about the deal," Carson said. He added that Clinton made clear he "felt that any ports deal should be subject to the full scrutiny process and should also take steps to make ports safer, not maintain the status quo."

"Like Senator Clinton and many others, he is concerned about foreign state ownership of our ports, and, to this end, he is supportive of her legislation," Carson told CNN.

Sen. Elizabeth Dole, a North Carolina Republican, has also raised questions about the Dubai-based company, while her husband, former Senate Majority Leader Bob Dole, assists a UAE delegation in Washington to lobby support for the deal.

According to a CNN/USA Today Gallup poll released Thursday, about two-thirds of Americans oppose allowing cargo operations at U.S. ports to be run by the Dubai-based company.

The telephone poll, with a margin of error of plus or minus 3 percentage points, also showed the American public would oppose the sale if the company were based in China, France or another Arab country.

However, about 70 percent of the 1,020 Americans polled had no problem with British companies managing operations at U.S. ports.

Another company reviewed

Hunter and other lawmakers also questioned the proposed takeover of the British company Doncasters, which makes precision parts for American defense contractors at nine U.S. plants, by Dubai International Capital.

The $1.2 billion deal is under review by the Committee on Foreign Investment in the United States, the same administration panel that approved the DP World-P&O merger.

CFIUS decided Monday to conduct a 45-day national security investigation. The committee has been criticized for initially skipping that process in the DP World deal.

"The more we learn about the CFIUS process, the more questions are raised," Schumer said. "Why did they do a 45-day review for tank engines in a box but not for potential nuclear weapons in a ship's container?"

CFIUS is also investigating plans by an Israeli software company, Check Point, to buy a smaller U.S. rival, Sourcefire, The Washington Post reported.

CNN's Paula Newton, Phil Hirschkorn and Ed Henry contributed to this report.

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