Foreign Investment Security Improvement Act of 2006

Mr. President, I come to the Chamber today first to announce introduction of legislation, S. 2333, which would deal with the Dubai Ports issue. The legislation is bipartisan. It has five Democratic and five Republican sponsors, although the number is growing. The lead Republican sponsor is my friend from Minnesota, Mr. Coleman, who had hoped to be here today, but I believe his flight was delayed, and he is just arriving about now.

First, I would like to speak about the recent developments in Dubai Ports World's takeover of several major ports. I believe the bipartisan legislation which I and others will introduce today is the path forward with respect to this deal and securing our Nation's ports and making sure that homeland security is the No. 1 priority.

As we know, the administration and DP World executives reached an agreement yesterday to allow for a 45-day investigation of security concerns raised by this deal. That is good news. I salute the administration and President Bush for doing so.

The bottom line is that many of us have called for this 45-day investigation--many of us from both parties over the last week and a half--and the fact that the President is doing it is very good news. To dig in one's heels doesn't make much sense, particularly when it comes to homeland security. So the new agreement is a major step forward, and it is a key part of what many of us have been asking for in recent weeks. But there are still some outstanding questions. That is why we will be introducing our legislation this afternoon. The devil is in the details. It is plain and simple.

Here are some of the questions that have yet be to answered.

First, we must make sure that the CFIUS Committee conducts a full, thorough, and independent investigation. We can ask for no less, given that the security of our homeland is at stake. Reports that I and others have received have been that the previous investigation was cursory, was casual, was not as thorough as it might be. There are reports, for instance, that people simply looked in the record books to see if there was something wrong that DP World had done. That is not the kind of investigation you need when for the first time they are going to operate the ports here in the United States. And because the committee has already taken a position, even if it is in a casual and cursory way, we have to make sure they are able to approach this with an open mind. We need real independence here.

Make no mistake about it; the CFIUS Committee in the past has too often made economic and diplomatic considerations at a greater level than homeland security consideration. That is buttressed by the fact that there are reports in the newspapers that the homeland security representative on the committee first objected and then withdrew his objection.

Again, we have to make sure there is a broader question; that is, whether the CFIUS Committee is the right committee to begin with to do this. Are they structured properly in a post-9/ll world?

When they were first set up more than 20 years ago, part of the purpose was almost to provide a security justification for economic deals that had to go through. But even in the confines of present law, we have to make sure that the investigation is thorough, complete, and independent.

Let me mention one point in this regard. I had been very perturbed when I learned that the Port Authority of New York/New Jersey, in charge of our ports, was not even consulted about this deal. Had they been consulted, they would have talked about all kinds of problems that they saw, and as a result they are now suing to block the deal. But how thorough could an investigation be if the governmental agency in charge of running the ports, in charge of security in the ports, in our largest port on the east coast, was not even consulted?

So the first question is, will the investigation be thorough, will it be complete, and will it be independent? Will those who have already brushed aside any complaints or worries be able now to have an open mind? I hope so. I am not prejudging, but it is a question that has to be asked as the investigation proceeds.

The second question is, what will happen with the report once it is completed? If the report is kept secret and only given to the President, then what good was the new 45-day investigation? After all, the President has already said he is for this, and I would like to hear the President say that if new concerns are brought up by the report, he would reconsider his support of this merger. We have not heard that yet. So at that point, we are sort of in a position where it is almost like Alice in Wonderland, where you first have the verdict and then the trial. For this 45-day investigation to have real merit, since it does go to the President by law and he gets the right to say ``yes'' or ``no,'' it would help with the American people to say he has an open mind as well; he is not locked into a position.

My belief is this: I think the report should be made available to the Senate

and the House, to any Member of the Senate and House who wishes to see it, and should be made public, at least the nonclassified parts of the report. It can be done on a redacted basis.

Why? First of all, we do need independent judgment. Again, because the President has come out so firmly for this proposal, to allow the House and Senate to see the full report makes a great deal of sense and because the American people have so many concerns. Go to any street corner in any city or town or suburb in this country and you will hear questions asked about this. Every time I have been on an airplane--and I have been on airplanes in various parts of the country--people actually get out of their seats and come over to me and say: What is going on here? So making the report public, at least in a redacted way, so the classified parts are not obviously exposed, makes a great deal of sense. So that is our second question.

The third question is evaluation. It seems to me that in this particular area where there has been such concern, there ought to be, in a constitutionally and legislatively proper way, an ability for this body and the other body to disapprove the deal. And that is what our legislation calls for. It calls for a 30-day period after the report is issued before any merger is consummated so that Congress can disapprove the deal. As you know, Mr. President, there are strict laws on how Congress can approve and disapprove administrative actions, and we have consulted those documents and our disapproval is in keeping with the way you should structure such a disapproval.

So those are the three major questions that our legislation asks. The legislation, S. 2333, which 10 of us, 5 Democrats and 5 Republicans, are introducing this afternoon, deals not only with the 45-day review which the President has already agreed to but the giving of the final report to the House and Senate and to the public in a nonclassified way and gives the Congress the 30-day right for disapproval.

Now, there is one other question not engaged by our legislation that has to be answered and that is this: Because this is a voluntary agreement between the administration and DP World, I have concerns about, because the merger is going to go forward, how securely walled off is the American part of this new enterprise from the rest. If you read the document that has been made public, it is sort of contradictory, in a certain sense. We want to make sure that those walls are thick, that nobody in the Dubai Ports World organization can influence decisions made here, at least while the investigation is going forward. These will be other questions that I think we should ask.

Now, what is the status, what will we do with this legislation? Well, the President's agreeing to a 45-day investigation obviates the need to ask for a vote in this Chamber immediately, although I am confident that if the legislation were brought to the floor, it would receive an overwhe1ming vote, probably a veto-proof majority. However, we will keep this legislation at the ready as we follow the investigation. If the investigation should falter or it should not be made public, then the legislation might well be brought to the floor again. The bottom line is, those of us who have great concern about this deal are in a period of watchful waiting. We are hopeful that the bipartisan compromise we have put together will sort of spread. We are hopeful that the President's going along with the 45-day investigation is an indication that we can continue to work together. None of us relishes the occasion to bring this legislation to the floor. It would be much better if the President would agree to all of its terms. But at the moment, we will carefully watch and wait, doing our best to make sure that the investigation is complete, thorough, and independent, doing our best to make sure that Members of Congress and the public can see all the appropriate parts of the investigation and then, should the need arise, have an opportunity to disapprove of this merger.

One other point, larger point. Whatever happens with this merger, in terms of its effect on the United States and its ports, there is one bit of good that can come out of this sorry mess; namely, that this Congress, that this administration focus much more on port security. There is no question that we have not done enough in terms of port security. In the air, we have done a pretty good job. We have spent about $8 billion, and while not all of it was spent perfectly, we are a lot safer from terrorism in the air than we were before. But in our ports, which are perhaps more vulnerable and wide open, we haven't done enough. Amendment after amendment after amendment that I and others have brought up over the last 4 years has been defeated, oftentimes on party-line votes. There is a need to do many things. There is a need to make sure that every container that comes into this country can be inspected, can be done mechanically for nuclear material. There is a need to make sure that those containers do not contain biological or chemical weapons. There is a need to make sure that the containers are far more tamperproof than they are today--not all of them are; far too many are not--so that there can't be something slipped into that container while it is on board ship or has already been loaded or checked out at the port of embarkation. There is a need to make sure that personnel both on our side of the ocean and on the other side of either ocean have been thoroughly checked out, in terms of their background, so that terrorist organizations cannot infiltrate because we all know in terrorism handbook 101, infiltration is probably the best way to smuggle some terrible weapons onto our shores.

We also have to make sure that we have greater personnel, greater machinery, greater computers and technology so that a higher percentage of containers, not just the 1 in 20, can be inspected; 1 in 20 is too great a gamble and too great a risk.

As we move forward, I hope that these will happen. And one other thing that ought to be done. We ought to take a look at the CFIUS committee, which in the past has too often taken the path of least resistance and doesn't give foreign takeovers the critical national security review they deserve.

According to a 2005 report, ``The manner in which the Committee on Foreign Investment in the United States implements Exon-Florio may limit its effectiveness. For example, Treasury in its role as Chair and some others narrowly define what constitutes a threat to national security.''

This week, the Banking Committee will hold hearings on CFIUS reform, and I look forward to working with Chairman Shelby and Senator Sarbanes to carefully examine the CFIUS process, something I have had trouble with in the past.

In conclusion, the last 2 weeks have been extraordinary. Rarely do we see these days a bipartisan, bicameral unity to ensure our Nation is protected, and those of us who worked hard at this, I say to my colleagues, can be proud that we have already seen some major progress. The 45-day investigation will commence. We must keep our vigilance and make sure the rest of the process is done fairly and carefully and independently because the security of our country depends upon it.

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. President, I come to the Chamber today first to announce introduction of legislation, S. 2333, which would deal with the Dubai Ports issue. The legislation is bipartisan. It has five Democratic and five Republican sponsors, although the number is growing. The lead Republican sponsor is my friend from Minnesota, Mr. Coleman, who had hoped to be here today, but I believe his flight was delayed, and he is just arriving about now.

First, I would like to speak about the recent developments in Dubai Ports World's takeover of several major ports. I believe the bipartisan legislation which I and others will introduce today is the path forward with respect to this deal and securing our Nation's ports and making sure that homeland security is the No. 1 priority.

As we know, the administration and DP World executives reached an agreement yesterday to allow for a 45-day investigation of security concerns raised by this deal. That is good news. I salute the administration and President Bush for doing so.

The bottom line is that many of us have called for this 45-day investigation--many of us from both parties over the last week and a half--and the fact that the President is doing it is very good news. To dig in one's heels doesn't make much sense, particularly when it comes to homeland security. So the new agreement is a major step forward, and it is a key part of what many of us have been asking for in recent weeks. But there are still some outstanding questions. That is why we will be introducing our legislation this afternoon. The devil is in the details. It is plain and simple.

Here are some of the questions that have yet be to answered.

First, we must make sure that the CFIUS Committee conducts a full, thorough, and independent investigation. We can ask for no less, given that the security of our homeland is at stake. Reports that I and others have received have been that the previous investigation was cursory, was casual, was not as thorough as it might be. There are reports, for instance, that people simply looked in the record books to see if there was something wrong that DP World had done. That is not the kind of investigation you need when for the first time they are going to operate the ports here in the United States. And because the committee has already taken a position, even if it is in a casual and cursory way, we have to make sure they are able to approach this with an open mind. We need real independence here.

Make no mistake about it; the CFIUS Committee in the past has too often made economic and diplomatic considerations at a greater level than homeland security consideration. That is buttressed by the fact that there are reports in the newspapers that the homeland security representative on the committee first objected and then withdrew his objection.

Again, we have to make sure there is a broader question; that is, whether the CFIUS Committee is the right committee to begin with to do this. Are they structured properly in a post-9/ll world?

When they were first set up more than 20 years ago, part of the purpose was almost to provide a security justification for economic deals that had to go through. But even in the confines of present law, we have to make sure that the investigation is thorough, complete, and independent.

Let me mention one point in this regard. I had been very perturbed when I learned that the Port Authority of New York/New Jersey, in charge of our ports, was not even consulted about this deal. Had they been consulted, they would have talked about all kinds of problems that they saw, and as a result they are now suing to block the deal. But how thorough could an investigation be if the governmental agency in charge of running the ports, in charge of security in the ports, in our largest port on the east coast, was not even consulted?

So the first question is, will the investigation be thorough, will it be complete, and will it be independent? Will those who have already brushed aside any complaints or worries be able now to have an open mind? I hope so. I am not prejudging, but it is a question that has to be asked as the investigation proceeds.

The second question is, what will happen with the report once it is completed? If the report is kept secret and only given to the President, then what good was the new 45-day investigation? After all, the President has already said he is for this, and I would like to hear the President say that if new concerns are brought up by the report, he would reconsider his support of this merger. We have not heard that yet. So at that point, we are sort of in a position where it is almost like Alice in Wonderland, where you first have the verdict and then the trial. For this 45-day investigation to have real merit, since it does go to the President by law and he gets the right to say ``yes'' or ``no,'' it would help with the American people to say he has an open mind as well; he is not locked into a position.

My belief is this: I think the report should be made available to the Senate

and the House, to any Member of the Senate and House who wishes to see it, and should be made public, at least the nonclassified parts of the report. It can be done on a redacted basis.

Why? First of all, we do need independent judgment. Again, because the President has come out so firmly for this proposal, to allow the House and Senate to see the full report makes a great deal of sense and because the American people have so many concerns. Go to any street corner in any city or town or suburb in this country and you will hear questions asked about this. Every time I have been on an airplane--and I have been on airplanes in various parts of the country--people actually get out of their seats and come over to me and say: What is going on here? So making the report public, at least in a redacted way, so the classified parts are not obviously exposed, makes a great deal of sense. So that is our second question.

The third question is evaluation. It seems to me that in this particular area where there has been such concern, there ought to be, in a constitutionally and legislatively proper way, an ability for this body and the other body to disapprove the deal. And that is what our legislation calls for. It calls for a 30-day period after the report is issued before any merger is consummated so that Congress can disapprove the deal. As you know, Mr. President, there are strict laws on how Congress can approve and disapprove administrative actions, and we have consulted those documents and our disapproval is in keeping with the way you should structure such a disapproval.

So those are the three major questions that our legislation asks. The legislation, S. 2333, which 10 of us, 5 Democrats and 5 Republicans, are introducing this afternoon, deals not only with the 45-day review which the President has already agreed to but the giving of the final report to the House and Senate and to the public in a nonclassified way and gives the Congress the 30-day right for disapproval.

Now, there is one other question not engaged by our legislation that has to be answered and that is this: Because this is a voluntary agreement between the administration and DP World, I have concerns about, because the merger is going to go forward, how securely walled off is the American part of this new enterprise from the rest. If you read the document that has been made public, it is sort of contradictory, in a certain sense. We want to make sure that those walls are thick, that nobody in the Dubai Ports World organization can influence decisions made here, at least while the investigation is going forward. These will be other questions that I think we should ask.

Now, what is the status, what will we do with this legislation? Well, the President's agreeing to a 45-day investigation obviates the need to ask for a vote in this Chamber immediately, although I am confident that if the legislation were brought to the floor, it would receive an overwhe1ming vote, probably a veto-proof majority. However, we will keep this legislation at the ready as we follow the investigation. If the investigation should falter or it should not be made public, then the legislation might well be brought to the floor again. The bottom line is, those of us who have great concern about this deal are in a period of watchful waiting. We are hopeful that the bipartisan compromise we have put together will sort of spread. We are hopeful that the President's going along with the 45-day investigation is an indication that we can continue to work together. None of us relishes the occasion to bring this legislation to the floor. It would be much better if the President would agree to all of its terms. But at the moment, we will carefully watch and wait, doing our best to make sure that the investigation is complete, thorough, and independent, doing our best to make sure that Members of Congress and the public can see all the appropriate parts of the investigation and then, should the need arise, have an opportunity to disapprove of this merger.

One other point, larger point. Whatever happens with this merger, in terms of its effect on the United States and its ports, there is one bit of good that can come out of this sorry mess; namely, that this Congress, that this administration focus much more on port security. There is no question that we have not done enough in terms of port security. In the air, we have done a pretty good job. We have spent about $8 billion, and while not all of it was spent perfectly, we are a lot safer from terrorism in the air than we were before. But in our ports, which are perhaps more vulnerable and wide open, we haven't done enough. Amendment after amendment after amendment that I and others have brought up over the last 4 years has been defeated, oftentimes on party-line votes. There is a need to do many things. There is a need to make sure that every container that comes into this country can be inspected, can be done mechanically for nuclear material. There is a need to make sure that those containers do not contain biological or chemical weapons. There is a need to make sure that the containers are far more tamperproof than they are today--not all of them are; far too many are not--so that there can't be something slipped into that container while it is on board ship or has already been loaded or checked out at the port of embarkation. There is a need to make sure that personnel both on our side of the ocean and on the other side of either ocean have been thoroughly checked out, in terms of their background, so that terrorist organizations cannot infiltrate because we all know in terrorism handbook 101, infiltration is probably the best way to smuggle some terrible weapons onto our shores.

We also have to make sure that we have greater personnel, greater machinery, greater computers and technology so that a higher percentage of containers, not just the 1 in 20, can be inspected; 1 in 20 is too great a gamble and too great a risk.

As we move forward, I hope that these will happen. And one other thing that ought to be done. We ought to take a look at the CFIUS committee, which in the past has too often taken the path of least resistance and doesn't give foreign takeovers the critical national security review they deserve.

According to a 2005 report, ``The manner in which the Committee on Foreign Investment in the United States implements Exon-Florio may limit its effectiveness. For example, Treasury in its role as Chair and some others narrowly define what constitutes a threat to national security.''

This week, the Banking Committee will hold hearings on CFIUS reform, and I look forward to working with Chairman Shelby and Senator Sarbanes to carefully examine the CFIUS process, something I have had trouble with in the past.

In conclusion, the last 2 weeks have been extraordinary. Rarely do we see these days a bipartisan, bicameral unity to ensure our Nation is protected, and those of us who worked hard at this, I say to my colleagues, can be proud that we have already seen some major progress. The 45-day investigation will commence. We must keep our vigilance and make sure the rest of the process is done fairly and carefully and independently because the security of our country depends upon it.

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. President, I rise to introduce a joint resolution disapproving the conclusion of the Committee on Foreign Investment in the United States, CFIUS, to allow Dubai Ports World, DP World, to take over certain port operations in the United States. My colleague and good friend, Congresswoman Jane Harman, will be introducing this resolution in the House of Representatives.

This resolution would do the following: 1. Disapprove the CFIUS review of the transaction; 2. direct the CFIUS to conduct a 45-day investigation in order to ensure that the sale will not have an adverse effect on national security; and 3. direct CFIUS to brief Members of Congress on the findings of its investigation before the transaction is allowed to proceed if the Committee maintains that it should go forth.

The pending sale raises potential maritime security concerns. The sale would transfer control of Peninsular & Oriental, P&O, Ports North America to DP World, a foreign government-owned entity. P&O Ports has extensive terminal and stevedoring operations along the eastern seaboard and on the gulf coast. It encompasses not only terminal facility leases in six major U.S. ports, as has been reported widely in the media, but also stevedoring and terminal operations in a total of 21 U.S. ports, including my home State in Portland, ME.

We have long acknowledged the vulnerability of our ports--both as a potential target and as a conduit through which terrorists, their weapons or other contraband may enter the U.S. coming from a State with three international cargo ports, I am keenly aware of the importance of our seaports to our national economy and to the communities in which they are located. In addition to our ports' economic significance, the link between maritime security and our national security is evident.

The attacks of 9/11 have forced us to reassess and rebuild our entire approach to security. Against an enemy determined to cause maximum harm to both the American people and the American economy, we are building a structure that, in great part, relies upon private-public partnerships. Nowhere is this more apparent than in our ports--where terminal operators, longshoremen, port authorities, importers, carriers, and others have worked with the United States Coast Guard, Customs and Border Protection, and state and local law enforcement to put security plans in place.

The foreign government in question, that owns DP World, is the government of Dubai, part of the United Arab Emirates, UAE. While UAE is an ally in the war on terrorism, it also has been used as a base of terrorist operations and financing. In fact, the 9/11 Commission reported that UAE was ``both a valued counterterrorism ally of the United States and a persistent counterterrorism problem.'' The attacks of 9/11 were planned in part in the UAE, and much of the financing for those operations was funneled through the UAE banking system. The facts warrant a thorough 45-day investigation by CFIUS, not a cursory review.

This incident has revealed significant shortcomings in the CFIUS process. It is not adequately transparent and does not provide for sufficient oversight reporting to appropriate committees and the leadership of Congress. The Exon-Florio provision of the Defense Production Act gives the President the authority to suspend or prohibit any foreign acquisition, merger or takeover of a U.S. corporation that is determined to threaten the national security of the U.S. Through Executive order, the President established the CFIUS to review transactions pursuant to Exon-Florio and make a recommendation regarding the exercise of his authority. It may be appropriate for the reviews, which may involve proprietary data and classified information, to be held confidential. However, once a decision has been reached by the CFIUS, it is wholly appropriate, and even necessary, that Members of Congress be briefed on the findings of the review and the basis for the decision.

I am truly troubled by the review process that was followed with respect to this purchase. The more I learn, the more questions are raised. The law requires a 45-day investigation in cases where an acquirer is controlled by a foreign government, as in the case of DP World, and the acquisition could affect the national security of the

Mr. President, I rise today to address the Dubai Ports World acquisition and the subsequent announcement to transfer operation of U.S. port terminals to a U.S. entity. Last week, my colleague from New York offered an amendment to S. 2349, the Legislative Transparency and Accountability Act of 2006. While the security of our ports is my foremost concern, especially as a Senator representing a State where one of the ports in question is located, I do not believe the time or the vehicle was appropriate for a vote on Senator Schumer's amendment. I have been a vocal critic of this transaction for weeks, but when my colleague's amendment was offered, Dubai Ports World had already resubmitted its application to the Committee on Foreign Investment, CFIUS. A second review of the transaction was pending. Furthermore, I had signed onto a bipartisan letter with Senator Schumer and eight other Members just the week before to the majority and minority leaders. In that letter, we expressed our desire to closely examine the facts that would be presented, and we retained our right to pursue legislative action after the review was completed should the outcome prove unsatisfactory.

Then, just last Friday, DP World announced their decision to transfer the U.S. port terminals acquired from Peninsular and Oriental Steam Navigation Company to a U.S. entity. While we are still seeking clarification of exactly what that means, my hope is that this decision will allay our concerns about this particular transaction. I expect a thorough review of this proposal by the appropriate agencies, and Congress assuredly has the will to act if concerns remain.

Should the immediate need for action disappear, Congress cannot ignore the underlying problems this acquisition has brought to light. First, we need to remain diligent in securing ports both domestically and abroad. Significant investments at foreign ports are critical. We cannot allow hazardous materials or weapons of mass destruction to enter our ports in the first place. By then, it could be too late. Second, Congress must undertake a comprehensive review of the CFIUS process. Chairman Shelby has already begun that process in the Banking Committee. I look forward to working with him and my colleagues to aggressively execute our oversight authority and expeditiously enact any reforms that may be necessary to ensure the safety and economic vitality of my State and this great Nation.

I ask unanimous consent that a copy of the above mentioned letter be printed in the Record.

Mr. President, I thank my distinguished friend and colleague. I would like to stay here and have the benefit of his remarks, but I am a member of the Homeland Security Committee. We are having a hearing on this subject now.

But I say to my good friend that he is privileged to represent a State which is at the vortex of commercial transactions of world trade and the one-world market of which I just spoke. I hope, in the ensuing days as we begin to debate this and discuss it, he will avail himself of his industrial base in his State and the finances in his State to get a broader picture of the magnitude of the investment by the Government of Kuwait and, indeed, other Arab nations in the United States of America. Consequently, it is essential that we view this situation as one that is not influenced by any bias or prejudice or duality or double standards. No.

I say to my friend, just ask your businessmen why would a company such as the UAE organization be looking to acquire just the franchises to operate terminals--not own terminal. We have to get that out. The terminals will remain in State control. Why would they want to invest $6.8 billion in projects throughout the world and in any way facilitate any individual or group to try an act of terror and be forced to jeopardize their own investment? We have to attribute to these people, even though they are beyond our shores, a tremendous business acumen, concern over their own security and their own interest.

Having the opportunity to meet with the Mr. Bilkey Saturday evening-- he asked to see me, and I was happy to do that--I learned a great deal about the knowledge and level they have of how to put a greater security situation in the transit of these containers. Let us give them an opportunity.

I thank my friend for his remarks.