[Lou Dobbs, Cnn Anchor:] Good evening, everybody. Tonight, the uproar over the sale of operations in six major U.S. ports to the United Arab Emirates is entering an entirely new phase. There has not been only been a failure of oversight and a conflict between co-equal partners of government, there is now a campaign of deceit and deception as the White House tries to save this deal. No one in this administration has talked about the fact that Dubai Ports World could be partially responsible for the shipment of military equipment through the Texas ports of Beaumont and Corpus Christi. There are also charges tonight that the Bush administration violated U.S. law by rushing this port sale through the Committee on Foreign Investments without a properly and legally-mandated review. At the same time, the White House, from the president on down, seems to be in complete denial about the risk to our national security from the sale of U.S. port operations to a country with ties to the 911 hijackers and nuclear proliferation.
[George W. Bush, President Of The United States:] People don't need to worry about security.
[Unidentified Male:] And we're not aware of a single national security concern...
[Donald Rumsfeld, Secretary Of Defense:] The Coast Guard is in charge of security, not the corporation. And the corporation is this correct?
[Scott Mcclellan, White House Press Secretary:] One thing we will never do is outsource to anyone the control and security of our ports.
[Dobbs:] As you just heard, President Bush today declaring there's no need to worry about security at our ports. But many members of Congress, governors, and mayors remain unconvinced. Today, senators blasted government officials who went on to Capitol Hill trying to win support for the administration's deal. Lisa Sylvester reports from Washington on the clash between senators and administration officials. Bill Tucker reports tonight from the Red Hook Container Terminal in New York on the reality of port security and new efforts tonight to try to block this deal. We turn first to Lisa Sylvester Lisa..
[Lisa Sylvester, Cnn Correspondent:] Lou, Congress is officially on break this week, but that did not stop a group of senators from gathering today demanding answers on this issue. And this is the first of several expected hearings.
[Sylvester:] Senators lashed out at administration officials for approving the Dubai Ports World deal.
[Sen. Hillary Clinton , Armed Services Committee:] If 911 was a failure of imagination and Katrina was a failure of initiative, this process is a failure of judgment.
[Sen. Edward Kennedy , Armed Services Committee:] The American people need to have confidence that the port deal won't undermine national security and that the administration isn't outsourcing our national security.
[Sylvester:] Of the five senators present during the briefing, only Senator John Warner backed the sale. The others accused the Committee on Foreign Investments in the U.S., or CFIUS, of being out of touch with the American people and failing to keep Congress in the loop.
[Sen. Carl Levin , Armed Services Committee:] We weren't notified at all, unless watching CNN and reading the morning paper constitutes notification.
[Sylvester:] CFIUS was roundly criticized for not doing a more extensive review required by law whenever a foreign entity seeks to purchase a U.S. asset that could affect national security.
[Levin:] Is there not one agency in this government that believes that this takeover could affect the national security of the United States? Is that what you're telling us?
[Robert Kimmitt, Dep. Treasury Secretary:] We have basically taken the position, as have previous Democratic and Republican administrations, that that is only triggered if concerns about potential harm to the national security have not been resolved.
[Levin:] If it could affect national security, then it has to go to that investigation?
[Kimmitt:] Sure.
[Levin:] That's what the law says?
[Sylvester:] Pentagon representatives trying to downplay concerns argue that the United Arab Emirates is an ally of the United States.
[Gordon England, Dep. Defense Secretary:] They provide United States and also our coalition forces unprecedented access, we have overflight clearances and a lot of logistical support from the United Arab Emirates.
[Sylvester:] But Democrats cited the 911 Commission report that recognized the UAE as both a valued counterterrorism ally and a persistent counterterrorism problem. The UAE was one of a handful of countries that recognized the Taliban in Afghanistan and refused to enforce sanctions prior to 911. Millions of al Qaeda dollars were funneled through the country and two 911 hijackers were from the UAE. All of that combined with the fact this is a government-owned company should have set off some major red flags. Senator Hillary Clinton says there is wide bipartisan support in Congress for a 45-day additional review of the deal, and she and Senator Robert Menendez are also introducing legislation to block foreign management of U.S. ports Lou.
[Dobbs:] Thank you very much. Lisa Sylvester. The White House tonight is insisting President Bush will use his veto for the first time in his term of five years if it is necessary to block any legislation that would delay this deal. President Bush appears unable to make a distinction between a British firm in the private sector and a United Arab Emirates company that is controlled by the government of Dubai.
[Bush:] The management of some ports which heretofore has been managed by a foreign company will be managed by another company from a foreign land. And so people don't need to worry about security. This deal wouldn't go forward if we were concerned about the security for the United States of America.
[Dobbs:] The president also appears not interested in the distinction of the roles played by Great Britain and the United Arab Emirates in the global war on terror.
[Bush:] What I find interesting is that it's OK for a British company to manage some ports but not OK for a company from a country that is also a valuable ally in the war on terror.
[Dobbs:] Great Britain, of course, did not have ties to the 911 hijackers, nor is it a center for nuclear proliferation, and nor is the P&O; company that Dubai Ports World is buying a government-owned company. Meanwhile, one senior White House adviser is suggesting this administration might offer its critics a compromise to end the contest over whether this ports deal should go forward. White House Deputy Chief of Staff Karl Rove saying there could be a delay in proceeding with this deal if a delay gives members of Congress what he called a comfort level about the sale. As we reported here, Dubai Ports World has hired former senator Bob Dole to lobby in support of the company's aggressive campaign, but the former presidential candidate so far has not been able to convince his wife, Senator Elizabeth Dole, that this deal makes any sense. Senator Elizabeth Dole says she's deeply concerned about the transfer of port operations to a United Arab Emirates company. A spokeswoman said the senator makes her decisions independently of her husband. Senator Bob Dole and the lobby firm he's working with didn't return our calls for his comment. Dubai Ports World has also hired a consulting firm set up by former secretary of state Madeleine Albright to help lobby and push the ports deal through. The Albright Group working with a lobby firm led by former Democratic Congressman Tom Downey. While the Bush administration and their advocates and supporters insist the port security will not be compromised by the sale of port operations to a government-owned company from the United Arab Emirates, there is reason to question the basis of that confidence. And, in fact, a number of those officials have said outright that the United Arab Emirates government-owned firm would have nothing to do with security. The White House has repeatedly failed to make that distinction between a government-owned company and a foreign company. The White House is ignoring what we've been reporting here for some time, that terminal operators themselves do play a critical role in protecting our ports and preserving security. Bill Tucker tonight reports from one of those ports in Brooklyn, New York.
[Bill Tucker, Cnn Correspondent:] When it comes to port security, it is the case of the administration that protests too much.
[Mcclellan:] This not about control of our ports, this is not about the security of our ports. And let me be very clear, one thing we will never do is outsource to anyone the control and security of our ports, whether that's Dubai or any other entity that operates terminals at our ports.
[Tucker:] The White House is wrong. It is about control of our ports. And security is routinely outsourced. Port security is very different from airport or border security. It is a public-private partnership and private companies play a key role.
[Sal Catucci, American Stevedoring Inc:] We're at every ship, and we watch everything that's going on. We know of everything that's going on within the port. And the security right now happens to be the top priority of the company.
[Tucker:] In simple terms, at most ports security works like this: while the ship is in the water, it's under the jurisdiction of the Coast Guard. While docked at the port and those goods are being unloaded, it's under the jurisdiction of Customs and Border Protection. But the minute those goods come off of the ships and land on the dock, security is the sole responsibility of the terminal operator. The security plans are reviewed by the Department of Homeland Security, but the terminal operator is solely responsible for the execution of those plans. The plans are classified secret. If a foreign government gains control of the terminal it becomes privy to the classified security arrangements. Not wise, in the opinion of this terminal operator.
[Catucci:] I think we're in trouble right now because it's happening. It's you're going to have to give that they're going to have a blueprint of that security.
[Tucker:] The port authority's authority at most ports ends at the roads leading to and connecting the terminals. Now, the cost for lighting, fencing, closed-circuit TV, Lou, those are shared by the port and the terminal operator. But when it comes to the security guards, they are hired, fire and paid by the terminal operator. In this case, it happens to be American Stevedoring, one of only two American terminal operators left in the ports of Newark, New York and New Jersey Lou.
[Dobbs:] Thank you very much. Bill Tucker setting the record straight on whether or not terminal operators are involved in security at the ports. Tonight, the largest port complex on the East Coast is filing suit to block this Dubai government port deal. The Port Authority of New York and New Jersey set to file a lawsuit as early as tomorrow to stop Dubai Ports World from taking over a Port of Newark container terminal. Port authority officials say the federal government failed to assure them that this deal would meet their critical security standards. It is important to note tonight that almost every governor whose ports would be affected in a Dubai government company takeover is completely opposed to this dangerous deal. Pennsylvania's governor, Ed Rendell, says if this deal goes through, he will fight to make certain a terminal lease is the Port of Philadelphia is not renewed. The governor says, "We can just not renew the lease. "Trust us" isn't good enough." New Jersey's governor, Jon Corzine, said on this broadcast here last night that he's filing state and federal lawsuits to block the deal. The governor says, "It's just outside of the realm of reason that we are going to without complete disclosure believe this isn't a risk." New York's governor, George Pataki, saying, "Ensuring the security off New York's port operations is paramount, and I am very concerned." Maryland's governor, Robert Ehrlich, "We needed to know before this was a done deal, given the state of where we are given security." Louisiana Governor Kathleen Blanco: "We in Louisiana take the management and safety of our ports seriously and we expect the same from Washington." Only one governor out of six says that he's not concerned about the takeover by a foreign-owned firm. It is none other than Governor Jeb Bush of Florida, who says, "I have full confidence that the president of the United States will make the right decision as it relates to our national security interests." Still ahead here, a special report on the Committee on Foreign Investments in the United States. Did in fact this committee break the law when it approved the port deal? And why Bush administration officials are so intent on possibly compromising national security in order in order to favor high- powered corporate friends. And is this the start of the Iraqi civil war? New sectarian violence breaking out. And our troops are in grave danger tonight. That story is coming up next.