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By Michelle Malkin  •  February 27, 2006 07:15 PM

If you were paying attention over the weekend, you saw this:

Stewart Baker, a senior Homeland Security official, said he was the sole representative on the panel who objected to the ports deal. Baker said he later changed his vote after Dubai Ports World agreed to the security conditions. Others confirmed his account.

“We were not prepared to sign off on the deal without the successful negotiation of the assurances,” Baker said.

Baker acknowledged that a government audit of security practices at the U.S. ports in the takeover has not been completed as part of the deal.

The audit will help evaluate Dubai Port World’s security programs to stop smuggling and detect illegal shipments of nuclear materials at the six U.S. ports.

Now, we learn:

The U.S. Coast Guard said questions about foreign influence, employees and operations made it impossible to assess the threat posed by a state-owned Dubai company’s purchase of a firm that manages some terminal operations at six U.S. seaports.

“There are many intelligence gaps concerning the potential” for assets owned by DP World or London-based Peninsular & Oriental Steam Navigation Co. “to support terrorist operations,” says an undated intelligence assessment by the Coast Guard that was released at a hearing today of the Senate Homeland Security and Governmental Affairs Committee.

The document wasn’t given to an administration panel assessing the national security risks of the acquisition, but its concerns “were addressed and resolved,” Stewart Baker, an assistant secretary at the Homeland Security Department, said.

Committee Chairwoman Susan Collins was skeptical. “I don’t see how you were able to close those gaps so quickly,” she told Baker and Admiral Thomas Gilmore, an assistant commandant with the Coast Guard.

Via AP:

The document raised questions about the security of the companies’ operations, the backgrounds of all personnel working for the companies, and whether other foreign countries influenced operations that affect security.

“This report suggests there were significant and troubling intelligence gaps,” said Collins, R-Maine. “That language is very troubling to me.”

Administration officials defended their decision not to trigger a 45-day review of national security implications of such a deal.

Let’s retire the race card now, shall we?


Update: The Coast Guard responds to the AP article.


Stewart Baker, an assistant secretary for the Homeland Security Department, told lawmakers that the excerpt was from an internal Coast Guard document that he did not see. However, Baker said the Coast Guard had indicated to the inter-agency panel that reviews such transactions that the security concerns it had ultimately had been resolved.

“It communicated to us that it had no further concerns about the transaction,” Baker said.

“I think it’s a little unfair to judge this report by one paragraph that happens not to be classified,” Baker said. “This paragraph is not really representative of the entire report.”

“I think the paragraph speaks for itself,” Collins responded before adjourning the public hearing for a closed session to explore the issue further.

The Bush administration defended its plans to conduct a highly unusual second review of a business deal it has already approved. It acknowledged that in some cases, the same officials who previously judged the agreement will serve on the new investigation by the multi-agency Committee on Foreign Investments in the United States.

The White House said Bush remains unconvinced the outcome will be any different. “The president has made his views very clear and they remain unchanged,” spokesman Scott McClellan said.

At the Treasury Department, which manages the committee, spokesman Tony Fratto said the broader 45-day investigation will result in a report submitted to the president, who will have 15 days to decide whether to approve the deal. Fratto said Treasury Secretary John Snow and other Cabinet secretaries will be directly involved.

“This is a new review and we will look at it with open eyes in terms of the national security implications,” Fratto said.

Well, that’s reassuring, I guess.

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