Sort of related – here’s a great article about how the media generated this controversy:
Media Sparked Firestorm
As Bush Got Snagged
In Bipartisan Criticism
Frist Takes an Early Stand
By GREG HITT and SARAH ELLISON
March 10, 2006; Page A1
On Monday, Feb. 13, as Americans were fixated on media accounts of Vice President Dick Cheney’s weekend hunting accident, CNN commentator Lou Dobbs weighed in on a different story. In a “special report” on his evening program, he asserted that “a country with ties to the Sept. 11 terrorists could soon be running significant operations at some of our most important and largest seaports with a full blessing of the Bush White House.”
That same day, Michael Savage, a conservative radio talk-show host, also attacked the transfer of some American shipping terminals to a company owned by an Arab state. Though the deal had received some newspaper attention before then, Mr. Savage’s angry message raised early concerns inside the Bush White House about trouble ahead.
The broadcasts helped set off a grass-roots brushfire that quickly consumed lawmakers in Washington. Yesterday the ports deal came crashing down. Dubai Ports World, the company controlled by the government of Dubai in the United Arab Emirates, announced that it would sell or spin off its American port operations.
Exactly how that will happen remains unclear. DP World just this week completed its acquisition of London-based Peninsular & Oriental Steam Navigation Co. Terminals at five American ports were a piece of that broader deal. DP World said it will transfer its new U.S. operations to a “United States entity.” The company may then sell the U.S. assets, a spokesman said, or may seek to create a corporate structure under which the U.S. business has no management ties to its parent in Dubai.
The battle over the Dubai ports deal has resonated widely because it touches on concerns far beyond the immediate issue of transferring cargo containers from ship to land. One is the question of whether the Bush administration since 9/11 has sufficiently bolstered overall port security – which is the job of U.S. law-enforcement officials, not terminal operators such as DP World.
The Dubai debate has also inflamed broader fears that America has opened itself up too widely to the outside world. It recalls earlier brouhahas over foreigners taking over U.S. assets, such as the uproar in the late 1980s and early 1990s when investors from a booming Japan bought Rockefeller Center and the Pebble Beach golf course.
Today, the outsourcing of jobs to Asia, the flood of immigrants from Latin America and America’s dependence on foreign investment all feed a sense of vulnerability among some voters. That sense is dangerous for President Bush and the Republican Party, whose biggest advantage for a generation has been voters’ conviction that the party can be trusted to do a better job than Democrats on security and defense.
The media portrayals of the port deal generated a wave of anger from Americans across the country that left lawmakers in Washington – by their own admission – following their constituents much more than leading them. Perhaps the most critical decision to ride the wave was made by Senate Republican leader Bill Frist, who by coincidence was visiting a port just as the heat was rising and decided to speak out against the deal.
Some misperceptions fed the political storm, including the mistaken idea that the Arab company would be responsible for maintaining security at the ports and inspecting cargo. Also, few Americans realized, at least initially, that foreign companies already operate most American terminals. Nonetheless critics argued that although the Treasury Department found no security problems with DP World’s takeover, the company could be used, perhaps unwittingly, by terror groups to get inside information on port procedures and infiltrate the work force.
The story began as a seemingly routine business deal, followed more closely in Britain than in the U.S. Jockeying for control of P&O began last fall, and the proposed sale to DP World was taken up for review by the Committee on Foreign Investments in the United States. The committee is a government body under the Treasury Department that rules on foreign acquisitions with potential national-security implications. It looked at the proposed sale, found no reason for concern and cleared it in mid-January. Midlevel officials made the decision without informing Treasury Secretary John Snow or his deputy, Robert Kimmitt.
In late January, a small Florida company began sowing the seeds of trouble in Congress. Eller & Co., a Fort Lauderdale stevedoring firm that is a partner at the Port of Miami with P&O, feared its business would be harmed by the DP World takeover. An Eller executive asked Joe Muldoon, a former drug-industry lobbyist, to work the halls of Capitol Hill. Mr. Muldoon came out of what he calls “semiretirement” to take the job, and quickly cloaked the issue in patriotic themes. “It’s about foreign control over critical infrastructure – during wartime,” he says.
The early going was tough. “I didn’t find anyone who was aware of this,” Mr. Muldoon says.
On Friday, Feb. 10, a rival Singaporean bidder for P&O withdrew from the race and DP World declared victory. The story got some coverage, including in The Wall Street Journal, but mostly in the inside pages.
Reframing the Debate
Over the weekend, though, the Associated Press framed the debate in a new way: “A company in the United Arab Emirates is poised to take over significant operations at six American ports as part of a corporate sale, leaving a country with ties to the Sept. 11 hijackers with influence over a maritime industry considered vulnerable to terrorism.”
The AP called New York Sen. Charles Schumer, a Democrat, for comment, and he was quoted in the story criticizing the deal. The story also quoted ports experts saying security shouldn’t be an issue. Democratic Rep. Rahm Emanuel says he called Mr. Schumer upon seeing the story and told him: “Chuck, you have something here. Stay after this.” The senator assured him he was already planning to, Mr. Emanuel recalls.
Then Mr. Dobbs got on the story. The CNN commentator, who has redefined his career by editorializing against outsourcing, illegal immigration and big business, aired his initial report in which he expressed incredulity that the deal was being allowed to go forward. That report was followed by 15 others in the following 17 of his shows.
The issue began to pick up steam, despite some cautionary stories making points such as the fact that overseas companies already operate many U.S. terminals. On Feb. 14 National Public Radio ran a segment quoting Stephen Flynn, a former Coast Guard commander who is now at the Council on Foreign Relations. Mr. Flynn called it “distressing” that there is “so little understanding within the U.S. government and within the American citizenry” about how port security works.
Once the Dubai deal became an issue, though, it revived longstanding complaints that the Bush administration was failing to give port security enough attention in its effort to improve America’s defense against terrorism. Critics said the U.S. needed to spend more money on scrutinizing cargo – although that could be done regardless of who operated the terminals.
Mr. Schumer, joined by several House and Senate Republicans, convened a news conference in the Capitol on Feb. 16 – his second in three days – to condemn the deal. He urged the Treasury Department to suspend it and conduct a deeper investigation. Leaders of the Senate Banking Committee from both parties sent a letter to Treasury complaining that the review completed in January was only “cursory.”
The issue made for unlikely bedfellows. In quick succession, the editorial pages of the conservative Washington Times and the New York Times criticized the deal.
Mr. Schumer spent part of the long Presidents Day weekend trying to gather more attention. He held a news conference in New York with families of Sept. 11 victims. As work resumed on Tuesday, Feb. 21, he held another with Rep. Peter King, a New York Republican, who vowed to introduce legislation suspending the deal.
That day proved to be a watershed moment, for politicians and the press. As it happened, Mr. Frist, the top Senate Republican, had embarked on a fact-finding tour to study port security and immigration issues. He was arriving at the big port in Long Beach, Calif., and knew he’d be asked about the Dubai deal.
Mr. Frist, an avid BlackBerry user, had been peppered with concerns by his staff, lawmakers and constituents for several days, and aides said he felt he needed to jump out in front of the issue if he had any hope of ultimately controlling it. So he jumped directly into the fray – on the side of slowing down the deal.
“The decision to finalize this deal should be put on hold until the administration conducts a more extensive review of this matter,” Mr. Frist said. “If the administration cannot delay this process, I plan on introducing legislation to ensure that the deal is placed on hold until this decision gets a more thorough review.”
That declaration – from a leading Republican, an ally of President Bush and a likely presidential contender in 2008 – was a signal to other Republicans that it not only was acceptable to oppose the port deal but also perhaps politically wise to do so.
The political and media focus instantly grew more intense. House Speaker Dennis Hastert soon echoed Mr. Frist’s complaints. Then Mr. Bush, on his way back from a speech in Colorado, met with reporters traveling on Air Force One and vowed to veto any legislation intended to reverse the deal. The president was digging in against top members of his own party. The hardening positions on both sides made it hard to find a face-saving compromise.
In the blitz of cable TV and Internet coverage that followed, critics of the deal seized the offensive. They had the more startling sound bites: The United Arab Emirates, which includes Dubai, was described as an Arab country that had ties to some 9/11 hijackers. The critics pointed out suspicions that the U.A.E. has been a site for terrorism money transfers and noted its relatively friendly ties with Iran. The administration couldn’t break through with its counter-arguments that the U.A.E. was providing crucial port and airfield facilities for the U.S. military and that it had tightened up its tracking of suspicious money transfers.
Groundswell of Opposition
The coverage was producing a groundswell of opposition back home, and members of Congress were hearing it. Republican Sen. Trent Lott got an earful at home in Mississippi. Rep. Hastert went on a fund-raising trip and got similar complaints from friendly audiences. Dubai was crowding out other issues.
Lawmakers said the negative response from constituents was overwhelming. Congressional offices on Capitol Hill were deluged by phone calls and emails protesting the deal, and congressmen told of being pulled aside wherever they went in their districts. Rep. Don Manzullo, a Republican from Illinois who is chairman of the House subcommittee on small business, said he hadn’t seen this level of negative reaction in his district for at least a decade, and he got more feedback overall than he did during Bill Clinton’s impeachment. “I got stopped all over the place,” he said. “People are big-time upset.”
Even seemingly neutral news coverage of the deal cut against the administration. A CNN report from Dubai showed articulate and Western-educated Dubai leaders offering assurances that they would strictly maintain security at any port facilities they operated in the U.S. But aides to House Republican leaders reported that the sight of men in Arab dress saying they would handle port security only made the calls of complaint come in faster.
A Feb. 24 item from Rasmussen Reports, a public-opinion polling firm, said only 17% of Americans believed DP World should be allowed to purchase operating rights at U.S. ports, with 64% opposed. The report said that even before the deal was announced, President Bush was falling below Democratic congressmen in measures of who is trusted on national-security issues.
‘The Deal Is Dead’
Such news stoked the deepest fears of Republicans, who have long held an edge in that area. On the Internet, conservatives normally supportive of Mr. Bush channeled those fears and fed the flames of opposition. Commentator John Podhoretz, citing the Rasmussen data, posted his analysis on National Review Online: “The deal is dead. … Congressional Republicans have no choice but to be extremely aggressive and nasty toward the president and the White House, because they will be properly terrified of looking like Bush’s lapdogs on a hugely unpopular matter that goes to the heart of the Republican Party’s political advantage in the United States.”
In an attempt to halt the tide, the White House released details of unusual arrangements to which DP World had agreed. The ports operator would allow U.S. antiterror officials to examine company records without a subpoena and check the background of any of its employees. It also promised to separate its U.S. port terminal operations from the rest of the company.
Finally, DP World agreed to undergo a new, 45-day U.S. government security review of the acquisition so all the questions could be considered again. The White House hoped that would buy time to cool the political passions. But as legislators from both parties continued to push measures to stop the deal, the White House strategy fell apart. Yesterday, DP World said it would shed the U.S. terminal operations.
Messrs. Dobbs and Savage still aren’t satisfied. “I think it’s far to early to say whether this is a bona fide and sincere withdrawal,” Mr. Dobbs said in an interview. Said Mr. Savage: “I’m doubtful.” Both said they plan to keep pushing the issue.
Write to Greg Hitt at email@example.com and Sarah Ellison at firstname.lastname@example.org