Dubai Company's Control of Six Ports 'Boggles the Mind'

Local lawmakers and terrorism specialists yesterday denounced the federal government's approval of a deal that would give operational control of six American sea ports - including one in New York City - to a company owned by the government of Dubai in the United Arab Emirates, a country that has had ties to terrorism.

"On its face, this looks like f- insanity to me," the Republican minority leader of the City Council, James Oddo, told The New York Sun. He said he was not aware of the specifics of the deal.

The chairman of the council's Public Safety Committee, Peter Vallone Jr., a Democrat of Queens, said he is familiarizing himself with the issue, but that "it raises some legitimate concerns."

The Emirati company, Dubai Ports World, is set to acquire the London based Peninsular and Oriental Steam Navigation Company, which currently operates the port, in a $6.8 million merger.

One of the terrorists who flew a plane into the World Trade Center on September 11, 2001, Marwan al-Shehhi, was born in the United Arab Emirates. Other hijackers traveled through that country to America, though President Bush now considers the Emirates an ally in the war on terror.

"This shouldn't happen. It really boggles the mind," the director of the American Center for Democracy and the author of "Funding Evil: How Terrorism Is Financed - and How To Stop It," Rachel Ehrenfeld, told the Sun. She said the United Arab Emirates is "a big hub for all kinds of terrorist activities. ... We know that terrorist money is being laundered there."

The director of the Institute for Gulf Affairs, Ali Al-Ahmed, said that in addition to being a staging point for the hijackers and a place where Al Qaeda launders money, the United Arab Emirates "has been fueling the insurgency in Iraq. They have hosted a lot of the Sunni insurgent supporters and Sunni insurgents."

He added: "If they're allowing this to happen in their country - Al Qaeda activities and Sunni insurgent in Iraq activities - why shouldn't they allow it in New York, where it's going to be more and more valuable?"

"It's the proverbial fox in the henhouse," the vice president of the Jewish Institute for National Security Affairs, Morris Amitay, said.

Senator Schumer at a news conference on Monday called on the secretary of the Department of Homeland Security, Michael Chertoff, to review the deal, which has been approved by the Committee on Foreign Investment in the United States, a federal committee composed of the secretaries of 12 federal agencies. On Monday, CNN reported that the committee had rubber-stamped the Chinese National Overseas Oil Company's failed 2005 bid to acquire the California-based oil company Unocal.

A spokeswoman for the Treasury Department, Brookly McLaughlin, said no agency on the committee objected to the deal going forward. She added that there is a higher level of scrutiny for government-owned companies. The secretary of the treasury, John Snow, heads the foreign investment committee.

Mr. Schumer said that the committee's approval "seems to have been unnecessarily fast-tracked" and requires more thorough investigation, given the Emirates' ties to terrorism in the past.

A spokeswoman for the Emerati Embassy in Washington, Farah Atassi, failed to respond to requests for comment.

The chairman of Dubai Ports World, Sultan Ahmed Bin Sulayem, told the Guardian newspaper that references to terrorism at a general meeting of the British company's shareholders on Monday were "bad," and that such stereotyping could not be condoned.