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Ports takeover approval alleged illegal

[JURIST] US Sen. Carl Levin (D-MI) [official website] said Thursday that the Bush administration is ignoring federal law by refusing to extend its investigation into the takeover of operations of six US ports by Dubai Ports World [corporate website], a state-owned business in the Untied Arab Emirates. The Senate Armed Services Committee [official website] heard testimony from several Treasury Department, Homeland Security and other administration officials, and Levin argued that the administration was ignoring provisions in the law establishing the Committee on Foreign Investments in the United States (CFIUS) [Treasury Dept. backgrounder]. A 1992 amendment to the statute governing CFIUS calls for a mandatory investigation [50 U.S.C. App. 2170 text]:

in any instance in which an entity controlled by or acting on behalf of a foreign government seeks to engage in any merger, acquisition, or takeover which could result in control of a person engaged in interstate commerce in the United States that could affect the national security of the United States.
Deputy Secretary of Treasury Robert Kimmitt [official profile] insisted that no national security concerns had been raised during a three-month review by the multiagency panel and said that the Bush administration interprets the statute as allowing discretion to decide whether to conduct an extended review. Kimmitt also said that the panel's decision to ratify the deal allowing DP World to takeover operations would only be reconsidered if the there is evidence that DP World officers provided false, inaccurate or misleading information during the review process. Committee Chairman John Warner (R-VA) said that he would ask US Attorney General Alberto Gonzales to prepare a memorandum outlining the administration's interpretation of the law and Warner also called for a separate review by the Senate's legal counsel.

In a move that will perhaps ease tensions between the White House and Congress, DP World said overnight that they will delay their end of the deal, agreeing not to take control of port operations while the administration reconciles with Congress. The takeover had been scheduled to take place on March 2. Jonathan Weisman of the Washington Post has more.

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