The Other Dubai Deal

Posted on March 15, 2006

Time magazine reports on another Dubai deal that most Americans don't know about: a Dubai firm has landed a huge contract with the U.S. Navy.

Yet while one Dubai company may be giving up on U.S. ports, another one shows no signs of quitting the U.S.�or of giving up a contract with the Navy to provide shore services for vessels in the Middle East. The firm, Inchcape Shipping Services (ISS), is an old British company that last January was sold to a Dubai government investment vehicle for $285 million. ISS has more than 200 offices around the world and provides services to clients ranging from cruise ship operators to oil tankers to commercial cargo vessels. In the U.S., the company operates out of more than a dozen port cities, including Houston, Miami and New Orleans, arranging pilots, tugs, linesmen and stevedores, among other things. The firm is also a defense contractor which has long worked for Britain�s Royal Navy. And last June, the U.S. Navy signed on too, awarding ISS a $50 million contract to be the "husbanding agent" for vessels in most Southwest Asia ports, including those in the Middle East, according to an unclassified Navy logistics manual for the Fifth Fleet and a press release from ISS.
*****
No question, the husbanding contract provides the potential for mischief. Husbanding agents arrange everything from fuel to spare parts to fresh vegetables for vessels at ports of call. More critically, they often provide security, like erecting concrete barriers and what the military calls "force protection." Husbanding agents often learn weeks in advance of a ship�s schedule so as to be prepared when the vessel arrives, information that the Navy keeps closely guarded since it could be invaluable in the hands of terrorists. The suicide bombing of the Cole, for instance, occurred less than three hours after the ship had completed mooring in the harbor of Aden, Yemen. "It would have been much more difficult for the bombers to execute the attack without some previous knowledge of the ship's schedule and its intent to pull into Aden," says a former Navy officer.
Contacted by TIME, a spokesman for ISS confirmed the existence of the contract, but said that confidentiality terms prevented him from discussing it. A statement issued by the firm declared that "ISS has undergone rigorous external security checks" and has "comprehensive internal policies on security." Regarding its U.S. port operations, the company states that all port staff "are fully vetted and cleared and undergo a background check to enable them to work within the port limits."
*****
ISS, in fact, isn�t the only Dubai company that has won big business with the Pentagon. In December 2004, another such firm, Seven Seas Shipchandlers, won a $700 million contract to be the prime vendor for maintenance and repair operations for troops in the U.S. Central Command region, which includes the Middle East. Seven Seas has also provided food supplies to U.S. troops in Iraq. Another Dubai-based firm, MAC International, is under contract to deliver $67.2 million worth of police trucks to the Army.

So far, Time magazine is the only media outlet reporting on this latest Dubai deal. Isn't it time we had a comprehensive policy regarding which U.S. assets should and which should not be allowed to be owned or controlled by foreign governments? The Emir of the UAE has so much money that he's been building islands to amuse himself. One island is shaped like a giant pineapple and others replicate a map of the world. The ocean keeps trying to reclaim these offshore islands, so the Emir has giant machines constantly building back up the sand that is eroded each day by the waves. We get it: the UAE is really wealthy. Clearly, the royal family is in need of some good investment opportunities where they can park all that extra cash. In the reality of the global economy, it is not logical to assert that no foreign governments can ever be allowed to invest in the United States.

But what is wildly illogical is for the White House to tell Americans that we are such imminent danger of being attacked by extremist Muslim groups that we must give up our rights to privacy via the Patriot Act and warrantless wiretapping, yet at the same time to turn over our ports and essential Navy services to a foreign government which routinely facilitates banking transactions for the same terrorists that want to kill us. The American people won't stand for it. And if Congress doesn't realize that fact very quickly, many lawmakers may find themselves out of a job in November.