[House Report 109-414]
[From the U.S. Government Publishing Office]
109th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 109-414
======================================================================
REQUESTING THE PRESIDENT AND DIRECTING THE SECRETARY OF HOMELAND
SECURITY TO PROVIDE TO THE HOUSE OF REPRESENTATIVES CERTAIN DOCUMENTS
IN THEIR POSSESSION RELATING TO THE DUBAI PORTS WORLD ACQUISITION OF 6
UNITED STATES COMMERCIAL PORTS LEASES
_______
April 7, 2006.--Referred to the House Calendar and ordered to be
printed
_______
Mr. Oxley, from the Committee on Financial Services, submitted the
following
R E P O R T
together with
DISSENTING VIEWS
[To accompany H. Res. 718]
The Committee on Financial Services, to whom was referred the
resolution (H. Res. 718) requesting the President and directing
the Secretary of Homeland Security to provide to the House of
Representatives certain documents in their possession relating
to the Dubai Ports World acquisition of 6 United States
commercial ports leases, having considered the same, report
thereon with amendments and without recommendation.
CONTENTS
Page
Purpose and Summary.............................................. 2
Background and Need for Legislation.............................. 2
Hearings......................................................... 3
Committee Consideration.......................................... 3
Committee Votes.................................................. 3
Committee Oversight Findings..................................... 4
Performance Goals and Objectives................................. 5
New Budget Authority, Entitlement Authority, and Tax Expenditures 5
Federal Mandates Statement....................................... 5
Advisory Committee Statement..................................... 5
Applicability to Legislative Branch.............................. 5
Section-by-Section Analysis of the Legislation................... 5
Dissenting Views................................................. 7
The amendments (stated in terms of the page and line numbers
of the introduced bill) are as follows:
Page 1, line 2, strike ``is directed'' and insert ``and the
Secretary of the Treasury are directed''.
Page 2, line 4, strike ``6''.
Page 2, line 9, after ``discussions'' insert ``, including
discussions''.
Page 2, line 10, after ``World'' insert a comma.
Page 2, line 12, strike ``and''.
Page 2, line 20, strike the period and insert ``; and''.
Page 2, after line 20, insert the following:
(4) all documents in their possession, including
notes from meetings, memos, telephone and electronic
mail records, logs and calendars, and records of
internal discussions, relating to the Committee on
Foreign Investments in the United States review process
for such acquisition.
Amend the title so as to read:
Resolution requesting the President and directing the
Secretary of Homeland Security and the Secretary of the
Treasury to provide to the House of Representatives certain
documents in their possession relating to the Dubai Ports World
acquisition of United States commercial ports leases.
PURPOSE AND SUMMARY
House Resolution 718, ``requesting the President and
directing the Secretary of Homeland Security to provide to the
House of Representatives certain documents in their possession
relating to the Dubai Ports World acquisition of 6 United
States commercial ports leases,'' was introduced March 9, 2006,
by Mr. Kucinich for himself and Reps. Larson and Brady of
Pennsylvania. It seeks to have the President and the Secretary
of Homeland Security provide, within 14 days of adoption, a
variety of documents relating to aspects of the proposed
purchase by Dubai Ports World (DP World) of the U.S. ports
operations of the Peninsular & Oriental Steam Navigation Co.
(P&O). Additionally, it seeks information related to a December
16, 2005, memo from the Coast Guard outlining concerns it
thought should be addressed as a review of the deal by the
Committee on Foreign Investment in the United States (CFIUS)
got underway. A portion of that memo has been made public.
Finally, the legislation seeks a similar variety of documents
from the President and Secretary covering ``internal
discussions'' from October 1, 2005, to March 2, 2006, between
the White House and the Carlyle Group related to the review of
the proposed Dubai-P&O deal.
While the transaction in question now is complete, DP World
has made an arrangement to leave the U.S. operations in the
control of P&O until they are sold off. Even so, scrutiny of
the CFIUS, both as related to this deal and to the underlying
process in general, was intense. This legislation was
introduced at the peak of the intensity of public interest in
the transaction. However, although the deal itself is moot and
thus the document request moot, the parliamentary nature of the
legislation impelled consideration.
BACKGROUND AND NEED FOR LEGISLATION
H. Res. 718 is a resolution of inquiry, which pursuant to
clause 7 of rule XIII of the Rules of the House of
Representatives, directs the Committee to act on the resolution
within 14 legislative days or a privileged motion to discharge
the Committee is in order.
Under the Rules and precedents of the House, a resolution
of inquiry is one of the methods used by the House to obtain
information from the executive branch. According to volume 7,
chapter 24, section 8 of Deschler's Procedure, it is a ``simple
resolution making a direct request or demand of the President
or the head of an executive department to furnish the House of
Representatives with specific factual information in the
possession of the executive branch.''
On February 13, 2006, shareholders from P&O approved a
$6.85 billion acquisition proposal from DP World, a port
terminal operations company owned by the government of the
United Arab Emirates (UAE). The acquisition, for which
negotiations began in October and on which a deal was struck
and reported in the financial press in November, was completed
in March, but not before a public outcry in the United States
caused close scrutiny of the deal, a vote in Congress to
repudiate it, and an agreement from DP World to sell off the
U.S. operations as soon as practical.
A 30-day review by the inter-agency CFIUS--charged with
determining if any such acquisition might cause a threat to
national security--began in mid-December. CFIUS is said to have
reached a multi-point agreement to mitigate certain security
concerns that appear to have been raised about the proposed
deal by CFIUS components. A 45-day investigation period that is
indicated in CFIUS authorizing legislation for any acquisition
by a state-owned company that triggers security concerns was
not conducted, because, the administration has said, the
security issues raised were successfully addressed.
While the transaction is complex, covering port operations
around the world, it is pertinent that P&O operates at some 20
U.S. ports in the Gulf of Mexico and East Coast, including the
major ports of New York, Baltimore, Miami and New Orleans.
While critics of DP World have called for a closer examination
of the implications of this transaction, it should be noted
that the majority of large U.S. ports are operated by foreign-
owned companies. Foreign-owned companies represent the four
largest operators of ports in the world; Hong Kong's Hutchinson
Ports is the market leader, followed by Denmark's APM
Terminals.
Given all of the facts of this situation, the Committee is
forwarding this report to the House without recommendation.
HEARINGS
The Committee held no hearings on H. Res. 718.
COMMITTEE CONSIDERATION
The Committee on Financial Services met in open session on
April 5, 2006, and ordered H. Res 718, as amended, reported to
the House without recommendation.
COMMITTEE VOTES
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the record votes
on the motion to report legislation and amendments thereto. A
motion by Mrs. Biggert to report the resolution, as amended, to
the House without recommendation was agreed to a record vote of
35 yeas and 32 nays (Record vote no. FC-18). The names of
Members voting for and against follow:
RECORD VOTE NO. FC-18
----------------------------------------------------------------------------------------------------------------
Representative Aye Nay Present Representative Aye Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Oxley...................... X ........ ......... Mr. Frank (MA)... ........ X .........
Mr. Leach...................... ........ ........ ......... Mr. Kanjorski.... ........ X .........
Mr. Baker...................... X ........ ......... Ms. Waters....... ........ X .........
Ms. Pryce (OH)................. X ........ ......... Mr. Sanders...... ........ X .........
Mr. Bachus..................... X ........ ......... Mrs. Maloney..... ........ X .........
Mr. Castle..................... X ........ ......... Mr. Gutierrez.... ........ X .........
Mr. Royce...................... X ........ ......... Ms. Velazquez.... ........ X .........
Mr. Lucas...................... X ........ ......... Mr. Watt......... ........ X .........
Mr. Ney........................ X ........ ......... Mr. Ackerman..... ........ X .........
Mrs. Kelly..................... X ........ ......... Ms. Hooley....... ........ X .........
Mr. Paul....................... X ........ ......... Ms. Carson....... ........ X .........
Mr. Gillmor.................... X ........ ......... Mr. Sherman...... ........ X .........
Mr. Ryun (KS).................. X ........ ......... Mr. Meeks (NY)... ........ X .........
Mr. LaTourette................. X ........ ......... Ms. Lee.......... ........ X .........
Mr. Manzullo................... X ........ ......... Mr. Moore (KS)... ........ X .........
Mr. Jones (NC)................. X ........ ......... Mr. Capuano...... ........ X .........
Mrs. Biggert................... X ........ ......... Mr. Ford......... ........ X .........
Mr. Shays...................... X ........ ......... Mr. Hinojosa..... ........ X .........
Mr. Fossella................... X ........ ......... Mr. Crowley...... ........ X .........
Mr. Gary G. Miller (CA)........ X ........ ......... Mr. Clay......... ........ X .........
Mr. Tiberi..................... X ........ ......... Mr. Israel....... ........ X .........
Mr. Kennedy (MN)............... X ........ ......... Mrs. McCarthy.... ........ X .........
Mr. Feeney..................... X ........ ......... Mr. Baca......... ........ ........ .........
Mr. Hensarling................. X ........ ......... Mr. Matheson..... ........ X .........
Mr. Garrett (NJ)............... X ........ ......... Mr. Lynch........ ........ X .........
Ms. Brown-Waite (FL)........... X ........ ......... Mr. Miller (NC).. ........ X .........
Mr. Barrett (SC)............... X ........ ......... Mr. Scott (GA)... ........ X .........
Ms. Harris..................... X ........ ......... Mr. Davis (AL)... ........ X .........
Mr. Renzi...................... X ........ ......... Mr. Al Green (TX) X ........
Mr. Gerlach.................... X ........ ......... Mr. Cleaver...... X ........
Mr. Pearce..................... X ........ ......... Ms. Bean......... ........ X .........
Mr. Neugebauer................. X ........ ......... Ms. Wasserman X ........
Schultz.
Mr. Price (GA)................. ........ ........ ......... Ms. Moore (WI)... ........ X .........
Mr. Fitzpatrick (PA)........... X ........ .........
Mr. Davis (KY)................. X ........ .........
Mr. McHenry.................... X ........ .........
Mr. Campbell................... X ........ .........
----------------------------------------------------------------------------------------------------------------
*Mr. Sanders is an independent, but caucuses with the Democratic Caucus.
The following other amendments were also considered by the
Committee:
Amendments offered by Mrs. Maloney, No. 1, adding the
Secretary of the Treasury, were AGREED TO by a voice
vote.
An amendment offered by Mr. Price (GA), No. 2, adding
the Secretary of the Treasury, was OFFERED AND A POINT
OF ORDER WAS SUSTAINED against its consideration.
COMMITTEE OVERSIGHT FINDINGS
Pursuant to clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the Committee made findings and
recommendations of the Committee, based on oversight activities
under clause 2(b)(1) of rule X of the Rules of the House of
Representatives, are incorporated into the descriptive portions
of this report.
PERFORMANCE GOALS AND OBJECTIVES
Pursuant to clause 3(c)(4) of rule XIII of the Rules of the
House of Representatives, the Committee's performance related
goals and objectives are reflected in the descriptive portions
of this report.
NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX EXPENDITURES
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee finds that this
legislation would result in no new budget authority,
entitlement authority, or tax expenditures or revenues.
FEDERAL MANDATES STATEMENT
H. Res. 718 contains no unfunded mandates.
ADVISORY COMMITTEE STATEMENT
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
APPLICABILITY TO LEGISLATIVE BRANCH
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION
As amended by the Committee, the resolution requests the
President and directs the Secretary of Homeland Security and
the Secretary of Treasury to provide to the House of
Representatives, not later than 14 days after adoption of the
resolution--
(1) all documents in their possession, including
notes from meetings, memos, telephone and electronic
mail records, logs and calendars, and records of
internal discussions relating to the December 13, 2005,
document by the Coast Guard Intelligence Coordination
Center relating to the Dubai Ports World acquisition of
United States commercial ports leases;
(2) all documents in their possession, including
notes from meetings, memos, telephone and electronic
mail records, logs and calendars, and records of
internal discussions, including discussions between the
White House and Dubai Ports World relating to the
Committee on Foreign Investment in the United States
review process for such acquisition;
(3) all documents in their possession, including
notes from meetings, memos, telephone and electronic
mail records, logs and calendars, and records of
internal discussions between the White House and the
Carlyle Group during the period beginning October 1,
2005, and ending March 2, 2006, relating to the
Committee on Foreign Investment in the United States
review process for such acquisition; and
(4) all documents in their possession, including
notes from meetings, memos, telephones and electronic
mail records, logs and calendars, records of internal
discussions, relating to the Committee on Foreign
Investment in the United States review process for such
acquisition.
DISSENTING VIEWS
H. Res. 718, sponsored by Mr. Kucinich (OH) and amended by
Mrs. Maloney (NY), is an important effort to obtain information
about what went wrong with the Bush Administration's handling
of the Dubai Ports World transaction, which was reviewed by the
interagency Committee on Foreign Investment in the United
States (CFIUS). The resolution directs the Secretaries of
Homeland Security and Treasury to provide to the House critical
information and records on the Dubai Ports World transaction.
Because foreign investment plays such a constructive role in
our economy, it is important for us to look at the facts
surrounding this transaction, so that we can take whatever
steps are necessary to reduce the likelihood of a repetition.
This request for information regarding the Dubai issue is
important because we need to separate out the mishandling of
this transaction from any problems surrounding the basic
structure of the CFIUS process. To the extent that there is a
flawed structure for dealing with these sorts of transactions,
we may need to legislate. But to the extent that the structure
was not deeply flawed, but the execution of the transaction
was, then major changes may be unwarranted.
Although the Dubai Ports World case has been resolved with
the company's agreement to divest its U.S. port assets, the
case continues to play a central role in various CFIUS
legislative reform initiatives currently underway in the House
and Senate. There is some legitimate concern in the financial
community that the reaction to the Bush Administration's
mistakes in its handling of this transaction might lead to
excessive restrictions in the area of foreign investment--which
is why those who support a continued role for an open and
constructive foreign investment policy should also support this
resolution. The Democrats on the Financial Services Committee
who unanimously voted to send the Kucinich resolution to the
floor for action are sensitive to the need to preserve elements
of the CFIUS process that adequately address national security
concerns without restricting legitimate foreign investment. We
believe that receiving the information requested by this
resolution would help us in achieving that balance and we
regret the partisan response of our Republican colleagues,
which is keeping from us information which would help us
legislate.
Barney Frank.