Dubai defense deal gets U.S. scrutiny

Dubai defense deal gets U.S. scrutiny    The Bush administration has notified Congress that it has opened a 45-day security investigation into another Dubai-owned company that wants to acquire factories in Georgia and Connecticut that make precision components used in engines for military aircraft and tanks, according to a front page story in Thursday’s Washington Post.
   Dubai International Capital is seeking to acquire London-based Doncasters Group Ltd. for $1.2 billion. The Committee for Foreign Investment in the United States, an interagency task force, is investigating whether the transfer of Doncasters’ U.S. subsidiaries has any impact on national security. President Bush will decide whether to allow or deny the sale based on the panel’s recommendation.
   Administration officials have decided to keep Congress better informed about foreign investments under review after getting politically blindsided by the negative reaction to news that another British company, Peninsular & Oriental (P&O) Steam Navigation Co., had received CFIUS approval for a $6.8 billion sale of more than 20 terminals and stevedoring operations along the U.S. East and Gulf coasts to Dubai Ports World. Opponents argue that Dubai, as part of the United Arab Emirates, has ties to terrorists and should not be given access to vulnerable critical infrastructure.
   During this and previous administrations, CFIUS has tended not to notify Congress about its work until after it had rendered a decision because of confidentiality restrictions in the law governing foreign investment.
   Sen. Charles Schumer, D-N.Y., a vocal opponent of the ports deal, said at a Senate Banking Committee hearing this morning that the new disclosure raises further questions about outsourcing security functions to foreign countries.
   As previously reported by Shippers’ NewsWire, CFIUS is also investigating the pending acquisition of Laurel, Md.-based Sourcefire by Israeli firm Check Point Software Technologies, which does cyber security work for the Department of Defense and intelligence agencies.