By DAVID ESPO and ANDREW TAYLOR

WASHINGTON - Bowing to ferocious opposition in Congress, a Dubai-owned company signaled surrender Thursday in its quest to take over operations at U.S. ports.

"DP World will transfer fully the U.S. operations ... to a United States entity," the firm's top executive, H. Edward Bilkey, said in an announcement that capped weeks of controversy.

Relieved Republicans in Congress said the firm had pledged full divestiture, a decision that one senator said had been approved personally by the prime minister of the United Arab Emirates.

The announcement appeared to indicate an end to a politically tinged controversy that brought President Bush and Republicans in Congress to the brink of an election-year veto battle on a terrorism-related issue. The White House expressed satisfaction with the outcome.

"It does provide a way forward and resolve the matter," presidential spokesman Scott McClellan said.

"We have a strong relationship with the UAE and a good partnership in the global war on terrorism and I think their decision reflects the importance of our broader relationship," he said.

A leading congressional critic of the ports deal, Rep. Peter King (news, bio, voting record), applauded the decision but said he and others would wait to see the details. "It would have to be an American company with no links to DP World, and that would be a tremendous victory and very gratifying," said the New York Republican, chairman of the House Homeland Security Committee.

"This should make the issue go away," said Senate Majority Leader Bill Frist. The Tennessee Republican was one of several GOP leaders to tell President Bush earlier in the day that Congress was ready to ignore his veto threat and scuttle the deal.

Several Republican officials, speaking on condition of anonymity, said Frist and Sen. John Warner (news, bio, voting record), R-Va., chairman of the Armed Services Committee, had been privately urging the firm to give up its plans.

After weeks of controversy — and White House veto threats that spokesman Scott McClellan renewed at midmorning Thursday — the end came unexpectedly.

The House Appropriations Committee voted 62-2 on Wednesday to block the deal, and GOP congressional leaders privately informed the president Thursday morning that the Senate would inevitably follow suit. Senate Democrats clamored for a vote, increasing pressure on Senate Republicans to abandon the president.

It was unclear how DP would manage the planned divestiture, and Bilkey's statement said its announcement was "based on an understanding that DP World will not suffer economic loss."

The firm finalized its $6.8 billion purchase Thursday of Peninsular & Oriental Steam Navigation Co., the British firm that through a U.S. subsidiary runs important port operations in New York, New Jersey, Baltimore, New Orleans, Miami and Philadelphia. It also plays a lesser role in dockside activities at 16 other American ports.

Despite the furor, the company's U.S. operations were never the most prized part of the global transaction. DP World valued its rival's American operations at less than 10 percent of the nearly $7 billion total purchase.

But that portion of the deal set off a political chain of events unlike any other in Bush's five years in office. Republicans denounced the deal, saying they were worried about the effects it would have on efforts to make ports safer from terrorist threats. Democrats did likewise, and capitalized on the issue as well as a way to narrow the polling gap with the GOP on issues of national security.

Bush defended the deal, calling the United Arab Emirates a strong ally in the war on terror and pledging to cast a veto if Congress voted to interfere.

Senate Republicans initially sought to fend off a vote to block the deal, and the administration agreed to a 45-day review of the transaction. That strategy collapsed on Wednesday with the vote in the House Appropriations Committee.

Warner, R-Va., provided the first public word of the firm's switch, when he went to the Senate floor and read aloud from its statement.

Warner said that Sheikh Mohammed Al Maktoum, prime minister of the United Arab Emirates, "advised the company ... that this action is the appropriate course to take."

Sen. Charles Schumer (news, bio, voting record), D-N.Y., a chief critic of the deal, reacted cautiously.

"This is obviously a promising development, but the devil's in the details," he said. "Those of us who feel strongly about this issue believe that the U.S. part of the British company should have no connection to the United Arab Emirates or DP World."

---------------------------

This is great news that has me breathing easier, but oh man what a crock! Yeah, those skittish fellows over at DP World got their egos a little bruised and decided to pull out of this sweet deal, all of their own accord. Riiiight. It just so happens to be a coincidence that this was the only way out for Bush without having to back down. Hmmmm. I guess sometimes you just get lucky! Frist nailed it right on the head, but unfortunately for Bush I believe the damage has already been done, and we are not all as gullible as he is banking on here.

Close your eyes. Breathe deep and regularly. You are getting sleeeeeeeppy. Your eyes are getting heavvvvvvvy.

Now let's remember way back...to whenever it was. A week ago? Two? Who was it who told you this Dubai ports deal wouldn't happen? That's right.

From February 21...

This one will be stopped in its tracks, I believe. Bush is only human. He can't be right all the time. He will be overruled on this one, I've no doubt.

In any case, I don't think it's going to be necessary to react too strongly to the port situation because I doubt that's going to happen.

When I snap my fingers you will awaken and repeat:

"Susan was right! She said not to worry. I must always listen to Susan."

Susan

     
“Half a truth is often a great lie.”

Ben Franklin

File this episode in the full to overflowing container labeled "Can't Win Either Way."

Susan 

     
“Half a truth is often a great lie.”

Ben Franklin

My dear friend, Dave, back on February 21, you included these characterizations about Bush's pushing forward with the Dubai ports deal:

stupid and/or incompetant move

makes me mistrust his judgement even further

I hope that he can see the light now

a very clear and frightening pattern of bad decision making

Then yesterday:

This is great news that has me breathing easier, but oh man what a crock!

It just so happens to be a coincidence that this was the only way out for Bush without having to back down. Hmmmm

So...

(and I do hope this ends here)

...I wrote that it is another case of "you can't win"

...meaning that the Dubai firms are giving up their stake in the US ports...

JUST AS YOU HAD HOPED...

BUT, you then charge that Bush was pulling strings behind the scenes...

...Dubai didn't decide on their own to give it up and so...

I wrote my "Can't Win" comment meaning...

BUSH cannot win with you. Had he pushed the deal through in spite of the opposition, you'd have a different gripe. And you know that's true. One case of "can't win."

OR...

Had he worked behind the scenes to put the plan on the skids, which he may or may not have, you'd say what you just did say. Hahaha, like I BELIEVE that crock that Dubai pulled out on their own. No way. Hmmmm. Another case of "can't win."

What I wouldn't expect you to say is, "How about the GWB! He recognized that this ports deal, which was not his baby to begin with, was clearly not going to fly with the American people, so he came up with a clever behind the scenes way to get himself and the US out of that jam. Way to go, George!" That's fine.

Anyway, I do understand that's not something you could ever say because you don't believe it. Fine. But recognize too that -- Yes to Dubai in US ports or No to Dubai in US ports -- whichever it was to be, your criticism of Bush's actions is something I've come to anticipate.

Talk about overkill in an explanation. Please tell me that somewhere within all these words I've just written, there is an explanation for why I wrote "File in the 'can't win' category."

Now then...

My first post on this thread WAS funny, dammit, and I'm not going to explain WHY it was funny or make any further explanations. You cannot trick me into feeling comedically insecure about what is so obviously hilarious, Dave. Don't even think about trying it! Just go with the comic flow and smile. Maybe every word I write here is not frought with hidden meaning or deep calculating points.

Secret dealings...

I can't discuss what secret dealings went on behind the scenes with the Dubai owners and Bush, nor what the situation will portend for the future of port issues or the future business transactions with the Emirates. I wouldn't be surprised if someone from the Bush administration negotiated a way out behind the scenes. And I'm just fine with that. I don't know what it will all mean on down the line. But with no American firms running US port operations, it isn't automatically Great News either way in my opinion, though at first blush, we all feel cheery at losing Dubaian port business.

BTW, there's a really interesting article in a special Style & Design issue that came with this week's Time magazine. It's about Dubai and their mega malls, the women's shopping sprees, the tourism, and all the money made and spent there. The Dubaian (?) businessmen may not be the worst example of The Islamist Enemy. Really, I just don't know.

 I really do love you just the same, Dave, and if I didn't deal with your precise questions or problems, je suis more desolee than you know.  God knows I try. 

Susan

Meet Me at The Mall
Dubai has become a kind of mecca for luxury consumers.
And its mega-malls--with everything from designer handbags to life-size dinosaurs--are the focus of the city's newfound shopping frenzy
Marion Hume/Dubai
3 March 2006
Time

ALANOUD BADR TAKES ONE HAND off the steering wheel of her limited- edition Peugeot 407 convertible, turns down the volume on the Black Eyed Peas and pulls her Moto Razr V3 out of her Gucci tote. "The traffic's terrible," she tells the friend she should have met 10 minutes ago at the Mall of the Emirates, the gargantuan new shopping destination that looms out of the construction-site-riddled desert along Dubai's Sheik Zayed Road.

The mall comprises not just a still-to-be-completed five-star hotel, a branch of London's Harvey Nichols and every designer boutique you can think of but also its own ski slope. Alanoud has graciously invited me to go along with her and her friend while they shop, grab a coffee and ski. Skiing, of course, is not normally part of their daily ritual, but in Dubai you have to do things when they are new. And new is a relative term in a place where there's always a bigger mall being built, boasting even more outrageous tenants. Currently under construction is Dubailand, which in addition to shopping will have a herd of full-size animatronic dinosaurs.

It's pretty clear from a glance at the miles of construction along Sheik Zayed Road that Dubai has plenty of room for growth as an international shopping capital. The Persian Gulf region already has 50 million sq. ft. of retail space, with an additional 27 million about to open. The retailers include every designer brand name, mass-market shops and international department stores like Saks Fifth Avenue and Harvey Nichols.

"Dubai is a very small place," says Joseph Wan, the group chief executive of Harvey Nichols, "but it's the safe haven of the whole region, the playground of the Middle East, an attractive, exclusive market with all this novelty." Indeed, mall shopping is the No. 1 leisure activity here for both the wealthy local Emirati people and the white-collar expats who outnumber them. After all, there's not much else to do in this heat--except build more malls, as South Asian migrant workers do in round-the-clock shifts.

The locals aren't the only ones who like to shop. More than 100 airlines fly to Dubai, carrying high-spending Russians as well as increasing numbers of Brits, who used to take shopping trips to equidistant New York City but now prefer to combine shopping with sunbathing. Then there are the vacationers from the rest of the Arab world, some attracted by Dubai's liberalism--alcohol is legal for non-Muslims in five-star hotels--others enjoying dry five-star establishments.

Alanoud glances at her diamond-encrusted Chanel J12 watch. The truth is, today's schedule is a little ambitious. We've already "done" Wafi Mall, which opened in 1991 and since then has virtually doubled in size, with a new subterranean "suq shopping experience" planned. We've stopped by the chic Emirates Towers Boulevard to mooch around Villa Moda, the designer emporium that also has stores in Kuwait, Qatar and Bombay. And Alanoud has taken me to the Village Mall, near her family home in the ritzy suburb Jumeirah, where the latest must-have accessory is a clutch bag made from a gutra, the checked head scarf worn by Arab men.

All I knew about Alanoud, 25, before we met this morning was that she's the oldest daughter of a prominent Saudi businessman and that her mother, who is half Lebanese, attends the haute couture shows in Paris fully veiled. Yesterday in the malls, as I watched women in floor-length black robes called abayas and head scarves called sheilahs, as well as those wearing burqas covering everything but their eyes, I wondered what Alanoud would be like and whether it would be difficult to relate to someone from a culture so different from mine. That was before a dazzling girl in a savvy mix of Seven jeans, layered tops from the chain store Mango, and Cartier jewelry showed up looking like an Arab Beyonce.

"Here, I'm very modern," Alanoud explains. "In Saudi, I have to wear a veil and cover up. In Dubai, I choose not to."

Far from being forced to wear the veil, this devoted fashionista sometimes wonders if she has passed up a trend. "In Dubai, it's not just an abaya anymore--it's an outfit. My friends custom-order and customize, and they look great."

So, are her veiled friends as stylish underneath their abayas as she is without one? "Just wait," she warns. "Every single piece they wear is stylish. We don't care what men think. Fashion is our girl thing."

Alanoud explains that in Dubai, women dress their hands. "The jewelry is amazing. Van Cleef is huge, Cartier, Chopard, Harry Winston," she says. Like her friends, Alanoud buys precious jewelry as a seasonal accessory, although in her case, it is necklaces--a Van Cleef gold-and-diamond clover and a vintage Cartier tiger necklace. The opulent triple circle of pave diamonds on her finger is an heirloom gift from her mother.

Handbags are also "hugely important," she says. They are the most visible accessory for women in abayas, but for Alanoud they make the outfit. Her recent choices include a cream-colored Gucci bag that she also bought in brown suede. She has ordered two Fendi bags, a Spy with pearls and a white leather Bag It Satchel; the Chloe Paddington; a Marni bag; and some Vuittons. The one big bag brand she doesn't have is Hermes. "I'm going to wait," she says. "My mom's always taught me, even though you can have it, the beauty is to have it at the right time. If you get a Kelly too early, what's left?"

As for who pays, she does--out of a private income and what she earns from 3W, or Three Women, an online multimedia company she helms with her mother, who is only 45 and earned her master's degree in Paris, and her 21-year-old sister, who recently graduated from Parsons in Paris.

"You know, when I travel, I still meet people who think all I do is ride around on a camel," says Alanoud, half annoyed, half amused. "We may do things differently, but we're very well educated, we've seen more of the world than probably everyone else. We're very open- minded--but with limits."

Those limits include not being permitted to date, although no one is forcing Alanoud into an arranged marriage either. She does meet prospective grooms when her family suggests it, "and the first thing I do is see if he walks in front of me," she says. "Then it's a no, because any man I'm going to love is going to walk by my side."

We are now nearly half an hour late for Nof Al Mazrui, the young mother who is Alanoud's shopping buddy. Nof, who hails from the neighboring emirate of Abu Dhabi and moved to Dubai when she married four years ago (in Elie Saab couture), is about to open a kids' store called Lolly Pop in the Village Mall. But how to find her now? Right in front of us is a site map that is cut into complicated colored cross sections. We're completely confused. Alanoud whips out her cell phone. "Upstairs? By Mont Blanc and Diesel? Got it."

Nof appears to be in traditional dress until I look past the metallic python Chloe Silverado bag parked on the table in front of her and notice that her abaya has a zip front. "I have them made for me. This one's a bit sporty," she says, "and I'm wearing it over"-- she unzips an inch and peers down her front--"a Top Shop T, Seven jeans and heels, of course. When I wear flats, I walk like a duck."

Nof stopped counting how many pairs of heels she owns at 80. "But I love them all. I have them lined up next to the bed," she says. In her closet, designer gowns from Dolce & Gabbana and Roberto Cavalli hang next to one-of-a-kind abayas. The dresses are for weddings (at which men and women are segregated), and the special abayas are for covering up at the moment when the groom arrives to collect his bride. Each wedding abaya is designed to emphasize the cut and curves of her dress and the diamonds on the jewelry she's wearing.

This afternoon's shopping agenda is not just about luxury labels. In fact, as Nof explains, most of their time at the mall is about socializing and snapping up fun, throwaway fashion from places like Zara and I-Zone (a Lebanese chain). The problem with luxury shopping in Dubai--and the great irony--is that, according to these world- class shoppers, you can't find "anything" in the stores. As Nof explains, "If Fendi receives five bags, they send them to the sheika's house (royal women get first pick). What's left over goes to personal shoppers for their clients, so that by the time [merchandise] gets to the shop--well, the best pieces of the season don't get to the shop!" She adds, "And I won't wait. I always have a contact person in London."

Those who run Dubai's malls concede that their competition includes stores in Europe (but not the U.S.). "Our main competition is Knightsbridge and Selfridges," says Eisa Ibrahim, the general manager of the BurJuman mall. Yet back in the mid-1990s, when BurJuman was gearing up to open (it, too, is in the process of expansion), most luxury brands turned down retail space. Now, even space that won't be ready until 2009 is leased.

As for the U.S., Alanoud says her family rarely visits these days. "It's such a long way, and there's so much happening around this part of the world that going there isn't necessary anymore." Nof doesn't travel there either, mostly because her husband forbids it. "We used to go a lot. We'd hop around to New York, L.A., Las Vegas," she says wistfully. "But my husband is from Ra's al Khaymah- -that's the most northern emirate--and one of the bombers on the 9/ 11 planes was from there." Instead, they go to London, where Nof's husband prefers that she not wear the abaya. "It attracts attention," she says. "Although without it, my mother's friends pass by and don't realize it's me. They don't usually see me in jeans and a top with my hair down."

They have probably never seen her on skis either. We have come to ski, and Alanoud is determined, changing into ski pants and a jacket while Nof slips a long padded parka over her abaya. Nof needs no encouragement to try tobogganing and even has a go at skiing after Alanoud, who is proficient, demonstrates where to position poles and skis. We might be in the middle of the desert, but it feels as if we are in the Alps: chairlifts lead up to the black-diamond run, and it's cold enough to fear frostbite.

The apres-ski plan includes an invitation to Burberry's store opening, where ceo Rose Marie Bravo surveys the crowd. "The consumer is so elegant here!" she says of the Dubai women outfitted in subtly customized abayas, designer handbags popped over their shoulder. "Aren't they gorgeous? They look stunning," Bravo continues. "They say, 'Well, you all wear uniforms in the Western world too,' and look at us," she says with a laugh, indicating how she and I are dressed. "They're right. We're in black as usual!"

Another day, another mall. The next morning, Alanoud shows me around BurJuman mall with her friend Raghda Bukhash, the designer of the gutra clutch bags. Under the label Pink Sushi, she also designs slogan Ts, and she gives me a peek at the one she has on under her abaya. "It translates as, 'Shake your hips, little ducky,'" Raghda says, laughing. "So now you know I'm a rock chick Madonna with my customized T and my micromini and my black tights and bright green jeweled shoes!"

Raghda is cute, and she's also ambitious. "I'd like my designs to represent my country and my culture in the wider world and to show we're not just rich kids who don't do anything," she says. Her idol is Gwen Stefani. "I love her! She's kashka. That's the Emirati word for cool. "

It's now afternoon, and Alanoud has a work meeting she can't miss. In any case, I have an appointment with David Dessureault, the buyer for Saks Fifth Avenue at BurJuman. As she leaves, Alanoud invites me to dinner at a place called Spectrum. "They do the best virgin mojitos," she says. (We end up having more fun on mocktails than I thought possible.)

But there's another surprise in store, literally, and it's not Dessureault's revelation that 495 Balenciaga bags have sold at Saks in just six weeks. Instead he leads me behind a boudoir-pink wall to a pretty blond in a matching pink uniform. She's wrapping a stack of saucy lingerie items for two women who are entirely veiled, including burqas. When they leave, Lisa Hastings, the manager of Agent Provocateur, explains that they are a mother and daughter shopping for the daughter's wedding lingerie, adding that she sells plenty of "playful" underwear to women wearing abayas. The shop's best-selling item? "The jeweled whip," Hastings says. "We can hardly keep them in stock."

"We don't care what men think. Fashion is our girl thing."In Dubai, women dress their hands. "The jewelry is amazing. Van Cleef is huge, Cartier, Chopard ..."--Alanoud Badr

     
“Half a truth is often a great lie.”

Ben Franklin

Yes, I really really was directing the "can't win either way" at Bush, who actually went both ways on the Dubai port issue. I was also trying to be succinct though I guess I could have thrown "Bush" into my phrase.

File this episode (Dubai ports issue) in the full to overflowing container labeled "Bush Can't Win Either Way."

If I had the choice (which I don't) of having you suddenly see things my way, I'd probably stop posting here! But don't go getting any ideas! I'll be able to tell if you're faking it just like I knew Jordan didn't really go liberal back during the 2004 election!

Soooooo, don't go changin' to try to please me...I love you just the way you arrarrarrarre... (Sing along...)

But, back to the Dubai ports issue instead of the ongoing, albeit scintillating, Dave-Sue debates. This editorial was ONE of two interesting pieces from today's LA Times -- the paper I rarely agree with but on which some good points are scored. I'm certain we haven't seen the last of the ramifications that are to come from this debacle.

See what we think:

Goodbye, Dubai

March 10, 2006

PROTECTIONISTS, REJOICE! The dastardly United Arab Emirates company that would have presumed to unload containers of underwear and toothpaste on U.S. soil has backed down, and it will now divest its U.S. port interests to an American entity. Rest assured, the nation is now safe from dangerous Middle Eastern accountants and port logistics specialists.

Dubai Ports World did what was necessary, if not necessarily fair, on Thursday by agreeing to give up the U.S. operations of its newly acquired British ports company. The House Appropriations Committee had voted 62 to 2 on Wednesday to block the deal; a similar bill was pending in the Senate. (The liberal LA Times seems to suggest that the US Congress was the strong-armed party)

Although President Bush rightly stood by the acquisition and vowed to veto any bill that stood in its way, (See what I mean, Dave. Here's an example of the Bush-whacking LA Times giving the guy his due.) he was fighting a losing battle that only deepened a growing rift in the Republican Party. Dubai Ports World officials wisely recognized that they had to put some distance between themselves and their new U.S. assets. The company probably will sell its U.S. assets or create a U.S. company with a separate board to run them. (The latter which will probably happen and then where are we? Hollow victory much?)

Much as we wish it would go away, the fight may not be over yet.

For one, the terms of the divestiture remain unclear, and some members of Congress are demanding more details. Will it be enough for Dubai Ports World to create a U.S. subsidiary? Will it have to open headquarters in the United States? Pay its employees in dollars?

For another, the flurry of disastrous bills the deal has inspired may yet find their way into law. Besides efforts to block the U.S. portion of the Dubai Ports World transaction, these include bills that would damage trade relations even further by restricting other foreign companies from taking over port operations. This despite the facts that such operations are dominated by foreign companies, that the bulk of the workers who actually load and unload containers are American longshoremen and that these companies have nothing whatsoever to do with port security, which is handled by U.S. government agencies such as the Coast Guard and Customs.

One has to wonder where this will end. Should a Saudi-owned airline be denied landing rights in the United States because most of the 9/11 hijackers were Saudis? That's the logic used by opponents of the Dubai Ports World deal, who fret that two of the hijackers came from the UAE and that its government supported the Taliban before the invasion of Afghanistan. Never mind that the UAE is a key ally and a hub for U.S. military operations in the Middle East.

The Dubai Ports World fiasco is unfortunate and embarrassing on many levels. But the damage can be contained as long as Congress does not start treating every private transaction involving ports the way it treats any deal involving defense contractors. (Foreign companies often must create a U.S. subsidiary to get business from the Pentagon — which makes sense, given that they are directly involved in U.S. security in the way that port operators aren't.)

It's true that keeping the United States secure in an increasingly globalized economy is a delicate balancing act. But members of Congress should realize that boosting trade with Middle Eastern countries is crucial to defusing tensions in the region and improving the U.S. image there. By that standard, this deal was a no-brainer — to go forward.

Here's a teaser and a link which I urge you all to read. We may soon be begging for foreign investment. India and China (coff, coff).

http://www.latimes.com/business/la-fi-arabinvest10mar10,1,1628182.story

Arab Assets May Seek Other Ports in Storm
The Dubai controversy could lead Mideast investors to shy away from the U.S. economy.
By Evelyn Iritani, Times Staff Writer
March 10, 2006

For people alarmed by a Dubai-based company's failed bid to take over operations at key U.S. ports, consider this: During the last few years, Arab investors have sunk billions of dollars into American business, including technology firms, a fried chicken chain and the building that houses Coast Guard headquarters in Washington. Middle East experts said congressional outrage over Dubai Ports World's $6.8-billion purchase of a British port company that operated in five U.S. cities could scare off foreign capital and lead Arab investors to shift their money to such booming economies as India and China.

Lots to think about...

Susan

     
“Half a truth is often a great lie.”

Ben Franklin