The Port Issue - When the twin American obsessions of national security and outsourcing collide.

The Bush Administration is finding itself between a rock and a hard place. The Govt of Dubai controlled Dubai Ports World Corp. (DPW) is set to win the management contracts for 6 of the nations largest ports. The debate raging inside Washington is whether a govt. controlled entity (esp. an Arab controlled govt entity) such as DPW should be allowed to run the nations critical infrastructure. President Bush (who apparently was not consulted prior to this news breaking) seems ok with it. The ports were being run by P&O, a British firm prior to this.

The US has preached the mantra of foreign investment and a fair playing field. If it were to deny DPW from being a bidder they are going to look patently unfair and just feed the Arab belief that the US speaks out of both sides of its mouth.

But this is an election year and this subject resonates with everyday Americans. It feeds nicely into the twin American obsessions of national security and foreign outsourcing and therefore has the ability to unite both the right and the left. Sen. Frist has already threatened legislation to block the award (Did I mention that he considers himself a contender for 2008?). GOP Congressman and Senators from Florida, New Jersey and New York have all weighed in and are against doing this. Bush is therefore facing an open revolt in his ranks for the first time.

Should companies controlled by foreign governments (not just Arab governments) or more specifically should any foreign companies run our ports and airports? Where do we draw the line on outsourcing management of our critical infrastructure? Would we feel comfortable entrusting security at other critical infrastructure (eg. Lawrence Livermore Laboratories or Sandia) to a foreign company? I think this is a more cogent and intellectually honest question and deserves open debate.

Singaporean and Chinese companies already run many harbors in the US and have done so for more than 10 years. Bringing in legislation to prevent this is akin to closing the stable doors after the horses have bolted.

The other question that needs answering is just how important is the management company in the security equation. Many foreign countries and foreign companies already pre screen cargo that comes into this country. Similarly foreign airlines (which are usually owned by foreign governments) own and operate freight clearing facilities within the US. Ultimately regardless of which foreign company manages US ports security will always remain in the hands of the Customs, the INS, the Coast Guard and the Dept. of Homeland Security.

Therefore is this issue just plain old Washington politics?