Lobbyist's Last-Minute Bid Set Off Ports Controversy
PETER OVERBY: This is Peter Overby. If you're looking for a story of how inside Washington works, this is it. Analyst James Andrew Lewis has watched the flap over Dubai Ports World unfold from his perch at the Center for Strategic and International Studies.
JAMES ANDREW LEWIS: People at political level are comfortable with a global economy. They're comfortable with big economic players like Dubai. And they didn't realize that they were going to be ambushed on the political side.
OVERBY: The story starts with the quaintly named Peninsular and Oriental Steam Navigation Company, P&O for short. The British firm operated some but not all terminal facilities at several U.S. ports. Last year, DP World set out to buy P&O. In mid October, even before it let P&O know, DP World went to work in Washington. It needed approval from CFIUS, the Committee on Foreign Investment in the U.S. It's the multi-agency federal panel that passes judgment on deals with foreign corporations that raise antitrust or national security questions.
ANDREW LEWIS: There's a small number of lawyers in Washington who specialize in CFIUS.
OVERBY: Again, James Andrew Lewis.
ANDREW LEWIS: These lawyers would advise you to start work early, kind of do a reconnaissance, and if you're going to have problems, are they a deal killer or is it something you can fix?
OVERBY: You've never heard of the lawyers DP World hired, but CFIUS had. Thomas Crocker and Jonathan Weiner both have State Department experience. Crocker in defense cooperation issues, Weiner in international law enforcement. Twelve different agencies participate in CFIUS. Crocker and his associates negotiated with them. By the time DP World and P&O announced their deal, the CFIUS agencies had stopped worrying about the security issues that had bothered them at first. That was all done by the end of November. Two weeks later, DP World filed its formal CFIUS application. No one from DP World would grant an interview for this piece. Tony Fratto is a spokesman for CFIUS.
TONY FRATTO: This is the way the reviews usually begin, with a lot of work done before the case is actually submitted for review.
OVERBY: The deal got noticed in the business press, and at one company in particular it set off alarms. Eller & Company, a Florida firm, has two joint ventures with P&O. Eller did not want to become what it calls an involuntary partner of DP World. The company's lawyer, Michael Kreitzer, says Eller concluded it had to go to its court of last resort, Congress. It couldn't afford a team of big name lobbyists, but someone at Eller was friends with Joe Muldoon. So, Kreitzer says, Eller hired him.
MICHAEL KREITZER: It was more or less a one-man show.
OVERBY: Muldoon says he was semi-retired on his horse farm in rural Maryland. Congress was out of session the entire month of January, so Muldoon had time for research. In February, with Congress back in town, Muldoon started making the drives in to Capitol Hill. He had just a laptop, a cell phone, and a binder full of information.
JOE MULDOON: You know, I'm obviously getting paid to do this, but I'll tell you the truth, I mean, I have done nothing else for 24/7 since I started looking at this issue. And it was clearly a long shot.
OVERBY: He says that at first nobody he talked to had heard of the ports deal.
MULDOON: I started with the Banking Committee, majority and minority.
OVERBY: Muldoon started there because the Senate banking panel had looked into CFIUS last year. As he talks, he searches his binder and pulls out a document on P&O.
MULDOON: I also spoke to, if you look at this map of the twenty-some ports in which they have operations, that sort of gave me a blueprint of Senate and House offices to go and try to start contacting.
OVERBY: One senator fit both criteria. On the Banking Committee and representing a major seaport, and he was media savvy to boot. It was Democrat Chuck Schumer of New York. Schumer's office heard from Muldoon, from Eller & Company lawyer Michael Kreitzer, and from an Associated Press business reporter who had been talking with Muldoon and Kreitzer. In a period of four days, the AP reporter's story ran nationwide, Schumer called for a review by the Department of Homeland Security, and he held a press conference with 9/11 families. He called on President Bush to step in. DP World hired teams of lobbyists. Congressional committees held hearings where DP World's Chief Operating Officer, Ted Bilkey, made it a point to mention his family's standing as Washington insiders.
TED BILKEY: Indeed, every generation of my family, from the earliest days, have served in the Senate, House of Representatives, or as Secretary of State.
OVERBY: But it may be too late. And Joe Muldoon, the semi-retired lobbyist who had a needy friend in the port operations business, is still hard at work.
Peter Overby, NPR News, Washington. Transcript provided by NPR, Copyright NPR.