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Dubai Ports World to Divest Itself of All American Interests

Aired March 09, 2006 - 13:36   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

KYRA PHILLIPS, CNN ANCHOR: Well, she was overpowered, beaten and left for dead, but she survived. Now we're hearing her voice and her story for the very first time today. It was one year ago this week Deputy Cynthia Hall of the Fulton County Sheriff's Department was brutalized by the man who would eventually gun down four people. Hall survived, but was hurt so badly she'll never be the same. Her attorney released videotaped comments from Hall. She reminded her former law-enforcement colleagues to always expect the worst.
(BEGIN VIDEO CLIP)

CYNTHIA HALL, INJURED DEPUTY: Make sure you watch over one another while you're working together. Keep each other safe is until you go home for the evening.

(END VIDEO CLIP)

PHILLIPS: I want to break away and take you straight to the Senate floor right now.

Can you tell me -- OK, it's Charles Schumer who has stepped up. As you know, we got through our sources within just the past few minutes, our Ed Henry on the Hill telling us, that his sources are telling him that the Dubai Ports World deal to acquire operation at six major U.S. ports is off.

Now we're going to listen to Senator John Warner talking about this on the Hill.

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SEN. JOHN WARNER (R), VIRGINIA: ... that what I had to say might bear on your remarks. Mr. President, I have had the opportunity to work very closely with the White House and the administration, with our distinguished leader, Bill Frist, and others in the Senate, several of the senators, on this question. And I've had the opportunity to meet and work with representatives of the DP World company, who came to the United States for the purposes of really acknowledging to the world the importance of this contract and their perspective.

I shall not recount the events that have occurred here in the last few days, but i've just been contacted by Edward Bilkey, chief operating officer of DP World, and in an effort to get this message to all interested parties as quickly as possible, I indicated a willingness to read a press release that is now being issued by DP World and Edward Bilkey. It reads as follows, "Because of the strong relationship between the United Arab Emirates and the United States, and to preserve that relationship, DP World has decided to transfer fully the U.S. operation of P&O Ports North America to a United States entity. This decision is based on an understanding that DP World will have time to effect the transfer in an orderly fashion, and that DP World will not suffer economic loss. We look forward to working with the Department of Treasury to implement this decision." End statement.

His highness Shaikh Mohammed Al Maktoum, prime minister of UAE, has advised the company that in the interest of the UAE, the nation, and the United States, that this action is the appropriate course to take in the future.

Now, Mr. President, I would say that I started the day with the secretary of defense, the chairman of the Joint Chiefs, and General Abizaid, discussing with them not the politics, but strictly our discussions were directed to the implications of the security.

And it really is the security of the world. It's not just the United States, but the world, the free world, which engaged in this war on terrorism.

And it is absolutely essential that we, the United States, and our coalition partners in the region of the Persian Gulf, who are doing our best to secure stated goals in Afghanistan and in Iraq, that the relationship between the coalition of partners -- and most specifically, the United States, and the government of the UAE, the government of Bahrain, Kuwait, Qatar, all of those nations -- be maintained as strong as possible, because they are valued partners in this war on terrorism.

It's just not the two current operations at the moment, Afghanistan and Iraq, but it is looking into the future -- the indeterminate future, as to how long nations of the free world such as these moderate nations, ourselves, our coalition partners, will be engaged in that war on terrorism to deter hopefully any attacks emanating from that region and, if necessary, to use force of arms to prevent injury to life and limb of those persons in the free nations of the world.

So, Mr. President, it's been a very interesting chapter in my 28 years, privileged to be a member of the United States Senate. But I do believe in good faith both governments have collaborated and acted in good faith, recognizing the circumstances and this document sets forth the objectives from this time forward. I yield the floor.

UNIDENTIFIED MALE: Mr. President ...

PHILLIPS: Just heard from Senator John Warner there, reading an press release, he says, from DP World, talking about the company, along with its CEO, Ed Bilkey, saying "because of a strong relationship between the UAE, United Arab Emirates, and the U.S., that the decision has been made that it will divest itself of all American interests."

Ed Henry on the Hill, Andrea Koppel at our Washington Bureau, also Dana Bash from the White House.

Ed, why don't we start with you? We were talking just moments ago. Your sources telling you that the deal was dead. Now we're hearing from Senator John Warner. What happens from here?

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: That's the big question. Frankly, everyone's trying to figure that out. Andrea Koppel was first hearing that, in fact, Senator Warner was going to go to the floor and make this announcement.

I'd been talking to Senator Warner all morning and he told me he had been talking to company officials late into the evening trying to work out some deal like this. But I think the question is, will it be enough? Will anything be enough for the critics in Congress?

What the House Republican-led Appropriations Committee did yesterday is vote 62-2 to kill the port deal altogether. I was speaking to some top House Republican aides this morning, and one of them told me it was, quote, "highly unlikely" that any deal would really fly and appease House Republican critics who want to see the entire deal go down, whether a subsidiary is brought in, whether there's a divestiture, that they just don't want to see any part of this deal go through.

But if Senator Warner is able to make a case that, in fact, this is a key ally in the war on terror and, in fact, that there will be enough distance from the UAE-owned company, enough distance from the U.S. ports, maybe that will convince the critics.

That is the next critical question. We saw Democrat Chuck Schumer. He's on the floor right now. He's been -- he's the one who brought up the amendment yesterday in the Senate to kill this deal altogether. We have to see. He and others are going to ask a lot of questions about exactly how is this structured. Is it enough to quiet their criticism? Kyra.

PHILLIPS: And Andrea Koppel, it was your sources that had pointed out, that told us within the past 10 minutes or so, that this announcement was probably going to come from Warner on the floor. What's your take?

ANDREA KOPPEL, CNN STATE DEPARTMENT CORRESPONDENT: Kyra, this has been a situation for Dubai Ports World that they didn't expect, clearly. I've been talking to sources close to the company for the last several weeks, and as of two days ago, I was still getting a very hard line from the company, saying, look, we're going to own Pennsylvania and -- P&O, the ports company -- we're going to own them outright, as of Thursday.

This is a case -- if Congress wants to block it, we're going to end up in U.S. court. So there was no signal up until about a half hour ago that they saw the writing on the wall that this deal was not going to go through on the Hill and that President Bush was not going to exercise his veto. So this was a face-saving way for the White House to get out of this deal. But I can tell you, Kyra, that for Dubai Ports World, the ownership of the North American operation, which they just took ownership of today, is only 10 percent of that $6.8 billion deal. So we're talking about what, until a few weeks ago, was about $680 million.

There are a lot of questions out there now, Kyra. Who's going to buy it? Where do they go from here? Will Dubai Ports World own a share of this or are they not going to own anything? Is this going to be a complete fire sale that investors on Capitol Hill are going to be licking -- on Wall Street are going to be licking their chops over?

As of earlier this morning -- I've got a press release right here that Dubai Ports World put out, saying that they had taken ownership of P&O today and that they were looking forward to closing this deal after this 45-day additional review that they had agreed to by the Committee for Foreign Investment in the U.S.

So you can see that this came out about four hours ago this morning, and as of, you know -- this day has just gone into overdrive, and obviously, turned out in a way that Dubai Ports World had not been hoping, how the White House had not been hoping, and creates a lot of questions not only on the financial front, Kyra, but also on the diplomatic front.

PHILLIPS: And you mentioned so many different parties. And we saw that same news come across the wires a couple of hours ago, too, Andrea, which led to a lot of confusion here among all of us trying to sort this out.

Dana Bash, Andrea bringing up an interesting point about the White House saving face. Is that what this comes down to? And is that -- is that what has happened here?

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Well, look, the bottom line is, Kyra, from the minute that President Bush made clear that he would veto any move by Congress to stop this deal, the president and his top aides were in a particular box, if you will, and they had to maintain that position.

Ask them. They say they wanted to maintain that position because they say they believe, the president believes, that this deal, regardless of where we are right now, was the right thing to go through.

Now in terms of the president, this morning -- Ed Henry was mentioning the fact that this morning there was an meeting here at the White House that really maybe was the climax of the incredible drama that we've seen in this particular situation of the president and the Republican leadership at a face-off over this.

This meeting here at the White House, Republican leaders said to the president what he already knew, according to senior aides, which is that this deal essentially is dead. It's just not going to go through as it had been moving forward. Now, the president in that meeting did not say, well, I'm going to veto this. He didn't reissue the veto threat. Why? Because we know now he didn't have to. The president at that time, Kyra, understood that the pressure was on the company to do exactly what we're hearing that they did now, to completely divest, to sell off the U.S. portion of this, to try to turn down the volume and try to end this incredible political firestorm over this issue.

So the president did know about that. This was discussed in this meeting here at the White House this morning. But they were on pins and needles here at the White House because they were never and are never sure, according to one senior official, how the company is going to deal with this, how they're going to go forward.

Because in all of the machinations of this, as we have gone through the twists and the turns of the story, Kyra, the White House has really had to rely on what the company is and is not willing to do because the president made very clear from the very beginning of this that he is behind the company. So they really had to take the company's lead on it. But you can be sure behind the scenes there was a lot of discussion about this.

And one more thing I can add for you, Kyra, here, just in terms of where we go from here, I just talked to somebody who was involved in this decision for this company to divest, to sell off their U.S. assets, and they really don't know the answer to that. They don't know who they're going to sell it to, in what form, when. All of that is very up in the air, as is the political situation right now.

PHILLIPS: Dana Bash, Ed Henry, Andrea Koppel, we'll stay on the story. Thanks to all three of you.

The news keeps coming. We'll keep bringing it to you. More LIVE FROM next.

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PHILLIPS: More on that hostage situation in France. Carol Lin working it from the newsroom.

Carol, what do you know?

CAROL LIN, CNN ANCHOR: Well, Kyra, it looks like a peaceful resolution. It is shortly before 9:00 in Paris, nighttime, and the hostage standoff is over. This 33-year-old former schoolteacher at this school in Le Mans, France has surrendered and is giving up to police right now.

Now what we know from Jim Bittermann, how is en route to the scene, he said that about 40 police officers had surrounded this school. It's a high school, a technical school. A former teacher had walked in earlier in the afternoon, had gotten past security, because everybody knew him. He used to work there. Then he took a classroom hostage.

Jim Bittermann had reported that 18 students were being held hostage, along with two adults. But it looks like, Kyra, right now, that this is a peaceful resolution. According to people on the scene, this former teacher had suffered depression, had not been able to find another job since he ended his teaching contract at this technical school -- Kyra.

PHILLIPS: All right, Carol Lin, thank you so much. We'll continue to stay on that as well in case we hear from anybody out of France since that's now ended. We'll follow that, plus a number of other stories, straight ahead on LIVE FROM.

Don't go away.

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