Cui bono?

Wednesday, February 22, 2006
I know, I've used this title before. It's often the most useful question to ask, though. I asked it in comments, downstream, on the P&O ports question.

Now, the New York Sun has an interesting insight on that question.

Somehow, it doesn't add up. Senators Menendez, Clinton, Lautenberg, Schumer, Dodd, and Boxer are up in arms over the Bush administration's decision to allow Dubai Ports World, a company owned by the United Arab Emirates, to take over operations at ports in New York, New Jersey, Baltimore, New Orleans, Miami, and Philadelphia. So are Reps. Vito Fossella and Peter King. One has to wonder, what makes this group, not particularly known for its hawkishness - in some cases known for abject dovishness - suddenly more hawkish than President Bush? It turns out their objections look to be less and less about American national security and more about plain old politics and political money and a labor union notorious for its ties to organized crime on the waterfront. ....

So what, one wonders, accounts for the sudden turnabout and interest of all these politicians in the UAE as a potential terrorist threat? The answer got a lot clearer yesterday afternoon when the International Longshoremen's Association, the AFL-CIO-affiliated union that represents workers at the six ports that would be affected by the Dubai deal, issued a statement praising the politicians complaining about the deal. The union's statement expressed "great concern" about the transaction. From there, it's easy to just follow the money - documented by The New York Sun's examination of Federal Election Commission records - from the political action committee of the International Longshoremen's Association into the pockets of the protesting politicians.

Mr. Schumer, the first to raise the alarm about the deal? He's collected $4,500 in campaign contributions from the trough of the Longshoremen. Rep. Peter King, the chairman of the House Homeland Security Committee, who was one of the first big-name Republicans to break ranks with the administration over the deal? The Longshoremen's political committee donated $5,500 to the King campaign. It turns out that nearly every politician who has been at the forefront of the opposition to the Dubai deal is on the receiving end of some Longshoreman largesse.

23 comments:

chuck said...

Well, maybe,

But the dollar amounts don't look that large. I expect that what the politicians gain in this case is political capital, not monetary capital.

David Thomson said...

This is going to end badly for the politicians who jumped aboard this train. I was among the first to warn people to stop and take a deep breath. Why was I so suspicious? It is quite simple: I instinctively do not trust Senator Charles Schumer. Finally, Georgia10 on the Daily Kos blog started to scream about how the “Bush Administration Sells Port Security To Highest Foreign Bidder.” What do Daily Kos crazies and the rest of us have in common? We might all like cute little puppies and kittens. That’s about all! If they are on one side of an issue---we probably should be on the other.

chuck said...

This is going to end badly for the politicians who jumped aboard this train.

I think it will be a close run thing at best, the advantage seems to be with the anti's right now. Ecclesiastes might be a better guide to the rewards of virtue than the mere presence of Schumer on the other side. Demagogues *do* know what they are doing.

Rick Ballard said...

It isn't as if this is hidden.

Delve folks - the answer is out there

Click "about" to achieve an understanding.

Nice famiy business - is there anyone in particular that I have to kill to get a piece?

Whom would one think "owns" the stevedores?

Knucklehead said...

DT,

I was thinking the same thing about the dollars involved but as Rick has pointed out, the Dem Money Well has been running a bit dry these days - deflation has set in.

This one seems, on the surface, a no brainer. The initial reaction of just about everyone is "Huh?!? Why does anyone think this is a good idea?"

But, as you and others have pointed out, let's hang on a second, take some deep breaths, and try and figure out if it is a bad idea. And the more one digs into it the less "bad" the thing seems. If DW hadn't won the bidding war for P&O against the Singapore outfit, would anyone be screaming about Singapore taking over US ports?

So what makes DW worse than Singapore? I'm not seeing anything that tells me that. There's no doubt there have been, and probably still are, some pretty wealthy whackjobs in the UAE who supported a-Q. We're also sitting there in the UAE with some pretty darned strategic valuable real-estate at our disposal. They may have some nutjobs, and they are surely taking their own interests into account, but they seem to have been a pretty darned cooperative lot over the past few years.

It is no original insight on my part but how on earth are we going to encourage whatever there is of "moderate Islam" if we kick and scream about ordinary business deals? If countries like the UAE can't be trusted to manage freight terminals then how can we trust them to land their airplanes in our airports or float their oil tankers into our ports?

There's too much heat here and not enough light.

I figure there's some good reason Bush is willing to fight on this one 'cause it would have been easy as falling off a log to bail on it. And I suspect that the reason is strategic military facilities as well as some significant cooperation, including results that shouldn't be made public, on the terrorism front.

As far as this ignoramous can tell the UAE and Qatar (sp?) have been doing a fairly good job of being about as high quality model world citizens as feelthy rich Ayrab oil shieks can possibly manage.

Knucklehead said...

The questions not asked, Rick. Thanks for pointing it out.

Why is Bush digging in his heels on this? (We can be reasonably sure it isn't because he's the idiot the Leftoids like to claim.)

Who stands to gain if the port management contracts are declared null and void? Well, there aren't a whole lot of large US owned freight terminal management outfits around anymore.

Here's an interesting little bit of info from Rueters, CHRONOLOGY-Major acquisitions by Gulf Arab investors. (ht: somebody called "The Ace" who comments at PoliPundit.) How come nobody was screaming bloody murder about:

* December 2004 - State-owned Dubai Ports pays $1.15 billion for the global port assets of U.S.-based CSX Corp. (CSX.N: Quote, Profile, Research), outbidding the world's two biggest container port operators.

Won't do much good to void the contracts and give 'em to CSX, will it.

Rick Ballard said...

Knuck,

He's digging in his heels because it's the right thing to do*.

That's why we hired him.

* as interpreted by Bushcultist 3rd degree.

chuck said...

...outbidding the world's two biggest container port operators.

I suppose I could protest the transaction on the grounds that government owned corporations are a bad thing: they get a competitive advantage due to government funding. How much oil money flows into DPW? How much government money flows into Airbus? There is an anti-competitive aspect here. It looks to me like DP may be attempting to acquire a monopoly.

Knucklehead said...

Chuck,

I suppose that's a case that can be made. Hard to piss and moan about the oil shieks handing over their petro-dollars to CSX stockholders. Anybody remember when Japan, Inc. was "buying up the US"? They bought high and sold low. That one turned out good for US companies and stockholders but bad for Japan, Inc.

BTW, this argument is also made against pretty much all dominant US companies also. I don't think it is a particularly strong argument but some would claim that government subsidies are as present, albeit in a different form, for Boeing as they are for Airbus.

The likes of DW may, in fact, be trying to establish a monopoly but I'm having some difficutly understanding why US firms can't be competitive in this market. It's not like DW gets to ship in a bunch of third world longshoremen who live in barracks under the docks and work for $3/day. Its the same cranes and stuff regardless of who runs the ops. Whoever manages the port freight operations has to deal with the local situation. What am I missing?

I suspect that it is more a case of a bunch of oil-rich people trying to figure out how to diversify within their core competencies. They probably no how to run the freight management stuff in large ports really well.

But heck, what do I know. Everytime I drive past a large port facility I wonder how the heck anybody makes any money. There are always gimongo areas of land with bajillions of containers just sitting around doing nothing. I suppose there's the potential for making a nice return if you can own the ships, containers, and freight handling 'cause there's gotta be some room for improving efficiencies in that business.

I was once in a class with a woman who worked for some company (Maersk IIRC) who was explaining the container thing to me. The whole container industry just sounded like a big free-for-all to me. They don't know what is where or when (or at least they didn't back then, it was some years ago).

flenser said...

It's not hard to see what the D's get out of this. At best they get an increase in their own private tax base, aka union workers. At a minimum they get to pose as tougher on security than Bush.

It's what is motivating the R's that has me baffled. But they don't call them the stupid party for nothing.

Eric Blair said...

The motivation for many on the right is simply knee-jerk bigotry. It also shows just how little a great many know about any of the countries in the middle East. (Especially those small Emirates, that are effectively client states of the US.).

Seneca the Younger said...

Don't forget that unions can offer significant help in ways that don't show up as dollars contributed, eg, union members who "volunteer" to walk the precincts. Not to mention the number of union people who otherwise know where the bodies are buried (which, with this union, may not be a metaphor.)

terrye said...

Myabe it is just me but I always worried about the unions and security. I think most of the rank and file are good people, but hey we have all the stories about organized crime. And I have never been impressed with the integrity of the Mafia.

I feel like I am missing something also. What was Bush supposed to do? P&O have a right to sell their company to the highest bidder if they damn well feel like it and unless we can come up with some real facts concerning Dubai's lack of trustworhtiness...on what grounds do we nix the deal? It would seem to me that unless we want to change the law and make it illegal for foreigners to do this then we can not very well complain when they sell to a {gasp} raghead. That is it isn't it?

I doubt if it makes the folks running UAE popular in their own neighborhood to be so close to the US, but they do it. That might change if we stiff them.

It is as if some guy wanted to sell his house to a black family and all the "decent" folks got up in arms about it.

Seneca the Younger said...

Well, Terrye, that would certainly tell you what the "decent" folks really think, wouldn't it?

terrye said...

seneca:

Yes, I guess it would.

Knucklehead said...

Terrye,

I don't think there's anything POTUS can do to prevent O&P from selling itself to DW. What he could do, I presume (I haven't been able to find a discussion of the legal issues involved), is declare all O&P port management contracts in the US null and void if the sale goes through. That might have the effect of making DW pull out of the deal.

What nobody seems to have discussed yet is what nulling the contracts would mean. Somebody has to run the ports. If DW went ahead and bought O&P, and the contracts are declared null and void, then what? How long would it take to rebid the contracts and get another management outfit in place? In the meantime, however long that was, you can bet the Dems would be screaming about all the longshoremen who were suddenly unemployed.

terrye said...

knucklehead:

I think you and I are the practical types. We wonder, yeah, but who would do the work?

You know I heard that they won this deal in a bidding war with Singapore. Would these folks be more happy with them?

chuck said...

Daniel Drezner has a good rundown on the controversy and lots of good links.

Syl said...

Something's bugging me and that's Instapundit mad at Bush because he should have foreseen this would blow up as a big hoopla.

I don't get it. I mean it's not as if Bush was signing the contract himself. There must be hundreds of these types of things going on every day. Why should Bush even know about it?

DHS surely does and they obviously didn't flag it in any special way.

And it's not as if it happened yesterday either.

But, heh. I question the timing. I thought this week was supposed to be Cheney bashing week. ;0

chuck said...

Dennis the Peasant comes through big time.

Syl said...

from Chuck's link (a quote from someone at the council of foreign relations):

"Calls from lawmakers to reconsider the approval have come after the thirty-day period to raise objections had expired."

Heh.

Syl said...

This is going to end badly for the politicians who jumped aboard this train.

Well the least I'd like to see is the MSM handed it's ass for the stupid initial reporting.

'Port Security' my left foot.

terrye said...

Syl:

I wondered the same thing re Bush. I hear it all the time. Everytime the Demcorats or the media shows their asses Bush should have seen this coming. Like he does not have anything else to think about except what hissy fit Malkin and Clinton might be getting ready to throw.

I have really been disgusted with the knee jerk reaction of some conservative bloggers on this.