Analysis Confirmed: Dubai Port Pullout a Fraud

IRIS Blog

Tuesday, March 14. 2006

Analysis Confirmed: Dubai Port Pullout a Fraud

Updates:

March 21: Dubai was an "Atomic Bazaar"

March 20: More evidence of Dubai terror financing: UAE Red Crescent Aided Kin of Palestinian Militants

March 15: DPW Sale Announcement Update
The public outcry has pressured DPW into a more serious, yet still non-commital, announcement

On March 10, Dubai announced that it was divesting itself of all US port operations. Nearly every news organization and expert pundit in the world reported that this meant that the controversy had ended because the pronouncement was taken at face value.

I was probably completely alone in my contrarian analysis on that day (Dubai Port Capitulation Likely Fraudulent). Today a leaked e-mail from a senior executive in the Dubai-owned firm confirms my points:

DP World: No Plan to Sell Miami Port Operations

The Dubai-owned company that promised to surrender its U.S. port operations has no immediate plans to sell its U.S. subsidiary's interests at Miami's seaport, a senior executive wrote Monday in a private e-mail to business associates.

Even if DP World were to sell its Miami operations to quell the congressional furor over an Arab-owned company managing major U.S. ports, "that would probably take a while," wrote Robert Scavone, a vice president for DP World's U.S. subsidiary....

Last week, DP World backed away from the deal further. It pledged to "transfer fully" its U.S. operations to an unspecified American company and said DP World will not suffer economic loss.

The company has steadfastly declined to clarify its statement or the timing of any possible sale....

Scavone told AP in an interview that his e-mail was intended to reassure officials at the Port of Miami Terminal Operating Co. which manages operations there and is half-owned by a DP World subsidiary that uncertainty surrounding the Dubai ports deal would not affect its work in Miami....

Scavone told the AP that under U.S. corporate laws, P&O's ownership in the Miami port company would not change even under DP World's planned divestiture.

"Just because a shareholder owns the top company of an elaborate network of corporations worldwide, it does not mean that what those corporations own changes hands," Scavone said.

This was precisely my analysis from March 10:

the Dubai corporation will maintain a separate incorporation status for the American subsidiary....This is a standard legal fiction for corporations who maintain complete operational control over their foreign subsidiaries.

As has been typical with the misinformation proferred by DPW, the executive played games over whether the e-mail was authentic:

Scavone declined to confirm or deny he sent the e-mail

Of course it is obviously legitimate:

[Scavone] contacted a reporter less than one hour after AP's inquiry to explain the message's meaning. Another P&O executive, Frank Fogarty, said he received Scavone's e-mail and did not doubt Scavone sent it.

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Posted by Barak at 06:49 | Comments (4) | Trackbacks (4)

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Dubai Port Capitulation Likely Fraudulent
Update (March 14): My initial assessment has just been confirmed: DP World: No Plan to Sell Miami Port Ops Update (March 13): Here is evidence of previous DPW misinformation that "The Dubai Government Has Nothing To Do With Us" Update (March 10):

Weblog: IRIS Blog
Tracked: Mar 14, 07:50

Dubai's withdrawal from port ownership a fraud
The IRIS Blog points to an AP article on Breitbart that reports about an e-mail obtained from a senoir DPW executive confirming the earlier analysis that Dubai's pullout from the port ownership is really just a fraud, certainly in Miami

Weblog: Tel-Chai Nation
Tracked: Mar 15, 15:34

DPW Sale Announcement Update
DPW has announced, after massive US public and congressional outcry, that it intends to sell its US port interests in 4-6 months, but that it intends to continue running the ports in the interim "independently." My comments: 1. I stand by my initial as

Weblog: IRIS Blog
Tracked: Mar 16, 08:38

Dubai was an "Atomic Bazaar"
Evidence continues to accrue regarding the risk of Dubai operation of US ports, from Duncan Hunter, the chairman of the House Armed Services Committee: As recently as 2003, customs officials in the United Arab Emirates (UAE), of which the government of D

Weblog: IRIS Blog
Tracked: Mar 21, 18:45

Comments

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GOES TO SHOW YOU WHAT LYING ************S THE BUSH REGIME REPRESENTS.

#1 MARK RUSSELL on 2006-03-16 00:16 (Reply)

From CNN.com this afternoon:

"Seeking to ease Congress' trepidation about a controversial ports deal, a company owned by the United Arab Emirates said Wednesday it would sell the management rights to six American facilities to an unrelated U.S. buyer within six months.

Some U.S. lawmakers had asked to see DP World's specific plans because of concerns that a statement the Dubai-based company issued last week could leave a loophole that would allow it to control some U.S. port operations.

According to a company statement released Wednesday, DP World is weighing offers and hopes to have the sale wrapped up in four to six months.

One of the top critics of the ports deal, Sen. Charles Schumer, D-New York, praised DP World's announcement.

"It now seems clear that this deal has finally been scuttled, and it is good news for keeping our country secure," Schumer said in a statement. "This announcement, once it is fulfilled, is exactly what we've been asking for. We will keep a watchful eye and our legislation at the ready until this deal is finally done."

. . .

Until a new buyer is found, P&O Ports North America Inc., the wholly owned U.S. subsidiary of the British company that DP World bought, will operate the ports, the UAE firm told the AP."

Note particularly the last paragraph. These operations were ALREADY in a U.S. subsidiary.

This is all completely consistent with my comment at realclearpolitics to your post four days ago. The reason you were alone (well, not entirely -- you and Schumer were together on this) on this point is that everybody else understood what was going on. Ready to eat some crow, bubba?

#2 ScurvyOaks on 2006-03-16 00:39 (Reply)

Thank you for your thoughtful comments. My reply is here:

http://www.iris.org.il/blog/archives/1136-DPW-Sale-Announcement-Update.html

While I love critical comments, I am somewhat surprised by your boldness given the events following your previous comment. You had said my interpretation was impossible, yet a senior DPW executive's e-mail was leaked in which he parsed the announcement in precisely the same way that I had.

#2.1 Barak (Link) on 2006-03-16 08:55 (Reply)

You're right that I got carried away; my apologies. Having looked around your blog a bit, I realize that I agree with you on a great many topics.

I look forward to reading the reply you linked and perhaps will comment on it.

#2.1.1 Anonymous on 2006-03-16 18:11 (Reply)

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