Ben Muse and Econbrowser reader Movie Guy (in the comments to this post) have been investigating some information disseminated by the Department of Homeland Security that appears to be misleading or inaccurate.
Ben Muse was the first to call attention to a press release from the Department of Homeland Security dated Feb. 22 and titled Fact Sheet: Securing U.S. Ports. This document makes the following statement:
DP World will not, nor will any other terminal operator, control, operate or manage any United States port. DP World will only operate and manage specific, individual terminals located within six ports.
- The recent business transaction taken by DP World, a United Arab Emirates based company, to acquire British company Peninsular and Oriental Steam Navigation Company (P&O) does not change the operations or security of keeping our nation’s ports safe. The people working on the docks also will not change as a result of this transaction.
- This transaction is not an issue of controlling United States’ ports. It is an issue of operating some terminals within U.S. ports.
- DP World will operate at the following terminals within the six United States’ ports currently operated by the United Kingdom company, P & O:
- Baltimore– 2 of 14 total
- Philadelphia– 1 of 5 (does not include the 1 cruise vessel terminal)
- Miami– 1 of 3 (does not include the 7 cruise vessel terminals)
- New Orleans– 2 of 5 (does not include the numerous chemical plant terminals up and down the Mississippi River, up to Baton Rouge)
- Houston– 4 of 12 (P&O work alongside other stevedoring contractors at the terminals)
- Newark/Elizabeth– 1 of 4
- (Note: also in Norfolk– Involved with stevedoring activities at all 5 terminals, but not managing a specific terminal.)
When I linked to Ben’s comments in this post, Movie Guy noted in comments the apparent inconsistency between this statement from the Department of Homeland Security and this story from UPI dated Feb. 24 which claims that the DP World takeover would involve 21 rather than 6 U.S. ports.
In subsequent investigation, Ben and Movie Guy found this map which details involvement in U.S. ports by P&O that are much more extensive than the six U.S. cities originally mentioned. Movie Guy writes:
I have verified that the sale of P&O to DP World will include the acquisition of ALL existing operations of P&O Ports North America. My verifications include communications with Bell-Pottinger, the public relations firm handling this matter. There is no question that the acquisition involves all P&O North America activities and
operations on the East Coast and Gulf Coast.Therefore, the acquistion will include the transfer of operations at 22 U.S. ports on the East Coast and Gulf Coast, not 6 ports as stated by the U.S. Department of Homeland Security. DHS, in its fact sheet as cited above, has failed to acknowledge the ongoing P&O North America operations at 16 additional ports located on the East Coast and Gulf Coast.
The acquisition will involve, at a minimum, the transfer of P&O North America operations at 55 terminals, not 11 or 16 terminals as stated by the U.S. Department of Homeland Security. Eliminating from consideration the cruise ship terminals that P&O North America presently operates, the number of terminals accounted for in my calculation of 55 is reduced to 49 terminals. DHS has failed to acknowledge the sale and transfer of 39 to 44 of the East Coast and Gulf Coast terminal operations of P&O North America.
Now, I’m wondering what this means. Perhaps in part DHS is drawing a distinction between the kinds of activities performed by P&O in these 22 ports and the activities in the 6 U.S. ports that they highlight. As support for this interpretation, the DHS fact sheet does mention a seventh port, Norfolk, in which it says P&O is involved in stevedoring activities, but does not manage a specific terminal. Hence there may be an intended interpretation to DHS’s use of the phrase “operate and manage specific, individual terminals” for which the press release is technically accurate, though the interpretation that a reader might naturally draw from the press release could easily be different from the true meaning.
Another possibility is that DHS honestly believes that P&O is only involved in the seven ports mentioned in the press release, in which case it would seem to provide ammunition for those claiming that the review of the security issues was less than thorough.
Either way, in my opinion it does not reflect well on DHS.
More Ports in the Storm?
Jim Hamilton at Econbrowser, Ben Muse, and Movie Guy have questions about how Homeland Security tallies ports slated for takeover by DP World: Homeland Security’s curious fact sheet, by James Hamilton, Econbrowser: Ben Muse and Econbrowser reader Movie…
Jim,
Your two alternatives simply do not match the facts presented by Movie Guy.
You are far too kind. Why?
Stormy, I’d like to hear DHS’s side of the story before I go too far with the accusations.
The information is readily available on the net, original sources: DHS and DP World and P&O.
You just have to dig a bit. Chertoff has repeatedly said six portsagain, easy to find.
Even as late as today, the Washington Post has Bush defending the sale of six ports.
It is clear that DHS has lied, inexcusably. I simply cannot accept that the government did not know this. I just cannot.
Apparently, none of the usual commentators on this blog are willing to step up. But lets step back for a moment and look beyond the issue of whether there should or should not be a sale.
Lets look at the larger issues at stake here: The really important ones.
We talk about transparency in a democracy. Not there.
We talk about an energetic news media. Not there.
We talk about governmental agencies being at least factual. Not there.
Yet, we complain about a cynical and disinterested public with very little interest in voting. And we know why.
The news is massaged from its source to its delivery, through lies, ineptitude, and self-interest. We all know this, although perhaps when we are public figures we do not want to acknowledge it too publicly. Ask anyone in the street, they will tell you what everyone knows: Its a PR game, a shell game.
The average voter simply does not have the time to expose the stuff, nor does he then have the energy to wade through the news agencies, push the right buttons to get it airtime.
[Lately, Brownie is getting his revenge with the release of the CBS pre-Katrina committee meeting tapes.]
Jim,
The U.S. Department of Homeland Security is headed up by a Cabinet Member who holds a chair at the CFIUS, as coordinated by the U.S. Deparment of Treasury. He has been an active voice in justifying the UAE DP World acquisition of P&O and P&O Ports North America.
There is no reasonable explaination as to why the Secretary of Homeland Security would not understand the scope of the acquisition of P&O and P&O Ports North America. Sec Chertoff has been testifying on the Hill about this matter. This week.
If he doesn’t understand the scope of the sale and acquisition, then perhaps he is the wrong individual to govern the U.S. Department of Homeland Security.
Jim — “Perhaps in part DHS is drawing a distinction between the kinds of activities performed by P&O in these 22 ports and the activities in the 6 U.S. ports that they highlight. As support for this interpretation, the DHS fact sheet does mention a seventh port, Norfolk, in which it says P&O is involved in stevedoring activities, but does not manage a specific terminal. Hence there may be an intended interpretation to DHS’s use of the phrase “operate and manage specific, individual terminals” for which the press release is technically accurate, though the interpretation that a reader might naturally draw from the press release could easily be different from the true meaning.”
This type of interpretation and possible justification for the DHS fact sheet will not support the facts nor the scope of interpretation you are suggesting may have been considered by DHS.
The Port of Houston P&O operations listed in the DHS fact sheet fall into the same category as 4 of 5 operations identified for the Port of Viriginia (DHS called it Norfolk, which is incorrect). Both are identified as operations where P&O stevedoring operations are being conducted at the ports, but P&O doesn’t operate the 8 terminals concerned. So, DHS has identified 8 of the 9 terminals at the two ports as representing only some form of stevedoring support. That same consideration should apply to the P&O operations being conducted at the other 15 U.S. ports not identified in the supposed fact sheet. That excludes 39 other therminal operations at 15 ports, including 6 full operational control terminal operations.
Let’s dig a bit deeper and examine the facts.
P&O Ports North America has full operational control of at least three major terminals at the Port of Tampa. The Port of Tampa is not identified in the DHS fact sheet. Why not?
P&O Ports North America has full operational control of three or more terminals at the Port of Lake Charles. More, P&O is identified in a corporate news release as the “exclusive freight handler for the Port of Lake Charles, providing terminal operations, stevedoring, log-yard and rail operations.” It would appear the P&O is running most of that port’s operations. The Port of Lake Charles is not identified in the DHS fact sheet. Why not?
The DHS fact sheet states that “DP World will not, nor will any other terminal operator, control, operate or manage any United States port. DP World will only operate and manage specific, individual terminals located within six ports.”
Obviously, this is a false statement as demonstrated by the exclusion of the P&O full operational control terminal operations conducted at the Port of Tampa and Port of Lake Charles as well as the exclusion of an apparent joint venture full operational control terminal operation at Port Newark, which falls into the same category of operation as the Port of Philadelphia terminal operaton included in the DHS fact sheet.
The Port of Lake Charles is not one of the six ports listed , nor is the Port of Tampa. So, a minimum of 6 terminals are missing from the full operational control of a terminal consideration you mentioned. Plus two to three ports are missing from the list under such criteria.
What the DHS fact sheet dated 22 February 2005 really says is that “DP World will operate at the following terminals within the six United States’ ports currently operated by the United Kingdom company, P & O:”, followed by the identification of the ports and number of terminals as:
Port of Baltimore – 2 terminals
Port of Philadelphia – 1 terminal
Port of Miami – 1 terminal
Port of New Orleans – 2 terminals
Port of Houston – 4 terminals
Port of Virginia – stevedoring support activities at 5 terminals
The term, “operate at”, is inclusive and would not necessarily be limited to full operational control. So, the fact sheet is off to a rough start with that phrase, considering that P&O Ports North America is conducting operations at 22 U.S. ports and at least 55 terminals located at such ports, not 6 or 7 U.S. ports and 11-16 terminals, as stated by DHS.
The fact sheet gives the appearance of having being pieced together or modified after its original draft. It’s my understanding that this is a modified version of the original information released by DHS. For example, the Port of New York was dropped from the list, as I understand it.
As mentioned previously in this post, the DHS fact sheet includes the documenting of 8 terminals where P&O operations are conducted, but P&O does not supposedly have full operational control over the terminals concerned. So, DHS has opened the door to include all terminals that P&O conducts operations at, not just those P&O has full operational control over.
DHS has excluded the listing of joint full operational control of terminals at other ports. The Port Newark Container Terminal LLC (PNCT) at Port Newark is excluded from the DHS list of ports and terminals. Conversely, the joint operation of the Tioga Marine Terminal by P&O and DRS at the Port of Philadelphia is included. Other examples exist.
Now, if the next justification by others is that DHS only considered container operations, be aware that P&O is conducting container operations at 15 ports, not 6 ports. So, once again the unknown DHS criteria for inclusion is questionable.
Most importantly, DHS does not acknowledge in its fact sheet that the acquisition of P&O and P&O Ports North America by UAE DP World included the acquisition and transfer of operations at 22 Ports and at least 55 terminals on the East Coast and Gulf Coast, of which 49 terminals are concentrating on cargo other than cruise vessels and passengers. No amount of quibbling by DHS and anyone else will dismiss those facts.
The U.S. Department of Homeland Security has issued a false fact sheet on the UAE DP World acquisition of P&O and P&O Ports North America. U.S. Customs and Border Protection (CBP) has made available on line the same false information with its 24 February 2006 update.
Both U.S. Government documents cited should be corrected to reflect the whole truth, or should be removed immediately from both web sites.
The supposed “fact sheets” issued by elements of the U.S. Government that need to corrected or removed immediately are:
Fact Sheet: Securing U.S. Ports
DHS Press Room announcement
Feb. 22, 2006
http://www.dhs.gov/dhspublic/interapp/press_release/press_release_0865.xml
Securing U.S. Ports
U.S. Customs and Border Protection
U.S. Department of Homeland Security
Updated 02/24/2006
http://www.customs.ustreas.gov/xp/cgov/newsroom/fact_sheets/trade/securing_us_ports.xml
Movie Guy, you make a compelling case. We clearly need to be hearing from somebody from DHS at this point.
I wonder why the mainstream media isn’t picking up on this yet.
It does not matter what you or I think, or our outrage.
The only thing that matters when it comes to business relations with Arab money, is the Carlyle group position.
HW Bush is a member as are a number of other notable former government officials, especially members of the former “Republican” sect.
The current radical sect (GW, Cheney, Rummy, Wolfy, etc.) are unofficially, or pre-officially, members of said industrialist group. Ergo the near-sightedness on the obvious potential terrorist link between the UAE port authority and the Arab league of Terrorists.
Before you go charging off to the DHS, you might actually attempt a read of P&O’s web site(s). And then you might try to understand the distinction between operating a cargo terminal and providing stevedoring services. Then you might look up what stevedoring actually is.
It’s amazing the number of ‘questions’ that can be answered when you bother to get a minimal understanding via a basic grounding in the facts… The inconsistencies being pointed to here are more a product of your not understanding what you are reading.
And it’s worth noting that the wire services have managed to get it all wrong… P&O operates cargo terminals at 5 U.S. (East Coast) ports (not 6, the wires were including Vancouver), and stevedoring at 23 port locations along the East and Gulf Coasts.
Well, let’s set the record straight.
The DHS fact sheet fails to identify all five ports on the East Coast where P&O Ports North America operates cargo or RoRo terminals. This consideration does not included the operation of cruise vessel terminals.
P&O Ports North America, according to its web site, provides cargo/RoRo terminal operations at five (5) or more U.S. East Coast ports.
These ports are:
– Port of Portland, Maine
– Port Newark
– Port of Philadelphia
– Port of Baltimore
– Port of Miami
P&O Ports North America also provides 11 or more terminal operations for Gulf Coast ports.
The available P&O web site information regarding operations at 22 ports is summarized under the comment post, P&O North America Operations – Ports and Terminals Locations.
That effort includes identifying all operations, terminals, and services based on available P&O Ports North America information.
Link: https://econbrowser.com/archives/2006/02/tempest_in_a_se.html
DHS only identifies 4 of the 5 ports on the East Coast where P&O operates cargo terminals. No mention of RoRo terminals.
DHS only identifies 1 port on the Gulf Coast where P&O operates cargo terminals. DHS captures only 2 of the cargo terminals that P&O operates on the Gulf Coast. No mention of RoRo terminals.
I have raised the issue of RoRo terminals because that is a key component of the P&O Ports North America operations.
DHS was apparently focusing on container, bulk, breakbulk, and other general cargo operations in its fact sheet. While some of the DHS number of terminals cited include RoRo terminals, there is no acknowledgment that P&O operates any of those terminals.
It’s somewhat unclear as to whether P&O operates many of the RoRo facilities at the various U.S. East Coast and Gulf Coast ports. Considering the RoRo volume at some ports, it appears that P&O is in charge of some RoRo facilities and/or operations. But that point is not made clear in the P&O Ports North America information at its web site.
P&O appears to hold exclusive contracts for certain RoRo operations. The volume is large.
Another possibility is that DHS honestly believes that P&O is only involved in the seven ports mentioned in the press release…
A third, and more likely, explanation is that the administration is simply lying. Again.
If you believe that the facts have not been fully released by the Federal Government, you can get involved.
You can help write emails to Congressmen and Congresswomen. Or call them. Or both.
Senators of the 109th Congress
http://www.senate.gov/general/contact_information/senators_cfm.cfm
House of Representatives
Members names and telephone numbers
http://clerk.house.gov/members/mcapdir.html
House Democrats
http://democrats.house.gov/about/member_pages.cfm
House Republicans
http://www.gop.gov/your_rep.asp
—
Dennis, if DHS was assuming that stevedoring was irrelevant, why did they report it for Norfolk but nowhere else? Would it not have been a more clear, accurate, and informative “fact sheet” had DHS spelled out specifically which activities they were assuming to be more important than others and given an accurate account of the magnitude of them all? Do you not agree that a clarifying statement from DHS would now be in order?
Jim,
DHS provided similar information for P&O operations at the Port of Houston:
“Houston 4 of 12 (P&O work alongside other stevedoring* contractors at the terminals)”
But here’s the best part.
U.S. Customs and Border Protection (CBP) disagrees with its boss, Homeland Security:
“Houston 3 of 12 (P&O work alongside other stevedoring* contractors at the terminals)”
http://www.customs.ustreas.gov/xp/cgov/newsroom/fact_sheets/trade/securing_us_ports.xml
The facts regarding the P&O operations at the Port of Houston are stated here:
http://portal.pohub.com/portal/page?_pageid=169,112148&_dad=pogprtl&_schema=POGPRTL#houston
Included in the P&O info is this:
“P&O Ports provides the following at the City Docks multi-purpose terminal:”
“Stevedoring and terminal services at City Dock 25 through City Dock 28 through a freight handling agreement with the Port of Houston Authority. Commdities handled are: containers, RoRo, automobiles, steel, breakbulk, heavy lift and bulk”
DHS and Customs do not have their facts straight.
Here’s what I posted under the previous thread regarding P&O operations at the Port of Houston:
Port of Houston
P&O Ports Shareholding
– 100%
“P&O Ports Texas is the Port’s assigned freight handler for wharves 25, 26, 27 and 28 at the City Docks Turning Basin Terminal.”
Operations
– Containers
– Break bulk
– Bulk
– Steel
– Automobiles
– RoRo
– Cruise Vessels
Terminals (4)
– Houston City Docks, Turning Basin Terminal, wharves 25, 26, 27, and 28
– Barbours Cut Terminal
– RoRo Terminal
– cruise ship terminal
Services
– stevedoring and terminal services
– On-dock Container Freight Station for stuffing and stripping intermodal equipment as well as a CCC-ILA approved subsidized Container Freight Station
– full service container marshalling and storage facility
– stevedoring, baggage handling, terminal services for cruise vessels at the passenger terminal berth
https://econbrowser.com/archives/2006/02/tempest_in_a_se.html#comments
Now, you can see why Customs dropped the number of terminals from 4 to 3 for the P&O operations at the Port of Houston.
Customs dropped the cruise vessel terminal operation. This would be correct under the methodology that DHS employed for creating its fact sheet.
DHS overlooked the distinction of a cruise terminal operation in its own fact sheet analysis.
There are far too many errors in the DHS fact sheet for DHS to have any professional credibility regarding the number of ports and terminals involved in the UAE DP World acquisition of P&O and P&O Ports North America.
How does DHS overlook the factual scope of the aquisition? Intentionally or accidentially?
Doesn’t DHS have a copy of the CFIUS information that its Cabinet Secretary is a member of and has been discussing in recent weeks?
The acquisition involves operations at 22 ports and 55 terminals at a minimum, of which 49 terminals are cargo movers other than cruise vessel operations.
DHS doesn’t know this? Customs doesn’t know this? The White House staff doesn’t know this?
Perhaps they should call the U.S. Coast Guard and get a head count.
22 ports not 6
Why is this lie so resistant to exposure, despite the fact that AP has finally reported it and that some local newspapers have finally talked about it.?
Has one senator or congressman mentioned it? Nope.
Has the Republican or the Democratic leadership mentioned it? Nope.
Has one major media outlet mentioned it? Nope.
Has Howard Dean used it? Nope.
Did anyone ask the question of scope in any hearing? Nope.
And attempts have been made to tell them all, repubs, dems, and the media. If they claim ignorance, they are just that: ignorant and incompetent.
Even here in economic blogland:
Has DeLong run with it, he who wants impeachment? Nope. Too boring. Even though I called the port deal to his attention well before the firestorm hit. Well before! Granted, at that time I did not know the lie. Now the lie is there.
Has Econobrowser really touched it? Nope.
It is not that just the CFIUS process is wrong, it is that DHS has lied. Why?
At this point, I am not interested in the pros and cons of security. I want to know what interests are being protected with the lie. A lot of very big money is being floated with the Sukuk bondand lots of profit attends it. Furthermore, DHS has the one of the keys to the economic cookie jar. Reminds me of the Mafia: Last thing they want is publicity.
Until economists start to look at how the process works, until everyone starts to look at how the process works, all the grand talk about debts and deficits is just smoke in the wind.
Jim,
You are the only blog that even began to touch it. Yet it has been dropped. The liberals that trot in here find it boring. Not a word. You wanted to hear from DHS. You got the fact sheet. We know the extent of D&Ps operations. The two do not mix.
This one persistent lie tells us something about the whole process. Grab it and pull it up. See where it leads. Who are the players?
If this lie is finally exposed, then a lot of things may crumble.