[FoRK] Nice piece on the DP World farce

Owen Byrne < owen at permafrost.net > on > Sun Mar 12 06:27:47 PST 2006

Really need to read the blog post with the correct formatting.

If This Isn’t Racism, What is It?

The following paragraphs contrast the excellent Wall Street Journal 
reporting on the recent Dubai Ports World’s aborted effort to acquire 
certain U.S. ports with the also-recent acquisition of a toll road in 
Chicago by the Australian investment bank, Macquarie Bank.

I have not added, changed, or modified a single word.

Dubai Ports World's offer to delay exerting corporate control over 
operations at five U.S. ports did little to calm the political firestorm 
in Congress as several key lawmakers dismissed the step and continued to 
demand that President Bush reopen a federal review of the deal.

—Wall Street Journal, 2/25/06

Last year, the city of Chicago was in a bind. It faced a $220 million 
budget deficit and its credit rating was under review for a possible 
downgrade. Voters feared a jump in property taxes.

Then help came from a surprising place: Australia. Macquarie Bank, 
Australia's biggest homegrown investment bank, organized a deal to take 
over Chicago's historic Skyway toll road under a 99-year lease for $1.8 
billion -- hundreds of millions of dollars more than some Chicago 
officials thought it would fetch.

—Wall Street Journal, 12/6/05

Officials at the government-owned Dubai management company said they 
plan to complete the $6.8 billion purchase next week of London-based 
Peninsular $ Oriental Steam Navigation Co, but to freeze all operations 
as they are at the five U.S. ports where P&O now manages terminals -- 
New York/New Jersey, Baltimore, New Orleans, Miami and Philadelphia.

Australia's emergence as Chicago's white knight illustrates a surprising 
development in the world economy.

On a given day, Macquarie Bank has a dozen bankers roaming the U.S. in 
search of deals.

But Sen. Charles Schumer (D., N.Y.), who has led the charge against the 
transaction, shot back that "the cooling off period isn't going to 
work." He and other Senate critics insisted that Congress needed more 
than just additional briefings by the White House and DP World 
officials, and should begin a full 45-day investigation of the security 
implications of the deal.

In San Diego, one of its funds is building a 12-mile-long toll road. In 
Virginia, a Macquarie fund invested more than $600 million to take 
control of the Dulles Greenway, a 14-mile toll road outside of 
Washington. Macquarie operates the tunnel that connects Detroit to 
Windsor, Ontario, and just bought, with other investors, Icon Parking 
Systems, one of the biggest parking-lot operators in New York City.

In another sign that the uproar hasn't subsided, Sen. Hillary Rodham 
Clinton, (D., N.Y.) plans to introduce legislation barring all 
foreigners from managing U.S. ports, despite the fact that the vast 
majority are now run by foreign companies and that U.S. companies are 
minor players in the industry. "We cannot cede sovereignty over critical 
infrastructure like our ports. This is a job that America has to do," 
Ms. Clinton told a gathering in Miami.

Macquarie funds also hold stakes in the airports of Brussels, Copenhagen 
and Kilimanjaro, Tanzania. Macquarie funds own stakes in a major port in 
China, a Japanese turnpike and one of England's biggest toll roads. This 
year, Macquarie said it was weighing a bid to buy the London Stock 
Exchange, though it is unclear whether that deal will be completed.

Mr. Chertoff [Homeland Security Secretary] denied that DP World was 
being held to different standards than other prospective foreign 
investors, but said that because the company was the first foreign 
terminal operator to be vetted by the secret Committee for Foreign 
Investment in the United States, the safeguards could serve as a 
template for future deals. "I would certainly anticipate that if another 
country had a company taking over a port [terminal] we would do the same 
thing," he said.

Chicago is certainly glad the firm came knocking. Opened amid great 
fanfare in the late 1950s, the Skyway was supposed to be a critical leg 
in a stretch of toll roads extending to New York City. The Skyway turned 
into an epic white elephant. The toll road failed to generate enough 
traffic. In the 1970s, Chicago defaulted on its Skyway debt.

[DP World] said they played by long-established rules that control the 
government's review of foreign investments. "We just complied with what 
was required," said Ted Bilkey, DP World's chief operating officer. Mr. 
Bilkey said the company began working last October to get the 
administration comfortable with the deal, and he personally met with 
senior officials in early December. "We felt we've done everything 
correctly, and all of a sudden there's this furor," he said.

Executives at Macquarie say U.S. drivers can expect to see more of them 
in the future. Says Nicholas Moore, the head of Macquarie's 
investment-banking division: "It's a firm bet that all of the roads that 
are being talked about in America, we'll be looking at."

If the political outcry against unfamiliar and dark-skinned foreigners 
from one side of the world owning ports in the United States, when 
contrasted with the red-carpet treatment given a more familiar brand of 
white-skinned foreigners from another side of the world, isn’t ignorance 
at best and racism at worst—then what is it?

Jeff Matthews
I Am Not Making This Up

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