Dubai Firm Accused of Breaking Pledge to Divest Itself of U.S. Port Operations

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Dubai Firm Accused of Breaking Pledge to Divest Itself of U.S. Port Operations

Published on Wednesday, March 15, 2006 by the South Florida Sun-Sentinel

Dubai Firm Accused of Breaking Pledge to Divest Itself of U.S. Port Operations

by Doreen Hemlock

The weeks-long saga of Dubai Ports World's purchase of operations in Miami and five other U.S. seaports took another turn Monday, when the company's Fort Lauderdale nemesis publicized a private e-mail and charged the note shows the Arab company has no intention of selling its U.S. assets.

Eller & Co., now a partner with DP World in a Miami operation after DP bought out a British firm last week, shared an e-mail that said the Arab company's sale of U.S. assets "would probably take a while."

The e-mail from Robert Scavone, a vice president for the port company now owned by DP World, also told managers in Miami to assume for now "ownership … is not going to change."

Eller's lawyer Michael N. Kreitzer said Monday the e-mail proves the Arab company has no plans to meet Thursday's pledge to transfer U.S. assets to a U.S. entity. The move aims to quell political furor -- much of it stirred up by Eller on Capitol Hill.

"We're making this public because we think Congress should do what it planned last week -- to pass a bill to specifically disavow the Dubai company from owning a U.S. port operation," Kreitzer said by phone.

But Scavone told The Associated Press that the e-mail instead was intended to reassure officials at the Miami unit that uncertainty surrounding ownership would not affect their work and operations.

Eller has been fighting for years against the British company that was its partner in the Miami ports venture and now has a lawsuit against DP World seeking $100 million in damages. It alleges both companies violated contract terms by buying and selling stakes without its consent. It also claims Dubai's ownership will hurt its operations.

The company has been pressing its case with fervor to Sen. Charles Schumer, D-N.Y. Schumer claimed the purchase of port operations by a United Arab Emirates government-owned company would compromise U.S. security.

"It is the American people's understanding that Dubai Ports World promised to relinquish control of all U.S. ports," Schumer told the AP on Monday. "If that is not the case, we will move our legislation immediately and force them to do just that."

His comments came a day after Senate Majority Leader Bill Frist, R-Tenn., said a Dubai purchase could still go through. If a U.S. buyer is not found, and a 45-day review finds no security risks, "I don't see how the deal would have to be canceled," Frist said on ABC's This Week.

Information from The Associated Press was used in this report.

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