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How a Deal Became a Big Liability for G.O.P.
New York Times
By SHERYL GAY STOLBERG
February 27, 2006

WASHINGTON, Feb. 26 — Representative Peter T. King of New York was in a room packed with reporters last week, complaining that the White House had jeopardized national security by contracting with an Arab-owned company to manage terminals in six American ports, when he felt his cellphone vibrate. It was Representative J. Dennis Hastert, the speaker of the House.

Mr. King, like Mr. Hastert a Republican, finished talking and hurriedly returned the call, expecting the speaker, who has never broken with President Bush on a major issue, to chastise him. "And before I said anything," Mr. King recalled, "he said, 'You don't have to tell me what a bad deal it is: you and I are on the same page.' "

That moment, on Tuesday in New York, was a critical tipping point in the political furor engulfing Mr. Bush over the deal by Dubai Ports World, a company run by the government of the United Arab Emirates, to manage American ports including some in New York and New Jersey.

Though the tensions were somewhat defused Sunday when the company agreed to a 45-day national security review, the problem continues to exact a steep political price from Mr. Bush, exposing divisions between the White House and Congressional Republicans in a critical election year and further weakening a president already reeling from a series of setbacks, from Hurricane Katrina to the war in Iraq.

"We've defended them on wiretaps, we've defended them on Iraq, we've defended them on so many things he's tried to accomplish, that to be left out here supporting this thing in a vacuum is kind of offensive," Representative Mark Foley, Republican of Florida, said Sunday in an interview after the company's agreement to the review was announced. He added, "If it's just about saving face and letting us humor ourselves, we won't be satisfied."

Sunday's agreement is likely to forestall, at least for the time being, a confrontation between Congress and the president over legislation, which Mr. Bush threatened to veto, blocking the Dubai contract. But with Republicans worried about their own re-election prospects, relations are clearly strained.

"With the Republicans in Congress, there's a certain breach right now that has to be repaired," Mr. King said in an interview Sunday, adding, "I think it was handled very badly."

The story of how President Bush, who has staked his political fortunes on his reputation for protecting the nation, was blindsided by the port security issue did not begin in Washington. When the news first broke, two weeks ago, the attention of the national news media was largely consumed with other matters, including Vice President Dick Cheney's accidental shooting of a fellow hunter.

But pressures from far beyond the capital forced the spotlight onto the Dubai deal. Fueled by a backlash on conservative talk radio and taunting by liberal blogs and comedy shows, the national outcry seemed almost organic, a bipartisan chorus that grew ever louder over the span of a week, reaching a cacophony that President Bush and members of Congress, besieged by calls from constituents, could not ignore.

"People were crazy about this," said the conservative talk show host Michael Savage, who railed against the Dubai contract on his radio program, broadcast on 370 stations with an estimated 8 million to 10 million listeners. "Even the Bush supporters went nuts."

The uprising is, in one sense, a clash over economics and national security that played on Americans' fears of another terrorist attack. Many shared the sentiments of Cira Alvarez, a 74-year-old Republican in Miami, who said of Mr. Bush, "I have supported him just about everywhere else, but this is just horrible."

But the story has a political element, too, featuring administration missteps, including a bungled Sunday morning television appearance by the homeland security secretary, Michael Chertoff, political calculations by Democrats and a growing restiveness among Republicans, including the Senate majority leader, Bill Frist, who were irked at having been kept in the dark. Some of the Republicans apparently decided that standing alongside an embattled president yet again this year would do them more harm than good.

In one of the tale's more curious twists, Mr. Frist, who is likely to seek the Republican nomination for the presidency in 2008, was in California on a fact-finding mission on port security last Tuesday, as the story reached its crest. After threatening to support legislation that would block the deal, Mr. Frist was photographed in a helicopter flying over the Port of Long Beach: a picture that made the front pages of the next day's papers, speaking volumes about the brewing political storm.

On Sunday, Senator Frist claimed credit for brokering the face-saving arrangement. Now, with lawmakers heading back to Washington after a weeklong recess, the handling of the deal will be picked apart on Capitol Hill. Members of both chambers will receive classified briefings on the port deal. The Senate has three committee hearings scheduled; in the House, the Homeland Security Committee, led by Mr. King, will hold one.

He remains mystified by the president's veto threat. "I don't see why the president wants to fall on his sword for the United Arab Emirates," Mr. King said. "Not in the post-9/11 world."

Unlike some news stories, which break with a bang, the story of the $6.8 billion sale of Peninsular & Oriental Steam Navigation, the British company that had been managing the ports, to Dubai Ports World, emerged in a trickle. It first began to attract notice on Feb. 13, when the news was dominated by the emerging details about the Cheney hunting accident and the storm that had buried New York City under two feet of snow.

Senator Charles E. Schumer, Democrat of New York and a longtime critic of the Bush administration on port security, was clued in early; a source in the shipping business tipped him off, he said. Also on Monday, right after the big snowstorm, Mr. Schumer held the first of a series of news conferences. But hardly any reporters showed up.

That same day, Mr. Savage, the talk radio host, spotted a report about the deal on his own Web site. He invited Mr. Foley and another Republican, Representative Vito J. Fossella of New York, as guests.

By midweek, Mr. Foley said, his phones were ringing off the hook with constituent complaints. And he was not the only one. Mr. Hastert, who represents a rural district in Illinois, was flooded with calls as well. On Capitol Hill, Mr. Schumer was continuing to hammer away, and had drawn support from an unlikely ally, Senator Tom Coburn, Republican of Oklahoma.

"This brings up the emotion of us being attacked," said Mr. Coburn, adding that his constituents were deeply concerned. Mr. Bush, he said, "did not handle this right," adding, "part of his leadership job is to assure the country that he's going to do everything to put their best interests ahead of any financial dealings or international trade."

To be certain, not all Americans are so critical. Over the past week, the public has learned that foreign companies have managed American ports for decades. Tim Filla, a 30-year-old ranch hand in Jackson, Wyo., said: "I think it's just election-year sensationalism. I don't think it's a big deal at all."

Yet lawmakers of both parties say that the White House was late in explaining the deal, and that Secretary Chertoff made things worse last Sunday in defending it on television. On the ABC News program "This Week," Mr. Chertoff said the deal had been vetted through "a rigorous process," but Mr. King, who by that time had been reviewing the decision with administration officials, publicly contradicted the secretary.

The pressure continued to build the following day. The Republican governors of New York and Maryland joined the growing chorus of critics, and senior Republican aides on Capitol Hill said they gave the White House pointed warnings that members were unhappy. Former President Jimmy Carter weighed in to support the deal, but the endorsement only inflamed Republicans.

The next day, Tuesday, Mr. Schumer, joined by Mr. King, held another news conference, the one where Mr. King received the call from Mr. Hastert. By day's end, Mr. King said he had gotten a call from a White House official he would not name. The congressman assumed he would hear that Mr. Bush had backed down, and the Dubai deal was off. Instead, he learned that Mr. Bush had just spoken to reporters on Air Force One and issued a veto threat.

"When I heard that," Mr. King said, "I realized this was just the beginning."

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