Wednesday, February 22, 2006

Another Carlyle Link To Port Sale

Yesterday we reported that Treasury Secretary John Snow formerly headed CSX, which sold its international port operations to Dubai Ports for $1.15 billion in 2004 before Snow joined the administration shortly after the Dubai Ports transaction was consummated. As Treasury Secretary, Snow sits on the Committee on Foreign Investment in the U.S., which under federal law, must approve a U.S. sale to a foreign-controlled entity which might affect the national security of the U.S., including the Dubai Port sale.

Truthout unearths the fact that CSX sold off another business to the Carlyle Group less than two years before it sold its international port operations to Dubai Ports. CBS Market Watch carried this item on December 17, 2002:

After the bell Tuesday, transportation giant CSX announced that it would sell a majority stake in its domestic container shipping unit -- CSX Lines -- to the Carlyle Group for approximately $240 million in cash and $60 million in securities. The deal, subject to regulatory approval, is expected to close in the first quarter of 2003. According to Michael Ward, CSX president, "completion of this transaction is consistent with our long-stated strategy of becoming a more rail-based organization, strengthens our balance sheet and provides shareholders with significant value." CSX Lines, which moves goods between the continental United States and Alaska, Hawaii, Guam and Puerto Rico, accounted for about 8 percent of the company's $8 billion in revenues last year.

Just last month, President Bush tapped a high ranking Dubai Ports official, David Sanborn, to run the U.S. Maritime Administration. Sanborn worked for Dubai Ports as head of its European and Latin American operations. What exactly does the U.S Maritime Administration do? This answer is provided on its website:

To strengthen the U.S. maritime transportation system - including infrastructure, industry and labor - to meet the economic and security needs of the Nation. MARAD programs promote the development and maintenance of an adequate, well-balanced United States merchant marine, sufficient to carry the Nation’s domestic waterborne commerce and a substantial portion of its waterborne foreign commerce, and capable of service as a naval and military auxiliary in time of war or national emergency. MARAD also seeks to ensure that the United States maintains adequate shipbuilding and repair services, efficient ports, effective intermodal water and land transportation systems, and reserve shipping capacity for use in time of national emergency.

Doesn't it sound a little bit like putting the fox in charge of guarding the henhouse?

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