WASHINGTON - A Senate Republican said Thursday that a Dubai-owned company has decided to transfer its management stake in some U.S. ports to a U.S. based company.
Sen. John Warner, R-Va., read a news release from Dubai Ports World saying the ruler of Dubai had asked them, in the interests of U.S.-Dubai relations to take this action and they will do so as soon as the financial arrangements can be worked out.
"Because of the strong relationship between the United Arab Emirates and the United States and to preserve that relationship, DP World has decided to transfer fully the U.S. operation of P&O Operations North America to a United States entity," DP World's chief operating officer, Edward H. Bilkey, said in the statement that Warner relayed to other senators.
The news comes shortly after Republican congressional leaders told President Bush that both the House and Senate appeared ready to block the controversial deal that would have given DP World operational control of several U.S. ports.
It was not immediately clear whether the announcement would be enough to cool widespread sentiment in Congress to pass legislation blocking the deal, which has become an election-year nightmare for Republicans.
President Bush had vowed to veto any legislation to interfere with the deal.
A day earlier, a Republican-controlled House committee voted 62-2 to block the transfer, which has prompted an unusual, election-year Republican revolt against the administration.
Senate Democrats were demanding a vote on the issue, placing Republicans on the political defensive as they tried to prevent the roll call from occurring.
A company spokesman said DP World officials were not present at the discussions between congressional leaders and the White House.
Senate GOP leaders had been hoping to prevent any votes until the conclusion of a 45-day review of the deal. At the same time, administration officials were using the time to try and ease the concerns of lawmakers.
That strategy collapsed in dramatic fashion on Wednesday, when the House committee overwhelmingly signaled its opposition to the deal.
Five Republican lawmakers attended the meeting with Mr. Bush where the ports deal was discussed. The conversation was described by two participants, both of whom spoke on condition of anonymity, citing the confidential nature of the discussions. The president's response was not described.
Rep. Peter King of New York, one of the Republicans who is at odds with the president, acknowledged the GOP is concerned about losing ground to Democrats on the issue of national security.
"My opposition is based on the fact I think it is damaging to our security," King said. "But there's also the political reality that Republicans don't want to cede the ground of security to the Democratic Party."
Both Democrats and Republicans tell CBS News this issue is all they are hearing about when they go home and talk to constituents or when they get telephone calls on Capitol Hill. And in what is an election year for most of them, they say they'd rather please the voters than the president.
Mr. Bush has defended the deal, on grounds of open, free trade, and, he says, because the United Arab Emirates has been a strong ally in the war on terror.
Earlier Thursday at the White House, spokesman Scott McClellan said President Bush stood by his threat to veto any bill that would block the port operations deal, even if such a measure were attached to a bill he wanted, reports CBS News correspondent Mark Knoller.
But McClellan said the White House is working to address the concerns of those in Congress who object to the deal.
"There are members who have concerns," he said. "We believe it's important to work with Congress to address those concerns, and find a way forward."
Increasingly, the only way forward seemed to be a veto or a decision by the company itself to shed its plans.
"I admire what the House did," Senate Democratic Leader Harry Reid, D-Nev., said on the Senate floor. "They said we know the president feels strongly about this. We know he said he's going to veto this. But we're going to do it because we think we have an obligation to our constituents."
Senate Democrats were trying to attach a measure blocking DP World's entry into the U.S. maritime industry to legislation designed to overhaul lobbying rules.
Deep public opposition to the ports deal has made the issue a dangerous one for congressional Republicans. Despite their own concerns, Senate GOP leaders have been trying to help the administration ease congressional worries about the proposal and are hoping to avoid an early showdown vote on the issue in their chamber.
"This issue should not be tangled up on the debate over whether or not to strengthen our lobbying disclosure laws," said Sen. Susan Collins, R-Maine, who has been a leader on both issues.
Sen. Charles Schumer, D-N.Y., offered the ports amendment on Wednesday, saying the Senate must act because of public opposition to the ports deal.
"We believe an overwhelming majority will vote to end the deal," he said.
Senate Republican leaders were trying to block a vote on the ports deal through a procedural vote that could occur as early as Thursday. That tactic was likely to fail, which could prompt Republicans to temporarily pull the lobbying reform bill from the floor to avoid an immediate defeat on the ports measure.
