The political firestorm continues in Washington over handing over management of six U.S. ports to a Dubai-owned company. Dubai Ports World offered to delay the $6.8 million deal after major clashes between the White House and both Democratic and Republican Congressmembers over national security concerns. We speak with Pratap Chatterjee of CorpWatch. [includes rush transcript]

We turn now to the political firestorm that has both Democrats and Republicans in a fierce clash with the White House. At the center is a deal between 2 foreign companies–British firm P&O and Dubai Ports World of the United Arab Emirates. The agreement is to turn over some terminal operations of 6 major U.S. seaports to Dubai Ports World, including New York, New Jersey, Philadelphia, Baltimore, Miami and New Orleans. But late Thursday night, Dubai Ports World offered to delay the $6.8 million deal after the White House reportedly signalled it would welcome such a move.

The announcement follows days of fierce opposition to the deal. Both Democratic and Republican lawmakers say it will make the U.S. more vulnerable to terrorism. They point out the UAE was the home of two of the hijackers involved in the September 11 attacks and that it was one of only three countries to ever recognize the Taliban as Afghanistan’s legitimate rulers.

The White House defended the deal by saying the UAE is a crucial ally in the war on terror and has worked to close loopholes used by Sept. 11 conspirators. Opponents were also accused of using a double standard with the company because it is Arab-owned. A Bush aide warned that if the Dubai company is treated differently than a British one, “the signal in the Mideast would be disastrous.”

Earlier in the week, Republican Senate Majority Leader Bill Frist called for the Bush administration to delay finalizing the deal, saying a more extensive review was necessary. Frist and other members of Congress threatened to enact legislation to block the deal. In response, Bush said he would veto any such legislation and defended his position at a press conference on Tuesday.

On Thursday, White House officials said Bush would accept a slight delay in implementing the deal even though he stood firm in his threat to veto blocking legislation. The White House was granted breathing room last night when the Dubai company made the offer to postpone its plans. It came after Congress members and administration officials clashed in a public hearing called by Republican Senator Jon Warner. In a statement Thursday night the company called the delay “unreasonable” and “impractical” and said it would engage in further consultations with the Bush adminstration. Congress is expected to introduce legislation next week requiring further examination into the deal’s national security implications.

• Prathap Chatterjee, managing director of Corpwatch. He is the author of a new piece on the Dubai ports titled “Ports of Profit: Dubai Does Brisk War Business” exploring how the U.S. depends on UAE in it war efforts in Iraq and Afghanistan.

In the article Chatterjee writes:

Every morning, from dawn till about noon, cargo and passenger flights to Iraq and Afghanistan make Dubai airport’s Terminal Two possibly the busiest commercial terminal in the world for the “global war of terrorism.” Conveniently located between the two countries, Dubai is the ideal hub for military contractors and a lucrative link in the commercial supply chain of goods and people between Afghanistan or Iraq and the rest of the world…

Dubai’s choice as the central hub for war traffic is not accidental. A sleepy Middle Eastern port for centuries, famed for its pearl trade and central location on the spice trade from India to the rest of the world, it became suddenly wealthy with the oil boom of the 1970s like the neighboring nations of Kuwait and Saudi Arabia. But the emirate wisely decided to invest its money in developing other businesses, such as tourism (which accounts for about a sixth of the national income) and the import-export business (which accounts for two-thirds)…

This profitable re-export business has recently come under scrutiny for overcharging. Under the sub-contract to KBR, Eagle Global Logistics (EGL), a company based in Houston, Texas, has been in charge of shipping military equipment ranging from “armor-plated vehicles to trash bins” from Houston to Dubai en route to Iraq for the last two years.”