Port Security Debate Heats Up
WOLF BLITZER, CNN ANCHOR: Thanks very much, Lou and to our viewers, you are now in THE SITUATION ROOM here new pictures and information are arriving all of the time. Standing by, CNN reporters across the United States and around the world to bring you the day's top stories. Happening now, holy shrines in ruins in Iraq. Tensions between Sunnis and Shiites exploding. It's 3:00 a.m. Thursday in Baghdad after a day of attacks, counterattacks and a lot of bloodshed. Is the country nearing the brink of civil war right now? Port security and political blunders. It's 7:00 p.m. here in Washington where the president is trying to contain a Republican revolt. This hour, mistakes made in that controversial port deal and the inside story on how it was approved. And lessons from the Katrina disaster. The White House about to release an anxiously-awaited report. It's 6:00 p.m. in New Orleans where residents are counting down to the next hurricane season. Is the city and the nation ready? I'm Wolf Blitzer, you're in THE SITUATION ROOM. Iraqi leaders tonight trying to talk their fellow countrymen away from the brink of civil war. Dozens of mosques have been burned today and religious violence is threatening to throw the fledgling democracy into chaos. We're covering all sides of that story. We will are going to get to it shortly. First, though, a CNN security watch. The White House admitting it could have handled the situation better, but that's doing little to calm the political battle over the deal that would put an Arab company in charge of six U.S. ports. Our White House correspondent Dana Bash standing by live with details. Dana?</s>DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, it's an internal Republican struggle that even some of the White House's closest allies fear could cost the president some of his precious political capital. And one today the White House conceded could have been avoided but wasn't because of some blunders.</s>BASH (voice-over): Top Bush officials now admit the Republican revolt over allowing an Arab company to manage U.S. ports could have been avoided or at least tempered with a little common courtesy and communication.</s>JOHN SNOW, TREASURY SECRETARY: Our failing here, if there was a failing was in explaining this process and having this process understood by -- by our critics.</s>SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: In hindsight, when you look at this and the coverage it's received and the false impression that's left with some, we probably should have briefed members of Congress about it sooner.</s>BASH: It is only now that top Bush officials are actively briefing lawmakers and blanketing the airways.</s>UNIDENTIFIED MALE: This company is a reputable company.</s>BASH: Making the case for why they think turning over port operations to a company owned by the UAE will not jeopardize American security. Across the board, Republicans say they were in the dark and under political pressure and had no choice but to take their concern public.</s>UNIDENTIFIED MALE: When you get to the issue of security you are going to watch individuals, in this case the Senate and the House, focus what they believe is best for their constituents in terms of safety and if they don't understand the decision they are going challenge it.</s>BASH: But the problem began inside the White House, as CNN first reported Monday, the president did not even know about the deal until lawmakers started questioning it. CNN is also now told, none of the top White House staff who may have foreseen and tried to quiet a political firestorm knew the deal was approved until after it was announced. Bush aides insist the process was their enemy. Deliberations are secret until over and focused on national security. One top official admits the panel had a collective tin ear.</s>UNIDENTIFIED MALE: I think we could have been more politically attuned, particularly with regard to briefing the Congress.</s>BASH (on camera): But it is important to know, Wolf, that there were some Republicans like Congressman Peter King of New York who was briefed and still did not think that this deal should have gone through the way it did. There should have been more time to review it and analyze it, but I can tell you that in talking to several Republicans, many Republicans, they do believe that had there been better communication, if the White House greased the skids better, if you will, this kind of firestorm wouldn't have happened.</s>BLITZER: Dana Bash, thanks very much. The White House reaffirmed today that the president did not know about the port deal until after it had been approved. Dana just reported that. Exactly who signed off on the sale, though? Our senior national correspondent, John Roberts is here in THE SITUATION ROOM. You've been looking into this part of the story, John. What are you picking up?</s>JOHN ROBERTS, CNN SENIOR NATIONAL CORRESPONDENT: Typically, Wolf, transactions like this are handled by a committee made up of people from 12 different arms of the administration. In this particular case there were actually 14 different arms that were brought in. Today I talked with on of two of the leaders of this whole process. His name is Clay Lowery, he is the assistant treasury secretary for international affairs and he's obviously stunned by this growing perception that this was a decision made by a bunch of dunderheads and he defended himself and all of his colleagues by saying that many of the people who made this decision are people who think about nothing else on a day to day base other than national security. Here's what he had to say.</s>CLAY LOWERY, TREASURY DEPARTMENT ASSISTANT SECRETARY: Why is it that they would change what they do every single day because of one single transaction? They didn't do that. They worked hard and they looked at that time very carefully and, you know, as, I guess, one of the dunderheads. I support the type of hard work that people tried to do in this case.</s>ROBERTS: Lowery insisted this was a decision made purely on the basis of national security not whether or not it was a popular decision. And it would seem, Wolf, after talking with him today, this idea that many foreign countries are involved in port operations here in the United States. Denmark, Taiwan, Singapore. It would seem that the idea of farming this out to another country, another company in another country whether it be in the United Arab Emirates or somewhere else just didn't seem to be some kind of a big deal as long as the national security implications were addressed.</s>BLITZER: There are also important financial implications for the U.S. as well.</s>ROBERTS: Absolutely. They're looking for cooperation on the war on terror from the United Arab Emirates. They want foreign investment in the United States and they're worried that it would have a chilling effect on at least two different issues if indeed this deal were not to go through.</s>BLITZER: John Roberts reporting for us. John, thanks very much. Despite the uproar, the U.S. officials in charge of inspecting cargo say it doesn't make any difference who runs those facilities. Security, they insist, will remain the same. Our national security correspondent, David Ensor takes us behind the scenes in this exclusive report.</s>DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT (voice-over): At their state of the art national targeting center in Northern Virginia, customs and border protection officials screen the manifests of every single ship head for American ports. Looking for clues on which cargo to search for terrorist materials, drugs or other contraband. Customs then opens up just over five percent. Assistant commissioner Jay Ahern says the purchase by an Arab- owned company of terminals at some U.S. ports will make no difference to the nation's security.</s>JAY AHERN, CUSTOMS AND BORDER PROTECTION: There's no foreign entity that owns a United States port. There's no foreign entity known for security in the United States ports. That still falls to the port authority that again, usually state, county and local governments.</s>ENSOR: Using sophisticated computer algorithms, officials here factor in over a hundred variables. Things like ports with historically poor security or corruption. Or possible deception. Bananas coming from Iceland, for example, would be sure to set off alarm bells.</s>AHERN: Certainly if someone wants to lie and misrepresent, they can take their chances to try to do that, but I'm very confident we have a lot of systems of checks and balances in place to go ahead and cross reference that data.</s>ENSOR (on camera): One factor that is not considered and officials say it does not need to be when deciding on the risk and which cargoes to open is whether that cargo will arrive at a terminal at a U.S. port that is managed by a foreign company. (voice-over): Instead customs officials focused on the place cargo was packed and the port of origin. They have arrangements with 43 foreign ports where they can inspect cargo headed to the U.S. before it even leaves. One of the ports where cooperation is excellent, say U.S. officials is Dubai in the United Arab Emirates. David Ensor. CNN, Washington.</s>BLITZER: And we are going to have much more on the ports controversy coming up this hour. Remember, though, stay tuned to CNN day and night for the most reliable news about your security. Zain Verjee is joining us now once again from the CNN Center with a closer look at some other stories making news. Hi, Zain.</s>ZAIN VERJEE, CNN ANCHOR: Hi, Wolf, New York's Mayor Michael Bloomberg says a newly-identified anthrax case appears isolated and accidental. The 44-year-old New York drummer has been hospitalized with anthrax symptoms in Pennsylvania after getting sick last week. Health officials say he became ill after handling animal hides he bought in Africa. Three other people may have also been exposed to anthrax spores are being treated with antibiotics. The South Dakota Senate approved a bill that would ban nearly all abortions in the state. Supporters hope that the measure would trigger a legal battle that goes all of the way to the U.S. Supreme Court and might ultimately overturn Roe versus Wade's decision legalizing abortion. But the South Dakota abortion ban isn't allowed yet. The state house which passed a similar measure must now decide whether to accept the Senate version. And would you retire right away if you won the nation's largest ever lottery jackpot of $365 million? Well, that's what at least three of the eight Powerball winners are doing. The seven men and one woman came forward today. They all worked at a meat processing plant in Lincoln, Nebraska and they'll each get $15 1/2 million after taxes are taken out. Wolf, would still anchor the SITUATION ROOM if he won, right, Wolf? I am wondering what Jack would do?</s>BLITZER: Jack. I don't know what Jack would do. But I know you would still be here in</s>THE SITUATION ROOM. VERJEE: No, I wouldn't.</s>BLITZER: Jack, what about it?</s>JACK CAFFERTY, CNN ANCHOR: I don't know, but I watched a little of the news conference this morning and one of those guys should have been a stand-up comic. He said he was a maintenance mechanic at that meat processing plant. He was one funny dude and had the press corps in stitches for the 10 minutes or so that I watched. Funny guy.</s>BLITZER: All right, Jack, let's move on.</s>CAFFERTY: Arab phobia. That's what some people are calling the backlash to this deal that would hand control of six major U.S. ports to a company from the United Arab Emirates. Some Arabs in this country and overseas are saying that it's bias and bigotry not security concerns at the root of the outrage. This is what Maureen Dowd said in the column in "The New York Times." We quote here. "The American people could be forgive if they're confused what it means in the Arab world to be a U.S. ally. Is it a nation that helps us sometimes, but also addicts us to oil and then jacks up the price, refuses to recognize Israel, denies women basic rights, tolerates radical anti-American clerics, looks the other way when its citizens burns down embassies and consulates over cartoons and often turns a blind eye when it comes to hunting down terrorist in its midst?" Unquote. Maureen Dowd. How's this for an idea? How about the Arab community address removing the radical Islamic jihadists from its midst? That would render this entire discussion moot, now wouldn't it? Here's the question, is it fair to characterize criticism of the port deal as anti Arab? e-mail us your thoughts. Caffertyfile@CNN.com or go to CNN.com/caffertyfile.</s>BLITZER: Jack, thanks very much. Jack Cafferty with the "Cafferty File." Coming up here in THE SITUATION ROOM. The protest, outrage and now a lot of bloodshed again in Iraq. Lives are lost, democracy right now at risk. We are going to have a report on the violence and we'll consider what if anything, the Bush administration can do about it. Also ahead, more on port security. It's under scrutiny right now. One Republican congressman says no to the deal and he's live in THE SITUATION ROOM to explain why. It could be just about 100 days before another disaster. With the next hurricane season on the horizon, will America be ready this time? You're in THE SITUATION ROOM.