The Bush administration, stung by the public outcry over the Dubai port deal, has launched a national security investigation of another Dubai-owned company set to take over plants in Georgia and Connecticut that make precision components used in engines for military aircraft and tanks.
The administration notified congressional committees this week that its secretive Committee on Foreign Investment in the United States (CFIUS) is investigating the security implications of Dubai International Capital's $1.2 billion acquisition of London-based Doncasters Group Ltd., which has subsidiaries in the United States. It is also investigating an Israeli company's plans to buy the Maryland software security firm Sourcefire, which does business with Defense Department agencies.
Administration officials are privately briefing leaders of half a dozen House and Senate committees this week about the two planned transactions, concerned that both deals could stir controversy in a political climate that remains supercharged over the Dubai port deal.
Now here's some of the details regarding this new Dubai deal:
Dubai International Capital's acquisition of Doncasters could present some of the same political problems created by Dubai Ports World's purchase of London-based Peninsular and Oriental Steam Navigation Co. Once again, a state-controlled Dubai company with deep pockets is purchasing a British firm with U.S. holdings. Doncasters has operations in nine U.S. locations and manufactures precision parts for defense contractors such as Boeing, Honeywell, Pratt & Whitney and General Electric.
A spokesman for Doncasters' corporate office in Connecticut said the company had no comment on the security investigation.
In the case of Dubai International Capital and Doncasters, an acquisition that ordinarily may have been whisked through the process without objection is now under security investigation, administration sources said. Dubai International Capital is the financial arm of Dubai Holding, an investment conglomerate that is the third-largest shareholder of DaimlerChrysler Corp. and is a major investor in Holiday Inn Express in the Middle East.
Doncasters' expertise is in forging, fabrication, machining and alloy production. The company owns a plant that makes aerospace turbine blades and components in Farmington, Conn.; a turbine and generator plant in Rincon, Ga.; a steel foundry in Springfield, Mass.; and a metal-rolling plant in Groton, Conn. The company's Web site says the Georgia and Connecticut plants manufacture "engine ready airfoils," for aircraft, helicopter and tank engines.
So it appears that Doncaster builds parts for aircraft, helecopters, and tank engines. And now Dubai International Capital wants to purchase Doncaster, and Dubai International Capital is also a state-run company from the United Arab Emirates. Now is there a security concern for this deal? How about the sending of trade and industrial secrets regarding U.S. military hardware being sent to al Qaida--especially if al Qaida can learn of any weaknesses that the M1 Abrams tank, or Bradley Infantry Fighting Vehicles, that they can then exploit in the Iraq insurgency? That could be a concern.
What I find amazing is that this deal is coming on the heels of Portgate--and very quickly on the heels of Portgate. I'd say that both deals are pretty much connected. The UAE government wanted to invest in both the American ports and this Doncaster company. The lobbyists for both DP World and Dubai International Capital were more than happy to deal with the Bush White House, and President Bush was more than happy to give these deals to his corporate cronies. In fact, I'll bet that the same lobbyists and law firms representing DP World, are also representing Dubai International Group. President Bush thought he could sneak both deals through Congress. But when the DP World's purchase erupted into a major scandal, the Bush White House has been trying to quietly downplay this new Dubai deal. And who knows, perhaps the White House may be able to slip this Dubai International Deal through, after Congress gets tired of fighting over the DP World deal.
More to come on this possible scandal.
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