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Thursday, February 23, 2006

Lessons Of The UAE Port Deal

Lesson One of Portgate: Scream "Islamophobia/xenophobia" often enough, and people will start to back down.

Lesson Two of Portgate: Mislead and mischaracterize your critics often enough, and people will start to back down.

Deputy Chief of Staff Karl Rove tells Fox News Radio that Dubai is a "great military asset" and "vital to our security." Meanwhile, the WSJ reports today:
Dubai is believed to have been one of the most important conduits for Iran's nuclear technology acquisition program, according to U.S. court cases and interviews with experts in the field. The Wisconsin Project on Nuclear Arms Control, a nongovernment advocacy group, last year published a list of 38 weapons-related smuggling cases since 1982 in which the goods moved through Dubai and the other islands that constitute the United Arab Emirates. Most of the illicit goods crossing Dubai go through its ports.

More generally, according to sanctions experts and numerous U.S. court and regulatory cases, Iran uses Dubai to evade U.S. economic sanctions on Iran and other Middle Eastern countries. The UAE doesn't recognize those sanctions.

Iranian front companies in Dubai routinely obtain prohibited U.S. goods, federal court records show. In one undercover investigation by the Immigration and Customs Enforcement agency that resulted in a November 2005 guilty plea in U.S. District Court for the District of Columbia, the representative of an Iranian front company was caught on tape assuring an undercover agent posing as a businessman not to worry about sanctions regulations.

"You are going to export to Dubai, which does not have any regulations. It's a free, uh, country for importing, exporting," said Khalid Mahmood, according to his guilty plea. Asked if the equipment would then be shipped to Iran, Mr. Mahmood replied, "Once it comes here, we'll ship it anywhere in the world, no problem."

Similarly, in 2003, UAE officials refused a U.S. request to intercept a shipment of nuclear technology bound for South Africa by a smuggler named Asher Karni, according to University of Georgia sanctions expert Scott Jones, who works with U.S. agencies on proliferation issues. Mr. Karni was convicted of violating sanctions against weapons of mass destruction last year in U.S. District Court for the District of Columbia. The UAE also was believed to be a nexus for Pakistan's nuclear program and hosted at least two front companies that forwarded material to Islamabad.

The supporters of, and retreaters on, the deal are also silent about the unprecedented, Islamic law-compliant funding scheme that allowed state-owned Dubai Ports World to force its more experienced rival to drop its bid for P&O. (The underwriters of Dubai Ports World's $3.5 billion Islamic financing instrument called a "sukuk" --Barclay's and Dubai Islamic Bank--were both cited as probable conduits for bin Laden money.)