Feb. 28 (Bloomberg) -- The head of the Senate Homeland Security Committee, citing a U.S. Coast Guard report, said the Bush administration's review of a state-owned Dubai company's planned takeover of facilities at six U.S. seaports was ``truly flawed.''

Senator Susan Collins, a Maine Republican, cited a report that said questions about foreign influence, employees and operations made it impossible to assess the threat posed by the purchase. ``There are many intelligence gaps concerning the potential'' for port facilities ``to support terrorist operations,'' the Coast Guard assessment said.

The report, issued in December, was never given to the administration's review panel, which approved the deal Jan. 23.

``I can only conclude there was a rush to judgment,'' Collins told reporters yesterday after she and other members of the Homeland Security panel were given a classified briefing on the document. ``I am now convinced that a thorough investigation will now occur.''

Joseph Lieberman of Connecticut, the panel's senior Democrat, agreed the review process was flawed. ``There were too many questions we asked that are not yet answered,'' he said.

The disclosure of the Coast Guard document came as the Homeland Security Committee quizzed Bush administration officials on their rationale for approving DP World's takeover of some U.S. terminal operations from London-based Peninsular & Oriental Steam Navigation Co.

`Addressed and Resolved'

Clay Lowery, an assistant secretary at the Treasury Department, told the panel the Coast Guard's concerns ``were addressed and resolved.'' Similar assurances came from Stewart Baker, an assistant secretary at the Homeland Security Department, and Admiral Thomas Gilmour, an assistant commandant with the Coast Guard.

Collins was skeptical. ``This report suggests there were significant and troubling intelligence gaps,'' she told Lowery and Gilmour. ``I don't see how you were able to close those gaps so quickly.''

The Coast Guard, in a statement last night, said the document released was an excerpt out of context that doesn't reflect the Guard's ``full classified analysis,'' which concluded that the acquisition ``in and of itself does not pose a significant threat to U.S. assets in (continental United States) ports.''

45-Day Review

DP World on Feb. 26 bowed to demands from U.S. lawmakers for a 45-day review of its deal to take over some port facilities at Miami, Baltimore, Philadelphia, New Orleans, New York and Newark, New Jersey. The container terminals are among the 29 DP World is acquiring as part of its purchase of P&O.

The acquisition has drawn criticism from U.S. lawmakers who worry that giving control of some port facilities to DP World will threaten national security.

Dubai is one of seven sheikdoms that make up the United Arab Emirates, where two of the hijackers involved in the Sept. 11, 2001, attacks came from. President George W. Bush has defended the sale, saying the UAE has been a vital ally in the war against terrorism.

U.S. senators, returning today from a week-long recess, immediately introduced legislation designed to insure the review goes forward and that they have a role in assessing the results and deciding whether the deal should be approved.

Review and `Separate'

DP World said it will ask the panel of administration officials known as the Committee on Foreign Investment in the United States to re-examine the deal. The sale originally was approved by the committee after a 30-day examination in which representatives of Cabinet agencies and departments, including Homeland Security, concluded the deal satisfied U.S. requirements.

The company also agreed to ``separate'' the U.S. ports from the rest of the purchase, allowing P&O's North America-based executives to run the port operations. The review will begin March 2, the day DP World formally takes control of P&O, the company's chief executive, Mohammed Sharaf, said.

Senator Carl Levin, a Michigan Democrat, challenged these assurances at today's hearing. ``If this closing takes place, Dubai owns these facilities'' and Bush would have to go to court to undo the deal, Levin said.

Senate Majority Leader Bill Frist said Congress should hold off any action to block the deal until the review is completed. Republican leaders in the House are scheduled to meet today when they return from their recess.

`Boost Congress's Role'

House Majority Leader John Boehner believes Congress should have input into approval of foreign acquisitions when national security is at stake, Kevin Madden, a spokesman for the Ohio Republican, said yesterday.

``Mr. Boehner believes that Congress has a role in this issue with regard to procedural review and oversight,'' Madden said. Any investigation by congressional committees into the DP World acquisition should focus on whether legislation is needed to boost Congress's role in the approval process, he said.

Lieberman and Collins said that the process for approving foreign acquisitions should be revamped so that the Homeland Security secretary, the director of national intelligence or the Defense secretary heads the review panel rather than the Treasury secretary. The process also would benefit from more congressional input, Collins said.

Senator Charles Schumer, a New York Democrat, introduced a bipartisan measure yesterday that would require a 45-day review followed by 30 days for Congress to weigh the probe's results and pass on the deal.

No Early Vote

Schumer said the measure wouldn't be brought to a vote pending results of the review. Cosponsors of the legislation include Republicans Norm Coleman of Minnesota, Olympia Snowe of Maine and Tom Coburn of Oklahoma and Democrats Hillary Clinton of New York, Robert Menendez of New Jersey and Jack Reed of Rhode Island.

The Schumer measure also would require Bush to put a hold on the acquisition and for administration officials to brief Congress on the review's findings. Currently, the administration alone determines whether the acquisition goes through.

Schumer said that, for the investigation ``to have real merit,'' the president should ``say he has an open mind.''

Collins, a co-sponsor of the Schumer measure, said she wouldn't press for a vote on it until the 45-day review is completed.

Clinton and Menendez also introduced a separate measure that would bar companies owned or controlled by foreign governments from acquiring U.S. port operations.

To contact the reporter on this story: Jeff Bliss in Washington at jbliss@bloomberg.net;

Last Updated: February 28, 2006 08:23 EST