A political firestorm erupted in 2006 when a ports-management deal between the U.S. and Dubai Ports World nearly placed the oversight of six major U.S. ports in the hands of a business from the Arabian Peninsula. Although the deal had been approved by the Committee on Foreign Investment in the United States--along with the Departments of State, Commerce, and Homeland Security--worries that a Dubai firm running U.S. ports might be more easily infiltrated by al Qaeda terrorists set back the company's global business efforts.

Shortly after initial approval, both Democratic and Republican members of Congress began positing that the deal would have a negative impact on port security. Almost overnight, the sheik's attempts to package his emirate as an enlightened pioneer in an unstable region were eclipsed by a furor in Washington. In February, Dubai Ports World postponed its takeover of significant operations at the seaports, and by mid-March the company had transferred the deal to a U.S. entity, cutting all business ties.

Ignoring the potential merits of the deal, critics led by Sen. Chuck Schumer, D-New York, rapidly demonized the government-operated firm as a security threat. Ironically, Schumer later sought to outsource U.S. cargo screening to the very same company by trying to force all ports participating in the Container Security Initiative to model their cargo-screening systems after Hong Kong's--a move that would have handed much of the country's foreign-cargo screening records to Dubai Ports World.

While the death of the Dubai deal is expected to quell the firestorm in the short run, analysts suggest that the aborted contract could have a far-reaching effect on Arab-American relations.