The Panama Canal

Under the Carter-Torrijos Treaty of 1978, Panama is expected to assume control of the Canal on January 1, 2000.1

Beginning in 1996, the United States and Panama conducted two years of talks specifically centered on the establishment of a MCC (Multinational Counter-Narcotics Center). On September 25, 1998, the talks apparently concluded; however, Congressional sentiments indicate that the United States was short-changed. The United States is leaving behind approximately $10 billion dollars in assets and 5,000 buildings for the Panamanians. The equipment and personnel from Howard Air Force Base in Panama were scheduled to be relocated to the MacDrill Air Force Base by May, 1999.2

Unfortunately, the funds for this transfer appear to be insufficient. Further, the State Department is still investigating other locations from which to conduct its operations, presumably in Ecuador or Aruba.3

From 1992 to 1995, the Clinton Administration cut the interdiction budget from $2 billion to $1.2 billion. During the same period, crop subsidiary programs were reduced from $633 million to $289 million. From 1994 to 1995, "ship days" inspections were reduced from 2,268 to 1,545.5

From 1993 to 1997, heroin use has increased 378% and LSD use has increased 48%.6 A total of 14,200 Americans died from overdoses last year alone.7

America is exposed to a second threat, not just from the drug runners. Hutchison-Whampoa currently controls ports at both ends of the Panama Canal. Wang Jun, the head of Poly Technologies, also has a senior position at Hutchison-Whampoa.8

"The People's Republic of China, through the Hong Kong-based Hutchison Whampoa Ltd. company, which has close ties to the PRC government and People's Liberation Army (PLA), was granted a 25-year lease, with an additional 25 year option, for control of the Canals Atlantic and Pacific Ocean ports of Balboa and Cristobal and adjacent facilities. [A Congressional] delegation witnessed Hutchison-Whampoa conducting major construction and port facility expansion at both the Atlantic and Pacific Canal ports.9

"Hutchison-Whampoa will control the stevedoring [loading and unloading of ship cargo] at the ports. The company also has a substantial interest in the railroad line that coordinates transportation of cargo between the ports. In addition, the Chinese company is a major bidder on construction of a new suspension bridge that will link "land canal" highways that will truck oversized cargo containers between the Atlantic and Pacific coasts."10

"In Panama, the delegation met with current and former Panamanian political leaders, Canal workers, journalists, U.S. embassy officials, US military representative and informal American and Panamanian private citizens. In addition, the delegation drove the length of the Canal, observing the ports of Balboa and Cristobal, the Free Trade Zone in Colon and operations of the important canal locks at Miraflores and Gatun. In addition, the delegation visited U.S. military facilities at Fort Clayton [Pacific Coast] and Fort Sherman Jungle Operations Training Center [Atlantic Coast]. By most accounts, an unfair and corrupt contractual bidding process, which was protested by the U.S. ambassador to Panama, enabled the Chinese Hutchison Whampoa Company to outmaneuver American and Japanese companies for the long-term lease on the Canal ports."11

According to Representative Mica, Chairman of the Subcommittee on Criminal Justice, Drug Policy and Human Resources, "The situation in Panama is pure chaos. The situation regarding even the operation of the ports, we were told that corruption has dictated how the awards for control of those ports will be determined, and that the Red Chinese, in fact, will control one of those port activities and gain that through corrupt activities."12

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