We Must Keep Watch! Trouble brewing in Panama

With eyes of the world focused on the Middle East and Korean peninsula, the United States must not ignore signs of trouble emanating from its strategically important and friendly neighbor in Central America: Panama. This country houses the famous Panama Canal that, for nearly a century, has served as a prime U.S. economic and national security interest.

The 50-mile American-made waterway is a spectacular engineering feat. It separates North and South America and provides merchant ships and military vessels an 8,000-mile shortcut to U.S. ports on the Atlantic and Pacific coasts. In today's dollars, it cost about $7 billion to construct. The United States uses the Canal more than all the other nations in the world combined.

Under the terms of two CARTER/TORRIJOS treaties, the United States relinquished ownership and control of the Canal Zone in December 1999. The properties included the waterway, land, 14 military bases and 5, 000 office and residential buildings. It was done as former President JIMMY CARTER put it, "to eliminate the vestige of colonialism." When the United States then withdrew its military forces from Panama, it didn't take long for Chinese companies to fill the vacuum.

With a little help from some Panamanian friends, a Hong Kong-based international shipping firm, Hutchison-Whampoa, with reported ties to China's communist government, quickly acquired 50-year leases on two prized shipping ports vacated by the United States. The ports at Balboa and Cristobal are located at the Canal’s main entrances.

China's interest in Panama is not limited to shipping ports. Panama's Maritime Handbook for 2002/3 lists China as the third greatest user of the Canal and another Chinese shipping firm, COSCO, as the largest single client on Panama's ship registry. The Washington Times reported, "In recent years, Chinese companies have invested $200 million in Panama, with millions more pledged."

Over the years, watchdog groups like the Center for Security Policy, National Security Center, Eagle Form and Freedom Alliance (which I work for) have warned about Chinese mischief around the globe. In addition, former U.S. Senator Fred Thompson, past Chairman and Ranking Member of the Government Affairs Committee and former Select Committee on Intelligence member wrote, "China has sold nuclear components to Pakistan, missile parts to Libya, cruise missiles to Iran, and shared a wide variety of sensitive technologies with North Korea."

Panamanian educator and journalist, Dr. Tomas Cabal, in testimony before the U.S. Congress said, "COSCO is the merchant marine for the Chinese military and has shipped weapons of mass destruction technology and delivery systems to other countries." Little wonder why many worry about the contents of cargo on Chinese ships transiting the Canal and being unloaded by the Chinese gatekeepers.

If this isn't chilling enough, the U.S. withdrawal also created opportunities for other opportunists in the region. A Columbian-based foreign terrorist organization, FARC, hides in Panama’s southern jungles because Panamanian security guards are unable to patrol the porous border with Columbia. In addition, South American drug cartels are flourishing in Panama. U.S. intelligence reports Panama still serves as a major cocaine transshipment point and a major drug money-laundering center.

There are other worrisome and potentially explosive conditions in Panama. For instance, 37 percent of the 2.9 million Panamanians live in poverty, as much as 30 percent of the Panamanian workforce may be unemployed, and tens of thousands of Panamanians live in squalor in the slums of the Chorillo and San Filepe districts of Panama City in the shadow of thousands of empty housing units formerly owned by the U.S. military.

Since the growing presence of Chinese enterprises and influence in the Western Hemisphere received so much criticism, I solicited the views of U.S. diplomats and other experts on this subject. When asked if Chinese firms pose a security risk to the Canal, Deputy Assistant Secretary of State for Western Hemisphere Affairs, John Keane said "there is no evidence whatsoever of any objective other than money … if necessary, the Neutrality Treaty gives the United States the right to defend the Canal." His boss, Assistant Secretary Otto Reich along with Charge d'affaires at U.S. Embassy Panama, Chris McMullen echoed his comments.

Deputy Canal Administrator, Ricaurte Vasquez, whose autonomous organization is responsible for managing, maintaining and safeguarding the Canal said, "I can't see it. Why should their presence in Panama be riskier than COSCO's presence on American soil?"

Hutchison's Hong Kong-based Managing Director, John Meredith said, "… amusement is my reaction to the criticism we've received … Hutchison has 80,000 employees in 35 countries and we've been in business for more than 150 years … we're putting another $200 million in developing the Panama Port infrastructure further … not one of the 1,400 workers at the two Panamanian ports are ethnic Chinese …U.S. warships berth at these ports … the U.S. should be pretty happy we are there – about a month ago we had a big drug bust and the DEA is very enthusiastic with our work ….”

These responses notwithstanding, the Panama Canal is vitally important to U.S. economic and national security interests. Americans should not lose sight of these interests and happenings in Panama and our hemisphere. Our adversaries have shown the proclivity to exploit any situation that helps their cause, and we should not be caught with our guard down.

Diplomatic relations between Panama and the United States are excellent and there is a strong bond between our citizens. President Bush could enhance these relationships, and mitigate any potential problems, by sending a high-level delegation for a visit. It's long overdue.

—Fred Gedrich is a Freedom Alliance senior policy analyst and recently visited Panama on a fact-finding mission.

CUT
Cosco is a Communist-owned, Communist Chinese-owned company. Its purpose is ship containers in and out of major ports all over the world. Recently, California has been devastated by the President's defense cuts. We have lost over 1 million jobs. The additional BRACC cuts in base closings and realignments have cost thousands to millions of jobs in the State of California. The people of Long Beach have lost thousands of those jobs, as we did at Kelly Air Force Base, as we did at El Toro and Miramar, and the shifting of different assets.

In that process, the people of Long Beach are looking for help. They have mouths to feed just like anyone else. They have children to send to college. They have been devastated from these cuts in national security in base realignment and closures.

What I plan to show tonight is a direct link between the White House fundraising with China and assets that have gone in favor of Communist China that could pose as a national security threat to the United States. I have intelligence reports that state so. I have facts that also state so, and I would like to make that case this evening.

First, Mr. Speaker, let us look at Long Beach perspective. Again, people have been devastated. They are without jobs, and they need help.

Mr. Speaker, I would say that all of my colleagues on both sides of the aisle that are opposed to a Chinese Communist company taking over Long Beach Naval Air Station would be more than willing to do everything we can to help Long Beach recover those jobs, but not to a Communist-controlled nation of the Chinese Republic.

Cosco's ships fly flags of the People's Republic of China. The port lease with Cosco will provide Cosco with its own terminal. Major imports from China to Long Beach include toys, sporting goods, footwear, apparel, electrical parts, and machinery.

But Mr. Speaker, that is not all. Last year, it was Cosco that delivered to the State of California 2,000 AK-47's. The company that builds the AK-47's, the company that negotiates the trade of AK-47's around the world, the company Cosco, all set up by the PRC, the People's Republic of China, owns. They do not report to department heads. Their CEO is Communist China, all owned and coordinated and controlled by Communist China. Yet, they delivered over 2,000 AK-47's into our country, with the intent of selling these arms to our inner cities to disrupt, to disrupt our inner cities, and disrupt our political environment within the United States of America.

At the same time, the Clinton White House accepted both Cosco and the gunrunners themselves in a White House coffee. I will later show the direct tie between the $366,000 that was conducted to the DNC by the White House recipients and Chinese investors to allow Cosco to gain this favored status.

Long Beach Naval Shipyard closed as a result, as I said, of the additional base closures and lots of jobs were lost. We have a long way to protect those. I would also like to point out that during the bid to reclaim Long Beach Naval Shipyard, the marines lost a bid for the site to a China Cosco firm, and I quote from the Washington Times:

Several officers in the Marine Corps have raised questions about why the Clinton administration favored turning over a military base in Long Beach, CA to the Chinese ocean shipping company, Cosco, over the protest of marine reserve battalion made homeless by the 1994 Northridge earthquake. Briefings on the firm fail to convince many of its members. The CIA, the Office of Naval Intelligence, and the Coast Guard reinforced the view that Cosco's strong link with the Chinese Government is a fatal flaw in its proposal to deliver the base to a company.

Mr. Speaker, there is a current report, an updated report from the FBI, that states that Cosco is currently actively involved in placing intelligence officers, spies, in all of their ports of call. That is a national security interest.

Cosco has enjoyed a 15-year access to Long Beach Naval Shipyard. I have no problems with that. My problem comes with Cosco taking over complete control of the 145 acres in which they will control access of

every ship there. Every cargo container that comes off there, they will place it. They will have control of who sees where that cargo goes, where it is stored, what time of night it goes out, and who receives it.

Mr. Speaker, if we give China that opportunity, we are going to see an increase of illegal aliens in which two Cosco ships forced, in the last Congress, two ships owned by Cosco shipped in illegal aliens, the Chinese, it was in the newspapers, along with the AK-47's. At the same time, you remember it was a Cosco ship that plowed into the port recently and nearly devastated the port in another U.S. facility.

We cannot discuss the actual details of that intelligence briefing as it would not be prudent and it was a classified briefing. But I want to mention that two of the representatives that represent, and I understand their needs, they represent the people that are looking for jobs, one of those individuals stated that, and I quote, `All intelligence agencies that briefed us have assured us that Cosco represents no threat to our national security.'

I want to tell you, Mr. Speaker, it is an untruth, the fact that the same intelligence briefers, the CIA, the National Security, the Coast Guard, have all stated that no such comment was ever made and ever intended. And as a matter of fact, they were very, very upset at the dear colleague press release.

Why? Because they stated that this is a policy issue for them to discuss, and they would never say that there is a national security interest, nor would they say that there is not.

So I would submit that is not the case and that after careful deliberation of experience that there is a national security interest.

Let me go through some of the facts. The national security of the United States is a responsibility of Congress and the President, not the city of Long Beach.

Cosco has been attendant at Long Beach since 1991. The proposed lease agreement would turn over 145 acres of port property and grant Cosco a much more significant presence at that port, which I have discussed.

Cosco ship, Empress Phoenix, had attempted to smuggle in some 2,000 AK-47's fully automatic assault weapons, the same kinds of weapons, Mr. Speaker, that were used in the bank holdup in Los Angeles that placed our law enforcement agents in great jeopardy, the same companies in port at which we recently found down off the border, M-2 fully automatic weapons going to Mexico to disrupt their elections which are going to take place over the next 90 days and cause anti-American, antireform legislators and affect the elections in Mexico City. That the Chinese regime is not steadily a U.S. ally.

On January 24, 1996, the New York Times reported warnings by the former Ambassador, Charles Freling, quoting a Chinese official that China would intimidate Taiwan because U.S. leaders would care more about Los Angeles than they would Taiwan.

When the U.S. fleet started to go through the straits, when communist China started shelling Taiwan and missile attacks, the Chinese responded as we started to enter our fleet that either we withdraw or the threat of nuclear warfare on the city of Los Angeles.

Now, let's take a look at a Communist-owned and controlled facility in Long Beach Naval Shipyard. Hutchinson Group, also owned by Communist China, recently purchased both ends of the Panama Canal. This would give the Chinese control of the Panama Canal, it would give them control of Long Beach Naval Shipyard, and all of the access to and from and who sees what and where it goes. We feel that this would be a major national security threat.

Mr. Speaker, let us take a look at why economically China would want to do this. There is a study coming out by the military. China's number one import from the United States is wheat.

Why, Mr. Speaker, does not China or other cargo-containing vessels go around the horn instead of using the Panama Canal? Primarily, it has affected seagoers for centuries, the weather is bad and the threat of lost ships.

If they own both ends of the Panama Canal, the major export of wheat out of the United States to China is controlled through Long Beach Naval Shipyard, they could control economically price fixing of all of our exports going out of our major port at Long Beach. And we feel that this is also an economy threat as well as a military security threat.
CUT
(House of Representatives - April 15, 1997)

Mr. Speaker, President Clinton took a personal role in promoting the interests of COSCO. At the same time he was cutting over 100 warships from the U.S. fleet, drawn up by the Bush administration, a 23 percent cut. The symbolism could not be anymore stark.

CUT

Let me first start with a family called the Riady family. The Riady family is based in Indonesia, controls a $12 billion financial empire operating under the umbrella of the Lippo Group. The family patriarch, one son, Stephen Riady has served as Lippo chairman since 1991. James Riady lived in Arkansas in the 1980's and there came to know then Governor Bill Clinton. The Riady family has an unusually big stake in maintaining most-favored-nation status for China since Lippo maintains enormous investments in Hong Kong, which is also the company that Mr. McDougal worked at.

The China connection. A Justice Department investigation into improper political fundraising activities has uncovered evidence that representatives of the People's Republic of China sought direct contributions from foreign sources to the DNC, the Democratic National Committee, before the 1996 Presidential election.

Mr. Speaker, our intelligence--the FBI and CIA--warned Janet Reno directly that China was attempting to influence the White House in policy decisions through campaign finance reports, much like they did in the port that we just talked about, by giving cash donations.

http://www.fas.org/irp/congress/1997_cr/h970415-cosco.htm

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