GENERAL Information
PANAMA Information
COSCO Information

Washington Times 3/16/99 Frank Gaffney, Jr. "…Clinton policies, practices and personnel that will, if uncorrected, give rise to a far more ominous problem for this country emanating from the People's Republic of China in the 21st century.

(1) Policy. Ever since it came to office (on a platform that correctly castigated the Bush administration for coddling China's communist dictators), the Clinton administration has pursued a policy it calls "engagement"…

• Ignoring or downplaying the significance of Chinese trafficking in weapons of mass destruction and other dangerous materiel….
• Helping China penetrate this country (notably, through four personal interventions by the president on behalf of COSCO, the Chinese merchant marine, in its bid for the U.S. Navy facility at Long Beach, Calif.), its capital markets (through unscrutinized bond and equities offerings); its economy (through inequitable trade arrangements that would be exacerbated by China's admission to the World Trade Organization under present circumstances); and even its political system (through the solicitation and use by the Clinton-Gore campaign of funds provided by Chinese intelligence and PLA operatives).
• And discouraging U.S. allies in Asia from expressing alarm over, let alone resisting, China's expansionist impulses in the region…."

(2) Practices: The W-88 episode has put into sharp relief the Clinton administration's appalling, systematic disregard of the most basic of security procedures…

• A Customs sting operation blown by an as-yet-unidentified Clinton official before it netted a Chinese "princeling"…
• Withholding from Congress information it is entitled to have about the PRC's malevolent intelligence and proliferation activities….

NEWSMAX 3/10/99 Christopher Ruddy "…Here are the shocking facts:

CLINTON URGED TURNOVER OF LONG BEACH PORT TO THE RED ARMY … COSCO -- the Chinese Overseas Shipping Company, a subsidiary of China's People's Liberation Army -- would be allowed to lease the navy shipyards in Long Beach, California for 16 annual payments of $14.5 million a year (total: $232 million). The deal would also have required the Port of Long Beach to spend $235 million to modernize the facilities….

AUTHORIZED IMPORTATION OF 100,000 CHINESE COMBAT RIFLES In 1996, soon after Clinton had signed a law outlawing importing foreign semi-automatic weapons into the US, he signed a waiver allowing the Chinese Overseas Shipping Co. -- COSCO (a subsidiary of the Red Army) -- to allow them to import 100,000 semi-automatic military rifles into the US, as well as millions of rounds of ammunition. Not content to just bring in semi-automatic weapons, COSCO also tried to smuggle in 2,000 illegal, fully automatic Chinese AK-47s. According to press reports, these weapons were destined to be sold to street gangs in Oakland. That seems like a phony cover story. We still need to know why China tried to smuggle into California enough weapons to equip an army....

GIVES CONTROL OF THE PANAMA CANAL TO CHINA… President Clinton has allowed a company controlled by Chinese communists -- Hutchinson-Whampoa Ltd. -- to take control of the Canal cities at both ends of the Canal. Further, under Panamanian Law #5, Hutchinson-Whampoa will determine which ships are allowed to enter the Canal and many of the Canal's operations. This is utterly absurd and frightening…. "

USA Today 1/7/00 Laura Parker "….Immigration officials on the West Coast are investigating what may be a new trend in immigrant smuggling after having caught 99 Chinese nationals hiding aboard cargo container ships. The discoveries started in late December. The Chinese, all men, were found concealed in cargo containers aboard six cargo ships that sailed from Hong Kong. Two of the vessels were owned by the family of Hong Kong Chief Executive Tung Chee-hwa, the highest public official in Hong Kong. "There is a working group of law enforcement that's taking a closer look at this smuggling in the soft-top containers to see what's behind it," said Sharon Gavin, a spokeswoman for the Immigration and Naturalization Service's western region. "This is a relatively new trend." The latest arrests were made Tuesday in Seattle when 14 Chinese nationals hidden in a container tried to flee as immigration officials searched the docked ship Norasia Shamsha A day earlier, 25 Chinese were taken into custody in Vancouver, British Columbia, when they were discovered aboard the Seattle-bound California Jupiter, and 18 Chinese were apprehended in Long Beach, Calif., when they were discovered in a filthy container on the Zim Shekou as the ship came into the harbor. …."

5/25/98 Edward Oliver WorldNetDaily "A Panamanian presidential candidate has asked the U.S. Justice Department to investigate China's activities around the canal and the possibility of a quid pro quo between the Clinton administration and the Asian Communist power. Concerned about possible executive branch complicity in China's gatekeeper status at the Panama Canal, Panamanian presidential candidate William Bright Marine wrote to the Justice Department May 4: "I have yet to speak to one single American who is not outraged at the fact that the Clinton administration has allowed Communist China to obtain control of U.S. ports, U.S. bases, and functions of the Panama Canal. They today, effectively control access to the Panama Canal ... this agreement could not have happened, without the consent of the Clinton administration ... the executive branch has been copied by my correspondence regarding communist China dating back to late 1996. They cannot claim ignorance." The Justice Department has not yet responded.."

WoldNetdaily William Bright Marine 8/24/98 "Just when you thought Panamanian politics could not get more bizarre the media in Panama is reporting, and the government has confirmed that President Balladares has hired James Carville. Carville is being funded by Mayor Alfredo Aleman. a major player in drug laundering and the money man for President Balladares campaign. President Balladares is trying to change Panama's Constitution so he can run for office again. The required plebiscite is to be held on August 30 this year. The latest polls show that President Balladares is trailing 51% to 31% with 18% undecided.."

Baltimore Sun 9/23/98 Robert Little "The handover of the Panama Canal to the Panamanian government next year could mean higher shipping costs and decreased access to Asian markets for East Coast ports, including Baltimore, a member of the federal commission appointed to study the canal said yesterday. C. Thomas Burke, appointed by President Bush to the Panama Canal Study Commission in 1990, said American inaction in Panama has helped foreign interests in China and Korea build alliances with the Panamanians. As a result, he predicted, when the canal changes hands on Dec. 31, 1999, it will be managed by a government beholden to nations with icy relationships in the West. "If we're not careful, we could be turning over the canal to a country that could possibly be an enemy of the United States," Burke said in a speech before the Baltimore Propeller Club, a group of local maritime industry executives. "I didn't want to bring you an encouraging speech here, I wanted to alarm you -- I want you to be frightened by this."."

The Brazosport Facts 12-10-98 Col. Otis C. Taylor, Ret. -- WWII Veteran ".A very important chapter of American history will soon come to a close. The Panama Canal, a monument to American "know-how," will come under the control of Communist China in the year 2000. Not only will our government's "Most Favored Nation" control the Panama Canal, but also the U.S. Army and Navy military installations within the Canal Zone. The American Legion Magazine (Oct. 1998) gave a good account of how China managed this. In recent bidding for future control of the canal, and associated security installations, the U.S. was the highest bidder. After all the bids were received, the Panamanian president changed the rules of bidding and allowed Communist China to submit a second bid. China's second bid exceeded the U.S. bid. the Panamanian newspaper, El Siglio, reported that "China was allowed to submit a second bid after bucketloads of money arrived from Asia....."

Washington Times 1/11/99 Tom Carter ".It was military need that prompted the United States to begin building the Panama Canal in 1903. But that need no longer exists, according to the men and women responsible for defending the United States at home and abroad. The national security interest kept U.S. troops on the ground in Panama for almost 100 years. But less than a year before the canal is due to be handed over to Panama at noon on Dec. 31, American military officials have concluded that changes in the world --ranging from new technology to the end of the Cold War -- mean it is no longer needed to protect the American way of life. "There is nothing absolutely vital here in Panama in terms of regional or geographical importance," said Lt. Col. Byron Conover, spokesman for U.S. Army South. "It is disappointing that we lose the ability to launch certain kinds of missions out of here, but from a military perspective, there is nothing vital here.".."

Indianapolis Star 2/22/99 Editorial "…A significant point in the issue of a missile defense is not being widely discussed. It is the threat of a hostile Red China and its potential for not necessarily launching long-range missiles from the mainland but for staging intermediate-range missiles from Panama. Yes, Panama, say a number of retired United States military officers. They are concerned that when the U.S. moves out of the Panama Canal Zone at the end of this year, the Communist Chinese will move in. Indeed, China has been quietly positioning itself to control both ends of the canal, according to the National Security Center, a defense issue think tank. The honorary chairman of its retired officer's advisory board is retired Admiral Thomas Moorer, former chairman of the U.S. Joint Chiefs of Staff. The NSC says that intense research and investigation has confirmed that "Red China has in fact emerged as the 'gatekeeper' of the Panama Canal. " The NSC reports: "In March of 1997 Hutchison Whampoa - a Hong Kong based business whose owner is a close ally of Red China - took over operation of key ports at the Panama Canal. These ports were turned over to Hutchison Whampoa even though American and other companies submitted better bids. "This contract gave Hutchison Whampoa certain 'rights' that could eventually give them and their Red Chinese ally complete control over the Panama Canal when the U.S. completes its phased withdrawal in 1999. " While all this may sound alarmist to those who recognize Hutchison Whampoa as a big player in the Asian business world, the details of its Panama deal are profoundly chilling. Those details are reported in a new NSC published book written by its president, Richard A. Delgaudio, and titled Peril in Panama - China as the Gatekeeper of the Panama Canal Threatens a New Missile Crisis…."

In a May 4 1998 Panamanian Presidential candidate William Bright Marine wrote about the ".fact that the Clinton administration has allowed Communist China to obtain control of U.S. ports, U.S. bases, and functions of the Panama Canal." Law #5 grants Hutchinson-Whampoa Ltd: responsibility for hiring new pilots, control over critical Atlantic/Pacific anchorages, authority to control the order of ships and to deny ships access if they are interfering with Hutchinson's business, right to unilaterally transfer its rights to a third party, right make certain public roads private. In law #5, if there is a conflict between the law and the provisions of the Canal treaty, the treaty prevails. In the deal, Hutchinson gets U.S. Naval Station Rodman; a portion of U.S. Air Station Albrook; Diablo; Balboa (Pacific); Cristobal (Atlantic); the Island of Telfers, a future home of the Chinese planned export zone. Hutchinson is controlled by Chinese communists - Hutchinson's subsidiary HIT, or Panama Ports Company has business ventures with COSCO (Chinese army owned) and is 10% owned by China Resources Enterprise. Lippo is also connected to CRE. At the time Hutchinson obtained the Panama Canal ports, it moved to gain Subic Bay in the Philippines in the wake of U.S. departure.

WorldTribune.com 3/1/99 Robert Morton "…But does anyone really care about the Panama Canal? No one, it would seem, except Communist China's Military Industrial Complex, otherwise know as the People's Liberation Army (PLA). If the United States does not consider the canal a strategic asset, the surviving communist superpower apparently does. In a deal reported by this newspaper on March 19, 1997, the Clintonesque government of Panama in effect sold the Chinese rights to two prime, American-built port facilities which flank the canal zone both to the east and the west. The 50-year contract awarded Balboa, on the Pacific side, and Cristobal, on the Atlantic side, to a giant Hong Kong shipping firm, Hutchison Whampoa, Ltd. By any analysis this company, headed by Li Kashing is an interesting operation: · Hutchison has worked closely with the China Ocean Shipping Co. (COSCO) on shipping deals in Asia even before Hong Kong reverted to Beijing's control in 1997. COSCO, you may remember, is the PLA-controlled company that almost succeeded in gaining control of the abandoned naval station at Long Beach California…."

WorldTribune.com 3/1/99 Robert Morton "…Li Kashing has served on the board of directors of China International Trust and Investment Corp., a PLA-affiliated giant run by Wang Jun whose name may ring a bell. Yes, the very same Wang Jun enjoyed coffee at the White House in exchange for a modest donation to the Clinton-Gore 1996 slush fund….Shortly after President Clinton announced the departure of the U.S. military from Panama, the Bank of China extended a 15-year, $120 million loan to Panama at a 3 percent interest rate. Nice. This was during the 1996 U.S. presidential campaign, incidentally, when boatloads of Chinese money were also making their way into the coffers of the Democratic Party. And the DNC chairman that year was Connecticut Sen. Chris Dodd who along with Jimmy Carter's National Security Advisor, Robert Pastor, supports the turnover as passionately now as they did in 1977…."

WorldTribune.com 3/1/99 Robert Morton "…Well, if the White House was for sale, why not the Panama Canal? The fine print in the China-Panama deal should outrage any competent commander in chief. Panama's Law No. 5 was a secret provision, passed by the legislative assembly on Jan. 16, 1997 that may have violated both the 1977 Panama Canal treaties and the Panamanian constitution. Among other things Law No. 5 provided Hutchison Whampoa: · "First option" to take over the U.S. Rodman naval station; ·"Rights" to operate piloting and tug boat services for the canal and private roads near the two ports; · Authority in the words of Adm. Moorer's testimony "to deny ships access to the ports and entrances of the canal if they are deemed to be interfering with Hutchison's business – in direct violation of the 1977 Panama Canal Treaty which guarantees expeditious passage for the United States Navy."…"

Conservative News Service 3/8/99 Lawrence Morahan "…[Admiral] Moorer predicted in 1978, the year after President Jimmy Carter signed a treaty with the Central American country giving control of the canal to Panama at the end of the century, that a U.S. withdrawal would occasion a dangerous vacuum that would possibly be filled by Soviet interests. Two decades later, in June 1998, Moorer testified before the Senate Foreign Relations Committee that his worst fears had been realized. The left-leaning government of Panama sold controlling rights of the American-built port facilities that flank the canal zone on the east and the west. The 50-year contract awarded Balboa on the Pacific, and Cristobal on the Atlantic, to Hong Kong shipping conglomerate Hutchison Whampoa Ltd. The company has close links to the China Ocean Shipping Co., which is controlled by the People's Liberation Army of China. Moorer, a former chairman of the Joint Chiefs of Staff and commander of both the Pacific and Atlantic fleets, contends the communist Chinese surreptitiously gained a stronghold on the Panama Canal. "My specific concern is that this company is controlled by the communist Chinese," Moorer said. "And they have virtually accomplished, without a single shot being fired, a stronghold on the Panama Canal, something which took our country so many years to accomplish."…"

Reuters 3/12/99 Michael Winfrey "…The withdrawal of U.S. forces from Panama enters a final stage Thursday as the symbolic handover of Rodman Naval Base marks the twilight of a controversial military presence lasting almost a century. Panama's President Ernesto Perez Balladares and the commander of the U.S. North Atlantic Navy Fleet, Adm. Paul Reason, will attend a ceremony at which control of Rodman will be symbolically transferred to the Panamanians. The full handover of the base will be completed by April 30, a U.S. Army official said. Under a 1977 treaty signed by former U.S. President Jimmy Carter and the late Panamanian Gen. Omar Torrijos, the United States must pull out all of its troops from Panama and hand over the Canal and all other facilities to the Panamanian government by noon on Dec. 31, 1999. ``The pace of the transfer is quickening in general,'' said U.S. Army spokesman Col. Byron Connover. ``We begin moving in earnest at the end of May. By June we'll be deactivating units, and by July all of the personnel's families will have left Panama.'' …"

http://www.ConservativeNews.org 4/9/99 Lawrence Morahan "..."While people are focusing on Serbia, they are overlooking massive corruption involving our relationship with communist China, including the turnover of crucially important security assets in the isthmus of Panama, creating a vacuum that communist China is filling," Howard Phillips, president of the Conservative Caucus, told CNS. .... "The foreign and military policies of the United States should be geared to the defense of our country, and they're not," Phillips said. "While we're inappropriately using resources in Serbia, we are surrendering the major battle of World War III by abandoning our strategic position in the isthmus of Panama to the Chinese.".... "

THE NEW AMERICAN Freeper report dated 4/11/99 Admiral Thomas H. Moorer "... Admiral Thomas H. Moorer, who has served America as Commander in Chief of the Pacific Fleet, Commander in Chief of the Atlantic Fleet, Chief of Naval Operations, and Chairman of the Joint Chiefs of Staff, is a genuine American legend...Admiral Moorer serves as honorary chairman of U.S. Defense-American Victory, a private educational group dedicated to America's defense and national security..... Rear Admiral C. A. "Mark" Hill began his naval career in World War II as a lieutenant on the U.S.S. Ray, one of the most decorated submarines of the war..... Admirals Moorer and Hill were interviewed by senior editor William F. Jasper at the Army-Navy Club in Washington, DC on February 10th, as the U.S. Senate began final deliberations in the impeachment trial of President Clinton…."

THE NEW AMERICAN Freeper report dated 4/11/99 Admiral Thomas H. Moorer"…Q. ... Aren't there a number of very serious concerns involved with this matter [Panama] that are being ignored by the Clinton Administration, Congress, and the media? Adm. Moorer. Yes, one of the issues which we have been addressing lately that has been completely ignored by just about everybody is the fact that the Red Chinese are poised to effectively take control of the Panama Canal. As your magazine pointed out very well in your issue on Chinagate, the Clinton Administration, in numerous ways, has been helping China build its military forces into a formidable, modern threat that can challenge our interests around the world. But the Panama Canal is very close to home and is one of our most vital commercial and military assets. In 1996, while China was illegally pouring millions of dollars into Clinton's re-election effort, it was also funneling huge amounts of cash to Panamanian politicians to ensure that one of its front companies, Hutchison Whampoa of Hong Kong, could move in when we vacate. In 1997, Panama secretly turned over the American-built port facility at Balboa, which controls shipping on the Pacific side, and at Cristobal, which controls shipping on the Atlantic side, to Hutchison. Over the next several months we are scheduled to turn over Rodman Naval Station, Howard Air Force Base, and other important military facilities to Panama, which has given Hutchison an option on these bases. This means that very soon we could see Communist China in control of one of the world's most strategic waterways in our own backyard. President Clinton may say that they are our friends and allies, but the Chinese military and Communist Party literature refer to the United States as "the main enemy." And despite what President Clinton, Henry Kissinger, and the media may tell you about "reform" in China, it is still run by a brutal, totalitarian, Communist regime that will do us harm if and when it thinks it can get the better of us....."

THE NEW AMERICAN Freeper report dated 4/11/99 Admiral Thomas H. Moorer "... Q. Americans, unfortunately, are woefully ignorant of world geography in general and of geo-strategic maritime choke points in particular. Why is an appreciation of this so vitally important? Adm. Moorer. Admiral Hill put his finger on the key word: logistics, the critical factor in any military operation. You cannot unload a division of troops ashore without having a steady stream of food, ammunition, uniforms, fuel, medical supplies, etc. The Air Force, for example, has the bulky problem of fuel - massive quantities of fuel - if it is going to have sustained operations. The fuel demand is tremendous when you have bombers, fighters, transports, and helicopters. You can't fly fuel into a foreign base in adequate amounts to fulfill their requirements. When you talk about moving logistic support by airlift you're talking about ounces; when you talk about logistic support that actually takes place with ships, you're dealing in tons. That's why the flexibility of movement of the maritime forces from ocean to ocean has been vital to the success of our strategy. And that's why it is vital to our survival to recognize when a hostile nation maneuvers to gain strategic dominance of these sea lanes. Unlike most other countries, we haven't been invaded and destroyed, and haven't had full-scale combat here on our own soil for over 100 years. One reason for this is that we are a maritime power....."

4/17/99 F.R. Duplantier "..."Communist China is the greatest emerging threat to United States security," observes retired Coast Guard Captain G. Russell Evans. "It has the largest army in the world, may soon have the second largest economy, and is rapidly building up its navy and air force." Evans is alarmed that "the Clinton administration has allowed allies of Red China . . . to take over the Canal ports and possibly secure other critical military facilities at the Panama Canal, only 900 miles from the United States!" ....Evans also warns that "Red Chinese J-11 attack jets, if launched from air facilities in Panama, could strike the mainland United States. Each J-11 can drop over 13,000 pounds of bombs," he observes, "and China will have over 100 J-11s in the next few years. This is the potential should Red China muscle into U.S. air bases in Panama," Evans explains. He adds that "Communist China will also have a critical base for its warships in our backyard with the Balboa and Cristobal ports." ...Captain Evans bemoans "the complete lack of interest in the United States government to protect its national security and treaty rights. There is a disturbing neglect of security matters in the Clinton administration," he charges, "in refusing to move to protect our clear and vital interests in Panama and in refusing to assert American rights spelled out in the Panama treaties." Evans urges Congress to "act immediately to halt the Communist Chinese infiltration into the Panama Canal and reassert American security interests in this vital waterway." Congress should also investigate the impact of foreign campaign contributions on the administration's policy of either ignoring or actively facilitating these potential threats to our national security...."

House Subcommittee Hearing 5/05/99 Bob Barr Freeper newsman ".... "The Clinton Administration has ignored the importance of Panama to American interests despite involving the U.S. military in record numbers of conflicts around the world. I encourage the President to reverse this situation by beginning a serious dialogue about this issue," Barr concluded, noting that we have a unique opportunity to move a dialogue forward with the new President-elect, Mireya Moscoso....."

Xinhua via NewsEdge Corporation 5/18/99 Freeper Thanatos "…U.S. ambassador to Panama Simon Ferro Tuesday delivered two patrol ships to the Panamanian authorities to reinforce the maritime borders of the country. "These boats are not a present from the United States to Panama, it is an investment," Ferro said. Ferro, a lawyer of Cuban origin, was designated this year as the White House representative in Panama, and has the mission of overseeing the total withdrawal of U.S. military forces from Panama and the handover of the Panama Canal on December 31…."

http://www.usia.gov 5/28/99 USIA Freeper Thanatos "...About 500 additional U.S. military personnel have been withdrawn from the Panama Canal, as the United States prepares to transfer control of the 81 kilometer-long waterway to Panama on December 31...."

WorldNetDaily 10/19/98 Edward G. Oliver ".Admiral Thomas H. Moorer, USN (Ret.), a former chairman of the Joint Chiefs of Staff, warned the Senate Foreign Relations Committee in closed session last summer that the U.S. is heading toward a confrontation with China over the Panama Canal, according to testimony obtained by WorldNetDaily. "I'm an old sailor now, but I know trouble when I see it, and Mr. Chairman and distinguished members of this committee, I see big trouble in Panama -- trouble that could evolve quickly into a conflict in our own hemisphere with world-wide implications," said Moorer. "Mr. Chairman, I speak of the transfer of the Panama Canal to the Panamanian government under the circumstances which now exist. There's far more going on there than meets the eye.".."Mr. Chairman, I have been honored to serve as this nation's commander in chief of the Pacific Fleet; commander in chief, Atlantic and Atlantic Fleet; chief of naval operations, and chairman, Joint Chiefs of Staff," said Moorer. "I truly can't remember a time when I have been more concerned about the security of our country. ..." …"

WorldNetDaily 10/19/98 Edward G. Oliver "….Moorer pointed out that Panama Ports Company (PPC) controls four of Panama's major ports. He identified PPC's principal owners as: Billionaire Li Ka-Shing (reportedly an ally "as close as lips and teeth" to Beijing, which offered Ka-Shing the governorship of Hong Kong ); Li Ka-Shing owns PPC's parent company, Hutchinson-Whampoa Ltd., China Resources Enterprise, an arm of the Chinese government identified as an "agent of espionage" by Sen. Fred Thompson. The entity is also a solid partner with the Lippo Group, owned by the Riady family of Indonesia, also identified as possible espionage agents for the People's Liberation Army. He also pointed out that the deal granting sweeping concessions to Hutchinson-Whampoa states that the company has the right to pilot all ships through the canal, raising the specter of the Chinese piloting U.S. Navy ships -- or refusing to -- after the U.S. hands over complete control next year. Moorer attacked as illegal Panama's "Law #5," which permits other military forces, defense sites and installations in the canal zone and raised concerns about infiltration of Panama again by drug lords. In contrast to the indifference displayed by the State Department about Hutchinson's grip on the canal ports, the admiral expressed grave concern before the committee. "Hutchinson-Whampoa controls countless ports around the world," he said.

WorldNetDaily 10/19/98 Edward G. Oliver "…."My specific concern is that this company is controlled by the Communist Chinese. They have virtually accomplished, without a single shot being fired, a stronghold on the Panama Canal, something which took our country so many years to accomplish -- the building and control of the Panama Canal, along with military and commercial access in our own hemisphere...Moorer expressed frustration with the Clinton administration's approach to national security as the date Dec.31, 1999, nears -- the date the U.S. relinquishes the last vestiges of control over the canal..He continued: "We are not talking here about an ill- funded Nicaraguan effort against the Communists in the late '80s; we are talking about the control of a strategic part of the world in our hemisphere, shortly to be controlled by the largest country on earth, Communist China, financially flush and people-strong with a growing imbalance of men over women. ... I can tell you honestly and truthfully, with strong conviction, that somebody needs to take a long, hard look at our vulnerability in the Panama Canal Zone."."

www.lakesregion.com [Current News Forum] CJ Barr 3/5/99 "…Call this a hunch. China has, for some time now, been quite busily moving its pieces around the board. Some of the moves make complete sense in a classical, theoretical way. It is, for example, entirely clear why an Asian power would like to position itself to be able to temporarily control access to the Panama Canal. Or why China, a major land power, would want to extend its power seaward. Or why they would want to deploy their own nuclear deterrent. But what if these moves are of more than theoretical significance? What if, as suggested by the mainland's smuggling of major amounts of explosives onto Taiwan, they are preparing for an actual military move against that island? It is quite possible that conditions will propel them into such a move within the next two years. American forces are spread thin. Significant assets are bogged down in the Persian Gulf and in various Serbia-related missions. Korea is showing signs of boiling over. Russia is unstable and, increasingly, hostile to America's foreign policy goals…In many ways, Clinton has been the ideal American president for China's ambitions. He has been open to their attempts at bribery. He has tolerated China's weapons transfers to areas that might later serve as diversions. He has helped Chica modernize its forces. He has allowed American readiness to collapse while recklessly deploying her forces on humanitarian and peacekeeping missions all over the globe. He has shown himself to be a weak and vacillating negotiator. And his administration has been reluctant to follow through with threats or act decisively -- except against foes powerless to resist…"

China Times 6/27/99 CAN "...US Rep. Duncan Hunter (R-CA) has introduced a House resolution prohibiting US assistance to Panama if a defense site or military installation built or formerly operated by the United States is provided by the Panamanian government to any foreign government-owned entity. A US congressional delegation that recently toured Central America in anticipation of the handover of the Panama Canal at the end of this year concluded in its report that mainland Chinese dominance of the Panama Canal zone represents a threat to US security. The US-Panama Security act of 1999, introduced by Hunter on June 16, was referred for consideration to the House Committees on International Relations, Banking and Financial Services, Armed Forces, and Intelligence. Hunter noted that a recent grant to Hutchison Whampoa, a Hong Kong firm with ties to the Beijing government, of management control of the Panamanian ports at either end of the Panama Canal has raised the specter of the expansion of mainland Chinese political influence in Panama, a situation aggravated by unanswered questions concerning the methods used by the Hong Kong firm to win its bid. The resolution requires the US president to submit to the Congress a report explaining how Hutchison Whampoa was selected to receive a grant for management control of the Panamanian ports at either end of the Panama Canal, and whether or not the US government had any knowledge of ties between the Hong Kong firm and the Beijing regime. The bill also requires the secretary of defense to report to the Congress on the extent to which such control by Hutchison Whampoa poses a threat to the security of the United States, and how the US strategic interests with respect to the Panama Canal will continue to be protected after its handover to Panama....."

Softwar.net Charles Smith 6/23/99 "...The Panama Canal, one of the world's key strategic waterways, is scheduled to be turned over to the Panamanian government on December 31, 1999. The Canal remains vital to American trade and defense capabilities. The Canal remains the vital sea link in the Western Hemisphere between the Atlantic and Pacific Oceans, and an economic and logistical bridgehead between North America and South America. Currently, some 15 to 20 percent of total U.S. exports/imports pass through the Canal, including some 40% of all grain exports. It is also a vulnerable "front-line" state against the spread of narcotics and terrorism that plague its South American neighbors. Ironically, the day that the delegation arrived in Panama, a week after the closure of the U.S. counter-narcotics center at Howard Air Base, heavily-armed Colombian narco-terrorist forces operating on Panamanian soil, dressed in full combat gear, were interviewed on national television. ....... 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. The delegation witnessed Hutchison Whampoa conducting major construction and port facility expansion at both the Atlantic and Pacific Canal ports. 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...."

AFP 6/22/99 "... Panama is defenseless against attacks by Colombian rebels and Washington should do everything it can to help Panama beef up its security forces, a top US general and a senator said Tuesday. Months ahead of a US troop pullout from the Central American nation as a century-old Panama Canal treaty draws to a close, Republican Senator Paul Coverdell and Commander in Chief of US Southern Command, General Charles Wilhelm, said they were concerned with Panama's vulnerability. "As our forces withdraw in compliance with the treaties," Wilhelm told a Senate panel, "I have concerns about the ability of local security forces to deal with the security challenges that confront Panama." "The Panamanian Public Forces are neither organized nor equipped to deal with incursions by Colombian insurgents into the Darien and San Blas provinces," Wilhelm told a hearing of a Senate Foreign Relations Subcommittee....Panama's Defense Forces were disbanded after the United States invaded Panama in 1994 to arrest military strongman Manuel Noriega. Currently, the country only has a National Police force that lacks military capabilities. Last week, the Colombian army said leftist rebels were crossing the border into Panama to escape their military pursuers...."

Stratfor.com Global Intelligence Center 6/23/99 "... 2230 GMT, 990623 Panama/U.S. - Panamanian Foreign Minister Jorge Ritter reacted sharply to comments made yesterday by U.S. Southern Command Chief Gen. Charles Wilhelm who warned the ongoing withdrawal of U.S. troops from Panama is creating a security threat to Panama. Wilhelm said the absence of U.S. troops in Panama will leave the nation open to Colombian rebels and drug runners, posing a potential threat to the security of the Panama Canal. Ritter responded by saying that Panama did not need U.S. troops to protect its borders. "Never have the U.S. military forces been here to guard our borders, and they have even less to do with the security of Panama," Ritter told reporters. "Nor do they have anything to do with the security of the canal." Ritter charged, "The growth of drugs in Panama did not begin with the withdrawal of U.S. troops, but instead... grew while there were military bases in Panama."...."

AP 7/7/99 "…Panama's president demanded Wednesday that the United States clear out the remains of explosives at military bases being handed over along with the Panama Canal by the end of the year. ``I advise the United States that its responsibility to clean up does not end with the handover and it should respond by indemnifying people who end up injured,'' Ernesto Perez Balladares said in a speech. The United States last week turned over one of the areas used for war exercises and target practice. Two others remain…."

The Center For Security Policy 7/2/99 "…On 23 June, Hutchison USA announced its investment of $957 million into the combined telecommunications company of Voicestream Wireless and Omnipoint. Hutchison is already the largest shareholder in Voicestream, owning 24% of the company and its latest investment will increase its ownership to 30% of the newly merged conglomerate….Hutchison USA is a division of the large Hong Kong business conglomerate, Hutchison Whampoa, whose business ventures include real estate, port ownership in Asia, Europe and Panama, retail and manufacturing, and telecommunications and energy projects. Owned largely by billionaire Li Ka-shing, the company has recently initiated an extensive overseas acquisition strategy. Among other companies, Li is also the principal owner of the Panama Ports Company and China Resources Enterprise which collectively control four major ports at the eastern and western entry points to the Panama Canal. In a recent hearing before the Senate Committee on Foreign Relations on U.S. interests in the Panama Canal, a former Chairman of the Joint Chiefs of Staff and Chief of Naval Operations, Admiral Thomas H. Moorer (USN, Ret.) raised an alarm over Hutchison's role -- and that of the Chinese government -- in Panama.

The Center For Security Policy 7/2/99 "…As Adm. Moorer put it: ...There's far more going on [in Panama] then meets the eye. A company called Panama Ports Company, S.A., affiliated with Hutchinson Whampoa, Ltd. through its owner, Mr. Li Ka-Shing, currently maintains control of four of the Panama Canal's major ports. Now, Panama Port Company is 10 percent owned by China Resources Enterprise, the commercial arm of China's Ministry of Trade and Economic Cooperation….. In their best-selling book, Year of the Rat, Edward Timperlake and William C. Triplett III claimed that China Resources "had previously been identified as an associate of Chinese military intelligence." The authors also identified ties between Li Ka-shing and known arms-smuggler Wang Jun, head of Polytechnologies, an enterprise closely associated with the People's Liberation Army.,,,, The Senate [Government Reform] Committee...revealed that Hutchison Whampoa's subsidiary, HIT, has business ventures with the China Ocean Shipping Company (COSCO), which is owned by the People's Liberation Army. COSCO has been criticized for shipping Chinese missiles, missile components, jet fighters and other weapons technologies to nations such as Libya, Iraq, Iran and Pakistan. In 1996, the U.S. Customs Service seized a shipment of 2,000 automatic weapons aboard a COSCO ship at the port of Oakland, California. The man identified as the arms dealer, Wang Jun, is the head of China's Polytechnologies Company, the international outlet for Chinese weapons sales. Jun also sits on the Board of the China International Trust and Investment Corporation (CITIC),(1) the chief investment arm of the Chinese central government. It is also the bank of the People's Liberation Army, providing financing for Chinese Army weapons sales and for the purchase of Western technology. Jun's fellow CITIC Board member is Mr. Li Ka-shing, chairman of Hutchison Whampoa Ltd…."

The Center For Security Policy 7/2/99 "…Li Ka-shing has profound ties to the Beijing regime. Li has invested more than a billion dollars in China and owns most of the dock space in Hong Kong. In an exclusive deal with the People's Republic of China's communist government, Li has the right of first-refusal over all PRC ports south of the Yangtze river, which involves a close working relationship with the Chinese military and businesses controlled by the People's Liberation Army. Li has served as a middle man for PLA business dealings with the West. For example, Li financed several satellite deals between the U.S. Hughes Corporation and China Hong Kong Satellite [CHINASAT], a company owned by the People's Liberation Army. In 1997, Li Ka-shing and the Chinese Navy nearly obtained four huge roll-on/roll-off container ships -- which can be used for transporting military cargo -- in a deal that would have been financed by U.S. taxpayers. A June 1997 Rand report, "Chinese Military Commerce and U.S. National Security," stated, "Hutchison Whampoa of Hong Kong, controlled by Hong Kong billionaire Li Ka-shing, is also negotiating for PLA wireless system contracts, which would build upon his equity interest in Poly-owned Yangpu Land Development Company, which is building infrastructure on China's Hainan Island." In 1998, Li Ka-shing attempted to issue $2 billion in bonds, through his Hutchison company, in the United States. According to the Dow Jones Newswire, Hutchison revealed that 50 percent of the bonds would be used through a subsidiary known as Chung Kiu Communications Ltd., which had signed agreements to provide cellular services and equipment to joint ventures between the People's Liberation Army and the Chinese Ministry of Posts and Telecommunications. (Emphasis added.) …"

The New American 8/2/99 Admiral Thomas Moorer (USN Ret) 7/23/99 "...The United States appears to be sleep-walking on a course to sure destruction, and America's leaders, who have plotted this course, appear to be completely oblivious to the mortal danger they are leading us into. Nowhere is this more apparent than in the imminent giveaway of the U.S. Canal in Panama. In just a few months, unless the American people raise a terrific outcry, this strategic waterway, so vital to our economy and national security, will be turned over to Panama.... In reality, if we allow this suicidal course to continue, we will be transferring our strategic canal not to Panama, but to whichever power moves in to fill the vacuum. And there is no longer any cause to wonder which power that will be. Over the past several years, the People's Republic of China has made unmistakably clear its designs upon the Panama Canal. In fact, it has already moved in and begun to take control of this critically important asset.......it is one of the great untold stories that have been completely ignored by our news media. If we proceed along our present course, by the end of this year, on December 31st, Communist China will become the de facto new owners and rulers of the Panama Canal...."

Investor's Business Daily 7/28/99 Brian Mitchell "...The U.S. Department of Energy calls it a ''major transit center for oil shipments and a potential choke point.'' At year's end, the transit center and choke point will slip from U.S. control into the hands of a Hong Kong company with close ties to the Chinese government and military. The surrender of the Panama Canal has been scheduled for years, since the Senate approved the Carter-Torrijos Treaties in 1978. But U.S. officials are only now coming to terms with what the pullout will mean....."

AP 7/30/99 George Gedda "...A retired Army general joined Thursday with House Republicans in warning that the phase-out of the U.S. military presence in Panama could be a boon to South American narcotraffickers. ``Panama is critical to counterdrug efforts,'' said retired Gen. George A. Joulwan, who once led all U.S. military operations in Latin America. Testifying before the House International Relations Committee, Joulwan said losing the U.S. military infrastructure in Panama will affect the U.S. ability to prosecute the war on drugs. Under the Panama Canal treaties, the United States has until the end of the year to terminate all military operations in Panama -- a process that is well under way. Committee chairman Benjamin Gilman, R-N.Y., said the authors of the 1979 pact ``could not have foreseen neighboring Colombia's drug-fueled agony, nor the sophistication of the drug cartels' corrupting criminal reach.'' Gilman said it was a mistake for the United States to have put itself in the position of closing Howard Air Force Base, from which 15,000 military flights had taken off annually. Rep. Dana Rohrabacher, R-Calif., said Panama has no army, navy or air force with which to combat ``the well-armed narcoterrorist forces'' in Colombia In addition, he said the Panama Canal, instead of reverting to Panamanian control as prescribed under the treaties, ``is now in the hands of communist China,'' saying numerous entities with close ties to China's People's Liberation Army are very active in Panama...."

Chattanooga Free Press 8/8/99 "...The 51 miles of the American Panama Canal between the Atlantic and Pacific oceans cut 8,000 miles off the ocean-to-ocean trip. Is that canal -- "our" canal -- now about to be surrendered to the control of Chinese Communists? .... an engineering wonder came into being -- open to the shipping of all the nations of the world -- under U.S. guarantees. Our canal became Panama's biggest business and supporter of its economy, from the shipping and military bases in the area. Sure, it was natural for Panamanian nationalist feelings to be stirred and for demands to be made to turn the canal over to Panama. After all, covetousness is a sin that has always existed. But it was "our" canal. We bought it. We paid for it. We built it. We should keep it. But Mr. Carter had a different idea, and Sen. Baker delivered his and other votes to make it possible for the United States to promise to give away our canal that provides convenient ocean-to-ocean transit for more than 13,000 ships each year. But the treaty mistakenly ratified by the United States Senate under our constitutional process was not the same treaty approved by the government of Panama's General Omar Torrijos! So great was the U.S. opposition to Mr. Carter's Panama Canal surrender that "the DeConcini Reservation" was added to it. It did not cure the danger of the Carter giveaway but did "guarantee" to the United States the right to use military force -- with or without the consent of Panama -- if that was deemed necessary to keep the canal open. But Torrijos never agreed to that! Mr. Carter allowed Gen. Torrijos to approve a different "agreement." A deal involving different understandings by the two parties should be no deal at all. But unless something is done by the United States Senate before midnight Dec. 31, our canal will be gone....."

House of Representatives 4/15/97 Rep Cunningham "...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....Panama Canal, one of the most strategic locations on the globe, has been brought under COSCO's web. Hutchinson Port Holdings Incorporated, a Hong Kong operated, controlled, again by a corporation, by Chinese Communists with direct ties to the Pacific and Atlantic entrances to the Panama Canal and global, syndicated columnist, Georgie Anne Geyer, Universal Press Syndicate, March 26, 1997....At the same time, Mr. Speaker, we lost the Panama Canal, both ends of it, to Communist China owned companies. We had an American company from Alabama that bid on those same sites. They won the contracts for both of those sites. It was selected by Panama. After selection, after announcement, the Chinese government went in with sacks of cash, much like they did with our government here in the United States, and said, here is $25,000 for you, here is another $25,000 for you. And guess what? That decision was reversed and it went to Chinese Communists instead of a U.S. based firm...."

AP 8/9/99 "... President Ernesto Perez Balladares on Monday denied reports that he had pressured officials to approve visas for Chinese citizens as part of an alleged immigrant smuggling scheme. The Miami Herald in its Monday edition quoted Panama's fired intelligence chief, Samantha Smith, as saying that Perez Balladares had pressured her to approve visas for about 140 Chinese citizens who she said planned to head for the United States. ``There is a confusion here,'' Perez Balladares told reporters. ..."

Miami Herald 8/8/99 Glenn Garvin "...The head of Panama's intelligence agency and several of her subordinates, as well as the director of Tocumen International Airport and the head of the national police's aviation service, were fired in mid-June after President Ernesto Perez Balladares learned of the investigation. Meanwhile, the investigation also has touched off a serious dispute between the U.S. Justice Department and Simon Ferro, the American ambassador here. Justice Department officials angrily accused Ferro of blowing the secrecy of the investigation by canceling the U.S. visa of the Panamanian intelligence chief. Neither government is willing to discuss the scandal on the record. Perez Balladares' office wouldn't answer questions. And a U.S. embassy spokesman would say only: ``We don't have any comment on this.'' ...Neal Kuo, publisher of Panama's Chinese-language daily El Expreso, said he talked with 31 illegal immigrants on a single flight from Hong Kong last month. ``And one of my reporters made the same flight recently, and she said there were about 30 on her plane, too,'' Kuo added..... "

Miami Herald 8/8/99 Glenn Garvin "... The Herald was able to piece together this picture of the ring's operations: Chinese citizens paid as much as $15,000 for visas permitting them to fly from Hong Kong to Panama. Upon arrival here, they were escorted out of Tocumen International Airport through the diplomatic lounge, avoiding ordinary immigration checkpoints. Most of the Chinese then headed north across the virtually unguarded border to Costa Rica, where they made contact with so-called coyotes who guide migrants up the Central American isthmus to cross into California or Texas.... The scheme would be impossible without cooperation from within the National Security Council, Panama's intelligence agency, which must approve visa requests from what the government considers ``sensitive'' countries -- Cuba, Arab nations and mainland China...."

http://www.washtimes.com/index.html 8/12/99 Rowan Scarborough "...Senate Majority Leader Trent Lott recently wrote to Defense Secretary William S. Cohen that a Chinese shipping company is gaining broad authority over the Panama Canal and could deny passage to U.S. ships. "It appears that we have given away the farm without a shot being fired," the Mississippi Republican said in the Aug. 1 letter requesting Mr. Cohen's security assessment. It was the first time a congressional leader has raised questions about growing Chinese influence over one of the world's most strategic waterways. Until now, warnings were being raised primarily by a handful of conservative lawmakers, led by Rep. Dana Rohrabacher, California Republican, who plans a fact-finding trip to Panama on Monday. The focus of concern is Hutchinson Whampoa Ltd., a giant Hong Kong-based shipping firm with ties to China's leadership and its armed forces, the People's Liberation Army (PLA) Under circumstances the U.S. Embassy in Panama called unusual, the government in 1997 awarded Hutchinson a 25- to 50-year contract to run the two major ports on the canal's Atlantic and Pacific entrances.....Mr. Santoli said the canal is part of a Chinese strategy to move into countries abandoned by the United States and the former Soviet Union. In Cuba, for example, Chinese intelligence officials are helping Cuba build a communications facility, he said. "They're using Panama as a staging area for the region," Mr. Santoli said. "They're doing a massive amount of construction, a lot of investment. Literally hundreds of mainland Chinese are moving into Panama at all levels." The Miami Herald on Monday quoted Panama's ousted intelligence chief as accusing his country's president, Ernesto Perez Balladares, of personally demanding visas for 140 Chinese immigrants. The newspaper said the U.S. Justice Department is investigating a scheme in which Chinese immigrants paid $15,000 each for visas to use Panama as a staging area for illegal entry into the United States....."

Charleston Post and Courier 8/12/99 "...Overtures by the incoming government in Panama, which has expressed interest in reaching an agreement to allow American military and anti-narcotics operations to resume after the end-of-the-year hand-over of canal and U.S. installations, should be warmly welcomed. Fears that Panama could once again become a center for drug distribution, money laundering and anti-U.S. espionage will be eased by the remarks of Jose Miguel Aleman, who will become foreign minister when newly-elected President Mireyra Moscoso assumes office Sept. 1. In an interview with the Dallas Morning News, Mr. Aleman noted Panama's "very significant historical, sociological, economic and commercial relationships with the United States." He went on to reassure Washington, "... we want to maintain excellent relationships with the United States and help in any matter that the United States would consider in its national security interests." ...Outgoing President Ernesto Perez Balladares refused to consider a U.S. proposal to retain Howard Air Force Base. His attitude was not surprising. Mr. Balladares is a protege of Gen. Noriega. The former Panamanian dictator is serving a long sentence in a U.S. jail for drug trafficking. Mr. Balladares is also the leader of the party founded by the late Gen. Omar Torrijos, a popular dictator who became a national hero when he persuaded the United States to give up the canal and U.S. facilities in the zone. Mr. Aleman indicated that after the formal hand-over of the canal and the withdrawal of the remaining American troops, the new Panamanian government would welcome a proposal that would allow U.S. military access to combat drug trafficking and to protect national security. ..."

UPI 8/12/99 "...The Pentagon has rejected the notion that a Chinese effort to build cargo unloading facilities at either end of the strategically vital Panama Canal could be a threat to U.S. national security, Pentagon spokesman Ken Bacon says (Thursday). Senate Republican leader Trent Lott recently wrote to Defense Secretary William Cohen expressing concern that the facilities could be used to bar access to the canal, which links the Atlantic and Pacific Oceans and is heavily trafficked by U.S. naval vessels...."

Fox news wire 8/12/99 "...The United States said Thursday it was satisfied that China will not try to command the Panama Canal despite Republican fears over a Hong Kong firm's control of ports at each end of the strategic waterway.

Republicans are worried about what they consider China's growing influence over the Panama Canal, which is to be turned over to Panama on Dec. 31 under a 1977 treaty. Panama in 1997 awarded a 25- to 50-year contract to giant Hong Kong shipping firm Hutchinson-Whampoa Ltd. to operate the two major ports on each end of the canal, which connects the Atlantic and the Pacific. The Washington Times reported Thursday that the shipping firm has ties to China's communist leadership and its armed forces, the People's Liberation Army. "The United States is satisfied our interests will be protected after the canal is turned over this December,'' said David Leavy, spokesman for the White House National Security Council. "We have seen no capability on the part of the PRC (People's Republic of China), which is a heavy user of the canal, to disrupt this operation. So I would caution people not to get too alarmist over this issue,'' he said....Leavy said American ships are guaranteed access to the canal under a law that governs the contract of the Hong Kong firm with Panama....."

Dallas Morning News 8/10/99 Tod Robberson "...Panama is willing to reopen talks with the United States regarding the use of its territory for American military and counternarcotics operations, the incoming foreign minister said Monday. Foreign minister-designate Jose Miguel Aleman said the government of President-elect Mireya Moscoso, who will take office Sept. 1, wants to take a fresh look at the issue of U.S. military access once the 1979 Panama Canal treaties are fully implemented at the end of this year. The incumbent government of President Ernesto Perez Balladares has categorically rejected the idea of any extended U.S. military presence and has demanded the full withdrawal of all U.S. military personnel from Panama by Dec. 31, as required under the canal treaties. U.S. officials acknowledge that the loss of access to Panama, home to Howard Air Force Base, the region's top counternarcotics surveillance outpost, has put a crimp in American anti-drug efforts. Although Howard is still operating, its counternarcotics flights have been transferred to other sites in Ecuador, Aruba and Curacao. Panama, which has no military, is described by U.S. officials as increasingly vulnerable to drug traffickers and guerrilla incursions from its southern neighbor, Colombia, the largest single source of cocaine and heroin sold in the United States...."

The Times 8/13/99 David Adams "...Mr Lott and others are worried by the operations of Hutchinson Whampoa, a large Hong Kong shipping company with ties to China, which in recent years has gained a big influence over canal traffic. The fears of Chinese domination in the US backyard come amid concern about China's global strategies, its human rights abuses and suspected spying at US nuclear laboratories. The United States protested in 1997 when the Panamanian Government awarded Hutchinson a contract to run the two ports at the canal's Atlantic and Pacific entrances. Since then Panamanian officials have been frequent visitors to Hong Kong and China, arousing suspicion of deeper ties. Yesterday China's Xinhua news agency announced that Alberto Vallarino, the Vice-President-elect of Panama, which is one of the few countries that recognise Taiwan, was visiting Beijing. After a recent trip to Panama by one US delegation, reports said that Panama had become the central base of operations for China in Latin America. According to critics of US policy, the recent changes in canal regulations could leave US commercial shipping and the navy "at the mercy" of China, potentially limiting or denying canal access to US vessels. But experts say the Republican fears are exaggerated. Despite the large Hong Kong-Chinese presence, US companies successfully compete for business at canal ports...."

The Washington Times 8/12/99 Rowan Scarborough "...The focus of concern is Hutchinson Whampoa Ltd., a giant Hong Kong-based shipping firm with ties to China's leadership and its armed forces, the People's Liberation Army (PLA). Under circumstances the U.S. Embassy in Panama called unusual, the government in 1997 awarded Hutchinson a 25- to 50-year contract to run the two major ports on the canal's Atlantic and Pacific entrances. Moreover, conservatives assert that Panama gave Hutchinson broader powers in legislation known as "Law No. 5." Al Santoli, an aide to Mr. Rohrabacher, said the law enables Hutchinson to assign the pilots who take control of ships and steer them through the canal. He also said the Chinese company can block passage of ships to meet its business needs. This contention was challenged by a spokesman for the Panama Canal Commission, a panel of five Americans and four Panamanians who run the waterway. The Panama Canal Commission spokesman said the treaty gives the United States the right to intervene militarily to protect access. Mr. Lott wrote to Mr. Cohen, "This administration is allowing a scenario to develop where U.S. national security interests could not be protected without confronting the Chinese communists in the Americas. U.S. naval ships will be at the mercy of Chinese-controlled pilots and could even be denied passage through the Panama Canal by Hutchinson, an arm of the People's Liberation Army. "In addition, the Chinese Communist Party will gain an intelligence information advantage by controlling this strategic chokepoint. It appears that we have given away the farm without a shot being fired.".... Military experts say a pattern of Chinese actions reveals a long-range strategic plan to dominate Asia and exert influence worldwide. The moves include its forays in Panama, its failed attempt to take over the old Long Beach, Calif., naval base, its suspected spying at U.S. nuclear labs, its illegal injection of campaign cash into Democratic Party coffers and its increased military spending, especially on nuclear weapons....."

The Center For Security Policy / http://www.security-policy.org/latest.html 8/10/99 "...Yesterday, President Clinton awarded the Presidential Medal of Freedom to former President Jimmy Carter. The timing of this tribute was striking since two of the many foreign policy "chickens" loosed during the Carter Administration -- the surrender of the Panama Canal and the normalization of relations with the People's Republic of China -- are now coming home to roost. Of particular concern is the inattention by Mr. Clinton and his subordinates (many of whom, as the current president noted in the course of his remarks yesterday in Atlanta, previously had worked for President Carter) to the convergence of two trends initiated by the last Democratic chief executive: a vacuum of power at the strategic isthmus of Panama and a determination on the part of an increasingly assertive China to fill it at America's expense...."

Excerpts from China's Beachhead at Panama Canal by J. Michael Waller Insight Magazine 7/25/99 "...Under the terms of a controversial lease, Panama gave Hong Kong-based Hutchison Whampoa Ltd. the right to build new port facilities in Balboa, the canal's only Pacific port, and a major Atlantic port in Cristobal, and to run them up to the next half-century. As Beijing increased its economic muscle in the country, Panama's politicians gave Hutchison Whampoa the right to control anchorages on both ends of the canal, to hire new pilots to guide ships through the waterway, to block all passage that interferes with the company's business, to take control of key public roads near the canal and to have right of first refusal for control of some former U.S. military bases. "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," according to Al Santoli, an aide to Republican Rep. Dana Rohrabacher of California. Santoli has traveled the perimeter of the Pacific monitoring Chinese maritime encroachments from the Philippines to Panama. U.S. Ambassador to Panama William Hughes nearly was declared persona non grata for protesting the Hutchison deal when it was exposed three years ago, a U.S. official tells Insight. President Clinton responded by appointing Robert Pastor, an architect of the 1977 canal giveaway and an advocate for left-wing revolutionary causes, to replace Hughes. Senate Foreign Relations Committee Chairman Jesse Helms of North Carolina, one of the few lawmakers watching the Panama powder keg, blocked the nomination....

Excerpts from China's Beachhead at Panama Canal by J. Michael Waller Insight Magazine 7/25/99 "...Beijing is in Panama for the long haul. Hutchison Whampoa has the right to extend its leases until the year 2047 or to transfer them to a third party. Already a Chinese corporation called Great Wall Panama has secured a lease as long as 60 years for an export zone on the bank of the canal on the Atlantic side. "I have a sense that the U.S. is edgy about Hutchison Whampoa," former Panamanian Vice President Guillermo "Billy" Ford tells Insight. But Washington has done little to pressure the corrupt government of President Ernesto Perez Balladares to reopen the bidding. Last year, Balladares hired Clinton strategist James Carville as his personal consultant in a bid to keep power beyond his constitutional term, which expires this month. Balladares says he will step down, but he has packed the new Canal Commission with his pro-Beijing cronies. ..."

Excerpts from China's Beachhead at Panama Canal by J. Michael Waller Insight Magazine 7/25/99 "...Beijing uses large-scale emigration to base future intelligence assets abroad to recruit agents from ethnic Chinese communities, Insight has learned. And Panama is a key target. "One of the primary factors accounting for the success of Chinese intelligence is the exploitation of ... the vast emigration of Chinese to communities worldwide," according to Stanislav Lunev, a former Soviet military-intelligence colonel who operated in Beijing before defecting to the United States in 1992. According to Lunev, "The Chinese intention to develop oceangoing capabilities for its navy is well-known. But the Chinese navy does not yet have such worldwide capabilities at a time when it needs to have information about the perimeter of the Pacific region. This is the reason that Chinese entrepreneurs are actively in the market for abandoned port facilities in strategic locations." Lunev specifically cites the Panama Canal.

Heritage Foundation 8/19/99 John J Tierney, PhD "…But phasing out America's strategic presence in Panama carries serious consequences. Unless the Clinton Administration cements a new agreement to retain a direct U.S. presence in Panama, the complete withdrawal of U.S. troops will jeopardize the security of, as well as U.S. access to, the Canal. It will open the door for China to gain virtual control of the Panama Canal and assert its influence in the Western hemisphere; it also could make the war on drugs and terrorism more difficult…..The 1977 treaty transferring ownership of the Canal to Panama requires all U.S. military troops to leave when the treaty expires on December 31, 1999. Under the companion Treaty of Permanent Neutrality, which also becomes effective on that date, the United States retains the right to protect and defend the Canal beyond 2000. The U.S. instrument of ratification for the Neutrality Treaty allows both sides to negotiate an extension of the agreement giving the United States the right to station troops in Panama and enjoy basing rights there. ….Indeed, most Panamanians recognize that their government is unable to defend the Panama Canal or protect the country against the type of terrorist raids that Colombian guerrillas conducted in the Darien region in 1997. José Luis Sosa, director of Panama's National Police, said that Panama is "not in a condition to undertake a battle in the field with any group." In such a vulnerable environment, a U.S. priority should be the joint establishment of an effective security force…."

World Tribune.com 8/19/99 G Russell Evan "…In June, a group led by Richard Delgaudio of the National Security Center observed extensive construction, barbed wire fences and Chinese guards at the Panama Ports Company, which is controlled by the Hutchison Whampoa group, which in turn is controlled by the Peoples' Liberation Army of China. Mr. Delgaudio is rightly concerned about China's activities in the Panama Canal area in a year when the last U.S. military forces have been withdrawn from bases there and which will see the canal turned over to Panama by the United States on Dec. 31. Article V of the Neutrality Treaty allows Panama only in defense sites. Article VI gives U.S. warships "head of line" priority. Not so, says Panama Law No. 5 in its 50-year lease to Red China's agent Hutchison Port Holdings, with "priority" at the ports and "occupation" of Rodman Naval Station and part of Albrook Air Force Station — where Red China can base missiles, submarines and J-11 bombers 900 miles from Miami. Hutchison's construction projects at Balboa on the Pacific side include new piers and huge warehouses. Workers' uniforms and signs proclaim "Panama Ports Company," a smokescreen for Hutchison. The new administration building at the Balboa port is also labeled "Panama Ports Company" and houses Hutchison offices and Midland Bank, which is now owned by Chinese interests. Nearby is Cable & Wireless Communications, which is 25 percent owned by the Chinese. This is all part of the $22.2 million per year lease engineered by Panamanian President Ernesto "Toro" Balladares behind the backs of American companies…."

World Tribune.com 8/19/99 G Russell Evan "…On the Atlantic side at Cristobal, also controlled by Hutchison, dozens of ships routinely await clearance. After the Canal surrender date of Dec. 31, Hutchison has authority under Panama Law No. 5 to use its own pilots and, with its "port priority," can certainly control "head of line" on a day-to-day basis. Through Hutchison, China has in effect "established a strategic beachhead in Panama," Delgaudio's group concluded in their report (available care of the National Security Center, 10560 Main St., #217, Fairfax, Va 22030). Members of the group included Al Santoli, an aide to U.S. Rep. Dana Rohrbacher, California Republican, James Doran of the Senate Foreign Relations Committee, and Michael Waller, vice president of the American Foreign Policy Council…."

Insight Magazine 8/20/99 J Michael Waller "…Control of ports on both sides of the Panama Canal by a Chinese shipping company tied to the People's Liberation Army, or PLA, poses no security threat to the United States, the Clinton administration has insisted in coordinated statements by the State Department, the Pentagon and the White House. But congressional Republicans aren't buying that story. Senate Majority Leader Trent Lott sent Insight's report, "China's Beachhead at Panama Canal," to Defense Secretary William Cohen, calling the article "very disturbing" and asking for his response. Some on Capitol Hill are starting to ask whether the Clinton administration, as part of a suspected policy of relaxing vigilance toward China as a result of campaign contributions, has allowed Beijing to dominate the Panama Canal.. The administration won't acknowledge the relationship between the controversial company, shipping giant Hutchison Whampoa Ltd., and the PLA, even though the Senate Governmental Affairs Committee investigating Beijing's alleged covert funding of the 1996 Clinton-Gore reelection effort publicly established the connection two years ago. GOP concerns involve coincidences in the actions of key Clinton administration figures, including some appointments in, of all places, Panama, at the same time the Panamanian leadership was cutting deals with Hutchison Whampoa Ltd. The suspicions tie in to similar associations of other administration officials in Washington during the Chinese campaign-funding scandal. One of the concerns is possible politicization of the Panama Canal Commission, the U.S.-Panamanian agency running the waterway. President Clinton appointed Undersecretary of the Army Joe Reeder, who had no expertise on Panama or maritime issues, to head the normally nonpolitical commission consisting of five Americans and four Panamanians. Reeder was an old friend and law-firm colleague of the late Democratic National Committee chief and Commerce Department secretary Ron Brown, a central figure in the China campaign controversy. In March 1996, with Hutchison Whampoa poised to establish its beachhead, Reeder accompanied Brown on a trade mission to Panama. In 1998, Clinton appointed former Florida Democratic Party chief Simon X. Ferro as ambassador to Panama. Ferro, who assumed his post in February, is suspected to have received the position as a reward for securing the ill-fated nomination of first lady Hillary Rodham Clinton's brother, Hugh Rodham, as Florida's Democratic candidate for the U.S. Senate in 1994…Clinton appointed longtime crony and former White House chief of staff Thomas "Mack" McClarty as special envoy to the Western Hemisphere, even though he had no experience in Latin America. A source with business in Panama tells Insight that McClarty has "spent a lot of time in Panama smoothing the waters for a lot of these activities going on" with Chinese companies and has built strong relations with Panama's secretive banking community. Another White House fixture in Panama is Clinton political strategist James Carville, who in 1997 advised outgoing Panamanian President Ernesto Perez Balladares, who wanted to serve beyond his constitutional single five-year term. Balladares engineered the turnover of former U.S. facilities to Hutchison Whampoa. In his Aug. 1 letter to Cohen, Lott was blunt: "Bill, this administration is allowing a scenario to develop where U.S. national-security interests could not be protected without confronting the Chinese Communists in the Americas." He termed Hutchison Whampoa "an arm of the People's Liberation Army."…."

Investors Business Daily 8/27/99 "…The Clinton administration has again dealt with the Chinese in a way that puts our country in grave jeopardy.'' With those words, Rep. Dana Rohrabacher, R-Calif., tried to express the outrage he felt after returning from Panama on a much-needed fact-finding mission. His outrage is justified. Ronald Reagan was disgusted when Jimmy Carter's treaty signed the canal over to Panama (to be effective Dec. 31, 1999). But Carter's signature looks like a master stroke when compared with what Bill Clinton has allowed in Panama. Carter retained a few rights, such as allowing American warships to go to the ''head of the line'' in waiting to go through the canal. …. In 1997, without the knowledge of our ever-alert embassy in Panama, a bill was quietly passed in the Panamanian legislature giving birth to Law 5. The law authorized the lease of the canal to a Hong Kong company, Hutchison Whampoa Ltd. Rohrabacher said Hutchison is a third owned by the People's Liberation Army of China, and was chosen over at least two American companies in a secret process. But contract or no, we have a treaty, right? Certainly, our ''head of the line'' agreement with Panama would be recognized in its contract with China, right? Well, not exactly. There's apparently a clause in the contract that would enable the Chinese lessees to refuse canal access to U.S. ships! Another Law 5 clause authorizes Hutchison to buy options to lease adjacent U.S. Navy and Air Force bases - handy for launching China's Russian-made submarines and American-style missiles just 900 miles from Miami….''The Clinton gang's handprints are all over this,'' said Rohrabacher. And ''guess who's going to run Balladares' re-election campaign? James Carville!'' If Carville does work for the Balladares campaign, this will be a clear White House endorsement of a regime against whom we should be taking swift action…."

Augusta Chronicle 8/21/99 Editorial "… The Clinton administration's ``denial'' that Communist China is moving to take control of the Panama Canal is, when you read between the lines, less than reassuring. ``We have seen no capability on the part of the People's Republic of China to disrupt the canal's operation,'' said White House national security spokesman David Leavy in response to concerns expressed by U.S. Senate Majority Leader Trent Lott, R-Mass., that Beijing's dictators are, indeed, trying to replace the United States as Panama's canal ``partners.'' Note that Leavy didn't really deny the takeover attempt, he simply denied the Red Chinese had yet reached the point where they could disrupt passage through the canal. …..China appears to be positioning itself commercially and militarily along key naval choke points as they build up their navy, the way the Soviets tried to do in the 1980s. Meanwhile, except for some mild protests from the administration about how the corrupt Panama regime awarded the canal contract, Clinton has been looking the other way as China's armed forces (which gave money to his re-election campaign) maneuver to pose a serious national security threat right on our own doorstep….."

BBC Internet 9/2/99 "…The new president of Panama, Mireya Moscoso, has pledged in her inaugural address to ensure a smooth transition when the Panama Canal - one of the world's most important waterways - passes to national control. Mrs Moscoso, the country's first woman leader, said her government would manage the canal responsibly and efficiently after the US withdrawal at the end of the year. "My government intends to increase the autonomy of the canal so it may operate without any partisan political influence," she told a crowd of 25,000 people in the national stadium..."

Xinhua News Agency via Northern Light 9/11/99 ".... Panama President Mireya Moscoso will demand the United States to clean the firing ranges during the visit she will make on September 23 to the U.N. Assembly. The Panamanian president was quoted Saturday by local press as saying that her government expects to meet with U.S. authorities to discuss the areas contaminated with big quantities of undetonated explosives, left by the U.S. Army. Mireya Moscoso, who assumed the presidency of her country September 1, said she will sit to talk with the U.S. authorities like friends and ask them to honor the Torrijos-Carter Treaties, signed by both countries in 1977 and clean those polygons, because this is indispensable for the Panamanian citizens security. The U.S. Army created three firing ranges in the canal zone during its permanence of almost one century, where the U.S. troops left a big amount of undetonated explosives. ..."

Codel Report: Congressman Dana Rohrabacher Al Santoli ".... 1. Growing Role of Communist China: The People's Republic of China is making major political, economic and intelligence inroads in Latin America and the Caribbean. China has increased its activities in Cuba, including the creation of major electronic intelligence/jamming facilities directed at the United States, and increased Spanish language broadcasts of Radio Beijing. Panama, the strategic choke point between the Atlantic and Pacific Oceans and between North and South America, is becoming China's "hub" or "beach head" in our hemisphere. U.S. security officials and knowledgeable Panamanians see the Chinese using trade as their cover for intelligence and political operations. Beijing's goals are: 1) usurping U.S. political influence in the region; 2) dislodging the political recognition and economic influence of Taiwan; 3) a base for sabotage in the event of any future U.S.-China conflicts over Taiwan or the South China Sea. Canal security is very difficult and the presence of Chinese entities controlling ports at both ends of the Canal is a serious security risk. In addition, their control of the ports and stevedoring enhances the two-way flow of sensitive weapons-related technologies and the potential for sabotage....".

Codel Report: Congressman Dana Rohrabacher Al Santoli ".... 2. Hutchison Whampoa Control of Canal Ports: Businessmen involved in the bidding, as well as current and former-U.S. officials claim that the Chinese Hutchison Whampoa Company obtained the contract for 25 to 50 year lease for the Canal ports by using unfair under-the-table tactics. At least two consortiums, involving American companies may have offered better bids for these strategic port facilities. The smell of corruption is exceptionally strong. In addition, China has stationed a senior intelligence official, reportedly Mr. Yu Gi Ye, is reportedly Beijing's Commercial Attache and de facto ambassador. He operates with a staff of 14 out of the Global Bank Building in Panama City. It is especially troubling that the Clinton administration has publicly stated that they have no knowledge of a connection between Hutchison Whampoa and the Chinese government or military. See the attached documents that include or cite reports by U.S. intelligence agencies, the U.S. Bureau of Export Affairs [BXA], the U.S. Embassy in Beijing and the Rand Corporation identifying Li Ka-Shing and Hutchison Whampoa as financing or serving as a conduit for Communist China's People Liberation Army [and navy] to acquire sensitive technologies and other equipment. In addition, Li serves as a board member on CITIC, which is a state-owned funding and technology acquiring source for Communist China's military. Hutchison Whampoa's control over millions of cargo containers at entrance points at both ends of the Canal for the next 50 years is a more pressing security concern than the legal debate over who may appoint Canal pilots.

Codel Report: Congressman Dana Rohrabacher Al Santoli ".... 3. Corruption, Smuggling and Money Laundering: Panama - especially Colon - has become the "K Mart" of worldwide smuggling; the counterfeit and piracy of U.S. products; repackaging of Chinese textiles to beat U.S. quotas; and illicit money laundering. Chinese triad gangs from the mainland and Taiwan have been working together, in tandem with Russian mafia Mafia and Cuban entities. There are also Middle Eastern organizations present, as well as the pervasive activities of the Colombian drug cartels and narco-terrorist organizations. The entire 2,000 mile coast of Panama, from Costa Rica to the Colombian border has been as drop-off points for weapons being shipped into Colombia. There are also some 1,500 islands along the coast. Corruption in the Colombian government is rampant. Example: Panama's negotiator for a treaty with U.S. on stolen cars brought to Panama for transshipment, herself drove a stolen car.

Codel Report: Congressman Dana Rohrabacher Al Santoli ".... 4. Chinese Alien Smuggling: There is strong evidence of massive systematic smuggling of Chinese illegal aliens into Panama, which results in a steady flow of illegal Chinese from Panama to the United States, with the complicity of the highest levels of the Panama government. This is a major news story in Panama. All Panamanians the delegation spoke with, from senior government officials to ordinary citizens, expressed deep concern about the exceptionally large numbers of illegal mainland Chinese migrants that have been flooding into Panama during the past few years, far surpassing similar activity that occurred during the Noriega dictatorship. Panama's former Intelligence chief Samantha Smith, now in hiding in fear of retaliation, told us in detail the role of President Balladares and his closest aides in the Chinese alien smuggling.

Codel Report: Congressman Dana Rohrabacher Al Santoli ".... THE THREAT: If mainland Chinese and their Hong Kong-based front companies dominate the local and macro Canal-based economy, Beijing will become the dominant political influence in the country. In Panamanian newspapers, the designated new Canal Commissioner Ricardo Martinelli has been quoted as stating, 'The departure of the U.S. role in the Canal Zone will have no economic impact on Panama because of the influx of income from [mainland] China.' The media also report that China has promised to step up economic assistance and investment in Panama after the U.S. departs. China's $2 billion worth of annual commerce in the Canal Zone dwarfs the $500 million of commerce by Taiwan. And there are reports, in Hong Kong and Panama, that Taiwan's Evergreen shipping company is planning to sell its port on the Atlantic Coast of the Canal, with Hutchison Whampoa a potential buyer.

Codel Report: Congressman Dana Rohrabacher Al Santoli ".... 5. The Clinton-Balladares-China Connection: The ties between the President Balladares and communist China, as well as the ties between President Clinton's political entourage and Balladares and China is a matter of serious concern. In 1996, the Canal contract bidding occurred while China was making substantial contributions to the Clinton campaign. Li Ka-Shing is an investor in the Riady family's Hong Kong China Bank. Clinton crony and former White House Chief of Staff Mack McClarty is the President's Special Envoy to Latin America and has reportedly spent "a lot of time" in Panama. In 1997, James Carville ran the Balladares campaign to extend his presidency. Clinton lawyer Gregory Craig has represented at least one Balladares crony indicted on drug-smuggling charges in the U.S., and was publicly mentioned by Balladares as the lawyer to possibly represent his interests if the Chinese alien smuggling issue is brought to a U.S. court.

Codel Report: Congressman Dana Rohrabacher Al Santoli ".... 6. Maintenance of the Canal: Around 1/3 of the world's economy passes through the Canal, including more than 15% of all U.S. trade. In addition the U.S. Navy makes some 200 passages through the Canal annually. The Canal is especially fragile to maintain and operate, requiring a cadre of skilled technicians and engineers to maintain. The Canal Workers Union reports that by the end of 1999, some 30 percent of skilled Canal Workers are being laid off. They are reportedly being replaced by inexperienced personnel, whose qualifications are based on their membership to one political party or another. There are also reports that after the Canal is fully under Panamanian control that further lay-offs of skilled workers are expected. In addition, there are reports that pilots, engineers and other technicians are being hired in Communist China for the Canal, but will not arrive in Panama until after the year 2000.

Codel Report: Congressman Dana Rohrabacher Al Santoli ".... 7. Colombian Narco-Terrorist Forces: The U.S. military and other counter-drug forces will completely depart Panama by December 1999. Panama has no army, air force or navy, except for a small Coast Guard. The government relies upon largely untrained and poorly-armed police to patrol the border area with Colombia where the FARC narco-terrorist forces are increasingly active inside of Panamanian territory. Colombian FARC military/political units are increasingly active in the Darien region of Panama, including setting up schools, free clinics and other institutions. They are essentially waging a Maoist "people's war." The incoming President Mireya Moscoso and her advisors have spoken inconsistently on a U.S. role in bolstering Panama's security, counter-narcotics operations from Panamanian territory and the legality of the "DeConcini Reservation" to the Carter-Torrijos Treaty that would permit the U.S. to intervene to defend the Canal's security. The Clinton Administration speaks of a "two to three year cooling of period" before resuming bilateral talks on a Multinational Counternarcotics Center in Panama. Unfortunately, by that time the narco-terrorists could be in a much stronger position on both sides of the border.

Judicial Watch 9/17/99 Joe Giganti On September 16, 1999, Judicial Watch filed suit against the Panama Canal Commission, Department of Defense, and Department of the Army to obtain documentation showing why the Clinton Administration has allowed Communist Chinese interests to occupy the Panama Canal zone. The suit is a prelude to other planned action to prevent the transfer of the Canal to the Panamanians under these circumstances at the end of the year....."

CSPAN 9/17/99 Freeper lynx2 "...Rep Dana Rohrabacker is on Cspan...he is talking of the Chinese corruption that BOUGHT the leases at the Panama Canal through millions of dollars in bribes to the corrupt President of Panama. He also said that the President of Panama was prohibted from running for a second term by the Panama constitution , but when Dana went to Panama to do some digging he found that JAMES CARVILLE was down there trying to find a way for the President to run again against their constitution ..."

Insight on the News 9/13/99 J Michael Waller "....The administration won't acknowledge the relationship between the controversial company, shipping giant Hutchison Whampoa Ltd., and the PLA, even though the Senate Governmental Affairs Committee investigating Beijing's alleged covert funding of the 1996 Clinton-Gore reelection effort publicly established the connection two years ago. GOP concerns involve coincidences in the actions of key Clinton administration figures, including some appointments in, of all places, Panama, at the same time the Panamanian leadership was cutting deals with Hutchison Whampoa Ltd. The suspicions tie in to similar associations of other administration officials in Washington during the Chinese campaign-funding scandal...."

Insight on the News 9/13/99 J Michael Waller "....One of the concerns is possible politicization of the Panama Canal Commission, the U.S.-Panamanian agency running the waterway. President Clinton appointed Undersecretary of the Army Joe Reeder, who had no expertise on Panama or maritime issues, to head the normally nonpolitical commission consisting of five Americans and four Panamanians. Reeder was an old friend and law-firm colleague of the late Democratic National Committee chief and Commerce Department secretary RonBrown, a central figure in the China campaign controversy. In March 1996, with Hutchison Whampoa poised to establish its beachhead, Reeder accompanied Brown on a trade mission to Panama. ....."

Insight on the News 9/13/99 J Michael Waller "....In 1998, Clinton appointed former Florida Democratic Party chief Simon X. Ferro as ambassador to Panama. Ferro, who assumed his post in February, is suspected to have received the position as a reward for securing the ill-fated nomination of first lady HillaryRodham Clinton's brother, Hugh Rodham, as Florida's Democratic candidate for the U.S. Senate in 1994. ...."

Insight on the News 9/13/99 J Michael Waller "....Clinton appointed longtime crony and former White House chief of staff Thomas "Mack" McClarty as special envoy to the Western Hemisphere, even though he had no experience in Latin America. A source with business in Panama tells Insight that McClarty has "spent a lot of time in Panama smoothing the waters for a lot of these activities going on" with Chinese companies and has built strong relations with Panama's secretive banking community....."

Insight on the News 9/13/99 J Michael Waller "....Another White House fixture in Panama is Clinton political strategist James Carville, who in 1997 advised outgoing Panamanian President Ernesto Perez Balladares, who wanted to serve beyond his constitutional single five-year term. Balladares engineered the turnover of former U.S. facilities to Hutchison Whampoa. ...."

Insight on the News 9/13/99 J Michael Waller "....In his Aug. 1 letter to Cohen, Lott was blunt: "Bill, this administration is allowing a scenario to develop where U.S. national-security interests could not be protected without confronting the Chinese Communists in the Americas." He termed Hutchison Whampoa "an arm of the People's Liberation Army." Before Cohen could reply, administration spinmeisters immediately responded with carefully worded statements coordinated between the White House, the State Department and the Pentagon. Hutchison Whampoa issued a statement denying any connection with the PLA. "We do not anticipate any problems whatsoever from the result of this - of the port facilities that are owned by a Chinese company," said Pentagon spokesman Kenneth Bacon in response to a Washington Times report on Lott's letter. "We do not see the Chinese-owned port facilities as a military or a national-security threat." ....."That's baloney," says Al Santoli, a special assistant to Republican Rep. Dana Rohrabacher of California, who monitors Beijing's long-term strategy to dominate the Pacific Ocean. "One or two people with a small amount of explosives can disable that canal for a very, very long time." The White House assertion that Beijing lacks the capability to block the Panama Canal, Santoli and other military experts say, is misleading, false or nave....."

Insight on the News 9/13/99 J Michael Waller "...."COSCO is building Panamax ships, not superships," says a maritime-industry expert. He notes that Panamax-class ships are designed to be as large as possible while fitting through the canal's locks, sometimes with as few as four inches to spare on either side, and that COSCO, the China Ocean Shipping Co., is considered the PLA's merchant marine. "Continued Panamax construction," the maritime businessman says, shows Beijing plans on keeping the canal open." He adds, "What do the Chinese know about the canal's future that we don't know?" Plenty, if the administration's public statements are any indication. In trying to refute Lott's letter, administration spinmeisters have resorted to legalistic defenses and assertions of the U.S. right to unilateral action. (Cohen had not yet responded to Lott's letter when this article went to press.) The White House and the State Department cite a January 1997 law that Leavy claims will ensure "that the canal will remain open to vessels of all nations." Leavy had to be prodded by a reporter to say that the law was Panamanian, not U.S., but insisted that "our stake in the canal is preserved" thanks to "legal remedies." What the White House and the State Department didn't say is that the law, known as Law No. 5, gives Hutchison Whampoa total control of the canal's only Pacific port, Balboa; the first option to take over the strategic former U.S. Rodman Naval Station across the waterway from Balboa; total control of the U.S.-built Cristobal port on the Atlantic; access to part of the former U.S. Albrook Air Force Station; the right to control the pilots of all ships using the canal; control of anchorages; and other concessions that critics say contravene the letter and spirit of the 1977 Carter-Torrijos treaties that handed the canal to Panama. Under the treaties, all U.S. forces will have left Panama by the end of this year, and all facilities will be turned over to the Panamanian government....."

China Times 9/19/99 "....Judicial Watch, a non-partisan, public interest American law organization dedicated to fighting government corruption, said Friday that it has filed suit against the Department of Defense, Department of Army and the Panama Canal Commission to obtain documentation showing why the Clinton administration has allowed Communist Chinese interests to occupy the Panama Canal zone. Larry Klayman, Judicial Watch chairman, said the suit is a prelude to other planned actions to prevent the transfer of the Canal to the Panamanians at the end of this year according to a treaty signed by the United States and Panama. "It would appear that the Clinton administration, perhaps because of Chinese campaign contributions, has overlooked yet another potential national security debacle. Judicial Watch intends to get to the bottom of this and take whatever action is appropriate, in conjunction with other interested parties," stressed Klayman. The Clinton administration, however, denies that US national security will be endangered after the Panama Canal is returned to the Panamanians, saying that it will not allow the Panama Canal to be controlled by a Hong Kong shipping company. ..."

Congressional Record, http://thomas.loc.gov 9/22/99 Rep Dana Rohrabacher (R-CA) "....During a recent trip to Panama, I spent time investigating the situation, spoke to people who were in hiding, who were afraid for their lives, spoke to others who were firsthand observers of corruption and firsthand observers of a strategic maneuver on the part of the Chinese that is moving forward and putting the United States in great danger. ...."

Congressional Record, http://thomas.loc.gov 9/22/99 Rep Dana Rohrabacher (R-CA) "....I was down, as I say, in Panama a very short time ago, a month ago; and I was shocked to see ghost towns in what had been only a short time ago American military bases. Panama, of course, has no military of their own. They have no military, and they have always relied on the United States military to protect the canal against any type of aggression. So when I traveled to Panama, and having been there many times in the past and seen many American military persons there to protect Panama and protect our national security interests and protect the canal, I was shocked when I saw they were gone. They are all gone. It is like this hall of Congress now. I am the only Member standing here. When one goes down to Panama where there used to be tens of thousands of American troops, Navy, Air Force, Marines, Army, they were always there; they are gone, and there is no Panamanian military force to take up the slack...."

Congressional Record, http://thomas.loc.gov 9/22/99 Rep Dana Rohrabacher (R-CA) ".... Now, what does that mean to us? Well, that means to us that there is a vulnerability there. There are two vulnerabilities: number one, there is a war going on next door in Colombia and already the narco terrorists, who are allied with Fidel Castro and the people who hate the United States, already those guerrillas have infiltrated into the Panamanian military. There is nothing standing between them and the Panama Canal. That alone should cause alarm bells to go off because the Panama Canal is vulnerable to sabotage. I will not go into detail, but it is incredibly vulnerable to sabotage...."

Congressional Record, http://thomas.loc.gov 9/22/99 Rep Dana Rohrabacher (R-CA) ".... What concerns me more is the overwhelming evidence of a Chinese presence and even domination of Panama in the Panama Canal, something that is in the process of happening. That, to me, was even more frightening because I know that we can blink our eyes and this magnificent achievement of the United States, a canal between the two oceans, something that we rely on in times of international emergency so we can send our ships from one ocean to the other and take off days, actually a week, of travel around the Horn in South America, that that Panama Canal now is totally vulnerable and is slowly coming under the domination of the Communist Chinese. Now, let me say what I mean. There is a company called Hutchison Whampoa, run by a man named Li Ka-Shing. He is part of the clique, he is part of Beijing's inner circle, he is a front man, and his company is a front for the Chinese Government. The Chinese Government, in fact, owns over 30 percent outright of his company. This company is tied, not closely but tied totally within the small circle of elite of the Beijing regime. This company now has won the contract which provides them control of all of the port facilities on both ends of the canal. Now, to be fair about it, there are some other new port facilities further away that are being built but on both ends of the canal, directly outside of the canal. Those port facilities are now under control of this Communist Chinese front company....."

Congressional Record, http://thomas.loc.gov 9/22/99 Rep Dana Rohrabacher (R-CA) ".... They are also in negotiations and are trying to, and I am not sure if this is part of the lease or not, to get control of one of the air bases in Panama, the Howard Air Base, as well as some of the other military facilities that we left behind. Now, how did that happen? What has gone wrong here? What is happening? How can a country that is considered to be belligerent, and many people are trying to have a realistic policy, considered to be belligerent and hostile to the United States, end up with a commanding position in the Panama Canal and a position to dominate this strategic waterway? How did that happen? Where was our intelligence? Where was the NSA? Who were they listening to? Where was the CIA? I think the CIA and the NSA probably did their job. The trouble is that they are reporting to the Clinton administration; and everywhere in the world where we look, where America's national security has been put in jeopardy by the Communist Chinese, the fingerprints of the Clinton administration are all over the crime scene. The people who are supposed to be protecting our interests are not protecting our national security interests....."

Congressional Record, http://thomas.loc.gov 9/22/99 Rep Dana Rohrabacher (R-CA) ".... So I went down and I met with the ambassador, the ambassador to Panama from the United States. I asked the ambassador, I said, Mr. Ambassador, how did they get this contract? I said, In fact, I have even heard that there might have been some bribery involved here....He says, oh, we do not know if there is any corruption involved in this. I said, what do your intelligence reports say? He said, what intelligence reports? I said, what does the NSA say when they are listening in on the conversations involved with the people involved in these negotiations? Well, I do not know, I have not seen those reports, if there are any. What does your station chief, the head of the CIA there, what does he say? I have not seen any report by him. This is the most important thing that has happened in the past 10 years in Panama, and the ambassador has not bothered to read the intelligence reports of how that contract came into being. So I said, well, Mr. Ambassador, this is really an important thing. Do you not think you ought to check up on it? And he says, oh, I guess maybe I should. Well, come to find out that there are certain people who work for the government whose job is not to see any evil, not to go looking for those reports. ...."

Congressional Record, http://thomas.loc.gov 9/22/99 Rep Dana Rohrabacher (R-CA) "....So I went out after meeting the ambassador. By the way, the CIA station chief was conveniently not available when I was in Panama, conveniently not available. So I went out to try to find things on my own. I am sorry to report today to my colleagues and to whoever is listening or reading the Congressional Record on this speech that I was able to find out information that has indicated to me that the lease arrangement, the contract arrangement with this Communist Chinese front company was obtained through bribery of high-level Panamanian officials. I talked to people who were directly involved with the negotiations, directly involved with the bidding process, and I was told, and these people are afraid to say so publicly, but they told me privately that there were bribes in the millions of dollars that were paid to the former president of Panama, Balladares, for the lease agreement with the Hutchison Whampoa company, and it was again repeated to me over and over again that Hutchison Whampoa did not offer the best bid for those port facilities on either side of the Panama Canal, yet they were awarded that lease agreement, and the only explanation is that millions of dollars of bribes were provided to high-level Panamanian officials....."

Congressional Record, http://thomas.loc.gov 9/22/99 Rep Dana Rohrabacher (R-CA) ".... President Balladares, who was president at the time and recently stepped down, it is important for us to note that the Panamanian Constitution prevents a president of Panama from running for reelection. President Balladares wanted to change the Constitution so that he could run for reelection. The Chinese certainly bankrolled that campaign, and guess who was down there running the referendum to try to change the Panamanian Constitution so this man who helped give away the Panama Canal would have the right to run again for office? Who was down there running that campaign for him? James Carville, that is who. Who is he? Every time you turn around, the President's inner circle is involved with something that is undercutting America's national security. I am recommending to our colleagues that we pay attention to Panama. Up until now, the reason these things are happening is that we have left it to the administration, and Panama has been off of the radar screen of the United States of America....."

Congressional Record, http://thomas.loc.gov 9/22/99 Rep Dana Rohrabacher (R-CA) ".... Just one other note. When I went to Panama, the head of the Panamanian CIA, that is their central intelligence agency, was in hiding. Her name was Samantha Smith. Samantha Smith was in hiding, and our embassy did not know where she was, they did not know what was happening, how to get hold of her. There was no report on Samantha Smith, of how we could talk to her. The head of the Panamanian CIA was in hiding for this reason, because there had been information that she had been involved in a smuggling ring of Communist Chinese aliens, Chinese residents of the mainland of China, who had paid $30,000 a head to President Balladares of Panama in order to go through Panama into the United States of America, hundreds of them. This woman, the head of the CIA, was the one who signed off on this operation. But she had signed off on it because her president had ordered her to sign those documents, those requests from these Chinese coming from the mainland. First of all, I want to know who these people were, who these Chinese were who could afford to pay $30,000 to be smuggled into the United States through Panama. Chinese farmers do not have that kind of money. I do not know if they are saboteurs, I do not know who they are, but I want to know who they are. The head of the Panamanian CIA, when she realized she was going to be the fall person, she was going to be blamed when this became known, went into hiding. Guess what our? Our embassy just could not find her. They had not had contact with her. But guess what, within one day, I found her....."

Congressional Record, http://thomas.loc.gov 9/22/99 Rep Dana Rohrabacher (R-CA) ".... Within one day, I had a meeting with this head of their Panamanian intelligence. She just told me everything about how the President had forced her to sign these documents, ordered her, even above her objection; and how these Chinese would come in, these illegal Chinese would come in, land in Panama, and there would be a special escort officer that would take them on the second floor at the airport in Panama and take them around, and then take them where she did not know; and how she had protested to the President, but the president of Panama, Balladares, had ordered her to do so. This is the man who also, fascinatingly enough, provided the contract for Hutchison Whampoa, the Chinese front company that now controls both ends of the canal. Let me tell the Members something that I consider to be even another little bit of evidence that we should not miss. Supposedly, our government has been negotiating with the Panamanian government, the government of Balladares, for what? We have been negotiating to try to maintain some type of military presence in Panama to protect the Panama Canal....."

Congressional Record, http://thomas.loc.gov 9/22/99 Rep Dana Rohrabacher (R-CA) ".... Polls indicate now that from 70 to 80 percent of the Panamanian people love the United States and want to see a military presence of the United States in Panama. We left. They told us to leave, and we left. Now they know we have been serious all these years, that we believe they have the right and freedom to control their own country. We are not like Russia, China. If the people do not want us, we do not stay there and brutalize the people in order to maintain our military bases. We got out. That just reconfirmed for the people of Panama, hey, the Americans are good people after all. They really do believe in democracy. We want them back. Although the polls showed 70 to 80 percent of the Panamanian people wanted us there, our State Department could not negotiate a contract and a deal that would permit us, an agreement that would permit us to have an American military presence in Panama. They could not do it. Something is wrong. Something is wrong here. Of course, it was President Balladares who was the head of that country, and of course our own ambassador had not read any of the intelligence reports. I do not guess he has read any intelligence reports on any instructions Balladares might have had with those negotiators, or any contact that he might have with the Communist Chinese. ...."

The New Australian Published: No. 135, 9/27-10/4/99 Larry Elgin "…Not too long ago, on 28 July, 1999, an interagency Panamanian police force seized a cache of heavy weapons at a waterfront home located just minutes in driving time from the Canal on the Atlantic side. The haul included 30 assault rifles, including G-3’s, M-16’s and FAL’s, a couple of rocket launchers, a 7.62 caliber machine gun (PKM) with 106 boxes of ammo containing 700 rounds each, a submachine gun, a couple of Chinese grenade launchers, with grenades, and some flares and scopes. The home was the property of a Panamanian originally from Italy. A combination of Panamanian police groups had had their eye on it. The brother of the owner is a high officer in a wharf group that operates the Colon Port terminal which not too long ago was cited by Panamanian legislator Miguel Bush as a conduit for arms traffic. Presumably, the account in El Panama America by Enrique Watts Rios said, the arms came into Panama from Colombia, declining to reveal more about the police sources of this particular information. …."

The New Australian 9/27-10/4/99 Larry Elgin "....Not too long ago, on 28 July, 1999, an interagency Panamanian police force seized a cache of heavy weapons at a waterfront home located just minutes in driving time from the Canal on the Atlantic side. The haul included 30 assault rifles, including G-3's, M-16's and FAL's, a couple of rocket launchers, a 7.62 caliber machine gun (PKM) with 106 boxes of ammo containing 700 rounds each, a submachine gun, a couple of Chinese grenade launchers, with grenades, and some flares and scopes. The home was the property of a Panamanian originally from Italy. A combination of Panamanian police groups had had their eye on it. The brother of the owner is a high officer in a wharf group that operates the Colon Port terminal which not too long ago was cited by Panamanian legislator Miguel Bush as a conduit for arms traffic. Presumably, the account in El Panama America by Enrique Watts Rios said, the arms came into Panama from Colombia, declining to reveal more about the police sources of this particular information. This is a confluence of events that could alarm an American observer if he were to take seriously the warning constantly given, in his Panama Canal testimony and elsewhere, by U.S. Defense - American Victory Honorary Chairman, Admiral Tom Moorer, that we must assess our strategic situation, not by what a potential strategic foe signals by way of intentions, but rather by what it has the capacity to do should it so choose. Thus, a seemingly minor incident of this sort, but one which demonstrates sufficient armament in place to enable the destruction and crippling of the Panama Canal, perhaps by something so simple as a ride in a cigarette boat, when coupled with overtones of high level Panamanian ties to communist Chinese dominated entities, Colombia with its drug lords and perhaps even other illicit ties, is cause for closer scrutiny. As Admiral Moorer has pointed out, we must be concerned with a potential foe's capabilities, not his presumed intentions to use them or not......The narcotrafficantes, the eternal revolutionists of Latin America, the gangsters whom they have allied with in the rest of the world, the aging leaders of the Chinese communist party, desperate to hang onto power, all want to destroy that America, which, as John Adams said afterwards, was created in the 20 years leading to our Revolution, not on the battlefields which then became the focus, but in the hearts and minds of those who founded us and wrote our principles eternally into the souls of those who love liberty. - and were and are willing to fight to preserve it. Their potential for use as a proxy in the ancient tradition of Sun Tzu's precepts is such that it must be examined. The even more dangerous possibility is the combination of such a proxy effort with Bill Clinton's loathing of our military. There is now incontrovertible proof that he has, at the very least, shown suspect judgment in dealing with known PLA operatives and agents, including campaign donors from (ironically for a child of the 1960"s) this greatest military industrial complex the world has ever known. He is a fertile target for the subtle practitioner. His well-known temper, his willingness to be bought, his intemperate hunger for immediate satisfaction, all are the perfect invitation for the unnoticed potions of the Taoist thinkers of the PLA. They, like the elder brother, appear to be using potions of an ancient style of warfare that are little noticed outside of their own village, and our President is the ideal target for such use......"

Associated Press 10/5/99 David Briscoe ".....Americans will not stand for Chinese control of the Panama Canal, a group that includes retired military officers said today. Dumping a four-foot-high pile of 250,000 petitions near the Capitol Building, the group opposed to a Hong Kong business's lease on canal ports appealed to Congress to ensure the canal stays open to U.S. shipping. Under a 1977 agreement, the last U.S. forces are pulling out of Panama on Dec. 31, turning over the canal to Panama. The petitions call upon Congress to investigate claims that the Clinton administration has allowed China to become the canal's "gatekeeper'' after U.S. forces leave. "We built it, we paid for it, we use it,'' said retired Adm. Thomas H. Moorer, former chairman of the Joint Chiefs. "We want to make sure the Chinese communists don't gain control of it.'' Moorer spoke at a news conference on the Capitol lawn with other members of the National Security Center and several members of Congress concerned about the canal's future. The center, which includes 80 retired military officers on its advisory board, has been stirring concern about U.S. turnover of the canal to Panama. "The United States and Panama have a joint regard for democracy and freedom ... and we do not want to see it weakened by outside influence from China,'' said Rep. Bob Barr, R-Ga. ...."

South China Morning Post 10/13/99 Greg Torode "....Hutchison Whampoa is taking urgent steps to protect itself from intensifying political attack in Washington over its Panama Canal operations. The company is negotiating with several lobby firms in the capital to quell claims it is at the heart of a mainland bid to eventually control the strategic shipping route. "We are increasingly worried about the situation and we are taking steps to ensure our side of the story is firmly and effectively put across to stop all this," one official said. "It is not good for us or Hong Kong in the long term. It is all quite ridiculous and we are talking to people who know Washington a lot better than we do." ...... Senior Republican figures, such as Senate Majority leader Trent Lott and former defence secretary Caspar Weinberger, have named Hutchison as a major People's Liberation Army security threat once American forces pull out of the canal in December. Open hearings of the Armed Services Committee of the House of Representatives are expected to start by the end of the month. Committee members are understood to have met intelligence officials last week to discuss the situation. Further attention is expected this week with the arrival in Washington of new Panamanian President Mireya Moscoso, who has refused to allow any future stationing of United States troops. ....... He described the Hutchison deal as the "biggest threat" to the canal's continued security and raised the prospect of the firm using a "trumped-up reason" to shut it to US traffic. Hutchison has fiercely denied the reports, insisting it has no links to the PLA, no ability to control the canal and no interest in doing so. ...."

Wall Street Journal 10/15/99 Peter Wonacott "....U.S. congressional scrutiny of a well-known Hong Kong conglomerate's operations in Panama point to a new wariness toward this city in some quarters of Washington following its return to Chinese rule. In the next few weeks, the U.S. Senate Armed Services Committee will discuss a Hutchison Whampoa Ltd. subsidiary's right to run two container ports at the Atlantic and Pacific entrances of the strategic Panama Canal. The hearing comes at the behest of Senate Majority Leader Trent Lott, who warned of "security risks" posed by the Hong Kong company. In August, Mr. Lott wrote to U.S. Defense Secretary William Cohen that "U.S. naval ships will be at the mercy of Chinese-controlled pilots and could even be denied passage through the canal by Hutchison, an arm of the People's Liberation Army.".... Hong Kong-listed Hutchison, one of the territory's oldest companies, has no known links to the PLA. And the city is home to hundreds of publicly listed companies with billions of dollars invested in China. Relationships between those companies' senior executives and Chinese officials are more the rule than the exception. Still, U.S. legislators have cited concerns that Hutchison's controlling shareholder, billionaire Li Ka-shing, has close ties to China's leadership...."

Wall Street Journal 10/15/99 Peter Wonacott "....The congressional concern is the latest manifestation of a China phobia sweeping conservative political circles in the U.S. Once beyond suspicion, Hong Kong is now lumped together with its mainland ruler in the eyes of many U.S. politicians. Those suspicions increased after recent allegations that Hong Kong companies may have helped China acquire sensitive U.S. technology, a charge Hong Kong officials vigorously deny. ..... For the sprawling conglomerate, with operations in China and around the world, dissecting the business empire for U.S. officials will not be easy. Aside from 19 port operations in six countries, Hutchison also has an international telecommunications business and an extensive property portfolio. Its stock, listed in both London and Hong Kong, is widely held by international investors. About half the shares are owned by Cheung Kong (Holdings) Ltd., a property and industrial conglomerate controlled by Mr. Li and his family. Hutchison executives say mainland Chinese interests hold no more than 1% ownership in either company......"

Miami Herald 10/11/99 Glenn Garvin "....The Clinton administration has quietly decided to throw in $160 million cash when it turns over the Panama Canal to the Panamanian government at the end of the year, a decision that has led some alarmed political leaders in both countries to predict a wild spending spree....The money is earmarked for long-term improvements to the canal, but some officials fear that Panamanian President Mireya Moscoso's government -- short on cash because its populist economic policies have made international loans hard to come by -- may divert the money to social programs. ``If that money is handed over, unencumbered, to the Panamanian government, it will represent a tremendous temptation,'' said Ricardo Arias Calderon, head of Panama's Christian Democratic Party. The decision to give the Panamanians the money, which is held in a U.S. Treasury account intended to fund long-term improvements to the canal, has stirred anger on Capitol Hill, where legislators see it as not only a giveaway but a violation of congressional authority over spending. ...."

AP 10/12/99 ".....The Panamanian government will invite Cuban leader Fidel Castro to attend ceremonies marking the U.S. handover of the Panama Canal in December, the country's ambassador to Cuba said. Ambassador Marcos Alarcon told reporters that "independent of ideological differences,'' Panama maintains excellent relations with Cuba. ..."

Washington Times 10/12/99 Bruce Fein ".....Mischief seems afoot along the Panama Canal as its scheduled delivery to the government of Panama on Dec. 31 approaches. Fulfillment of Panama's treaty obligations is in doubt. Senate Majority Leader Trent Lott, Mississippi Republican, has called for hearings before the Senate Armed Services Committee chaired by Sen. John Warner, Virginia Republican. An unstarry-eyed examination of potential threats to the openness and neutrality of the Canal and the right of United States warships to expedited treatment during emergencies - all guaranteed by the Permanent Neutrality Treaty - is warranted. What should be sought is not humiliation or denigration of Panama, but joint measures to dispel serious concerns about the canal's safety, neutrality, and operations. They are not contrived. The notorious Colombian narco-terrorist organization, FARC, circulates freely in Southern Panama with means of sabotaging the Canal. Panama lacks a military, and its police are both corrupt and incapable of arresting FARC's activities.....A danger equally worrisome is Panama Law No. 5 of Jan. 16, 1997. It grants a 25-year renewable concession to the Panama Ports Co. for "development, construction, operation, administration and management of the terminals and containers, ro-ro, passengers, bulk cargo and general cargo in the Ports of Balboa and Cristobal." The Ports Co. is controlled by Hong Kong based Hutchison-Whampoa, an ostensible commercial entity. But all may not be what appears. The meticulous Cox Committee report on Chinese espionage and acquisition of militarily sensitive technology in the United States found that thousands of apparent commercial enterprises were fronts for the Chinese government. Any line between the military and the commercial or civilian in China is specious; the government of the People's Republic of China controls everything it wishes to control. The Ports Co. concession contract might be exploited by the PRC to conduct spying against the United States, to preposition military equipment, or to undertake other hostile measures against American national security interests....."

UPI Focus 10/19/99 "..... With the United States' ceding of the Panama Canal barely two months away, the White House on Tuesday rejected Republican warnings of a looming Chinese takeover as "silly stuff." "That is the kind of silly stuff that gets out from time to time in this town," White House press secretary Joe Lockhart said of widespread concerns among conservatives that a company closely tied to the Beijing government has been granted a key contract for operating ports at both ends of the canal. Lockhart defended the administration's handling of the U.S.-built canal after President Clinton met with Panama's new president, Mireya Moscoso, spending much of their 45-minute White House session discussing the 52-mile waterway's scheduled change to Panamanian control at the end of the year... And despite its close ties to the Chinese government, Lockhart said, Hutchison Whampoa is "the largest company in the world doing this kind of business. So it was no surprise that they won this business." A White House official said there is "ample evidence that this company is a legitimate company in the business in which they're working on." The official added: "We are not concerned about this company."....."

The Reagan Information Interchange 10/19/99 Kenneth White "..... Second-hand information exactly confirms Virginia Taxpayers Association prediction almost 3 weeks ago (see release following) that Sen. John Warner's (R-VA) Armed Services Committee hearings on Panama Canal security after U. S. relinquishes Canal Zone authority Dec. 31 will be rigged to minimize threat of Chinese People's Liberation Army takeover of canal. The Hearing, reportedly scheduled for Friday, Oct. 22, will be almost totally dominated by pro-Clinton witnesses in person: a high State Department official, commanding general of SouthCom, chairman of Panama Canal Commission, Panamanian member of commission, and only one American concerned about keeping an active U. S. military relationship with the canal: Caspar Weinberger. Actual date of hearing and list of witnesses were not confirmed by committee staff at 9:20 a.m. today, Monday, Oct. 18. .....Most authoritative persons equipped to testify on U. S. side -- Admiral Thomas Moorer (Ret.), former chairman of Joint Chiefs of Staff, who