Floor Statement - The Panama Canal

CONGRESSIONAL RECORD

THE PANAMA CANAL

Mr. SMITH of New Hampshire. Mr. President, there are a lot of things going on in the world. Sometimes there is so much going on that we forget some of the more important things. What I would like to do is to remind my colleagues and the American people that, as of today, there are 88 more days before the United States of America loses its right to the Panama Canal.

It is also interesting to point out that these little flags on this chart-in case someone may not know what they are-are Communist Chinese flags. So I am going to place another one over October 4 and note that in 88 days the Chinese Communists are going to have control over both ends of the Panama Canal.

It is amazing to me that in the Presidential debates-not formal debates but in the discussions of Presidential politics-we did not even hear anything about this. Yet here we are, the nation that is probably the largest threat to the United States of America is now going to control the Panama Canal and not a whimper comes from this administration.

So I am going to be on the floor of the Senate almost every day I can-at least every day that is a business day-to remind the American people and the administration that we are now going to allow the Communist Chinese flag to be hoisted over that canal, which we once controlled, which we, unfortunately, gave away during the Carter administration.

The Panama Canal Treaty requires the U.S., by the date of December 31, 1999, to relinquish its bases in Panama.

The Panama Canal-a monument to American engineering, American construction, American ingenuity-is among the world's most strategic waterways and remains critical to U.S. trade and national security.

In case anybody is interested, the United States has invested $32 billion of taxpayer dollars in that canal since its inception. It remains a critical artery for our Navy and Merchant Marine, with an estimated 200 Navy passages a year going through that canal.

On December 31, the Communist Chinese flag will control both ends of that canal.

Mr. President, 15 to 20 percent of total U.S. exports and imports transit the canal, including approximately 40 percent of all grain exports.

Before the canal was constructed, the voyage around Cape Horn required 4 or 5 months. The Colombian Government was assessing differential duties which made transisthmian travel prohibitive, even under ordinary circumstances.

Traveling the United States from coast to coast took 8 or 9 months and sometimes fighting Indians. That was how long ago. Today, that canal saves 8,000 miles and 2 weeks over the Cape Horn route.

Public opinion in the United States towards construction of a canal was galvanized by the voyage of the battleship U.S.S. Oregon from the Pacific around Cape Horn, joining Admiral Sampson's fleet in battle against the Spanish fleet of Cuba in 1898. The Oregon arrived just in time to engage in the last naval battle of the Spanish-American War, the Battle of Santiago.

In Teddy Roosevelt's first message to Congress, he described the canal as the path to a global destiny for the United States and said:

No single great work which remains to be undertaken on this continent is of such consequence to the American people [as the Panama Canal].

In 1918, Teddy Roosevelt warned against internationalism of the canal:

... we will protect it, and we will not permit our enemies to use it in war. In time of peace, all nations shall use it alike, but in time of war our interest at once becomes dominant.

There has been lots of talk about the potential perils of Y2K, which is also going to take place on January 1 or at the end of this year. For me, the complete transfer of the Panama Canal by December 31 is the biggest Y2K challenge facing America, and the clock is ticking. There is the countdown-88 days until we lose not only the canal but the access, coming in and out of that canal.

This August, President Clinton awarded former President Jimmy Carter the Presidential Medal of Freedom. Now the Carter foreign policy legacy, the giveaway of the Panama Canal and normalized relations with the Communist People's Republic of China, has come full circle with ominous consequences.

Panama City's deputy mayor, Augusto Diaz, states:

If Red China gets control of the canal, it will get control of the government.... The Panama Canal is essential to China ... if they control the Panama Canal, they control at least one-third of world shipping.

Already the PRC is the largest goods provider into Panama's free zone, at $2 billion a year. The People's Republic of China is the largest user of the canal, after the United States and Japan, with more than 200 COSCO ships alone transiting the waterway annually.

The United States has already shut down its strategic Howard Air Force Base. Howard Air Force Base has also served as the hub of counternarcotics operations with 2,000 drug interdiction flights a year. By the approaching deadline, we will also have given up in Panama Rodman Naval Station, the Fort Sherman Jungle Operations Training Center, and other important facilities.

The Clinton administration was supposed to be working towards negotiating an arrangement with Panama that would have allowed for a counterdrug center, but even that option has fallen apart. In September, the administration announced the collapse of 2 years of talks on a multinational counternarcotics center.

More than 2 decades ago, then-Chairman of the Joint Chiefs of Staff, Admiral Thomas Moorer warned the Senate Foreign Relations Committee that the U.S. withdrawal from Panama would occasion a dangerous vacuum that could be filled by hostile interests. His comments were very prophetic.

In 1996, while China was illegally secreting millions of dollars through conduits into the Clinton reelection coffers, it is alleged that it was simultaneously funneling cash to the Panamanian politicians to ensure that Chinese front companies would control the Panama Canal.

When is America going to wake up? When are the American people going to wake up?

Hutchison Whampoa, a Hong Kong company controlled by Chinese operatives, will lease the U.S.-built port facilities at Balboa, which handle ocean commerce on the Pacific side, and Cristobal, which handle commerce on the Atlantic side. A Hong Kong company will control-remember, Hong Kong is now part of the PRC. Its chairman is Li Ka-shing, who has close ties to the Chinese Communist leaders and a de facto working relationship with the People's Liberation Army. Li is a board member of the Chinese Government's primary investment entity, CITIC, China International Trust & Investment Corporation, run by PLA arms trafficker and smuggler Wang Jun. That is the Hong Kong company that will control this canal in 88 days.
Insight magazine published an article maintaining that Li serves as a middleman for PLA business operations, including financing some of the controversial Hughes and Loral deals which transferred weapons technology to the PRC. He has also been an ally of Indonesia's Riady family and the Lippo Group, so deeply implicated in the illegal Chinese/Clinton fundraising scandal.

Hutchison Whampoa's subsidiary runs the Panama Ports Company which is 10-percent owned by Chinese Resources Enterprise. CRE was identified by the Senate Governmental Affairs Committee as a vehicle for espionage-economic, political, and military-for China. Does anybody care? One of the favorite expressions among preachers is: Hello. Does anybody care? Is anybody listening? This is Communist China in the Panama Canal that we built, that we maintained, for $32 billion. Not a whimper. Nobody is talking about it, let alone doing anything about it. Nobody cares. Where is the administration?

In addition to concerns about Chinese objectives in securing Balboa and Cristobal ports, Panama is in the front lines of the U.S. fight against narcoterrorism principally exported by the FARC, revolutionary armed forces of Colombia, in Colombia. A week after closure of Howard Air Force Base, heavily armed FARC members were interviewed in full combat regalia on Panamanian television, operating in Panamanian territory.

U.S. Southern Command Chief, General Charles Wilhelm, testifying before the Senate Foreign Relations Committee in June, said Panamanian security forces were undermanned and ill equipped to deal with growing threats from Colombian guerrilla incursions and drug traffickers. Colombia is the source of an estimated 80 percent of the world's supply of cocaine and the source of 75 percent of heroin seized in the United States. The FARC is known to have ties to the Russian mafia. That canal will be a great opportunity for them.

Public opinion polls in Panama indicate that between 70 and 80 percent of the Panamanian people support an ongoing U.S. security presence in their country. Alternative sites for counterdrug operations, the so-called FOLs, or forward operating locations, are expected to cost hundreds of millions of dollars for infrastructure building and fees. We have no assurance that even if we build the infrastructure, we can stay in the designated FOLs for any extended time.

Another issue that must be raised is that of the corrupt and unfair bidding process surrounding the 25-year-plus leasing arrangement, with an option for another 25 years, with Hutchison Whampoa. The then-U.S. Ambassador to Panama, William Hughes, protested this corrupt bidding process, and American and Japanese firms lost out because of the stacked deck. No help from the administration.

Ambassador Hughes came close to being declared persona non grata for protesting the rigged deal 3 years ago. It should be noted that Hughes is now parroting the administration's line on Panama and the PRC. President Clinton then appointed Robert Pastor, architect of the 1977 canal surrender. He appointed him, and Pastor's nomination was blocked by Foreign Relations Committee Chairman JESSE HELMS.

Six U.S. Senators, in May 1997, charged in a letter to the Federal Maritime Commission that there were irregularities in the bidding process, which denied U.S. firms an equal right to develop and operate terminals in Panama. The Commission acknowledged that the port award process was unorthodox and irregular by U.S. standards.

In 1996, Panama asked a Seattle-based company to withdraw a successful bid for Cristobal-a successful bid-on the grounds that it would give the U.S. firm a monopoly because of its existing business in Balboa. In 1997, Panama gave the leasing deal to Hutchison Whampoa for both ports. With the introduction of Hutchison Whampoa, there follows real concern that Chinese organized criminal organizations involved in drug trafficking, guns, and smuggling of illegal aliens will ensue. COSCO, mentioned earlier-another Chinese-run firm that tried to lease the Long Beach Naval Shipyard-owned the ship which entered Oakland containing smuggled AK-47s intended for the street gangs of Los Angeles. And we almost had that firm in control of the Long Beach Naval Shipyard. Two firms with ties to the PLA and the Chinese Government were under Federal investigation for the smuggling attempt. While the U.S. Government is equipped to deal with this type of threat, Panama, with no standing army, is not.

The United States and Panama have security provisions in existing treaties under which we could negotiate joint security initiatives to address our common interests.

Eighty-eight days, Mr. President. Eighty-eight days. That is what we have left to get it done.

The major obstacle appears to be an unwillingness of this administration to preserve a presence in Panama and a tendency to downplay the significance of Chinese acquisition of the twin ports.

The 1977 treaty gives the United States the right to defend the Panama Canal with military force. The United States attached a condition, known as the DeConcini condition, which stated that if the canal were closed, or its operations interfered with, the United States and Panama would have the right to take steps necessary, including use of military force, to reopen the canal or restore operations in the canal. This modification was never ratified in Panama and met with protest by the Torrijos regime. Panama's version of the treaty denies unilateral defense rights to the United States. Some believe that Panama and the United States cloaked the differences in order to avoid a Senate vote on the issue and a plebiscite in Panama. In fact, the Senate turned back a series of amendments that would have required the treaties to be renegotiated and resubmitted to the Panamanians for another referendum.

The DeConcini condition, because it was attached to the Neutrality Treaty, remains in force permanently. But as former Admiral and Joint Chiefs Chairman Thomas Moorer noted, how does the "right" to go into the canal with force compare to the advantage of defensive bases that could prevent the takeover of the canal by an enemy?

A new Panamanian law gives this company, Hutchison Whampoa, the "first option" to take over the U.S. Naval Station Rodman and other sites. Panamanian law also gives the Chinese company the right to pilot all vessels transiting the canal. Admiral Moorer warned the Senate last year that our Navy vessels could be put at risk since Hutchison Whampoa has the right to deny passage to any ship interfering with its business, including U.S. Navy ships.

It is of interest to note a 25-percent leap in immigration to Panama from the PRC over the past few years-a 25-percent increase in immigration to Panama from the PRC. Beijing has used large-scale emigration as the basis for future intelligence recruits, with Panama a key target. Stanislav Lunev, a defector and former Soviet military intelligence colonel, claimed Chinese intelligence succeeded because of their ability to exploit the vast emigration of Chinese to communities across the world.

Eighty-eight more days, Mr. President. Eighty-eight more days.

The Congressional Research Service's August 1999 Issue Brief on China addresses a Chinese immigrant scandal. Panamanian visas were sold for as much as $15,000 to Chinese citizens who would fly from Hong Kong to Costa Rica, where smugglers would guide them through Central America and Mexico into the United States. Then President Balladares fired his head of intelligence as a result of the scandal-another issue which causes consternation among Americans with regard to Panama's ability to deal with its China problem.

If I could put it bluntly, this administration has dropped the ball big time. The House Subcommittee on the Western Hemisphere stated in March 1995 that over 80 percent of Panamanians favor some sort of U.S. military presence in their country. A September 1997 poll found that 70 percent believe that some U.S. bases should remain after the end of this year.
Eighty-eight more days.

More recently, a May 1998 poll showed that 65 percent of Panamanians support the concept of a multinational counterdrug center.

Despite public support-as high as three-fourths of the people in Panama wishing for the United States to stay in some capacity-this administration appears wedded to an unconditional pullout, an unconditional surrender toward a "cooling off" period that could allow the PRC to consolidate a new strategic toehold in Panama.

The Panama Canal Treaty was negotiated between President Carter and Panamanian dictator Omar Torrijos. It doesn't reflect public opinion in Panama. It did not, arguably, reflect public opinion in the United States.

When Operation Just Cause was launched in 1989, following the deaths of American soldiers and civilians in Panama, the United States intervened to safeguard American lives, to defend democracy in Panama, to combat drug trafficking, and to protect the integrity of the Panama Canal Treaty. It would be a shame if, because we fail now to protect Panama and the common security interests of the United States, to risk military intervention in the future.

Finally, a Pentagon spokesman has dismissed the notion that the United States should even worry about Chinese encroachment in Panama. Don't worry about it. According to an AP story, Admiral CRAIG Quigley said:

We have nothing to indicate that the Chinese have the slightest desire to somehow control the Panama Canal.... And we don't consider this a security issue at all. It is a business issue.

Hello. Is anybody listening out there in the administration? What are we saying? Eighty-eight more days and they will control both ends of it. But, according to Quigley:

We have nothing to indicate that the Chinese have the slightest desire to somehow control the Panama Canal.... And we don't consider this a security issue at all. It is a business issue.

That is what he says: "It is a business issue." Yes, it is a business issue all right-between the Chinese Government and Panama, to our detriment. There isn't any private business in China. It is all done by the Government. That is business as usual in the Clinton White House. This is a serious mistake that will in the future cost us dearly in terms of our national security.

This is the same Red China that has labeled us their "No. 1 enemy;" the same China that has sought to steal all of our nuclear weapons secrets from our DOE labs; the same China that sought to buy the 1996 Presidential election, and massacred students at Tiananmen Square; the same China which has committed genocide in Tibet and which is supplying state sponsors of terrorism in Iran, Libya, Syria, and North Korea; the same China that has provided missiles and other weapons of mass destruction and technology to be sent around the world; the same China that threatened a nuclear attack on California and which has implied it would use the neutron bomb against Taiwan.

Here is the flag right here. Eighty-eight more days. In 88 more days, it will be hanging on a mast over that canal. That is the flag. That is also the flag of a country to which, right here in this Senate, a majority of my colleagues, I regret to say, said we should provide most-favored-nation status.

In conclusion, the United States should re-engage the new government of Moscoso on the issue of a continued U.S. presence. General McCaffrey, the drug czar, has shown a renewed interest on what he now calls an emergency situation in Colombia, albeit several years after the State Department and the Clinton administration stalled, thwarted, and blocked congressional efforts to assist Colombia's antinarcotics police in its fight against the FARC.

Despite these differences over tactics in the drug war, McCaffrey stands out in the Clinton administration as someone who cares about the drug problem. But this is bigger than drugs. This is drugs-there is no question about it-but it is also the national security of the United States.

We could also urge the new Panamanian Government to conduct a referendum on maintaining a U.S. presence. No one is talking to them about that. We could urge reopening of the bidding process to be more fair and equitable, and to ensure that no hostile powers are permitted to bid. We are not doing that either.

The canal was built at a tremendous expense-$32 billion-and at the sacrifice of thousands of American lives. What a pity, the good working relationship that has developed between Panama and the United States to be lost because of the ineptitude and indifference of people in the State Department and the Defense Department of this administration. If this administration remains blind to the threat facing Panama, it is incumbent upon this Congress to make the case to the American people, to the new government in Panama, and to the Panamanian people.

That is exactly what I intend to do on this floor every day that I can get the time and the floor to do it between now and December 31. I am going to be posting another flag each day to remind the American people that we are getting closer and closer and closer to the People's Republic of China-Communist China-controlling both ends of the Panama Canal-the country that has trampled the rights of Tibetans, that threatened to run over its peaceful protesters with tanks, that has stolen our nuclear secrets, that funneled money into our Presidential campaigns, and purchased or stolen other targeting devices to target our cities, and, frankly, threatened the country of Taiwan, and even threatened California if we step in. What do we do on the Senate floor? Not only do we let them take the canal, but we also give them most-favored-nation status.

At some point, the American people are going to have to wake up. I don't know when it is going to be. But I hope it is not too late.

Mr. President, I yield the floor.

Source: Government Printing Office
From CQ Congressional Record Service
Providing government documents on demand, in context.
©1999 Congressional Quarterly Inc. All Rights Reserved.
Copyright 1983-1999. Congressional Quarterly Inc. All Rights Reserved.