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Monday, May 25, 1998

WorldNetDaily Exclusive

The Panama-China Connection

Port company at canal has close ties to Lippo group

Copyright 1998, WorldNetDaily.com

By Edward G. Oliver

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.

Marine is a dual U.S.-Panamanian citizen born and raised in the canal zone. The 45-year-old businessman has been a catalyst in Panama politics since the Noriega era when he was jailed and exiled for opposition to the regime. ABC's "nightline" featured Marine in an edition detailing the treatment of prisoners jailed by the dictator. The former "Zonian" threw his hat in the ring with a platform of negotiating a new U.S. base and Panama Canal treaty -- and canceling "law #5" which gives Hutchinson-Whampoa Ltd. rights to key former U.S. ports and military installations.

The 1977 Panama Canal treaties give complete legal jurisdiction over the canal to Panama on midnight, Dec. 31, 1999. The U.S. has been following a scheduled transition process of handing over facilities and control to Panama.

Marine told WorldNetDaily that article 319 of Panama's constitution was violated because Panama never held a plebiscite allowing the people to vote on leasing the ports to Hutchinson-Whampoa Ltd. The Hutchinson subsidiary Hong Kong International Terminals (HIT) uses the alias Panama Ports Company (PPC) in Panama. Marine claims this helps keep the Panamanian people in the dark about who is controlling their ports and bases.

U.S. Army Gen. Gordan Sumner, ret., former chairman of the inter-American defense board and ambassador at large at the State Department told WorldNetDaily: "Apparently Hutchinson is a good solid commercial operation, I guess the problem from our standpoint is it's basically controlled by the Chinese Communists. It is a way of getting in here and yonder including into the Long Beach facility. That's something that when you look at what's going on at the White House with Clinton and the Chinese, the Chinese penetration there -- it raises a lot of questions in a lot of peoples' minds; it's a problem."

A Senate Committee on Foreign Relations staff report on the privatization of the Panamanian ports dated May 14, 1997, identified Hutchinson's subsidiary HIT, or Panama Ports Company, as being 10 percent owned by China Resources Enterprise (CRE), which is the commercial arm of China's "Ministry of Trade and Economic Co-operation."

During the Senate Governmental Affairs Committee hearings, the South China Morning Post on July 16, 1997, quoted Sen. Fred Thompson as saying China Resources was "an agent of espionage - economic, military, and political - for China."

"China Resources denied allegations it helped spy for Beijing. Chairman Gu Yongjiang said claims made during United States Senate hearings on campaign finance abuse were 'total nonsense,"' the paper reported.

Also, a Lippo Group connection to CRE can be found from the hearings which focused on illegal foreign contributions. Marine hopes an investigation can reveal if those contributions are responsible for the situation at the Panama canal.

Thompson's summary of hearings into 1996 campaign finance abuses stated: "Lippo group, run by the Riady family which employed (John) Huang, had over the past few years become a major business partner with China Resources, a trading company wholly owned by the Government of the peoples republic of China, and which has reportedly served as an intelligence-collection front for China."

The South China Morning Post article stated China Resources (Holdings) "has solid relations with the Lippo Group. In 1992 it acquired 50 percent of the Hong Kong Chinese Bank, which is also 50 percent owned by Lippo, and sold the stake to its listed arm China resources Enterprise last month."

The Post quotes Thompson saying "Lippo had shifted its strategic center from Indonesia to China ... much of the conglomerate's business now involved joint ventures with China Resources and the latter had a more geopolitical purpose. Kind of like a smiling tiger; it might look friendly, but it's very dangerous."

Marine mentioned to WorldNetDaily the famous photograph of President Clinton giving a radio address with representatives of China Resources looking on.

On Jan. 2, 1997, Emily Lau replied to Bill Bright's query about Hutchinson. Lau at the time was a Hong Kong legislator until China dissolved the legislature. Her note reads, "The major shareholder of Hutchinson is Mr. Li-Ka Shing, one of the richest men in HK and a close advisor to the Chinese Government. I am not familiar with the situation in Panama but I have full sympathy for your worries."

The Senate report muses: "A question to consider is the extent that the PRC can, if at all, pressure Ka-Shing into altering his business practices to favor mainland China."

An October 1996 Journal of Commerce article by Joe Studwell reported, "When Hong Kong reverts to Chinese rule in July, tycoon Li Ka-Shing, uncrowned prince of the colony, is sure to be standing next to the top leaders of Beijing. Li's flagship Hutchison Whampoa Ltd. gives him the best connections with top Chinese government officials of any local tycoon. Its core is Hong Kong International Terminals Ltd. (HIT), the largest box handier in Hong Kong...."

The Senate Foreign Relations report also revealed Hutchinson's subsidiary HIT had business ventures with COSCO, the China Ocean Shipping Company. The Chinese army owns COSCO.

A State Dept. official told the WorldNetDaily "There are no Chinese ports. There is a holding company based in Hong Kong that has invested in those ports, but the term Chinese ports is a misnomer as it implies some sort of overall control. This is an investment and business group."

Marine displayed briefings taxed to multiple government and private recipients from the time Hutchinson first showed interest in the ports in 1996. There is ample evidence of resulting congressional and Senate interest in the matter but not from the executive branch. In fact, Mr. Marine claims the U.S. Embassy, State Department and the government of Panama misrepresented Hutchinson's connections.

Writing of his trip to Washington where he put on a presentation to key congressional committees, he told the Justice Department: "I traveled to Washington in March 97, and met with key people in Congress. Based on this trip, several articles appeared in the newspapers regarding Communist China controlling the Panama Canal. Based on the information provided, multiple congressional delegations have traveled to Panama. Each and every one of these missions have been misled by Ambassador Hughes. Until recently, he told them that Hutchinson has no ties to Communist China."

U.S. Rep. Bob Barr, R-GA, visited Panama on a recent fact-finding trip in early February 1998. Barr told WorldNetDaily "controlling ports at both ends of the canal will give the Communist Chinese the ability to shut the canal on and off at will. It also raises the possibility that ships could be trapped in the canal for extended periods by closed ports at one end or the other, This situation will dramatically raise the potential for U.S.-Chinese confrontations."

"The president of the United States has the ability today to go right down to the President of Panama and say we will not stand for this and Panama would be forced to let these guys go," said Marine. "That's the type of juice we have down there."

At the time Hutchinson obtained the Panama Canal ports, it moved to gain Subic Bay in the Philippines in the wake of the U.S. departure. Marine sent warnings about Hutchinson to Phillipine officials. President Ramos twice vetoed Hutchinson's award and the company was denied the base.

After President Balladares of Panama was elected in May 1994, the government began searching for companies to privatize the ports claiming high operating costs and inefficiency.

Panamanian law doesn't require a bidding process, but bids were taken in a process criticized by U.S. Ambassador Hughes as "unorthodox" and "lacking transparency." Hutchinson won amid cries of protest from competitors. There was talk of shady deals under the table. In their defense, Panama officials said they were inexperienced at taking bids.

What followed was a "sweetheart deal," claimed critics, that violates the canal treaty between the U.S. and Panama, violates the constitution of Panama and risks the security of the canal, the U.S., and Panama. The contract is for 50 years.

Marine described in his letter how the U.S. Ambassador got his first look at the secretive agreement about to be implemented:

"Eight days before the Communist China takeover date of March 1, 1997, an American executive met with U.S. Ambassador William Hughes in Panama. At this meeting, the executive advised Ambassador Hughes what was in the Panama Communist treaty. Mr. Hughes and Commercial Attache Benson were surprised, and kept repeating time after time, no that cannot be, that was taken out. That same evening, the executive hand-delivered a copy of the law number 5 in Spanish to Ambassador Hughes' residence. The attached copy of the law number 5 in English was hand delivered to the executive several days later. The sections marked with A-E came that way from the US Embassy. ..." Marine displayed a copy showing where the ambassador underlined his concerns.

The U.S. Embassy has not responded to submitted questions and multiple calls from WorldNetDaily about this matter.

Following are some key "rights" from "law #5" granted to China's Hutchinson-Whampoa Ltd.:

Included in the deal for Hutchinson is U.S. Naval Station Rodman; a portion of U.S. Air Station Albrook; Diablo; Balboa (Pacific U.S.-built port); Cristobal (Atlantic U.S.-built port); the Island of Telfers (strategically located adjacent to Galeta Island, a critical communications center). Telfers Island is the future home of the Chinese planned export zone called "The Great Wall of China Project."

A clause was inserted at the end of "law #5" that states if a conflict between provisions of the law and provisions of the Canal treaty occur, the Canal treaty prevails. Marine says the clause that is only as good as the governments in place willing to back it up.

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