[House Hearing, 106 Congress]
[From the U.S. Government Publishing Office]



 
 TO RECEIVE AN UPDATE ON SELECTED REGIONAL ISSUES TO INCLUDE: COLOMBIA 
    AND U.S. POLICY; LEGISLATIVE ELECTIONS IN HAITI AND U.S. TROOP 
 WITHDRAWAL; STATUS OF COUNTER-DRUG FORWARD OPERATING LOCATIONS; U.S. 
 CUBA COUNTER-NARCOTICS COOPERATION PROPOSAL; CHINESE INFLUENCE IN THE 
    PANAMA CANAL; POLITICAL EVENTS IN VENEZUELA; AND STATUS OF U.S. 
                      PROPERTY CLAIMS IN NICARAGUA

=======================================================================

                                HEARING

                               before the

                            SUBCOMMITTEE ON
                         THE WESTERN HEMISPHERE

                                 of the

                              COMMITTEE ON
                        INTERNATIONAL RELATIONS
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED SIXTH CONGRESS

                             FIRST SESSION

                                   ON

                               __________

                           SEPTEMBER 29, 1999

                               __________

                           Serial No. 106-64

                               __________

    Printed for the use of the Committee on International Relations


                                


                      U.S. GOVERNMENT PRINTING OFFICE
 60-799 CC                   WASHINGTON : 2000
------------------------------------------------------------------------------
                   For sale by the U.S. Government Printing Office
 Superintendent of Documents, Congressional Sales Office, Washington, DC 20402



                  COMMITTEE ON INTERNATIONAL RELATIONS

                 BENJAMIN A. GILMAN, New York, Chairman
WILLIAM F. GOODLING, Pennsylvania    SAM GEJDENSON, Connecticut
JAMES A. LEACH, Iowa                 TOM LANTOS, California
HENRY J. HYDE, Illinois              HOWARD L. BERMAN, California
DOUG BEREUTER, Nebraska              GARY L. ACKERMAN, New York
CHRISTOPHER H. SMITH, New Jersey     ENI F.H. FALEOMAVAEGA, American 
DAN BURTON, Indiana                      Samoa
ELTON GALLEGLY, California           MATTHEW G. MARTINEZ, California
ILEANA ROS-LEHTINEN, Florida         DONALD M. PAYNE, New Jersey
CASS BALLENGER, North Carolina       ROBERT MENENDEZ, New Jersey
DANA ROHRABACHER, California         SHERROD BROWN, Ohio
DONALD A. MANZULLO, Illinois         CYNTHIA A. McKINNEY, Georgia
EDWARD R. ROYCE, California          ALCEE L. HASTINGS, Florida
PETER T. KING, New York              PAT DANNER, Missouri
STEVE CHABOT, Ohio                   EARL F. HILLIARD, Alabama
MARSHALL ``MARK'' SANFORD, South     BRAD SHERMAN, California
    Carolina                         ROBERT WEXLER, Florida
MATT SALMON, Arizona                 STEVEN R. ROTHMAN, New Jersey
AMO HOUGHTON, New York               JIM DAVIS, Florida
TOM CAMPBELL, California             EARL POMEROY, North Dakota
JOHN M. McHUGH, New York             WILLIAM D. DELAHUNT, Massachusetts
KEVIN BRADY, Texas                   GREGORY W. MEEKS, New York
RICHARD BURR, North Carolina         BARBARA LEE, California
PAUL E. GILLMOR, Ohio                JOSEPH CROWLEY, New York
GEORGE RADANOVICH, California        JOSEPH M. HOEFFEL, Pennsylvania
JOHN COOKSEY, Louisiana
THOMAS G. TANCREDO, Colorado
                    Richard J. Garon, Chief of Staff
          Kathleen Bertelsen Moazed, Democratic Chief of Staff
                                 ------                                

                 Subcommittee on the Western Hemisphere

                  ELTON GALLEGLY, California, Chairman
DAN BURTON, Indiana                  GARY L. ACKERMAN, New York
CASS BALLENGER, North Carolina       MATTHEW MARTINEZ, California
CHRISTOPHER H. SMITH, New Jersey     ROBERT MENENDEZ, New Jersey
ILEANA ROS-LEHTINEN, Florida         ROBERT WEXLER, Florida
MARSHALL ``MARK'' SANFORD, South     STEVEN R. ROTHMAN, New Jersey
    Carolina                         JIM DAVIS, Florida
KEVIN BRADY, Texas                   EARL POMEROY, North Dakota
PAUL E. GILLMOR, Ohio

               Vince Morelli, Subcommittee Staff Director
           David Adams, Democratic Professional Staff Member
                    Kelly McDonald, Staff Associate



                            C O N T E N T S

                              ----------                              
                                                                   Page

                               WITNESSES

The Honorable Peter F. Romero, Ambassador, Acting Assistant 
  Secretary of State, Bureau of Western Hemisphere Affairs, U.S. 
  Department of State............................................     7

                                APPENDIX

Prepared statements:

The Honorable Peter F. Romero....................................    34

Material submitted for the record:

Article Printed by the Washington Post Titled 20,000 Troops 
  Later, Submit by Honorable Benjamin Gilman.....................    47
Question submitted by Honorable Cass Ballenger to Honorable Peter 
  F. Romero concerning the untilization of Mexican Helicopters in 
  Colombia and response thereto..................................    49
Article printed by the Washington Post titled Choppers to 
  Colombia, Submit by Honorable Benjamin Gilman..................    51
Question submitted by Honorable Cass Basllenger concerning 
  chinese Army involvement in Hutchinson-Whampoa and response 
  thereto........................................................    52
Letter, dated October 6, 1999 to Honorable Peter F. Romero, 
  submitted by Honorable Robert Wexler...........................    53



TO RECEIVE AN UPDATE ON SELECTED REGIONAL ISSUES TO INCLUDE: 
COLOMBIA AND U.S. POLICY; LEGISLATIVE ELECTIONS IN HAITI AND 
U.S. TROOP WITHDRAWAL; STATUS OF COUNTER-DRUG FORWARD OPERATING 
LOCATIONS; U.S. CUBA COUNTER-NARCOTICS COOPERATION PROPOSAL; 
CHINESE INFLUENCE IN THE PANAMA CANAL; POLITICAL EVENTS IN 
VENEZUELA; AND STATUS OF U.S. PROPERTY CLAIMS IN NICARAGUA
                              ----------                              


                     Wednesday, September 29, 1999

                  House of Representatives,
                Subcommittee on Western Hemisphere,
                      Committee on International Relations,
                                                   Washington, D.C.
    The Subcommittee met, pursuant to call, at 1:33 p.m., in 
room 2172, Rayburn House Office Building, Hon. Elton Gallegly 
(Chairman of the Subcommittee) presiding.
    Mr. Gallegly. If everyone will please take their seats.
    Why don't we put the poster over there?
    Today the Subcommittee will receive testimony updating us 
on several issues facing the Hemisphere and how U.S. policy is 
addressing these issues.
    When we sent our letter of invitation to the Department we 
asked the Secretary to address seven specific issues. Some of 
these issues will serve as a follow-up to the recent visits of 
Presidents Chavez of Venezuela and Pastrana of Columbia. Others 
were added at the request of Members of this Committee.
    We are pleased to welcome Acting Assistant Secretary of 
State Peter Romero to present the Department's views.
    On a personal note, Mr. Secretary, I know the past few 
months have been both a little frustrating and disappointing to 
you as you have awaited Senate confirmation of your nomination 
to be Assistant Secretary. Those of us who know you know of 
your high qualifications for this position and appreciate the 
information and insights you have provided our Subcommittee 
throughout your time as Acting Secretary. I hope the other body 
will expedite your confirmation.
    That being said, there have been complaints both from 
within Congress and from Latin Americans themselves that the 
U.S. seems to have placed Latin America on the so-called ``back 
burner'' willing only to express our interest in times of 
natural disasters or when drugs are concerned.
    As you say in your remarks, ``more than anywhere else in 
the world, problems in this Hemisphere have a way of intruding 
directly and immediately on our lives and livelihood''. Yet, 
issues involving the guerrilla war in Colombia, the future of 
the Panama Canal, democracy in Haiti, political instability in 
Ecuador, political developments in Venezuela and important 
national elections in Mexico, Guatemala, Argentina and Peru, 
which can have serious and long-lasting impacts on the United 
States, do not seem to be a high priority within this 
Administration.
    It is no wonder, then, that we hear all kinds of 
speculations, rightly and wrongly, that nations such as China 
and Cuba are telling our neighbors how little we care about the 
region hoping to raise their own levels of influence in the 
Hemisphere.
    Again, Mr. Secretary, we do appreciate your willingness to 
appear before the Committee to address some of these issues. I 
hope, through this appearance today, the Administration will 
signal a renewed interest in the region beyond drugs and 
disasters, and that we will continue to recognize the 
importance of our neighbors and partners to the south.
    Before turning to the Secretary it is my pleasure to defer 
to the Ranking Member, Mr. Ackerman, for any opening remarks. 
Mr. Ackerman.
    Mr. Ackerman. Thank you, Mr. Chairman. Thank you for your 
opening remarks.
    Mr. Chairman, I am pleased to join you this afternoon in 
welcoming Assistant Secretary Peter Romero before the 
Subcommittee. Peter has served throughout his career with 
distinction, playing key roles in the Peru-Ecuador Peace 
Agreement and in negotiating the Peace Accords in El Salvador. 
I join with you, Mr. Chairman, in the hope that Peter will soon 
be able to remove the ``Acting'' from his title so that we can 
benefit fully from his expertise.
    We are here today to discuss a variety of hemispheric 
issues of concern to the United States. While the issues the 
Chairman mentioned in his invitation letter are important, 
there are other things that are going on that I hope we can 
discuss today as well. For instance, there are elections on the 
horizon in Argentina, Chile and Mexico. These elections carry 
with them further signs that democratic processes are deepening 
and opening in Latin America. In Mexico in particular the long 
dominant PRI has moved to a primary system to select its 
Presidential candidate.
    But even as democratic institutions expand there is 
widespread discontent with the results of democratization and 
economic liberalization. As the article in Monday's Wall Street 
Journal noted, many in Latin America are worse off than they 
were before economic reforms and, for better or worse, they are 
beginning to doubt democracy's promise.
    While I don't think there will be movement backwards toward 
authoritarian regimes, there has been a noticeable slowing of 
economic reforms as the political support for free market 
capitalism wanes. I hope that the United States will continue 
to be engaged and to do what we can to encourage developing 
nations to continue on the path of economic and democratic 
reforms. Having a confirmed Assistant Secretary would be a very 
nice start.
    I thank you, Mr. Chairman; and I look forward to Secretary 
Romero's testimony.
    Mr. Gallegly. Thank you very much, Mr. Ackerman.
    The gentlelady from Florida.
    Ms. Ros-Lehtinen. Thank you so much, Mr. Chairman.
    I would like to thank you, Mr. Gallegly, for holding this 
very timely hearing. The issues to be addressed today are 
critical items to the U.S.-Hemispheric relations as they impact 
upon our foreign economic and security policy toward the 
region.
    Due to time restraints, I would like to focus on the 
Nicaraguan property issue and on the Castro regime's 
involvement in narco-trafficking.
    There are three areas of claims, Mr. Romero, which I hope 
that you will address today; and they require a prompt 
resolution: First, the CORNAP cases; second, those cases in 
which the property has been returned in name but in which the 
owner cannot occupy the property; and, third, where there is an 
existing court judgment.
    These cases in Nicaragua require the full attention of the 
State Department. They need to be raised within the context of 
discussions at the international financial and lending 
institutions, and they must be resolved expeditiously. American 
citizens should be able to depend on their government to defend 
their property rights and their right to indemnification and 
just compensation.
    Just compensation does not include payment in bonds, which 
at current levels are valued at about 14 cents on the dollar. I 
would like the Secretary to address the Department's position 
on this practice and what actions have been taken to raise this 
issue with the Nicaraguan authorities and elaborate on the 
achievements in the conversion of compensation bonds to a 
standardized format, the creation of special courts to deal 
with property cases, and the creation of alternatives to the 
compensation bonds.
    Turning to the issue of Cuba and the drug trade, the 
Clinton Administration is making every attempt to justify 
cooperation and engagement with the Castro dictatorship, citing 
the inability of the regime to interdict the drug trade 
supposedly and ignoring the facts and the history of the 
regime's complicity and participation in narco-trafficking 
networks.
    This position of the Administration is outrageous. Given 
that the Castro regime exerts absolute control over its 
territory, over its people and its ruling structure; given the 
attack on the Brothers to the Rescue planes in 1996 by the 
Castro air force; given the attack on the 13 de Marzo tugboat 
by the Cuban coast guard, the arrest of Cubans trying to flee 
the island in makeshift vessels; given the intelligence 
resources of the Castro regime which enabled a spy ring to 
penetrate U.S. military installations and espionage network 
classified as sophisticated and efficient by our very own FBI, 
it is unconscionable that anyone could believe that this regime 
has neither the knowledge nor the ability to prevent the use of 
its land, air and water for the drug trade.
    It is beyond logic how the Administration can rationalize 
an arrangement which would entail sharing of U.S. information 
and intelligence with a terrorist regime which is a declared 
enemy of the U.S.
    Specifically, I would like to ask Secretary Romero during 
his presentation to update our Subcommittee on the status of 
the investigation on the seizure of over seven metric tons of 
cocaine seized in Cartagena on December 3rd of last year that 
was supposedly destined for Cuba. Without divulging specific 
details, which we understand, Mr. Secretary, if you could share 
any information concerning cooperation with the Spanish and 
Colombian authorities and the sharing of data to prove that 
this shipment was destined for Cuba.
    Has the Department accessed the Cuban police investigation 
which contradicts the Castro regime's account of the seizure? 
Is the Department working with other agencies on this 
investigation? If so, is it all coordinated by the Department 
and why?
    We welcome the Secretary with us today. We look forward to 
his testimony and especially the explanation for the 
Department's acceptance of the Castro regime's version of the 
events. We welcome him today, especially since he is a south 
Floridian. So thank you, Peter, for being with us today.
    Thank you, Mr. Chairman.
    Mr. Gallegly. I thank the gentlelady.
    The gentleman from New York, the Chairman of the Full 
Committee, Mr. Gilman.
    Mr. Gilman. Thank you, Chairman Gallegly, for scheduling 
this timely hearing. The broad agenda reflects the fact there 
are a number of visible and highly important foreign policy 
concerns in our Western Hemisphere. We welcome Acting Assistant 
Secretary Romero to come before us once again, and we look 
forward to hearing his thoughts as he shares his views with 
regard to some of these critical issues.
    With regard to Colombia, during his recent visit, President 
Pastrana announced a $7.5 billion plan to reinforce Colombia's 
military forces to fight drug trafficking and strengthen the 
presence of the state in the lives of the citizens throughout 
his country.
    The outline of his plan makes sense. It is broad-based. It 
seeks to rectify important weaknesses that undercut the 
legitimate authority of the state. But the Administration has 
been so preoccupied with avoiding being involved in Colombia's 
counterinsurrgency effort that it has permitted the situation 
in Colombia to deteriorate.
    The Administration did have some encouraging words for 
President Pastrana's plan. Key officials traveled to Bogata to 
consult with the Colombia team that wrote the plan. However, 
there is no word on when or even if the Administration is going 
to send a request for emergency supplemental appropriations for 
Colombia to Congress for how much or what will be included in 
that request.
    As we wind down this session in the last few weeks, I think 
it is critically important for our government to expedite the 
delivery of assistance which has already been funded and is now 
languishing in the pipeline.
    With regard to Haiti, Haiti is back on the front pages of 
our newspapers once again. The Haitian National Police is being 
corrupted by drug trafficking and the manipulation by former 
Haitian army officials that are tied to former President 
Aristide.
    Haiti's legislative and municipal elections face further 
delays and some serious challenges, and we are troubled by the 
lack of high-level attention from our government to just what 
is going on in Haiti.
    Prime Minister Preval has become hostile to the electoral 
council he appointed and is engaging in stalling tactics. 
Street violence fomented by former President Aristide's Lavalas 
Family Party threatens freedom of assembly, threatens freedom 
of speech and may threaten the elections as well.
    The Haitian National Police don't appear to have a 
comprehensive plan to provide security during the forthcoming 
election. The electoral council faces significant logistical 
hurdles to provide critically important voter identification 
cards and meet the type of electoral calendar that it has 
established.
    No progress has been made toward privatizing Haiti's state-
owned telephone monopoly. On Tuesday, the state-owned cash cow 
arbitrarily shut down a private Internet provider, Alpha 
Communications Network, cutting off Haitian access to the 
Internet. I urge the State Department to investigate and 
protest that kind of outrageous action.
    The permanent deployment of our troops in Haiti will end 
and periodic New Horizons exercises are going to take their 
place. Our colleague Porter Goss, the Chairman of Intelligence 
Committee, published an article in today's Washington Post on 
Haiti which refers to our troop withdrawal.
    Without objection, I would ask, Mr. Chairman, that it be 
included in the record of this hearing.
    Mr. Gallegly. Without objection.
    Mr. Gilman. Thank you, Mr. Chairman.
    [The information referred to appears in the appendix.]
    Mr. Gilman. With regard to Panama, last March, Speaker 
Hastert and Senate Majority Leader Lott sent President Clinton 
a letter urging him to make a major effort this year to 
negotiate an extension of the U.S. military presence in Panama. 
In a very disappointing response dated April 19th, the 
President said the Administration has concluded that the new 
government in Panama will not have time to negotiate such an 
extension and win the necessary support of the Panamanian 
people for it. His response basically implied that the 
Administration wasn't going to do anything in this regard 
unless some Panamanians come to us and virtually beg us to 
stay.
    Since that time, the Administration's alternative to 
Panama, the so-called Forward Operating Locations, have proven 
disappointing. In addition, there have been some very 
encouraging signals from the new government about their 
possible interest in working out an extension of our military 
presence there. In particular, I believe they may be interested 
in the approach suggested by the legislation I introduced last 
year, the United States Panama Partnership Act, to give them 
various trade and other benefits in exchange for affording our 
military continued success in Panama.
    I hope you will comment, Mr. Secretary, whether the 
Administration will be pursuing their interest on their part. I 
will be very disappointed if you tell us that there has been no 
change in the Administration's position since last April. It 
would be truly reckless to let such an opportunity slip away.
    In addition, I note that a growing number of our Americans 
are deeply upset that a Hong Kong company with ties to 
communist China has been granted leases to ports at both ends 
of the Panama Canal. If our government has any evidence that 
these leases were influenced or obtained through any 
corruption, that information should be provided to the 
government of President Moscoso without delay.
    So I thank the Chairman for this time. I look forward to 
sharing some thoughts with Secretary Romero. We appreciate your 
being here today. Thank you, Mr. Chairman.
    Mr. Gallegly. I Thank the Chairman, Mr. Gilman.
    Are there any other opening statements?
    Mr. Burton. If I might, real quick.
    Mr. Gallegly. The gentleman from Indiana.
    Mr. Burton. I won't take a great deal of time, but I do 
want to discuss with Mr. Romero some statements he made before 
the Government Reform and Oversight Committee regarding 
developmental assistance to the FARC guerrillas when he 
appeared before our Committee.
    We believe there are some inconsistencies in what you told 
my Committee and what was actually the case. We have before us 
today secret documents that I subpoenaed from the White House 
and the State Department, and I hope that you will take 
seriously, reconsider what you told our Committee when you 
testified before it, because we find strong inconsistencies in 
your memos and what you told the Committee. If that continues, 
there is very likely going to be a contempt of Congress 
citation that you will have to deal with.
    I am also concerned about Title IV of the Helms-Burton law. 
It is your responsibility, I understand, to issue letters of 
determination or sanctions again the companies that violate the 
embargo. There are 21 plus foreign companies in violation of 
the embargo. I guess you have issued advisory letters against 
three hotel companies who are in violation of the embargo, but 
21 plus are in violation that you have not contacted.
    I also would like for you to explain the Cuban spy Fernando 
Garcia Belsa--I think I pronounced his name correctly--who 
supports terrorism and espionage and who has worked with the 
guerrillas in Puerto Rico who were recently released by the 
President of the United States.
    The last thing I would like to talk to you about is what 
the Chairman of the Full Committee, Mr. Gilman, just talked 
about, and that is the danger to the Panama Canal and the 
United States as a result. The FARC guerrillas are within 100 
miles of the Panama Canal, and it is my understanding they 
could move in that direction at any time with virtual impunity, 
and at the same time we have got the communist Chinese about to 
control both ends of the canal. Since it has a direct impact on 
the economy of the United States and possibly the security of 
the United States, we would like to know what you and the 
Administration plan to do about that.
    With that, Mr. Chairman, thank you very much.
    Mr. Gallegly. No other opening statements.
    Mr. Gallegly. Mr. Secretary, your full written text will be 
placed in the record, without objection, in its entirety, and 
you are welcome to proceed in any manner you see fit. Mr. 
Secretary, we welcome you.

  STATEMENT OF PETER F. ROMERO, ACTING ASSISTANT SECRETARY OF 
STATE, BUREAU OF WESTERN HEMISPHERE AFFAIRS, U.S. DEPARTMENT OF 
                             STATE

    Mr. Romero. Thanks for the promotion, Mr. Chairman; and I 
really appreciate the opportunity to appear before the 
Committee. I would like to thank you for your opening remarks 
and those of your distinguished colleagues here, and I hope to 
get to all of those questions and more. But permit me to at 
least frame briefly where I see and where we in the Department 
of State see the Hemisphere going and our relationship with it.
    While acknowledging the many challenges before us I believe 
the countries of the Western Hemisphere are at a very promising 
juncture. We have, arguably, the best relationships with our 
neighbors throughout the region than we have ever had. 
Geography, trade, travel, migration and technology have all 
combined to produce an unprecedented level of integration and 
interdependence and cooperation. This means that hemispheric 
issues, crime or immigration or economic growth or natural 
disasters, quickly tend to become domestic U.S. issues that 
resonate in our local communities. More than ever, strong U.S. 
leadership is absolutely critical.
    Organizationally, another manifestation of this deepening 
integration is the change in the old Bureau of Inter-American 
Affairs. With the addition of Canada, we are now the Bureau of 
Western Hemisphere Affairs. The incorporation of Canada into 
our Bureau not only reflects an economic and geopolitical 
reality but has the beneficial effect of causing us to 
regularly rethink how we look at the totality of our 
relationships and our goals in the Hemisphere.
    Mr. Chairman, the questions that you submitted to me are 
very important questions, and I hope to have all opportunities 
to be able to engage the Members of your Committee in 
discussing them. But often times when you look at the 
challenges ahead, you tend to view the glass as half empty, if 
you will. What I would like to do is to just briefly go through 
the Hemisphere just to talk about some of the high points.
    Within the next couple of weeks, Mr. Chairman, there will 
be an unprecedented act that will probably go relatively 
unnoticed in Uruguay. That is the signing of a multilateral 
evaluation mechanism that has been agreed upon by every single 
member state of the OAS. And what that will do will be to take 
much of what we had accomplished with respect to the 
certification process and move it about 15 steps ahead in terms 
of having a hemispheric process that will not only evaluate 
performance, counternarcotics performance, in each country, 
along the full range of counternarcotics issues, but also 
provide recommendations and issues that should be supported 
internationally. This follows a hemispheric strategy that had 
been agreed upon about two years ago, and this really puts the 
rubber on the road, if you will, Mr. Chairman, in terms of 
hemispheric cooperation on counternarcotics.
    Beyond that, we have got excellent cooperation which has 
been improving with the Mexican Government on law enforcement 
issues but particularly as they relate to counternarcotics.
    Virtually unnoticed in the press a couple of days ago there 
was a combined U.S.-Mexico law enforcement operation which 
resulted in the arrests of 93 Americans and Mexicans and others 
both inside the United States and in Mexico. The key component 
of that was the fact that this investigation and the operation 
was two years in the making. Law enforcement on both sides of 
the border kept to a need-to-know strategy, and they were able 
to spring this operation on 93 very unsuspecting criminals. 
This was an operation that yielded a lot of cocaine and 
millions of dollars worth of cash.
    In Mexico, in addition to that, you are seeing a primary 
process which for the first time has opened up the 
Revolutionary Institutional Party (PRI) of Mexico to a U.S.-
style type primary that will be held before the end of the 
year. I think that this shows promise. It shows that democracy 
is taking root not just in Mexican institutions but, obviously, 
in the political party atmosphere. You can go to Mexico at any 
given time, turn on the television set and see debates within 
the PRI, candidates who would not have debated publicly the 
issues before.
    As you know, Mr. Chairman, the President was largely chosen 
in a very closed-circle back room before. And now you have got 
debate largely on all the air waves in Mexico, on key issues 
and you have got a little bit of mud-slinging going on at the 
same time. But clearly a turn toward democracy.
    Throughout the region, beyond the greater cooperation that 
we have on counternarcotics, that cooperation has begun to 
yield real results. In Peru over the last couple of years we 
have witnessed a 52-percent decline in cocoa production. In 
Bolivia, the Bolivian people have adhered to a strategy under 
the current president, President Banzer, to rid the country of 
cocaine by the Year 2002. Not only are they on schedule for 
that, but they are ahead of schedule in terms of eradication of 
cocoa production in that country.
    Elsewhere, we had a very nasty turn of events, Mr. 
Chairman, over the last couple of months in Paraguay. Luckily 
we and the other friends of Paraguay were able to work together 
to continue or to have Paraguayans continue on the course of 
constitutional order. There was an assassination of a vice 
president there. But the constitution did hold, and a new 
president was elected, or assumed office, and was seated. We 
are hoping for greater cooperation in Paraguay, but they are 
off to a very good start.
    As you mentioned, Mr. Chairman, we are seeing elections 
unfold or campaigns unfold toward elections in Chile and 
Argentina. We have spoken in depth on our issues to all major 
candidates and believe that we can work with all major 
candidates to advance our common goals in the Hemisphere and 
bilaterally in both countries. We were able to assist in the 
forestalling of economic collapse and chaos in Brazil. We were 
able to support President Cardoso in his drive to structurally 
reform the state and to avoid dire economic circumstances. The 
Treasury, the IMF, State Department, we all worked hand in 
glove to prevent that from happening; and, quite frankly, it 
was a whole lot better than the most dire predictions before 
the Brazilian Government was able to see headroom.
    Elsewhere around the region we have begun to see a plethora 
of robust regional groupings, whether it be SICA (Central 
American Intelligence System) in Central America or Caricom in 
the Caribbean or Mercosur in the south. The Andean Pact has 
redefined itself and is calling itself the Andean Union. There 
is definitely a drive toward free markets and shared views 
toward democratic institutions and goals and objectives.
    Let me--before I leave that, let me just say that, in terms 
of Ecuador and Peru, the United States played a very strong 
role in ending a border dispute that arguably went on for about 
140-years, and now both of those countries can turn toward more 
peaceful pursuits.
    Then finally, Mr. Chairman, while the free trade issue gets 
debated and perhaps even heats up in the course of campaigns in 
the United States, let me just throw out a little fact and that 
is that our leading trading partner is a NAFTA partner and our 
second leading trading partner is a NAFTA partner. Canada and 
the United States do almost $1 billion worth of trade a day. 
And Mexico our other partner in NAFTA has superceded Japan as 
our second most trading partner. The benefits are manifest of 
free trade, Mr. Chairman.
    The timing of my appearance here is very opportune. I spent 
much of last week and parts of this week in New York in the 
U.N. General Assembly where I met with a variety of hemispheric 
leaders and discussed many of the same issues that concern all 
of us here today.

                                Colombia

    On Colombia, among those I spoke with was Colombia 
President Pastrana, who met with President Clinton on September 
21st. President Pastrana faces some of the most difficult 
internal challenges of any leader in the region, and I say that 
with a historical perspective also. In response, the government 
of Colombia has unveiled a good, comprehensive plan that 
provides a strategic vision outlining how the government of 
Colombia intends to address its national challenges.
    The Plan Colombia, plan for peace, prosperity and 
strengthening of the state, is an ambitious package of mutually 
reenforcing policies to revive Colombia's battered economy, 
strengthen democratic institutions, and promote the peace 
process while more aggressively moving against narcoproducers 
and traffickers. The plan covers five critical themes: the 
peace process, counternarcotics, the judicial system, 
democratization, human rights and social development and 
economic policy.
    The government of Colombia recognizes the imperative to 
regain the confidence of the Colombian people by strengthening 
democratic and social institutions, particularly those 
assisting Colombian victims of the country's violence and drug 
trade. The government of Colombia will promote greater respect 
for human rights, assist those displaced by the internal 
conflict, implement alternative development programs, combat 
corruption, strengthen local government and provide sustainable 
development assistance to conflictive areas.
    Guerrilla and right-wing militia violence has taken a very 
heavy toll on Colombia both in terms of human life and in terms 
of the economic losses. Moreover, both the guerrilla and right-
wing militias are increasingly tied to the narcotics industry. 
We believe that President Pastrana is correct in making peace a 
major priority by folding it into a robust security strategy.
    Measures which aid in settling Colombia's internal conflict 
will also help in other areas. For example, Colombia's internal 
fighting discourages domestic and foreign investment which is 
vitally needed to restart an economy currently suffering from 
the worst downturn since the 1930's. We intend to support 
Colombia's peace process through contributions to alternative 
development in areas controlled by the government, strengthen 
respect for human rights and measures to promote good 
government at the local government level.
    We need to help the Colombian Government succeed. The 
likely price of a failure would be further disintegration of 
the Colombian state, higher levels of paramilitary and 
guerrilla violence and a worsened narcotics situation. Such a 
failure would have dire consequences for the United States and 
the region as a whole.

             The status of our Forward Operating Locations

    Tracking the narcotics air and maritime operations is an 
essential component of our interdiction strategy. With the 
closing of our military bases in Panama we have adopted a new 
tool called Forward Operating Locations. U.S. counternarcotics 
aircraft have been operating out of temporary FOL's in Curacao, 
Aruba, and Manta, Ecuador, since last April, under interim 
accords negotiated with the Dutch and Ecuadorian Governments. 
We are now finalizing negotiations with both governments for 
long-term, 10-year-plus agreements.
    While there has been some degradation in aerial 
counternarcotics coverage, we anticipate that when the third 
FOL is established, coverage will likely exceed what we had at 
Howard Air Force Base. We plan to establish a third FOL site in 
Central America at an appropriate location as conditions 
warrant and obviously as funding permits.

                 U.S.-Cuba Counternarcotics Cooperation

    Geography dictates that a narcotics interdiction strategy 
include a strong Caribbean component. Cuba's Caribbean location 
between South America and the U.S. market means we have to 
consider Cuba as we design our strategy and as we refine the 
same.
    Given that Cuban air space and territorial waters are at 
risk of being used by traffickers smuggling drugs into the 
United States our law enforcement community has begun exploring 
ways to plug these interdiction gaps. Toward that end, we had 
technical and exploratory talks with Cuban officials in Havana 
last June but did not reach any formal agreements whatsoever.
    Directly relevant to our counternarcotics engagement with 
Cuba is the issue that was brought up earlier in the 
statements: the 7.2 ton cocaine shipment bound for Cuba that 
was seized by Colombian authorities in December 1998. The 
intelligence community is conducting an all-source assessment 
of that shipment and possible Cuban Government complicity in 
it. We will consider the results of that assessment as we 
determine our future narcotics control relationship and 
strategy with Cuba.
    The meeting of our working level counternarcotics experts 
in Cuba was governed by our desire to address a drug threat. 
For many years we have engaged in a case-by-case strategy of 
cooperation with Cuba, when it is or when it was in our 
national interest to do so.
    The counternarcotics talks do not signify a change in U.S. 
policy toward Cuba. We continue to press the Cuban regime to 
democratize and to respect human rights while seeking to engage 
and assist the Cuban people in order to promote the peaceful 
transition to democracy. Evidence of this was our successful 
effort to score Cuban human rights practices earlier this year 
at the Human Rights Commission in Geneva.

             Panama Canal and the Chinese influence over it

    In 1996, the government of Panama initiated a process to 
privatize the operations of ports at both ends of the Canal. We 
protested vigorously what we considered a flawed bidding 
process which resulted in a port concession being awarded to a 
division of the Hong Kong-based company Hutchison-Whampoa.
    Since that time, the process leading to the award to 
Hutchison-Whampoa has been reviewed by, inter alia, a Senate 
Foreign Relations Committee staff delegation and the Federal 
Maritime Commission. These studies concluded that though the 
bidding process was at best unorthodox, there did not appear to 
be discrimination against U.S. companies.
    Concern has been expressed over Chinese influence in Panama 
as a result of the Hutchison-Whampoa concession, and we have 
taken a very close look at this issue and will continue to 
follow it very, very closely. We have concluded that the 
presence of Hutchison-Whampoa in the ports of Balboa and 
Cristobal does not represent a threat to Canal operations or to 
U.S. interests this Panama.

            The status of U.S. property claims in Nicaragua

    Seeking resolution of U.S. citizens' claims for property 
confiscation during the Sandinistan regime remains our most 
important and most difficult bilateral issue with the 
government of Nicaragua. Successive Nicaraguan Governments have 
made encouraging progress in stepping up and accelerating the 
pace of claims resolutions.
    In July, Secretary Albright issued the sixth annual waiver 
of Section 527 provisions which, had they not been waived, 
would have prohibited most forms of bilateral aid to Nicaragua. 
Her decision was based on the fact that Section 527 would have 
provoked disastrous results for Nicaragua's economic reform 
process, particularly in the wake of the devastation caused by 
Hurricane Mitch. Her decision also reflected our sense that the 
government of Nicaragua under President Aleman is making good 
progress in resolving claims.
    While we are making solid progress on the property issue, 
we must maintain constructive pressure on the government of 
Nicaragua. Americans have been patient in seeking resolution 
and deserve a fair shake. Like many of you, and like many U.S. 
citizen claimants, I am frustrated with this difficult and slow 
process. But with perseverance and insistence I believe we can 
eventually find acceptable resolutions of these claims.

                  The political situation in Venezuela

    Following Hugo Chavez' election as president of Venezuela 
in December 1998, Venezuelans again returned to the polls in 
April and voted overwhelmingly to create a National Constituent 
Assembly the ANC, to draft a new constitution. Elected on July 
25th, a vast majority of the ANC supports President Chavez. The 
ANC was given six months to complete a draft of the new 
constitution. However, President Chavez has requested that the 
ANC finish its work within the next three months.
    The process got off to a difficult start with turf 
conflicts between the ANC and the legislature and the courts. 
The Assenbly's claim to originating powers (in essence, 
establishing its superiority to the existing branches of 
government) was indirectly upheld in a Supreme Court opinion, 
and the President of the Court resigned in protest. A clash 
between the Congress and ANC--with the ANC issuing emergency 
decrees limiting Congress's powers--was resolved in an 
agreement brokered by the Catholic Church.
    Most Venezuelans believe that profound change is needed to 
save their democracy. We agree with that. And they have tasked 
the ANC with that responsibility. We recognize the importance 
of that undertaking. At the same time, we have cautioned that 
changing the rules of democracy, must, itself be done 
democratically in the context of open, inclusive debate and 
that, that process respect checks and balances and fundamental 
democratic principles.
    In addition, we believe that the current focus on political 
and institutional issues has obscured the dire need for 
Venezuelan Government engagement on economic policy. Pressing 
economic problems must be addressed forthrightly and quickly 
even as the ANC continues its work on the proposed new 
constitution.

                                 Haiti

    Finally, Mr. Chairman, on Haiti, the elections and the 
status of U.S. and U.N. forces there. September marks the fifth 
anniversary of the U.S.-led effort that restored elected and 
constitutional government to Haiti. And although Haiti's 
political and economic progress has been impeded by a prolonged 
and devisive political impasse, we in the Administration remain 
committed to helping the country achieve sustainable democracy, 
and a level of economic growth that will lift the Haitian 
people out of abject poverty.
    The U.S. military support group has contributed 
significantly to U.S. objectives in Haiti and provided 
outstanding assistance to the Haitian people. Plans are under 
way for the redeployment home in early 2000 of the nearly 400 
strong U.S. military support group in Haiti. However, we will 
continue to be engaged militarily and are currently reviewing 
proposed activities including temporary training exercises 
under what Chairman Gilman mentioned earlier and that is the 
New Horizons program.
    The four year-old Haitian National Police, despite its many 
defects, and some of those defects were catalogued in an 
article in The Washington Post yesterday, is the best police 
force that Haiti's ever had. The U.N. International Civilian 
Police Mission, or MIPONUH, has been critical in helping Haiti 
develop an increasingly credible police force. MIPONUH's 
mandate is due to lapse in November of this year, November 
30th, and we are currently working with the U.N. and other 
donors to obtain passage in the United Nations General Assembly 
of a new mandate for a smaller and restructured U.N. police 
assistance mission, one that would mentor and monitor at the 
same time, combine both functions.
    In a few months from now, Haiti will hold legislative 
regional and local elections. These elections are critical to 
fully restoring the Parliament that lapsed January 11th of this 
year. We are urging the Haitians to hold these elections as 
soon as possible in a free, fair and transparent manner. We 
appreciate, Mr. Ackerman, your concerns about preparations for 
those elections and I would be happy to address that later.
    The U.S. and international community are actively engaged 
in helping Haiti prepare for the upcoming elections and will 
continue to remain engaged in that preparation.
    Mr. Chairman, I have attempted to respond to the seven 
areas that you have asked me to address. I look forward to 
answering any questions that you or other Members of the 
Subcommittee might have and thank you for this opportunity.
    Mr. Gallegly. Thank you very much, Mr. Secretary.
    [The prepared statement of Mr. Romero appears in the 
appendix.]
    Mr. Gallegly. The Chairman has a previous commitment and if 
there is no objection I will defer to him as he has one or two 
questions he would like to ask. Mr. Chairman.
    Mr. Gilman. Thank you, Mr. Chairman. I have to go to 
another meeting, and I appreciate this opportunity. I just have 
two brief questions.
    We thank Secretary Romero for his oversight of all of the 
major issues that he is aware of.
    President Pastrana has come and gone with his plan in 
Colombia that the Administration asked him to develop. Our own 
drug czar, General McCaffrey, describes the situation in 
Colombia as critical and the proliferation of illegal drug 
trafficking a disaster.
    Congress is going to be leaving town soon, hopefully. Time 
is running out for an emergency supplemental for Colombia. Can 
you tell us when and if ever the Administration is going to 
send up its Colombia emergency supplemental aid request?
    Mr. Romero. Mr. Chairman, let me just say that my sincerest 
hope would be that it would be very soon. But let me just talk 
a little bit about some of the work that needs to be done.
    The Pastrana Administration has put a price tag on the Plan 
Colombia of about $7.5 billion. We helped in the construction 
of much of that plan, particularly as it related to 
counternarcotics and as it related to the social development 
side. It is the intention of the Pastrana Government to reach 
out to all potential international donors. They believe that 
they have the wherewithal, notwithstanding an incredible 
contraction of their economy and, of course, the revenue of the 
government that falls as a result of that, to fund about $4 
billion, which would leave about $3.5 billion for the 
international community to fund.
    What we are doing right now, Mr. Chairman, is talking to 
them in an effort to determine where they believe other 
international assistance will come, whether it be on 
alternative development or whether it goes to reforms, and all 
kinds of other things that will be needed to regain ground in 
Colombia. Once we have worked out with them, what they will be 
funding--and they want to bear the lion's share of this, which 
I think is a very good prognosis--but they also want us to be 
able to work with them in helping to coordinate an 
international donor appeal on this. Once we have worked through 
what, where, they will plug in where we the U.S. can plug in 
and obviously where others can. Then we will be better prepared 
to talk a little bit more in terms of numbers. But Mr. 
Chairman, we are more than prepared to talk with you, any 
Members of this Committee, any members of your staff in terms 
of your concerns about where money and resources and attention 
and focus should be placed.
    Mr. Gilman. Well, Secretary Romero, we are interested to 
know just what the Administration is proposing, where the money 
will come from, and for what purposes it will be used. I 
understand the IMF is about to approve a $3.5 billion loan for 
Colombia. Is that correct?
    Mr. Romero. I am not sure about the figure, but I know the 
IMF is working on a loan.
    Mr. Gilman. I thought we were asking our delegation to be 
the leaders in that loan for Colombia.
    Mr. Romero. We are. I don't know what the dollar figure, 
sir, Mr. Chairman, is to that loan, but I do know that 
Undersecretary Larson is working very closely with folks in the 
Treasury and at the IMF.
    Mr. Gilman. I just want to remind you, Mr. Secretary, we 
have very limited time, if you are going to try to do something 
before we wind up this session. Otherwise, it will have to go 
over to January or February.
    Mr. Secretary, why aren't you talking to the Panamanians 
about maintaining a U.S. security presence at key facilities in 
Panama after 1999? Again, we are running out of time. When are 
we going to start talking to the new government that is 
interested in re-establishing our presence in Panama?
    Mr. Romero. Mr. Chairman, if you would allow me just to 
finish or close the loop on your question relative to Colombia.
    Mr. Gilman. Yes, please.
    Mr. Romero. I think that it is very important to look at 
Colombia and what has happened in a very deliberate, careful 
way. I appreciate your need for speed, and we are working as 
fast as we possibly can in support of the Colombia Government 
on this. The Colombia Government has been able to put a 
strategy together, Mr. Chairman, in about three weeks, which I 
think is astounding when you look at the breadth and scope of 
what they have begun to put together. We will be working with 
them.
    The issues are deep and go very, very wide, and they have 
to do with focusing on the southern part of Colombia and not 
just a police, not just a military, and not just a civilian 
presence but all of them combined, with alternative development 
strategies toward village banking, to win back these whole 
chunks of Colombia some of which have never really been within 
the grasp of the Colombian Government in terms of local 
government and others in other times have been lost to 
narcoguerrillas who operate in those areas.
    On Panama, Mr. Chairman, let me just say that the 
assessment of our military planners, those engaged in 
counternarcotics planning, is that with the possible 
introduction of a third FOL, Forward Operating Location, 
somewhere in Central America, that we could probably be up, as 
I mentioned earlier, to about 120-percent of our coverage and 
our time on station as it related to our operations out of 
Howard before we were forced to close those down.
    Mr. Gilman. Do we have any Central American proposal?
    Mr. Romero. I think that there are a number of 
possibilities with respect to the case of Panama. We haven't 
discarded the possibility. We have spoken to the Panamanian 
Government, the new government of President Moscoso, about 
this. And, Mr. Chairman, what we have begun to put into motion 
is a more intensive bilateral mechanism whereby we talk about 
lots of bilateral issues with respect to things that they are 
really looking for in terms of housing and other kinds of 
things, but particularly focus on law enforcement issues and 
the kinds of things that the Panamanians will need over the 
years to better secure Panama.
    I broached that subject a couple of weeks ago with the 
Panamanian foreign minister when he was here. We are set to 
begin those talks probably in Washington, but they will begin 
within the next couple of weeks. Those kinds of issues, 
security issues, law enforcement issues, and then of course the 
FOL issue in conjunction with our counternarcotics policy 
through the region will be discussed.
    Mr. Gilman. Thank you, Mr. Secretary.
    Mr. Romero. Thank you, Mr. Chairman.
    Mr. Gallegly. The gentleman from New Jersey, Mr. Menendez.
    Mr. Menendez. Thank you, Mr. Chairman.
    Good afternoon, Mr. Secretary.
    Let me ask you in two different veins, first on Colombia, 
what benchmarks--I asked President Pastrana when he was here, 
and I really didn't get a sense from his answer, so now I want 
to know from our perspective, from our government, what 
benchmarks are we establishing for our decisionmaking in the 
context of what will very clearly be a very significant 
participation, notwithstanding what you said about Colombia and 
the other international partners, clearly we will have a rather 
significant participation. What benchmarks are we establishing 
for ourselves internally to decide whether or not we are going 
to participate in these endeavors?
    As we do participate in these endeavors, I happen to be one 
of those who believe that it is in the interests of the United 
States to work with Colombia in terms of these issues for both 
national security and other national interests. Nevertheless, I 
question myself when we are looking at these large amounts of 
money what type of benchmarks are we establishing to determine 
whether or not true progress is being made in the context of 
good negotiations by the FARC and the ELN and others.
    Mr. Romero. Thank you, Congressman Menendez. Excellent 
questions.
    Let me just say that the benchmarks are still a work in 
progress in terms of what it is we would be asking the 
Colombians to do with whatever amount of resources we are able 
to apply to the problem. Let me just sketch broadly what those 
benchmarks would be.
    First of all, we would insist that there be greater 
integration of forces, both the police but also military and 
other forces, toward the increasing threat in southern 
Colombia.
    If I might, if you look at the map, essentially we have 
been working in this area of Guaviare over the last several 
years, and most of the work that we have been doing has been 
aerial eradication. Much of Guaviare and northern Caqueta has 
been sprayed with very good results.
    Notwithstanding excellent results there, notwithstanding 
excellent results in Peru and in Bolivia, narco-production or 
cocoa cultivation has mushroomed in the areas south of there in 
the Putamayo and southern Caqueta areas. Unfortunately, that 
has coincided with a very big guerrilla presence in just that 
same area. So, consequently, what we are looking for is a focus 
in that area which is a major area of cocoa production, an 
integrated approach using police and all branches of the 
military, an effort to put a civilian government presence on 
the ground.
    We know from Central America, we know from other kinds of 
insurgencies that police and military are not enough. You need 
to have--you need in this case to bring the fabric of those 
societies and those small towns and villages back into the 
national fabric, under government control.
    As a result of that, there is going to have to be a 
combined set of benchmarks which includes continued improvement 
on human rights. The military has shown great improvement on 
human rights, better integrated intelligence and operations, 
joint operations in this southern--southeast Colombian area, 
but also putting the machinery in place on the civilian side to 
ensure that there is alternative development, that there is 
work generation, that there is access to credit in terms of 
village banking, and that all of this is woven tightly.
    Mr. Menendez. If I can interrupt you, just because my time 
is returning out. I have other questions. But none of what I 
have heard, and I understand all that, and I appreciate it as 
well, but none of it is interrelated with the response by the 
guerrillas in any of these attempts at negotiation, and so none 
of our benchmarks will focus on the response by the guerrilla 
movements in the context of the Colombian Government's effort 
to negotiate with them, we are not going to judge any 
benchmarks in that regard?
    Mr. Romero. I think the negotiations are up to the 
Colombian Government to pursue. We have supported them in many, 
many different ways in terms of what has worked and what has 
not worked in the context of places and other negotiations with 
guerrilla groups. We continue to be there for advice and 
recommendation on this.
    But let there be no mistake, this is an issue that they are 
leading. Quite frankly, they have told us that they want to 
leave the door open to negotiations, and they have. I think 
that they have been exceedingly forthcoming and some would say 
even too forthcoming, but they have reflected the fact that the 
Colombian people, after 38 years of bloodshed, want peace; and 
they are adopting a policy that enables them to work smarter, 
and at the same time keep the door open to the prospects for 
peace.
    Right now the peace is bogged down in issues related to a 
commitment by the largest guerrilla group, the FARC, to an 
international observer presence in this safe haven zone that 
the government has extended to them at least temporarily, and 
their unwillingness to allow observers to come in.
    Mr. Menendez. Thank you, Mr. Chairman. I have other 
questions. If there is a second round, I would appreciate it.
    Mr. Gallegly. We will have a second round. I would like to 
move to Panama just for a minute if we can, Mr. Secretary. What 
authority, if any, has Panama granted the Hutchison-Whampoa 
company to operate or control the operation of the canal?
    Mr. Romero. Well, Mr. Chairman, the entry of Hutchison-
Whampoa into Panama was by virtue of part of the Panamanian 
Government's privatization program, privatization of facilities 
and installations at the canal. Our Embassy and the U.S. 
Government has characterized that privatization process, 
particularly that bidding process in the case of Hutchison-
Whampoa, as at best irregular. It seemed to be what those in 
the business call a ``semi-blind auction'' rather than a true 
bid, and it disadvantaged some of those who were bidding.
    Essentially what happened was Hutchison-Whampoa, as I am 
told, put a full-page ad in a Panamanian paper, essentially 
saying that they would outbid by a long shot all other bidders 
in this thing. I don't know whether there was inside 
information or what. They came in millions of dollars above the 
next highest bidders and subsequently got the bid.
    We are told that the reason why Hutchison-Whampoa wanted to 
operate ports on both sides of the canal was for business 
reasons. They have a container port, I am told, in the Bahamas, 
and this complemented their activities in the area.
    I know that there was a Senate Foreign Relations staff, 
though, that went down and took a look at the situation. I am 
told that our Federal Maritime Commission went down and 
investigated, and essentially their findings were that while it 
was an irregular process, there doesn't seem to be anything 
about that process and the winner of that process which would 
challenge U.S. security interests.
    Mr. Gallegly. Mr. Secretary, to your knowledge, does 
Hutchison-Whampoa's Chairman, Li Ka-Shing, have ties to the 
Chinese Communist Party or the People's Liberation Army to your 
knowledge?
    Mr. Romero. Mr. Chairman, I know that he is or was a Hong 
Kong businessman. Hong Kong is now part of PRC. This company 
has been in operation, I am told, since the middle 1800's, and 
while it was a Hong Kong company--now it is obviously a PRC 
company, and I cannot describe nor do I know anything about any 
kinds of contacts he might have with high-ranking PRC 
government and military officials.
    Mr. Gallegly. OK. In the Department's view, does the Panama 
Canal Treaty ensure that the United States can intervene in the 
canal if its operation is jeopardized by internal or external 
threats?
    Mr. Romero. That is correct, Mr. Chairman. I believe 
written into the language of the Canal Treaty itself, there is 
a neutrality clause and also one that provides for the free 
movement of ships through the canal without prejudice, and I 
believe also that there is a part of that agreement which talks 
about the use of the canal during a time of need by U.S. 
warships, a preferential use of that canal by U.S. warships.
    In terms of Hutchison-Whampoa, just to reiterate, we will 
be looking--I have asked the intelligence community to use all 
sources to look at any threats to the canal and where those 
threats might be coming from. There is a classified report, Mr. 
Chairman, and I can't get into the details of that report, but 
it essentially concludes that the business arrangement, this 
particular business arrangement of Hutchison-Whampoa, does not 
constitute a threat to canal operations. We continue to watch 
very closely.
    Mr. Gallegly. Thank you, Mr. Secretary. The gentlelady from 
Florida Ms. Ros-Lehtinen.
    Ms. Ros-Lehtinen. Thank you so much, Mr. Chairman. Mr. 
Secretary, I would like to get you and the State Department on 
the record regarding the Cuba drug issue, and I have a 5-part 
question I would like for you to answer.
    Do you agree or disagree that the Castro regime exerts 
absolute control over its territory and activities inside its 
territory?
    Do you believe that senior Cuban military officials, as was 
alleged by the Castro regime with the General Ochoa case and 
the de la Guardia brothers could actually be involved in 
narcotrafficking, yet be acting independently, and without the 
knowledge of the regime?
    Do you believe that senior regime officials could be 
involved in the drug trade, as was reported in the rumor 
concerning former Cuban Foreign Minister Robaina without Fidel 
or Raul Castro's knowledge?
    Also, given the attack on the Brothers to the Rescue, 
international flights of humanitarian nature in 1996, the 
shootdown by the Castro Air Force, do you believe that Cuban 
air space can be used by narcotraffickers without the knowledge 
and the consent of the Castro regime?
    Given the attack on the tug boat by the Cuban Coast Guard 
and the arrest of the Cubans who were trying to flee the island 
in makeshift vessels, do you believe that narcotraffickers can 
use Cuban territorial waters without the knowledge and the 
complicity of the regime?
    Finally, given the intelligence resources of the Castro 
regime which enabled, as you know, a spy operation to be 
penetrating a U.S. military installation, an espionage network 
which was classified by our FBI as sophisticated and efficient, 
do you believe that the regime is unaware of the trafficking 
that is using its own territory?
    Mr. Romero. Let me just say that for a long, long time, 
Congresswoman Ros-Lehtinen, and growing up in Miami, I have 
often thought about your question, even before I entered 
government, about how absolute the control is of the Castro 
regime over every facet of life in, over, and around Cuba. I 
have to say that while we can sit here and others can debate 
Marxism and Leninism and all the rest of it, that really what 
we are talking about when it comes to Cuba is Castro's control 
over his people. There is very little that resembles a Marxist/
Leninist paradise in Cuba except for Fidel Castro's 
authoritarianism, but there is very little that resembles it on 
the economic side and that sort of thing when you look at how 
Fidel Castro has tried to accommodate his loss of benefactors 
from the Soviet Union and elsewhere to what has become part of 
the Cuban economy.
    That having been said, I think it would be a stretch to say 
that the Castro regime knows everything that happens in Cuba or 
every vessel that passes around or inside or skirts its 
territorial waters or perhaps even flies over its country or 
skirts the country. We are looking at the latest target of 
opportunity, if you will, and that is the 7.2 metric ton 
shipment that was shipped from Cartegena, Colombia, to Cuba or 
through Cuba. We don't know the answer to that yet to determine 
whether there was any high-level Cuban involvement in that, and 
we will adjust our policies and our strategies accordingly, 
depending on the outcome of that assessment.
    Ms. Ros-Lehtinen. Mr. Romero, just related to that seizure, 
where does most of the cocaine that is coming to the U.S. 
transit through? Isn't it through Mexico? Mr. Mica just had a 
Subcommittee hearing yesterday where Mr. McCaffrey testified 
about the trade going through Mexico. Isn't it true that, as to 
the December 1998 seizure of those tons of cocaine Colombia 
cosigned to Cuba, that there is a possible Mexico link?
    Mr. Romero. Well, there is no doubt that there is a major 
trafficking route that starts in southern Colombia and works 
its way up the Central American isthmus into Mexico and then 
subsequently into the United States. There is no question about 
that.
    Ms. Ros-Lehtinen. Are you questioning the Mexican officials 
about the Cuba link, the Colombia, the three transit points? 
What information can you share with us about these discussions 
about the Cuba-Mexico-U.S.-Columbia links?
    Mr. Romero. I think that in this particular case of this 
shipment, and that is really pretty much what we are keying off 
of right now, we are looking at a shipment that went from 
Colombia to Cuba. We are continuing to engage the Colombian 
people or, pardon me, the Colombian Government, particularly 
law enforcement authorities, in an effort to determine what 
they knew and what they know about this particular shipment, 
and to do all that we possibly can to help the Colombians 
investigate this in Colombia.
    Obviously, we will be using all sources of information. I 
can't characterize how the intelligence community is conducting 
its investigation, since I have neither the results of that 
investigation or a recent readout as to where it is even going, 
but we are expecting a report. I expect one on my desk within 
the next couple of weeks in terms of this particular shipment, 
and we will adjust our policies accordingly.
    Ms. Ros-Lehtinen. Thank you.
    Mr. Gallegly. Time of the gentlelady has expired.
    The gentleman from Indiana, Mr. Burton.
    Mr. Burton. Castro knows everything that is going on down 
there. They have got a block cap system set up, and they have 
got informants on every block to watch out. So when you say it 
is a stretch for him, knowing everything that is going on in 
Cuba, that is not a stretch, and you know that.
    As far as those containers, the drugs were not sent to 
Cuba, the 7.2 tons. One of the containers was earmarked for 
Mexico. It had it on the container. So we have a pretty good 
idea that those drugs weren't going to Spain. They were going 
to a company in Mexico, and then going to be shipped up further 
to the United States of America, but that is not the issue I 
want to start with.
    The issue I want to start with are these property claims. 
There are still 1,000 U.S. citizens who are being denied what 
is rightfully theirs, their property, in Nicaragua. The Supreme 
Court has ruled twice in favor of several of the claimants, and 
even though the Supreme Court has made their decision, nothing 
has been resolved. We granted a fifth waiver, and I know the 
hurricane is a tragedy down there, but we granted them a fifth 
waiver and they still aren't making restitution on a lot of 
these claims that are very important, and I just hope that the 
State Department will take a close look at that because I think 
it is very important. A lot of these people have come to the 
United States and are suffering. Some aren't but some are, and 
those claims need to be resolved.
    Now, I want to talk to you about an issue that I feel very 
strongly about. You appeared before one of my Subcommittees and 
you were asked questions about whether or not the State 
Department was negotiating with the FARC guerrillas last 
December. I asked you four times, and I have got a list of the 
questions I asked you. In fact, I will read them to you real 
quick.
    ``did you talk about alternative developmental aid?
    ``Ambassador Romero. This was a component of the 
conversation that the Government of Colombia wanted us to talk 
to them about, that the government could in no way enter into 
an agreement that would impede those counternarcotic operations 
or suffer loss of USAID, and the Government of Colombia wanted 
us to tell them and we did.
    ``so you didn't talk about alternative development aid, 
though?
    ``not to my knowledge, no; but our line on alternative 
development is that it cannot go to guerrillas in the absence 
of significant movements toward a peace agreement.''.
    This is me again. ``and there was no alternative 
development aid discussed?
    ``not to my knowledge, no.''.
    So on four separate questions you said that you didn't 
discuss developmental assistance. Do you stick to that 
statement?
    Mr. Romero. I think if you went back, Mr. Chairman, and you 
looked at the record, you get a very clear sense for the fact 
that I began that statement by saying I don't have the 
memorandum of conversation in front of me, and I am at a loss 
to characterize it. I would like to say that I don't have the 
memorandum of conversation in front of me right now, and I am 
not going to characterize it.
    But let me just add something here, Mr. Chairman, if I 
might. As soon as I left for my office, I went back, I started 
a process to declassify the memorandum of conversation so that 
you could get access to it as soon as possible so that you 
could see for yourself the record on this thing. You are taking 
a piece of what was discussed and essentially making it appear 
that, that was the central part of the conversation that I had 
or, pardon me, that my folks had----
    Mr. Burton. Let me just interrupt here, because, Mr. 
Romero, lying to the Congress of the United States is something 
that is not going to be tolerated. I am about to move to hold 
you in contempt of Congress because you answered four separate 
questions, and I have three secret memos before me that I can't 
go into, and you know that, it took us five months to get them 
from you and from the State Department. If you are not going to 
tell us the truth now, I will move in our Committee to hold you 
in contempt of Congress.
    Now, did you talk to the FARC guerrillas about 
developmental assistance or did any of your contemporaries do 
that?
    Mr. Romero. I believe that they talked about alternative 
development in the context of a much larger discussion related 
to the welfare and whereabouts of American citizens who have 
been missing in Colombia for over three years and the necessity 
of the accountability of those Americans before we would be 
able to have further conversations.
    Mr. Burton. Mr. Romero, I said to you clearly, ``and there 
was no alternative development aid discussed,'' and you said 
not to my knowledge, no. Now, is that a correct statement? Did 
you know about developmental assistance being discussed?
    Mr. Romero. I did not recall alternative development.
    Mr. Burton. I have three separate memos, two from you; one 
to the Secretary of State from you, talking about developmental 
assistance; one from you to the Secretary; one from Romero to 
Pickering; and one from Chicola to Romero. You don't remember; 
is that what you are saying?
    Mr. Gallegly. Pardon me, Mr. Burton. The text of the issue 
that you are discussing, you can't go into detail.
    Mr. Burton. I am not going into detail.
    Mr. Gallegly. I understand that, and I think in fairness to 
the Committee, since you can't go into detail regarding that, 
you have pretty well gone on record as it relates to--you both 
seem to know what each other is talking about. It might be more 
appropriate to meet one on one, since we can't make it----
    Mr. Burton. Well, let me just finish, Mr. Chairman, and I 
will wind up. If we don't get a straight statement from Mr. 
Romero, I will go back to the Government Reform Committee, and 
we will hold a Committee hearing, and I will move to hold you 
in contempt of Congress.
    Now, all I want you to say today is that you knew about the 
negotiations with the FARC guerrillas on developmental 
assistance.
    Mr. Menendez. Mr. Chairman, a point of inquiry.
    Mr. Burton. Did you know? Let me finish with my time.
    Mr. Menendez. I am asking a point of inquiry, Mr. Chairman. 
Is it appropriate for Members of this Committee to threaten the 
witnesses without the Committee having any basis of 
substantiation for which such threats would be made? I mean, I 
have a great deal of respect for the distinguished gentleman, 
but it is impossible for me because in essence what he is doing 
to the Secretary is impugning his credibility, not only on that 
issue but on everything he has testified, because if he lied 
once, ostensibly then he would lie again. It is impossible for 
me to sit here in the Minority and expect that in fact we could 
have such accusations made without a substantiation to the rest 
of the Committee for the Committee to understand the validity 
of whether or not his charges are warranted.
    Mr. Burton. He interrupted. Let me finish, Mr. Chairman, 
please.
    Mr. Gallegly. First of all, let me respond to the inquiry. 
As the Chairman of your respective Committee, you have the 
right to say what you are going to do in your Committee. 
However, I do think it is difficult for us to participate in 
this dialogue here when we don't have the actual document to 
which you are referring.
    Mr. Burton. I am not asking anybody on the Committee to do 
anything. Mr. Chairman, I am not asking anybody on the 
Committee to do anything, and if you want to see the documents 
we have them here. They are Top Secret. I will be glad to share 
them with anybody. But what I am trying to do today is to get 
Mr. Romero to give us a straight answer about this issue 
because it bears upon our foreign policy. That is all I am 
asking for, and I will ask him one more time. Did you discuss 
developmental assistance with the FARC guerrillas?
    Mr. Romero. I did not.
    Mr. Gallegly. The time of the gentleman has expired, and 
the Secretary has on the record answered the question.
    The gentleman from North Carolina, Mr. Ballenger.
    Mr. Ballenger. Thank you, Mr. Chairman. I have got a couple 
of real quick questions I would like to try out on helicopters, 
which I have been involved in for about two or three years. 
First of all, Mexico returned 50 of their old Hueys to this 
country. Is there a possibility that those old Hueys can be 
used to be upgraded into Huey IIs? I don't know who owns them. 
Does Mexico still own them or do we own them, or what?
    Mr. Romero. I think they are part of a fleet of over 100 or 
so helicopters that through the years have been shipped down to 
Mexico. The Mexican Government has had a hard time with finding 
the expertise and spare parts, et cetera, to maintain those in 
an appropriate fashion in terms of readiness, and I think that 
what we have attempted to do is to try to use the spares from 
some of those that are really not in terrific shape, to 
cannibalize them to use with others in order to get a greater 
number of these up and running.
    Mr. Ballenger. What I am wondering is, you know, to upgrade 
into a Super-Huey or a Huey II, you have got to have an old 
Huey to start with, and there are 50 of them that they sent 
back. If we cannibalize 50 and produce 10 old Hueys, that is 
all you have got, you have got 10 old Hueys. But is there not a 
possibility those 50 can be used and upgraded quickly because 
of their ability, since they exist, to get them back to 
Colombia?
    Mr. Romero. I think that in terms of lift, there have been 
a number of Blackhawk helicopters, both purchased by the 
Colombian Government and----
    Mr. Ballenger. Really I am talking about the 50 Hueys.
    Mr. Romero. Right. But what I am saying, Congressman 
Ballenger, is that there are a number of helicopters that have 
been delivered over the last couple of months, more that will 
be delivered, including 18 UH1Ns that we are purchasing from 
the Canadian law enforcement or Canadian military. I can't 
assess, Congressman Ballenger, whether the ones that the 
Mexican Government, the helicopters that the Mexican Government 
will not be able to fly, whether they will be applicable or 
even usable in a Colombia context.
    Mr. Ballenger. Well, could I ask you to look it up and see 
if it is possible?
    Mr. Romero. Sure.
    [The information referred to appears in the appendix.]
    Mr. Ballenger. Let me ask you another question. The 
delivery system for the helicopters that are being rebuilt in 
Alabama or Mississippi, one of those places, I forget which 
one, is based on the fact that you can't ship any until you get 
six. Then you take all of them apart and put them on a big 
plane and fly them to Colombia and take them back out of the 
thing and put them all back together again. As it occurred the 
last time, one of them didn't get quite put back together 
properly. Is there no way to fly those things down there?
    Mr. Romero. I can't answer that, Congressman Ballenger. I 
do know that we have gotten a lot of experience shipping these 
aircraft and even more experience shipping them to Colombia, 
but I just don't know the mechanics behind it.
    Mr. Ballenger. A couple of things, Mr. Chairman, I have got 
a request here from Chairman Gilman. In last week's Washington 
Post, Chairman Gilman laid out a plan of action for Colombia 
that is worthy of both the Administration as well as the 
Pastrana Administration, and I ask unanimous consent for that 
to be included in the record of these proceedings if that is 
proper.
    Mr. Gallegly. Without objection.
    [The information referred to appears in the appendix.]
    Mr. Ballenger. Now, having been down to Venezuela and 
having met with Mr. Chavez and knowing the overflight 
situation, have we found out anything? Where do we stand on the 
overflight situation?
    Mr. Romero. As you and perhaps other Members of the 
Committee will recall, a couple of months ago President Chavez, 
in response to a press statement or press question, responded 
that he is in charge of essentially who and where and how--he, 
Chavez, who and where and how other governments fly over 
Venezuela in terms of their own aircraft.
    We have been working with the Venezuelan Government over 
the last couple of months to try to put together what we 
consider and they consider obviously a good formula for 
overcoming the issue related to sovereignty. We have offered a 
number of formulas, and there has been some progress, 
particularly as it relates to issues of hot pursuit. In other 
words, when our aircraft are chasing aircraft, narcoaircraft, 
and they happen to duck into Venezuelan air space, what have 
you, there has been a workable agreement that has been 
established in that case. In terms of just normal transit, we 
haven't gotten there yet, and we are still continuing to work 
with the Venezuelan Government and hope that we can get there 
very soon, but it is a high priority.
    Mr. Ballenger. Thank you. Thank you, Mr. Chairman.
    Mr. Gallegly. The time of the gentleman has expired.
    The gentleman from New Jersey, Mr. Menendez.
    Mr. Menendez. Thank you, Mr. Chairman. Mr. Secretary, one 
last comment on Colombia so I can move on. For myself, as one 
of those people who is generally supportive of assisting 
Colombia--and we have heard anywhere between 500 million to 
$1.5 billion--I think some of us are going to have to see some 
form of benchmarks established beyond those which you describe, 
particularly if any of our aid is used in pursuit in the 
negotiations with La Guerrilla toward accomplishing some of 
those negotiated goals, assuming that any of them can actually 
be negotiated successfully.
    So some of us are going to have see that, or we may be very 
well withdrawing our support, and I just want to commend it to 
your attention.
    Let me turn to Cuba, and I want to echo one comment by 
Congresswoman Ros-Lehtinen. It is impossible to believe, even 
though I see all of the statements, both in your statement and 
the Administration, about we are not normalizing relationships 
and we are in fact committed to our policy.
    I believe that consistently we undermine that policy in a 
variety of ways, and when I hear that in fact we are not 
willing to make a very clear and transparent statement that 
when Castro can clearly shoot down U.S. civilian planes in 
international air space, when he can sink a civilian tug boat 
who is simply looking to leave its coastline in search of 
freedom, when he can in fact have some of the most 
sophisticated spying facilities that both the Russians and now 
the Chinese are seeking to use for U.S. commercial as well as 
military intelligence, it is impossible for some of us to 
accept that the overflights over his air space can be accepted 
as something that just happens and he can do nothing about it. 
He must have unique technology that can zero in on U.S. 
civilian aircraft but that can consistently let overflight take 
place from what is clearly narcotics trafficking.
    What I would like to ask you, and if you could give me a 
yes or no because my time is limited: Do we have as a 
government any independent verification system when the Cuban 
Government actually has a seizure? Do we have any independent 
verification of what they do in terms of disposing of that 
seizure?
    Mr. Romero. I am sorry, Congressman Menendez, I don't know 
that. I would assume that the intelligence community has 
sources and methods that would be directed toward confirming or 
not Cuban Government seizures, but I just don't know.
    Mr. Menendez. This is part of our problem. Everybody who I 
have asked who has appeared before the Committee one way or 
another, who has had relationship to this issue, cannot tell 
the Committee that in fact there is an independent way in which 
to verify seizures. Therefore, we wonder what happens to the 
substances once they are seized.
    Second, can you tell me the working group that meets in 
terms of Cuba and that particularly pursues Title II of Helms-
Burton with reference to our efforts to develop civil society 
and promote human rights and assist dissidents inside of Cuba? 
I sense, as the author of that provision, I sense that there is 
a continuing movement by the working group to fund exchanges, 
and the problem with that is everything I have seen of these 
exchanges to date are no more than junkets. They have very 
little itinerary.
    They have, to a large degree, no real communication at the 
level of those in civil society that we seek to create, as we 
did in Poland with Solidarity, as we did with Vaclav Havel in 
his country. Is this the focus now of the State Department, to 
use all of these Title II moneys for these type of exchanges?
    Finally, so that you can answer this question for Mr. 
Ackerman who asked me to ask it on his behalf, in the context 
of Bolivia, with all this talk about assisting Colombia, there 
is a concern that Mr. Ackerman has. Do you think Bolivia will 
meet its goal of being coca free by 2002, and will the 
additional assistance that we intend to provide to Colombia 
have an impact on the assistance levels we are able to provide 
to Bolivia?
    Those are Mr. Ackerman's questions he asked me as the 
Ranking Democrat to ask you.
    Mr. Romero. Congressman Menendez, what I would like to do 
is take the Bolivia question first, and that is, I think that 
Bolivia has been an enormous success story when it comes to 
counternarcotics and just generally good stewardship of their 
economy and investment strategies. Over the last couple of 
years, there has been huge foreign investment in gas pipelines 
in Bolivia. There is a general sense that the Banzer Government 
wants to make Bolivia kind of the center of energy in the 
southern cone of South America, and they are off to a very, 
very good start. Obviously, there are things that need to be 
done.
    In the context of all of that, what President Banzer and 
Vice President Quiroga have done is to put together a strategy 
that has been really bought and accepted by the Bolivian 
people, and that is not to eradicate coca or to interdict or 
move against narcotraffickers or cultivaters because of foreign 
pressure, but because Bolivians want to get out from under the 
reputation of being considered coca producers. They have come 
up with the plan for national dignity, and not only has the 
government been able to vigorously move out in terms of 
eradication and interdiction and score some magnificent 
successes over the last couple or two years, but more 
importantly, they have been able to bring in the Bolivian 
people in terms of getting a buy-in and getting the Bolivian 
people as stakeholders, that they want more for their country 
than to be considered or to have been considered the coca 
capital of the world.
    They are on track. I just met with the Bolivian Foreign 
Minister yesterday, and he really did impress me with not only 
their determination but their track record in terms of even 
being early on eradication.
    Your question is a good one with respect to how any kind of 
Colombia supplemental would impact on Bolivia. Certainly any 
component that you would request for Colombia would have to 
have a component for its neighbors, even if it were small and 
over an extended period of time. That would have to include not 
only Venezuela and Ecuador, who border along or who are on 
borders that are pretty delicate and fragile, but also places 
like Bolivia. There would have to be consideration, better 
consideration, more consideration given to Bolivia, largely 
because you don't want the spillover to then just go south 
again and repeat the problems that we faced in the eighties in 
Bolivia.
    In terms of Cuba, your question, Congressman Menendez, 
related to?
    Mr. Menendez. The working group and this predisposition now 
to fund, instead of civil society efforts, independent 
journalists, independent economists, human rights activists, to 
now fund exchanges where we are actually going to pay for 
junkets for people to go down with very little of an itinerary, 
no feedback of any consequence, and not meeting the people who 
Title II is intended to do.
    Mr. Romero. As you know, Congressman Menendez, this has 
become part of our people-to-people measures that began after 
the Pope's visit in Cuba and to which we have announced 
additional measures in January 1999. In terms of the actual 
exchanges, my understanding of the process is that there needs 
to be a request made, that request goes to the Department of 
Treasury.
    In many cases, if not most cases, it is reviewed by our 
folks on the Cuba desk in my bureau, and one of the tests of 
all of that is that they need to show that, if this is a U.S. 
group or organization going down to Cuba, that they are meeting 
with counterparts and that this is a principal part of their 
visit down there.
    Mr. Menendez. You have got my question wrong, and I just, 
with the indulgence of the Chairman, just to finish on this 
point. I am talking about funding that we are providing under 
Title II, AID's Cuba Project, where as part of the inter--
whatever you call it.
    Mr. Romero. The people-to-people?
    Mr. Menendez. No, no. The State Department, NSC, Treasury, 
the interworking group, Interagency Working Group, there now is 
a focus, as I understand, because I follow this very carefully, 
of using those Title II moneys that the Congress specifically 
set aside, about $2 to $3 million for the purposes of trying to 
promote civil society inside of Cuba--independent journalists, 
independent economists, political dissidents, human rights 
activists--and instead, of using that funding, official funding 
of the United States, for exchanges.
    Now, exchanges that others want to do with their own money 
through their own organizations is one thing, but to use the 
money of the U.S. Government for these purposes is clearly 
beyond every intention that the Congress had both in the law 
and in the Committee report language, and certainly the 
intention of this author, who authored it.
    So I want to commend to you that we will raise holy hell 
about it because that is not why we provide funds, to send 
people on junkets to Cuba that have no civil society connection 
whatsoever.
    Mr. Romero. Point taken, Congressman Menendez, and I will 
look into that. I am a little at a loss for words here in terms 
of these exchanges because I don't think we have even begun to 
look at this kind of exchange yet, as far as I know, but I will 
keep your words in mind.
    Mr. Ballenger. Ms. Ros-Lehtinen.
    Ms. Ros-Lehtinen. Thank you. That word ``yet'' is 
worrisome.
    Mr. Secretary, to followup on two issues that you discussed 
in your statement: Nicaragua property claims resolutions and 
true electoral reforms in the upcoming elections in Haiti.
    For those of us in south Florida, as you know, those are 
not international concerns but very real domestic issues. I 
think we have moved beyond some of the more simple cases, and 
now we are doing the more difficult resolution of those 
property cases. There are many cases that have been supposedly 
resolved through the court system, yet the property owners, the 
American property owners have not been properly compensated.
    What action would you be taking to make sure that those 
claims are respected and honored and that the resolution is 
actually more than the check is in the mail, that these owners 
will be compensated?
    On the second part, on the electoral reforms, we have many 
American lives that have been dedicated to the reform of 
Haiti's Government and a lot of manpower went in there, a lot 
of U.S. funds. We have a lot invested in Haiti, and it is of 
ongoing concern to us that with those elections around the 
corner, they actually be honored and internationally supervised 
and true reforms take place.
    How optimistic are you that with the substantial U.S. 
investment that we have already made in Haiti that something 
real will come out of these elections?
    Mr. Romero. Thank you, Congresswoman Ros-Lehtinen. If I 
might just take a step backwards and look at the Nicaraguan 
property claims issue somewhat in the aggregate, that is, that 
over the last two years where we have issued waivers for the 
Government of Nicaragua, they have resolved over 900 U.S. 
citizen claims. The pace of claims resolution has accelerated 
under the Aleman Government. As of August 1999, last month, 
there were 894 pending claims as registered by our Embassy 
Managua data base, and of these, only 276 were filed by 
claimants who were American citizens at the time their property 
was confiscated.
    I mention that largely because the universe--I was around 
back when this all started and property claims were being 
registered--and the universe of those claimants who are 
registering now as American citizens has expanded and 
mushroomed over the years. We do think that the Government of 
Nicaragua is not only doing its job but an even better job in 
accelerating the pace of these adjudications over the last 
couple of years.
    I can't think of a meeting that I have been in or have had 
others prepare for where the issue of Nicaraguan or U.S. 
property claims has not been a central focus and feature of 
those discussions. We continue to press the Nicaraguan 
Government. We will continue to do that, and we will continue 
to push for even more acceleration in the adjudication process.
    In terms of Haiti, of course you know very well that the 
elections in, I believe it was March 1997, were disrupted; some 
of the outcomes unclear, particularly on some of those Senate 
seats. We believe it is very important for the renewal of 
democracy in Haiti that they hold elections as soon as 
possible, and we are also very, very mindful over the fact that 
you need adequate preparations for elections. We have sponsored 
various NGO's through our aid programs down there that have 
worked on elections and elections preparation and all of the 
other kinds of things that go into them, and we are hoping to 
see elections the first part of this coming year because we 
believe they can be held in a peaceful environment and be held 
with a certain degree of integrity to that process.
    Ms. Ros-Lehtinen. Thank you.
    Mr. Ballenger. [Presiding.]--Mr. Burton, I hope you can 
keep it cool. Pardon me, I am sorry.
    Mr. Burton. Thank you, Mr. Chairman. This information I 
have received indicates that the property settlements in 
Nicaragua have been, the properties--granted. It is a 
substantial number, but as far as monetary settlements, it is 
very small compared to the outstanding settlements that are 
still waiting to be settled. So, you know, it is kind of 
misleading when you say, well, they have settled almost 1,000, 
there are only 800-and-some left. The major ones are the ones 
that are left.
    Let me get to the issues at hand. We talked to Jack Leonard 
and Phil Chicola, and those two diplomats told us that so-
called alternative development aid was discussed in December 
with the rebel leaders. When I talked to you before our 
Committee, you insisted that these were meetings and not 
negotiations. Now, when I read the documents that were finally 
delivered to me after five months, it was clear that there were 
memos to you and from you that clearly indicate these were 
negotiating sessions. It is very clear, and when I talked to 
you before our Committee, I was talking about--and I can get 
the entire transcript, if you like--I was talking to you about 
the State Department's discussions, the people who were down 
there from the State Department discussing alternative 
developmental aid.
    You said when I asked you the question, ``So you didn't 
talk about alternative developmental aid, though,'' meaning the 
State Department people who were down there, you said, ``Not to 
my knowledge, no.''.
    Then I went on to say, ``And there was no alternative 
development aid discussed,'' and you said, ``Not to my 
knowledge, no.''.
    The memos that we have before us indicate that you did 
know, you did know that alternative development aid was being 
discussed. Now, this is very, very important because we are 
talking about a narcoguerrilla group that occupies an area 
about the size of Indiana as a demilitarized zone, that is 
killing people all over the place down there, and they are 
terrorists, they are known terrorists. We acknowledge they are 
terrorists, and we are not supposed to negotiate with 
terrorists. What I was trying to find out at our hearing and am 
still trying to find out is, were we negotiating with them?
    Now, if we were talking about developmental assistance, and 
if you read these memos, and I can't make them public, but if 
you read these memos, it is clear we were talking about if you 
do this, we will do this. There were negotiations taking place.
    So I want to ask you one more time. To your knowledge, was 
developmental aid discussed in those meetings?
    Mr. Romero. After review of the memorandum of conversation, 
I can say to you now that the issue of alternative development 
was discussed. It was not in any way negotiated. It was 
discussed in the context of many other issues.
    Mr. Burton. And did you know that before you appeared 
before my Committee?
    Mr. Romero. I did not recall it. As I mentioned to you at 
that time, and as you, Mr. Chairman, have just reiterated, I 
said ``not to my knowledge.'' I did not recall every facet of 
that conversation.
    Mr. Burton. Developmental assistance is a pretty important 
thing when you are talking to these FARC guerrillas, and the 
memos were prior to our hearing, some of them. So it is kind of 
disappointing that you just failed to remember. That is what 
you are saying.
    Mr. Romero. I don't think we are talking about 
developmental assistance as much as alternative development 
which is a little bit different. Those memos that you have 
before you are internal deliberations, none of which were part 
of what was actually discussed with the guerrillas.
    The memorandum of conversation which I declassified and 
which was sent to your office now several weeks ago is, I 
believe, an accurate rendering of the exact language of what 
was used, and there is no way that I can see that anyone 
reading that language in that memorandum of conversation, Mr. 
Chairman, can construe the exchange as in any way a 
negotiation. Since that memo has been declassified, I think 
anyone here would be available to have you read the passage to 
us.
    Mr. Burton. Oh, I will be happy to, if you would like. 
Sure. We have three separate memos if you like.
    Mr. Romero. I am talking about the memorandum of 
conversation from the one meeting that was held.
    Mr. Burton. You don't want me to read these then?
    Mr. Romero. There is an unclassified--we declassified the 
document. You have had it for several weeks, and if you would 
like to make reference to what you consider to be a negotiation 
on alternative development, I would like to see what the 
language is that disturbs you.
    Mr. Burton. I will be happy to show it to you, but the fact 
of the matter is, the things you declassify don't shed light on 
this as much as the classified documents, and you know I can't 
go into those.
    Mr. Romero. But the memorandum of conversation, Mr. 
Chairman, that you have in your hand is an accurate rendering 
of what transpired between two State Department representatives 
and a FARC member in the context of a much wider conversation 
over American citizens. Now, you can read the unclassified 
version of what was actually said, and if you have problems 
with some of the language that was used by our people, I would 
be happy to entertain what problem you had.
    Mr. Menendez. Would my friend yield? And I would simply 
ask, Why don't you include the declassified memo into the 
record so we can all read it?
    Mr. Burton. I will do that, and I will be happy to read it, 
but the classified version is also very important because it 
goes into more detail, and I think it makes the case that I am 
making, and I will read it.
    It says, ``Participants also revisited''--revisited--``the 
issue of agrarian reform and alternative development. 
Reinforcing the FARC's basic position, Hernandez explained that 
in the past GOC infrastructure, development had followed the 
cash crops.'' .
    So they did discuss alternative development, and they went 
into more detail in the classified versions which I can't go 
into.
    Mr. Menendez. But that was the FARC speaking. Would the 
gentleman yield? I know your time has expired, but since the 
Chair is being gracious, that is the FARC speaking that you 
just read.
    Mr. Burton. The gentleman is very--he can come down and 
read the classified version. You are cleared for Secret. I will 
let you read them. Both sides were discussing it, not just the 
FARC.
    Mr. Menendez. But what you just read was the FARC, was it 
not?
    Mr. Burton. That was the unclassified version. They 
declassified that because they knew it didn't cause them any 
heartbreak.
    Mr. Romero. If I might clarify this, what you have before 
you, Mr. Chairman, is the totality of what was discussed with 
the FARC.
    Mr. Burton. On both sides.
    Mr. Romero. As best we rendered it immediately after when 
that memorandum of conversation was written, and all of that 
has been declassified. So there wasn't anything else that 
occurred other than what is in that one piece of paper.
    Mr. Burton. Let me finish. Mr. Romero, I am not going to 
belabor this point. I just want you to know when you appear 
before my Committee, I don't want you hedging in the future. If 
I subpoena you to come before our Committee, as a Member of the 
Congress and Chairman of one of our Committees, I want you to 
be very clear and very forthright, and what you did before our 
Committee I think is very clear, and I hope that never happens 
again. Thank you.
    Mr. Romero. Mr. Chairman, let me just say that I very much 
regret not being able to recall that this was a component of 
that conversation, but I hope that you have an accurate 
rendering now of what was said by both sides in that 
conversation.
    Mr. Ballenger. If I may, just a couple of quick ones before 
we adjourn, unless you have another. Earlier this year, the 
former Andean desk officer, David Passage, testified that 
Section 660 of the Foreign Assistance Act prohibited the U.S. 
from providing training for police forces. Does our U.S. 
Government have the authority now to train and support the 
Panamanian National Police for counterinsurgency and 
counternarcotics activity on the border with Colombia?
    Mr. Romero. I don't know of any provision, Mr. Chairman, 
that would prevent us from working with police along the whole 
facet of law enforcement issues. Indeed, as I mentioned 
earlier, my sincerest hope through this consultation with the 
Panamanian Foreign Minister would be to develop a much closer, 
more cohesive relationship between our law enforcement and 
their law enforcement over the years ahead as well.
    Mr. Ballenger. Does that include military assistance as 
well?
    Mr. Romero. There is no military in Panama. Certainly, if 
they needed certain kinds of equipment, we could look into 
that, yes, sir.
    Mr. Ballenger. Let me ask you, in 1997 Nicaragua witnessed 
a protest by farmers over property titles and debts. Later that 
same year, the FSLN and the Aleman Administration reached a 
compromise on the issue of disputed properties that culminated 
in Nicaraguan Property Law Number 278. Under the provisions of 
this law, were settlements of U.S. property claims made more 
complicated and would the settlement of U.S. property claims, 
would they provoke further strife according to this regulation?
    Mr. Romero. The property law, Property Law 278, has made it 
more complicated to settle some of the U.S. citizen claims. The 
law was intended to make it easier for the government to take 
property away from occupants and hopefully return it to the 
original claimants who are not paying taxes or who were 
otherwise in violation of the agreement by which they came to 
occupy that particular property. However, it contains clauses 
which grant certain legal protections to occupants who hold a 
national agrarian reform title. It also reduces the documentary 
requirements to prove that one holds such a title, which in 
some cases has made it more difficult for legitimate claimants 
to win cases in court.
    Mr. Ballenger. If I may, we have heard that the government 
may have made a $1 million cash payment which no one is talking 
much about, is that true, the Nicaraguan Government?
    Mr. Romero. To whom?
    Mr. Ballenger. I guess to the Cernas.
    Mr. Romero. To whom?
    Mr. Ballenger. Cernas.
    Mr. Romero. A $40 million payment.
    Mr. Ballenger. No, 1 million.
    Mr. Romero. I have heard that figure but I can't verify it.
    Mr. Ballenger. Let me just ask one more thing. Since 
Hutchison-Whampoa is a traded stock, is there any way--I mean, 
if it was a United States listing and so forth, you would know 
who the owners were and what percentage of the ownership and so 
forth. Since it is Hong Kong, is there any way to know who 
actually controls that operation?
    Mr. Romero. Hutchison-Whampoa is a fairly well-known 
company worldwide, and their establishments are well-known to 
U.S. Government, U.S. Embassy people. Our folks in our 
consulate in Hong Kong have known Hutchison-Whampoa people for 
a long, long time, and I think that their view and our view is 
that this is straight business transaction and that there was a 
need that the company had expressed for a presence in the area, 
the Panama Canal, for container purposes, and this gave them a 
leg up in that regard, and that when it comes to the actual or 
perceived threat to the canal, that it doesn't come from this 
particular commercial venture.
    As I said, we will have the intelligence community continue 
to look very closely at this, but the treaty does call for a 
free navigation, free transit in the canal, but more 
importantly, even the neutrality of the canal is guaranteed.
    Mr. Ballenger. Again, I ask the question, since they are a 
traded company, is there any way to know if the Chinese Army, 
or whatever you want to call it, actually owns control of that 
company?
    Mr. Romero. I am told from our embassy reporting, that is 
not the case, but I would have to get back to you on that.
    [The information referred to appears in the appendix.]
    Mr. Ballenger. Well, as far as I am concerned, we thank 
you--whoops, here we go. Oh yeah, I would ask unanimous consent 
for Mr. Wexler to submit a statement for the record, and 
without objection, so done. And again, thank you very much.
    [The information referred to appears in the appendix.]
    [Whereupon, at 3:30 p.m., the Subcommittee was adjourned.]
      
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                            A P P E N D I X

                           September 21, 1999

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