[House Hearing, 106 Congress]
[From the U.S. Government Publishing Office]
COUNTERDRUG IMPLICATIONS OF THE UNITED STATES LEAVING PANAMA
=======================================================================
HEARING
before the
SUBCOMMITTEE ON CRIMINAL JUSTICE,
DRUG POLICY, AND HUMAN RESOURCES
of the
COMMITTEE ON
GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTH CONGRESS
SECOND SESSION
__________
JUNE 9, 2000
__________
Serial No. 106-217
__________
Printed for the use of the Committee on Government Reform
Available via the World Wide Web: http://www.gpo.gov/congress/house
http://www.house.gov/reform
______
U.S. GOVERNMENT PRINTING OFFICE
71-970 DTP WASHINGTON : 2001
_______________________________________________________________________
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COMMITTEE ON GOVERNMENT REFORM
DAN BURTON, Indiana, Chairman
BENJAMIN A. GILMAN, New York HENRY A. WAXMAN, California
CONSTANCE A. MORELLA, Maryland TOM LANTOS, California
CHRISTOPHER SHAYS, Connecticut ROBERT E. WISE, Jr., West Virginia
ILEANA ROS-LEHTINEN, Florida MAJOR R. OWENS, New York
JOHN M. McHUGH, New York EDOLPHUS TOWNS, New York
STEPHEN HORN, California PAUL E. KANJORSKI, Pennsylvania
JOHN L. MICA, Florida PATSY T. MINK, Hawaii
THOMAS M. DAVIS, Virginia CAROLYN B. MALONEY, New York
DAVID M. McINTOSH, Indiana ELEANOR HOLMES NORTON, Washington,
MARK E. SOUDER, Indiana DC
JOE SCARBOROUGH, Florida CHAKA FATTAH, Pennsylvania
STEVEN C. LaTOURETTE, Ohio ELIJAH E. CUMMINGS, Maryland
MARSHALL ``MARK'' SANFORD, South DENNIS J. KUCINICH, Ohio
Carolina ROD R. BLAGOJEVICH, Illinois
BOB BARR, Georgia DANNY K. DAVIS, Illinois
DAN MILLER, Florida JOHN F. TIERNEY, Massachusetts
ASA HUTCHINSON, Arkansas JIM TURNER, Texas
LEE TERRY, Nebraska THOMAS H. ALLEN, Maine
JUDY BIGGERT, Illinois HAROLD E. FORD, Jr., Tennessee
GREG WALDEN, Oregon JANICE D. SCHAKOWSKY, Illinois
DOUG OSE, California ------
PAUL RYAN, Wisconsin BERNARD SANDERS, Vermont
HELEN CHENOWETH-HAGE, Idaho (Independent)
DAVID VITTER, Louisiana
Kevin Binger, Staff Director
Daniel R. Moll, Deputy Staff Director
David A. Kass, Deputy Counsel and Parliamentarian
Lisa Smith Arafune, Chief Clerk
Phil Schiliro, Minority Staff Director
------
Subcommittee on Criminal Justice, Drug Policy, and Human Resources
JOHN L. MICA, Florida, Chairman
BOB BARR, Georgia PATSY T. MINK, Hawaii
BENJAMIN A. GILMAN, New York EDOLPHUS TOWNS, New York
CHRISTOPHER SHAYS, Connecticut ELIJAH E. CUMMINGS, Maryland
ILEANA ROS-LEHTINEN, Florida DENNIS J. KUCINICH, Ohio
MARK E. SOUDER, Indiana ROD R. BLAGOJEVICH, Illinois
STEVEN C. LaTOURETTE, Ohio JOHN F. TIERNEY, Massachusetts
ASA HUTCHINSON, Arkansas JIM TURNER, Texas
DOUG OSE, California JANICE D. SCHAKOWSKY, Illinois
DAVID VITTER, Louisiana
Ex Officio
DAN BURTON, Indiana HENRY A. WAXMAN, California
Sharon Pinkerton, Staff Director and Chief Counsel
Carson Nightwine, Professional Staff Member
Ryan McKee, Clerk
Micheal Yeager, Minority Senior Oversight Counsel
C O N T E N T S
----------
Page
Hearing held on June 9, 2000..................................... 1
Statement of:
Beers, Rand, Assistant Secretary, Bureau of International
Narcotics, Department of State; Ana Maria Salazar, Drug
Enforcement Policy and Support, Department of Defense; and
William Ledwith, Chief, International Operations, Drug
Enforcement Administration, Department of Justice.......... 90
Cabal, Professor Tomas, University of Panama................. 179
Letters, statements, etc., submitted for the record by:
Barr, Hon. Bob, a Representative in Congress from the State
of Georgia, Legislative Assembly Law No. 5, Republic of
Panama..................................................... 148
Beers, Rand, Assistant Secretary, Bureau of International
Narcotics, Department of State, prepared statement of...... 93
Cabal, Professor Tomas, University of Panama, prepared
statement of............................................... 185
Ledwith, William, Chief, International Operations, Drug
Enforcement Administration, Department of Justice, prepared
statement of............................................... 114
Mica, Hon. John L., a Representative in Congress from the
State of Florida:
Followup questions and responses......................... 153
Letter dated June 8, 2000................................ 121
Prepared statement of.................................... 6
Mink, Hon. Patsy T. Mink, a Representative in Congress from
the State of Hawaii, prepared statement of................. 9
Ose, Hon. Doug, a Representative in Congress from the State
of California, followup questions and responses............ 150
Rohrabacher, Hon. Dana, a Representative in Congress from the
State of California:
January 16, 1997, memo................................... 83
Legislative Assembly Law No. 5........................... 14
Prepared statement of.................................... 88
Salazar, Ana Maria, Drug Enforcement Policy and Support,
Department of Defense, prepared statement of............... 104
COUNTERDRUG IMPLICATIONS OF THE UNITED STATES LEAVING PANAMA
----------
FRIDAY, JUNE 9, 2000
House of Representatives,
Subcommittee on Criminal Justice, Drug Policy, and
Human Resources,
Committee on Government Reform,
Washington, DC.
The subcommittee met, pursuant to notice, at 10 a.m., in
room 2247, Rayburn House Office Building, Hon. John L. Mica
(chairman of the subcommittee) presiding.
Present: Representatives Mica, Barr, Souder, Hutchinson,
Ose, Mink, and Schakowsky.
Also present: Representative Rohrabacher.
Staff present: Sharon Pinkerton, staff director; Charley
Diaz, congressional fellow; Carson Nightwine, professional
staff member; Ryan McKee, clerk; Lauren Perny and Brian Bobo,
interns; Michael Yaeger, minority senior oversight counsel;
Sarah Despres, minority counsel; Earley Green, minority
assistant clerk; and Teresa Coufal, minority staff assistant.
Mr. Mica. Good morning. I'd like to call this hearing of
the Criminal Justice, Drug Policy, and Human Resources
Subcommittee to order.
This morning we'll be conducting a hearing entitled,
``Counterdrug Implications of the United States Leaving
Panama.'' We have two panels, and we're going to go ahead and
proceed with the consent of the minority. We should be joined
by other Members, but we do have a full hearing so we want to
keep this proceeding moving.
The order of business will be opening statements, and I'll
start with my opening statement. I'll yield to other Members as
they come. And with the consent of the minority, we will leave
the record open for a period of 2 weeks for additional
statements, information or background that may be submitted as
part of this hearing record.
It's been about 6 months since the United States military
has left Panama in accordance with the 1977 Carter-Torrijos
Treaty. Today, this subcommittee will examine some of the
implications of that move on our drug interdiction and
eradication efforts in that region.
Located at the nexus of two oceans and two continents, the
country of Panama holds a uniquely strategic importance in the
free flow of trade in the Western Hemisphere. Unfortunately,
that trade also has come to include the trafficking of
contraband such as illegal drugs, illegal arms, black market
goods, and also extensive money laundering.
Over the years, a critical element of our international
drug eradication and interdiction efforts has been our
operations which have been based in former United States bases
in Panama. That all came to a grinding halt last year with the
turnover of the Panama Canal. By the end of 1999, the United
States had abandoned the Panama Canal and the 360,000 acre
Canal zone, as well as military property consisting of 70,000
acres and 5,600 buildings worth an estimated $10 to $13
billion. Since the late 1980's, these bases have served as the
cornerstone of the U.S. military's counterdrug effort in that
region.
Today, the United States can no longer fly planes out of
Howard Air Force Base. Likewise, we can no longer base our
ships at Rodman Naval Base. We can no longer coordinate our
regional counterdrug efforts out of Fort Sherman. Somehow I
still don't understand why this administration wasn't able to
foresee this predicament and develop contingency plans. I know
we from the subcommittee have done everything possible to
highlight what we knew would be problems in this area with the
close-down of those bases. Instead, we find ourselves today
playing a catch-up game, and we have a long way to go to make
up for the losses of these bases and strategic forward
operating anti-narcotics efforts.
Over a year ago, on May 1st, 1999, the United States ceased
all surveillance flights from Howard Air Force Base in Panama
from which the United States had flown more than 2,000 anti-
narcotics flights per year. Over the past 12 months, the United
States has signed 10-year agreements with Aruba, Curacao and
Ecuador, and most recently with El Salvador, to provide
alternative staging areas, known as forward operating locations
[FOLs], for both our military and law enforcement surveillance
aircraft.
Two of the 10-year agreements have been ratified. The El
Salvador agreement still lacks parliamentary approval. But, in
fact, we once operated out of just one base, and now the United
States may be forced to maintain and finance bases in four
locations.
Also, we're faced with mounting construction costs and
operational costs for these forward operating locations at the
new operating locations, and every time we have folks appear
before the subcommittee the estimates of cost of operating
those bases climb.
Even more troubling, the date at which all four FOLs will
be fully operational keeps slipping. The most recent guess is
that we will not be fully operational until the year 2002.
Meanwhile, drug-laden boats and planes keep heading toward our
shores undetected. Each of these deadly craft carry death and
destruction bound for the U.S. streets and neighborhoods.
I hope to hear from today's administration witnesses about
our latest cost estimates, the latest timeline for getting
these FOLs fully operational. I also want to know the
likelihood that these four FOLs will make up for the extensive
coverage loss that we experienced with the shutdown of Howard,
including a breakdown of coverage in the source zone and also
the transit zone.
I chaired a similar hearing on Panama 1 year ago where we
discussed the implications of losing Howard Air Force Base. At
that hearing I stated that, ``hopefully, we can avoid a near-
term gap with the damaging loss of critical coverage.''
Obviously, this administration missed the mark. Unfortunately,
the gap is now something we're experiencing and it's very real.
By SOUTHCOM's own admission in a letter to the subcommittee
sent yesterday by Charles Wilhelm--and I invited him to testify
today. I hope the Members will take a look at this. But his
words are that we estimate our capability will continue to be
approximately one-third of what it was in Panama. This is an
incredible gap. I think it's one reason that we have drugs,
particularly a resurgence of cocaine now, incredible quantities
of heroin, pouring into our shores.
Again, according to our own SOUTHCOM Commander, we are two-
thirds shy of what is needed. I understand that a majority of
this shortfall is in the critical source zone countries of
Colombia, producing 80 to 90 percent of the cocaine now, by the
administration's own estimates, and some 70 percent of the
heroin on our streets that's seized, according to DEA
estimates--Peru and also Bolivia, and their efforts to
eradicate the cocaine production are now also being harmed
we've learned from recent reports. These are the very countries
that need our support and need our help right now. We must
minimize the extent and duration of this gap in coverage.
Instead of closing the gap, though, this administration
reduced the number of counterdrug flights by a staggering 68
percent from 1992 to 1999. Again, I refer to the document
requested. I didn't conduct the study. GAO did, upon our
request, citing a 68 percent reduction in these anti-narcotics
surveillance flights in the period from 1992 to 1999.
I read in today's New York Times that we have increases in
drug use, particularly cocaine, marijuana and other hard drugs
of our young people. I think the CDC--and we may ask them to
come in and testify now--but from 1991 to current, dramatic
increases in use. And again we have a reduction in our
counternarcotics effort, most effective tool for stemming these
shipments.
The number of ship days also, according to this report,
dropped 62 percent.
It is painfully clear that this counternarcotics effort is
not a priority, top priority for this administration. And I
don't know why. As we all know by now, a real shooting war,
largely financed by the illegal drug trade, is raging just
south of Panama in the Republic of Colombia. In fact, you can't
have a meaningful discussion of the drug situation in Panama
without considering what is happening in Colombia.
I know the House has acted. I salute my colleagues in
working with me and the Speaker and others in trying to get the
$1.6 billion passed and from the House to the Senate. It's
shameful that the Senate, including the Republican leadership
there, have not acted on that measure. I want to make sure I
put the blame on everybody today.
In the past there have been reports of significant
Colombian rebel activity in the Darien Province of southern
Panama. Now with the United States withdrawal from Panama and
the recent focus on Colombia, we have already witnessed an
increase in narco-terrorist incursions into Panama. With a weak
and corrupt police force, Panama is now ripe for takeover by
narco-dealers.
At last year's hearing, I voiced concern about the
expanding FARC guerilla presence in Panama. I warned that,
absent an effective United States policy--and this is my quote
a year ago--``the United States will be back in Panama at some
point in the future, and at great cost and sacrifice, to
preserve the sanctity of the Canal and protect our national
interests.'' 1 year later, my concern about this deteriorating
situation is even greater.
We'll probably hear more about this, but I think everyone
is focusing today on a report, and I honestly have not read the
entire report, only seen press accounts, this headline--and
this happens to be the Washington Times, but it's in the Post
and the New York Times--``With U.S. Gone Panama Is a Mecca for
Drug Trafficking.'' And we'll hear more about that report.
From my perspective as chairman of the subcommittee, I
don't think this administration has taken this threat
seriously. How could this administration turn its back totally
on direct tenders that captured key Panamanian court contracts
at Colon? And the administration officials, including General
McCaffrey, have confirmed to me both publicly and privately
that these were corrupt tenders that allowed these contracts to
go to Chinese interests and zero out United States competitors.
Today, we have a complete lack of engagement by this
administration and Panama, and the region is in turmoil.
Colombia is in chaos, Venezuela is thumbing its nose at the
United States, and the administration is undermining our best
ally in the anti-narcoterrorist effort, President Fujimori of
Peru.
This complacency is jeopardizing stability in the region,
and it is also a threat to our national security. The threat to
the region and the Canal is real, and we need to address it.
In the aftermath of the United States efforts to apprehend
the Panamanian dictator Manuel Noriega in 1989--and just as a
lesson of history we went after him for being involved in drug
dealing and corruption--we insured that the corrupt Panamanian
Defense Force [PDF], was dissolved. In fact, we had their
military dissolved by that action. And Panama changed its
constitution to prohibit a standing military.
Now the security of that country is in the hands of the
institutionally weak Panamanian National Police force. And if
we're to believe these reports, they've been very seriously
corrupted and infested by narco-drug traffickers.
Experts contend that this modest, ill-equipped force does
not have the capacity to effectively monitor or guard the
southern border with Colombia. In fact, despite President
Clinton's certification of Panama last year, I have received
troubling reports that drug seizures in Panama dropped by some
80 percent in 1999 from 1998.
In Panama, we face serious challenges in the months and
years ahead, challenges that in fact will impact our ability to
keep drugs, illegal narcotics off our street and from our
children. With the pullout of the United States military from
Panama, it appears to me we'll only see more increases in drug
trafficking, narcoterrorism, illegal arms smuggling and money
laundering in Panama and also throughout the region.
Hopefully, today's hearing will shed light on these issues
and help us address some of them squarely, collectively and in
a bipartisan fashion and effectively. The citizens of the
United States and this hemisphere deserve no less.
In this region, if we recall from history, Teddy Roosevelt
adopted the policy of ``walk softly and carry a big stick''.
Unfortunately, historians may record the Clinton foreign policy
for this region at this time as the ``que pasa'' era. And if
you're not familiar with Spanish, que pasa is sort of a blase
``what's happening'' for a literal interpretation. And we do
need to find out what's happening here today.
With those opening comments, I'm pleased to yield to the
ranking member of our subcommittee, the distinguished lady from
Hawaii, Mrs. Mink.
[The prepared statement of Hon. John L. Mica follows:]
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Mrs. Mink. I thank the chairman for yielding to me at this
time.
I do hope that the intent of these hearings today is to
really find out what's happening in terms of the impact of the
United States having no military base in Panama as a result of
an agreement made some years ago. While I think it's useful to
examine the situation of the pullout and what the impacts have
been with respect to the United States and the region, I do
think that the discussions about drug trafficking do not really
lend any particular intelligence to the discussion of this
subject.
I think it's quite obvious that with a pullout of our
military bases that we would lose a very important command post
in our counterintelligence activities. I've always taken the
viewpoint that it's important for us to establish strong
relationships and a sense of related responsibility toward the
supply side of the various drugs from this region.
But in looking at the whole picture it's very important to
understand that we have two sides to this issue, and that is
demand and supply. And while we want to bring considerable
pressure on these countries to perform better, it's really our
responsibility to make the relationships work and to establish
those counterintelligence posts that are meaningful.
We knew we had to pull out of Panama, and I think if there
is a deficit of policy, it was not being able to establish on a
much earlier timetable the replacement posts for the absence of
the Howard Air Force Base. And so my emphasis has always been,
what do we do here in the United States? What are we doing to
curb demand?
I think that the Congress has a very large responsibility
in this area, and we have been focusing heavily on our side to
strengthen the law enforcement aspects of all the incursions of
drugs coming into United States and also understanding that
part of the demand policy is also what we do with respect to
those who need treatment. If we can't do something about
treatment of those who are addicted to drugs, then we're not
really looking at the demand side.
So while I welcome this opportunity to discuss Panama today
and to look at the implications of the loss of our military
base there in Panama, I do think that a full view of this
situation, rather than simply a condemnation of administration
policy, has to take the balance, look and see what implications
this means for our strengthened resolve to do more within the
United States on the demand question.
Thank you, Mr. Chairman. I ask unanimous consent that my
statement be placed in the record.
Mr. Mica. Without objection, so ordered. Thank you.
[The prepared statement of Hon. Patsy T. Mink follows:]
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Mr. Mica. I'll recognize the vice chairman of our panel,
Mr. Barr, the gentleman from Georgia, at this time.
Mr. Barr. Thank you, Mr. Chairman; and thank you for
convening these two very distinguished panels today to continue
what you know must be a long-term, sustained focus on Panama
and the surrounding problems in the Caribbean and South
America.
This is not a problem, like many here in Washington, that
somebody will focus on for 1 day of hearing and then everybody
will go back and do their other things and forget about it.
That happens far too often, and that's why we find ourselves
frequently in crisis situations here in the Congress or facing
crisis situations elsewhere.
You've taken a different tack, and I commend you for that.
You realize that the problems with regard to drug trafficking
and money laundering and narco-terrorist activity in Central
America, in Panama, in Colombia, and elsewhere is something
that must be attacked every single day of the year, year in and
year out. And the problems that we're facing in Panama largely
now are a result of the vacuum created by the departure and
turnover to Panama of all military--all United States personnel
and facilities and the lack of planning by this administration
to have alternatives such as operational FOLs ready to go and
to hit the ground running the day after the turnover are very,
very severe and continuing.
And while I do appreciate the steps that have been taken
and I recognize that these are not easy contracts to negotiate
and to go so in a manner that is respectful of taxpayer money.
Previous hearings that we've had have indicated that things
could have moved much more quickly if they had been started
much earlier as well.
But, be that as it may, there's nothing we can do at this
point to make up for prior shortcomings. What we have to do is
continue to focus on the problems created by the vacuum when
the United States departed Panama lock, stock and barrel and to
see if there are some steps that can be taken both in the
civilian sector with regard to encouraging--and this might be
something that we can look at legislatively as well as look
United States companies to become more active in Panama.
It also requires a look at the very distressful increase in
the Communist Chinese influence and interest in Panama.
As we all know, Panama has been, over the years, very, very
courageous, more courageous than our country, as a matter of
fact, in recognizing the free people of China and in providing
diplomatic recognition to the Republic of China, not the
Communist People's Republic of China. This has been a sore
point for Beijing for many years, and they have been mounting
over the last few years a much more sustained effort to switch
allegiance, and I do hope and encourage the people of Panama to
resist such entreaties.
But the Communist Chinese presence, which took a quantum
leap forward with what I believe was a very corrupted process
of negotiations, has given them a foothold through Hutchison
Whampoa on both ends of the Panama Canal which certainly we
anticipate that they will expand. There would be no reason for
them to be there if they didn't plan on expanding, and that has
been the nature of Communist Chinese presence in other parts of
the world. This is something we do need to focus on.
The administration is not--the President, in perhaps a
Freudian but probably very accurate slip of the tongue, a
number of months ago indicated that he seemed pleased with the
Communist Chinese presence there, and they would run the Canal
properly. Many of us up here, including, I know, you, Mr.
Chairman, and certainly myself and Mr. Rohrabacher and I
suspect all members of this panel, take a much different view.
We are concerned about the increased Communist Chinese focus in
Panama, just as we are concerned about the danger posed to the
Panamanian people by incursions by narco-terrorists, by the
FARC and ELN, in the southern provinces of Panama where it
borders on its neighbor to the south.
These are matters that do impact us, and they impact us in
many, many different ways, including the security of the Canal.
If commercial shippers do not believe that the security of the
Canal will be maintained long into the future and indefinitely
into the future, if they foresee problems, then they are going
to start looking at alternatives. Once they start doing that,
much of the revenue currently derived by Panama from the Canal
will start to dry up. So that's something that neither country
certainly wants to see happen.
I also hope, Mr. Chairman, that we can begin to focus on
the problem of the cleanup of the target ranges in Panama and
the testing ranges. As I understand it from talking with people
both in Panama who have traveled down there and experts, this
matter has not yet been resolved, and I think we could go a
long way toward improving the climate for future negotiations
and current negotiations between our two countries for a more
cooperative physical presence down there if we can get this
matter resolved as well.
So there are many, many facets to the problems that you are
continuing to focus on, Mr. Chairman. I've just enumerated a
few of them. You have also.
I read the same press reports this morning of the
intelligence estimate, the law enforcement officer estimate.
This is very, very troubling, although not terribly surprising.
It, too, is the result of lack of foresight by the
administration in really laying the groundwork to address these
problems that we all knew would crop up.
But, again, I hope that we can work and I anticipate we
will continue to work with the administration to resolve these.
Certainly we would have preferred to see it done sooner rather
than later, but it is not too late. And you are playing,
through your convening--through this hearing today and I know
future hearings, Mr. Chairman, playing a key role in that, and
I thank you.
Mr. Mica. Thank the gentleman.
I'll now recognize Mr. Ose from California.
Mr. Ose. Thank you, Mr. Chairman. I think I'll pass on the
opening statement.
Mr. Mica. Thank you.
The gentleman from Arkansas, Mr. Hutchinson.
Mr. Hutchinson. I pass and look forward to the witnesses'
testimony.
Mr. Mica. The gentleman on our panel, Mr. Souder from
Indiana.
Mr. Souder. Pass.
Mr. Mica. We're also joined by a member of the
International Relations Committee who's taken an active
interest in this hearing; and, without objection, I'm pleased
to recognize Mr. Rohrabacher from California at this time.
Mr. Rohrabacher. Thank you very much, Mr. Chairman.
As you know, I've had a very deep interest in Panama and in
the national security interest of our country that I believe
are being put at risk by some of our policies in Panama. And I
want to thank you for conducting this hearing on the national
security threats that are developing in the Panama Canal area
which remains a key strategic choke point for the Americas.
When I visited Panama last summer I was stunned by the
complete absence of American security forces in what had been
for nearly a century America's military outpost protecting our
Nation's vulnerable southern flank. And I had been to Panama
several times during the Reagan years when I worked at the
White House, and those of us who visited Panama in the past
realize how significant a military presence America had there
and what role that presence played in the stability and played
for a positive factor in Latin America and in that region.
Today, Communist China and transnational criminals are
filling the strategic vacuum created by the total withdrawal of
the United States of America from Panama. Major ports on both
ends of the Canal are now under the control of a Hong Kong-
based Chinese company, Hutchison Whampoa, which has close ties
to the Communist Chinese Government and is partly owned by an
entity which is itself wholly owned by the Communist Chinese
regime, the China Resources Enterprises, which is also very
well known as a front for the Chinese military intelligence.
I am submitting for the record a copy of the Panamanian
Government's official open bid document, and it shows that
American companies initially outbid the Chinese companies for
control of the port facilities in both ends of the Panama Canal
but were denied the port contracts through what our State
Department has called, a highly irregular process.
[The information referred to follows:]
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Mr. Rohrabacher. Please also include for the record the
enclosed document that describes the relationship between
Hutchison Whampoa and its owner Li Ka-Shing and China Resources
Enterprises to the Communist Chinese regime itself.
[The information referred to follows:]
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Mr. Rohrabacher. It is not a coincidence that Taiwan, which
is under the threat of military attack by Beijing, has stopped
shipping military supplies through the Panama Canal because of
their concern that all ships' cargo manifests will be seen by
Hutchison Whampoa and reported to Beijing.
Equally troubling, since the removal of United States
counterdrug operations at Howard Air Force Base, there has been
a significant increase in the vast quantities of South American
cocaine and heroin that transit through and around Panama.
And let me say to my colleague from Hawaii I certainly
share her commitment to trying to reshape America's drug effort
so it isn't totally aimed at enforcement and interdiction, but
that does not take away from the importance of these other
efforts. But putting treatment in the mix is a good idea. It's
an important element.
But when we take a look at what's going on now as a result
of America pulling back from Panama and the weakening of our
drug enforcement mechanisms, it's having a harrowing effect on
American security and on the security and well-being and
stability of that part of the world.
The war in neighboring Colombia against well-armed narco-
terrorist forces financed by laundered drug profits through
Panama's banks is escalating and threatens to spread throughout
the region. Panama does not have an army, a navy or an air
force.
The Panamanian Government and its National Police force
are, at best, unable to cope with the challenges they face; and
the people of Panama understand that. They're unable to cope
for a number of reasons. There is incompetency and corruption
charges, but also it is a very small force, and it is a very
small country. It makes absolutely no sense for the United
States Government to pour billions of dollars into a
counterdrug war into Colombia and to deploy an increasing
number of American soldiers there while ceasing to seriously
negotiate with Panama for a reinstatement of American security
advisers and, yes, even security forces and counternarcotics
experts there in order to participate in a regional effort.
In all recent public opinion polls--and this is what makes
it so incredulous that this is happening--80 percent of the
Panamanian people support a continued United States security
presence in their vulnerable homeland. They want us there. The
empty American bases and total absence of American military
presence in Panama--at America's most important strategic point
in this hemisphere. This is a glaring example of this
administration's callous disregard for our country's national
security interests.
In Panama, the people want us there, but yet this
administration was unable to negotiate an agreement to permit
us to have a military presence there. It's a travesty. In fact,
I would say it's more. It's a sham when one says that we were
honestly trying to negotiate so America could maintain some
sort of a presence there in Panama.
And those of us who, spent time in that part of the world,
it's shocking to go and see now that there's just no American
troops, no American military. What was an area where it was
bustling with Americans, we had presence, we were able to deter
evil forces--and I know that people don't like to use the word
``evil.'' It maybe sounds a little bit too plebeian to use the
word evil, but there are evil forces in this world and
America's presence was able to deter those forces from
dominating this very small country of Panama.
So this hearing is very important for our national security
today because we do have evil forces, countries and forces that
hate the United States that are involved with drug trafficking,
forces that would undermine our national security, and Panama
needs America's help, and it needs America's presence. And I
thank you for holding this hearing.
[The prepared statement of Hon. Dana Rohrabacher follows:]
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Mr. Mica. I thank the gentleman for joining our panel this
morning and for his comments.
We have already agreed to leave the record open, with
consent of the minority, for 2 weeks. Without objection. Also,
I think the material that the gentleman from California
requested will be made part of the record.
At this time, we have our first panel; and I'd like to
recognize our first panel: the Honorable Rand Beers, who is the
Assistant Secretary of the Bureau of International Narcotics
for the Department of State; Ms. Ana Maria Salazar, she is the
with the Department of Defense in charge of Drug Enforcement
Policy and Support; and Mr. William Ledwith, and he is the
Chief of International Operations from the Drug Enforcement
Administration.
I think they've all been before our panel before, and
they're familiar with the requirements of this investigations
and oversight panel.
If you would please stand and be sworn.
[Witnesses sworn.]
Mr. Mica. The witnesses answered in the affirmative.
I am pleased to welcome back today Mr. Rand Beers, who's
the Assistant Secretary of State for the Bureau of
International Narcotics. You're recognized sir.
STATEMENTS OF RAND BEERS, ASSISTANT SECRETARY, BUREAU OF
INTERNATIONAL NARCOTICS, DEPARTMENT OF STATE; ANA MARIA
SALAZAR, DRUG ENFORCEMENT POLICY AND SUPPORT, DEPARTMENT OF
DEFENSE; AND WILLIAM LEDWITH, CHIEF, INTERNATIONAL OPERATIONS,
DRUG ENFORCEMENT ADMINISTRATION, DEPARTMENT OF JUSTICE
Mr. Beers. Thank you, Mr. Chairman and members of the
Subcommittee on Criminal Justice----
Mr. Mica. I'm not sure if we can hear that. You might have
to pull that as close as you can.
Mr. Beers. Is this better, sir?
Mr. Mica. Yes, go ahead.
Mr. Beers. Thank you for this opportunity to speak today
about Panama and in particular the narcotics trafficking
situation. Panama's shared border with Colombia leaves it
vulnerable to narcotics trafficking and to incursions into the
Darien Province by guerrillas and narco-traffickers. It is
arguably one of the most strategically located countries in the
Western Hemisphere for drug trafficking and other organized
criminal activities. Panama's location between South and North
America, its long coastlines, border with Colombia, the Canal
and other factors make it a key staging areas for drug
shipments and insurgent unrest originating in Colombia. It is
crucial, therefore, that we remain committed to a partnership
that promotes security for both the United States and Panama.
Panama was certified as fully cooperating with the United
States on counternarcotics in 1999. While this country is not a
significant producer of drugs or precursor chemicals, due to
its strategic location, advanced transportation infrastructure
and financial development it serves as a crossroads for
transnational crime, including drug trafficking and money
laundering. Panama's long land border and shared sea-lanes with
Colombia and its extensive Caribbean and Pacific coastlines
make land and sea interdictions a major challenge. The Panama
Canal, container seaports, the uncontrolled Colon Free Zone and
the beginning of the Pan American Highway, an international hub
airport and numerous uncontrolled airfields create unlimited
transportation opportunities for drug traffickers.
Accordingly, Panama has become a major transshipment point
for illicit drugs smuggled from Colombia into Panama by ``go-
fast'' boats, by containers transported by maritime cargo
vessels that transit the Canal or off-load in Panama's ports,
by private and commercial overland vehicles and aboard private
and commercial aircraft.
Colombian cocaine is, in turn, often stockpiled in Panama
and repackaged for further shipment to the United States and
Europe. Panama is also extremely vulnerable to money laundering
due to its international banking sector, the Colon Free Zone,
and the United States-dollar-based economy.
Panama's law enforcement agencies maintain good relations
with their United States counterparts and have demonstrated
their willingness to cooperate on an interagency basis.
In 1999, the United States and Panama carried out four
coordinated counterdrug operations. The Technical Judicial
Police and the Panamanian National Police also executed three
major joint interdiction operations along the Costa Rican
border against alien smugglers and drug traffickers. In fact,
we had one just in the past week.
At the request of the Moscoso Administration, the United
States and Panama began law enforcement bilateral discussions
on November 23rd, 1999. This past Tuesday, June 6th, the
Government of Panama hosted the second round of law enforcement
bilaterals. The issues discussed included law enforcement,
specifically drug interdiction cooperation, alien smuggling,
money laundering and judicial reform. In addition to these
issues, this particular round of bilateral discussions was
concluded with the signing of a Stolen Vehicle and Aircraft
Treaty.
According to United States law enforcement and insurance
agencies, Panama is an important destination for vehicles
stolen from the United States. Some of these vehicles are
transported to Panama for the local market, while others are
routed there for transshipment to Europe and elsewhere. Stolen
vehicles are often used by Colombia drug traffickers to
transport drugs. This treaty for the repatriation of stolen
vehicles and aircraft illustrates Panama's commitment to
building successful law enforcement and judicial institutions
and enhancing bilateral cooperation beyond counternarcotics.
Panama continues to be a major drug transit country because
of its proximity to the world's largest cocaine producer. The
situation in Colombia, therefore, is critical for the
surrounding region. Colombia is increasingly threatened by
well-armed and ruthless narcotics traffickers that are
supported by guerillas and paramilitaries. Not only is the
Colombian Government unable to exert effective control over
thousands of square miles of its own territory, but the border
areas of neighboring countries are also put at risk by the
instability and violence. The corrosive powers of narcotics and
narcotics money are ever-present threats to the institutions
and economies of the entire region.
The situation in Colombia also poses a considerable number
of direct threats to United States national security interests,
including thousands of Americans killed by drugs and drug-
related violence each year, losses to our economy from drug-
related accidents, inefficiency in the workplace and the social
and human costs of abuse and addiction.
After strained relations with the tainted Samper
administration, President Pastrana's tenure and the proposed
funding for Plan Colombia offer the United States and Panama a
golden opportunity to work with Colombia to confront such
threats. Panama faces complex and daunting problems, not only
those emanating from the Colombian crises but also others that
are outgrowths of institutional weaknesses in Panama.
Our challenge as a neighbor and a partner is to identify
ways in which we can assist Panama in resolving its narcotics-
related and other problems. At this moment, Panama is a partner
who shares our counternarcotics concerns and possesses the will
to proceed with the needed reforms, bilateral agreements and
operations. I look forward to working closely with the Congress
as we continue to address these critical issues.
Thank you very much.
Mr. Mica. Thank you. We'll withhold questions until we've
heard from all three members of the panel.
[The prepared statement of Mr. Beers follows:]
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Mr. Mica. I'll recognize next Ana Maria Salazar, who is
with the Department of Defense, Drug Enforcement Policy and
Support. You're recognized.
Ms. Salazar. Thank you, Mr. Chairman. I'm pleased to have
the opportunity to testify once again before the subcommittee
and to provide an update on the status of our forward operating
locations.
At this time, I would like to summarize my statement and
submit a written statement for the record.
Mr. Mica. Without objection, your entire statement will be
made a part of the record. Please proceed.
Ms. Salazar. As you know, a year ago last month the runway
at Howard Air Force Base in Panama closed and the interagency
began conducting counterdrug flights on an expeditionary bases
from existing commercial facilities in Aruba, Curacao and the
Ecuadorian military airfield in Manta. Since the last time I
testified a year ago on this issue, we have made important
progress toward replacing and enhancing our capabilities.
In November 1999, the Government of the United States and
Ecuadorian Government signed a 10-year agreement for the use of
the Manta airfield to support interagency counterdrug missions
throughout the source zone, including Colombia, which supplies
90 percent of the cocaine shipped to the United States. The FOL
at Manta is now capable of 24-hour, 7-days-per-week, all-
weather flight operations. United States Navy P-3s are
conducting Eastern Pacific counterdrug detection and monitoring
missions from this facility as we speak. The Manta airfield is
suitable for United States Customs Service P-3 operations, and
the deployments are currently scheduled for this month. This
fact alone will allow the United States to increase the
surveillance capability in the source zone tremendously.
In March of this year, our government and the Kingdom of
the Netherlands signed a similar 10-year agreement for the
critical coverage of the northern source zone and Caribbean
portions of the transit zone.
The United States Customs Service has been flying from
Aruba since April 1999, and the Department of Defense has been
operating with aircraft such as the F-16s, United States Navy
P-3s and E-2s, United States Air Force AWACS, as well as other
Intelligence, Surveillance and Reconnaissance platforms from
Curacao since May of last year.
Shortly after initiating flight operations from the FOLs,
the interagency exceeded pre-Howard closure counterdrug
detection and monitoring on-station time by 15 percent.
Furthermore, transit zone detection increased by 50 percent;
and maritime-related cocaine seizures climbed by over 500
percent.
Most recently, in March 2000, we signed a 10-year agreement
with the Government of El Salvador for the use of Comalapa Air
Base, which will support P-3 counterdrug flights in the Eastern
Pacific and Western Caribbean portion of the transit zone. This
agreement is pending ratification by the Salvadorian
legislative assembly prior to initiating counterdrug
operations.
Geographically, the El Salvador location optimizes the
integrated coverage of the three FOLs, minimizing overlaps
while simultaneously extending the reach of airborne
counterdrug missions to the northern region of the Eastern
Pacific transit zone along the west coast of Mexico.
Although progress has been made, important challenges still
remain. The vast majority of D&M on-station hours were flown in
support of counterdrug transit zone missions, primarily in the
Caribbean. In fact, source zone on-station time has decreased
by 75 percent.
We need to increase our airborne D&M coverage over the
source zone to complement the Puerto Rican ROTHR, which has
completed its testing phase and is now fully operational,
providing unprecedented coverage over southern Colombia. Once
full operational capability is established at each of the FOLs,
the interagency will have significantly greater source and
transit zone coverage than existed when counterdrug operations
were flown out of Howard Air Force Base.
I would like to briefly talk about some of the issues that
you have raised in regard to Panama.
I know that members of the subcommittee are concerned about
how and what effect illegal drug trade is having on Panama.
From DOD's perspective and perhaps the interagency at large, we
are closely monitoring the situation, and we stand ready to
assist Panama, as with any other country in the region, in
support of that country's security concerns. We do not foresee,
however, any counterdrug requirement for an FOL-like presence
in that country at this point.
The El Salvador FOL meets or exceeds all Department
requirements and optimizes the synergetic effect of the
geographical situation of the three locations. A Panama site
suboptimizes the FOL architecture because its coverage--the
region that it would be covering would overlap that provided by
the other operating locations.
However, we are engaged with the Government of Panama in
counterdrug concerns. There have been ongoing bilateral
discussions, as mentioned by Assistant Secretary Rand Beers;
and SOUTHCOM has participated in those efforts. However, until
Panama signs a visiting forces agreement, an agreement that we
have in many countries around the hemisphere, it will be very
difficult for DOD to increase dramatically their support.
I would like to briefly talk about the Colombia
supplemental. Most of the required military construction
funding for the FOLs is currently contained in the fiscal year
2000 supplemental developed to support Plan Colombia. From an
execution perspective, the Department requires a funding as
soon as possible, especially in the case of the Manta FOL,
which could go to contract as early as July.
President Pastrana has asked for international support to
address an internal problem that has international dimensions
fueled in part by our country's demand for cocaine. It is a
long-time sense that we should move forward on the Colombian
supplemental, and I hope that we can do so soon.
We cannot execute our congressional mandated mission to
curb the shipment of illegal drugs without the FOLs. The
Department of Defense along with our interagency partners has
made important progress over the past year, and with the
continued congressional support we hope to continue to do so in
the future.
I thank you for affording me the opportunity to speak to
you in regards to the FOLs and Panama; and, with that, I look
forward to answering your questions.
[The prepared statement of Ms. Salazar follows:]
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Mr. Mica. We will withhold questions until we've heard from
our final witness. And that witness is William Ledwith, Chief
of International Operations for our Drug Enforcement
Administration under the Department of Justice. Welcome and
you're recognized sir.
Mr. Ledwith. Good morning, sir.
Mr. Mica. You might have to pull that up close. For some
reason, they're not picking up over there.
Mr. Ledwith. Good morning, sir.
Mr. Chairman and members of the subcommittee, I appreciate
the opportunity to appear before the subcommittee today on the
subject of Panama. My comments will be limited to an objective
assessment of the law enforcement issues involving drug
trafficking and money laundering in and through the country of
Panama. I would like to again express my thanks to the
subcommittee for your continued support of the Drug Enforcement
Administration and for your overall support of drug law
enforcement.
Today's organized crime leaders are strong, sophisticated
and extremely destructive. They have the capability of
operating on a global scale. They are callous individuals who
send their surrogates to direct the distribution of the drugs
they ship to the United States. These organizational leaders
have at their disposal airplanes, boats, vehicles, radar,
communications equipment, money and weapons in quantities that
rival the capabilities of some legitimate governments.
Panama is the most strategically located country in the
Western Hemisphere for drug trafficking and other transnational
crime. Panama's location between South America and North
America, with its long coastlines, its border with Colombia,
and the Panama Canal make the country a key transit point for
drug shipments originating in Colombia for further shipment
north.
Other factors which make Panama attractive to major drug
traffickers are its weak law enforcement and public security
institutions, its large and sophisticated international banking
sector, the Colon Free Zone and cargo container port facilities
on both ends of the Panama Canal.
Panama continues to be threatened by Colombian drug
trafficking organizations that utilize containerized cargo,
aircraft, maritime vessels and the Pan American Highway in
order to transport their illicit drugs through Panama.
In addition, these same drug trafficking organizations
utilize the Panamanian economy in order to launder their
billions of dollars in drug proceeds through the Colon Free
Zone.
To combat this threat, the Government of Panama continues
to cooperate with DEA to investigate and prosecute these
transnational drug criminals.
In 1999, Panamanian agencies seized a significantly reduced
amount of cocaine and marijuana. This was principally due to
changing trafficking methods and Panamanian authorities' lack
of resources and training to respond to these changes.
However, cocaine and heroin seizures in 2000 are on a pace
to exceed the record seizures made by Panamanian authorities in
1998. Panama continues to be a major financial and commercial
center, ideally positioned for illicit financial transactions
and drug smuggling. Panama's international banking center, a
long-established tax haven, combined with the Colon Free Zone
and a United States-dollar-based economy, render Panama
vulnerable to money laundering.
The Colon Free Zone is second only to Hong Kong as the
largest free zone in the world and is the largest in the
Western Hemisphere. The Colon Free Zone comprises over 161
acres of warehouses and showrooms which accommodate over 1,600
companies. Operating as a free trade zone, the CFZ is an area
where goods can be imported and reexported without being
subject to tariffs, quotas or taxes. Therefore, importers
throughout Latin America can purchase a wide variety of these
products at a competitive price.
In addition, CFZ merchants will routinely accept third-
party checks, money orders, wire transfers and cash as payment
for these goods.
Illegal narcotic sales in the United States generate
billions of dollars annually, most of it in cash. Efforts to
legitimize or launder this cash by the Colombian drug cartels
are subject to detection because of intense scrutiny placed on
large financial transactions by United States banks and
institutions. To avoid detection, the drug cartels have
developed a number of money laundering systems that subvert
financial transaction reporting requirements and manipulate
facets of the economy unrelated to the traditional financial
services industry.
One such form of money laundering is known as the Black
Market Peso Exchange. The Black Market Peso Exchange is a
complex system currently used by drug trafficking organizations
to launder billions of dollars of drug money each year. In
addition, this financial scheme exploits the advantages of the
CFZ, which serves as an integral link in the Colombian money
laundering chain.
The Black Market Peso Exchange is an underground financial
system used to evade reporting and recordkeeping requirements
mandated by the United States Bank Secrecy Act, as well as by
Colombian foreign exchange and import laws and tariffs.
Money brokers, utilizing pesos, purchase United States
dollars from narcotics dealers in Colombia in exchange for
Colombian pesos. These United States dollars are sold to
Colombian importers in exchange for Colombian pesos. The United
States dollars purchased by Colombian importers are used to pay
for merchandise bought in the CFZ. The purchased goods are
shipped to Caribbean or South American destinations, sometimes
via even Europe or Asia, then smuggled or otherwise
fraudulently entered into Colombia.
The Colombian importer takes possession of his goods,
having avoided paying extensive Colombian import and exchange
tariffs, and they pay the peso broker for the items with
Colombian pesos. The peso broker, who has made his money
charging both the cartels and the importers for his services,
uses those new pesos to begin the cycle once again.
These investigations are extremely complex and require
cooperative law enforcement efforts between the United States
and Panama. Although cooperation between the United States and
Panama on money laundering investigations has improved, the
pursuit of such investigations remains constrained by
Panamanian laws requiring prosecutors to satisfy an unusually
high burden of proof and to meet extremely difficult
evidentiary standards.
Under Panamanian law, if a merchant demonstrates that
transactions include real goods and that payment is at fair
market value, he is not engaged in money laundering. Thus,
willful ignorance of the law is not a crime.
From the Panamanian perspective, criminal money laundering
takes place only when a person moves cash without a
commensurate exchange of goods and the cash involved results
from specific drug transactions.
These legal loopholes continue to be exploited by money
laundering organizations operating in the Colon Free Zone.
In conclusion, as the gateway to the Caribbean, Panama
continues to provide a significant link between South American
drug cartels and their ability to transport their poisons to
the continental United States. The country of Panama is
singular in the opportunities it provides for traffickers, as
well as the challenges it creates for law enforcement
authorities.
Over the past several years, the United States Government
has refocused a great deal of asset and enforcement initiatives
along the southwest border in order to address the threat posed
by Mexican drug trafficking organizations and their alliance
with Colombian drug cartels. While these initiatives have
resulted in outstanding successes, we remain concerned about
the increased drug trafficking activity throughout the entire
Panamanian and Caribbean regions. I can assure you that the DEA
will, therefore, remain diligent in our efforts to respond to
any apparent shift in drug trafficking trends.
The use of Panama as a drug transit zone by Colombian drug
trafficking organizations, as well as a means of securing their
narcotics proceeds, creates unique challenges to Panamanian
United States law enforcement authorities. We are dedicated to
cooperative drug enforcement investigations with our Panamanian
counterparts in order to address this threat.
Mr. Chairman, thank you for the opportunity to appear
before this subcommittee today. I sincerely appreciate the
interest that you and the subcommittee have shown in DEA's
counterdrug role in Panama. At this time, I will be happy to
answer any questions you may have.
Mr. Mica. Thank you.
[The prepared statement of Mr. Ledwith follows:]
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Mr. Mica. I will start with some questions.
Again, from all the papers that have disclosed the
existence of--I believe it is a Customs report that I had not
seen--Mr. Beers, have you seen the Customs report?
Mr. Beers. Sir, I have it in my possession, and I looked
briefly at it, but I haven't had a chance to read it closely.
Mr. Mica. How about you, Ms. Salazar?
Ms. Salazar. I have not seen that report, and I believe it
was not cleared through the Department of Defense.
Mr. Mica. Mr. Ledwith.
Mr. Ledwith. I have not had a chance to review it yet, sir.
Mr. Mica. First of all, I am going to request from Customs
a copy of the report and, if necessary--hopefully, they will
voluntarily provide it to the subcommittee. If not, I will
consult with Chairman Burton about subpoenaing the report.
The report--and again I only have the press reports of what
it says--there is a quote that intelligence sources indicate
that Chinese and Russian organized crime factions are active in
narcotics, arms and illegal alien smuggling, utilizing Panama
as a base of operations.
Are you aware of those activities, Mr. Ledwith?
Mr. Ledwith. There is intelligence indicating that there is
significant Chinese involvement in that part of the world, yes,
sir.
Mr. Mica. The other part of this says--and again I have to
quote from this--says drug seizures by authorities in Panama
declined by 80 percent last year from 1998 levels, and no major
narcotics traffickers or money launderers were arrested.
Is this factual, Mr. Beers?
Mr. Beers. Yes, sir. If you aggregate the cocaine, the
marijuana and the heroin seizures, that is an accurate
statement, but it is based entirely on the drop in the area of
marijuana. Both cocaine and heroin seizures went up. However,
having said that, it is also true that if you take 1998 as your
base year everything went down.
Mr. Mica. I had invited General Wilhelm to come today, and
he wasn't able to be with us, for scheduling reasons. He did
submit this letter, which I think the minority also has.
Without objection, Mrs. Mink, I would ask that it be made a
part of the record. Is that acceptable that we submit that? I
think they supplied you with a copy.
[The information referred to follows:]
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Mr. Mica. But in this letter, which will be part of the
record, it says, we estimate our capability will continue to be
approximately one-third of what it was in Panama.
Ms. Salazar, is that correct?
Ms. Salazar. From the perspective of what we are doing
right now and the coverage we are providing the source zone, I
believe it is correct.
Mr. Mica. I have held a number of closed-door meetings, not
to embarrass the administration, on trying to replace these
forward operating locations. It is critical that we get them in
place.
We do have the now signed, I guess, 10-year agreements with
the two. For the record, will you tell us when you estimate
they now will be fully operational?
Ms. Salazar. Are we talking about the source zone, transit
zone, sir?
Mr. Mica. All of our capabilities, source zone and transit
zone, that we had when we had Panama fully operational.
Ms. Salazar. I am going to try to answer this question. The
biggest problem we have right now is trying to increase our
coverage in the source zone. If you look at what we are doing
in the transit zone and what I said in my oral statement we
have, in fact, better coverage now than we had when we were
flying out of Howard Air Force Base.
Mr. Mica. One of the problems is this stuff is coming out
at unprecedented quantities out of the source zone.
Ms. Salazar. You are absolutely correct, sir, and with
Customs initiating flights out of Manta this month--and I don't
want to give you numbers because then I get quoted and these
numbers change.
Mr. Mica. Well, they do, and we have been conducting these
hearings and we get sort of a revolving description of when we
are going to have full operational capability in place. So you
are not prepared--some of the documentation I think you have
supplied to us said 2002 is the latest estimate.
Ms. Salazar. When we are going to have most of the MILCON
construction done, when we are going to be able to have the
AWACS flying out of Manta, you are absolutely right, and it is
going to take about a year and a half to be able to do most of
the upgrades.
Mr. Mica. You did talk about what is going on in Manta. One
of the problems with Manta is the condition of that airstrip;
is that correct?
Ms. Salazar. That's correct.
Mr. Mica. How much is it going to cost now to get it fully
operational?
Ms. Salazar. It is going to cost--the total--I am going to
give you the total cost for the MILCON that we have requested
for Manta airport, which is $61.2 million, and that includes
the barracks. That includes----
Mr. Mica. You described aircraft flying out of there, but I
understand it is being remodeled and reconstructed to also
support U-2 aircraft; is that correct?
Ms. Salazar. U-2 aircrafts, I am not aware of that, sir. It
would be for AWACS.
Mr. Mica. I am sorry, AWACS?
Ms. Salazar. Yes, that's correct.
Mr. Mica. AWACS, and there are no AWACS flights out of
there now?
Ms. Salazar. Out of Manta, no, sir.
Mr. Mica. All right. The AWACS capability then will not be
up and running in that location until 2000?
Ms. Salazar. That's correct.
Mr. Mica. Two?
Ms. Salazar. 2001. My advisors here tell me that the runway
itself will be available in the summer of 2001.
Mr. Mica. One of the problems we have is, of course, the
U.S. military doesn't conduct any enforcement operations and is
prohibited really from being an enforcement agent under the
Constitution and our laws, but what they do is provide
surveillance information to the source countries.
This GAO report which was provided to me recently says that
United States officials in Peru told us there has been little
or no United States airborne intelligence or surveillance of
air traffic routes between Peru and Bolivia since 1997. The
United States Ambassador to Peru warned in an October 1998,
letter to the State Department that the reduction in air
support could have a serious impact on the price of coca.
Mr. Ledwith, aren't we seeing an increase in cocaine coming
out of this zone?
Mr. Ledwith. If you take the zone as a whole, yes, sir, we
are seeing increased cocaine production.
Mr. Mica. For the first time, I was told by some officials
that we are seeing an increase again in Peru. Is that correct?
Mr. Ledwith. There are reports of an increase beyond the
previously achieved low, yes, sir.
Mr. Mica. If I ask, Ms. Salazar, these people in Peru who
have been our allies, or Bolivia or Colombia, if they are
getting the same level of information and intelligence for
surveillance of drug trafficking production, etc., in those
areas, what are they going to tell me?
Ms. Salazar. Sir, they are probably going to tell you, at
least from the air surveillance aspect, that they are going to
be receiving increased information. As you know, the ROTHR
Puerto Rico came on board, and the importance of the ROTHR, at
least for the Department of Defense and the role we play, is
that you will have the capability of being able to have--see
what is going on in the way of air flights in Peru, Colombia,
Northern Brazil.
So in the short term they are probably going to tell you
that they are going to have more information in the way of air
flights.
Mr. Mica. The ROTHR has been up for how long?
Ms. Salazar. It just came--there were still playing with
it, but it is formally and it has been in use for about, I
would say, 3 weeks now. I was--in fact, I was looking at the
site a day and a half ago.
Mr. Mica. It's too early to get any data from its effect,
or about its effectiveness?
Ms. Salazar. Well, sir, in fact, talking to our experts,
they are actually quite pleased with what they are seeing right
now; and they have, in fact, started to increase--providing the
information to source zone nations.
Mr. Mica. Thank you.
Mrs. Mink.
Mrs. Mink. Thank you very much, Mr. Chairman.
From all of your statements and testimony, I gather that
the area coverage, in terms of the surveillance activities by
the United States, is greater than it was during the operation
of Howard Air Force Base. Is that correct?
Ms. Salazar. For the transit zone, the Caribbean zone, yes,
it is.
Mrs. Mink. Could you explain exactly what that coverage is
with respect to the issue that we are discussing this morning
about Panama and the drug trafficking through Panama? To what
extent does this transit coverage meet the problems that we are
discussing this morning about Panama?
Ms. Salazar. OK. Madame, if you allow me to use this map
you will probably get a good sense as to each one--of the
coverage that will be provided by each one of the FOLs.
Panama would be that yellow spot that you see in the middle
of those bigger circles. As you can see, when you look at the
FOL, Aruba and Curacao, who is the green star, the amount of
coverage we are receiving right now, because where
geographically you find Aruba and Curacao is much larger than
we were in Panama.
If you look at where the Salvador FOL--which hopefully will
be coming on board in the next couple of months and we will
start providing flights, we are going to have a larger coverage
through what is called the East Pac. And what does that mean
for us? As my colleagues from DEA will state, we have seen
increased flow of maritime tracks through East Pac; and, in
fact, there has been a pretty large interdiction of drugs
through the East Pac. And because we are going to be having
that--geographically, Salvador is the higher Central American
strait--we are going to be able to have more coverage of the
East Pac.
If you look down at the blue star, where the Manta FOL is,
you can see we have a deeper coverage of the source zone
countries. It is easier to get to Peru and southern Colombia,
where, you know, 90 percent of the drugs that come to the
United States are either produced or cultivated.
If you look at the map, we have--our air platforms will
have easier access to get to that area; and, therefore, they
will be spending less time in the transit zone. They will be
using their time to be on the source zone and being able to
surveil from that area.
I don't know if that explanation helps you, but once we
have the three DOL fully functioning we will, in fact, have a
better coverage, air surveillance coverage, than we had from
Howard Air Force Base.
Mrs. Mink. When do you expect that to be fully on board?
Ms. Salazar. We expect the missing part of the puzzle right
now is the fact that we can't fly AWACS out of Manta.
Mrs. Mink. What is the reason for your inability to fly
AWACS out of Manta?
Ms. Salazar. The airfield doesn't--can't withstand an
AWACS, which is----
Mrs. Mink. Why can't you fix the airfield?
Ms. Salazar. We are going to do that. In fact, the MILCON--
--
Mrs. Mink. Do you have funds to do it?
Ms. Salazar. We do not have funds. We requested the MILCON
in the Colombia supplemental, and we are hoping that once the
Colombia supplemental has been approved we would be able to
even cut a contract.
Mrs. Mink. What is the current status of that supplemental?
Ms. Salazar. Right now, it is--I think it is ready to go to
conference. I think they are trying to attach it to the MILCON
bill. My sense is, in regards to the MILCON discussions in the
supplemental, there is no--there is no questions about it. It
is just a matter of supplemental.
Mrs. Mink. How much are you requesting in that MILCON?
Ms. Salazar. We are requesting, for all the FOLs, $126
million.
Mrs. Mink. That is now stuck in the Senate? As I understand
it, we passed it in the House in the emergency supplemental?
Ms. Salazar. I believe that's correct.
Mrs. Mink. And currently, as I understand it, that
emergency supplemental is not moving, so it has to await
passage of the regular appropriations bill before you get
funded?
Ms. Salazar. My colleague from the State Department was
reminding me, there are two parts to it. We have the military
part of the supplemental and also the State Department part of
it, and our part of the supplemental would be attached to the
MILCON. I think they were going to initiate discussions in the
next 2 or 3 weeks. I don't--it would be very difficult for me
to predict when it----
Mrs. Mink. So assuming that you get the funding in late
fall, that would be the timeframe in which you could begin the
reconstruction of the airfield, is that correct?
Ms. Salazar. That's correct, and that's why, when I stated
that the pavement would be ready to have AWACS flying out of
Manta, what I was mentioning--what I was referring to was that
if we started the--if we got the money sometime in July or
August, most of the repairs of that airfield would be done by
the summer of the year 2001. At that point, we would be able to
fly out of Manta.
Mrs. Mink. Now, with the departure of our military base out
of Panama, what is the reality of having a visiting force
agreement in place with Panama to substitute for the absence of
an actual military base?
Ms. Salazar. It is--I think we are talking about two
different issues. If we have a visiting force agreement, it is
an agreement that we use in most countries to basically protect
our people when they are deployed. What does that mean? That
there is just basic rules and regulations as to what we can do
in a country when we are--when I say we, I am talking about
DOD--what DOD personnel can do in any specific country when
they do deployment, provide technical assistance and support.
We have been in conversations with the Government of Panama
for the last number of months. This agreement has not moved
forward and DOD, as you can understand, would be very nervous
in increasing our activities and increasing our presence,
increasing our training deployments to Panama until we had a
signed agreement.
Mrs. Mink. Now, if you had a visiting forces agreement,
could you do with that agreement some of the drug surveillance
activities that we had done previously at the base?
Ms. Salazar. No, that would be a different type of
agreement. As you know, with the forward operating locations,
when you look at that agreement it basically outlines the type
of activities we would perform from any specific airport and
the types of assets we would be using. Those are two different
types of platforms.
At this point, we haven't approached Panama or had any
conversations with Panama to--in regards to having an FOL
presence because, as you see from the map, Panama at this point
does not help us graphically when you take into consideration
that we will probably be initiating flights out of Salvador in
the near future.
Mrs. Mink. The news article that the chairman referred to
this morning from the Washington Times makes reference to
Chinese and Russian-organized crime groups. You, Mr. Ledwith,
indicated that the presence of the Chinese groups has increased
in Panama. Can you make a comment about the Russian-organized
crime?
Mr. Ledwith. Only in this realm, to say that there has been
increasing evidence of a Russian-organized crime influence in
that part of the world, also, ma'am.
Mrs. Mink. When you speak of organized crime, this is drug-
smuggling activities basically, since that is the focus of our
attention in this committee?
Mr. Ledwith. Our area of interest would, of course, be
specifically drug trafficking.
Mr. Beers. But it is broader than that, ma'am.
Mrs. Mink. Would you like to amplify on that, too?
Mr. Beers. Russian-organized crime is a poly crime
activity. It involves both drugs, which is one of the basic
reasons for their interest in that particular area of this
hemisphere, but they are also involved in laundering money out
of Russia, in the movement of counterfeit goods and counterfeit
money and alien smuggling and trafficking in women and
children.
All of those are activities that Russian-organized crime
has sought to bring to this hemisphere and other locations
around the world. They are just spreading out.
Mrs. Mink. Have you reports or other documents that you can
make available to this committee with regard to that?
Mr. Beers. There are intelligence documents, ma'am, and we
can ask the intelligence community to make those available.
Mrs. Mink. Thank you. Thank you, Mr. Chairman.
Mr. Mica. Thank you.
I would like to yield to our vice chairman. Could you yield
to me for just a second, Mr. Barr?
Mr. Barr. Certainly.
Mr. Mica. I just want to point out for the record, and
there will be a written record and if we submit this chart as
testimony, part of the testimony, that the circle shown to the
subcommittee this morning with a star indicating El Salvador is
not in operation at all and that we only have a fraction of the
capability coming out of Manta at this time and, again, no
AWACS capability, just for the record.
Mr. Barr, thank you.
Mr. Barr. Thank you. If we could have a staff person turn
that so that both the witnesses and the Members could see it, I
would appreciate it.
Prior to our evacuation of Howard Air Force Base, Ms.
Salazar, it is correct, is it not, that we were flying some
2,000 counterdrug flights per year out of Howard?
Ms. Salazar. That's correct--I think it was actually more
than that. Yes, 2,000 including support missions.
Mr. Barr. OK. And it is true also, is it not, that the cost
of operating Howard Air Force Base was approximately $75
million per year?
Ms. Salazar. Approximately.
Mr. Barr. With all of these circles up here, how many
counterdrug flights are currently being operated?
Ms. Salazar. If you give me--we have that in, I believe,
one of my charts, but I will give that--if you give me a couple
of minutes, we will try to get that information to you right
now.
Mr. Barr. OK. I think the chairman made a very, very good
point. I mean, this is a very pretty drawing and the circles
are very nice and the stars and so forth, but this is
theoretical. I mean, these areas are not being covered
currently in the same manner as the larger circle reflected
coverage out of Howard Air Force Base.
What these circles reflect, I believe, is the theoretical
coverage. You can draw all the circles in the world that you
want, but if you don't have planes up in the air they don't
really mean anything.
Ms. Salazar. Actually, sir, I am sorry. The map is somewhat
confusing. That larger circle that you see----
Mr. Barr. I don't find it confusing.
Ms. Salazar. No, the larger circle that you see actually
reflects the AWACS, the capability of the AWACS.
Mr. Barr. But there are no AWACS.
Ms. Salazar. But there will be AWACS flying out of Manta.
Mr. Barr. So this is theoretical at this point.
Ms. Salazar. At this point, we don't have AWACS flying out
of Manta.
Mr. Barr. Well, we don't have AWACS flying out of any of
these areas.
Ms. Salazar. No, sir. We do actually have AWACS flying out
of Curacao.
Mr. Barr. How many are there down in Curacao today?
Ms. Salazar. Right now, today, I can't give you details.
Mr. Barr. It is my information there are none down there
today.
Ms. Salazar. There may not be one there today, sir, but we
have had the AWACS flying in the AOR; and, specifically, they
have been flying out of Curacao.
Mr. Barr. There are no AWACS that are permanently stationed
in any of these locations; that's correct, isn't it?
Ms. Salazar. Nor were there in Panama. The AWACS normally--
--
Mr. Barr. There are none?
Ms. Salazar. No, but, sir, even when we had Howard Air
Force Base the AWACS were never permanently stationed out of
Panama.
Mr. Souder. They were prior to them being transferred to
Kosovo, and so forth.
Ms. Salazar. No, no.
Mr. Barr. There are no AWACS down here on a regular basis.
Ms. Salazar. I would disagree, sir. We do have AWACS
coverage flying out of Curacao.
Mr. Barr. From time to time.
Ms. Salazar. We--as much as we had--when you have only one
AWACS--I mean, I think the issue here is we only have one AWACS
and at different points.
Mr. Barr. We only have one AWACS in our defense inventory?
Ms. Salazar. No, sir, we only have one AWACS that has been
assigned to this.
Mr. Barr. Therein lies the problem. A policy decision has
been made by President Clinton, or Secretary Cohen, I don't
know which, not to make the AWACS available. We have AWACS.
Ms. Salazar. We do have.
Mr. Barr. They are just not assigned here.
Ms. Salazar. As you know, sir, throughout the years there
has been a reduction in a number of these assets, and a
decision was made by the Secretary that there were other
missions around the world that required----
Mr. Barr. We are well aware of these other so-called
missions around the world and how they are eating up our
resources. That's why we don't have them here.
Would any of you disagree with the estimates that I have
seen that the FARC in Colombia strength--what is the FARC
strength as far as you all know?
Mr. Beers. Sir, my understanding is that it is between
10,000 and 15,000 armed individuals.
Mr. Barr. OK. Would any of you all have any reason to doubt
those figures?
Mr. Ledwith. No, sir.
Mr. Barr. OK. By any measure, a fairly substantial
presence.
Are you all familiar, I presume, to one extent or another,
with Panama law No. 5, organic law No. 5? Mr. Beers, I
certainly know you are very familiar with it.
Mr. Beers. You are going to have to remind me what it says,
sir.
Mr. Barr. Well, OK. Panama law No. 5 has been written about
extensively, both publicly as well as in United States
Government documents, because it is the framework that
specifically provides the powers for Hutchison Whampoa to
control assignment of pilots for ships transiting the Canal, to
hire pilots for ships transiting the Canal; to determine the
order of ships going through the Canal.
None of you all are familiar with Panama law, organic law
No. 5?
Mr. Beers. No, sir.
Mr. Ledwith. No, sir, not particularly so.
Mr. Barr. Mr. Chairman, I am speechless.
Mr. Mica. We want to make sure that's included in the
record, that you are speechless.
Mr. Barr. I guess this is one reason why we see so little
concern on the part of the administration over Communist
China's presence in Panama. The administration apparently is
not even familiar with the basic law of Panama that provides
very significant powers to Hutchison Whampoa that provide for
the hiring, the assignment of pilots for ships transiting the
Canal, the order of line for ships going into and out of the
Canal.
Are you all familiar with the recent purchase by a
Communist Chinese bank of Marine Midland Bank, which is one of
the major banking institutions in Panama?
Mr. Beers. Simply that it happened, sir.
Mr. Barr. Was this significant enough to hit the radar
screen of the U.S. Government, the administration?
Mr. Beers. Sir, we are concerned about financial
transactions in Panama as a general issue because as several of
us have indicated, the issue of money laundering is a serious
issue in Panama.
Mr. Barr. How about is there any specific concern with
regard to increased Communist Chinese presence and power in
banking and other financial institutions located in Panama?
Mr. Beers. Sir, as a general matter, that's, of course,
something that we pay attention to, look at----
Mr. Barr. Good.
Mr. Beers [continuing]. And report upon.
Mr. Barr. I appreciate that.
Is this of concern to other agencies of the government, the
increased Communist Chinese financial presence in Panama
through such things as the purchase of Marine Midland Bank? Is
this of concern to the Department of Defense?
Ms. Salazar. Sir, as you know, I am the Deputy Assistant
Secretary of Defense for Drug Enforcement so I--although----
Mr. Barr. Does that include money laundering?
Ms. Salazar. Not necessarily. As you know, my role is
detection--our role is detection and monitoring and providing
support through our DOD forces. However, when we do get
requests for training, we provide training and intelligence.
But, generally, we don't participate in money laundering
support--into money laundering support.
Mr. Barr. Mr. Ledwith, I know that you all's agency is very
concerned about and does very, very good work on attacking
money laundering. Are you concerned about the increased
Communist Chinese presence in financial institutions and power
in Panama?
Mr. Ledwith. Yes, sir, we are working in cooperation with
our colleagues in the Customs Service and the FBI we watch that
very closely.
Mr. Barr. You might want to share that concern with some
other agencies of our government.
Mr. Ledwith. Yes, sir.
Mr. Barr. I might also state for the record, Mr. Chairman,
and encourage representatives from our government, too, look
carefully at Panama organic law No. 5 because it also provides
contract rights transfer authority for Hutchison Whampoa. In
other words, they can take the contract rights that they have
through this very, very long-term contract that they signed
with the Panamanian Government and transfer them to a third
party, without restriction; and that would include transferring
of their rights to other components of the Communist Chinese
Government, other corporations controlled by different
components of the Communist Chinese hierarchy, and so on and so
forth.
I have other areas, Mr. Chairman, but since there are other
Members will we have another round of questioning?
Mr. Mica. If time permits.
I will recognize Mr. Ose now.
Mr. Barr. Thank you.
Mr. Ose. Thank you, Mr. Chairman.
Mr. Ledwith, I am interested in a particular area and that
is from your base of knowledge, how much money do we spend
addressing the issues of drug enforcement in this area? I mean,
from your Department's----
Mr. Ledwith. From DEA's perspective, sir?
Mr. Ose. Yes.
Mr. Ledwith. Limited to Panama or the region?
Mr. Ose. The region.
Mr. Ledwith. Millions of dollars.
Mr. Ose. Tens of millions or $5 million?
Mr. Ledwith. We would probably say tens of millions.
Mr. Ose. OK. Ms. Salazar, the same question, generally
speaking.
Ms. Salazar. In this area I can give you some specific
numbers, and then we could come back with--I could give you
some general numbers and then come back in general.
Mr. Ose. Sure.
Ms. Salazar. This year we spent, in the whole FOL process,
which would include what we have spent in Manta and Aruba and
Curacao, I would say approximately $34 million. Now, you also
must add on, if we are talking about that--the region in
general, we have a very large and important program in Colombia
that goes to $60 million, $70 million, and we also have
important programs in Peru. So we are talking----
Mr. Ose. We are on the area of nine figures somewhere as it
relates to your particular area?
Ms. Salazar. Probably.
Mr. Ose. Mr. Beers.
Mr. Beers. Likewise. Hundreds of millions of dollars in the
region.
Mr. Ose. The reason I ask that question is, having spent
all of this money, do we know who the individuals are behind
the exportation of drugs to this country, the individuals? Not
the cartel names, not the cities from which it comes but the
individuals?
Mr. Ledwith. Yes, sir, we know many of them.
Mr. Ose. Say again?
Mr. Ledwith. Yes, sir, I would say that we do know many of
them, yes, sir.
Mr. Ose. I would like to visit with you later about perhaps
creating a list of such individuals.
Mr. Ledwith. Yes, sir, I would be happy to do that.
Mr. Ose. I always find that shining a light on specific
people, kind of helping bring attention to their activities, is
helpful.
I also want to go back to the question of the operating
bases. As I understand it, Ms. Salazar, as it relates to Howard
Air Force Base, we were running about 2,000 flights a year out
of there; and it was costing us around $75 million a year to
operate that effort.
Ms. Salazar. I stand to be corrected. I was given the
numbers that Congressman Barr had asked for and, in fact, when
we were flying--as you know, Howard had a number of different
types of flights that took place. Some of them were counter
drugs. Some of them were support for the hemisphere. When you
look at the counterdrug flights, we were flying approximately
550--520 detection and monitoring missions per year.
This year, we have flown, up until now, 600 detection and
monitoring flights. So, in fact, the number of flights has
increased.
Mr. Ose. Is the $75 million number correct in terms of the
general operating expenses?
Ms. Salazar. For Howard, yes, approximately.
Mr. Ose. For Howard?
Now we have got a number for these new forward operating
locations in terms of capital expenditures. I think the number
was $126 million is the one you cited, investment in these
airports.
Ms. Salazar. I am sorry, sir. What I am talking about, yes,
it is a capital investment in the next 2 years of being able to
improve the capabilities of the FOLs, which would include----
Mr. Ose. Would that be all three of them?
Ms. Salazar. That would include all three of them, 126----
Mr. Ose. This would be, for instance, airports like
National Airport or Dulles or Sacramento International? I mean,
that's the comparable facility, if you will? You have private
carriers coming in. It is not like Howard Air Base in that it
is strictly a military facility?
Ms. Salazar. Yes. Manta, although it is an Air Force
facility, it also has international flights flying out of it.
So it is also an international airport, yes.
Mr. Ose. If I understand correctly, we have $126 million
worth of capital investment going into these three forward
operating bases. Do we have any feel for what the annual
operating costs for these three forward operating locations
would be?
Ms. Salazar. OK. I am going to stand to be corrected one
more time. It is $136 million when you include Salvador.
Mr. Ose. OK. So do we have a number for the estimated
annual operating expenses for the three forward operating
locations?
Ms. Salazar. We are struggling with those numbers right
now, sir, in part because--there are a number of reasons. We
initially had anticipated $19 million to $18 million is the
numbers that General Wilhelm had provided us, but it looks like
those numbers are going to increase, and they are increasing
based on the fact that now we have not accounted for Salvador
at the time we were providing those numbers, and there are
costs that we couldn't anticipate when we were trying to
predict as to what were the needs in these different airports.
Mr. Ose. If you had to estimate presently, to the best of
your knowledge, you are probably talking $100 million a year
for operating expenses out of the three forward operating
locations?
Ms. Salazar. $100 million? No. I would say 23--between 23
and--23 would be the lower end right now, what we are looking
at. It could go higher than that, $23 million.
Mr. Ose. How do you reconcile the $75 million number at
Howard for 520 detection excursions with the $23 million at the
three bases on an annual basis?
Ms. Salazar. The $23 million--well, we--maybe you could
repeat the question?
Mr. Ose. I asked earlier about what were the annual
operating costs for running the drug interdiction efforts at
Howard.
Ms. Salazar. Right.
Mr. Ose. You told me $75 million.
Ms. Salazar. That's correct.
Mr. Ose. That was generating about 520 excursions, if you
will, for detection purposes and the like. Now I am interested
in what the annual operating costs are estimated to be for the
three forward operating locations that will replace Howard, and
you have told me the best estimate you have today is $23
million a year.
Now, the question I have is, if Howard was generating 520
detection missions for $75 million a year, how is it that we
are able, at least year to date, just generically, to generate
600 detection missions from the three bases at $23 million a
year? There just seems to be a logical disconnection on a
relative basis, and I am trying to reconcile that.
Ms. Salazar. There is a couple--there are a couple of
reasons. On the one hand, when we were at Howard, we had a full
base facility. When you look at how we are functioning out of
Aruba, Curacao, Manta and Salvador, they are more on an
expeditionary basis, and they are not permanently there. So
these are--the cost in many ways would be--probably are going
to be less because our footprint is less.
Mr. Ose. Is the $75 million number that you previously gave
me the total operating expense at Howard?
Ms. Salazar. Total operating expense.
Mr. Ose. So not only the drug interdiction effort but the
military effort?
Ms. Salazar. Correct. Correct.
Mr. Ose. Let me go on to my next question then. I may want
to come back to that, if I have time.
Mr. Barr was very effective as it relates to the AWACS
planes not being in the region, and I see on your very clear
picture the circles for the P-3s. Now do we have P-3s in the
area right now?
Ms. Salazar. Yes, we do, sir. We have P-3s flying out of
Manta and Aruba.
Mr. Ose. All right. How much in capital improvements do we
have to make to continue the operation of the P-3s in the area?
Ms. Salazar. Not much, because we are doing it already.
Mr. Ose. OK. So I guess, Mr. Chairman, that begs the
question why would we spend $126 million to improve an airport
for an AWACS that's not there if we have got P-3s that are
operating there effectively now?
With that, I would yield back.
Mr. Mica. Thank you.
Mr. Souder.
Mr. Souder. I have a couple of different lines of
questions.
Mr. Ledwith----
Mr. Mica. Mr. Souder, you are not picking up for some
reason.
Mr. Souder. I am discouraged.
Mr. Ledwith, on the question of the Communist Chinese, have
you seen any involvement in money laundering related to
narcotics from many of their institutions?
Mr. Ledwith. Sir, we have no definitive information that I
could put forward at this time, no, sir.
Mr. Souder. But clearly that means you are closely
monitoring because there is possible doubt?
Mr. Ledwith. Because of the scope and complexity of money
laundering in general, and particularly in Panama, yes, sir, we
are watching it closely.
Mr. Souder. What we have seen in Panama predominantly is
Colombian heroin coming north. Have you seen any sign that they
also could get Asian heroin moving the other direction with
their presence in Central America?
Mr. Ledwith. Are you referring to Asian heroin coming to
the United States from Panama?
Mr. Souder. The increasing presence of China.
Mr. Ledwith. We have not seen any indications of that yet.
Mr. Souder. So to the degree you are watching it, you are
mostly watching to see if they become involved in South
American events?
Mr. Ledwith. Yes, sir. There are other issues that we are
also closely monitoring. China, for instance, is a source of
much of the ephedrine in the world that is utilized in making
methamphetamine, which is a particular product available----
Mr. Beers. From a broader perspective, sir, alien-smuggling
is an issue, the flow out of China, and Panama is an
intermediate destination.
Mr. Souder. But the DEA--zeroing in on narcotics, I
understand that the ephedrine would be coming from Asia. You
say they are involved in that. Any of you who want to answer?
Mr. Ledwith. China is one of the major producers and
exporters of ephedrine, and clearly we have our eye on that
particular element also, yes, sir.
Mr. Souder. So part of the reason for the investment, in
fact, in Central America could become to try to be involved in
that precursor business in South Central America,
theoretically?
Mr. Ledwith. I cannot speak to what their ideas are, but
certainly it is something that we are interested in and closely
monitoring.
Mr. Souder. That is certainly not an illogical jump? In
other words, it is enough that you at least would want to watch
it, because if they are one of the largest providers of the
precursors, this is the largest provider of narcotics, it would
be totally unwise not to be watching an increasing presence in
that zone if there is going to be some future linkup?
Mr. Ledwith. You are absolutely correct, sir, and that's
why we are watching it.
Mr. Souder. OK. Thank you. I can't have Mr. Beers at a
hearing and not talk about Blackhawks for a second.
My favorite staffer on Colombia, John Mackey, was just
showing me some wonderful pictures of actual Blackhawks in
Colombia with the galvin 18 guns on one side, and I hope we can
continue to work to get the guns on the other side as well
since it looks like the first five helicopters that were
damaged were damaged on the side without the more powerful
guns.
Which leads me to one of my frustrations that I am
discouraged on. I know all of you from multiple of these
things. I think the biggest problem we are fighting right now
in the anti-narcotics effort is that there is a movement
growing on both sides, right and left, that somehow this is an
unwinnable war and that we are all fighting hard to try, and
disagreeing at times as to how to do it, but we are in a real
battle here, and this is part of my frustration on these dates
questions.
My generation is obsessed with Vietnam, that we are always
behind and that we can argue whose fault it was or how we got
into this in the Panama Canal, but as a business guy I look at
it as somehow a critical path method wasn't done here to
realize the date for having a final decision in Panama, was too
late for us to be able to, you know, replace the resources fast
enough. That I happen to believe, and I think many others are
very concerned, that there has been a stockpiling going on
while we are in transition; and that while we are trying to
figure out how to get our AWACS there, I don't disagree
theoretically.
This may not, in the end, give us better coverage in the
antidrug effort. There are still other issues in the zone such
as, say, the Canal that happens to be very important in
international trade. That alone may be enough of an argument to
have an FOL in Panama or some sort of a function there that may
not be related to narcotics at all. It is a big trade question,
I mean, nominally related to narcotics.
I heard in Ms. Salazar's testimony, that's what we should
have been working on in mid-1998, if it takes us a year and a
half, because there is plenty of blame to go around. I
personally believe that Plan Colombia and these Blackhawks
should have been requested from us 4 years ago. I was fighting
for over six Blackhawks, and now we need 20's and 40's and 60's
down there.
But the truth is, Congress is moving at a snail's pace
right now, too, and now that the administration has come forth,
now we are dinking around with whether we need the right
helicopters, when this money is going to come through, and then
by the time we get it there we are going to need more.
Furthermore, I read in Mr. Beers' written testimony about
an incursion into the Darien by the paramilitary's six men, not
much, but this week an incursion of 70 armed rebels last week.
If we, in fact, do put a billion and a half into Colombia and
that is mostly oriented toward a push south-southwest, why
isn't it going to pour right across that line? And how many
police do they have to move to the border there?
Mr. Beers. A very limited number, sir.
Mr. Souder. And what is our strategy? Ms. Salazar said, I
believe the exact quote was, we are closely monitoring the
situation and stand ready to assist Panama.
What does that mean, given the fact that if we do pass this
bill, take a year and a half probably to get all the stuff down
there or a year, we get it there, we start hammering them, what
does this mean? Are we going to wait until they are already in
Panama and then have to have another billion and a half
supplemental?
Ms. Salazar. And perhaps I did not--I didn't fully detail
with you all the number of ongoing engagements SOUTHCOM has
with Panama at this point, but it is an engagement that is
somewhat limited to the fact that we won't be able to increase
our capability of deploying people down there and increase our
training and technical assistance to the Panamanians until we
have this agreement that we talked about earlier. But we do
have--we do have an ongoing engagement.
SOUTHCOM has been working very closely with the Panamanians
in developing their national security strategy. They also have
been helping and working with the Panamanians so that they
develop a nationwide communication system for their forces. So
we do have something of--I am not going to say a presence but
of an engagement with Panama.
And what I said is exactly right. I mean, we continue to
monitor this situation very closely and try to cooperate and
work with the Panamanians in so much as the Panamanians want
it.
Mr. Souder. I have been involved in this subcommittee from
the time we took over Congress and have been down every year to
South America and even got lost in Santiago one night, that one
of the things that is frustrating here is that we wait, we get
the information, once we get the information we go through the
process, and we get just enough to now be just slightly behind.
And something like this is the most tragic thing we are
battling in the streets and in our families, and it is not
going down, it is getting exacerbated--unless we can get ahead
of the curve and try to anticipate what is going to happen
next, rather than reacting to what has happened, the charges
against us are going to continue to be true and undermine our
support base to do anything about it.
Mr. Beers. Thank you, sir. That is the intention of our
effort, to work with you on Plan Colombia to get ahead of the
curve with sufficient resources, to be able to have a real
opportunity to be effective, and we welcome your support and
appreciate it.
Ms. Salazar. And the Department of Defense also shares your
concern and somewhat your frustration. We did not anticipate
that we were going to have to leave Panama, so we found ourself
almost, from 1 day to another, in the situation where we had to
start negotiating with a number of countries agreements so we
could land, finding the resources so we could be able to deploy
assets that had not been deployed to these areas and basically
finding ourselves seeking MILCON construction so we could be
able to kind of replace and enhance our capabilities that we
had flying from Panama. So, in many ways, the Department of
Defense shares your concerns and your frustrations.
Mr. Souder. Anything you want to say, Mr. Ledwith?
Mr. Ledwith. Yes, sir. The Drug Enforcement Administration
looks forward to the passage of Plan Colombia, also. It is
something that is very, very needed, very timely; and I would
like to see it go forward.
Mr. Souder. Are you concerned that, if we pass it, it is
just going to overrun Panama and that we aren't prepared to
fight the Panama situation?
Mr. Ledwith. We are concerned from a regional perspective
about what the displacement effect will be of all of those
resources in Colombia. And, of course, Plan Colombia also has a
regional focus; and that is something we are watching very
closely.
The situation in Ecuador, the situation in Venezuela, the
situation in Panama, these are all areas that can be adversely
impacted by a displacement of either drug traffickers or
guerrillas.
Mr. Beers. But at this point in time, sir, in all fairness
to your point, the cultivation----
Mr. Souder. Right.
Mr. Beers [continuing]. Which is the principal focus of
Plan Colombia wouldn't be expected to move in the direction of
Panama. It is too small, and it is in the wrong geographic
area.
Mr. Souder. But that FARC is predominantly a protection
group. What they could do is much like what happened in
Vietnam. They go across to Cambodia, harbor themselves over
there for awhile, we destroy one season of the crops, they come
back across. Our guys can't control that much land with the
amount of money we are giving them. That's only a fraction of
the cost.
Mr. Beers. Remember, it is not seasonal, sir. The cocaine
is not seasonal.
Mr. Souder. Depending on what we use to destroy it.
Mr. Beers. No. It is a perennial, not an annual. It is not
like the opium poppy. You grow a plant, and you continue to
harvest it year after year after year for about 15 to 18 years.
So they have a startup requirement that's 18 to 36 months to
get started.
Mr. Souder. That's assuming, of course, we have eradicated
everything, that we got control of the whole zone, which $1.9
billion is not going to do.
Mr. Beers. Yes.
Mr. Souder. But it is an important start. For example, we
are dealing with a stagnant bill. We need to continually look
at that for the Panama question, because I heard this week and
last week are new things that we hadn't seen before. We suspect
it might happen, but that clearly we have a change in the
dynamics of Peru. We don't know what the opposition is going to
do. Are they going to align with that? Are there going to be
additional pressures there? As we look at our package, we have
to understand we have to stay ahead of the curve, not just be
reactive. Otherwise, we are just throwing money away, wasting
money.
Mr. Mica. Thank you, Mr. Souder.
Let me see--Mr. Rohrabacher.
Mr. Rohrabacher. Thank you very much.
First of all, let me just restate for the record that I do
agree with Mrs. Mink about America's drug program cannot be
just focused on interdiction. We have got to start trying to
affect demand, which also includes treatment. And until we do
get demand under control, we can't expect only law enforcement
to do the job. So first, before I go into that, I want to
identify with Mrs. Minks' statement.
Let me also say that, in terms of the other end of this
battle, I have been very deeply disappointed in the
administration, and especially in what the administration has
been doing in relationship to Panama, which I consider to be a
frontline country in this whole situation.
If we forget Panama, we do so at our own peril. Having
looked at what has been going on in Panama, I would say that
the administration has--at best--been incompetent. And trying
to engage the Panamanians in a way that would result in
policies and in a reality that is beneficial to the United
States and protecting our interests. Not only drug interests,
but interests in terms of potential enemies like Communist
China.
First and foremost, let me ask you, the baseline that you
are using today, Ms. Salazar, you are suggesting that there are
actually more flights now than when we had Howard Air Force
Base.
Ms. Salazar. That's correct.
Mr. Rohrabacher. When we had Howard Air Force Base, as of
what year are you talking about? Are you talking about as of 2
years ago? What about 10 years ago? Were there more flights 10
years ago before the Clinton administration?
Ms. Salazar. I could get you those numbers.
I guess what I would have to clarify, if you are talking
about counterdrug flights or other types of support activities
that the Department of Defense provided.
Mr. Rohrabacher. If you could give me those numbers, would
it surprise you to know that there were dramatically more
flights 10 years ago?
Ms. Salazar. Ten years ago? I don't think there would have
been many--I believe--you know, I couldn't speculate, because I
am trying to understand the numbers and the way of the
counterdrug flights and the numbers that were increased.
Mr. Rohrabacher. I have a chart in front of me here that
suggests that at least the number of hours that were present in
the flights has gone from over 8,000--from about 8,000 to under
5,000 hours.
Mr. Beers. Which is your base year, sir?
Mr. Rohrabacher. This is--the baseline is 1992, before the
Clinton administration.
Ms. Salazar. OK.
Mr. Rohrabacher. It appears here, it is under 5,000--or
around 5,000, I guess, but it was over 8,000. So you see a
reduction of at least maybe a third of the number of hours.
Ms. Salazar. Are you talking about a 1992 baseline, sir?
Mr. Rohrabacher. Yes.
Ms. Salazar. I don't know if you are aware, but there was a
congressional mandate to cut approximately $300 million of the
CTA program, which I supervise, and a lot of that cut was
reflected in flight time and steaming hours. So the numbers are
absolutely correct.
Mr. Rohrabacher. OK. But the mandate wasn't that you cut
this; it was to cut something, right?
Ms. Salazar. No, no. It was actually when you look at the--
--
Mr. Rohrabacher. It was to cut the number of hours--the
Congress mandated that we cut the number of hours for drug-
related flights?
Oh, that was when the Republicans came in, I guess.
Mr. Ose. Mr. Rohrabacher, I am curious. May I interject
something?
Mr. Rohrabacher. Yes.
Mr. Ose. The mandate on the $300 million, was that passed
by a Congress--what year was that passed----
Mr. Rohrabacher. Well, is it the 1992 Congress that you are
talking about mandated this?
Ms. Salazar. It was for the 1993 FYI; yes, FYI.
Mr. Rohrabacher. So that was----
Mr. Ose. That would have been the Congress elected in 1992
then?
Mr. Rohrabacher. Right.
Mr. Ose. Thank you.
Mr. Rohrabacher. I seem to remember there was a shift in
control of Congress somewhere around there.
Ms. Salazar. But, sir, beyond who was----
Mr. Beers. There was a Congress elected in 1990.
Mr. Rohrabacher. So you are saying the Democrat-controlled
Congress mandated that you shift--dramatically decrease the
number of drug control flights in this area; is that right?
Ms. Salazar. There was a concern expressed by a GAO report
written in 1992 that the Department of Defense was spending way
too much money in detection and monitoring, in light of the
capability of our law enforcement to perform end games and the
capability of other countries to perform end games.
Mr. Rohrabacher. So there is an excuse for them to want to
dramatically decrease it. So you are not using that year as a
baseline. You are using some year after these dramatic cuts.
Ms. Salazar. Yes, 1998. The figure I gave you, 520.
Mr. Rohrabacher. 1998 obviously; what were we in the
process of in 1998? We were in the process of moving out of
Panama in 1998, were we not?
Ms. Salazar. No, sir, we were not. We left Panama in 1999.
Mr. Rohrabacher. Right. We just left in 1 day?
Ms. Salazar. No, the decision to leave Panama, at least
when we were advised that we would be--when the decision was
formally made to leave Panama was in, I believe, October 1998,
Randy? Yes.
Mr. Rohrabacher. Let me just say there were negotiations.
Howard Air Force Base was closed in June 1999, of course, which
means I don't think they just decided the day before they shut
the door. It seems to me there is probably an evolution of--
especially considering the terrific job that the administration
did in negotiating to try to keep Howard Air Force Base, there
is probably an understanding that Howard was going to actually
shut its doors. So the baseline you are using is a baseline
when Howard was in transition to be closed.
Ms. Salazar. I would politely disagree, because the
ratcheting down of flights began, I believe, in January or
February 1999.
Mr. Rohrabacher. You are trying to tell us--the essence of
your testimony today is that we really didn't need Howard after
all.
Ms. Salazar. No, sir.
Mr. Rohrabacher. Well, that is what you are saying. You
have all these circles here and saying look at the coverage we
are getting without Howard. You are trying to say, oh it was OK
that the administration----
Mrs. Mink. Will the gentleman yield? I don't feel that is
an appropriate interpretation. They are left with a situation
where they have to come up with an alternative, and this is the
alternative plan which they feel is adequate in meeting the
coverage that Howard Air Force Base previously provided, but
not because they didn't need Howard.
Mr. Rohrabacher. OK, that is very fair, and one could
conclude that only if one believes that the administration was
negotiating seriously to keep Howard. And what I am trying to
say or suggest, and what my observation is, is that there was
no serious negotiation, just like the administration hasn't
done anything to keep this Chinese Communist-dominated company
from controlling both ends of the Canal. The administration
also was not negotiating seriously to try to keep an American
military presence in Panama.
There is an intent that is going on here that is not on the
surface, is what I am saying, and I am trying to get to that.
It seems to me by suggesting that, well, we really haven't had
any problem because of this because now we have the coverage
anyway, takes away from an understanding of just how drastic a
change has taken place in Panama and what that has to do with
our national security and our efforts to combat drug shipments.
Ms. Salazar. If I could make two comments, at least from
DOD's perspective and as a person who had to deal with the fact
that we were leaving Panama, we pretty much were under the
impression, and we were behaving as a Department, that we were
going to be in Panama until September 1998. And the reason why
I tell you this is that from at least our perspective, there
was a sense or there was a hope that we would be able to stay.
With that said, if I have sounded Pollyannaish and have
given you the sense that there aren't challenges in our
program, I apologize; there are huge challenges. And one of the
biggest challenges we have right now is being able to increase
our capability of doing surveillance over the source zone which
is the area, as you know, we need to place most of our
resources, because that is the area where most of the drugs
that come to the United States come from.
So I am not trying to be Pollyannaish, but kind of
paraphrasing what Congresswoman Mink was saying, we woke up, we
had the situation, and I believe within a year the Department
of Defense has been able to react.
Mr. Rohrabacher. You try to make the best out of a bad
situation, and I guess what I am suggesting is this
administration created the bad situation. This administration,
through either incompetence or whatever their motive was, has
overseen a total withdrawal of the United States from Panama.
There are evil forces in this world, forces that are enemies of
the United States, forces that don't like democracy, whether
they are gangsters or drug lords or Communist Chinese who may
hate us for whatever reason, that would like to control and
dominate the strategic country of Panama. The Panamanian people
know that. They wanted us to stay. Polls indicate that 80
percent of them wanted us to reach an agreement; yet this
administration wasn't able to do so.
That is the reason why I am expressing, anyway, here to
express doubts about what the administration has done and to
applaud the chairman for focusing on this, because it affects
our drug efforts, but it affects our national security in so
many ways.
Mr. Mica. We appreciate the gentleman joining the panel. I
do want to give our ranking member an opportunity for another
question. I think Mr. Barr had a question, if we could proceed.
Mrs. Mink. Our visitor on the committee has riled my
adrenaline, because I don't think that his conclusions are
really fair to the administration. It is true that the
negotiations failed, but as the explanations have been given to
this committee, formally and informally, I believe that the
negotiations were being conducted very aggressively and
seriously. It was the interposition of political circumstances
within Panama, as I understand, the elections and so forth,
that caused the failure of the negotiations to finalize an
agreement where we could stay in some form or another; perhaps
not the full base, but at least for our drug surveillance
requirements.
I have said in my previous comments on this that I was very
disappointed that the negotiations failed, and I would have
hoped that they could have been successful. But to say that the
administration itself caused this to happen, I think is a
complete misanalysis of the circumstances that we find
ourselves in.
Having said that, I join the chairman of this committee in
urging the administration now to do everything they can to
provide the United States with the equal resources that we lost
when we lost Panama. That is the sentiment that both the
chairman and I share, that we have to develop an aggressive
policy that will give the United States the same kind of
capacity to obtain intelligence on the drug movement and to do
the interdiction that is required in order to curtail traffic
in our own country.
We can't interpose our wishes upon an independent country.
We don't own them. We can't dictate policies to an independent
country. Some on this committee would probably wish that we
could, but we can't. The reality is we can't. Therefore, we
have to come up with a substitute policy.
If the majority feels as strongly as they have indicated
today, they should get to work on the other side of the Hill
and make that money available to the administration so that
they can do the repairs and put the AWACS operations into full
effect so we can have the surveillance of source as well as
transit.
This is an area of enormous concern to the minority, and we
join the majority in expressing them. We may have different
emphasis on where we would like to see our efforts. Many of us
on our side are so frustrated that we can't get enough funding
and attention on the treatment end, so we continue to go to the
floor and try to urge that point of view. I believe it probably
will be done again shortly.
I think this it is an area which we should minimize, this
country-bashing. I don't see any point in bashing Panama at
this point and its political leadership, and this leads me to
my final question.
We talk about all this name calling about the local
Panamanian law enforcement efforts. To what extent are we able
to work with the law enforcement agencies that exist there?
What are we doing to help them meet the challenge and are we
meeting with any success at all? Anybody on the panel?
Mr. Ledwith. I would be happy to respond to that, Madam
Congresswoman. We have a very good working relationship with
the Panamanian authorities. We have eight agents stationed in
Panama. Due to congressional increases, we hope to increase
that in the upcoming year to maybe 10 agents. We have a good,
strong, working relationship with them.
Yes, there are problems, there are a lack of resources, and
they are almost overwhelmed with the scope of the problem. But,
yes, we are able to work with them, and we will continue to do
so.
Mrs. Mink. Is there any indication that they resent or
reject our efforts to support and supplement their own internal
law enforcement activities with respect to the drug issue?
Mr. Ledwith. As to drug interdiction, no. As to money
laundering, it is a somewhat different subject.
Mrs. Mink. So in that area they do resist our
interventions?
Mr. Beers. It isn't so much that they resist them. They
have taken our assistance and our training. The issue is that
they haven't completely created the legal framework that makes
it effective.
As Mr. Ledwith said earlier, the only predicate at this
point in time for their money laundering legislation is drug
trafficking. It would be a much more effective regime if the
implementation or the law were broader based so we could do
that. But we have been training their financial intelligence
unit, we have been working with them. They have not made the
prosecutions off of this unit yet that we would like to see
them make, and that is something we have talked with them as
recently as this week about. So it is an ongoing issue of
concern.
Mrs. Mink. What about the free trade zone? What efforts are
we making there to meet the problems that all of you have cited
with reference to the free trade zone?
Mr. Ledwith. Well, if I may, I would like to echo my
colleagues' remarks. I wouldn't characterize it resisting our
efforts. I would categorize it as a legal entanglement. The
Colon Free Zone is of such paramount economic interest to
Colombia and is a source of such revenue, changes in the laws
of Panama that would enable more effective investigations and
prosecutions of money laundering are economically difficult.
There are a variety of interests at play.
Mrs. Mink. Well, that is no different now than it was
before we lost the air base. I mean, that is not a new
development, is it?
Mr. Ledwith. I think you would be accurate in representing
that it is not a new development. The Colon Free Zone has been
there for some time.
Mrs. Mink. No, I am talking about the money laundering.
Mr. Beers. Right. No, it has been an ongoing concern. I
have been involved in this situation for 10 years.
Mr. Ledwith. It has been a concern for many years.
Mrs. Mink. So it is sort of the situation and frustrations
that we express when we discuss the internal difficulties we
have with Mexico.
Mr. Ledwith. Anytime----
Mrs. Mink. There is a very close correlation in what we
would like to see happen and the difficulties because of their
internal legal system, their laws and so forth.
Mr. Beers. As well as economic interests, yes, ma'am.
Mrs. Mink. Thank you, Mr. Chairman.
Mr. Mica. Mr. Ledwith, you said you hadn't seen this report
that says that there are more serious problems arising from
corruption of law enforcement and other agencies within Panama.
Mr. Ledwith. I now have a copy of it, sir. I haven't had a
chance to read it yet.
Mr. Beers. Sir, I skimmed it, and I have tried to
understand how one could draw from that to say that this is
something that has happened, as Mrs. Mink has said, something
that has happened in the very recent past. It seems to me to
describe a situation that has been there for as long as I have
looked at Panama as an area of concern.
Mr. Mica. I will look at the report. I have not seen a copy
of it. We will get back with you after we have reviewed that
and see how dramatically the situation has changed.
Mr. Barr.
Mr. Barr. Thank you, Mr. Chairman.
Going back to our map over here, Ms. Salazar, given that
there had been some 2,000 counterdrug flights per year, what
mix of flights would you have to have out of these three
potential locations in order to reach that level of 2,000
counterdrug flights per year?
Ms. Salazar. I misstated that number. There were 2,000
flights leaving Panama at the time, but of those 2,000 flights,
at least in the year, base year that I am talking about, 1998,
there was 520. As of right now, we have 600 flights that have
been flying out of the FOLs. Most of those flights----
Mr. Barr. You are confusing me. The figure of 2,000
counterdrug flights is yours.
Ms. Salazar. Sir, I am sorry. I misstated. It wasn't 2,000
counterdrug flights.
Mr. Barr. I don't mean today. This has been your consistent
position. You stated in sworn testimony on May 4, 1999, before
this committee, you used that figure as well. Forgive me, but I
suspect what we are hearing is a typical Clintonism. In an
effort to make us believe through smoke and mirrors that there
is really even more drug flights going on now than there were
before, you are trying to now change the definition of what a
counterdrug flight is.
I don't buy that. I mean, you used, have used for over a
year now, the figure of 2,000 counterdrug flights per year.
That is a quote from your sworn testimony. And now you are
telling me, oh, there really weren't 2,000 counterdrug flights,
there were only 500, and therefore all of a sudden, hey, it is
magic, there is more now than there were before.
Ms. Salazar. Sir, if my testimony says 2,000 counterdrug
flights, I apologize. That number is wrong. And I don't
question you, it may be in my testimony. I should not have said
that.
Mr. Barr. Can somebody take these documents to the witness,
please?
This was your sworn testimony in May 1999. We rely on you-
all's testimony. When you all come up here and take an oath and
swear to give us correct information, we would like to be able
to rely on it, and our staff relies on it. And when they
prepare information for us, whether it is going on a foreign
CODEL, such as the ones that Mr. Souder mentioned he is going
on, whether it is for our work up here to perform our job on
behalf of the American people and to legislate and to
appropriate and to conduct oversight, we have I think a right
to rely on sworn testimony from administration witnesses.
Now, when an administration witness comes up here, as you
did in May 1999, and gives us, both in written testimony and in
sworn oral testimony, that there were over 2,000 counterdrug
flights per year originating from Howard Air Force Base, I am
inclined to believe you. Now you are telling me, you are trying
to play games and say oh, that doesn't really mean 2,000, and I
apologize, maybe I misspoke. I don't think you misspoke. I
think that there were in fact over 2,000 counterdrug flights
originating from Howard.
Ms. Salazar. When I spoke 2,000 counterdrug flights, we
were talking about flights that included resupplying, bringing
in equipment, bringing in individuals and probably involved in
some of those numbers were flights that did not necessarily
have the counterdrug nexus. If you wish, I can bring you
concrete numbers as to the types of flights that we were doing
out of Howard Air Force Base prior to its closure and what we
are doing right now.
When I spoke of the 520 flights, I am talking specifically
of 520 detection and monitoring flights. That is, those flights
that specifically took off from either Aruba-Curacao or one of
the FOLs and did surveillance over any specific region. Of
those detection and monitoring flights, specific detection and
monitoring flights, we did 520 in the base year 1998, and this
year we did 600 of those flights, detection and monitoring.
Mr. Barr. So your position now is, just by coincidence,
when we are up here trying to get to the bottom of some things
here and to find out why we don't have the same capability that
we had under Howard, you are now trying to convince us that
even without further work on any of these bases, these FOLs,
even without any AWACS, that you expect us to believe that the
air coverage for this region is now even better than it was
when we had Howard and were operating out of Howard?
Ms. Salazar. Sir, the big difference between the types of
flights that are taking place----
Mr. Barr. Are you trying to with a straight face convince
us that the situation is now even better than it was when we
had Howard?
Ms. Salazar. No, sir; I am trying to give you the facts.
Mr. Barr. You are telling me that according to your now new
definition of what a counterdrug flight is, that there are more
counterdrug flights now than there were when we had Howard?
Ms. Salazar. The difference between the activities or the
flights taking place when we had Howard and now is the AWACS.
All the other assets are flying in the region. They are either
flying Aruba/Curacao----
Mr. Barr. What AWACS? There aren't any AWACS down there.
Ms. Salazar. Sir, we have right now, this year alone, we
were provided an AWACS, and it flew--16 percent of the number
of flights I provide you were AWACS.
Mr. Barr. Over 300?
Ms. Salazar. Over 300? Are we talking about the number of
AWACS?
Mr. Barr. No, the number of flights.
Ms. Salazar. No, sir, I am----
Mr. Barr. I thought you said there were something over 500
flights?
Ms. Salazar. 600 flights. Of those 600 hundred flights, 16
percent of those flights were AWACS related.
Mr. Barr. That is what I am saying.
Ms. Salazar. Sixteen percent. One, six.
Mr. Barr. I thought you said 60.
Ms. Salazar. No, I apologize. Sixteen.
Mr. Barr. I now realize we can't take anything for granted.
You didn't say AWACS flights, you said AWACS related.
Mr. Salazar. They are AWACS. AWACS flights. I can give you
the breakdown of the number of flights that the P-3s did, the
number of flights the Citations did, the number of Double Eagle
packets.
Mr. Barr. But those 600-something flights are counterdrug
flights?
Mr. Salazar. That is correct, sir.
Mr. Barr. And you are trying to have us believe----
Mr. Salazar. Sir, they are detection and monitoring
flights. Those are not flights where we were moving people
around, where we were moving equipment. These are 600 bona fide
surveillance flights.
Mr. Barr. I don't know what you mean by bona fide anymore.
Maybe we have to go back to basics. What does a counterdrug
flight mean?
Mr. Salazar. A counterdrug flight, the flights that I pay
for, that they use my funding for, has to have a counterdrug
nexus.
Mr. Barr. What is a counterdrug nexus?
Mr. Salazar. It could be that they were moving people
around, that they were trying to transport people from one
place to another. It could be transporting equipment. It could
be ISR, which is different than detection and monitoring
flights. So when you take all these different types of
counterdrug flights, what I am telling you right now is the
detection and monitoring, the flights that we perform to be
able to do the surveillance, was 600.
Mr. Barr. So detection and monitoring flights would be a
subcategory of a counterdrug flight?
Mr. Salazar. That is correct, sir.
Mr. Barr. And when you use the figures for here, which are
you using?
Mr. Salazar. The figures I am using for here are detection
and monitoring.
Mr. Barr. So I go back. Your testimony today is you are
trying to convince us that despite what seem to be glaring
problems here in getting sufficient planes in the air and down
there, that the situation is actually better today because you
have more detection and monitoring flights in the air than we
did previously with Howard?
Mr. Salazar. I am not--if you believe--if that is what is
understood from my testimony, then I am going to give a caveat.
We acknowledge most of those flights took place, those
detection and monitoring flights, took place in the transit
zone. What I am trying to say is that is the biggest challenge
we have right now. We need to be able to take those 600 flights
and start increasing the number of flights in the source zone.
So I am not--I am acknowledging----
Mr. Barr. What zone do we have here?
Mr. Salazar. Both.
Mr. Barr. Other than the twilight zone, I think.
Ms. Salazar. No, sir.
Mr. Barr. Where is the transit zone?
Mr. Salazar. If you look at the blue star and the circle
around the blue star, we would classify that as the transit
zone. Excuse me, excuse me, the source zone. The star, the
green star--I would say above the green star, that would be the
transit zone, all the Caribbean region and the east-Pac region.
What I am trying to say, each one of those circles doesn't
necessarily encompass one region, the transit zone or the
source zone regions.
Mr. Barr. When we heard from you earlier, when we talked
about the number of counterdrug flights per year originating
from Howard, did that include both source zone and transit zone
also?
Mr. Salazar. Yes. The 2,000 flights, yes.
Mr. Souder. What about the 540?
Mr. Salazar. The 520, that would include both transit zone
and source zone. Sir, I am acknowledging here we have a
problem. Most of those flights have been in the transit zone.
The priority of this administration has been to get those
flights into the source zone where they need to be.
Mr. Barr. These figures may not mean an awful lot.
Mr. Salazar. They mean there has been great effort----
Mr. Barr. You really have to go beyond simply whether it is
2,000 or 500 or 600 and look at precisely what kind of flight
it was.
Mr. Salazar. I agree.
Mr. Barr. And precisely what area it covered.
Mr. Salazar. I agree.
Mr. Barr. Somebody take that off then, because it is
absolutely meaningless and I don't want it to confuse the
issue.
Looking at the particular airfields at the FOLs, it is
correct, is it not, that these are civilian airfields?
Mr. Salazar. No. The Manta is an Air Force Base that does
also have a runway that has international flights. The Salvador
is also an Air Force Base, but also it is right next to an
international airport.
Mr. Barr. What about Aruba/Curacao?
Mr. Salazar. Aruba/Curacao are international airports.
Mr. Barr. So you all have a problem. Obviously, one problem
is security and having nonmilitary personnel spotters who could
very easily spot what aircraft is coming and going, and when.
Mr. Salazar. And that, unfortunately, has been the case
even when we were in Panama. The issue of the spotter was an
issue we had to constantly battle with. I guess the advantage,
if there is an advantage in this, is that having three airports
or four airports where we are flying out of, it just makes it
somewhat more difficult for the traffickers to predict at what
point we are going to be flying an AWACS or P-3 in any given
area or region. But when we were in Panama, the spotters----
Mr. Barr. You wouldn't say it is an insurmountable burden
for them, though, certainly? You wouldn't say it is an
insurmountable problem for the drug traffickers, given they
have billions of dollars?
Mr. Salazar. They have a lot of resources. Even when we
were at Howard, we had to deal with this problem.
Mr. Barr. Could I, Mr. Chairman, I would like to introduce
into the record a document entitled Legislative Assembly Law
No. 5 of January 16, 1997, from the Republic of Panama.
Mr. Mica. Without objection, so ordered.
[The information referred to follows:]
[GRAPHIC] [TIFF OMITTED] T1970.101
Mr. Barr. Is the GAO report to which our colleague Mr.
Rohrabacher referred to, is that a part of the record also from
December 1999, the GAO record?
Mr. Mica. It has been made a part of the record in the
past. We did a hearing specifically on that report. We will
refer to that for that.
Mr. Barr. Thank you very much, Mr. Chairman.
Mr. Mica. Thank you. Mr. Ose.
Mr. Ose. Thank you, Mr. Chairman. I want to go back, if I
may----
Mr. Mica. We are going to have a vote shortly, and I would
like to try to get our witness up, so maybe we could divide the
time up remaining.
Mr. Ose. I will submit my questions in writing, Mr.
Chairman.
[The information referred to follows:]
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Mr. Mica. Mr. Souder.
Mr. Souder. I have one brief comment I want to make.
Mr. Salazar. I understand that the Coast Guard is very
worried about the increase in gas prices, at we have some in
the supplemental, but they are saying they could be down as low
as 10 percent of their coverage in the transit zone. So we also
have to be looking at mixed resources.
I would like to request for the record an ``apples to
apples,'' so that we can look back on this hearing and try to
see this, possibly using the definition, because I have a
different concern, slightly, than Mr. Barr had. Now I feel kind
of duped by the 2,000, because I thought the 2,000 were flights
that were tracking, which may mean we had a more significant
drop earlier.
What I would like to see, given the specifics of the
definition, a 1990, a 1995, a 1998----
Mr. Mica. Mr. Souder, it is very difficult. We have been
round and round and they have changed the definitions. There
were in fact 15,000 flights taking off annually from Howard Air
Force Base. Some of those were military, some might have had a
drug nexus, some might have been delivering personnel. We have
been behind closed doors and tried to sort this out. We have
gotten different definitions and evaluations. I would be glad
to again look at your request. We can go back and sit down. But
the terms have changed, the definitions have changed, and you
are not going to get a straight answer.
Mr. Souder. I would like to know what the witness's
statement of 2,000 constituted, and then I would like to have
that compared by the Department of Defense to before and
afterwards, apples to apples, because right now you have shaken
the confidence of our ability to measure, because when we were
told, it was counter-drugs; and now we are hearing it was
shuttling around in 1998. Part of our concerns in 1998 were we
were already cranking down from 1995, and 1995 was arguably
maybe starting to go back up, but from 1990. So we are really
comparing things here that the base years are important and we
need a little bit of a pattern of a definition.
Mr. Mica. We will request that information.
Mr. Souder. We would really like surveillance and detection
flights, 1990, 1992, 1995 and 1998. That is really the critical
thing. If we are going to go out 600, I would like to see some
years before Clinton, and source zone emphasis.
Mr. Mica. Briefly, Mr. Rohrabacher.
Mr. Rohrabacher. I know we have a vote, so let me just
state for the record that Mr. McNamara, who was a negotiator
for this administration with the Panamanian Government,
testified before the committee on which I sit, International
Relations Committee, that there was a need and that the
administration determined a need for a 2-year cooling off
period; in other words, for a closure of all America's military
presence in Panama for a 2-year period before we would then
start negotiations, serious negotiations, for an American
military presence. Which seemed to indicate that what has been
happening down there, the fact that you open your eyes and
there is now no Americans down there in order to have a
positive influence on Panama, was part of an actual policy,
although it hasn't been stated.
What we have been discussing, of course, in this last
little interchange about the 2,000 flights is simply what the
definition of ``is'' is, and it keeps coming back over and over
again with this administration, and we keep having to face
questions like that.
Mr. Mica. Thank you. Well, we do have a vote. We will be
submitting additional questions for the record to these
witnesses. I appreciate their cooperation and testimony today.
We will dismiss them at this time.
[The information referred to follows:]
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Mr. Mica. What I am going to do is, since there is a vote,
I think we will recess until a quarter of one. At a quarter of
one, we will have Professor Thomas Cabal provide his testimony
and hear from our second panel. With that, we will excuse this
panel.
The subcommittee stands in recess until a quarter of one.
[Recess.]
Mr. Mica. I would like to call the subcommittee back to
order. We should be joined by other Members. But I do want to
call forth our second panel so we can proceed.
Our second panel consists of Professor Tomas Cabal. He is
with the University of Panama. Welcome to our subcommittee.
This is an investigations and oversight subcommittee of
Congress. We are pleased to have you provide us with your oral
testimony, and also upon request through the Chair, we will be
glad to submit lengthy documents or information, reports in the
record, or make reference to them by request.
Also, this being an investigations and oversight
subcommittee, we do swear in our witnesses. If you would stand,
please, to be sworn.
[Witness sworn.]
Mr. Mica. The witness has answered in the affirmative. I am
pleased to welcome you at this time and also to recognize you
for your testimony and also thank you for being with us, for
the record. I understand it was somewhat difficult and
straining circumstances on your coming, leaving Panama, to
provide us testimony, and we do appreciate your willingness to
come forward and supply us with your background and point of
view at this juncture. Thank you.
STATEMENT OF PROFESSOR TOMAS CABAL, UNIVERSITY OF PANAMA
Mr. Cabal. Thank you, Congressman Mica. I want to do two
things. I will submit my written testimony, as I will only
cover part of my statement----
Mr. Mica. Without objection, your entire statement will be
made part of the record. Please proceed.
Mr. Cabal. Right. And then, I will cover the areas having
to do with the Chinese presence in Panama.
I would also like to preface my statement by thanking
Congressman Rohrabacher, Congressman Barr, Congressman Metcalf,
for their role in securing or making sure that I was present
today at this hearing. As you mentioned in your statement, it
was very difficult. We still have very stringent libel laws in
Panama, we call them gag laws, introduced by the Noriega
regime, precisely to persecute, prosecute and intimidate
citizens and journalists just trying to do our job. So again,
thank you to your efforts that I am here today.
I also would like to address some of the issues brought up
by the panel, because I think there is a lot of information
that has not been properly presented, and some of that
information I think is clearly misleading.
I have a background in engineering and my family has been
involved in construction in the Panama Canal Zone for over 20
years. We built many of these bases, the housing involved, and
we also helped build a key facility that has been closed down,
which is Galata electronic listening post that operates on the
Atlantic side.
If you will, Mr. Chairman, I will go directly into my
testimony and bring up some points that were brought up in the
question and answer period by some of the Congressmen.
The presence of Red China. In the last 5 years, powerful
Chinese companies have invested millions of dollars in Panama.
Recently the Hong Kong Shanghai Banking Corp. purchased the
local branch of the Chase Manhattan Bank. Cable and Wireless,
an English corporation with close ties to Hong Kong, owns
Panama's phone company. Hong Kong and China export 25 percent
of all the goods purchased by the Colon Free Zone. Hutchison
Whampoa, a Hong Kong-based company that operates ports
worldwide, won the right to operate the ports of Balboa and
Cristobal on the Pacific and Atlantic entrances to the Panama
Canal.
Experts disagree on the level of influence that the Chinese
will have in Panama, but congressional investigators and the
National Security Center note that the contract they signed
allows them abundant leeway in their operation of the port
facilities. Hutchison controls 50 percent of all stevedoring
services in Hong Kong, a situation that lets them set container
transport prices and may allow them to undercut their
competitors in Panama. Li Ka Shing, Hutchinson's chairman, is a
key advisor to the Chinese leadership in Beijing.
Some experts believe that Hutchison will be able to affect
canal operations and that they could impede the normal flow of
vessels, a contention disputed by the Panama Canal authorities,
who insists that only they can determine the level of
expediency in canal traffic.
With America's retreat from Panama, the Red Chinese are
quickly filling the power vacuum. Companies identified by the
Cox report as participating in industrial espionage or the
purchase of restricted technology are active in Panama.
COSCO, the Chinese shipping company that services the
People's Liberation Army, sends 300 ships every year through
the Panama Canal. They are investing heavily in Panama and have
just started a new service from China to Europe via the canal.
Other Chinese companies will take advantage of the
modernization of the Panama railroad, while others will be
bidding the operation at Howard Air Force Base, investments
that could put them in a commanding position in Panama. The
presence of Red Chinese companies may tilt the diplomatic
balance in favor of Beijing.
Currently, Panama maintains diplomatic relations with
Taiwan, but as the Bahamian Government just proved, a $40
million investment by Hutchison Whampoa in port facilities led
to a switch in its diplomatic allegiance from Taipei to
Beijing.
Continued investment by Chinese corporations could greatly
diminish the ability of the United States to influence events
in Panama. The Chinese community is already very influential,
and with the support of Chinese companies and investments this
influence could increase. The Government of Panama wants
foreign investment, but as a recent poll shows, 81 percent of
the population would welcome the return of the United States
and would support a limited American military presence to aid
the country in its war on drugs and to secure the Colombian
border.
The key to any negotiations that would bring back American
military forces to Panama is a fair economic arrangement
between both countries. The United States still has an
opportunity to influence events in Panama through investment
and foreign aid. Panama needs $100 million to fully implement a
national security plan that would protect the Colombian border
and limit the activities of international drug traffickers.
As part of the aid package to Colombia, the Congress only
included $8 million in aid to Panama. The Panamanian Government
needs to purchase helicopters, patrol boats, aircraft, radar
and communication equipment, and it needs to improve the
training and equipment provided to the border police. A naval
base to patrol the Atlantic companies must be constructed,
while radar coverage must be extended to cover the Pacific area
and the Colombian border.
On the Pacific side, the United States Coast Guard could be
instrumental in reopening Rodman Naval Station, a modern naval
facility located near the entrance to the Panama Canal. The
Coast Guard could also be instrumental in helping the National
Maritime Service improve its interdiction ability in Panamanian
territorial waters. American corporations could become key
players in the bid to transfer Howard Air Force Base into an
international air cargo facility that would take advantage of
its proximity to the canal and the Colon Free Zone to ship
goods all over the world. Tax incentives and export-import
funding could help American companies invest in Panama if
Washington and the Congress decided that Panama is still an
important strategic partner for the United States.
American companies ship more than 140 million tons of cargo
through the Panama Canal every year. The canal is still very
important to American commerce and to American prosperity. Many
experts agree that a new strategic partnership between Panama
and the United States is the key to the operation of a safe and
efficient international waterway that is a marvel of modern
engineering and Yankee ingenuity. Many people in the United
States and Panama would like the two countries to reestablish a
strategic partnership, then, to enhance canal security and to
protect both nations from the threat of international drug
traffickers.
Organizations like the Center for Security Studies, the
Conservative Caucus, and the National Security Center have been
instrumental in getting the issues before public opinion in
Panama and in the United States.
Let us hope that the elected representatives of the people
in the U.S. Congress examine the facts and work toward
reestablishing a strategic alliance that will enhance the
security of both countries.
On the issue of drug interdiction flights, you mentioned,
and we heard today, all types of figures being bandied about.
The figures start at 20,000. Those were the flights coming out
of Howard Air Force Base.
Howard Air Force Base has the longest runway and the best
infrastructure of any facility of its kind south of the Rio
Grande. The United States does not have and will not have in
the near future a facility such as Howard Air Force Base.
Another element that I notice was not fully analyzed this
morning has to do with what intelligence experts call real-time
information. The antidrug center that operated at Howard Air
Force Base had a budget of $238 million a year. This amount of
money was expended because you had the air crews living and
working out of Panama on a rotation basis, the aircraft were
serviced and maintained, they were fueled. The facility also
had top-of-the-line computers and communications facilities
that tied in to the Galata Island communications facility, so
that when the AWACS and the P-3 Orions were operating, this
information could be fed and coordinated with other regional
radar coverage. The United States provided the Governments of
Colombia, Peru and Venezuela with radar coverage that allows
them to monitor and to intercept suspicious drug flights.
One of the outcomes of the operation of the antidrug center
at Howard Air Force Base and real-time information getting
promptly to law enforcement and to military groups in the
region, was that the drug interdiction, the aerial drug
interdiction effort, was very successful. From 1995 to 1998, 38
aircraft were shot down in the region. Drug planes were shot
down, most of them by the Peruvian Air Force that has been very
aggressive. The Peruvian philosophy is if you do not hail an
order to land the aircraft, you are shot down.
The Colombians have a little different variety. They pursue
the aircraft and try to force it to land, rather than shoot it.
But recently they too have resorted to the effort at shooting
down, and recently a suspected drug plane was shot down on
Colombian territory. So that in itself accounted for a
substantial increase in the price of coca in the region
producing the cocaine.
The other aspect that I think was not fully addressed, and
you can look at it, if one of the staffers would be kind enough
to put the circle there again to look at it, it is the fact
that Panama is a strategic center because of its very close
proximity to the countries producing cocaine. Here you have
extended coverage. Yes, you might extend the coverage, but you
are not that close.
It means we haven't heard any figures pertaining to the
cost of fuel, which in my estimate, will skyrocket because of
the increased distances that the aircraft will have to fly. The
distances also mean that the aircraft will not be able to be in
the air for longer periods of time. And Howard Air Force Base
is a key element to that because of its proximity to the
regions that are producing these drugs that are inundating the
streets and cities of the United States.
Another element that I think fits and has not been fully
disclosed to this subcommittee is the fact that along with drug
interdiction, you have facilities in Panama like at Fort
Sherman where training could be enhanced, not only for
Panamanian border police, but for regional armies, that can
train in the counterinsurgency and the jungle training so
needed in areas such as this.
In the Darien province which was mentioned this morning, we
share a very heavy jungle terrain, tropical rainforest border,
225 kilometers with Colombia, which is now becoming a haven for
the FARC guerrillas. Over the last 2 weeks, more than 1,000
Colombian citizens have fled the fighting between the
paramilitary, the Colombian Army and the FARC guerrillas and
are now in Panamanian territory. This last week there were two
or three incidents of groups of armed Colombians coming into
Panamanian territory in areas where the Panamanian police
simply can't do the job.
Panama's national air service has one helicopter
operational and three small fixed-wing aircraft to patrol the
Colombian border. The maritime service does not really have the
equipment or the capacity or the infrastructure to patrol both
the Atlantic Coast and the Pacific area which, because we have
no radar coverage out of Howard anymore, that area is
completely open. There is no radar coverage in this area.
Now, whether this administration is going to provide radar
coverage in the so-called eastern region, again, remains to be
seen. But the way this thing works is you have regional radar
coverage, and then in each individual producing country, you
have smaller mobile radars that are operated by the local
military with the support and training of American personnel.
As you know, Mr. Chairman, there are now close to 300
military advisers in Colombia trying to get the antinarcotics
battalion fully operational, trying to get Plan Colombia off
the ground. In Plan Colombia, this Congress intends to spend,
what, something like $1.6 billion to try to help the Pastrana
administration win its war against drug traffickers and
Colombian subversives. All they have to do, Mr. Chairman, is
cross the border, and it is time out. They simply cross the
border and they will escape the Blackhawks or the Hueys you
give them or the new battalions they train. They will simply
cross over into Panamanian territory and hide out like they
have done for the last 10 years.
Arms smuggling. There is an ongoing route that begins in
the Middle East with Libyan arms trafficker, East European arms
traffickers. The weapons are shipped basically to Honduras and
Nicaragua, and then from then on by land and sea they are
shipped into Panama and on to the Colombian subversives. This
is one of the fallouts from the paramilitary and the left wing
guerrillas in the Caribbean area of Uraba province, which the
Colombian province of Uraba borders the Panamanian territory,
is that both the right wing and the left wing need the access
to the Caribbean Sea to get their weapons in and to ship their
drugs out.
Colombian guerrillas and paramilitary profit about $600
million a year in the sale and export of drugs. They have moved
from simply protecting and taxing the campasinos, the farmers
that grow the drugs, into overall commercialization,
refinement. And, of course, as you know the FARC guerrillas now
control free territory the size of Switzerland, in which
laboratories are now operational, in which cultivation is now
taking place. That is why the figures that were presented here
by the DEA representative have skyrocketed.
In the last year, Colombian drug production has risen by
about 25 percent. That means a rise from around 450 tons of
cocaine produced in 1998 to between 520 and maybe as much as
650 tons of cocaine.
Heroin is also rising in the areas occupied by the
guerrillas. The estimates by experts is anywhere between 7 and
10 tons of high-grade heroin are now flowing into the United
States, almost single-handedly from the Republic of Colombia,
between 7 and 10 tons. This transit goes through Panama. The
figures we have is about 300 tons of cocaine and maybe 2 to 4
tons of heroin are shipped through Panama every year into the
United States.
So I guess the administration can argue on the values of
how much they are going to have to spend on these forward
operation locations and whatnot, but the fact is that real on-
the-ground intelligence, real human resources being utilized
close to where the action is occurring, is certainly much more
effective.
There are issues, of course of politics and Panamanian
sovereignty, which the chairman there addressed. But, overall,
the American military presence was a welcome presence. Eighty-
one percent of the Panamanian people want Uncle Sam to come
back. They are not saying, ``Gringo go home,'' they are saying,
``Gringo, come on down.'' Why? Because the American military
presence, the infrastructure and the jobs that they generated
signify some $300 to $400 million in the local economy.
The Panamanian economy is today in a severe economic
recession because high-paying workers have lost some 20,000
jobs. There are about 100,000 Panamanians that depended in one
way or another from the American military presence. That is
gone. This money fueled the economy, and we in Panama were not
prepared. The government was not prepared to make that
transition.
[The prepared statement of Mr. Cabal follows:]
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Mr. Mica. As you can hear, the buzzer has gone off for a
vote. We want to have some time for questions, we have about 10
minutes for questions. I wanted to ask a couple, and we
appreciate again your testimony and your coming before us
today.
First of all, how would you estimate since the closure of
Howard Air Force Base last May, a year ago, what would you
estimate the amount of increased transit of cocaine and heroin
to be through Panama?
Mr. Cabal. I would estimate that the figures in 1998 were
100 to 200 tons, 100 tons of cocaine and about 2 tons of
heroin.
Mr. Mica. Additional.
Mr. Cabal. In addition; yes, sir. As you know, the heroin
trade is 95 percent by human mules, people that swallow, so the
authorities have uncovered in the last year several what we
call defecation houses. These are small houses or apartments in
which the drug runner brings his cargo, defecates it, they
clean it up and they give it to somebody else, who swallows it
and on to the United States.
Mr. Mica. Coming out of Colombia?
Mr. Cabal. What they do is disguise the origin of the
traveler. It is one thing, if you come out of Colombia, you go
into Miami or fly into L.A., New York, or Houston, you are
certainly going to be looked over very carefully. But if you
come out of Panama, they are not as rigorous.
Mr. Mica. You also described a disruption along the border
and you said 1,000, was that Panamanians?
Mr. Cabal. No, these are Colombian citizens----
Mr. Mica. That fled into Panama.
Mr. Cabal. Yes, they are there currently hiding. What
happens is the paramilitaries, the left and the right are
fighting over control of the Caribbean, the access to the
Caribbean, so they can ship their drugs and receive their
weapons.
Mr. Mica. I also appreciate your testimony. I think you
said about $8 million is earmarked for Panama and some of the
other surrounding countries.
Mr. Cabal. Yes. The original request was for $30 million,
and the Congress allocated $8, and that is simply not going to
get the job done.
Mr. Mica. I think you raise a good point about this
spreading as we put pressure on Colombia and Panama. I think
you cited very graphically, you just step across the border and
you are scot-free from the Blackhawks and others. Again, we
appreciate your testimony and your insight. Again, you're
risking some of your personal well-being coming here today.
I want to yield at this time to Mr. Rohrabacher.
Mr. Rohrabacher. Thank you very much. Mr. Chairman, again,
thank you very much for holding this hearing. I think that the
drug issue overlaps into other areas of national security. And
I am on the International Relations Committee and have spent
considerable time on the other implications, but this is
important in a number of areas and a number of levels.
You mentioned that 81 percent of the people down in Panama
would like to see----
Mr. Cabal. That is the most recent CID-Gallop poll
published in the local paper, 81 percent.
Mr. Rohrabacher. Which indicates that the Americans were
having a positive influence, not just for military security.
Mr. Cabal. Economic. We are in a severe recession as we
speak, because $354 million is no longer circulating in the
economy.
Mr. Rohrabacher. While we were there, we were playing a
dominant role in Panama. People don't necessarily want us to
dominate Panama, but our presence was a positive role. That
influence that we had, and have now, just left. That void is
being filled by----
Mr. Cabal. The Red Chinese, for example, have taken over
the Russian listening stations in Lourdes in Cuba. The Chinese
are now operating electronic eavesdropping stations that allows
them to monitor Federal, military and commercial.
Mr. Rohrabacher. They are involved in your banking system.
Mr. Coble. Yes, they just bought out Marine Midland, which
was mentioned by Congressman Barr, and they now just bought out
Chase Manhattan, which is the second oldest bank in the
Republic of Panama, right after Banco Nationale.
Mr. Rohrabacher. And, as well, a company that controls both
ends of the Panama Canal.
Mr. Cabal. And the phone company. Cable and Wireless has
substantial amounts of Chinese money behind it.
Mr. Rohrabacher. So the United States has walked away from
one of the most strategic areas in this hemisphere, where both
of the continents come together, both the oceans come together,
walked away from people who liked us and wanted us to be there,
and we are letting the presence be filled by Communist Chinese
and by drug lords and gangsters.
Mr. Cabal. Russian gangsters who are now active in the
Colon Free Zone. The Chinese triads. Panama has an extensive
Chinese community that is the prey of the triads. They are
involved in prostitution, illegal gambling, and illegal alien
smuggling.
Mr. Rohrabacher. One last question. Is illegal alien
smuggling still going on?
Mr. Cabal. It has actually increased, Congressman.
Mr. Rohrabacher. This is very disturbing. What is happening
in Fort Sherman now? You mentioned what was going on before.
What is happening now at Fort Sherman?
Mr. Cabal. Nothing. The facility is up for sale, for lease.
There is talk of ecological development. But the runway is not
being used, the building is not being used, and certainly the
Panamanian border police is ill-equipped, ill-trained, and they
need all the help they can get. They are a unique world-class
facility that could be used by the Panamanians, that could be
used by the Americans. The same with Rodman Naval Station. For
example, the Coast Guard could be working there to help the
interdiction in the Pacific area.
They could also help the Panamanians build a Naval base on
the Atlantic side to stop the flow of drugs through the
Caribbean.
Mr. Rohrabacher. With the United States withdrawing from
the role that it has played in Panama for so many years and
stepping up of other forces as we have talked about, what kind
of pressure is that putting on elected officials in Panama? Can
you really blame them when the United States is not offering
that anchor of stability and integrity that we did in the past?
Mr. Cabal. Certainly it is a substantial issue. The
gentleman from the DEA clearly explained peso brokering. The
Colon Free Zone does about $11 billion of business a year, $5
and $5, import/export, $5, $6. That in an economy that barely
reaches $8 billion. So it is very, very important.
What it does, the Colon Free Zone is an area where money
laundering is occurring, about $3 billion every year, about
half through the peso brokering mechanism explained before.
The other money laundering occurs in the banking area; and
one thing the Panamanian Government, and the governments before
this administration, have to take a hard look at their
political commitment to put an end to money laundering. Bank
secrecy laws, the Colon Free Zone, I mean, you have to have a
commitment.
Panama does have one of the few financial investigative
units, but they need money, they need training, they need
specialists, they need communications. But there has to be a
clear political commitment from the Panamanian Government to
put an end to money laundering, and I don't see that happening.
As long as that doesn't happen, it is going to go on.
Mr. Rohrabacher. Mr. Chairman, let me note it is very
difficult for a small country like Panama that's very
vulnerable to powerful outside interests, it is very hard for
those government officials to make that commitment when the
United States basically has surrendered and run away and left
the playing field to tyrants, to gangsters, to people who are
antithetical to everything that we believe in.
Mr. Cabal. Congressman, there is a grave question regarding
political contributions, where this cash is coming from and who
it is getting elected.
Mr. Rohrabacher. Thank you very much. Thank you, Mr.
Chairman.
Mr. Mica. I want to thank you, Professor, for being with us
today and, again, for offering your insight. You certainly have
a very great knowledge of what is going on in Panama; and your
experience in economics, I think, sheds a great deal of light
for this subcommittee on the money involved, the trafficking
involved and the influences that may be, in fact, corrupting
Panama, and also the difficulty we have incurred since we have
lost our forward operating locations at that point.
Mr. Cabal. Yes.
Mr. Mica. I know that other members had questions.
Unfortunately, I am going to have to adjourn the hearing at
this time, but we will be submitting additional questions to
you for the record.
Mr. Cabal. I have a very good working relationship with the
Congressman and his assistant. We are in constant contact. We
have e-mail.
Mr. Mica. We may have additional questions from members of
our panel. So we would like to make them part of the hearing.
Again, we thank you for your contributions today and for
your appearing as a witness.
There being no further business before the Subcommittee on
Criminal Justice, Drug Policy, and Human Resources at this
time, this meeting is adjourned.
[Whereupon, at 1:15 p.m., the subcommittee was adjourned.]
[Additional information submitted for the hearing record
follows:]
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