[Congressional Record Volume 145, Number 145 (Friday, October 22, 1999)]
[Senate]
[Pages S13043-S13044]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                            THE PANAMA CANAL

  Mr. SESSIONS. Mr. President, along with Senators Lott, Thurmond, 
Helms, Kyl, Inhofe, Allard, and Tim Hutchinson, I have introduced a 
concurrent resolution, with the House, regarding the transition of 
control of the Panama Canal from the United States to the Republic of 
Panama. I thank my colleague, the chairman of the Foreign Relations 
Committee, Senator Helms, for agreeing to discharge the resolution 
quickly to give Congress a chance to consider it in a timely manner.
  I hope we can bring this resolution before the Senate, debate it, and 
vote up or down on the merits. Indeed, the Senate must be heard on this 
issue, which is important to our national security.
  In accordance with the 1977 Panama Canal Treaty, the withdrawal of 
the United States Armed Forces from Panama is almost complete, and with 
it will be the relinquishment of our control of the canal, which will 
take place December 31 of this year.
  The canal is of vital interest, however, to the United States, and it 
is an invaluable world asset. Unfortunately, Panama's ability to 
maintain and provide adequate security for the canal is lacking. 
Exacerbating this tenuous situation is the growing influence of the 
People's Republic of China in the region.
  Almost as soon as we started our pullout, a company called Hutchison-
Whampoa, closely associated with the People's Republic of China, began 
to establish its presence and to fill the void left by the United 
States in Panama. Hutchison-Whampoa, Limited, holds leases for two port 
facilities at either end of the canal. Documented evidence shows that 
Hutchison-Whampoa, Limited, is closely tied to the Chinese Government.
  The fears voiced by the American people when the United States 
negotiated this treaty in 1977 have been validated. The American people 
were right to be skeptical of Panama's ability to adequately maintain 
the operability of the canal and guarantee its independence and 
security. These fears were supposedly addressed in the Panama Canal 
Treaty's companion, the Treaty Concerning the Permanent Neutrality and 
Operation of the Panama Canal, which promises that the canal will 
remain open during times of peace and war. It also guarantees 
``expeditious transit'' to the United States through the canal in times 
of conflict, generally interpreted to mean that, in an emergency, U.S. 
warships would be sent to the head of the line. Still not satisfied 
with these provisions, the Senate, under Senator DeConcini's 
reservation, insisted on the right of the United States to intervene 
militarily, if necessary, if it appeared the canal was about to be 
closed or threatened. Apparently, Panamanian President Torrijos did not 
agree and offered his own counter-counterreservation, nullifying 
DeConcini. Inexplicably, this counterreser- vation, which Panama 
ratified, was never transmitted to the Senate for consideration.

  Consequently, in 1996, the Panama Government awarded control of two 
key port facilities through a questionable bid process to Hutchison-
Whampoa. Under the so-called Law No. 5, passed by the Panamanian 
National Assembly, it appears Hutchison-Whampoa has the authority to 
block or delay passage of ships through the canal to meet its business 
needs. This Chinese company could simply declare that passage of U.S. 
warships could be harmful to their business and we would have a serious 
problem in moving ships through the Panama Canal.
  I have heard from many of my constituents on this issue. Some believe 
China will attempt to base bombers and missiles there. The Department 
of Defense has asserted this scenario is unlikely. However, recent 
antagonistic statements by China, such as thinly veiled threats 
concerning Taiwan and declarations possessing the neutron bomb, are 
reasons for people to be concerned.
  There are two legitimate security concerns related to regional 
spying, narcotrafficking, illegal immigration, and the creation of 
bureaucratic obstacles which over the long term could impede the flow 
of traffic through the canal. Such actions could have a significant 
impact on American trade.
  The Panama Canal sees the transit of nearly one-third of the world's 
shipping

[[Page S13044]]

each year, including 15 percent of all imports and exports of the 
United States, 40 percent of U.S. grain exports, and in the vicinity of 
700,000 barrels of oil every day. Though prohibited by treaty, 
Hutchison-Whampoa, perhaps at Chinese's behest or with their influence, 
could impede commercial military traffic.
  We hope this will not occur. There is no immediate indications that 
it will occur. But stopping the flow of these exports is a possible 
consequence of the leases that have been executed, and they could have 
significant devastating impacts on free trade, particularly for the 
United States.
  The resolution I introduced was intended to address the issue of the 
Panama Canal security to raise the concerns of the Congress to the 
President, before some action is taken that could in the long term 
damage or threaten our security.
  Panama has recently elected a new government. By reputation, 
President Moscoso is a woman of the highest personal character and 
possesses an astute political intellect. I am confident of her ability 
to lead Panama into the 21st century and to positively contribute to 
the security and economic growth of the Western Hemisphere. I believe 
there is probably no better time than while this new administration is 
in its infancy to engage Panama in discussions to address the concerns 
I have described.
  As this resolution calls for, the United States should request that 
the Moscoso government investigate the charges of corruption or 
improprieties related to the granting of the Panama Canal contract to 
operate the ports by the previous administration.
  Prior to the awarding of these leases, several consortiums--some of 
which included U.S. bids--had submitted bids to operate the ports that 
were better than offers made by Hutchison-Whampoa. Without warning, 
Panama twice closed and reopened the bidding process, changing the 
rules and accepting higher bids after the bidding was supposed to have 
been closed. At one point, it is said that Panama asked a U.S. company 
to rescind its bid, citing a potential monopoly of firms in Panama. The 
sudden rules changes and unusual requests, at the very least, raised 
suspicions. Our Ambassador to Panama vigorously protested this bidding 
procedure and fought hard against it. The matter is even more troubling 
because the contracts have, by the passage of laws in Panama, extended 
them to the length of 25 to 50 years. It is called Law No. 5 in Panama.

  Therefore, this resolution also requests that if President Moscoso, 
along with her government, finds illegal or improper dealing in this 
bidding process, they take steps to ensure a new process be undertaken; 
that it be transparent and fair to all parties.
  The final provision of this resolution addresses the security issues. 
The canal, its mechanism of locks and dams, is fragile at best. By 
their own admission, Panama doesn't have the necessary resources to 
protect it. It disbanded its military after the U.S. invasion in 1989 
to oust the Noriega regime. Now, as the United States has withdrawn its 
military forces--there are only a few hundred troops remaining today--
drug trafficking through Panama has begun to increase. Panama's 
national police force is ill equipped by all admissions and is not 
prepared to counter this threat.
  The Colombian civil war is spilling over Panama's eastern border and 
the threat of terrorism is growing daily. Russia and other organized 
crime groups are developing bases in the isthmus. Further, China's 
newfound foothold in the Americas has affected the flood of illegal 
immigrants who are coming in, using Panama as the staging area for 
their journey to the United States.
  As a U.S. attorney, around 1990 I prosecuted a major international 
alien smuggling case involving a planeload of Chinese citizens who were 
brought to Panama and then secreted into the United States. They were 
able to be stopped, arrested, and people were prosecuted for it. Even 
at that time, China was using Panama as a conduit to bring illegal 
aliens into the United States. There is evidence that there is a 
Chinese role in this smuggling.
  Our resolution calls for the negotiation of security arrangements to 
protect the canal and Panama on a mutual basis, respecting the 
sovereignty of each nation to protect Panama and the canal from any 
outside forces that might undermine it and undermine the free trade on 
which we have come to depend that goes through the canal.
  The United States must not abrogate its leadership responsibilities 
when we relinquish control of the canal. We must emphasize to Panama 
our legitimate interest that sound, security standards be maintained, 
and we must work with Panama to fight corruption, illegal drug 
activity, gun running, and illegal immigration rings. The United States 
must also send a clear message to China, or any other entity with 
designs on the canal, that we will guarantee the security and 
neutrality of the canal through all necessary force.
  China's influence in Latin America has been expanded. We certainly 
don't want to see a resurgence of Communist activity in the Western 
Hemisphere at this time in history.
  I see the majority leader is here. I thank him for his leadership and 
interest in so many areas, particularly in this matter.
  The PRESIDING OFFICER. The majority leader.
  Mr. LOTT. Mr. President, I say to my colleague from New York, I will 
be brief. I have a cloture motion to file.
  But I do also want to comment just briefly on the remarks of the 
Senator from Alabama. I thank him for his remarks. He is raising very 
important concerns--ones that I have discussed with the Chairman of the 
Armed Services Committee, and I have written to the Secretary of 
Defense expressing my concerns. As a result of the correspondence with 
the Secretary of Defense, and our worry about the Chinese involvement 
in the Panama Canal through a particular company having control of port 
facilities on both ends of the Panama Canal, our concern is about what 
is their relationship with the Chinese Government as well as other 
concerns as we move toward turning over the Panama Canal on December 
31.
  Narcoterrorism is of concern in the area, as well as corruption in 
the government. We do, at this very moment, have a hearing underway in 
the Senate Armed Services Committee. We have had Members of Congress 
testify about their concerns. We have a panel now that includes General 
Wilhelm, who has jurisdiction for our military over that region; 
Ambassador Gutierrez from the State Department, answering questions; as 
well as the Honorable Aleman Zubieta who is Deputy Administrator, I 
believe, of the Commission. That testimony is underway right now. 
Secretary Weinberger is there. I know they are looking forward to 
Senator Sessions returning to ask questions.
  There may be no problem here, although there is clearly a problem 
with narcoterrorism and corruption in the government. But I think we 
have an absolute responsibility to ask questions and get into the law 
about how this is going to work.
  There is a provision in Law No. 5, as it is described in Panama, that 
raises some questions about how U.S. military vessels would have access 
to the Panama Canal after December 31. To the extent they say they 
would have right of passage provided it didn't interfere with the 
operations of the Panama Canal, we need to make sure we know what is 
happening there. We are going to carry out our responsibilities in that 
effort. I thank Senator Sessions for his work in that also.

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