Quietly, away from the glare of the television lights, and out of range of most reporters’ tape recorders and interest, a debate continues to rage over the fate of the Panama Canal, the strategic waterway, military analysts agree, so vital to the security of the United States.

WorldNetDaily reported last month that Admiral Thomas H. Moorer, USN (Ret.), a former chairman of the Joint Chiefs of Staff, warned the Senate Foreign Relations Committee in closed session that the U.S. is heading toward a confrontation with China over the canal. Chinese companies, with close ties to the military, control both ends of the waterway.

WorldNetDaily has now obtained a response to Moorer’s concerns as expressed by William J. Hughes, U.S. ambassador to Panama.

“In assessing the admiral’s concerns, it is useful to note that the canal and the ports at either end of it are separate and distinct entities, and ships transiting the canal are not required to go through PPC ports,” countered Hughes. PPC refers to the Panama Ports Company, a subsidiary of the Chinese-owned Hutchinson-Whampoa.

Moorer responds: “Anyone who has been involved in logistics planning, where the time of transit from sources of supply to the deployed forces is so critical, knows the dangers faced when chokepoints are controlled by unfriendly forces. In the case of the Panama Canal any entity that controls the anchorages has the capacity to control and disrupt the flow of shipping. Panama’s recent law #5 does just that. It gives the PPC, closely allied with the commercial arms of the Chinese military, (as has been recognized in the maritime press and by Senator (Fred) Thompson’s committee, among others) control of the anchorages and the anchorage area. Thus the distinction made by Ambassador Hughes between the ports and the canal proper is evasive and irrelevant. … In the event of a military confrontation in the Pacific, (e.g. Taiwan Straits or Korea) the large number of logistic ships required to support our deployed forces in the Western Pacific must have available to them unfettered transit of the canal from a matter of hours to a maximum of 10 days to sustain combat effectiveness. The forward deployed forces in the Eastern Mediterranean (NATO) or the Persian Gulf require the same assurances for logistic resupply from the Pacific to the Atlantic through the canal. Control by a hostile power
of the approaches to the canal and the anchorages that would interdict the timely transit of those ships could require taking the facilities by force at a high cost in American lives.”

Hughes told the committee that many of Moorer’s comments simply focus on “possibilities that could arise in managing traffic”

“It is not ‘managing traffic’ under normal circumstances with which I am concerned,” countered Moorer, “it is the ability of a potential enemy to disrupt traffic so as to block military supply, which in times of conflict is 80 to 90 percent dependent upon sea lift capability for there to be any sustained forward effort.”

Hughes also assured the committee that PCC officials are confident that existing legal safeguards are adequate to protect future canal operations.

“I am unable to understand how an American ambassador can assure the United States Senate that concerns of national security are alleviated by the fact that officials of an organization that has become increasingly responsive to the wishes of a commercial entity closely allied to, and virtually part of, the enormous business operations of the Communist Chinese military ‘are confident that … legal safeguards’ which they have negotiated without any participation by the United States, or without even keeping the United States informed, for that matter, are adequate to protect future canal operations,” responded Moorer. “A major strategic opponent is being given the capability to interfere with our unimpeded ability to use the canal where the national security interests of the United States are concerned. And who gave Panama the authority under the Canal Treaty to agree to have matters arbitrated under the rules of the International Chamber of Commerce? Not only are such arrangements inconsistent with our nation’s security, they are inimical to it. The International Chamber of Commerce has historically been disinclined to rule in favor of U.S. interests and for that reason is often avoided by American business in its international dealings. This hardly augers well for our security interests as a nation.”

Hughes also defended a provision of the Panamanian agreement with the Chinese company that requires it to approve of all pilots navigating ships through the canal or to provide its own pilots. Hughes called such a provision “logical.”

“It takes a long time to train a pilot for any particular waterway,” explained Moorer in his rebuttal. “Piloting skills are irreplaceable in a short span. This is even more critical for a ‘lock’ canal where pilots are normally granted complete control during a ship’s passage. The mere power to train its own pilots in an operation so closely tied to the PLA (Chinese People’s Liberation Army) as the PPC is, will be a threat to our national security. But now we learn from William Bright Marine that Panama has agreed in law #5 to allow Communist Chinese-affiliated Hutchinson to retain and use its own pilots, thus giving it the right to train pilots. All Hutchinson has to do is to state that its (Hutchinson’s) customers are not satisfied with the performance of pilots provided by the Panama Canal Commission (which will become the Panama Canal Authority once the U.S. leaves). Hutchinson customers include COSCO and many other arms of the People’s Liberation Army, as well as those entities so anxious to do business with Communist China that they are willing to compromise the security of nations to please the Chinese Communists. In the meantime the training of pilots by the PCC is declining as the U.S. departure nears. It is easy to see where this is headed — toward de facto control of pilotage by Hutchinson, which is subservient to the interests of the Chinese Communist military and its strategic goals. In the Vietnam conflict the president authorized the mining of Haiphong Harbor with a proviso that mine activation be delayed to allow sufficient time for neutral merchant ships to leave port. The Vietnamese, not wishing to lose the material in the unloaded ships, precluded their timely departure by the simple expedient of moving the qualified pilots up river out of the reach of those ships. The pilot issue is one that should not be avoided or evaded by an American Ambassador. To do so is to place us in a position where hostile action by Communist China, e.g., against Taiwan, could only be dealt with by the use of massive military force under extremely adverse conditions to retake the canal with a large cost in American lives and extensive collateral damage to non-combatants — to Panamanians, to Americans, to other allies and to ships of other countries.”

“Admiral Moorer maintains that the contract grants the company control over critical Atlantic/Pacific anchorages, including a monopoly on the Pacific side when Rodman Naval Base reverts,” said Hughes. “Since law #5 is a concession to manage ports, it does give PPC control over areas and facilities needed to that end. … A long term monopoly on the Pacific side is by no means ensured. The bottom line is that competitors would have to invest considerable sums to compete with PPC’s Balboa operations.”

Moorer could scarcely conceal his anger at that statement.

“I speak of national security and the ambassador answers by speaking of commercial competition and the possibilities for capital-intensive expansion of port capacity,” sputtered the admiral. “This does not answer what I said, it evades it. Granting the right to take over Rodman is a threat to our security because of its location. … If the PLA wants Rodman for strategic reasons, it can have Hutchinson-Whampoa take it for its strategic purposes, that is the bottom line.”

Hughes also said there is no reference in the Panamanian law as to denial of entry of ships to the canal. Only the PCA (Panama Control Authority, the new name for the PPC after the year 2000 handover) has the right “to deny entry to the canal of any vessel not abiding by the rules and regulations for navigational safety established in their law and regulations.”

“As a former commander-in-chief of our Pacific Fleet, supreme allied commander, Atlantic and commander-in-chief of the Atlantic Fleet, chief of naval operations and chairman of the Joint Chiefs of Staff, where an enemy’s capabilities — not an estimate of his intentions — are the basis for strategic planning, I consider the ambassador’s answer to my testimony in this regard most unresponsive,” countered Moorer. “The practical power of controlling anchorages, scheduling, pilotage and services is placed in the hands of a commercial affiliate of a strategic foe that is already on the spot and functioning, one that operates under a system that makes no difference between commercial and strategic planning, because the bulk of its commerce is, in the last analysis, controlled by its military and party apparatus, not by private merchants and entrepreneurs, however wealthy they may become from the monopolies which this apparatus bestows upon them. The canal treaty gives us the right to preserve our national security in connection with the canal. The operational capacity of an entity which is so closely tied to the Chinese Communist military to impede our passage through the canal by practical control of services and facilities essential to that passage is by its mere existence a threat and a violation of national security, regardless of the rights of the Canal Authority.”

Hughes says the new agreements “permit the use of installations in the existing ports to U.S. Army vessels, as established in the Panama Canal Treaty, until the expiration of such treaty in the year 2000.” Thereafter, he said, U.S. military vessels are free to contract on a commercial basis with PPC for access to ports and needed port services.

Moorer responds: The ambassador’s statements are made as if they refuted my testimony when in fact they make it clear that the Hutchinson Whampoa company is being given control over U.S. national security. For example, this supposed refutation of my concerns admits that, even in this legalistic world of the ambassador, all Hutchinson Whampoa and its head Li Ka Shing, who is closely allied to the Chinese military, would have to do after the treaty expires, is to jack up rates on everyone to prohibitive levels and the U.S. military could be included, and that’s apart from Hutchinson’s control of the services essential to passage through the canal.”

“All I can say is that, when the Nazis, in the years leading up to our entry into World War II, were attempting to expand their influence in Latin America, President Roosevelt made his concerns about the canal known in no uncertain terms in speeches that were broadcast on radio and shown in newsreels all over the country,” Moorer continued. “Any ambassador to Panama at that time who had shown this degree of apologetic cooperation with the totalitarians would have found himself recalled in short order and would have enjoyed a considerable degree of opprobrium from the president and the American public.”

See “Admiral: ‘I see big trouble in Panama'”



Joseph Farah is editor and chief executive officer of WorldNetDaily.com.

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