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China does pose at least an “indirect” threat to the Panama Canal and
the Clinton administration knew it all along, a newly declassified U.S.
military document shows.
Judicial Watch, a public-interest government watchdog group based in
Washington, forced the military document to be released by the Clinton
administration through the Freedom of Information Act.
The document, an “Intelligence Assessment” prepared by the U.S.
Southern Command Joint Intelligence Center, is heavily blacked out and
stamped with an original classification of “Top Secret//X1.” The
prepared in October 1999, two months prior to the official turn
over of the Panama Canal. According to the U.S. military
assessment, the Chinese firm that acquired control of the canal,
“Hutchison Whampoa,” does indeed represent a threat.
“Hutchison’s containerized shipping facilities in the Panama Canal,
as well as the Bahamas, could provide a conduit for illegal shipments of
technology or prohibited items from the west to the PRC, or facilitate
the movement of arms and other prohibited items into the Americas,”
concluded the U.S. military intelligence report.
“The fact that the Clinton White House elected to release this
assessment after the transfer of the Panama Canal is very revealing,”
stated Judicial Watch Chairman Larry Klayman. “It confirms why the
Clinton administration wanted to keep this data secret.”
The U.S. military report noted that Beijing’s direct ties to the
owner of Hutchison Whampoa are a threat against the weak Panamanian
“Hutchison Whampoa’s owner, Hong Kong tycoon Li Ka-Shing, has
extensive business ties in Beijing and has compelling financial reasons
to maintain a good relationship with Beijing,” states the military
report. “For example, Hutchison Whampoa could threaten to shift some
business from Panama to its facilities in the Bahamas, thus giving the
company additional leverage over the Panamanian government.”
In addition, the Chinese may move into bases that the U.S. military
abandoned inside Panama. According to the military assessment,
Hutchison Whampoa “may plan to lease a limited portion of Rodman Naval
station as well as some storage space at the reverted Albrook Air
However, Beijing’s move to control the Panama Canal, according to the
military assessment, is actually part of a larger economic war being
waged against Taiwan.
“Economic influence equals political leverage and in some Latin
American countries PRC and Taiwan competition for influence is running
head-to-head. Currently, 16 of the 30 countries worldwide which
diplomatically recognize Taiwan are located in Latin America,” states
In an article published Dec. 1 by the South China Morning Post, “Li
denies controlling Panama Canal” by Rachel Clarke and Danny Gilbert,
Asian billionaire Li Ka-Shing, openly refuted suggestions that his
Hutchison Whampoa company would control the Panama Canal for red China.
“We are not even the largest operator in Panama, compared with some
of the Americans and Taiwan operators,” said Li. “We are running a
container port business which has nothing to do with the operation of
the Panama Canal.”
Who is Li Ka-Shing? Li Ka-Shing owns the huge shipping firm
Hutchison Whampoa Ltd. and the giant far east investment firm Cheong
Kong Holdings. Li Ka-Shing was recently described by China military
specialist William Triplett, co-author of “Red Dragon Rising,” as “the
banker” for the Chinese army.
“Li Ka-Shing is to the Chinese army intelligence HQ what Howard
Hughes was for the CIA,” said Triplett.
According to official Commerce Department documents, Loral Chairman
Bernard Schwartz was to meet Li Ka-Shing during a 1994 Hong Kong cruise
onboard the oceanliner “Pacific Princess.” The Clinton White House gave
Mr. Schwartz a full dossier on Li Ka-Shing prepared by an unnamed
“intelligence” agency. This reporter acquired Li Ka-Shing’s dossier and
documents from the 1994 trade trip in a successful federal lawsuit
against the U.S. Commerce Department.
According to the official White House dossier, Li is not a red
Chinese government official nor is Li a member of any military service.
However, the detailed dossier on Li Ka-Shing was given to Schwartz along
with the dossier on 20 top communist Chinese officials, including
President Jiang Zemin.
According to the 1994 Clinton supplied dossier, Li has “significant
economic and political ties to China” including investments in a “power
station, a highway construction project and a large contribution to
According to the White House documents, Li was “found guilty of
insider trading after a widely publicized trial in 1984; he was not
punished by the courts.”
In 1997, the Rand Corporation wrote a secret report on the “Chinese
defense industry” and it also included a section on billionaire Li
Ka-Shing. The Rand report was also obtained in a successful federal
lawsuit against the Commerce Department.
The Rand Corporation report highlights Li Ka-Shing’s direct
connections to the Chinese military. According to the Rand report,
“Hutchison Whampoa of Hong Kong, controlled by Hong Kong billionaire Li
Ka-Shing, is also negotiating for PLA wireless system contracts, which
would build upon his equity interest in (Chinese army) Poly-owned Yangpu
Land Development Company, which is building infrastructure on China’s
One powerful connection noted by both the White House and the Rand
Corporation is Li Ka-Shing’s role in the Chinese bank CITIC. According
to the 1994 White House dossier, Li Ka-Shing is a “member of the boards
of directors of the China International Trust and Investment Corporation
The Rand report, however, noted that “CITIC does enter into business
partnerships with and provide logistical assistance to PLA and
defense-industrial companies like Poly (Technologies).”
“Poly Technologies, Ltd., was founded in 1984, ostensibly as a
subsidiary of CITIC, although it was later exposed to be the primary
commercial arm of the PLA General Staff Department’s Equipment
Sub-Department. Throughout the 1980s, Poly sold hundreds of millions of
dollars of largely surplus arms around the world, exporting to customers
in Thailand, Burma, Iran, Pakistan, and the United States,” states the
CITIC, according to the Rand Corporation, “became identified with the
PLA as a result of the scandal surrounding (Poly Technologies chairman)
Wang Jun and his visit to the White House on 6 February 1996.”
In February 1996, President Clinton met with Poly Technologies
Chairman Wang Jun after taking a donation from Arkansas restaurateur
Charlie Trie. The Rand report notes that “Wang Jung is both director of
CITIC and Chairman of Poly Group, the arms trading company of the
General Staff Department.”
“Poly’s U.S. subsidiaries were abruptly closed in August 1996,”
states the Rand report. “Allegedly, Poly’s representative, Robert Ma,
conspired with China North Industries Corporation’s (NORINCO)
representative, Richard Chen, and a number of businessmen in California
to illegally import 2000 AK-47s into the United States.”
“Unfortunately for them, their ‘customers’ turned out to be
undercover U.S. Customs and BATF agents, posing as members of a Miami
syndicate. Poly’s representative, Robert Ma, fled the country one step
ahead of Federal law enforcement officials who had a warrant for his
arrest, and his current whereabouts are unknown,” concludes the Rand
The recently declassified military assessment on Panama was produced
over two years after the Rand Corporation documented the illegal Chinese
arms imports to the United States. According to Klayman, the true threat
was deliberately hidden by the Clinton administration.
“The Chinese firm Hutchison Whampoa is a security risk and the
Clinton White House knows it,” said Klayman.
“Judicial Watch will be filing legal proceedings in both the United
States and Panama to have Hutchison Whampoa removed from the canal,”