Pubdate: Fri, 09 Jun 2000
Source: Washington Times (DC)
Copyright: 2000 News World Communications, Inc.
Author: Bill Gertz


Panama is a haven for illegal drug trafficking and money laundering
that has grown worse since the pullout of U.S. military forces last
year, according to a law enforcement intelligence report.

"Panama's corrupt and ill-trained law enforcement units continue to be
overwhelmed by trafficking efforts and are basically ineffective in
their struggle," says the internal report obtained by The Washington

The May 2000 report says Panama has made "few inroads" in the battle
against illegal drug trafficking and financial crimes during the first
half of 2000.

The failure is blamed on the country's new president, Mireya Moscoso,
and "the U.S. withdrawal and turnover of its military bases and the
Canal in January 2000."

Panama's Tocumen International Airport has "a serious security problem
. . . with internal conspiracies involving ramp and cargo personnel
who facilitate narcotics loads," the report says.

Flights by the Panamanian carrier, COPA, will begin soon to Los
Angeles and will create new problems for airline and airport security
that "already has its problems keeping narcotics off . . . aircraft,"
the report says.

Chinese and Russian organized crime groups also are using Panama for
smuggling illegal drugs, weapons and aliens.

"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," the 11-page
report says, noting that the number of Chinese nationals in Panama
increased dramatically in the past five years.

The intelligence report was produced by a U.S. government law
enforcement agency involved in monitoring imports. The name of the
agency was withheld at the request of an agency spokesman.

The report also says a Chinese company that leased port facilities at
either end of the Panama Canal obtained the concessions through "an
unfair and corrupt contractual bidding process."

The company, Hong Kong-based Hutchison Whampoa Co. Ltd., runs the
facilities at the strategic ports of Balboa and Cristobol, on the
Pacific and Atlantic respectively.

"Its major shareholder, Li Ka-Shing, reportedly has ties with the Red
Chinese government," the report says. "Shen Jueren, the communist
official who heads China Resources, and Li Ka-Shing, owner of
Hutchison Whampoa, are both reportedly partners in a Hong Kong bank."

China Resources owns 10 percent of Hongkong International Terminals,
Hutchison Whampoa's flagship company, whose majority owner is Li
Ka-Shing, according to a 1997 memorandum from the U.S. consulate in
Hong Kong.

Senate investigators identified China Resources in 1997 as "an agent
of espionage  economic, military and political." The firm also is
linked to the Lippo Group, which was implicated in illegal campaign
donations to the 1996 Clinton-Gore re-election campaign.

The intelligence report was produced to assist U.S. law enforcement
agencies in tracking illegal activities in Panama. Any people or cargo
entering the United States from Panama should be watched closely, it

The report is expected to be discussed Friday at a hearing on Panama's
security by the House Government Reform subcommittee on criminal
justice, drug policy and human resources.

According to the report, Panama's political instability, economic woes
and criminal activities began after the December 1989 arrest of Gen.
Manuel Antonio Noriega by the U.S. military. The situation has not
improved under Miss Moscoso, whose administration has been unable to
cope with the activities, despite increased efforts at drug

"Panama remains a major transit country for cocaine and increasingly
heroin, due to its proximity to Colombia and other narcotics-producing
nations and its apparently inadequate border, airport and maritime
controls," the report says, noting the government is facing "a
difficult uphill battle."

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."

Experts on the region supported the conclusions of the

"The increase in drug activity is a direct consequence of closing
Howard Air Force Base, and the loss of radar coverage by AWACs planes
that are no longer flying out of there," said Tomas Cabal, an
investigative reporter based in Panama.

"The Panamanians have no way to defend themselves," said retired U.S.
Army Lt. Gen. Gordon Sumner, a former chairman of the Inter-American
Defense Board and former ambassador-at-large for Latin America. "We've
withdrawn our capability and left them vulnerable to whoever wants to
come in. The narcoterrorists have money and they have bought their way
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