U.S. GOVERNMENT PRINTING OFFICE

62–716 CC WASHINGTON : 2000

POST–1999 U.S. SECURITY AND COUNTER-DRUG

INTERESTS IN PANAMA

HEARING

BEFORE THE

COMMITTEE ON

INTERNATIONAL RELATIONS

HOUSE OF REPRESENTATIVES

ONE HUNDRED SIXTH CONGRESS

FIRST SESSION

THURSDAY, JULY 29, 1999

Serial No. 106–73

Printed for the use of the Committee on International Relations

(

(II)

COMMITTEE ON INTERNATIONAL RELATIONS

BENJAMIN A. GILMAN, New York, Chairman

WILLIAM F. GOODLING, Pennsylvania

JAMES A. LEACH, Iowa

HENRY J. HYDE, Illinois

DOUG BEREUTER, Nebraska

CHRISTOPHER H. SMITH, New Jersey

DAN BURTON, Indiana

ELTON GALLEGLY, California

ILEANA ROS-LEHTINEN, Florida

CASS BALLENGER, North Carolina

DANA ROHRABACHER, California

DONALD A. MANZULLO, Illinois

EDWARD R. ROYCE, California

PETER T. KING, New York

STEVE CHABOT, Ohio

MARSHALL ‘‘MARK’’ SANFORD, South

Carolina

MATT SALMON, Arizona

AMO HOUGHTON, New York

TOM CAMPBELL, California

JOHN M. MCHUGH, New York

KEVIN BRADY, Texas

RICHARD BURR, North Carolina

PAUL E. GILLMOR, Ohio

GEORGE RADANOVICH, California

JOHN COOKSEY, Louisiana

THOMAS G. TANCREDO, Colorado

SAM GEJDENSON, Connecticut

TOM LANTOS, California

HOWARD L. BERMAN, California

GARY L. ACKERMAN, New York

ENI F.H. FALEOMAVAEGA, American

Samoa

MATTHEW G. MARTINEZ, California

DONALD M. PAYNE, New Jersey

ROBERT MENENDEZ, New Jersey

SHERROD BROWN, Ohio

CYNTHIA A. MCKINNEY, Georgia

ALCEE L. HASTINGS, Florida

PAT DANNER, Missouri

EARL F. HILLIARD, Alabama

BRAD SHERMAN, California

ROBERT WEXLER, Florida

STEVEN R. ROTHMAN, New Jersey

JIM DAVIS, Florida

EARL POMEROY, North Dakota

WILLIAM D. DELAHUNT, Massachusetts

GREGORY W. MEEKS, New York

BARBARA LEE, California

JOSEPH CROWLEY, New York

JOSEPH M. HOEFFEL, Pennsylvania

RICHARD J. GARON, Chief of Staff

KATHLEEN BERTELSEN MOAZED, Democratic Chief of Staff

CALEB MCCARRY, Professional Staff Member

JILL N. QUINN, Staff Associate

(III)

C O N T E N T S

WITNESSES

Page

General George A. Joulwan, Former Supreme Allied Commander in Europe, Former Commander in Chief, U.S. Southern Command ................. 5

The Honorable Thomas E. McNamara, President, Americas Society,

Former U.S. Chief Negotiator in Panama .................................................. 8

APPENDIX

Prepared Statements:

The Honorable Benjamin A. Gilman, a Member of Congress from New

York and Chairman, Committee on International Relations .................... 30

The Honorable Dana Rohrabacher, a Member of Congress from California .............................................................................................................. 32

The Honorable Thomas E. McNamara, Former U.S. Special Negotiator

for Panama .................................................................................................... 36

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POST–1999 U.S. SECURITY AND COUNTERDRUG INTERESTS IN PANAMA

Thursday, July 29, 1999

HOUSE OF REPRESENTATIVES,

COMMITTEE ON INTERNATIONAL RELATIONS,

Washington, D.C.

The Committee met, pursuant to call, at 10:40 a.m., in Room

2172, Rayburn House Office Building, Hon. Benjamin A. Gilman

(Chairman of the Committee) presiding.

Chairman GILMAN. The Committee will come to order. This

morning we will be examining post-1999 U.S. security and counterdrug interests in Panama. I will be brief as we have two excellent

witnesses who have been able to join us this morning.

At the end of this year, there will be no American troops in Panama for the first time since 1903. Yet, our own drug czar, General

Barry McCaffrey, has called the narco-guerrilla crisis next door in

Colombia a ‘‘serious and growing emergency’’. The United States

military is turning over our facilities, valued at some $5 billion, to

Panama on schedule. The Panama Canal Treaties will be implemented to the letter, and that is appropriate.

What is not appropriate, however, is for the U.S. Government to

turn our backs on Panama. Just as Panama is about to exercise

full sovereignty over its territory, that country finds itself in a very

dangerous neighborhood. The framers of the 1977 treaties could not

have foreseen neighboring Colombia’s drug-fueled agony; nor the

sophistication of the drug cartels’ corrupting, criminal reach. Nonetheless, under the treaties, our Nation will still protect the Panama

Canal.

Although the treaties provide that the United States and Panama can extend the U.S. military presence in Panama beyond

1999, no agreement has been reached.

Howard Air Force Base was the crown jewel in our fight against

narcotics. Panama is a critical choke point in a region that produces all of the world’s cocaine and three quarters of the heroin

sold in our Nation. Sitting on the drug-producing nation’s doorstep,

Howard’s 8,500-foot runway saw 15,000 flights annually. That base

could handle up to 30 helicopters and over 50 planes. Our Nation

should not have put itself in a position of closing down Howard on

May 1st. Our Government is now scrambling to conclude hasty

agreements with the Netherlands Antilles and Ecuador for forward

bases from which to deploy military and civilian antidrug forces.

Quite simply, those plans cannot replace our strategic infrastructure in Panama.

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I closely followed former Ambassador Ted McNamara’s considerable efforts to conclude an agreement for a continued U.S. presence

in Panama. Regrettably, those efforts did not result in the promised Multilateral Counter-narcotics Center, the MCC. Those negotiations became entangled in Panama’s internal electoral politics.

We even met with the Foreign Minister about a year ago, who assured us that he was supportive of trying to bring the MCC into

Panama.

However, the Department of Defense, and in particular our Air

Force, did not provide the support, the flexibility, and the creative

diplomacy that were needed to secure this vitally important continued U.S. presence in Panama.

Last October, I introduced H.R. 4858, the United States-Panama

Partnership Act of 1998, offering Panama the opportunity to join

Canada and Mexico in forging a new, mature, mutually beneficial

relationship with our Nation. In exchange, this legislation asked

Panama to remain our partner in the war on drugs by continuing

to be a host of our U.S. military presence after 1999.

I note it is not too late. We can and we should extend America’s

hand to forge a new partnership in Panama in the 21st century.

[The statement of Chairman Gilman appears in the appendix.]

Chairman GILMAN. Today we will be joined by two distinguished

panelists, who we will introduce in just a moment. I ask our Ranking Minority Member, Mr. Gejdenson if he has any opening remarks.

Mr. GEJDENSON. Thank you, Mr. Chairman. It is a pleasure to

have Ambassador McNamara here, and General Joulwan. It is

clear that there has been a change in the region; Panama is regaining its control of the canal and the assets in the region. I am with

Senator Helms on this one. It is better to sign no agreement than

to sign a bad agreement. I think that some of what you are seeing

in Panama today is that they are figuring out maybe they should

have been a little more accommodating in their negotiations.

I also understand that as we look at the options before us, that

we will be able to handle in the plan that is presently before us

between 110 and 120 percent of the operations that we previously

had in Panama. So, I think that at the end of the day, we actually

strengthen ourselves by broadening our positioning in the region,

and by having the Panamanians recognize that they may have

missed an opportunity here; that our ability to do drug interdiction

will be just as strong; that we will, in future negotiations with the

Panamanians, have Panamanians who recognize much more realistically the value of their assets. I think they thought we would

pay any price and do anything they demanded in some kind of psychological panic over no longer controlling the area around the

canal and having those assets.

I think that the kinds of decisions you made in this process are

the ones that will strengthen us in long-term negotiations, and inevitably will give us a much better agreement and relationship

with the Panamanians. Their new authority gives them the right

to say no to us, but that also means that American military personnel will not be there spending the dollars that keep their economy moving, and they are going to miss that.

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I look forward to hearing from our colleagues here and commend

them on the work they have both done today.

Chairman GILMAN. Mr. Rohrabacher.

Mr. ROHRABACHER. Thank you, Mr. Chairman. The Panama

Canal is still one of the world’s key strategic waterways, and Panama itself is in a strategic position, and important to the United

States of America in terms of our national security. However, the

canal, for all practical purposes, is now, from what I can see, falling into the hands of Communist China through the Hong Kongbased Hutchison—and I think it is Whampoa—and I guess probably our witnesses will give me a good pronunciation of that company, which has close ties to the People’s Liberation Army.

In a controversial under-the-table deal with the Chinese, they

were granted a 25 year lease with an additional 25 year option for

control of the canal’s Atlantic and Pacific Ocean ports and other facilities. The Chinese are currently conducting major construction

and port facility expansion in Panama. In addition, Chinese companies tied to the People’s Liberation Army are becoming alarmingly

active in Panama.

China’s flagship commercial shipping fleet, the China Ocean

Shipping Company, COSCO, is directly connected to the People’s

Liberation Army and the Chinese Communist Government. COSCO

ships have served as carriers for massive smuggling operations

around the world, including to the United States, where we have

found weapons, automatic weapons, being smuggled into the

United States by COSCO, drugs, even illegal aliens. This organization, COSCO, is deeply involved in the strategy in Panama.

The war in neighboring Colombia, in terms of Panama, against

well-armed narco-terrorist forces with ties to Cuba is escalating,

threatening to spread throughout the region. This makes Panama’s

role even more important. Panama does not have an army or a

navy or an air force. The Panamanian Government doesn’t have

the military, but it does have an ongoing reputation for corruption

and mismanagement. Chinese organized crime organizations are

active, and there is all kinds of evidence of drugs and gun smuggling and, as I said, even large-scale illegal alien smuggling going

through China. We also are aware that the Russian Mafia now is

active in Panama, supplying weapons to Colombian narco-terrorists.

This is not a pretty picture, Mr. Chairman. What was an inspiring story in Panama of enterprise and achievement for the United

States is very slowly but surely turning into a horror story of peril

and danger for the United States of America. Mr. Chairman, when

there is a vacuum left by the United States, it seems that Communist Chinese and other very active elements in this world are

ever more ready and willing to fill that vacuum, and as we move

out of the Panama Canal, and out of Panama, we cannot let forces

that are hostile to United States, who would do us damage, fill that

vacuum.

We can’t even close our eyes to the fact that the corrupt nature

of some of the deals that have been made down in Panama, that

some people supposedly representing the Panamanian Government

may actually be making deals that are contrary to the interests of

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the people of Panama itself, and especially contrary to the national

security interests of the United States and Panama.

We have had a very long history with the Panamanian people,

and certainly I think that we have to consider the Panamanian

people our friends. The alarm bells that I am sounding today are

aimed as much at our security, but also at the security of the Panamanian people to control their own destiny. There are only a couple million Panamanians, and in trying to deal with forces as powerful and as wealthy as those within Communist China, and these

narcotics terrorists down in Colombia, this is something that we

should be very concerned about.

We are facing this peril now, not only from Cuba, where the

Communist Chinese are involved with building communications

and intelligence facilities right adjacent to the Russian massive

electronic spy center in Lourdes, Cuba, but now here in Panama

as well. So this is a long-term danger to the United States, and it

is right here on our doorstep. I applaud you, Mr. Chairman, for

holding this hearing and calling America’s attention to the situation in Panama.

[The prepared statement of Mr. Rohrabacher appears in the appendix.]

Chairman GILMAN. Ms. Danner.

Ms. DANNER. Thank you, Mr. Chairman. I would very much like

to associate myself with the remarks just made by Congressman

Rohrabacher. I certainly agree with his comments. I question

whether we have had, as a Nation, the forward-planning that some

of the other nations have made with regard to their futures, not

looking just at the present, but at the decades to come, and that

is a concern that I have. So I am very pleased that we are going

to be addressing that issue, and hope that we can find a solution

that benefits not only those of us who reside here in the United

States, but the global family as well. Thank you, Mr. Chairman.

Chairman GILMAN. Mr. Burr.

Mr. BURR. I thank the Chairman. I thank my colleagues for their

comments. Mr. Chairman, I thank you for this hearing.

Welcome, General and Ambassador. I think the need for this

hearing is evidenced from the comments of the Members of Congress and by your presence here today. Clearly this reversion of

bases and the leaving of a military presence there is a challenge

for us as it relates to our future in that region and how we handle

the challenges that we know are present before us today, and those

that are unforeseen today.

Clearly, Congressman Rohrabacher has raised a concern that I

think most of us share about the Chinese presence in the canal.

But I think that our long-term interest is with, in fact, the canal’s

use and the access that we and others have to it for commerce and

for other issues. Clearly, if the Chinese intent is for something else,

we need to look at that and follow that extremely close.

The comments, as they relate to the drug trafficking, are an

issue that every American is concerned with. If, in fact, the Panamanian people would like to see U.S. military presence back in

the region, I am hopeful that we can find something to accommodate that will of the Panamanian people. In the meantime, I know

that we have not left any stone unturned where our presence can

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be felt in the region for the purposes of preparedness and stabilization.

I hope that this will not be the last of the hearings that deal with

Panama’s participation or possible future participation in the trafficking of illegal drugs. There are many efforts—certainly General

McCaffrey has spoken on them numerous times—but most importantly there is a will of the American people now to stop the use

and the trafficking of illegal drugs. I hope, General and Ambassador, that you will use this Committee in any way that you feel

is useful in the future to make sure that the U.S. presence in that

region, and the U.S. interest in that region are, in fact, furthered

through the use of this Committee and this Congress.

I thank the Chairman once again for his willingness to hold this

hearing to bring this issue into the forefront of people’s minds. I

yield back.

Chairman GILMAN. Thank you, Mr. Burr.

Chairman GILMAN. As I indicated, we are joined by two distinguished panelists. Our first witness is General George Joulwan,

who is a 1961 West Point graduate, a decorated two-tour Vietnam

combat veteran, the former Supreme Allied Commander in Europe,

and from 1990 to 1993 was the Commander in Chief of our U.S.

Southern Command in Panama. When he retired from active duty,

then Secretary of Defense William Perry called General Joulwan a

warrior diplomat in the best traditions of General George C. Marshall. General Joulwan was instrumental in designing and implementing our Nation’s Panama-based counter-drug strategy. We

welcome his testimony before our Committee this morning. Please

proceed.

STATEMENT OF GENERAL GEORGE A. JOULWAN (RET.),

FORMER SUPREME ALLIED COMMANDER IN EUROPE,

FORMER COMMANDER IN CHIEF, U.S. SOUTHERN COMMAND

General JOULWAN. Mr. Chairman, thank you for the opportunity

to appear before the Committee on International Relations to discuss Panama’s importance both to U.S. national security and U.S.

counter-drug operations. Although it has been 6 years since I commanded U.S. forces in Panama, I will endeavor to give you my

frank, candid and best views.

But first, Mr. Chairman, I want to thank you for your constant,

consistent and tireless efforts in our Nation’s fight against the flow

of illegal drugs into our country. There is no greater threat to our

national security, and you have been on the front lines of this war

for many years. I urge you, and all on your Committee, to continue

your fight not only here in the United States, but also throughout

the entire drug zone at the source, in transit, and along our borders.

Mr. Chairman, as you know, over 14,000 drug-induced deaths

were reported in the United States for 1996. Illegal drugs cost our

society $110 billion last year. Illegal drugs are addicting our young,

terrorizing our neighborhoods, and threatening our potential as a

nation. Unfortunately, I said those same words 7 years ago when

I testified before congressional committees as a Commander in

Chief of the U.S. Southern Command. At that time, 10,000 Americans a year were being killed by illegal drugs.

6

In 1992, I reported to Congress that the narco-traffickers were

penetrating the fragile democracies of Central America, and paying

those assisting them in the transit zone not in dollars, but in cocaine. I warned of crack babies, corruption, and crime, imposed on

fragile democracies ill-equipped to handle these threats. Today, unfortunately, our southern neighbors are experiencing the hard realities of an ever-increasing narco-trafficking threat.

There is no easy way, Mr. Chairman, to reduce this clear threat

to our people, our national security, and, more importantly, to the

stability of the Americas, North, Central and South. It will take a

comprehensive strategy by the United States in order to reduce the

American casualties caused by the illegal transit of drugs such as

cocaine and heroin. It will take political will and bipartisanship. It

will require partnership with our friends and allies. Most of all, it

will take U.S. leadership and perseverance to prevail against the

narco-traffickers.

It is against this backdrop of the counter-narcotic threat to our

Nation that I want to address the issues before this Committee.

In my opinion, Panama has been, and still is, critical, not only

to counter-drug efforts, but also vital to the global strategy of the

United States.

Let me be more specific. I have already mentioned that Panama

occupies a strategic location. It not only sits astride the transit

routes used by the narcotics traffickers and other illegal drugs that

come from the producing countries of the Andean Ridge in South

America, in addition, Panama assists the United States in its global responsibilities by providing a water route for rapid reinforcement of most stable assets from either east or west coast facilities.

During my 3 years as CINCSOUTH, I developed in Panama a very

robust command and control capability at Howard Air Force Base

in Panama. I would agree, Mr. Chairman, it is the crown jewel in

our counter-drug efforts.

As I mentioned, Panama sits astride the transit routes used by

the narcotics traffickers. Panama is also ideally suited to launch

aircraft and other assistance to those source countries of the Andean Ridge—Colombia, Peru, Bolivia and Ecuador. No other country

provides the same degree of location and infrastructure as Panama.

My concern at CINCSOUTH was for both the mission and for the

safety of our troops, and the base at Panama was the best option

for supporting both.

During my time as CINCSOUTH, Mr. Chairman, it was clear to

me that we had to attack the narco-trafficker simultaneously at the

source, in transit, and along our borders. Concurrent with this simultaneous engagement, demand reduction, education rehabilitation and law enforcement had to be emphasized in the cities and

streets of the United States, and the forward-deployed base in Panama was key in implementing this comprehensive engagement

strategy. Early on in my tenure as CINCSOUTH, I concluded that

success in the counter-drug fight would require cooperation among

numerous U.S. organizations and agencies as well as the willing

support from the host nations of Central and South America. The

challenge was to recognize that the counter-drug fight was primarily a law enforcement effort. Law enforcement was the lead

7

agency, not the military, but military support was vital for success.

Having a forward-deployed base in Panama played a key role.

I came up with the slogan, ‘‘One team, one fight,’’ to emphasize

the teamwork required if we were to be successful against the very

robust, determined, well-resourced and brutal narco-trafficking organization. My intent was to facilitate cooperation among the disparate U.S. organizations; to focus the efforts in the region on the

narco-traffickers, not on needless turf squabbles among U.S. agencies. Policy directives would come from the ONDCP and the departments in Washington, but execution and implementation would be

coordinated, harmonized and directed from the forward base in

Panama. Mr. Chairman, it worked. The DEA, CIA, State, Customs

and numerous other organizations came together in Panama as we

built the team, and it was impressive and effective.

Our first operation was called ‘‘Support Justice,’’ and it exceeded

all our expectations. We pooled our assets—DOD, CIA, Customs,

DEA, State, and others—and we developed a clear footprint of

narco air activity between the coca growing fields of Peru and Bolivia and the refining of cocaine in Colombia.

Chairman GILMAN. If I could interrupt you a minute. We will

continue our hearing right through the votes. If our Members

would go and come right back.

General JOULWAN. Working with our Ambassadors—and we

briefed with maps and charts this narco air bridge to the political

and military leadership of the Andean Ridge countries—the host

nations then joined us in our efforts. Customs forward-deployed

their aircraft in Panama and invited host nation militaries and

representatives on board, as we did with our airborne reconnaissance aircraft, the ARL. U.S. radar teams were positioned in Colombia, Peru and Ecuador. Information was downlinked in Panama

and provided to all participants in the drug fight. We shared intelligence through tactical analysis teams. In a short period of time

that narco bridge was interdicted, the Andean Ridge countries participated in the end games, and the kingpins of the narco organizations came under attack.

The point I came to make is that this was a joint combined action, and that forward-deployed base in Panama was critical for its

success. Not having that base, in my opinion, will reduce our effectiveness against the narco-traffickers. We also use the base for

what we call fuertas caminos, our nation-building exercises where

our reservists would come to Panama and Central America in order

to train and build roads and bridges and clinics. These exercises

built goodwill and allowed us to interact with the militaries in promoting democratic institutions and ideals.

I also, Mr. Chairman, worked with the Panamanians in developing a turnover of facilities. We respected their sovereignty, and

it paid off. We gave every indication that the United States would

comply with the Panama Canal Treaties. A 10 year timetable for

reverting of the canal zone properties was provided to the Panamanians. This timetable included the turnover of key facilities such as

Fort Amador and the headquarters on Quarry Heights. We also

made it clear in the early days of this decade that the United

States was willing to remain, if the Panamanians agreed, at a

much reduced level to carry on the fight against the narco-trafVerDate 11-SEP-98 10:48 Mar 30, 2000 Jkt 000000 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 62716.TXT HINTREL1 PsN: HINTREL1
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fickers. Every indication at that time was that the Panamanian

people overwhelmingly supported a continued United States presence beyond the year 2000.

Mr. Chairman, I am sure other alternatives will be found to offset the loss of the Panama base. Indeed, the fight against the narcotics trafficker must continue. But to be clear, losing the infrastructure and operating base at Howard Air Force Base in Panama

will effect the prosecution of this country’s war on drugs. Therefore,

I urge, as you have stated, continued efforts to build the strategic

relationship between Panama and the United States. It is in Panamanian and Latin America’s interest, as well as the United

States, to eliminate this insidious threat to the democracies and

their hope for the future.

Mr. Chairman, Panama and the United States share common

values and ideals, and in many respects a common history. Panama was, is, and will remain a strategic location for the United

States. As such, it will be subject to threats from the border it

shares with an unstable Colombia, from terrorism, from crime, corruption, and money laundering. Panama, as was mentioned, has no

military and a fragile evolving police force. We, the United States,

have every reason to do all we can to ensure not only the implementation of the Panama Canal Treaties, but the reforging of a

strategic partnership with Panama based on mutual trust and respect for their sovereignty and their people.

Again, Mr. Chairman, I thank you for your leadership in the war

on drugs, and I am prepared to answer your questions. Thank you.

Mr. ROHRABACHER. [Presiding.] As you have seen, we have

changed chairmen temporarily. When you have a vote on, you have

to make these accommodations.

Ambassador McNamara, you may proceed. For the record, our

Members will be coming back from the vote as you testify.

STATEMENT OF THOMAS E. McNAMARA, PRESIDENT, AMERICAS SOCIETY, FORMER U.S. CHIEF NEGOTIATOR IN PANAMA

Mr. MCNAMARA. Thank you, Mr. Chairman. I also want to thank

the Committee for the invitation to testify today. I hope I can assist

you in some way in understanding the evolution of the negotiation

in 1997 and 1998 that attempted to reach agreement with Panama

for continued United States presence in Panama beyond the year

2000. This is a possibility that was envisioned in the 1979 treaties,

but only provided that both countries negotiate an agreement for

that continued presence.

My own role was a limited one at the time, both in time and

scope. I was the last of several U.S. negotiators, and I took over

late in the process, in what can accurately, I think, be portrayed

as the final months before circumstances would preclude an agreement.

I came to the negotiations with the background of having participated in the first State Department study of the post-2000 presence

in the early 1980’s, and throughout the 1980’s I worked on Panamanian and Central American political and military issues and

counter-narcotics and counter-terrorism here in the hemisphere. I

finished out the decade as the Ambassador to Colombia from 1988

9

to 1991, and I also served on the National Security Council and as

Assistant Secretary of State before leaving government late last

year. In those positions I also was involved in hemispheric political,

military, counter-narcotics and counter-terrorism affairs.

Let me say, by way of introduction, that my understanding of the

situation we faced in these negotiations begins with an understanding of a century of U.S. involvement in Panama. While the

United States has solidly favorable remembrances of that involvement, Panamanians have very mixed feelings about it. Most Panamanians have friendly and favorable attitudes about Americans,

and they realize that Panama owes much to the American involvement in the country. But many, even among those so favorably disposed, have strong unfavorable memories of times when a sovereign zone split their nation in half, and when Americans lived

among them in a separate, privileged, and culturally segregated society. There is, therefore, a certain ambiguity and resentment

about the American role in Panama, particularly among the educated elite of the country, and it is unfortunately true that Panama

is a country where the political elite determine the outcome of important issues. In short, we cannot discount the century of intense,

emotional, and complex history that is a part of any negotiation

that we may undertake with Panama, in the past or in the future.

Hence, my first observation on the negotiation is that the Panamanian Government approached the table with a very ambiguous

attitude about a continued United States presence in Panama after

the year 2000. The political parties in the government coalition

were divided. In particular, the lead party of the coalition, the

Democratic Revolutionary Party, the PRD, was divided. Any attempt to negotiate a continued United States presence was bound

to create powerful strains and conflicts within the party and within

the government.

As for the public in general, despite years of unrelenting negative

press coverage of the counter-narcotics center and similarly unrelenting negative coverage of the negotiations, despite the few and

unenthusiastic statements of support made by the government during the course of the negotiations, despite all that, there was a very

strong, stable majority of public opinion in favor of a continued

American presence in Panama. The polls consistently showed from

65 to 80 percent of the public wanted a Multinational counter-narcotics center, an MCC, and a U.S. military presence that would be

a part of that MCC.

This difference in attitude between the educated elite and the average Panamanian is not surprising. First, the average Panamanian saw the counter-narcotics center as a source of jobs and commerce which would provide substantial, reliable economic benefits

for many years to come. Second, the average Panamanian distrusts

Panamanian politicians, and a continued United States presence

was thought to be, therefore, a hedge against the instability, conflict, corruption, and authoritarianism that have marked Panamanian political life, and which is resented and feared by the average

citizen.

Opinion here in the United States was also divided, and there

were different opinions about whether a continued presence in Panama was necessary or desirable. Outside the government, those

10

who opined on this issue were divided. Some saw little strategic interest to the United States and were willing to see the special relationship end. Others were supportive of a counter-narcotics center

because of the importance of the counter-drug fight and the value

of military monitoring and interception of drug flights.

Within the executive branch, the White House, the Department

of State, and the Office of National Drug Control Policy were

strong supporters of a counter-narcotics center and of the negotiations. The law enforcement agencies were agnostic. The attitudes

in the military were more complex.

In large measure the attitude of the U.S. military, it seemed to

me, was a result of the heavy focus in the negotiation on creating

a drug center rather than a traditional military facility for the conduct of traditional military operations. SOUTHCOM, the operational command in the region, was strongly supportive because it

saw the MCC as a very powerful tool in carrying out its mission

in drug monitoring and drug interdiction, and, as General Joulwan

mentioned, he was a very powerful and strong advocate of the position that we should have the drug center, as were his successors.

Other elements of the military considered that they could accomplish the counter-drug mission without remaining in Panama. Still

others wanted a wide range of missions performed from the center

in Panama, or if that were not possible, then no presence in Panama. In the end, the U.S. military position was that they could fulfill their mission for less money by relying on U.S. bases and forward operating locations in the region as substitutes. It remains to

be seen if this is a correct calculation.

Let me turn to the negotiating strategy briefly. In the summer

of 1997, when I was asked to lead the negotiations, I concluded

that time was short, but that it would be possible to negotiate an

agreement. To be successful we would have to have very intensive

talks that would finish before the end of the year 1997. There were

two reasons for this: First, Panama was quickly approaching a referendum campaign that would determine whether President Perez

Balladares could run for a second term of office. This national referendum was to be initiated by a vote in the Congress early in

1998. I believed that unless the Multinational counter-narcotics

center was settled quickly, it would be interjected into that domestic political debate. The longer the negotiations continued, the

greater danger of this happening.

The second reason for speed was that the United States had to

make decisions on drawing down personnel and activities from

Panama to comply with the 1979 treaties. Recall that no agreement

meant that we must leave. That withdrawal would involve expenditures to build and modify facilities in the United States as well as

other expenses, and the military wanted to move quickly on alternatives to Panama if it was to prove necessary to withdraw completely. I felt certain that as substantial funds were expended to

withdraw, we would lose support for the Multinational CounterNarcotics Center. We needed, by the end of 1997, a negotiated text

demonstrating that a concrete solution that did not involve complete withdrawal was possible.

I therefore spoke with my counterpart, and we agreed that both

sides would benefit if a successful agreement could be concluded

11

before the end of 1997. We then outlined to each other the major

issues which would have to be settled, and we agreed to a schedule

of meetings and negotiation that would allow time to reach a conclusion.

Without going into the details of those negotiations, I can say

that between early September and late December 1997, we had

successfully negotiated all of the essential points of the agreement.

When we broke for Christmas, on December 23, 1997, there were

a few details that needed to be addressed, as well as some technical

issues remaining. The largest issue unresolved was to decide how

to transform a bilateral text into a multilateral agreement. Hence,

there was no reason in December to think that the remaining details could not be settled. It was, in fact, on the basis of that December 23rd text that President Perez Balladares announced the

following day that an agreement had been reached.

During the Christmas holiday period we understood that the negotiated text had been shown to government and other leaders in

Panama, and that the reaction of some of them was strongly negative. By late January the government appeared deeply divided. Foreign Minister Ricardo Arias assured us that we should come to

Panama nonetheless to initial the text and discuss it with other

Latin American states he had invited to a meeting in Panama. Despite this assurance, at that meeting, on January 20th, the Foreign

Minister refused to confirm the essential agreement or to initial

the text.

In subsequent weeks, Panama suggested major changes that

amounted to a renegotiation of the December text. The United

States’ position was that we were willing to consider small changes

that would make the agreement acceptable to Panama, but we

were not, at that late date, able to renegotiate a text that had been

all but finally agreed. Indeed, we were all in the situation that I

tried to avoid. The referendum campaign was in full swing by May,

and the matter, it seemed to me, could not be successfully settled

in the atmosphere that prevailed in Panama.

Let me mention a few miscalculations and some contradictory attitudes that had an influence on the negotiations. There were several. The Panamanian miscalculation was a virtually universal belief in Panama that the United States would never leave our facilities in Panama. Panamanians believed that we would pay an extremely high price to remain because we were totally committed to

having a base in Panama. This led them, I think, to overestimate

the leverage available to them to gain concessions from the United

States. On the United States side there was a miscalculation prevalent, particularly among the military, that the Panamanians

would, in the end, accept a large U.S. military presence despite the

intense opposition within the ruling elite of Panama. Both of these

miscalculations made negotiations more difficult.

The contradictory attitudes are also interesting because they

tended to mislead the other side. Let me mention two. Initially

there was a substantial amount of posturing in Panama to the effect that the United States must leave, that it was a matter of national pride and sovereignty that Panama have back the bases, and

that all foreign forces, all U.S. forces, be out of Panama by the year

2000. Yet later, Panamanians took the position that the United

12

States could remain, and some form of bases might be possible if

the United States paid rent.

Then, in June 1996 Panama suggested a multilateral counterdrug center to avoid the base and the rent issue. But, in fact, the

residue of this inconsistency remained throughout the talks, and it

caused some on the United States side to discount the seriousness

of the opposition in Panama, and to think that Panama would go

further than, in fact, it could.

The U.S. military also had a paradoxical position in the negotiations. They insisted that we must have a facility at the MCC that

would be capable of a wide range of counter-drug and nondrug-related operations; that is, that we needed a large facility. We also

told Panama and others that we could dispense with the facilities

in Panama and operate from relatively small forward locations and

from substitute facilities in the United States. This convinced the

Panamanians that we could, in fact, do our drug-related operations

from a small facility, but that we were driving them toward a base

disguised as a counter-narcotics center so that we could conduct

other missions and yet not have to pay rent.

There are several reasons, some of which I have outlined above,

that caused these negotiations to fail. I want to emphasize the history of the relationship and the resentment that it left among a

small but vocal minority of Panamanians that caused them to adamantly oppose any U.S. military presence. Additionally, as I have

suggested, there was an unwillingness on the part of the Panamanian Government to support publicly and to explain to their public

the course of the negotiations, the issues, the elements that were

being discussed, and the ultimate outcome that could result. This

left the field wide open to the opponents of an MCC, and it resulted

in a correct perception of a lukewarm support by the Panamanian

Government for an agreement. This was matched, of course, by the

lukewarm support of the U.S. military for a continued military

presence in Panama.

The bottom line, I think, is that maintaining an MCC in Panama

was too difficult a political step for the Government of Panama to

take. For the U.S. Government it was one of only several alternative ways of conducting military missions in the region.

Now, a suggestion. Having failed to reach agreement, I strongly

recommend that both countries adopt a cooling-off period of several

years before addressing again the issue of whether Panama would

agree to the presence of U.S. military in the country. Both countries tried hard, came close, but failed. The political and military

value of the presence was not strong enough to overcome the alternative of doing without it.

In that regard, I believe that the negotiations reflected the real

world has evolved since the end of the Cold War. A continued

United States presence in Panama would have been a beneficial

outcome for both countries, but it was not essential to either. I see

no value and much danger in one side or the other pressing, in the

next few years, for another agreement. The Panamanians need to

see that we will fully implement the 1979 treaties, that we will

completely leave the country without any intention of returning.

On the other hand, the United States must learn to function in the

region in a very different way than in the past. Conditions have

13

changed. Having spent the money to move out of Panama, I think

now we should do just that, leave. We must then commit whatever

resources are necessary for the conduct of equally effective counternarcotics missions from bases in the United States and from forward-operating locations in the region. As I said earlier in my remarks, it remains to be seen if we can.

That, Mr. Chairman, concludes my prepared statement.

Mr. ROHRABACHER. Thank you very much.

[The prepared statement of Mr. McNamara appears in the appendix]

Mr. ROHRABACHER. I will just assume—as I am the Chairman

temporarily—I will just proceed as the Chairman until Chairman

Gilman returns.

Mr. Ambassador, it sounds like what you are saying is that when

you mentioned the lukewarm support of that, and the contradictory

signals here and there that we were giving and the other side was

giving as well, it sounded like this Administration wasn’t paying

much attention to this very serious negotiation.

Mr. MCNAMARA. I wouldn’t say that. I got, as I said in my statement, very strong support from the White House, the State Department, from the Office of National Drug Control Policy. I also got

support from the Office of the Secretary of Defense, very strong

support.

Mr. ROHRABACHER. When you say strong support, do you mean

strong support, or did you get guidance, the type of guidance you

need and policy direction from these people, or did they just take

you out to lunch at the White House mess?

Mr. MCNAMARA. No, I got very strong support in the sense of policy guidance and instructions. In fact, it was strong enough for us

to reach a conclusion to actually negotiate an essential agreement

with the Panamanians. I do not think the essential problem was

the inability of the Administration to formulate a policy or to implement the policy. The critical element that caused this agreement

to fail was internal Panamanian politics.

Mr. ROHRABACHER. Your suggestion that 70 percent—and actually I am not sure exactly what—what was your specific——

Mr. MCNAMARA. It ran from 65 to 80 percent. The public polling

that was done supported a continued United States presence, yes.

Mr. ROHRABACHER. So we have a situation where 70 to 80 percent of the people of a country are supporting basically a position

that would be positive toward the United States, but we were not

able to handle the diplomacy of the situation with the powers that

be to get a more favorable result.

Mr. MCNAMARA. I would contest whether it was diplomacy that

failed, but rather it was internal politics within the Panamanian

Government.

Mr. ROHRABACHER. Let’s focus on the internal politics for a moment. Do you think that—most politicians in the United States,

when they see a poll and it says 70 to 80 percent of the people are

on one side of an issue, they would generally tend to go in that direction. Now, I know you described the cultural manifestation of,

I guess, the need to demonstrate one’s independence from the

United States in Panama. Do you think that bribery played a role

in this or other negotiations dealing with the facilities or bases, or

14

the agreement with the United States? Was there any foreign bribery or domestic bribery going on with the Panamanian officials?

Mr. MCNAMARA. Not that I am aware of in these negotiations.

I can’t talk about other negotiations or other situations, but in this

one I do not believe there was any indication of either domestic or

foreign bribery playing a role.

Mr. ROHRABACHER. General, do you know, are you—do you calculate that there was some type of skullduggery going on behind

the scenes that might have played an outcome and what we are

now having as a total withdrawal of American presence in Panama?

General JOULWAN. Chairman, I am not privileged to that sort of

information. I will tell you that, as you have stated, the vast majority of Panamanian people—and that did not include just those who

wanted to have us there for money—there was a genuine, I think,

desire by both the elites and the people to continue to have a strategic relationship with the United States. Somehow, that desire

was not able to manifest itself in an agreement. But that support

is there, still there, today.

Mr. ROHRABACHER. I certainly understand people’s willingness,

or unwillingness I should say, to cast aspersions on the motives of

people you have been negotiating with. But this seems to me to be

a very alarming situation. But it is a fairly alarming result when

you have the support of the population in a country like Panama,

that—and we have a country that is strategically so important,

both the canal and the location of the country as a choke point between the Americas—that we have a result that seems to be detrimental to the United States and our ability to exercise influence

in that part of the world. Somewhere there seems to be a breakdown. Please feel free to comment.

Mr. MCNAMARA. Mr. Chairman, yes, I don’t refrain from being

critical of those I negotiated with. In fact, if I have a criticism, it

is that the Government of Panama did not undertake to build the

support for the policy that it was following with respect to the negotiations; that is, a policy of attempting to construct a counternarcotics center. As I said in my remarks, by not trying to build

that national consensus and understanding about what it was

doing in the negotiations, it left the field open to the naysayers and

the negative.

To the extent——

Mr. ROHRABACHER. On that point, let’s just look at it. We are

talking about an anti-narcotics center that would also serve as a

United States presence in terms of our military presence, something that was considered vital by many people fighting the drug

threat here in the United States. We have billions of dollars of

money being made in profits from drugs with the terrorists right

next door in Colombia. We have got what I pointed out in my opening statement as what seems to be a demonstrable Chinese influence going on down there. You don’t think that these forces played

a role in the outcome of these negotiations as well as other agreements that were made that determine the future of the Panama

Canal and the Panamanian Government?

Mr. MCNAMARA. I don’t mean to discount a whole range of influences that played a role in this, including the ones you are menVerDate 11-SEP-98 10:48 Mar 30, 2000 Jkt 000000 PO 00000 Frm 00017 Fmt 6633 Sfmt 6633 62716.TXT HINTREL1 PsN: HINTREL1
15

tioning. I think the overwhelming influence, the overwhelming factor that in the end caused these negotiations to fail, was the split

within the government on grounds, essentially, of nationalism, that

is whether or not Panama needed to, as some of them referred to

it, ‘‘cut the umbilical cord’’, establish its own identity, separate

itself from the United States in order to demonstrate that it was

capable of functioning without a United States presence.

There were a whole series of attitudes in Panama. They were

generally referred to, or sometimes referred to, as the dependency

syndrome and that there needed to be a break. Even some of the

opponents were willing to see, after a lapse of unspecified length,

a return to examine the possibility of the United States coming

back into Panama. But among the very hard-core opposition within

the government, within the parties that made up the government

coalition and, above all, among that political elite that was the

vocal minority, there was a powerful, very, very powerful national

sentiment that said we must break, we must comply with the 1979

treaties. When one examines the situation, I think that was the

overwhelming factor that led to the situation we are now in.

Mr. ROHRABACHER. With the indulgence of the Chairman, who

has just returned, I have two more questions to ask. General, what

do you believe would be the minimal useful U.S. security and

counter-narcotics presence in Panama, and do you believe that we

should continue to seek a United States presence at Howard Air

Force Base, Rodman Port, and Fort Sherman?

General JOULWAN. What I described back in 1990, in this 10-year

plan we developed, was a location around Howard and an estimate

between 2,000 and 2,500 personnel. This would operate the air

field and be able to coordinate the activities of all the other agencies. Remember, we had Customs, DEA, and other agencies that

were involved in the drug fight. The coordination of these organizations is what needs to be understood as to why Howard Air Force

Base was so important. But about 2,000 to 2,500 military personnel.

Mr. ROHRABACHER. Let me just state for the record, when you

have a situation where 70 to 80 percent of a population is supportive of a United States presence, and we have an outcome that

has been so abysmal to our country and abysmal in the sense that

we no longer will have a presence in what was considered one of

the most strategic important areas of our country—for our country,

this area that ties both the Pacific and the Atlantic together, this

area that—it is the choke point between North and South America.

The fact that we had the support of 70 percent of the population and

now we are not going to have that presence, I would suggest that

the outcome was not just based on some sort of historical anomaly

of ego. I would suggest that what we are talking about here is the

corruption of a small number of elite politicians in that country and

the determination by narcotics traffickers and terrorists from Colombia and elsewhere, as well as the Communist Chinese, to influence what was going to happen in that country, and we were paying

much more attention to it than our own Administration.

So with that rather hefty statement, I will return the Chair to

the Chairman.

Mr. GEJDENSON. Mr. Chairman.

16

Chairman GILMAN. [Presiding.] Mr. Gejdenson.

Mr. GEJDENSON. I would hope that our colleague from California,

if he has evidence of these allegations, would share them with

Members of the Committee and the Administration. Others may

have this evidence. Lots of people may have these suspicions, but

it seems to me that when you are a Member and you make these

kinds of allegations that are very serious, and if you have the evidence, you ought to make it available.

Mr. ROHRABACHER. Would the gentlemen yield? I would be very

happy to share this evidence, and I would suggest that people who

are deeply involved in that part of the world know what is going

on, and they just will not state in public hearings what is happening. So I would share that evidence.

Mr. GEJDENSON. If the gentleman would get that to this Member

in a timely manner.

I think we have this syndrome in America, trying to figure out

who lost China and trying to figure out who to blame for losing

China. I am not sure China was ours. I am not sure Panama was

ours. I think it is not surprising that the political structure in Panama may have some resistance or some desire, frankly, to have

that separation that you talked about, to kind of have a concrete

expression of their separation. I am hopeful, as there is popular

support by most people’s estimates for an American presence there,

that the leadership, once they have exercised their independence,

will feel less threatened by an American presence, and we will return there.

I guess my question is that so much of what we do here deals

with interdiction. Interdiction is an important part, but the demand is what keeps these folks running drugs in our direction, and

the paths that they deliver the drugs here are so variable in a

sense, should we be simply putting more of our effort into trying

to reduce demand? Are we adequate in the interdiction effort, recognizing that in an open society like ours it is easy to get stuff in

here, sadly to say, especially when there is this kind of demand?

Are there things that we should do on interdiction that we are not

doing? Are there goals we ought to be seeking, are there activities

that we could undertake, whether it is from Panama or elsewhere,

that would give us an ability to be more effective in interdiction?

Gentlemen, I ask both of you.

General JOULWAN. I can take a try at that, Congressman. I

looked very hard at that question when I went to Panama in 1990,

and I am looking very hard at it again today. As I said in my statement, I truly believe you need a comprehensive strategy. Demand

reduction alone is not going to work. The figures tell us that despite interdiction, 700 metric tons are unaccounted for. That is a

hell of a lot of cocaine that is getting into the United States.

In the analysis I did in trying to come up with this strategy I

used a very simple analogy. What happens when the coca paste

goes from Peru and Bolivia to Colombia and is refined into cocaine.

The drug cocaine is then distributed many different ways, as you

say, to come into the United States and elsewhere. I asked, do you

go after the bees or the beehive? I think you need to do both, but

just going after the bees is not going to solve the problem. We have

to attack the beehive—and we know where the beehive is. It is very

17

limited in area and scope. We need to get the affected nations—Colombia, Peru, Bolivia, Equador—to join us in this fight, and it is

tough work to do so.

We have had very good success in Peru. They are working well

with us, but we have seen some back-sliding now. I am not sure

whether that is linked to the lack of command and control out of

Panama or not, but it needs to be looked at. But if you don’t have

a comprehensive strategy at the source, in transit, and interdiction,

and on-demand reduction, I really don’t think you are going to attack the problem.

Mr. MCNAMARA. I concur quite heartily with what General

Joulwan has just said. It is, as we all know, the law of supply and

demand. It is not the law of supply, and it is not just the law of

demand. The demand element is a major factor in the drug trade.

If we can’t reduce the demand, if we can’t, ourselves as a country

and as a Nation, and our citizens individually and collectively, exercise some self-control and bring that demand under control, then

the supply will always be there.

As you noted, we are an open society. We can’t close the borders,

but that doesn’t mean that, in fact, we shouldn’t go after the supply, because, in fact, if we don’t go after the supply, one of the

most—as I have observed over the last 15 to 20 years of deep involvement in the counter-narcotics effort—that the single most important element in whether or not a drug is used, any drug, whether it is aspirin or cigarettes or cocaine, is availability.

Mr. GEJDENSON. Let me just ask you, my time is running out,

General McCaffrey has suggested $1 billion for Colombia to try to

wipe out the source of some of this. $1 billion, is that realistic?

Does it take that kind of money? If we wipe it out in Colombia, will

we just end up destabilizing the next country where they move to

or——

Mr. MCNAMARA. Congressman, I think that $1 billion in assistance for Colombia, if properly distributed to a number of programs

in a number of ways, is a realistic amount, if the Congress can find

that within the budget parameters that it has to work with. But

it is not just Colombia. It is also Mexico and the other Andean

countries besides Colombia. It is a plague that is affecting those

countries. It happens at the present time, as a result of an unfortunate 4 year period in Colombia when they had a President of, at

the very best, third-rate capabilities in this regard, that Colombia

is suffering more than some of the other countries. I think President Pastrana is fully committed to working to end, to the best of

his ability, the narco-trafficking in Colombia. I think we ought to

join him in that effort.

General JOULWAN. If I could just comment briefly, again, I think

putting money into Colombia is important. But—and I am a soldier—however so, I will say that diplomatic, economic, political, as

well as military elements of this strategy need to be developed.

When you look at how the narco-trafficker operates, you need a

comprehensive strategy. You need all the nations in the region to

come together to understand that this is a clear threat to their security, to their children, as well as to the United States. That is

why you need, I think, all the nations to understand that, because

18

if you put the heat on in Colombia or Peru, and they slip out

through Brazil, illegal drugs are still getting out.

So it is that comprehensive approach, Congressman, that I think

is needed, and we need it for the long haul, not for 1 year or one

President’s term. It needs to be a constant effort, and that is why

I applaud what Congressman Gilman has been trying to do in

keeping the pressure on. Because it is going to take perseverance

and persistence as well as money in order to end this threat. It is

a fight.

Chairman GILMAN. Thank you, Mr. Gejdenson.

Mr. Ballenger.

Mr. BALLENGER. Thank you, Mr. Chairman.

And, General Joulwan, I am with you 100 percent, as the Chairman here.

The one thing I would like to ask each of you, you were there,

obviously the problem was still there—I mean, it was, I guess, just

before Samper that you were there, General, or, Mr. Ambassador,

and somewhere along the line were we doing anything to fight it

except being organized, as you said, General, before Samper came

in? Just a question.

Mr. MCNAMARA. Let me address the Colombia aspect of that. The

answer is yes. In fact, Chairman Gilman and I met for the first

time in Bogota, Colombia, in 1989, when he came with a congressional delegation and witnessed the terrible devastation that the

mafia was wreaking on the country of Colombia. I think President

Barco and President Gaviria, the two predecessors of President

Samper in Colombia, did an extraordinary job and, in fact, turned

around the country psychologically, and in many other ways during

the period I was there to confront the problem of narco-trafficking.

When I arrived in Colombia, in fact, when I left the United

States to go to Colombia, both in the United States and in Colombia the general attitude was finger-pointing. The Colombians were

saying, it is your fault up in the United States because you people

are consuming these drugs; and the people in the United States

were turning to the Colombians and saying, it is your fault because

you are supplying them. By the time I left 3 years later, the Colombians had come to recognize that the drug supply operations that

were going on in Colombia were destroying their society, and I

think that, thanks to Mrs. Reagan starting with her very simple

but effective ‘‘just say no’’ campaign which followed in succeeding

Administrations, the United States recognized that, in fact, the

consumption of drugs is part of the problem, and we have to face

up to that.

I thought the turning point was probably just about 1990, more

or less the time that Chairman Gilman was in Colombia.

Mr. BALLENGER. You were building an effort at that time. I don’t

know, it sounds like both you all did a terrific job, and all of a sudden we just cut out and forgot the whole damn thing.

General JOULWAN. What was impressive to me is what I mentioned in my opening remarks. To attack this we had all these different U.S. agencies working together. We brought them together,

and Howard was the key point, Howard Air Force Base. When I

went to Colombia with Ambassador McNamara, we went in to see

the President, and I rolled out this map that showed what our

19

AWACs had picked up of narco aircraft tracks that went back and

forth from Colombia, Peru, and Bolivia. I would say: Mr. President,

it is not the Americans that are violating your sovereignty, it is

being violated every day by these narco-traffickers. These narcoplans have no flight plans, and they are bringing paste back into

your country that is made into cocaine.

I did that with President Fujimori, with the President of Ecuador, Venezuela, et cetera, and they started to see the problem. I

made it clear that it was in their interest to protect their sovereignty, and we started to get very good cooperation, particularly

with the Peruvians. The Peruvians really started to attack the

narco planes, and it had a dramatic impact on this air bridge.

Therefore, the coca leaf and paste in Peru started to stack up, and

it couldn’t get through, and the price, therefore, went down, and

therefore the price of cocaine in the United States started to go up.

So we started to have that effect.

But it takes perseverance. But in my view our military is not enamored with this mission. It never has been. That is part of the

challenge in the post-Cold War period. I think we need to get military support for this as a clear mission that affects 14,000 deaths

every year in this country caused by a chemical called cocaine.

Mr. BALLENGER. The reason I was asking this point of both of

you—because you were there—obviously there was an effort on

your part and our Government’s part to do something about the

trafficking, the drug problem and in protecting the Panama Canal

and so forth, but it appears it didn’t take about a year, and Samper

gets elected, and the whole kit and caboodle got thrown out. This

is no longer our problem. We are not going to take care of it.

Our Administration, I wouldn’t say they cut and run, but they

just decided that we aren’t going to be involved down there. Sadly,

General Joulwan, you had a great effort on our part, on the part

of our Government in Bosnia, at the same time we are making no

effort in Panama or Colombia. It is just a sad situation to be able

to say I wish somebody somewhere had cared a little bit.

The one thing I noticed differently, Congressman Gilman and I

have been working on this thing for 2 or 3 years, but I have never

seen anything in the news media anywhere that showed that the

situation was going on until last week on Washington Week in Review they finally brought a reporter in that said Panama is a disaster; we have got to do something about it. I only wish that somewhere along the line the two of you all had stayed in office and we

had backed you up. It is water over the dam now, but we are going

to have to go back from where we started from with you guys.

I was down and met President Pastrana, and maybe he made a

mistake in trying to do something with his land giveaway. Maybe

it was an effort on his part to buy some time. But somewhere along

the line we are going to have another war, and whether it involves

Panama or Colombia or both of them or us, we have a very sad,

as far as I can tell, something to look forward to as far as that area

of the world is concerned. I don’t know if that strikes you all. I

think my time has run out.

Chairman GILMAN. Thank you, Mr. Ballenger.

Dr. Cooksey.

Mr. COOKSEY. Thank you, Mr. Chairman.

20

Ambassador McNamara, I would like to pose two questions to

you and then one to you, General Joulwan. Would you clarify for

me the legal entity or commercial entity or government entity from

China that is going to have a presence in the Panama Canal zone;

and supposedly for shipping purposes, and since the PRC, the People’s Republic of China still has a Communist political model and

a Socialist economic model, convince me that this Chinese shipping

entity is not a part of the Chinese Government or the Chinese

Army.

First, General Joulwan, and you can space this time accordingly,

how can we know that our commercial and military shipping will

have access to the Panama Canal for purposes of transit? And how

important is the Panama Canal to the U.S. military from a global

strategic standpoint with today’s means of transportation in terms

of aviation and shipping? Ambassador McNamara.

Mr. MCNAMARA. I am afraid I am not quite the one to ask the

question about the legal and commercial structure of the

Hutchison-Whampoa organization and the relationship between it

and the Chinese Government, except that I know enough to know

that there is such a relationship and that it is a—if you will, a

parastatal type organization, that is to say a commercial organization in which the Government of China has a major and possibly

a controlling interest. But I am not expert enough to be able to go

beyond that rather general statement.

Mr. COOKSEY. Who is Hutchinson? Who are they as players? Are

they just Chinese with English names?

Mr. MCNAMARA. If I am not mistaken, there is a Hong Kong connection, and I believe Hutchison—I would have to refresh my memory, but I believe it is a Hong Kong corporation or a Hong Kong

entity with that name, and that is where the English name comes

from, but I am not 100 percent certain.

Mr. COOKSEY. If you, as the Ambassador, if you are not the

source of that knowledge, who would be able to get this information?

Mr. MCNAMARA. I was not the Ambassador in Panama, I was

simply the Ambassador for the negotiations. I had other duties and

responsibilities here in Washington at the time. I would say that

either our Ambassador in Panama or possibly someone in the Department of Commerce, Department of Treasury, or Department of

State that is now intimately involved in looking at Chinese commercial operations around the world.

Mr. COOKSEY. Thank you, General.

General JOULWAN. I will try to answer, Congressman: I think the

essence of your question is how do we assure that commercial and

military shipping will have safe transit through the canal. I believe

that the Panamanians for some time have been working on the

management of the canal. I don’t know the exact number of the

work force now that is Panamanian, but over the last, I would say,

7 or 8 years, it has been becoming more Panamanian. The leadership of the canal is Panamian. I have every confidence that the

running of the canal by the Panamanians will be in accordance

with the right standards.

Military passage is still very important for our global strategy,

not just some of the larger aircraft carriers that can’t get through.

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But primarily most of the shipping of our logistics and submarines

and other ships such as cruisers and destroyers use the canal. The

canal allows us to have two swing capability from predominant

naval ports, one in San Diego and one in Norfolk. They are on each

coast. If you have to reenforce, the canal still is extremely important. We need to take a hard look at the security of our ships passing through there. Though I hesitate to mention it, we should always understand that it is a terrorist target in the canal, and I

think adequate measures must be taken to ensure that it is protected from those sorts of threats. But it is still very important in

our military strategy, the use of the Panama Canal.

Mr. COOKSEY. Let me ask you this question. If we—and I don’t

have this China phobia that some of my colleagues on this side

have, and I have been to China, some years ago—but let’s say we

bombed a couple more of the Chinese embassies or did some more

dumb things, we were at war with China, and I don’t want to be

at war with the Chinese. I am convinced the Chinese people are

warm, wonderful people, just with questionable government. But

let’s say, worst case scenario, we are at war with China. Would you

feel safe riding on a ship—and I know you are in the Army, and

I am ex-Air Force—through the Panama Canal while we were at

war with China? Or would you rather fly over in an Air Force

plane?

General JOULWAN. I think we will have no choice but to use the

canal. I think there are provisions in the 1977 treaties that still

make the United States responsible, in a strategic way, for the

canal. So without getting into any sort of contingency planning, I

would assume that contingency planning does exist to ensure that

we can use the canal; not just us, but world traffic as well. That

is already in the 1977 treaties that the United States, even after

the year 2000, would have that strategic responsibility.

Mr. COOKSEY. If I could throw in one bit of history. I am sure

I don’t know if you ever had occasion to visit the Garber Museum,

which houses 80 percent of the Air and Space Museum’s airplanes.

There is a Japanese airplane that was designed to be carried in a

submarine. There was a submarine en route from Japan to the

Panama Canal when we bombed Hiroshima and Nagasaki. Those

planes were going to be launched from a submarine, believe it or

not—the plane is over there, you ought to see it—those planes were

intended to obstruct the Panama Canal so our troops in Europe

who had a victory in Europe could not get to Asia. So, 50 years ago,

the other Asians thought it was important strategically, and there

is one surviving airplane. The submarine pushed those planes off

from the Pacific and headed back to Japan. But the Garber Museum has one. It is an interesting bit of history.

Thank you, Mr. Chairman.

Chairman GILMAN. Thank you, Dr. Cooksey.

Again, I want to thank our panelists who have done such an outstanding job today in reviewing the issues. I have just a few questions, and I regret we were interrupted by the voting that took

place.

Ambassador McNamara, a couple of quick, brief questions. Isn’t

it true that in late 1995, Ambassador Bill Hughes and Panamanian

Foreign Minister Gabriel Lewis Galindo virtually reached a consenVerDate 11-SEP-98 10:48 Mar 30, 2000 Jkt 000000 PO 00000 Frm 00024 Fmt 6633 Sfmt 6633 62716.TXT HINTREL1 PsN: HINTREL1
22

sual agreement on a deal in which the United States would be able

to retain seven of our military bases in Panama, including Howard,

and keep about 7,000 of our U.S. military personnel in Panama in

exchange for a modest compensation package? Did that occur?

Mr. MCNAMARA. I would prefer that Ambassador Hughes or

somebody else answer that question. I was not intimately involved

in that in 1995. I do know, however, that there was an in-principle

agreement to discuss the modalities for setting up an arrangement,

in fact, for an agreement that would include up to seven facilities.

I do not know whether Gabriel Lewis Galindo, the Foreign Minister, was speaking with complete authority for his government at

the time, but it was certainly an in-principle understanding that

that would be the basis for discussions. That changed subsequently.

Chairman GILMAN. Mr. Ambassador, we understand that deal

fell apart after our Administration categorically rejected any form

of compensation to the Panamanians for letting us stay after 1999.

Is that your information?

Mr. MCNAMARA. What was categorically rejected was the idea of

paying rent for staying behind. Indeed, in December 1995, I believe

it was the President of Panama, President Ernesto Perez

Valladares, who suggested to us as a solution to the problem that

there be instead a counter-narcotics center established, and that

that counter-narcotics center, because it would not be a base, and

because it would be there to conduct essentially counter-narcotics

operations (but there would have been a possibility of some other

ancillary operations also) that that would not require rent. We got

by the problem by redefining what it was that would remain behind after 1999.

Chairman GILMAN. It was, I think, part of that concept that

there would be some U.S. military presence in absence of any compensation and relationship to that.

So it was the Panamanians’ proposal for this United States—for

this Multilateral Counter-narcotics Center, is that correct?

Mr. MCNAMARA. That is correct, it was a Panamanian idea.

Chairman GILMAN. Then in retrospect, isn’t it clear that we did

make a serious mistake in not trying to conclude that kind of an

arrangement with the Panamanians before their Foreign Minister,

Gabriel Lewis, passed away in 1996? It seemed to me we made a

serious mistake in not taking advantage of that proposal. What are

your thoughts about that?

Mr. MCNAMARA. My thoughts are that, quite frankly, I think Gabriel Lewis Galindo was ahead of his government and ahead of the

Panamanian public. He was a visionary man, an individual for

whom I have the very highest respect and regard. Whether or not

had he remained healthy and in office, neither of which happened

unfortunately, for Panama and for the United States, whether we

would have been able to take this in-principle understanding and

turn it into a concrete, definitive, negotiated agreement remains—

and will remain, I think—one of the mysteries of the process. The

fact is that he became seriously ill, left office, and subsequently

died, and his influence, his vision, was lost to the Panamanian

Government.

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Chairman GILMAN. General Joulwan, would you like to comment

about the kind of a negotiation that was going on?

General JOULWAN. Before I left command in 1993 I suggested

that we shrink back into Howard Air Force Base as a minimalist

sort of position and establish a counter-drug center. I also urged

that the Panamanians take credit for the role they were playing in

the counter-drug fight. Panamanians were suffering also from

crack babies and addiction, as were other countries in Central and

South America, so this was to be their initiative that the Panamanians should get credit for what they are doing. Illegal drugs were

not just going to be a concern of the United States. So what I started back in the early 1990’s perhaps can help us followup even

today to get the Panamanians to be part of the solution to this very

difficult threat that faces all Americas, North, Central and South.

Chairman GILMAN. Thank you.

Ambassador McNamara, the compensation package along the

lines that we proposed in our U.S.–Panama partnership probably

would have been enough to clinch the deal if we had offered it back

in 1995 or 1996; is that correct?

Mr. MCNAMARA. You are referring to the trade benefits?

Chairman GILMAN. Yes.

Mr. MCNAMARA. The NAFTA equivalency, that certainly would

have made the negotiations a lot easier had that been part of the

package. Whether it would have clinched it or not is very difficult

to say. It is history in the conditional, what if.

Chairman GILMAN. Mr. Ambassador, tell us, even after Gabriel

Lewis died and you had taken over the negotiations for our Nation,

would a compensation package like we had proposed in our bill,

would that have been helpful to you in reaching an agreement for

a post-1999 United States presence in Panama?

Mr. MCNAMARA. Since it was something the Panamanians were

asking for, usually if a negotiator can give somebody what they are

asking for, that helps.

Chairman GILMAN. Helps a great deal, I should imagine.

General Joulwan, we have lost several Americans, regrettably, in

a plane crashed in the FARC-infested zone of Colombia in the last

few days. The search and rescue mission was delayed for several

days due to bad weather. I understand we had to rely heavily on

the Colombian National Police and Colombian military to provide

air assets for this search and rescue. Our own supporting assets

had to be flown into Colombia from the continental United States

How long would it have taken us to deploy proper search and rescue equipment, had we been able to able to operate out of Howard

Air Force Base?

General JOULWAN. It would have taken hours, Mr. Chairman.

Search and rescue was part of the mission every time we flew into

source regions. We always had that contingency.

Chairman GILMAN. General Joulwan, General Serrano, the highly respected Colombian drug warrior in Colombia who is leading

the front line and has lost so many of his own police—over 4,000

police—has warned that after we leave Panama we will see even

more drugs moving north and more arms being shipped south to

destabilize the region. Do you share his opinion?

General JOULWAN. Yes.

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Chairman GILMAN. Earlier this week our Drug Czar, General

Barry McCaffrey, who also served as SOUTHCOM Commander—

I guess, after you left office—it was good seeing you over in Bosnia

when we got over there—said the situation in Colombia is, and I

quote, ‘‘a serious and growing emergency in the region’’. So with all

of that, is it time for us to be leaving Panama?

General JOULWAN. Absolutely not, Mr. Chairman. But we are

faced with the situation that the mission must continue, and until

we have an alternative—or until we have some settlement with

Panama beyond what we have today, I think we need to find ways

to continue. I hope we can someday get back into Panama, because

I think it is very important.

Chairman GILMAN. Ambassador McNamara, the electoral season

in Panama that bedeviled your own good efforts, and a new President has now been elected. We are hearing some sounds that he

would be interested in further negotiations, and a strong majority

of Panamanians apparently favor a continued United States presence. If you were given a task of negotiating a presence now, and

I hope you would, do you believe conditions are favorable for a successful mission of that nature?

Mr. MCNAMARA. As I said in my opening statement, I think it

is time for a bit of a cooling-off period. I would say that if the Panamanians came to us, then that would be one set of circumstances.

But for us to take an initiative at this juncture I think would simply open up many of the debates and the wounds there—and there

were wounds in Panama. There weren’t that many up here in

Washington, but in Panama there were. They became apparent in

late—in early 1998 and later in 1998. It is difficult to say absolutely yes, but if the Panamanians came to the United States and

said that they wished this to happen, or that they wished to begin

to discuss that possibility, I certainly think that we ought to respond positively.

Chairman GILMAN. General Joulwan, what is your impression; do

you think the environment, the atmosphere is appropriate now to

renegotiate?

General JOULWAN. Mr. Chairman, yes. I think that what must

happen in Panama is what I have tried to do during my 3 years

as CINSOUTH. We must make it clear that what we are trying to

do in Panama, as the United States, is in Panama’s interest. I believe Panama will find and is finding out that there are threats to

its stability, sovereignty, and to its people. These threats come

from the FARC on its border in Colombia, and transiting of drugs

and through the Darien and San Blas. To combat there threats is

in Panama’s interest as well as the United States. Indeed it is in

the interest of all of Central and South America. So I think we

have to demonstrate these threats and the Panamanians have to

realize that it is in their interest, and therefore we need a strategic

partnership. We don’t want to dominate Panama, we don’t want to

occupy Panama. What we want to do is work with Panama. I think

if we approach it in that way, the leadership of not only Panama,

but all of Central and South America will have this strategic relationship with the United States based on mutual trust and confidence and shared interests.

Mr. MCNAMARA. If I may add—.

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Chairman GILMAN. Yes.

Mr. MCNAMARA [continuing]. That General Joulwan has put it

very, very well. That is precisely what the Panamanian Government has to decide. If it decides that, then I would suggest that the

next thing, the next step, is to convince and to educate—I suppose

you would have to say to educate the educated elite in that respect,

because the general population in Panama is very strongly in favor

of seeing the counter-narcotics center and the United States presence. So there is an education effort that would have to be undertaken by the new Panamanian Government to ensure that they

don’t fall into the problems that the preceding government fell into.

Chairman GILMAN. General Joulwan.

General JOULWAN. Mr. Chairman, just briefly, the fight continues. The narco-trafficker is not going to take a pause in this

fight. He is going to take advantage of what is happening now. I

think we have to understand that that is going to equate to more

crack babies, to more Americans dying, to more Central and South

Americans being corrupted and addicted. So I think we have to

look at it from the threat side of it. It will continue. It will accelerate. We need to be able to handle this threat every bit as well

as we are doing elsewhere in the world. This is a threat to the

American people, to our way of life, to our children, and we have

got to address it.

Panama is part of that equation, but it is a much larger issue.

Panama is central to it, but it is a much larger threat we have to

face.

Chairman GILMAN. It is an emergency to the national security

interests of our Nation as well.

I would like to recommend that both of you be made part of a

new team to go down and negotiate, and as a matter of fact, I probably will make that recommendation to the Administration.

Ambassador McNamara, in your judgment was it only the Panamanian side that was inflexible in the negotiations, or did we

have something to do with the inflexibility of the negotiations?

Mr. MCNAMARA. As I said in my statement, there were miscalculations on the part, I believe, of the Department of Defense,

in just how far the Panamanians would go to meet what the Department of Defense felt was its minimum requirements. The minimum requirements were for a larger presence than, in fact, was

politically acceptable in, at least in 1997 and 1998 in Panama.

Whenever negotiations fail, then it means that the necessary flexibility on both sides was not there, because if it were there, we

would have had a successful outcome.

Chairman GILMAN. Mr. Ambassador, who back in the State Department was supervising the negotiation? Who was overseeing it?

Mr. MCNAMARA. I was overseeing it in its day-to-day phases. The

Secretary of State, the Deputy Secretary of State, and the Assistant Secretary of State for Latin American Affairs, or now Hemispheric Affairs, were deeply involved. I saw them frequently, as

well as the Undersecretary of State for Political Affairs. I saw all

of them.

Chairman GILMAN. Who were they, Mr. Ambassador?

Mr. MCNAMARA. During my time as negotiator that was Secretary of State Albright, Deputy Secretary of State Talbott, UnderVerDate 11-SEP-98 10:48 Mar 30, 2000 Jkt 000000 PO 00000 Frm 00028 Fmt 6633 Sfmt 6633 62716.TXT HINTREL1 PsN: HINTREL1
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secretary of State Pickering, and Assistant Secretary of State Jeffery Davidson, and then subsequently Acting Assistant Secretary

Romero.

Chairman GILMAN. Ambassador McNamara, when the State Department was negotiating a Multilateral Counter-narcotics Center

with the Panamanian Government we understand that the Defense

Department set forth a series of red-line threshold negotiating positions, including quality of life assurance for our personnel, full

United States legal jurisdiction over our soldiers, and among other

requirements, multiple missions beyond counter-narcotics operations. Can you tell us which of those red lines were met in your

temporary agreements with Curacao and Ecuador?

Mr. MCNAMARA. I left government service before we began those

arrangements with Curacao and Ecuador, and I am not privy,

therefore, to whatever agreements were reached. I would note that

in the negotiations I conducted that reached essential agreement in

December 1997 all of those red lines were met.

Chairman GILMAN. In your opinion, Ambassador, are negotiations with Panama ever given a priority position by the Administration? Do you get a sense that the senior U.S. officials cared

whether or not you succeeded or failed in your negotiations?

Mr. MCNAMARA. I think we were given priority, and yes, senior

officials in the White House and the other agencies were fully involved. I think the failure was not one of lack of attention within

the Administration. As I said earlier, both in my statement and in

answer to other questions, I think the Panamanian Government

simply could not take the political heat that it would have had to

take in order to stand by what was negotiated in December 1997.

When you sort of strip away the many and complex influences in

the negotiation the core problem was a particular problem in Panama, a domestic political problem in Panama.

Chairman GILMAN. Both of our panelists have pointed out the

priority of the issues involved here and focused attention for this

Committee on what we should be doing and what we should have

been doing, and we look forward to continuing in our efforts. I

might note for you that this Committee has conducted some eight

hearings on the problems of narcotics policy in and around this region, particularly with regard to Colombia. I remember full well

when we went and we took a look at the burned-out Supreme

Court in the Plaza, Bogota, that left a long-burning impression on

our minds of what can happen to a country that virtually becomes

a hostage to the drug traffickers. We don’t want to see that happen

anymore, anyplace.

Just one more question of General Joulwan: With regard to the

bad weather, did that stall our effort to try to get that downed

plane? Were there assets at Howard that could have gotten around

those hurdles, the bad weather and the inability to reach these

people?

General JOULWAN. I am not really sure what would have been

there today, Chairman. Weather is always a problem, particularly

in that area. It has always been a problem. I am not sure we would

have had the assets that could have gone there in what I would

call all weather. The response time, though, would have been much

faster from a forward-operating base like Howard.

27

Chairman GILMAN. Again, I want to thank our panelists. You

have given us a great deal of food for thought, and we hope to continue in our efforts to persevere and make sure we have a good

multilateral drug center in that part of the world. Thank you very

much. Our Committee stands adjourned.

[Whereupon, at 12:20 p.m., the Committee was adjourned.]

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JULY 29, 1999

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