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MEXICO to Cut TIES TO SOMOZA REGIME Cancun, Mexico.-President Jose Lopez Portillo announced today that Mexico is breaking diplomatic relations with Nicaragua because of the “horrendous genocide” committed by the government of President Anastasio Somoza. He called on other Latin American countries to take the same action.

In Nicaragua, reports reaching the capital of Managua said an estimated 300 guerrillas had seized the town of Jinotega and Samoza's National Guard was fighting block-by-block to retake it. One refugee from Jinotega, 100 miles north of Managua, said, "There is fighting in all parts of the city," but he did not know how many persons had been killed.

Lopez Portillo made his surprise announcement at a luncheon honoring Costa Rican President Rodrigo Carazo, who is in Cancun on a one-day visit to discuss purchasing oil from Mexico.

“It was something that we knew about and we didn't want to believe-that in Nicaragua a hateful attack is being carried out against the Nicaragua people, a horrendous genocide,” Lopez said.

Costa Rica, of course, is the nation which has continually lent itself to Panama's support activities of Sandanista revolutionaries against Nicaragua.

Today's Miami Herald of May 21 provides the best overview of the Panamanian gun trafficking to date with the key question of whether gun running can wreck the Panama Canal treaties. The article is as follows:

Is MIAMI U.S. CAPITAL FOR GUNS?

SMUGGLED WEAPONS FLOWING FROM CITY

(By Joe Crankshaw and Sam Jacobs) Don Kimbler used to wreck moonshine stills in Georgia. It was his job. He was a government revenuer.

Kimbler now works in Miami as a federal agent, and some people hope that Kimbler, just doing his job, will wreck something else: the Panama Canal treaties.

It is an odd story.

Miami is known these days for its Cubans, its drug traffic, its gay rights rhubarb and its no-smoking election.

What isn't so well known is its gun smuggling. Miami may well be Gun Smuggling Capital, U.S.A.

Smugglers here have been caught sneaking out guns in refrigerators, air conditioners, boxes of automobile transmissions and even industrial rubber glovers.

"We're supplying all the banana republics with the instruments of war," says Lee Waldron, a chief in the government's Bureau of Alcohol, Tobacco and Firearms (ATF).

Waldron is Kimbler's boss. It is Kimbler's job to watch over places like the Garcia National Gun Shop in Little Havana.

It is a large white building. Inside are racks and racks of rifles. The walls are lined with what look like shoeboxes. The boxes are filled with ammunition.

On a wall outside is a sign: "Take your boy hunting. You'll never have to hunt for your boy.”

On the front door are stickers for Master Charge, Visa, American Express and Diners Club. But most customers pay cash.

Agent Kimbler is gray-haired, square-faced, tanned and muscular. He looks uncomfortable in a suit and necktie. He is a stickler for the rules. He goes by the book.

It is his job to make sure that gun dealers fill out forms correctly, especially on multiple sales of pistols.

Last October Kimbler thumbed through sales logs at the Garcia National Gun Shop. Everything seemed to be in order—as far as the gun shop was concerned.

But on a hunch, Kimbler decided to check records on “long guns”-rifles and shotguns. They aren't regulated as closely as handguns.

They never have been. One of Florida's early governors, Napoleon Bonapart Broward, even smuggled weapons to Cuba before the Spanish-American War. Broward County is named after him.

Kimbler wasn't exactly surprised when he kept finding the same names again and again.

One was Jose Antonio Alvarez, a one-time pawnshop salesman. Alvarez, 31, held a federal license to deal in firearms. He was married to a Panamanian. He made frequent trips to Panama. And he shipped a lot of weapons to Panama.

All this was perfectly legal. Alvarez would later insist, “I only sold legal weapons. The State Department issued an export license for all my weapons."

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And he was right-except for one thing. On the forms at the gunshop, he had failed to say that the guns were for shipment to Panama.

And if the forms were incorrect, so Kimbler believed, "somebody had broken the law."

His investigation intensified. Others became suspects.

Just where were the weapons going? Nervous gun shop owners, afraid they would lose their licenses, volunteered information.

Court documents now provide a plot.

Col. Manuel Noriega, Panama's intelligence chief, it seems, had an assignment for his Miami consul: Buy 1,000 weapons. Ship them to a private hunting-and-fishing club in Panama.

The consul, Edgardo Lopez Grimaidi, accepted the mission. He also earned an under-the-table 10 percent commission on deals.

Initially, Kimbler and the ATF folks weren't positive about where the guns were going.

Last Nov. 9 they seized a shipment before export. They confiscated 12 Colt .45caliber pistols, 10 Remington Woodmaster 30.06 rifles with telescopic sights and 8,000 rounds of ammunition. Value: $25,000.

The next day, Kimbler and John Spidell, an ATF supervisor, marched into the Panamanian consulate in Miami. They wanted to know what was up. They had lots of records.

Lopez, the consul, admitted he knew about seven shipments. He said he had received his instructions from "an official of the Panamanian G2,” the agency supervises spies, secret police and military intelligence.

Lopez doesn't live in Miami anymore. He left in a hurry the day after the interview.

The G2 official, it turned out, was Col. Noreiga. It is easy to tell that he is in the spy business. The insignia on his stationery is a pair of binoculars.

The colonel wrote a formal letter of protest to Washington. He said the arms were for the Panama National Guard.

The State Department rejected the protest. With diplomatic tongue in cheek, the U.S. government announced it was pleased that the guns were intended for use by the Panama National Guard.

It didn't believe it. Although it didn't say so, the U.S. figured the guns were destined for the Sandinista guerrillas in Nicaragua.

The Sandinista guerrillas are fighting the regime of Gen. Anastasio Somoza in Nicaragua

They are a well-armed Marxist cadre numbering more than a thousand. They ambush Somoza troops, occupy towns and raid government outposts.

Technically, the Panama government professes neutrality. But President Aristides Royo makes no secret about his sympathy. He likes the guerrillas.

The guerrillas lost one in March. An undercover agent had picked up a smuggling tip on an arms shipment. Watch for the Firestone Rubber Co. trucks, he said.

So the Nicaraguan National Guard watched. And sure enough, one by one vans began to cross the Costa Rica-Nicaragua border at Sapoa.

They got them all. Hidden under the tires, the guardsmen found carbines, rocket launchers, hand grenades, pistols, machine guns, dynamite and ammunition.

Serial numbers on the carbines matched sales made by Johnson Firearms in New Jersey and Universal Firearms in Miami.

Alvarez, the Miami exporter, had shipped them to the Panama hunting and fishing club, records showed.

Since then a federal grand jury in Miami has indicted Alvarez for illegal shipment of arms.

Also indicted are Jose A. Pujol, 36, the Miami cargo manager for Air Panama, and Carlos Wittgreen, the president of the hunting and fishing club, Caza y Pesca. He, too, is G2, it now develops.

The grand jury also charged Walter Donald McComas, 41, another Miami exporter, and James Allen Howell, 33.

Howell used to be an instructor at the National Intelligence Academy in Fort Lauderdale, sometimes known as Wiretap U. It is a private school for teaching policemen electronic bugging. Howell calls himself a "diplomatic security analyst" and lives in a plush house.

The indictments, the gunsmuggling and the Panamanian commotion are a joy to some congressmen who don't like the Panama Canal treaties.

In Washington last week, Rep. George Hansen (R., Idaho) cited the smuggling episode as proof that Panama is not a “model international citizen.” To turn over the canal to Panama is foolish, he says.

Some House legislators are angry because they didn't get to vote on the treaties last year. Only the Senate votes on treaties.

But both Houses must pass “implementing legislation," and last week that legislation ran into heavy opposition.

Voting 200-198 Thursday, the House came within two votes of sending the implementing legislation back to committee.

President Carter didn't like it at all. He found it “very disturbing.”

“They (the treaties) are the law of the land," he said Friday. "The Panama Canal Zone will become Panama territory on the first day of October 1979, no matter what the Congress does this year on implementation.".

But failure to pass the legislation, he indicated, could close the canal, cut off vital oil supplies and diminish U.S. ability to defend the strategic waterway.

"Hey,” says agent Kimbler, the old moonshine-still worker. "I'm just doing my job."

I do not think that there is any way that the Neutrality Treaty which was approved by the U.S. Senate prior to the Panama Canal Treaty itself can work if the Government which is going to be the eventual caretaker of the Panama Canal is going to be engaging in revolutionary and terroristic activities all over Latin America. It is time that we take a good look at what is going on, what kind of business deal we are really getting into with the Government of Panama, before we go into implementation legislation.

And on that subject, if we are to go into implementation legislation--and I think that the gentleman from New York, the gentleman from Maryland, and others on the committee have done a good job in tightening what was originally a very loose proposal for implementation-I think we need to do one more important thing and that is cut the money completely out of this bill, stop the assault on the taxpayers.

PROTECT AMERICAN TAXPAYERS AND TOLLPAYERS-ADD THE "HONESTY”.

AMENDMENT TO H.R. 111 It was promised by all of the key treaty proponents in the Senate and the administration prior to the approval of the Panama Canal Treaty that the American taxpayer would suffer no liabilities and that the tollpayer would be protected. This has not yet been done, and this kind of protection must be provided.

I will be offering an amendment called the “honesty amendment,” sponsored by dozens of members of a “new majority coalition”-an amendment that is going to help those who made those promises to keep those promises.

American citizens were promised the Panama Canal transfer would cost taxpayers nothing, but H.R. 111 without the “honesty” amendment breaks that promise by allowing huge taxpayer costs and admits an effort only to "control the dole."

Tollpayers (consumers) were promised protection again, huge toll increases in a transfer of the Panama Canal but H.R. ill, without the “honesty” amendment, is being loaded with many extra costs and official State Department papers now project toll increases upward of 50 percent.

H.R. 111 without the "honesty” amendment interferes with conditions of treaty payments to Panama, while leaving American taxpayers and consumers (tollpayers) saddled with the major costs of treaty implementation.

H.R. 111 without the “honesty” amendment causes U.S. taxpayers and consumers (tollpayers) to underwrite a $70 million annual windfall to Panama which can finance on an even grander scale their bootlegging of firearms and Cuba-type revolutionary activities in Latin America as recently exposed in U.S. courts. Who can justify channeling American money into bombthrowing, assassinations, kidnapings, and other acts of terrorism? H.R. 111 without the “honesty" amendment is still a $4 billion payaway.

Mr. Chairman, the President of the United States has told this body that it is the duty of this House to pass implementing legislation “as is,” without any restrictions or limitations. In short, we are told to rubber stamp the administration's bill because anything we do will either violate the treaty or damage the pitifully few rights the treaty retains for us.

I urge the Members of this House to look closely at the course of events since the President signed these treaties in September 1977.

First, the basic treaty was so dependent on the neutrality treaty that the neutrality treaty was voted on first in the Senate. Only then was the giveaway treaty considered. That priority makes sense. If the canal can be made safe by an international treaty, then the other treaty will do less damage.

Second, since Panama signed that neutrality treaty, it has been engaged in overt and covert subversion of its Latin American neighbors.

Third, the State Department has revealed that Panama has, since being taken over the Communist dictator Torrijos, a decade ago, gone downhill economically and is now so badly in debt that soon more than 70 percent of its Government revenues will go exclusively to debt service. How does the United States transfer the canal to a government which shows all the signs of being about to collapse under its own debt structure?

Since Panama, in ruining the economy of its own country and most particularly in becoming a base for leftist insurgency in Central America, has rendered the neutrality treaty questionable if not impossible of performance, are we required to turn over the canal, knowing that it is now the target of all the Central Americans whom Panama has attempted to subvert? Has not Panama already breached the treaty which was the condition precedent to the giveaway treaty? Are we bound to a treaty which the other side can no longer perform? I say we are not.

But even were we bound, we are bound only by the terms of that treaty, not by the secret deals and arrangements reached behind closed doors. We can still work our will on those terms of the treaty which are ours to flesh out and implement. It is precisely this which I and my colleagues who support me have done in the amendment to be offered in our name when the administration and the leadership finally decide to end their arm twisting and allow us to vote on implementing legislation.

Despite the administration's media blitz, it is the coalation and its "honesty" amendment which performs in accord with the treaty terms. It is the coalition amendment which keeps the promises upon which the Senate relied in consenting to the treaties. We need not stand behind the door when the terms honor and truth are spoken in this Chamber. The very ones prating of our national word and honor have violated that word to our own citizens by lying about the monstrous costs of the treaty. It is they whose honor has been tarnished. We did not pull the bill. We do not fear the judgment of the Nation. We can live with our stand. Can those who so blithely dispense with the truth in order to force an odious treaty upon an unwilling and resisting Nation. Mr. Chairman, I strongly urge the passage of the “honesty” amendment to H.R. 111.

PROTECT U.S. TAXPAYERS AND CONSUMERS-STOP THE PAYAWAY (Mr. Hansen asked and was given permission to revise and extend his remarks.)

Mr. HANSEN. Mr. Speaker, we can live with this rule, but I feel there was a deliberate attempt to subvert the first amendment right of free speech, and there fore, if a record vote is taken on his rule, I shall vote no in protest.

This issue is most complex and most important and should in no way be handled under restricted debate rules.

To illustrate my point, we have witnessed poorly framed treaties, first billed at no cost to the taxpayers and now ranging, by the State Department's own admission, which has been revised upwards several times, to $981 million. Admitted omissions push costs on up to some $4 billion, if we are to include those items they acknowledge are there but which they do not want to include.

The chairman of the Merchant Marine and Fisheries Committee has also given, before the Rules Committee, an estimate of some $4 billion 280 million for cost of implementation. By my own devices, through General Accounting Office figures, Department of Defense statements, and committee hearings, I found that the price tags come to some $4 billion 111 million, as a conservative estimate. So we find that there is a tremendous cost to the American taxpayer for giving away the Panama Canal, which of course makes debate in this body and a decision by this body imperative since this is where the purse strings are controlled.

Mr. Speaker, we find a government deeply in debt, being invited to be our partner. I ask my colleagues if this is not great cause for concern that we are thinking of going into a partnership with a nation that has the worst debt structure of all of the nations of the world. This is a known fact by the admission of our own State Department's internal papers, taken from sources in the office of Panama's treasury.

How can we invite into partnership a bankrupt nation virtually in the hands of receivers without some question as to who is really going to be calling the shots for Panama.

Is it going to be the big bankers that they are very beholden to? Is it going to be the Japanese who are providing large loans to shift some of the burden from the bankers? Is it going to be the Arabs in similar fashion, who already control a monopoly on oil in one part of the world, who could then gain a tourniquet on the rest of the world's supply? Who are we really going into partnership with?

We also find a government heavily involved in Cuban-type terrorism and revolution. There has been recently exposed in the U.S. courts revolutionary activities by the Government of Panama which invite acts of reprisal that already threaten the Neutrality Treaty. There is no way the Panama Canal can be kept neutral and secure if the owner of that canal is engaging in revolutionary and terroristic acts in the Americas or even the world.

Mr. Speaker, I will be offering and amendment, if the rule is approved and debate is carried out, which will give this body the opportunity to prohibit any cost to U.S. taxpayers from treaty implementation and protect the toll payers and consumers from the burdensome rates that seem assured in the pending legislation. It will also give us an opportunity to prevent U.S. funds from being used in inciting revolution and terrorism in Latin America.

It is critical that we not be a party to bomb throwing, assassinations, kidnapings, and other acts of terrorism in Latin America. In fact, I think it is most appropriate that the treaties themselves be set-aside until we can have briefings from the CIA and firm assurances that Panama is not a mainland-based Cuba-type revolutionary operation rampantly exporting terrorism among its neighbors with the money they get from the Panama Canal.

PANAMA TREATY IMPLEMENTATION IN SERIOUS TROUBLE Mr. HANSEN. Mr. Speaker, the vote today on this rule for debate on Panama Treaty implementation legislation had immense impact on origianl plans for House consideration of this issue as stated in the following series of wire service releases for this date which I bring to the attention of my colleagues and concerned American citizens:

WASHINGTON.---The House today narrowly turned back a conservative challenge to legislation implementing and funding the treaty under which the Panama Canal will be turned over to Panama by the year 2000.

In what amounted to a preliminary test vote, the House voted 200-198 to approve the procedures under which the House will debate and amend the bill. That debate is scheduled for Tues, and Thurs. of next week.

The vote keeps the bill alive, but is a clear indication the legislation is in serious trouble and may either be defeated or amended in a hard-line fashion that would be unacceptable to President Carter.

Conservatives led by Idaho's two GOP Congressmen, George Hansen and Steve Symms, urged the House to defeat the procedures and force the Rules Committee to come back with procedures that would make it easier for a more conservative bill to pass.

The version of the bill favored by Hansen and Symms would force Panama to pay the entire costs of the treaty.

"It's time to send a message downtown (to the White House) that the United States is tired of being pushed around," said Symms.

Under the bill favored by House leaders Panama would receive payments of 30 cents for each ton that moved through the canal-about $55 million in 1st yearplus up to $30 million a year in other payments, including a "fixed annuity” of $10 million a year.

Tolls would have to be increased about 33 percent to make up for additional expenses.

The legislation also would provide for the transfer of U.S. property to Panama and would set up a Panama Canal Commission to run the canal during the transition period.

Benefits for American workers also would be established by the bill.

(By Don Phillips) WASHINGTON.—The House today narrowly defeated a conservative challenge to legislation implementing and financing the Panama Canal Treaties and House leaders immediately delayed further action on the Bill.

In what amounted to a preliminary test vote, the House voted 200-198 to approve the procedures under which the House will debate and amend the Bill. General debate is scheduled to occur on Monday, but substantive votes have been put off for at least two weeks.

The legislation finances and implements the Treaties under which the Panama Canal will be turned over to Panama by the year 2000. It was known to be in serious trouble, but apparently is in worse trouble than House leaders throught.

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