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tined for the use of revolutionaries in Latin America. At this time, the problem appears to hold principal residence in Nicaragua.

We have learned that in Miami, Fla., an erstwhile consul for Panama is a key factor for this gunrunning. We think it is important to probe and establish the source and extent of financing of this illicit traffic in weaponry.

Of great concern to this committee is the threat such behavior holds to the uninterrupted operation of the canal which is essential to shipping by world transporters. We are committed in every instrument drawn and signed by our respective governments to a course of protecting the canal.

If Panama is, in fact, providing arms to Central American revolutionaries, they are urging upon themselves possible retaliation and upon us, a party to the treaty, they are bringing additional military concern.

We are further concerned about the possible political embarrassment that these alleged incidents of gunrunning hold for us as a party to the new treaties. We were promised by our President, Jimmy Carter, that these treaties would usher in a new era of peace and understanding in Latin America. We cannot tolerate light regard of treaty terms that are so costly to the American people.

Another question that some of my colleagues have raised is what will come of additional revenues that the Panama Canal will produce? Will these funds underwrite the cost of continuing revolution in Latin America?

The 2 days of hearings will deal with these and other issues that have had a late onset before final consideration of implementing legislation. We will hear the evidence of those who have been called to testify to determine the gravity of these problems which, I am told, have been known to responsible people in our Government for some time now.

One important caveat is in order. The subcommittee is aware of the pendency of criminal actions in two Federal Courts arising from the weapons transactions at issue. Those cases will not be tried in these proceedings. On the contrary, I exhort my colleagues

. to appreciate the sensitivity of these matters and, at the same time, recognize that official witnesses may circumscribe their testimony so as to protect individual rights and the Government's case in chief.

At this time, before I read the statement of the distinguished Chairman of the full Merchant Marine and Fisheries Committee, I would call on Robert Bauman, the ranking minority member of the Panama Canal Subcommittee, for any statement he may wish to make.

Mr. BAUMAN. Thank you, Mr. Chairman.

I want to also thank you for responding to the request made by myself and others to hold this hearing. I think it is totally consistent with the mission of this subcommittee and its role in writing the implementing legislation for the Panama Canal Treaty to consider the problems presented by the events that you have described in your statement and that will be the subject of testimony in the next 2 days. I think that these developments are more than disturbing. They may have direct impact upon the legislation that we

will be considering next week on the floor of the House. The schedule has been changed for that consideration a number of times due to political factors.

We do indeed have to address the question of whether or not these treaties take effect on October 1, but the income that will accrue to the Government of Panama will be added to the subject of these hearings. A great deal of money will be paid to Panama under the treaty terms, and I suspect that we will find evidence in these hearings that already Government involvement on the part of Panama may have diverted funds for this purpose. And that is certainly an issue of great concern and indeed you are quite correct in raising the issue of the U.S. military involvement under the neutrality treaty which is not the subject of implementing legislation but which is self-executing.

The United States acquires a great many obligations to defend the neutrality of the Panama Canal and to insure its continued operation. If indeed the facts that have been reported in the press and the subject of testimony are true, the Government of Panama certainly is inviting retaliation from other governments and could thereby involve the United States in obligations under that neutrality treaty as well as obligations under the treaty which we will be implementing in our legislation.

It is my own view that these hearings will probably produce evidence that officials of the Government of Panama are engaged in violations of the U.N. charter, and most certainly in violation of the charter of the Organization of American States, because they are, in fact, engaged in intervention in the affairs of another nation. They are engaged apparently in supporting gunrunning and in the importation of arms, some examples of which we see in the committee room today.

The central question that we should concentrate upon, in my view, is not the threat to the existence of the Nicaraguan Government, although that is a legitimate concern since it is a properly constituted government, but rather to find in our mission as the Panama Canal Subcommittee what regulations the implementation may require, what further dynamic restrictions may be written into that law, and whether or not the Government of Panama is not already in violation of the treaty that we signed with them in 1977. Those are the questions that I would like to engage in today and tomorrow.

I thank the chairman for his indulgence.
Mr. HUBBARD. Thank you very much, Congressman Bauman.

We will proceed another 5, 6, or 7 minutes before we have to go to the floor for a vote, and then we will come right back and proceed immediately.

Repeating the reason why we are a few minutes late today there was the necessity of having unanimous consent that we meet in fact today while the House is in session under the 5-minute rule.

I would say, as chairman of the subcommittee, that is, as one who has been opposed to the Panama Canal Treaty from the outset, that it is very possible that during these 2 days of hearings, the people of this subcommittee and the full committee and, in fact, perhaps the entire Nation, will realize that it is very possible that those millions of Americans who were very, very much op

posed to the Panama Canal Treaty were wise in their judgment. Kentuckians, such as those that I represent, who were 90-percent opposed to the Panama Canal Treaties, were told that we were illinformed and not fully advised. It could be that these millions of Americans who opposed these treaties from the outset may be proved to be correct.

Chairman Murphy is out of the country on official business but let me please read his statement, which is brief, at this time.

This is the statement of the Honorable John Murphy, chairman of the Committee on Merchant Marines and Fisheries.

In recent weeks, there have been a number of incidents of gun smuggling at points on the Gulf of Mexico from Florida to Texas. The object of the smuggling has been to supply the means for the Sandinista Liberation Front, which is seeking the violent overthrow of the duly elected Government of Nicaragua, to accomplish just that. I will repeat that sentence from Chairman Murphy. The object of the smuggling has been to supply the means for the Sandinista Liberation Front, which is seeking the violent overthrow of the duly elected Government of Nicaragua, to accomplish just that. There is no question that the Communist Government of Cuba and its Communist surrogates in Panama and Venezuela are involved in this gun smuggling.

The gravity of this matter is apparent to all. First, it is a threat to the peace and stability of Central America. The United States cannot and should not tolerate the use of armed force to subvert Nicaragua's constitutional processes for electoral change. Violence will only breed further violence and lead to instability and chaos in the Caribbean.

Second, this matter raises a serious question about the future intentions of the Panamanian Government in Central America. Does Panama respect the constitutional processes of its neighbors? Does it endorse the principle of peaceful change?

Until now, the public evidence of gun smuggling to the Sandinista National Liberation Front has been scattered-media reports nd the like. There have been random indictments of Panamanian nationals by the Federal Government. And there have been, of necessity, only fragmentary news stories. The purpose of this hearing today and tomorrow is to collect all the evidence so that it may be intelligently assessed by the Members of Congress, who are now involved in enacting legislation to implement the Panama Canal treaties, and by the press, which is charged with informing the American public, and, ultimately, by the public itself.

The purpose of this hearing is neither to delay nor to derail the Panama Canal Treaty implementing legislation. And I will repeat that. The purpose of this hearing is neither to delay nor to derail the Panama Canal Treaty implementing legislation. I remain committed to the concept that the Congress must now enact legislation that will honor our Nation's execution of the Panama Canal Treaty, insure the efficient and neutral management of the canal in the years ahead, insure the future protection of the canal, and deal fairly with the many Americans who have devoted their careers to the operation of the canal or the management of the Canal Zone.

H.R. 111 was carefully designed to honor my commitment to implementing legislation and to achieve a proper degree of balance in meeting the various concerns of our Nation raised by the Panama Canal Treaty. The evidence that this hearing will bring out may require some modification of H.R. 111. But I think the basic principles behind this bill still remain sound. It is my urgent hope that after the Members of Congress have had a chance to study and assess today's evidence, they will turn back to the vital task of enacting legislation to implement the Panama Canal Treaty.

And in view of what the evidence will show during these hearings, I would hope that the President of the United States would let our treaty partner, the Government of Panama, know that this Nation will not permit their continued participation in fomenting revolution in Latin America.

There is more to come and more to be said, but we will break at this point, and Brandon Grove, Deputy Assistant Secretary for Inter-American Affairs, Department of State, will not be testifying today, but we will be hearing instead from Mr. Brian Atwood. Mr. Brian Atwood is Deputy Assistant Secretary for Congressional Affairs, Department of State, and Mr. William B. Robinson, Director, Office of Munitions Control, also from the Department of State.

Mr. Atwood, we will hear from you, and then Mr. Robinson and then perhaps Mr. Bryant. STATEMENT OF J. BRIAN ATWOOD, DEPUTY ASSISTANT SECRE

TARY FOR INTER-AMERICAN AFFAIRS, DEPARTMENT OF STATE, ACCOMPANIED BY WILLIAM B. ROBINSON, DIRECTOR, OFFICE OF MUNITIONS CONTROL, DEPARTMENT OF STATE, AND CLYDE G. BRYANT, JR., CHIEF, SUPPORT SERVICES DI. VISION, OFFICE OF MUNITIONS CONTROL, DEPARTMENT OF STATE

Mr. ATWOOD. Mr. Chairman, I have a prepared statement. Mr. Robinson and Mr. Bryant are here to respond to questions.

Mr. HUBBARD. What is Mr. Bryant's first name?
Mr. ATWOOD. Clyde.

Mr. HUBBARD. We will try to return in about 10 minutes or less. The subcommittee will now stand in recess.

[Short recess.)

Mr. HUBBARD. Having been interrupted by the rollcall vote, we now resume this hearing by calling on Mr. Brian Atwood, Deputy Assistant Secretary for Congressional Relations.

Mr. Atwood?

Mr. ATWOOD. Thank you very much, Mr. Chairman. I appreciate the opportunity to present a very brief statement on behalf of the administration.

I cannot resist a comment that if this were a court of law, I might have to challenge one or two of the judges. It seems that many of you have made up your minds. I think you will find over the next few days that these issues are very, very complicated, and that conclusions are difficult to arrive at.

First, we in the administration are deeply concerned about the situation in Nicaragua. Indeed, we are confronted with a very dangerous situation in the entire Central American region. As you know, the United States has good relations with a large number of countries in Latin America. The policies of these countries on the Nicaragua situation vary considerably. In fact, many of our close friends, many of the democracies in that area, agree with Panama in its policy toward Nicaragua.

But let me address some of the points made by you, Mr. Chairman, and Mr. Bauman, earlier, by emphasizing very strongly on behalf of the administration that nothing could diminish our influence in that crucial area of the world more than defeating the Panama Canal implementing legislation or encumbering it with amendments which violate the treaties.

Nothing could strengthen the hand of our adversaries-Cuba and the Soviet Union-more than forcing the United States to go back on its treaty obligation to Panama. And nothing could be more adverse to our own interests than creating the conditions which would cause the closing of the Panama Canal.

I have had an opportunity this week to discuss this matter briefly with Chairman Murphy, and he agrees, as he has indicated in the statement he has issued, that the implementing legislation should be considered on its own merits.

For these and other reasons the matters you will examine over the next 2 days are extremely delicate. I am confident that this subcommittee will work with the administration to conduct these proceedings on the basis of fairness, keeping in mind legal and national security considerations.

We have cooperated fully with your staff in preparing for this hearing on very short notice. We have advised the staff that we cannot discuss certain information relating to active criminal and civil proceedings. You have asked to discuss some cases which are being investigated actively or for which indictments have already been issued. I am sure that you will agree that indicted individuals—whether they be American, Panamanian, Nicaraguan, or whatever nationality-should not go scot free because of pretrial publicity. I sincerely hope that the administration's inability to discuss these matters will not subject our witnesses to charges that we are trying to deny this subcommittee information.

We have also advised the staff that we cannot participate in any effort to damage our relations with a friendly government. In this regard, certain information which may or may not be relevant to your inquiry, must be classified for diplomatic or intelligence reasons relating to our national security. We obviously will not discuss this type of information in public. I am confident that subcommittee members understand these restrictions. Our witnesses would not want to be put into the position of having to confirm or deny information members of this subcommittee have received in classified briefings.

Finally, Mr. Chairman, I would like to make a comment on the practice of permitting a foreign government to present evidence against the nationals of another government before a committee of Congress Working in the Office of Congressional Relations and having worked on the Hill for 6 years, I am a strong advocate of congressional prerogatives, but this procedure seems to me to be terribly awkward from a legal and foreign policy perspective. I would point out that there are international organizations, such as

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