Interview of Captain Kenneth P. Pucket by William Norman Grigg 

Captain Kenneth P. Puckett, U.S. Army chief warrant officer (Ret.), was a senior Panama Canal pilot and served as port captain of the Panama Canal from 1994 to 1996. As port captain, he was responsible for managing all of the Canal’s operations on a 24-hour-a-day basis. He served two and a half tours of duty in Vietnam as a vessel master and harbor master for the Army, and served similar duty in Army ports in Okinawa, Japan, and Pusan, Korea.

In December 1999, shortly before the Panama Canal was turned over to nominal Panamanian control, Captain Puckett was called upon to testify before the House Committee on Banking and Financial Services regarding the future of Canal operations. “Whoever operates the Panama Canal controls [an important] Utility and holds the switch that ultimately regulates world commerce,” warned Captain Puckett. “The big question is, after December 31, 1999, who will assume the responsibility to insure the switch remains open?” This question is more important than ever now that Hutchison Whampoa, a Hong Kong-based company closely tied to Beijing, now operates the Canal’s “anchor ports.” Hutchison is a partner with the notorious China Ocean Shipping Company (COSCO), the merchant marine of the Chinese People’s Liberation Army (PLA).

Hutchison’s owner, billionaire Li Ka-shing, is a director of the China International Trust and Investment Corporation (CITIC), a ministry-level conglomerate established by the Chinese government to promote foreign investment in China. According to biographer Anthony B. Chan, Li has displayed “unfailing loyalty” to Beijing, which began its courtship of Li in 1977. Li served as a member of Hong Kong’s Preparatory Committee, which set the stage for Beijing’s absorption of the island in July 1997.

Captain Puckett, who spoke with Hutchison officials during a 2000 visit to Panama, warns that China is consolidating its hold on the Canal Zone as part of a strategy of “commercial encirclement” of the United States within our own hemisphere. This spring he will be featured in a nationwide tour sponsored by The John Birch Society Speakers Bureau, on the subject “In Enemy Hands: The Panama Crisis.”

Q. Why do you refer to the state of affairs in the Canal Zone as a “crisis”?

A. Because the Canal, an irreplaceable commercial and strategic asset, has fallen under the influence of a professed enemy power that is rapidly becoming the dominant power in the Canal Zone. Many supposed experts scoff at the idea that Red China poses a strategic threat to our nation. But Beijing, through commercial fronts, is consolidating control over the Canal, which would offer them vital strategic leverage in this hemisphere.

Many have commented about the crucial military role played by the Canal in supporting our forward-deployed forces. However, there are strategic implications to the Canal’s commercial use as well. Every year, more than 190 million tons of cargo pass through the Canal; grain exports from the American Midwest to the Far East alone account for 23 percent of all traffic through the Canal. Imagine what would happen to our current transportation system if the Canal were shut down and even a portion of its current traffic had to be routed across the continental United States. The gridlock would virtually shut down our harbors, highways, and railroads.

Because of its commercial importance, the Canal has always been an inviting target for terrorists. Prior to the Canal handover on January 1, 2000, the U.S. Southern Command had the responsibility to deal with potential terrorist threats and to handle any negotiations that might be necessary. However, now that the U.S. military has been evicted from the Canal Zone, a security vacuum has developed. The Panamanian Guardia Nacional [national guard] is poorly armed, under-trained, and ill-equipped to deal with such contingencies. In fact, Panama’s borders are essentially open now, because the country hasn’t got the means to patrol them. I don’t mean to denigrate the Panamanians, because they are for the most part good, competent people. But the fact remains that right now Panama can’t protect its borders or the Canal Zone, and we’re no longer there to do so, either. So there is a real and growing possibility of a terrorist attack on the Canal from the FARC [the Colombian Marxist narco-traffickers] or another radical group.

Q. Who would be in charge of dealing with a terrorist incident in the Canal Zone?

A. According to my contacts in the military, in the event of a terrorist strike against the Canal we would have to request that the United Nations intervene. Another possibility is that Red China, which has a permanent seat on the Security Council and a large and growing presence in the Canal Zone, would request UN intervention to protect its assets and nationals in the region. According to the best estimates I’ve seen, there are between 85,000 and 110,000 Red Chinese nationals in Panama, and Beijing has invested $55 billion in Panama — much of it through Hutchison Whampoa and similar entities. So if a terrorist strike were to occur, Beijing might call for UN mediation of the conflict. And since the Carter-Torrijos treaties require that the U.S. protect the “neutrality” of the Canal, that requirement could be used to support such a role for the UN, which would be to the benefit of both the UN and Beijing, but would obviously be damaging to our own national interests.

This is one of the really dangerous implications of the Carter-Torrijos treaties, which require that we defend the “neutrality” of the Canal.

Q. Several years ago, many Americans became alarmed by the Clinton administration’s attempt to arrange the lease of the former Long Beach Naval Yards to COSCO, the China Ocean Shipping Company. Defenders of this proposal, including Navy Secretary John Dalton, insisted that COSCO was just a large commercial container shipping fleet. How would you describe that operation?

A. COSCO is a commercial shipping fleet owned by the Red Chinese government. But it is also the merchant marine of the People’s Liberation Army. Even if it were only involved in container shipping, there would be cause for alarm, given the priority treatment COSCO vessels will receive at the Panama Canal and the fact that we have no way of inspecting the contents of those vessels. COSCO vessels have been found to be involved in drug smuggling, arms smuggling, and other illicit activities. The large shipping containers found on COSCO vessels can hold up to 26 tons of cargo; they’re about the size of tractor trailers. Some of the bigger ships can hold 4,000 containers this size.

But the most important fact to remember is that COSCO is regarded by the PLA as a military asset; in fact, the PLA’s literature refers to COSCO vessels as zhanjian, or “warships.” COSCO has more than 600 merchant ships in its fleet, which is larger than the U.S. merchant marine during World War II. We presently have between 185-235 commercial shipping vessels available for merchant marine duty, despite the fact that we need a 600-ship merchant fleet as well.

Q. Why can’t we find out what is being transported aboard COSCO vessels? What potential dangers might they represent?

A. When we ceded control over the Panama Canal we shut down the Industrial Security Office [ISO]. They did a pretty impressive job of learning what was being taken through the Canal. But with the end of the ISO and the removal of our intelligence assets, there is literally no way of knowing what’s being hauled through the Canal. The dangers here aren’t limited to potential problems of smuggling. Some large freighters carry cargoes of volatile, toxic, or otherwise dangerous substances. Any one of these would be a target of opportunity for a terrorist attack.

In fact, back in the 1980s the U.S. military ran a training exercise in which terrorists hijacked a cargo vessel carrying a load of liquefied petroleum gas (LPG), and threatened to blow it up unless a number of Colombian drug traffickers were released from prison. In the exercise it was estimated that blowing up an LPG cargo of that size would create an explosion about the size of a small nuclear bomb. This nightmare scenario remains a possibility, especially in light of the fact that we no longer have the ISO available to collect information. And, as I already mentioned, in the event of a terrorist strike, we would probably have to call in the UN to handle it.

Q. Admiral Thomas H. Moorer, former Chairman of the Joint Chiefs of Staff, has expressed concerns that Panama might become a Chinese missile base. Is there any substance to this concern?

A. This question illustrates one way in which Beijing has used its commercial strategy to overcome its present military and technological disadvantages. While it may be true that Red China’s missiles are not as reliable as ours — despite Beijing’s investment in buying a president who was willing to help them obtain more reliable missiles — COSCO’s cargo vessels are a very reliable delivery system. Even if we were to assume, which we shouldn’t, that Beijing’s missiles might not be accurate when launched from China, they couldn’t miss from Panama. They could ship a missile and launcher in a COSCO vessel, anchor the ship in Lake Gatun, open up a cargo container, and have a ready-made launch platform. There’s your missile base. And, once again, we no longer have the ability to collect information on what’s going through the Canal.

Q. You’ve used the term “commercial encirclement” to describe the way in which Hutchison/COSCO assets have been planted in the Western Hemisphere. What does this expression mean?

A. Once it is understood that COSCO is a military asset, not just a commercial shipping fleet, then the map of its North and Central American holdings tells the story. As far back as 1919, Vladimir Lenin’s Bolsheviks demanded that “all straits leading into inland seas, as well as the Suez and Panama Canals, are to be neutralized” — and, remember, the treaty under which we ceded control of the Canal specifies that we are committed to maintaining the Canal’s “neutrality.” The long-term strategy described by Lenin called for the Communists to expand into eastern Europe, and then to conquer the masses of Asia, and then to bring about the encirclement of the United States itself.

Because of its trade surpluses, which are largely a reflection of a slave labor-based economy, Beijing has a lot of money to invest, and business interests all across north America are literally falling over each other trying to strike deals with Hutchison. The deal that Hutchison was able to strike to get the Panama Canal’s anchor ports was greased with bribes.

When I was in Panama last year, I had the chance to talk to the Panamanian finance minister, a brilliant and very capable young man. When one member of our entourage challenged him about Panama’s willingness to deal with Beijing, this young man made an excellent point. He reminded us that our own Congress never failed to extend Most Favored Nation status to Beijing, and that it was a little hypocritical of the U.S. to criticize Panama for dealing with the Red Chinese when our own political and corporate leaders do the same thing.

Q. What, if anything, can Americans do to address the Panama crisis?

A. The first thing they can do is recognize that we’re dealing not just with the actions of a hostile foreign power, but also with betrayal from within — as the Panamanian finance minister pointed out. So informed Americans need to inform their friends and neighbors, and get organized to hold our political leaders accountable. This is why I joined the John Birch Society, became a chapter leader, and agreed to do a speaking tour on this subject.

The Carter-Torrijos treaties under which we surrendered control of the Canal are entirely invalid, since there were two versions of the agreement in question. We can nullify those treaties through a simple act of Congress — assuming, of course, that a sufficient number of informed citizens pressure Congress into taking this action. Once this is done we will have to approach the Panamanians and negotiate a new arrangement for the operation and protection of the Canal. During my recent visit I came away with the impression that the Panamanians — those who understand the situation — want the U.S. back. So there is some reason for optimism here. But given the moves by Beijing to consolidate its power in the area, we had better move quickly.

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