Howard and Peggy Phillips

(in behalf of our children and grandchildren:

December 17, 1999

I am just back from three days in Panama and have some good news for you.

TCC is making real progress on our strategy to get Red China out of Panama and the United States back in.

Larry Klayman, the founder of Judicial Watch, and I had a series of meetings in Panama earlier this week which convinced me that we have a fighting chance to cancel the contract which gave Hutchison Whampoa control of the two ports, Balboa and Cristobal, at the Pacific and Atlantic sides of the Panama Canal.

I am also encouraged by the strong support Larry and I found in Panama among the general populace, and within the government as well, for the restoration of a U.S. military presence to deter and defeat any terrorist attack on the canal.

While in Panama during the week of the "official" Panama Canal surrender ceremonies, Larry and I met with a ranking member of the cabinet of Mrs. Mireya Moscoso (the new President of Panama), with the chairman of a key legislative committee in the Panamanian assembly, with a prominent member of the Panamanian judiciary, as well as with influential private citizens.

It is important that we received preliminary assent to our request that hearings be held in the Panamanian legislature reviewing the award of the contract to Hutchison Whampoa and law Number Five (which gives Hutchison Whampoa extraordinary rights seemingly in conflict with provisions of the Carter-Torrijos treaties of 1977).

Moreover, we received the support of a prominent member of the judiciary for our plan to file suit challenging the corruptly concluded contract favoring Hutchison Whampoa and we now look forward to working closely with that prominent Panamanian jurist during the months ahead.

Most encouraging of all was my meeting with a member of Mrs. Moscoso's cabinet (a man whose identity cannot be revealed at this time). This gentleman is a person of extraordinary character, integrity, and wisdom who understands that it is in the mutual interest of both Panama and the United States to have American military assistance in preventing anything which might threaten the canal --- the continued operation of which is as important to Panama as it is to the United States.

This gentleman is also fully aware of the bribery and corruption involved in the decision of the previous Panamanian government to award the Balboa-Cristobal contract to a company closely linked to the government of Communist China and its People's Liberation Army.

While in Panama, I spoke extensively with representatives of the media and was able to deliver our message in the United States via CBS TV, Reuters, The New York Times, and the Atlanta Journal and Constitution.

I also was interviewed by a foreign television broadcast service, using this opportunity to point out that "an ounce of prevention is worth a pound of cure" and that overwhelming majorities of both the Panamanian and American people want to see a restoration of the U.S. military presence in Panama.

The Communist Chinese threat to U.S. vital interests in Panama is real, especially with Hutchison Whampoa's control of huge, sealed shipping containers.

The hard reality is that the China-linked company which controls the ports will know what is in the containers --- and we will not.

There is nothing to prevent hostile forces from filling those containers with tanks, aircraft, helicopters, missiles, drugs, or human cargo.

Panama is a nation without an army of its own, besieged by a developing threat on its border with Colombia, where Castro-backed narcoterrorists control some 40 percent of Colombia's territory and are moving at will across the border with Panama.

The return of Communist influence in Latin America is not just a long-term problem for the United States --- it must be addressed now.

Red China and Fidel Castro are working closely with Hugo Chavez, the Communist-trained and -allied President of Venezuela, on which the United States depends heavily for our oil supplies.

There is still strong Communist influence in El Salvador, Nicaragua, and other Central American countries, and the Communist Chinese have established a listening post in Cuba.

Also a matter of concern is Hutchison Whampoa having been awarded a portion of Telfert Island, from which it is possible to interfere with canal shipping and to gather essential intelligence.

The United States, which once had 65,000 troops in Panama, has, at this writing, only 12 military personnel on the ground. We have surrendered our intelligence assets at Galeta Island and Quarry Heights --- and our human intelligence capabilities are virtually nil.

By contrast, Red China is increasingly influential in the Panamanian economy, controlling well over 20 percent of the trade at the tax-free Colon Free Zone, and acquiring dominant influence over Panamanian banks and corporations.

Two developments during my visit to Panama were disturbing and ought not be forgotten.

Former U.S. President Jimmy Carter was designated by Clinton to be the instrument of formalizing the surrender of the canal to Panama. Mr. Carter, in his most sniveling, self-righteous manner, used the occasion to criticize his own country and characterized those who disagreed with his policy of surrendering the U.S. Canal and Zone at Panama as "demagogues".

In his self-glorifying remarks, Carter lamented the political price which had been paid by those members of the U.S. Senate who supported the Carter-Torrijos surrender treaties, observing that, of 20 U.S. Senators who supported the treaties who were up for re-election in 1980, thirteen were denied reelection.

That brought a smile to my lips --- remembering the key role which I and members of The Conservative Caucus had been able to play in bringing about the 1980 defeats of such pro-treaty Senators as Herman Talmadge (Georgia), Frank Church (Idaho), Birch Bayh (Indiana), John Culver (Iowa), John Durkin (N.H.), Jacob Javits (N.Y.), Robert Morgan (N.C.), George McGovern (South Dakota), Warren Magnuson (Washington) and Gaylord Nelson (Wisconsin), all of whom succumbed to political pressure to set aside the wishes of their constituents and the just rights of their country in a decision which will live in infamy as long as there is a United States of America.

Alongside Mr. Carter during his visit to Panama were the infamous David Rockefeller and Sol Linowitz, whose financial stake in betraying America's control of the canal helped drive their side of the debate in the American media during the 1970s.

Rockefeller, of course, was the head of the Chase Manhattan Bank and Linowitz headed the Marine Midland Bank --- both of which operated on the belief that, if the government of Panama received the tolls from the canal traffic instead of the United States, they would be more likely to receive payment on the bad loans which their banks had made to Panama.

Another dark spot on the day's events were the remarks by the new Foreign Minister of Panama, Jose Miguel Aleman, who characterized California Congressman Dana Rohrabacher as "mentally deranged" because of his criticism of Communist Chinese government connections of Hutchison Whampoa.

Congressman Rohrabacher has, in fact, behaved heroically in this matter and, as a result of his leadership, some 82 members of Congress have now joined with us in advancing our strategy to cancel the Hutchison Whampoa contract and return U.S. forces to Panama.

In a nutshell, the battle continues to rage. It isn't over. We are going to stay the course, in the future as we have in the past, until we have achieved victory.

None of what we do would be possible without your support.

The advertisements we have sponsored in leading conservative publications, the travel we have underwritten, for witnesses before committees of Congress, and for visits to Panama by American journalists and Congressmen are expensive.

It is going to be necessary for us to do a great deal more commuting between America and Panama, more advertising, and more grass-roots lobbying. Ongoing research and education expenses will be involved as well.

I am profoundly grateful for your support and for your confidence. I believe we are showing results.

But we cannot continue without your continued assistance.

I pray that, after reading this letter and the enclosures which accompany it, you will decide to send by return mail the most generous possible contribution to support the work of The Conservative Caucus.

MY SINCERE BEST WISHES GO OUT TO YOU AND YOUR FAMILY FOR A BLESSED CHRISTMAS AND A SAFE, HEALTHY, AND PROSPEROUS NEW YEAR.

I thank God for your friendship and for the many blessings he has bestowed on me, my family, and on all those who work with me at The Conservative Caucus and The Conservative Caucus Foundation.

Howard Phillips