-Caveat Lector- Insight Magazine May 1999 Timothy W. Maier The Chinese Ocean Shipping Co.'s bid to operate from the Long Beach Naval Station foundered amid controversy, but the City of Angels now is eager to make a similar deal. They're back. The China Ocean Shipping Co., or COSCO, the merchant marine for the People's Liberation Army, or PLA, has returned with a vengeance. It didn't set well with COSCO when it lost out on the former U.S. Navy base in Long Beach, Calif., last year because an alerted Congress tucked legislation into an appropriations bill prohibiting such a takeover. . . . . But Beijing now may have an opportunity to slip through the back door while Congress is focused on the Kosovo crisis. COSCO's checkered past includes smuggling heroin and AK-47 assault rifles into the United States and delivering arms worldwide for the PLA, but it has not given up hope of securing a U.S. mainland facility for its shipping and/or espionage operations. Insight has learned that COSCO could end up with its port, anyway, once another company takes over the old Long Beach Naval Station and port facility. . . . . If that fails, COSCO has set its sights on a base in Los Angeles, which is only too eager to do business with the comrades. Supporters of COSCO -- such as "honorary adviser" and former secretary of state Al Haig and a host of Long Beach and Los Angeles officials -- claim it is no threat, noting it has been operating in the port for 15 years, sharing facilities as it has done in New York and Miami. . . . . But COSCO doesn't have its own port, with its own armed security and potential base for espionage, which is a major difference to concerned U.S. intelligence experts who long have warned that allowing COSCO to operate its own port on U.S. soil could create a national-security nightmare. . . . . Sen. James M. Inhofe, an Oklahoma Republican, has described the PLA's shipping arm this way: "COSCO is not a benign private commercial enterprise. It is a wholly owned subsidiary of China's People's Liberation Army. It serves as the merchant marine of the Chinese military, and there is every reason to believe it will do their bidding in terms of smuggling, intelligence-gathering and weapons shipments. Considering China's long-term ambitions for superpower status in the next century, it would be foolish for America to surrender control of a strategically located West Coast port to an arm of the Chinese military." . . . . Just how foolish? Here's a snapshot of COSCO's history of activity in U.S. ports. In 1992 the U.S. Federal Maritime Commission fined COSCO $400,000 for paying kickbacks. In 1993 a COSCO ship was caught transporting 87 pounds of heroin. In 1996, a Justice Department sting operation exposed an attempt to sell 2,000 AK-47s to California street gangs, with the promise of delivering missiles to knock a 747 airliner out of the sky. . . . . Concern about this pattern of behavior last year prompted Inhofe and California Republican Rep. Duncan Hunter to use an appropriations bill to prohibit COSCO from seizing the Long Beach Naval Port. But this did nothing to prevent COSCO from taking over a civilian port or even negotiating a port deal with Los Angeles. Speculators are only too glad to work out a land swap. Informed of COSCO's latest plan, Hunter tells Insight, "I'm going to write a letter to the secretary of the Navy and tell him such a land-swap deal using the Navy base as trade bait for an alternative location for COSCO is an attempt to circumvent Congress' intent." . . . . Hunter says he also plans to introduce legislation calling for a "comprehensive ban on shipping companies guilty of illicit arms transfers, as COSCO is, from having access to American ports." He adds: "It's sad to see commercial greed has outbalanced legitimate security interests." . . . . As of now, COSCO is subleasing port facilities in the Long Beach area and in several other parts of the country. But it wants its own secure port operation. Surprised that Beijing is planning to go ahead, Hunter and Inhofe will have to move fast to stop the Chinese military's merchant shipper from securing a permanent U.S. base. Inhofe's spokesman, Gary Hoitsma, says issues associated with the war in Kosovo have been taking up most of their time, but they will take a hard look at COSCO to see what sort of legislation would have to be passed to prevent it from landing a port in a heavy high-tech and defense area. . . . . President Clinton has no plans to thwart this Communist China priority. In fact, the Clinton administration has done just the opposite. At the very time the Justice Department launched its biggest espionage case since the Rosenbergs, concerning allegations that nuclear secrets were stolen by Beijing from the Los Alamos National Laboratory, Clinton was paving the way for COSCO to take over the port at Long Beach. Even as it denied payments had been made by the government of China to the Clinton/Gore campaign fund and other Democratic Party causes, the White House pressured preservation officials in the Navy, State Department and local government to abandon efforts to preserve the historic buildings at the naval station. . . . . In 1997, the New York Times raised questions concerning why a "Clinton-administration official made what several people involved describe as highly unusual telephone calls to push for construction of a container terminal that would be leased to a shipping company owned by the Chinese government." . . . . But why would Clinton have a personal interest in COSCO? That was never fully understood -- until now. Enter Johnny Chung, friend of the president. Chung was sentenced to five years probation after pleading guilty to charges relating to illegal campaign monies received from the PLA. He now is cooperating with the Justice probe dealing with Chinagate. Chung's claim that Beijing dumped $366,000 into the Democratic fund-raising activities is explosive, and the timing of the donations certainly is suspicious. . . . . In 1995, while the National Security Council staff was starting to worry about Chung portraying himself as being sanctioned by Clinton to negotiate the release of human-rights activist Harry Wu from a Chinese gulag, Chung set up meetings with then-Democratic National Committee, or DNC, chairman Don Fowler. They met March 9, 1995, at about the same time Chung was providing Hillary Clinton's top aide, Margaret Williams, with a $50,000 political donation. . . . . After the DNC meeting, Fowler arranged for Chung and his COSCO friends to attend a Clinton radio address. Chung and six Chinese "business executives" listened to the radio address and, shortly afterward, Chung dropped $50,000 to the DNC. . . . . During the next two years, Chung incorporated seven companies with investors from China. Federal Election Commission records show several of his largest political donations were made as he created shell corporations. . . . . As the money rolled in, the White House aggressively began to pursue COSCO's project, finding itself in the "unusual" role of making telephone calls to Long Beach officials. Chung began dropping money to the DNC in 1994, the very year the Clinton administration closed the base. By March 1995 Chung is dropping big bucks --$50,000 a pop -- and the Marines suddenly found themselves evicted from Long Beach Naval Station. Soon the White House was pressuring Long Beach to cut a deal with COSCO, with Dorothy Robyn, a member of the Economic Council, calling local preservation officials to discourage efforts to save buildings at the base and allow them to be razed quickly. At the same time federal institutions interested in using the base, such as the Marines and the Federal Maritime Commission, were turned away because Clinton wanted to give it to Long Beach with the understanding it would be handed to the Chinese. . . . . "It's very clear that the money that Chung gave from the Chinese had influence in corrupting the entire base-closure process," says Richard Fine, a citizens' advocate who sued Long Beach to force creation of a commercial museum, arguing it doesn't make economic sense to turn the Navy port into a container yard. "The White House gets real active once the money comes in. The only thing missing in this story is the White House quote: 'Johnny Chung is here with $366,000 and we'd like your help with COSCO.' The timing chronology is too perfect. Chung gives money and the White House comes calling. That tells you the U.S. government is the cheapest government to buy." . . . . Fine lost his case when the court ruled he had no standing to sue, but he appealed. He argued that turning the naval station into a port would result in $569.7 million of waste, create fewer jobs than would the museum, destroy the local ecology and demolish the historical buildings built by famous black architect Paul Williams. Fine claimed it would take some 75 years for the port to recoup its investment loss on the proposed deal and 52 years to pay back the principal on the money that would be borrowed to build new port facilities. . . . . If Fine wins his appeal, it simply means COSCO will be more aggressively courted by Los Angeles. . . . . For now, the former naval station is gone and so are the historical buildings, says Bill Hillburg, a reporter with the Long Beach Telegram, who has followed the case. While some activists are trying to get on the ballot to rebuild all those historical buildings, it's unlikely that will happen -- just as it is unlikely that COSCO will be stopped from operating a U.S. port. The bottom line, Hillburg says, is that "COSCO will be in Long Beach or Los Angeles." . . . . Unless Congress stops it, the PLA will hit the beach on U.S. soil with a facility so large and protected that it will be impossible for U.S. Customs to monitor the contents of the huge cargo containers moving in and out from China or the possible clandestine activities that such a base would afford the People's Liberation Army. U.S. -> Send "subscribe snetnews " to [EMAIL PROTECTED] -> Posted by: Bob Bartch <[EMAIL PROTECTED]> DECLARATION & DISCLAIMER ========== CTRL is a discussion and informational exchange list. 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