News
Wednesday 29th January 2025.
January 28, 2025
The United States Senate Committee on Commerce, Science, and Transportation, chaired by Republican Senator Ted Cruz , is holding a hearing on Tuesday, January 28, entitled “Tariffs and Foreign Influence: Examining the Panama Canal and its Impact on U.S. Trade and National Security.”
At the beginning of the hearing, Cruz said that they cannot allow “US shipping companies to be extorted” and “turn a blind eye when Panama is exploiting a strategic route.”
Law professor Euguene Kontorovich said that “if the neutrality regime is violated,” the United States can take “appropriate measures to maintain the neutrality of the Canal.”
He also explained that the Torrijos-Carter Treaty does not contemplate what mechanisms should be taken in the event that the United States or Panama decided that one of the parties had violated the agreements.
Regarding the ports managed by Chinese companies near the Canal, Kontorovich said that if those tenders were acquired by the Chinese government through bribes to Panamanian officials, that would not represent a violation of the treaties.
Senator Dan Sullivan asked Kontorovich whether it would be a violation of the neutrality regime if, in a hypothetical case, these ports decided to prevent passage through the Canal by order of the Chinese government.
The specialist assured him that he does not know if they would be obliged to follow the orders of the Chinese government, but that they would have “many tools of influence and pressure on these companies” and that because of this, the United States could “act to put an end to the real obstructions of the Canal.”
Daniel Maffei, a Democratic senator and former chairman of the Federal Maritime Commission (FMC), said that Chinese companies operate various ports around the world and that if it is assumed that China has influence over the Panama Canal, it would also have to be assumed that they could have influence over the Suez Canal, the Strait of Singapore, the Mediterranean Sea and the English Channel.
Luis E. Sola , president of the FMC, stressed that critical decisions regarding the interoceanic route depend on the Panama Canal Authority and that this institution has managed it in an “efficient manner.”
During the session, Senator Andy Kim asked Sola if the Hutchinson company really controlled the Canal locks, to which he assured that the ports “are under concessions granted by the Panamanian government. However, they are within the Canal’s operating range.”
According to Sola, the annual loss of approximately 1% to 2% of water puts the sustainability of the interoceanic route at risk, which could reduce its operational capacity by up to 40% by 2050.
In response, Senator Lisa Blunt-Rochester raised the issue of whether the ACP anticipated the impacts of droughts in its strategic planning. In response to the question, Joseph Kramek, president and CEO of the World Shipping Council, said he had “no information on what they (ACP) considered,” but that they have “done the best they can with the information available.”
The star witness at the hearing in Washington on China’s alleged control of the Panama Canal called for sanctions against the newspaper La Prensa and tried to persuade the US State Department to support his family’s private marina project in Amador .
This is Louis Ernest Sola , president of the Federal Maritime Commission (FMC) and father of Carolyn Sola, president and legal representative of Amador Marina, SA , a company that has a direct concession to develop a marina on Flamenco Island , at the entrance to the Canal. Sola was the representative of Amador Marina, SA until 2018, when he was appointed to the FMC during the first term (2017-2021) of President Donald Trump .
At Tuesday’s hearing in the US Senate, Sola defended his private interests and acknowledged that, in 2018, when he was renegotiating the concession in Amador, he asked for help from two senators, who, according to his own account, “resolved” the problem and managed to get Panama to “return” the land to his family. He never specified that it was a direct concession (obtained without a public tender) on land owned by the nation.
Regarding Amador Marina and the federal commissioner’s connections, La Prensa published an investigation entitled Land in Amador ceded to a private marina, without prior bidding , on October 1, 2024.
That same day, Sola, using official FMC stationery, wrote a note to then-Secretary of State Antony Blinken requesting that the U.S. embassy in Panama withdraw any support or statements from La Prensa , which she accuses of violating federal laws on intimidation and threats in commerce, obstructing federal investigations, and harassment, whether virtual or digital. She also requested that the decision to award Annette Planells, president of Corporación La Prensa, S.A. (Corprensa) , the Anti-Corruption Champions Award (in Spanish, the Campeones Anticorrupción prize), in December 2023, be reconsidered.
In that same letter, Sola openly acknowledged what he said on Tuesday before the Senate: that Amador Marina’s project responds to his interests and even mentioned that his daughter Carolyn, who acts as project manager , regularly participates in meetings with representatives of the US embassy and its “Panamanian counterpart.” He alleges that this interference has been “necessary” due to the alleged “harassment” of Panamanian officials, whose name or position he does not specify, except that they are “low-level” personnel.
The maritime commissioner maintains that the concession in Flamenco was “confiscated” during the government of Juan Carlos Varela (2014-2019), which is false. In fact, under Varela’s mandate, the Administrative Unit of Reverted Assets (UABR) awarded Amador Marina the use of 2.7 hectares on the island, for 20 years, renewable.
Regarding Varela, Sola reminded Blinken that he was sanctioned for “significant corruption” by the State Department, a sanction that also fell on another former president, Ricardo Martinelli (2009-2014), during whose mandate Sola supposedly closed an agreement with the Ministry of Security (Minseg) for the use of a piece of land in Flamenco where an air-naval base was originally to be built.
The letter makes no reference to Martinelli or to the naval air base, which was never built. Instead, Sola assured Blinken in the letter that his navy would have been “substantial” in the fight against drugs and accused “neighboring navies,” which, according to his account, are used for the transfer of narcotics.
Sola wrote to Blinken that during the Varela administration, initiatives to combat drug trafficking were abandoned, an attempt was made to build the Chinese embassy in Amador, and all information related to its navy was handed over to a “Chinese competitor.” She does not specify who this “competitor” would be, although she could be referring to the cruise terminal that operates on Perico Island, owned by the Panamanian government, whose construction contract was awarded to the consortium made up of China Harbour Engineering Company (CHEC) and the Belgian Jan De Nul.
The federal commissioner – who never granted an interview to the newspaper, as did his daughter Carolyn, despite calls and attempts – accused La Prensa of publishing “falsehoods” and “inaccuracies” and of “attacking” relatives of US officials, as well as “interfering” in “federal investigations” and promoting Chinese investments in areas sensitive to the national security of their country.
It would not be the first time that Sola has used his federal position to further his private interests.
Last July, during an official FMC mission to Panama, he participated as a “guest” in a meeting of Panama Canal Authority (ACP) officials with representatives of Amador Marina, SA, in which the authority explained its concerns about the scope of the project (which will eventually have a marina for cruise ships) and its compatibility with Canal operations.
During his official visit, Sola was also received by President José Raúl Mulino and the Ministers of Environment, Juan Carlos Navarro, and of Canal Affairs, José Ramón Icaza; the administrator of the ACP, Ricaurte Vásquez, and the administrator of the Panama Maritime Authority (AMP), Luis Roquebert.
All the officials who accompanied the president run entities that issue permits and concessions, such as those requested by Amador Marina.
During the US Senate hearing on the Panama Canal, international law expert Eugene Kontorovich stated that although the United States has the ability to withdraw from the Torrijos-Carter Treaties , which ceded the maritime route to Panama, that would not automatically reverse the transferred sovereignty.
“I think treaties like this demonstrate that countries really need to think carefully before giving up strategic assets,” Kontorovich said.
These statements come after Republican Senator Ted Cruz raised the possibility that a violation of the treaty could lead to its annulment and, consequently, allow the United States to regain control of the Canal.
Cruz also said that the Senate Committee on Commerce, Science and Transportation “has jurisdiction” to examine evidence of possible violations of the Torrijos-Carter Treaties by Panama.
Kontorovich, for his part, noted that “concessions related to sovereign control are not particularly reversible,” citing as an example an agreement between Israel and Lebanon on maritime territory that also does not allow for automatic recovery in the event of non-compliance.
Cruz was emphatic in stating that the fact that Chinese companies manage ports at both ends of the Canal and are building a bridge over it, could allow China to block passage through the maritime route without warning and use the ports as strategic observation points.
“This situation poses acute risks to the national security of the United States,” warned Cruz, who also pointed to the increase in transit fares as another point of friction.
Senators will have until February 4 to submit additional questions to witnesses, who will have until February 18 to respond.
The last two US ambassadors to Panama alerted Washington to the restoration of diplomatic relations with China in 2017, as well as the automatic extension of the Panama Ports Company (PPC) concession in 2021. However, at that time, “the United States did not express significant concerns.”
Both sides believe that Tuesday’s hearing in Washington should have focused on how to encourage American companies to take advantage of investment opportunities, in the face of what they consider to be a “stealthy” commercial expansion by China in Panama.
“At this critical time, we encourage the leadership of the United States Senate Commerce Committee to work with the Trump administration to better incentivize American technology, infrastructure, and construction companies to take advantage of Panama’s multiple requests for foreign direct investment in its infrastructure needs, both at the Canal and throughout the country,” said former ambassadors John D. Feeley and Mari Carmen Aponte , in a letter addressed this Monday, January 27, to Senator María Cantwell , Democratic leader in the United States Senate Committee on Commerce, Science, and Transportation, where the hearing on China’s possible influence on Canal operations was held on January 28, 2025.
“None of us see a plausible near-term Chinese naval threat to the Canal, nor can the Hutchinson-operated ports block or sabotage Canal operations any more than the other three ports on the Canal, which are operated respectively by a US, a Singaporean and a Taiwanese company,” they noted.
Feeley and Aponte say the Panama Canal Authority (ACP) is not subject to the authority of the Panamanian government and has managed the waterway “in a neutral and professional manner” for the benefit of its main user: the United States. Seventy-two percent of goods going to or from U.S. markets transit through it. In addition, the construction of a third set of locks, completed in 2016, offered U.S. producers of liquefied natural gas a new commercial route to sell their product to Asian markets aboard post-Panamax-sized ships, “vessels that had not even been designed or built when the [Torrijos-Carter] treaties of 1977 were signed.”
“If an American citizen purchased a Chinese-made iPhone or a big-screen TV in the last decade, it was likely shipped most cost-effectively through the Panama Canal,” Feeley and Aponte argue in their letter to the senator.
The former ambassadors assure that there are no violations of the Neutrality Treaty and that the relationship with Panama is close, particularly with regard to the defense of the Canal.
“The United States Southern Command (SouthCom), the United States Coast Guard, the Department of Homeland Security, the Department of Defense, the Army Corps of Engineers, and multiple agencies of the United States intelligence community have a continuous presence in Panama and routinely participate, under the coordination of the United States Embassy in Panama, in exercises, training of Panamanian counterparts, and participation with the private sector in international maritime transportation consortia. This is done to ensure that terrorists, organized crime syndicates, or malign nation-states do not exploit or endanger the Canal,” they noted.
They recalled what happened on July 10, 2013, when the transit of the North Korean ship Chong Chong Gang , which was carrying weapons hidden under tons of sugar, was interrupted. At that time, Feeley, from his position in the State Department as Security Coordinator for the Western Hemisphere, coordinated the interception of the ship. “This example of coordination and cooperation between Panama and the United States government is emblematic of how we protect the Canal under the Neutrality Treaty,” the former ambassadors maintain in their letter.
Feeley and Aponte said that Panama “is the most pro-American country in Latin America” and that President José Raúl Mulino is already cooperating with the United States “to an unprecedented degree,” allowing deportation flights to return irregular migrants who cross the Darién.
“Seeking even deeper cooperation now on trade, migration and national security interests with Panama is, in our view, effectively pushing an open door,” they said, adding that an alliance of pre-certified private service providers from the United States could be a fast track to securing bids on needed Panamanian infrastructure.
The Third Administrative Litigation Chamber of the Supreme Court of Justice admitted the nullity claim filed by former anti-corruption prosecutors Adecio Mojica and Zuleyka Moore against the resolutions issued by former attorney general Javier Caraballo in June 2024 through which he ordered their dismissal as prosecutors of the Public Ministry (MP).
Through edicts No. 90 and 91, posted on January 14, 2025 and under the report of Judge María Cristina Chen Stanziola, the parties are informed of the admission of the complaint and the beginning of the phase of presentation of evidence on the legality or not of the action undertaken by the MP.
The appeals filed by both prosecutors seek to annul resolutions No. 1640 of June 27, 2024 and No. 1644 of June 28, 2024, by which Caraballo removed them from office, arguing that they were not career officials, so their positions were freely appointed and removed.
However, both Moore and Mojica have pointed out that Caraballo’s action violated Article 384 of the Judicial Code , which also states that “Public Prosecutor’s agents may not be suspended from the exercise of their functions except in the cases and with the formalities determined by law, nor may they be dismissed except by virtue of a sentence for a crime or for a serious breach of judicial ethics.”
The Third Chamber sent a letter to the MP to send to that judicial body a complete and authenticated copy of the personal file of Moore and Mojica.
The MP is also asked to establish whether the positions occupied by both former prosecutors were open to competition and for the Human Resources Department to report how many positions were open to competition from 2012 to this date in that entity.
Both Moore and Mojica were part of the team that investigated the bribes that Odebrecht distributed to Panamanian officials . Moore was also in charge of investigating the alleged embezzlement in the purchase of nine radars from the Italian company Selex, a subsidiary of the Finmeccanica group, in which the former Minister of Public Security and current president, José Raúl Mulino , was linked .
Caraballo had already removed them from the front line. When he took over as acting prosecutor in March 2021, he made several moves and rotations among the prosecutors; he even sent them on vacation.
Mojica was the primary care prosecutor in Chiriquí, while Moore was assigned to the Regional Prosecutor’s Office in Bocas del Toro.
Moore and Mojica were dismissed by former attorney general Javier Caraballo in June 2024, which led to a series of criticisms from civil society organizations, who claimed that it could be a settling of scores for having handled cases related to a figure from the new government.
Following the dismissal of Moore and Mojica, other anti-corruption prosecutors who were in charge of high-profile cases decided to leave the MP, such as Aurelio Vásquez , who was in charge of the investigation of the Blue Apple case .
Similarly, prosecutor Ricaurte González resigned from the MP, after having participated in the trial of former president Ricardo Martinelli in the case of wiretapping .
In the case of prosecutor Tania Sterling , who also participated in the investigation of the Odebrecht case, she was removed from the Anti-Corruption Prosecutor’s Office and initially sent to Colón, and later to the province of Veraguas.