Hutchison Whampoa is taking urgent steps to protect itself from intensifying political attack in Washington over its Panama Canal operations. The company is negotiating with several lobby firms in the capital to quell claims it is at the heart of a mainland bid to eventually control the strategic shipping route. 'We are increasingly worried about the situation and we are taking steps to ensure our side of the story is firmly and effectively put across to stop all this,' one official said. 'It is not good for us or Hong Kong in the long term. It is all quite ridiculous and we are talking to people who know Washington a lot better than we do.' A senior Hutchison official is expected to visit the capital soon. Senior Republican figures, such as Senate Majority leader Trent Lott and former defence secretary Caspar Weinberger, have named Hutchison as a major People's Liberation Army secu- rity threat once American forces pull out of the canal in December. Open hearings of the Armed Services Committee of the House of Representatives are expected to start by the end of the month. Committee members are understood to have met intelligence officials last week to discuss the situation. Further attention is expected this week with the arrival in Washington of new Panamanian President Mireya Moscoso, who has refused to allow any future stationing of United States troops. 'This one is not going to go away . . . things could get a lot more painful for Hutchison in the weeks and months ahead,' one diplomat said. 'Conservative Republican fears over Bill Clinton, China and Panama are fast converging and Hutchison is finding itself at the centre.' Hong Kong officials in Washington are monitoring developments. Trouble flared for Hutchison six weeks ago when Senator Lott described the firm as an arm of the PLA and personally linked tycoon Li Ka-shing to mainland efforts to control the canal. Hutchison signed contracts in 1997 allowing a subsidiary to run port operations at Balboa and Christobal on the Pacific and Atlantic entrances. The fears come amid open Republican anger at the Clinton administration over its compliance with a pact signed under president Jimmy Carter to hand the canal back to Panama by the end of this year. The 1977 treaty gives the US a stated right to continue to defend and protect the canal to ensure its openness, but is still not enough for several prominent conservatives. Mr Weinberger, still a figure of influence on Capitol Hill, warned against 'political efforts to make everyone feel good'. He described the Hutchison deal as the 'biggest threat' to the canal's continued security and raised the prospect of the firm using a 'trumped-up reason' to shut it to US traffic. Hutchison has fiercely denied the reports, insisting it has no links to the PLA, no ability to control the canal and no interest in doing so.
