from TPDL 2000-Jul-17, from Insight Magazine:

Speaker In Dark?
Hassert Claims He Wasn't Told About His New Defense Aide's Role As Paid Agent For Beijing

7/16/00 - House Speaker Dennis Hastert has told colleagues that he did not know that his new defense and foreign policy adviser was a paid, registered foreign agent. And he claims he had no idea she had sold her top Republican connections to a company controlled by a Hong Kong billionaire loyal to Beijing and tied to the Chinese military - or that she was lobbying against a Republican bill that would protect the Panama Canal against Chinese encroachment.

Days or even hours before her reported July 13 appointment as the Speaker's defense and foreign policy chief, Nancy P. Dorn was a lobbyist with Hooper, Owen & Winburn, where she was a registered agent of Hutchison Port Holdings, a subsidiary of Hutchison Whampoa Ltd., which won control of ports at the Atlantic and Pacific sides of the Panama Canal under suspicious circumstances.

According to Insight's sources, Hastert said he thought Dorn was a "stay-at-home mom" with solid foreign policy and defense credentials from stints in the Reagan and Bush administrations.

Dorn's other clients included the embassy of Azerbaijan and the government of the Islamic Republic of Pakistan. She also represented the AFL-CIO, which has made Hastert's political fall a priority issue this year.

Insight broke the story on July 14 (http://www.insightmag.com/cgi-bin/ViewNews.cfm?Item=3D122). Hastert's office referred questions about Dorn to its July 13 news release. Dorn did not return Insight's call for comment.

Congressional sources tell Insight that even as Hastert was considering Dorn's appointment as one of his most sensitive aides, Dorn was trying to block a congressional investigation into allegations that Hutchison Whampoa, a Chinese-connected firm controlled by Hong Kong billionaire Li Ka-Shing, won control of the strategic Cristobal and Colon ports at both ends of the Panama Canal by bribery and other means, and that it threatened U.S. national security.

The sources say Dorn, with fellow paid agent Charlie Wilson, a former Democratic congressman, was actively lobbying to defeat a Republican piece of legislation, H.Con.Res. 186. The resolution raised concerns about Hutchison's alleged ties to the Chinese Communist Party leadership and its People's Liberation Army and its suspected bribery of Panamanian officials that may have deprived U.S. companies of the ports - including land on former U.S. military bases in Panama. It also stated that Hutchison's dealings in Panama threatened the national security of the United States. Rep. Dana Rohrabacher, California Republican, authored the resolution and introduced it last fall with 89 cosponsors.

"Nancy Dorn has spent the spring and early summer of this year trying to prevent an investigation into corruption allegations of the Chinese company getting the strategic ports [in Panama]," a senior House staffer tells Insight.

Hutchison Whampoa chief Li Ka-Shing held a news conference last year to denounce Insight's stories ("China's Beachhead at Panama Canal," August 16, 1999; and "At What Price Did China Get Canal?" September 13, 1999) of his company's control of ports at both ends of the Panama Canal and the controversy the stories provoked. Senate Majority Leader Trent Lott, Mississippi Republican, sent the original Insight article to Defense Secretary William Cohen, with a letter asking for an official explanation. Lott requested the Senate Armed Services Committee to hold a hearing on the issue, which took place in October 1999 (see "PC Answers on Panama Canal," November 22, 1999). Hutchison Whampoa officials said they would hire lobbyists in Washington to represent the company. U.S. intelligence and the U.S. Southern Command believe that Hutchison Whampoa poses a threat to the independence of the Panama Canal and the security of the United States.

Sources tell Insight that Hastert's staff did not tell the Speaker that Dorn was a paid foreign agent, even though a Hastert news release quickly dispatched to news reporters after the Insight story broke and dated July 13 called her "a partner with the firm of Hooper, Owen & Winburn of Washington, D.C." Hastert said her credentials and recommendations impressed him.

Among Dorn's short-term GOP postings were Deputy Assistant Secretary of Defense for Inter-American Affairs, which included policy concerning the Panama Canal; and Assistant Secretary of the Army for Civil Works, which included responsibility for canals.

President Clinton appointed Dorn to the board of the Inter-American Foundation, an independent taxpayer-funded agency, in August 1997.

In an October 1999 Washington Post article on GOP lobbyists, Dorn, a Texan, was described as a member of the "kitchen cabinet" of House Majority Whip Tom DeLay, Texas Republican.

GOP defense and foreign-policy experts are angry that a paid agent of Li Ka-Shing would become the seniormost House staffer on their issues, but asked not to be identified because they do not want to be seen as attacking Hastert.

"This is a real embarrassment for the Speaker of the House," says a longtime congressional defense expert.

"Hastert looks stupid at best," according to a Republican foreign-policy operative who served in the Reagan administration and in Congress.

"If this is true, that Hastert's staff never told him that Dorn was a paid agent for Azerbaijan, Pakistan, and a Chinese firm tied to the People's Liberation Army, then heads should roll," says a veteran GOP operative with close ties to the George W. Bush presidential campaign. "Hastert should dismiss Dorn and fire whoever recommended her but failed to inform him. There's just no excuse."

"You just don't jump from being on the payroll of Li Ka-Shing and shady foreign governments one week, and become the national security adviser to the Speaker of the House the next," says a former House and Senate staffer who specializes in intelligence issues. "Dorn will taint any House leadership position on national security and defense, especially relating to Panama and China."

"It's not like there aren't enough qualified experts already serving on Capitol Hill who haven't sold their Reagan and Bush connections to unfriendly foreigners," says a senior Capitol Hill foreign-policy figure. "The Speaker could easily have chosen among dozens of qualified Hill staffers who are serving the American public and not some creepy foreign interest like Pakistan or Li Ka-Shing."

Beijing has been investing heavily in operations to promote its military and security goals through influencing the U.S. government and Congress (see "China's Agents of Influence," May 1). http://www.insightmag.com/archive/200004077.shtml

Operatives close to the Bush campaign have told Insight that they worry that Hastert's appointment of Dorn could hurt the GOP in key areas. They say her paid agency relationship with the Pakistani government could undermine Republicans' attempts to woo Indian-American voters; that her influence-peddling for Azerbaijan would play negatively with millions of Armenian-American voters who traditionally have voted Democratic; and that her service for Li Ka-Shing will undermine Republican attempts to paint Vice President Al Gore as being in the pocket of interests loyal to Beijing.