Long Beach Port Plan Faces Rising Tide of Criticism

Under fire from opponents as diverse as the Audubon Society and conservative columnist Patrick J. Buchanan, the administrators of the Port of Long Beach today are expected to take a crucial second vote on a plan to build a $200-million cargo terminal for their fastest-growing customer, China’s state-run shipping line.

If the port commission approves the terminal, it would still be exposed to a fierce debate on Capitol Hill, where a San Diego congressman has introduced a bill to block the lease of the land to any foreign company, and it would still face a Pentagon review.

City officials hope that construction of a 145-acre terminal on the site of the shuttered Long Beach Naval Station would create hundreds of jobs and a windfall of $1 million per year in tax revenues. But a rising tide of opposition, led by critics of both the demolition of the 55-year-old Navy base and the plan to lease it to the China Ocean Shipping Co., or Cosco, has thrown the project’s fate into doubt.

When they signed the lease in October, port administrators thought the project faced few obstacles. But last month, local environmental organizations, including the Audubon Society, argued in court that the port had rushed the project’s approval. Then Superior Court Judge Robert H. O’Brien ruled that the five-member port commission had to rescind its approval, hold an additional public hearing and reconsider the terminal plan.

The ruling disrupted the port’s plans just as opposition to the project was growing among some conservative lawmakers and pundits, who decried it as a potential breach of national security.

The plan also faces a separate lawsuit from KCET television host Huell Howser, who contends that Navy recreational facilities and dormitories on the site should be spared from bulldozers and put to public use.

For Long Beach and the Los Angeles region, the stakes are enormous: China is the area’s second-largest trading partner, with more than $18 billion worth of cargo moving between Los Angeles and China each year. Cosco handles about 25% of U.S.-China trade.

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Conservatives attempting to sink the project “are driven by ideology and they don’t quite understand the bottom line,” said Jack Kyser, chief economist at the Economic Development Corp. “They don’t stop to think that international trade is hitting home runs year after year. There is a new wave of neo-isolationism that seems to be sweeping the United States, and it’s a very dangerous wave for Southern California. People need to stand back and take a deep breath.”

What has shocked project backers is that such fierce opposition would surface so long after the United States and China became open trading partners. The terminal would be the first in the United States dedicated exclusively to Cosco. The company now shares space with other companies at various ports and has been a tenant at the Long Beach port since 1981. Cosco ships call weekly on hundred of ports worldwide, among them New York, Baltimore, Charleston, S.C., and Seattle. It would lease the new terminal for a minimum of $14.5 million per year. Additional user fees would help finance the construction.

“Why are they suddenly considered a threat?” asked Don Wylie, the port’s maritime services director. “The only thing they get is the preferential right to use the property. We retain the right to inspect the premises at any time. We retain the right to inspect their records. . . . It is disturbing that in this day and age there is so much ignorance about our relationship with the rest of the world.”

Both the Port of Long Beach and the adjacent Port of Los Angeles jockeyed for Cosco’s business last spring when the company expressed an interest in expanding its terminal space. But it was Long Beach that was considered the lucky winner in April when it wooed Cosco to sign a letter of intent to lease property. Los Angeles port officials have since traveled to Beijing to lobby the company to reconsider if the lease with Long Beach collapses.

Rep. Duncan Hunter (R-El Cajon) has said that he would prefer that Cosco didn’t do business at any U.S. port, and last week introduced a bill to outlaw the lease of the Naval Station site to Cosco or any company owned by a foreign country. Hunter warned that the project would be a “Communist Chinese beachhead” that could be used for arms smuggling.

Conservative pundit Patrick J. Buchanan, in a newspaper column, voiced similar fears and derided the project as “a sweetheart deal . . . for Beijing.”

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Both Sen. Dianne Feinstein (D-Calif.), who as mayor of San Francisco solicited Cosco to call on her city’s port, and Sen. Barbara Boxer (D-Calif.) have requested a national security review of the port’s plan.

Wylie said he was irate that what he considers “misinformation” about the Cosco lease is threatening to derail a project that city officials view as critical to Long Beach’s economy.

The port’s consideration of the matter comes amid controversy involving alleged efforts by Beijing to influence American political campaigns last year. But port officials insist that there is no connection to the Cosco project.

White House records show that Hongye Zheng, the chairman of China’s Chamber of International Commerce and an advisor to Cosco, was escorted to the White House with five Chinese businessmen by a Democratic National Committee donor last year to watch the president make his weekly radio address. A White House official said that the radio address was attended by about 60 people, and that in general, “these things are opportunities for people to see the president give a radio address and have a brief photo op.” It is unclear if Zheng spoke with the president.

Zheng is one of at least 15 advisors to Cosco. Others include former U.S. Secretary of State Alexander M. Haig, who has prodded lawmakers to support most-favored-nation status for China, and former British Prime Minister Sir Edward Heath.

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The donor who brought Zheng and the other businessmen to the White House was Johnny Chung, a Chinese American businessman who made $366,000 in donations to the Democratic National Committee that were later returned because they were deemed improper.

To be sure, Cosco itself has suffered some embarrassments, but its record is largely comparable to those of other shipping lines. It ranks as the fourth-largest shipping line in the world in cargo capacity, and ninth in number of containers carried to and from U.S. ports.

It was a Cosco freighter that slammed into a New Orleans riverfront mall in December in an incident that injured more than 100 people. The Coast Guard initially indicated that the collision was the result of a mechanical failure. The National Transportation Safety Board is still investigating, an agency spokesman said.

And it was a Cosco ship that carried 2,000 Chinese-made assault rifles discovered by U.S. Customs Service agents in Oakland last March. The manufacturer of the weapons is closely tied to the Beijing government, federal officials said, but Cosco was not charged in the case.

Los Angeles-based customs agents have seized all manner of contraband from nearly every steamship line at the Los Angeles and Long Beach ports at one time or another. In one of their biggest recent cases, investigators found 7 tons of narcotics that had been smuggled from Uganda aboard an American steamship line in 1995. But there was no evidence that the company knew it was carrying contraband.

One customs agent said that prosecuting a shipping line would be “like filing charges against the bus company because criminals use the bus.”

Cosco also was fined $400,000 by the Federal Maritime Commission in 1992 to settle charges that the company illegally cut its rates below published tariffs, although the case was far from unusual. That year, the maritime agency levied a total of $1 million in penalties on four other lines, including the two dominant American steamship lines, for rate malpractice.

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U.S. Coast Guard records show that six of the company’s 600-plus ships have been cited for safety violations in U.S. waters since 1991--a number that is consistent with the safety records of other large shipping lines. Coast Guard officials said Evergreen Marine Corp., the largest shipping line in the world and a tenant at the Port of Los Angeles, also has had six citations since 1991.

Shipping lines with more than two citations in one year are placed on a list of cargo-handling companies to be targeted for inspection by the Coast Guard for one year. The current list includes 75 companies, among them Cosco, Evergreen Marine and Hanjin Shipping, a tenant also with a new terminal under construction at the Port of Long Beach.

“If you have a company with a large number of ships . . . and you’ve had one or two ships detained out of the hundreds that have visited, that’s not a high number,” said Lt. Cmdr. Chris Oelschlegel. “By virtue of a company being on this list doesn’t mean they’re not a safe operation.”

In fact, the Coast Guard’s top officer in Long Beach sent the company a letter of recognition in September after three routine inspections of Cosco vessels.

“The seaworthy condition and preparation of the crew on each vessel all contributed to a fleet maintained in compliance with international agreements, U.S. regulations and the smooth progress of the inspections,” the commander wrote. “These inspections are an excellent example of the benefits available when the owner/operator takes safety and regulatory compliance seriously.”