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Getting to Sack the General

The Israeli interest in Panama apparently derived from Noriega’s willingness to provide information to Israel about the activities of the Palestine Liberation Organization in Central America. His intelligence services could trace money paid by Arab countries to the PLO and sent to Panama, a convenient transmission point for funds supporting terrorist acts against Israeli diplomats, businesses, and other interests. Last autumn there were reports in Jerusalem that the United States was putting pressure on Israel to have Harare get out of Panama.15


By the end of 1987 the Reagan administration seems finally to have decided that Noriega was expendable. From Senate and House committees’ testimony over the years, however, it is clear that the US has found it of overriding importance to use Panama, and Noriega in particular, for a variety of intelligence activities, notwithstanding his flagrant involvement in exporting cocaine to the US. Twice in the last four years the Reagan administration rejected recommendations from its embassy in Panama City to break with Noriega—first in 1984 when Noriega arranged to have Nicolás Ardito Barletta declared president in a fraudulent election, and again in 1985 when Barletta was ousted in favor of Delvalle.16 It was only after the riots in the summer of 1987 that the tide began to turn. By the end of the year even the Defense Department had come around to the State Department’s view that Noriega had to go.

In December, Richard Armitage, an assistant secretary of defense, headed a mission in Panama City to deliver this message, but apparently the language Armitage used was too soft. While he was in Panama Armitage showed some enthusiasm for a plan for a transition to democracy that had been drawn up in October by Blandón and members of the Panamanian exile community. According to this scheme, Noriega would retire in April with the group of Panamanian officers who were closest to him. The next highest officer would serve as head of the PDF until the elections scheduled for May 1989. Although Blandón claimed that the general was aware that he was drawing up the plan, Noriega denounced the scheme only in January and fired Blandón as consul general in New York.

Noriega disavowed the plan probably because other officers close to him had discovered what was going on and feared he would abandon them. Or Noriega himself may have feared that, like any Mafia chieftain out of power, he knew too much and would be assassinated by the Medellín drug cartel.

With the United States committed to removing Noriega, the general struck back by issuing orders to use more violence against the people demonstrating against him. In Washington, a shadow Panamanian government forced the administration finally to take action to try to bring about the general’s downfall.

After trying to fire Noriega in February and failing, President Delvalle, by the end of March, was still in hiding. Washington, however, refused to recognize his successor, Manuel Solís Palma, and put into effect an economic squeeze designed to bring Noriega down. Panama had already defaulted on all interest payments for the $1.5 billion it owes to international lending institutions (as part of its foreign debt of almost $5 billion). Noriega was about to suspend all interest payments to private banks in mid-March. Washington then froze all Panamanian assets in banks outside the country, withheld the $6.5 million the US pays each month for the use of the canal, and suspended trade preferences on $96 million of imports from Panama. Forbidden by law to create its own currency, Panama is wholly dependent on the dollars the US provides. By the middle of March, there were no dollars to pay many thousands of Panamanian employees, and no gasoline for ordinary citizens; people were being fed by churches and church organizations, and families were going hungry. To add to Noriega’s problems, the Civic Crusade called a general strike, which brought the economy to a virtual standstill for the rest of the month.

Delvalle was a most improbable hero. After Barletta was forced out for suggesting an investigation of Spadafora’s murderer, Delvalle had willingly assumed the post of president and was widely considered Noriega’s lackey. A rich sugar planter from Panama’s well-to-do Jewish community, Delvalle was a member of the traditional oligarchy known as rabi blancos (or rich behinds) who formed the backbone of the Civic Crusade, and had little in common with the members of the armed forces who were generally darkskinned and from the poorer classes. Delvalle was considered by his friends to have betrayed his class when he became president and was no longer welcome at the exclusive Union Club. Last fall he was also snubbed by members of his congregation when he attended synagogue for the high holidays. Delvalle, I was told, was under heavy pressure from his family and friends to get rid of the general; he was also losing revenues from his sugar plantation after the United States suspended the sugar quota.

In Washington I was told that each of the administration’s recent actions were taken at the behest of Delvalle in hiding. This seems hard to believe. What is clear is that Delvalle turned over considerable authority to act in his name to a former assistant secretary of state for inter-American affairs, William D. Rogers, now a Washington lawyer at the firm of Arnold and Porter. With Delvalle still recognized by the United States as the legitimate president, the government of Panama became, in effect, Rogers’s law office. Rogers, however, was not acting alone. His associates in Washington also included Juan Sosa, the Panamanian ambassador to Washington, Gabriel Lewis Galindo, the former Panamanian ambassador to the United States, who had also been raising money for the Civic Crusade’s efforts in Washington, and Joel McCleary, a political consultant with the New York–based Sawyer and Miller Group. The public relations firm became, with Rogers’s law firm, part of a quasi-government of Panama being run from the US with varying degrees of collaboration with the Reagan administration.

I learned that McCleary had met with Delvalle in Miami a day or so before the Panamanian president was to see Elliott Abrams, the assistant secretary of state for inter-American affairs, on February 17. McCleary told Delvalle that prominent Panamanian exiles, now including José Blandón as well as Gabriel Lewis, were behind him if he were to fire Noriega. The only question was how to do it. Should he make an announcement in Panama? At a meeting of the Organization of American States in Washington? Or should he resign peacefully and then call for Noriega’s removal?

Without giving McCleary a firm answer, Delvalle then met with Elliott Abrams to discuss whether or not the United States would drop the indictments against Noriega were the general and his close associates to go into exile. Though Abrams reportedly told Delvalle he had no power to offer such a deal, he also told Delvalle: “What is certain is that Noriega has to go.”17 Delvalle, I was told, was assured of US backing if he fired Noriega, but it was probably not clear to Delvalle exactly what the United States was prepared to do.

The opposition parties, especially the Christian Democrats led by Ricardo Arias Calderón and the Authentic Panamanian party of Arnulfo Arias (or Arnulfistas as they are known), joined with the coalition of business and labor groups that made up the Civic Crusade in support of Delvalle when he announced he was firing Noriega. Still, Delvalle did not gain significant popularity, and, I was told, he was widely regarded as the US candidate to head a government of transition. On the other hand, with Arnulfo Arias in exile, no single Panamanian has emerged as the leading opponent of the general. Although the followers of Noriega have accused members of the Civic Crusade of being solely from the upper classes, the Crusade’s support has grown over the last six months throughout the population. Church leaders, too, endorsed the movement to unseat Noriega. Until March, the Church had been reluctant to confront Noriega, because many priests do not hold Panamanian citizenship. It was hard to find any support for Noriega outside the military and officials of his own party.

In early March, after Delvalle had dismissed Noriega and was supported in this by US economic pressure, many Panamanians believed Noriega would soon step aside. Most of the politicians I spoke with expected a three-man junta to emerge, including even a member of the armed forces, that would prepare for national elections in May 1989. But Noriega showed surprising staying power. When he was faced with strikes and demonstrations called for by the Civic Crusade, and later by spontaneous protests by government employees, including teachers, hospital employees, and dockworkers, Noriega responded with violence: he ordered his troops to tear gas the teachers and to storm the largest hospital in Panama. At least twenty-three workers were wounded.

Later in the month, Noriega had the PDF occupy flour mills, confiscating flour that was being held to feed the poor by Caritas, the Roman Catholic relief organization. After the dockworkers went on strike, the armed forces reopened the Pacific port of Balboa, though the port workers refused to return to work unless they were paid. Noriega ordered Panamanian troops and paramilitary units to storm a luxury hotel and arrest and detain many opposition figures who had earlier organized yet another protest march, which had again been broken up by police firing tear gas, water cannon, and birdshot. Noriega insisted that the banks open early in April, to cash government-issued checks, and the banks reportedly agreed to do so. 18

As the general strike spread throughout the country in the third week of March, Noriega sought to surround himself with loyalists. He fired at least eighteen officers, most of whom were put under arrest for having participated in a failed coup to unseat him earlier that month, and promoted 104 officers. But this move, according to his former second in-command, Roberto Díaz Herrera, may help to bring about “Noriega’s institutional death”; he jumped his favorites over senior officers in line for promotion.19

Noriega tried virtually any tactic to obtain dollars. He sent a pilot to Cuba to pick up $50 million from Libya but found that the Libyans had refused to send the cash, and the pilot—who later defected to the United States—returned carrying only Cuban arms, which then were stored in depots throughout Panama.20 The Wall Street Journal reported that Noriega tried to have local banks deposit checks owed to the government in a New York account at Chase Manhattan; this move, too, was unsuccessful. Some government workers, I was told, were being paid in coin from the hotel casinos.

Two senior State Department officials even went to Panama in mid-March to try to arrange for Noriega’s exit. They offered political asylum in Spain, and promised that the US would not seek Noriega’s extradition or try to seize his financial assets outside Panama. In return Noriega had to promise to retire his closest accomplices and those officers with over twenty-five years of service. The talks broke down because Noriega insisted he be allowed to remain in Panama. Clearly the administration had badly underestimated Noriega’s ability and determination to stay in power. Elliott Abrams admitted that “our experience with Marcos and Duvalier had led us to believe [US economic pressure] would work.”21 Neither Marcos nor Duvalier, however, was a military dictator.

By the end of March, Noriega had obtained enough money to meet some of the government’s payrolls. The cash came mainly from taxes paid by US companies with branches in Panama and from the conversion of Panamanian assets of the Latin American Export Bank (BLADEX) to hard currency in Europe.22

Latin American and Spanish officials urged mediation rather than coercion. Meeting in Costa Rica in the last week of March, the Spanish prime minister Felipe González, the Costa Rican president Oscar Arias Sánchez, the former Venezuelan president Carlos Andrés Pérez, and the former Costa Rican president Daniel Oduber asked Panama’s archbishop Marcos Gregorio McGrath to mediate. After talking with both sides, McGrath agreed to go ahead.23

As American economic pressure failed to bring down Noriega, Latin American nations began to complain of coercion by the United States. At a meeting of the Latin American Economic System on March 29, twenty-two countries, as ideologically diverse as Cuba and Chile, urged the Reagan administration to lift economic sanctions. They also said they would consider a Panamanian request for economic aid.24 The President of Mexico also warned the United States not to interfere “in political matters that are the sole concern of the Panamanian people.”25

As the month of March drew to a close, Noriega had retreated into a bunkerlike mentality. “Virility is proven by remaining in power,” 26 the general said last fall. As his country fell in ruins around him, General Noriega seemed determined to show he believed what he said—even at the risk of US military intervention, which Panama’s ambassador to Washington, speaking in the name of Delvalle, was calling for.27

Even with Noriega gone, however, the problems of setting up a democracy in Panama are formidable. The most serious issue is reform of the immensely corrupt Panama Defense Forces. A high US official told me, “We don’t see any member of a reformist military.” Everyone I spoke with agreed that Noriega’s closest accomplices in the military, the so-called inner cupola, variously listed as between six and ten officers, would have to be fired if there is to be any serious change. I was also given the names of officers who are considered relatively “clean.” Colonel Eduardo Herrera Hassan, currently the Panamanian ambassador to Israel, is most often mentioned.

At best, the PDF may be rendered less corrupt. But over the years the armed forces and its individual officers have been reported to hold interests in about 60 percent of Panama’s commercial enterprises. Military officers collect their own taxes on merchandise in the Colón Free Zone, on savings and loan companies, and on profits from prison labor. “You can’t make a mafia into a professional army,” said one Panamanian dissident.28 There is no way to turn the PDF back into a police force. On this all the leading politicians agree. So do the US officials, both in Panama and Washington. “We have to play ball with the PDF,” a Pentagon official told me; but the problems of keeping corruption under control may well be insoluble. Nor can one expect the drug cartel to abandon its efforts to suborn the officer corps.

In a post-Noriega world, the international banking community might well give credits to a government committed to democratic reform and economic solvency. But it is far from clear how a democratic system can be organized. A question much talked about is how to make legitimate the annulled 1984 election of Arnulfo Arias as president. If this were done, and Arias headed a junta government of transition, he would probably not run for president in 1989. On the other hand, if he decided to run a fifth time, at the age of eighty-three, and won, the military would certainly be hostile to him. An election that would involve an alliance between the Christian Democrats and the Arnulfistas would probably also result in the defeat of the Democratic Revolutionary party (PRD) that General Torrijos founded and that has been a tool of the military since. The only hope for the PRD, I was told repeatedly by party members in local political offices, is reform—something that would happen only if the armed forces were shaken up after Noriega leaves.

The future of Panama necessarily involves the future of the US military presence there and the defense and administration of the Panama Canal. It would seem weak on the part of the US to move the Southern Command from Panama in the face of threats from the Panamanian military. But there is a good case for placing the military command in the United States later on. This is what the former head of Southcom, General Paul Gorman, urged when he testified before the Kerry committee. “I regard the presence of the headquarters there as dysfunctional,” he said.

It is the only headquarters of a US combat command, the gates of which are guarded by foreign troops, the water, sewage, electricity is under the control of a foreign power, and at the moment, I would have to say, probably a hostile power. Not a very useful kind of a posture to have a headquarters involved in a significant military undertaking. 29

Unless Panamanian armed forces are reformed, however, there would be little support in Washington for shifting the Southern Command elsewhere until the US is obliged to do so, according to the treaty, in the year 2000.

Should the military remain in tight control of Panama, violent attacks on the canal itself cannot be ruled out. I was told by a leading Panamanian critic of Noriega that sabotage of the canal was likely to be the next move were Noriega to stay in power. This would be done specifically to provoke US intervention so that a “less corrupt” PDF would take over.

The canal remains Panama’s most important asset. Even if it is too small for supertankers it is still a vital international waterway, with tolls and revenues (in 1987) reaching $330 million in the fiscal year ending September 1987. Panama itself received $80 million in fees. Although the canal itself has been run impartially and well under the direction of the US chief administrator, Dennis P. McAuliffe, and the deputy administrator, the Panamanian Fernando Manfredo, there have been attempts by the PDF to override the procedures guaranteeing that ships pass through the canal on a firstcome, first-serve basis. The New York Times reported in March that “Panamanian naval and other craft, including impounded vessels, have sometimes tried—but never with success—to push ahead of ships that had reserved places in line.” Other canal operations, including ports, marine bunkering facilities, a railroad, a bridge, and air traffic control, are already controlled by political appointees “who have failed to run the operations efficiently or in a nonpartisan way.”30

Beginning in 1990, the chief administrator must be a Panamanian, to be appointed by the winner of the 1989 presidential elections in Panama. Under US Public Law 96-70, however, the chief administrator, while nominated by the new Panamanian government, must be approved by the president of the United States “by and with the advice and consent of the Senate.”31 It is hard to imagine that any appointee of a Panamanian government dominated by a corrupt military would gain Senate approval. If so, this would put in question the Panama Canal Treaty itself.

There is already talk among prominent Panamanians of setting up an independent commission composed of canal users when the canal is finally turned over to Panama that would help to insulate the canal’s administration from political interference. By the end of the century, however, it may well be that neither Panama nor the United States will control the canal. The Japanese have offered financing—well over $400 million—to widen the fifty-one-mile-long waterway. If this happens, Japanese will surely join the Americans and Panamanians now sitting on the board.32

For two decades the United States has supported the creation of a Panamanian armed force in order to defend an indefensible canal. The professional army we trained turned into a hostile military in the pay of a foreign drug cartel. The Reagan administration used it to help in its war against the Sandinistas and to further its aims in EL Salvador. We are now left with an army that has been justly described as “the axle around which the wheel of corruption turns.”33 It is this army that now holds the key to democracy in Panama and America’s exit from the ongoing tragedy of the isthmus.

March 31, 1988

  1. 15

    See Ma’ariv (Jerusalem, October 14, 1987).

  2. 16

    See the Miami Herald (March 3, 1988).

  3. 17

    The New York Times (February 18, 1988).

  4. 18

    The Washington Post (March 27 and March 28, 1988); The New York Times (March 29 and March 30, 1988).

  5. 19

    Miami Herald (March 23, 1988).

  6. 20

    The New York Times (March 23, 1988).

  7. 21

    The New York Times (March 28, 1988), p. A6.

  8. 22

    The Washington Post (March 31, 1988).

  9. 23

    The Boston Globe (March 29 and March 20, 1988); The New York Times (March 30, 1988).

  10. 24

    The New York Times (March 30, 1988).

  11. 25

    The New York Times (March 27, 1988).

  12. 26

    The New York Times (March 21, 1988).

  13. 27

    The New York Times (March 30, 1988).

  14. 28

    See the Los Angeles Times (September 21, 1987).

  15. 29

    Testimony by General Paul Gorman, US Army (Ret.), before the Senate Subcommittee on Terrorism, Narcotics and International Communications (February 8, 1988).

  16. 30

    The New York Times (March 7, 1988).

  17. 31

    Panama Canal Act of 1979,” Public Law 96-70, Section 1103, Legislation on Foreign Relations Through 1985, Volume II (US Government Printing Office, 1986). This is the implementing legislation that permits the United States to carry out provisions of the treaty.

  18. 32

    See Forbes, “Everyone Wants Us” (February 23, 1987).

  19. 33

    See the report of a staff study mission to Southeast Asia, South America, Central America, and the Caribbean, “US Narcotics Control Program Overseas: An Assessment,” Committee on Foreign Affairs (February 22, 1985), p. 31.

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