W. Scott Malone: The Panama Debacle — Uncle Sam Wimps Out

Posted: May 1, 2012 by BlackNETintel-2 in W. Scott Malone
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OPEN SOURCE

[redacted]; US/1           MEMBER CONTRIBUTIONS 

[ed.note: (Check how we spelled Muammar Gadhafi back in the day.)
In 1988-9, Colonel Gadhafi had supplied some $50 million in Libyan cash to his Panamanian money-laundering amigo, General Manuel Noriega. 
According to then secret US intelligence documents that had come our way at the time, Gadhafi’s $50 million cash infusion helped the Panamanian strong-man withstand the harsh rhetoric and grand jury indictments emanating from Noriega’s once-close amigos at the Yankee running-dog CIA and military for almost a year.
But as the 1988 US presidential elections approached, the secret effort to unseat Noriega, negligible to begin with, was put off until after Vice President Bush was sworn in a President in January 1989. 
As events would unfold, the provocatively head-lined Washington Post article (below) could have been entitled “How to start a war against a friendly dictator without really trying too hard.”
There remains much more back-story still to be written on the escalating repercussions that followed and metastasized from this one single article.

The George H.W. Bush Administration, through the auspices of then Secretary of State, James L. Baker, III,  leaked to the US News & World Report the claim that President Bush 41 had signed a until then quite ‘secret,’ $10 million Covert Action Finding authorizing a limited program for “regime change.”

The calculated leak in response to the our article had come on a SATURDAY to a weekly magazine whose deadline is FRIDAY, as was the Washington Post’s for Sunday Outlook Section articles. Needless to say, havoc reigned at the Washington Post’s fifth-floor newsroom. latest possible Saturday evening “stop-the-presses” deadline moment neared…

Then Outlook Editor David Ignatius rushed over to the Post’s 15th Street headquarters, absolute, zero-hour deadline clock tick-toc-ed away. I was ordered not to come anywhere near the Post building, and not even to try to call him there again unless I had a major story-changing, on-the-record quote.

Period. Slam. Dial-tone.

The Sunday Washington Post for April 23, 1989, was an hour and half late in arriving at the distributors. One of the earliest places in DC to catch the widely and much anticipated Sunday Post was the distributor at the corner of 23rd and M Street, just outside of Georgetown, where I lived at the time. 


It was a lonely vigil on that pleasant April evening, but as the minutes turned into an hour, I was the only one left still standing around waiting for the Sunday paper. 
Looking forlorn, and holding my putz…
But a half an hour later, the Post truck drove up, and there was the story in black and white.
The next week, General Noriega, pounding a silver-plated machete on his presidential podium, denounced the leaked $10 million CIA funding claim, and promptly called off Panama’s first scheduled elections since he had seized power in 1982. (CK-date).

Eight months later, employing whatever little Libyan cash he still had to hand, Noriega fled in to the deposed-dictator mists of confusion, with U.S. Delta and special forces at his heals. Unlike Saddam Hussein and Muammar Gadhafi, Manuel Noriega surrendered and lived, though ever since 1990 in a Florida federal prisonand most recently, a French prison.]

April 23, 1989 
Sunday, Final Edition

The Panama Debacle — Uncle Sam Wimps Out

By William Scott Malone

   A YEAR AGO, the United States was trying to intimidate Panama’s Manuel Antonio Noriega and oust him from power. Today, the opposite seems to have happened: It is Noriega who is intimidating the United States and our power in Panama that is crumbling.

The Panama fiasco is a classic lesson in the misuse of American power. Indeed, it seems almost like a re-run of the 1982-84 Lebanon debacle: the United States faced a challenge from an intractable foe; administration hardliners responded with aggressive military options, but without a practical political strategy; the Pentagon, worried about the risks to U.S. forces, opposed the hardliners. The resulting policy was a half-hearted middle course that accomplished little and left America’s allies hanging.

Added to this messy mix was election-year politics. Panama became a political hot potato during the 1988 campaign. The Reagan-Bush administration, which had provoked the confrontation with Noriega, then walked away from it as the election approached. They never returned to the fray — to the point that today, the United States can’t even provide a radio transmitter for the Panamanian opposition we helped create!

The folly of our Panama policy was captured by New York Sen. Alphonse D’Amato (R), who likened it to “setting your hair on fire and trying to put it out with a hammer.”

[US/1’s All Time Favorite Quote EVER…]

The following reconstruction of how Noriega outfoxed the United States is based on classified U.S. documents and interviews with over a dozen American officials and Panamanian opposition figures.  The State Department and the National Security Council declined to comment on any of the information. Some of the evidence remains controversial within the U.S. government, which has been bitterly divided for more than a year about Panama policy. Among the highlights:


* Cuban commandos may have joined Gen. Noriega’s forces in military attacks against American bases in Panama, including an April 1988 raid on a fuel tank farm. Like the Marines in Beirut, the troops of the U.S. Southern Command (SOUTHCOM) in Panama have lacked clear rules of engagement allowing them to respond to such attacks.

* Libya’s Muammar Gadhafi provided crucial financial support that helped Gen. Noriega survive U.S. economic sanctions last year. According to one intelligence source, the Libyan leader provided $ 24 million in cash.

* In its efforts to topple Noriega, the administration considered a range of tough tactics — including luring the Panamanian to the Dominican Republic and kidnapping him to the United States to stand trial on drug-trafficking charges. A much more limited covert-action plan was adopted last July, based around a group of Panamanian exiles. But by all accounts, it has failed to bring any real pressure against Noriega.

The Panama roller coaster began in February 1988, when Noriega was indicted by two federal grand juries on drug-conspiracy charges. The indictments culminated several years of growing American disenchantment with Noriega, despite his longtime assistance to the CIA and covert support for the contras program. In late February, with U.S. encouragement, Panamanian President Arturo Delvalle tried to fire Noriega from his post as commander of the Panama Defense Forces. Instead, Delvalle himself was ousted.

State Department officials, led by Assistant Secretary Elliott Abrams, decided that it was time to play hardball. To discuss options, the Reagan administration arranged for Eduardo Herrera, then Panama’s ambassador to Israel, to fly secretly to Washington on March 7, 1988 for a series of meetings with U.S. officials. Despite the attempt to conceal the Herrera mission from Noriega, the Panamanian leader quickly learned about it and forced out Herrera — providing an early demonstration of his saavy.(Herrera later emerged as the military leader of the Panamanian opposition.) By late March, hardliners at the State Department had put together a tentative plan that included economic sanctions against Noriega, beefing up the American military presence in Panama, and covert support for the Panamanian resistance. The strategy, in effect, was to lure Noriega into a confrontation in which the United States could deliver a devastating blow.

One specific proposal was to send Herrera and other Panamanian exiles into Panama and let them operate from safe houses on American military bases or other U.S.-controlled territory. They would conduct sabotage operations, such as raiding Noriega’s bases, and propaganda operations, including clandestine radio broadcasts. These activities might draw a counterattack — with Noriega hitting the American-controlled areas. But that apparently was part of the plan, since it would allow the Reagan administration to intervene to protect Americans.

Another option was kidnapping Noriega. One CIA official said the original plan entailed luring Noriega for a secret visit to the Dominican Republic. Noriega’s daughter is married to the son of a powerful Dominican general, and he apparently feels safe there. The Defense Intelligence Agency also noted Noriega ‘s Dominican connection in a March 1988 report: “In view of his daughter’s marriage . . . Noriega may have sent some of his assets [there] for storage as a contingency measure.”

An Army special-forces officer involved in the planning says the administration “had a variety of options — five different ones. One was the DR [Dominican Republic] plan.”

The National Security Council is said to have debated the hardline options, but President Reagan ultimately decided against them — largely because of Pentagon opposition. The military feared that the confrontation strategy would make the roughly 25,000 American military personnel and dependents in Panama sitting ducks. 

The Pentagon’s wariness was illustrated by one exchange: The military argued that dependents should be evacuated before any confrontation with Noriega. Fine, said the State Department, but how long will it take? About eight months, said the military — basing its estimate on information provided by commercial moving firms.

Jose Blandon, Noriega’s controversial former chief of political intelligence and by then a leading opposition figure, describes the Pentagon’s rejection of hardline options this way: “Last March [1988] the exiles wanted to return to the [former] U.S. Canal Zone, but the Defense Department said no.” Another opposition official recalls that in April 1988 anti-Noriega forces requested permission from the U.S. ambassador to place a radio station on U.S.-controlled territory, only to be informed that “the Army says no.” Despite the American vacillation, Noriega and his Cuban allies moved toward a confrontation. The most extraordinary incident was an April 13, 1988 raid against the Arraijan fuel tank farm near U.S. Howard Air Force Base on Panama’s Pacific coast. There’s still a lively debate within the intelligence community about what happened, but some analysts believe that Cuban commandos led the attack.

The raid began just after 1 a.m., when Marines guarding the tank were attacked by about 60 “unidentified individuals” wearing black camouflage uniforms and using assault rifles and mortars, according to a U.S. intelligence report prepared shortly after the incident. The document noted that fighting had continued for “approximately 2 1/2 hours” into the early morning, but “no U.S. casualties were reported.”

U.S. military intelligence finally pieced together an account of the Cuban connection only by accident, according to one American official. “Three of the Cubans were wounded in the [April] attack. They were taken to a PDF military hospital and registered under the Spanish equivalent of John Doe. One died, and after some of the hospital workers became suspicious, the other two were transferred to a Cuban ship transiting the canal.”

The intelligence community gathered other evidence of Cuban involvement with Noriega. One late April report stated that Cuban leader Fidel Castro intended to “ensure that events turn out favorably” for Noriega. Another intelligence report warned that Castro was sending “Cuban soldiers [to] Panama” to render “guerrilla warfare training for Panamian soldiers.”

Some U.S. officials contend that the Cubans were brazen enough to return to the Arraijan tank farm for a second attack last year, but that the Pentagon has deliberately played down the incident because it doesn’t want to stir up trouble with Noriega. A SOUTHCOM spokesman denied Friday that there has been any cover-up. There have been over 50 attacks at the Arraijan fuel depot, the spokesman said, but there is “no confirmed evidence” of Cuban involvement.

Castro wasn’t Noriega’s only covert backer. To cope with the financial squeeze that began in March, when the United States suspended payments to Noriega, the Panamanian dictator turned to the Reagan administration’s No. 1 nemesis — Libya’s Col. Muammar Gadhafi.

An account of the Libyan connection comes from Panamanian Air Force Maj. Augusto Villalaz. He recalls that on March 14, 1988 he was told to fly to Cuba on a special mission. En route, a Noriega intelligence officer named Capt. Felipe Camargo told him: “Our mission will be to receive $ 50 million from the government of Libya.” The plan was to meet a Libyan airplane at an airbase outside Havana. But when they arrived, they were told that the money hadn’t arrived yet. So they instead flew home with a cargo of 32,000 pounds of Soviet-made small arms.

“We hear Noriega did receive cash through Cuba [around April 1988],” says Blandon. According to a military intelligence source, “$24 million ultimately went through from Libya last year.” The CIA reported that “Noreiga [had] run through his Libyan money” by late September, according to one intelligence document.

With U.S. military options rejected by the Pentagon and economic sanctions blunted by Gadhafi, the Reagan administration turned to diplomacy. The State Department’s deputy legal counsel, Michael G. Kozak negotiated with Noriega’s representatives during May 1988 to drop the U.S. drug indictment if Noriega would relinquish control and leave Panama. The negotiations finally collapsed on May 25. While Secretary of State George Shultz waited on the tarmac at Andrews airbase to depart for Moscow, Noriega relayed his final answer — no deal.

Noriega had won! This galled U.S. officials who were familiar with intelligence reports about his harassment of American citizens. According to the latest Defense Department figures, there have been over 670 incidents of harassment against U.S. civilians and troops during the past year, ranging from detention without charge to severe beatings.  The Reagan administration took another brief shot at covert action against Noriega. An intelligence finding was prepared in the summer of 1988; a mid-July State Department memo noted that the administration faced an “uphill battle” trying to persuade the Congressional intelligence committees to “support” it. The White House, this memo stated, felt the Panama finding required congressional approval, “since monies must be reprogrammed.”

The presidential finding apparently was signed by early August. Jose Blandon recalls that during the first week of August, “President Reagan called Delvalle in New York City and told him that he had signed a finding. Kozak and [Robert] Pastorino from NSC also told us the president had already signed a finding.”

The finding, in essence, provided for “a power transmitter for a radio station and for the CIA to coordinate activities with [Eduardo] Herrera,” according to one Panamanian source. Blandon wouldn’t discuss details of the finding, but he says in general: “After the May negotiation process failed, there were some plans to use the PDF against Noriega and we received some U.S support, clandestine support for radio and TV broadcasts . . . .” But the American effort was short-lived and half-hearted. In August, according to one source, the DIA informed opposition operatives that they “should expect nothing, nothing, from the military forces of the U.S.” Noriega opponents who met with CIA officials in September were told that the agency also opposed military operations against Noriega.

By the end of September, even the modest clandestine radio project had been stalled by bureaucratic infighting. According to minutes of a Sept. 28 meeting of the interagency “Panama Working Group,” the CIA had not even “been back in contact” with the key Panamanians who were to run the radio network, even though the agency had completed its “field report” on broadcasting from mobile vans.

“Technically, this is highly feasible and would provide full coverage of Panama City with no risk that their location could be pinpointed,” according to the minutes. “Nevertheless, both the [CIA chief of station] and SOUTHCOM consider the risk unacceptable since Noriega will retaliate against U.S. assets if he believes that we have contributed to enhancing the effectiveness of opposition activities.”

“Covert operation?” muses one of the exasperated Panamanian rebels. “The covert operation was a radio station! Noriega brought in a Cuban team to trace [it]. When that didn’t work, they constructed a large transmitter to jam [it]. We [could] only get on the air for 30 seconds before jamming starts. We needed better technical equipment, but it didn’t come.”

A Senate source confirms that the extent of covert support for anti-Noriega forces was “radio equipment, leaflets, and some sabotage.” The radio broadcasts and other non-military operations were being financed from the interest on Panamanian government assets frozen by the Reagan administration in April 1988. The entire propaganda operation received “substantially less than $ 1 million,” according to various opposition and Senate sources.

The military side of the anti-Noriega effort was handled by the “Herrera group,” centered around Panama’s former ambassador to Israel, which received $1.3 million last year, apparently from the escrow accounts, according to Panamanian sources. (Neither the CIA nor the Pentagon considered supplying weapons to the resistance groups.)

Herrera, in concert with the Delvalle government-in-exile, had been planning to launch a military operation against Noriega, say American and opposition officials. Yet by late October, says one American official, “the CIA [had] nixed the Herrera operation. He had been abandoned — no meetings — no explanation.” As Herrera told this official last November: “They made all these promises and then totally left me out in the cold.” The loss of the U.S. government’s remaining enthusiasm for the anti-Noriega opposition was probably attributable to the upcoming U.S. election. Politics were certainly on the minds of the members of the Panama Working Group in late September. According to the minutes, some officials suggested “deferring” the decision on supporting opposition radio and TV broadcasts “until after the election.”

By October, the Noriega issue had disappeared almost entirely — except in the rhetoric of Democratic contender Michael Dukakis. Noriega opponents in the United States had been advised to maintain a “low profile” in the remaining month before the election. “The U.S. [government] requested us not to talk about Panama because of the election,” recalls one key opposition figure. U.S. officials, in particular, managed to keep the outspoken Blandon, then under protection of the U.S. Marshals Service, virtually incommunicado before the election — moving him last October to a Navy base far from Washington.

After the election, U.S.-backed opposition leader Delvalle was granted a 15-minute audience with Ronald Reagan and President-elect George Bush in the Oval Office. “There must be no misunderstanding about our policy,” Bush pledged after the meeting through a spokesman. “Our policy will be that Noriega must go.


Yet the anti-Noriega forces haven’t received any funds since that warm December meeting, according to both U.S. and Panamanian officials. “No money since Bush was inaugurated,” says dejected opposition official. “Nothing.”

Meanwhile, Noriega continues his intimidation of Americans. Early last month, Maj. Luis Cordova, the head of Noriega’s Transit Police, ordered 21 U.S. school buses full of hundreds of American children stopped for license-plate violations. The children were marched from the buses at gunpoint. A videotape of the incident shows one U.S. security officer helplessly screaming: “You’re terrorizing school children!”

At the moment, the Bush administration appears so snakebit by Noriega that it has no policy whatsoever on Panama. Panamanians are preparing for elections on May 7, but Secretary of State James A. Baker III has privately told senators that the United States doesn’t plan any significant actions before the election. And sources say that 10 days ago, before a closed session of the Senate Intelligence Committee, SOUTHCOM commander Gen. Fred Woerner testified that he still would not allow U.S. bases to be employed for opposition broadcasts. The Pentagon believes that such propaganda activities would, among other things, violate the Panama Canal Treaty.

According to Blandon, the Pentagon’s position still carries the day. “The Defense Department has a specific position — they want to have the canal open — that’s the only thing they care about. They would like to have an agreement with Noriega no matter what happens in the elections.”


The anti-Noriega opposition the United States helped create is now in ruins. On April 6, all of the opposition’s remaining clandestine radio equipment was seized by Noriega, and the operator, an American businessman, was arrested. “We ‘re out of the ball game now,” says one distraught exile official, choking back tears.

William Scott Malone, a television producer, has won two national Emmy awards for investigative reporting. Additional research and reporting for this article was provided by Washington-based reporter Anthony Kimery.

[Information contained in BKNT E-mail is considered Attorney-Client and Attorney Work Product privileged, copyrighted and confidential. Views that may be expressed are those of the author(s) and do not necessarily reflect those of any government, agency, or news organization.]

 

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