Explosive Mix

United States

new internationalist
issue 224 - October 1991

Explosive mix
The Central American cocktail of drug-running, CIA meddling and corrupt
Presidents was shaken by the US invasion of Panama. Shaken but not stirred.
Alexander Cockburn and Andrew Cohen reveal how the recipe hasn’t changed.

In times of war truth is said to be the first casualty; by implication in times of peace truth should stay out of the sick bay. But it’s getting tougher to tell war from peace as the US war on drugs progresses in Latin America.

The invasion of Panama on 21 December 1989 was dramatic confirmation that the war on drugs means the substitution of guns for justice, followed by business as before. The invasion left 20,000 homeless; the precise number of dead will never be known, though estimates of 1,000 now seem plausible. US officials ceased keeping a tally within days of the invasion, but members of the 193rd Infantry Brigade told author Godfrey Harris that hundreds of body bags were transported to Honduras for clandestine burial.

The reason for this carnage was, ostensibly, the ‘narcoterrorism’ of President Manuel Noriega. While he was on the CIA’s payroll Noriega did indeed engage in real terrorism. He plotted with Oliver North to sabotage factories in Managua in 1985 and 1986 and offered North the services of British mercenaries and Israeli commandos in his pay. It wasn’t for this, however, that he was eventually hauled off to Miami while the US military installed democracy in Panama at gunpoint. His arrest was to face serious drug charges.

Yet little changed as a result. It is hard to say which took off faster in Panama after the invasion, the crime rate or the drug trade. The US-created Public Force was filled with Noriega’s old thugs – one reason why today there are almost 200 rent-a-cop agencies in Panama City.

Then there is the question of Noriega’s successor as President, Guillermo Endara. A few weeks after ‘Operation Just Cause’, and while the cover-up of popular resistance to the GIs and the number of civilian casualties were still under way, the US Drug Enforcement Agency (DEA) quietly undercut Washington’s official rationale for the invasion. The agency provided evidence to Panama’s new Attorney General that the Panama-based bank Interbanco was laundering Colombian drug money. This wasn’t so surprising. What was remarkable was that the Secretary of Interbanco’s board of directors was none other than Guillermo Endara, the new President.

The Interbanco scandal surfaced in the Panamanian press late last summer, just a few months before 500 American troops suppressed a police mutiny which the Endara government proved powerless to contain. Panamanians seemed less upset by the drug connection than by the revelation that President Endara had longstanding links with Noriega’s unsavory cabinet ministers Rodolfo Chiari and Jorge Ritter, who also sat on the Interbanco board. Endara promised to resign his seat on the Interbanco board but in the midst of the police mutiny he forgot. He did have time to oversee the bank’s reorganization, leaving his relatives and his political allies with a controlling interest.

Panamanian Attorney General Rogelio Cruz delayed investigating Interbanco for more than eight months. He himself was directly implicated in other ‘dirty money’ dealings. He had sat on the board of First Interamericas Bank, owned by the Colombian Cali drug cartel leader Gilberto Rodriguez and liquidated following US pressure in 1985. Endara’s new Treasury Minister and his new Chief Justice were also former directors of First Interamericas.

Interbanco was declared insolvent and suddenly liquidated last January, but that doesn’t let Endara off the hook. Last August Yvette Torres, an agent of the DEA, revealed a long list of Panama-based banks and corporations owned by Augusto Falcion and Salvador Magluta, whom the DEA accuses of running cocaine into Florida. Endara is the treasurer for six of their businesses.

Interbanco was insolvent because it had loaned as much as 80 per cent of its total declared capital to a single borrower, Celso Fernandez Espina. Spanish narcotics authorities have linked him to both the Medellín and Cali drug cartels in Colombia. One of Espina’s closest financial associates is Juan Matta Balesteros, a ‘Class 1’ DEA offender now in prison in the US in connection with the 1985 murder of DEA agent Enrique Camarena. A 1983 US Customs report identifies Matta as one of the largest drug traffickers known to the Reagan administration, noting that he had transported 850 kilos of cocaine for the Cali cartel in January 1982.

None of this, however, presented an obstacle to ‘business as usual’. Even after the 1983 US Customs report, the State Department awarded hundreds of thousands of dollars in ‘humanitarian’ aid for the Contras in Nicaragua to Matta Balesteros’ Honduran cargo firm, SETCO Air. His indictment in the US was held up until 1988, after the Iran-Contra scandal had broken. The DEA shut down its Honduras office ‘for lack of sufficient funds’ at the same time that the CIA expanded its operations in Tegucigalpa, the Honduran capital, and only a month after Customs asked the Honduras DEA agent to investigate SETCO.

As for President Endara, if it’s protection he wants he could clip the CIA’s advertisement from the New York Times. His predecessor, Noriega, signed on for a six-digit salary in 1976, when George Bush was CIA director. Noriega’s income was interrupted only during the Carter administration and the unpleasant two years before the invasion. He did have to earn his pay. He let the Medellín cartel fly cocaine through Panama for a mere $200,000 a trip and he turned in their competitors to the US.

Noriega also arranged for pilots to fly arms to the Contras and cocaine back through Panama. As Senator John Kerry’s narcotics subcommittee concluded: ‘There was substantial evidence of drug smuggling through the war zones on the part of individual Contras, Contra suppliers, Contra pilots, mercenaries who worked with the Contras and Contra supporters throughout the region… Senior US policymakers were not immune to the idea that drug money was a perfect solution to the Contra’s funding problems.’

The hypocrisy of the so-called ‘war on drugs’ has been documented by Peter Dale Scott and Jonathan Marshall. They have exposed the foreign ‘assets’ that the DEA shared with the CIA; their underworld drug connections; their ties to the Chilean and Argentinian secret police and their efforts (abetted by Oliver North and the Justice Department) to silence witnesses who could attest to the Contra-drug connection.1

‘The long and sordid history of the CIA involvement with the Sicilian Mafia,’ conclude Scott and Marshall, ‘the French Corsican underworld, the heroin producers of South-East Asia’s Golden Triangle, the marijuana- and cocaine-trafficking exiles in Miami and the opium smuggling mujaheddin of Afghanistan simply reinforces the lesson of the Contra period: far from considering drug networks their enemy, US intelligence organizations have made them an essential ally in the covert expansion of American influence abroad.’

Just as the war on drugs in the cities of the US has come to mean police-and-prisons divorced from any kind of social or economic solution, the logic of the war on drugs abroad, such as it is, gives way to the same, stark absurdity. Bush’s promised aid to Panama, after devastating the country, shrank from billions to $450 million. According to the Council on Hemispheric Affairs, the proportion of Panamanian poor has risen from 33 per cent of the 2.3 million population before the invasion to 50 per cent today. A recent seminar of Panamanian economists with the Isthmian Foundation reported that 546,200 people were living in extreme poverty and another 461,000 in poverty. Unemployment hovers around 25 per cent and the figure reaches 50 per cent when combined with underemployment.

Meanwhile the Panamanian press reports that the Endara government has approved millions of dollars in military aid. While the privileged conduct business as usual and US policy ‘stabilizes’ Latin America under cover of new excuses, life for ordinary Panamanians just gets harder. In this ‘war on drugs’ it seems there are never first casualties, just ongoing ones. If the US wanted to keep the Third World poverty-ridden and drug-distracted then the war on drugs could be no better war.

Alexander Cockburn is a regular columnist for The Nation, New York, where Andrew Cohen also works.

1 Cocaine Politics, University of California Press, 1991


The reasons why
Why did the US invade Panama on 21 December 1989?
There are competing explanations.

The version according to President Bush:
In his first public explanation of the invasion President George Bush gave four reasons:

• To protect US lives – Panamanian troops were reportedly threatening US civilians and military personnel in the country.

• To defend the Panama Canal – although there had been no direct threat to close it, the deteriorating relationship between the US and Panamanian governments increased the risk that traffic in the canal would be disrupted.

• To restore democracy to Panama – the country had been ruled by the military since 1968.

• To stop drug trafficking and to bring General Manuel Antonio Noriega to justice – persistent accusations linked him to the Colombian drug cartels. A Panamanian bank had been convicted in the US of laundering drug money.


But earlier this year an Independent Commission of Inquiry, headed by former US Attorney General Ramsey Clark, published its findings.1 They tell a very different story:

The version according to the Independent Commission of Inquiry:
• In 1977 Panamanian President Omar Torrijos signed three treaties with US President Jimmy Carter. The treaties affirmed that the Panama Canal would be turned over completely to Panama by the year 2000 .

• There was also agreement that the 14 US bases in Panama would be returned to Panamanian control.

• In January 1990 a Panamanian appointed by the Panamanian government was due to oversee the administration of the Canal for the first time. Since the invasion the appointment has been stopped.

• For five years before the invasion the US had been demanding the renegotiation of the 1977 treaty agreement on the closing of US military bases. General Noriega refused to comply.

• Admiral John Poindexter (of Iran-Contragate fame) demanded repeatedly on behalf of the US government that Nicaraguan Contra forces be based in Panama. General Noriega refused.

• The US also demanded that Panama end its economic and political co-operation with Nicaragua and Cuba. General Noriega refused.

• The invasion took place just weeks before elections in Nicaragua, sending a threatening message to Nicaraguan electors about what could happen if they voted for the Sandinistas.

• Since the invasion three US military bases which had been returned to Panama have now been taken back by the US Southern Command.

• The Independent Commission discovered a chart giving the names of US State Department and Pentagon officials in Panama who are in charge of every ministry of the new Panamanian government.

• Since 1856 there have been 16 invasions and military interventions by the US in the Panama region.

1 The US Invasion of Panama: The Truth Behind Operation ‘Just Cause’, The Independent Commission of Inquiry on the US Invasion of Panama, South End Press, Boston, 1991.

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