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Declassified in Part - Sanitized Copy Approved for Release 2013/02/01 : CIA-RDP90M00005R000700110051-2 Iq Next 3 Page(s) In Document Denied STAT Declassified in Part - Sanitized Copy Approved for Release 2013/02/01 : CIA-RDP90M00005R000700110051-2 XT __? t1l Declassified in Part - Sanitized Copy Approved for Release 2013/02/01 : CIA-RDP90M00005R000700110051-2 -- ? vi av`~ \) VI, CIA Data, Panel Told Reports Are Said To Include Details On Kennedy, Helms By Joe Pichirallo W+a$. P. San Wfftr Panama's strongman, Gen. Man- uel Antonio Noriega, received "in. telligence reports" prepared by the Central Intelligence Agency and the National Security Council on the po- litical and personal views of U.S. senators and their aides, Jose I. Blandon, a former top Noriega po- litical adviser, told a Senate panel yesterday. Blandon said the information in- cluded reports on two leading crit- ics of Noriega, Sens. Jesse Helms (R-N.C.) and Edward M. Kennedy (D-Mass.), and on two of their aides. He said the data about Ken- nedy included material on the sen- ator's "personal problems." "We had all types of information on him," Blandon said, referring to Kennedy. The CIA Yesterday denied that it furnished any information to No- riega about U.S. public officials. Blandon, who has become a lead- ing Noriega critic, did not provide a complete account of the alleged re. Ports' contents and did not specify which U.S. government agency may have supplied them. TestifyM under oath before the Senate Foreign Relations subcorn- nlittee on terrorism, narcotics and international communications, Blan- don said he read the CIA and NSC re on a ports in connection with serving I Rencepteam tthatehid access to in- formation from Panama's intelli. gence agencies. "As part of the political intelli- gence team in Panama, documents which were drafted in the area of political intelligence on individuals costing to Panama caste into my hands," Blandon said. "And the CIA did prepare reports." Under questioning by Sen. john F. Kerry (D-Mass.), subcommittee chairman, Blandon said the docu- ments he saw were "clearly" from the United States and 'marked classifiecl.' " Kerry said it would be "reprehen. sible" if the allegation is true and called it "as disturbing a revelation as I've heard in the course of a lot of disturbing revelations over the past year and a half." Sed. Alfonse M. D'Amato (R- N.Y.), who has interviewed Blandon extensively, said that if true, the "charges are very serious ... out- rageous." D'Amato called Blandon a "very credible source" and said it would be illegal for the CIA to turn over reports on U.S. officials to No- mega.. D'Amato said he and Kerry have asked. the Senate Select Committee on Intelligence to investigate Blan- don's tt?gations. Sven E. Holmes, staff director and general counsel to the Senate intelligence panel, said he has asked the CIA, NSC and Department of Defense to provide a quick re- sponse to Blandon's testimony. In a statement, Kennedy said, "It is unconscionable to think that the CIA knew about Gen. Noriega's drug-trafficking activities and con- tinued to work with him for such a long time, but it is even worse to think that the CIA would provide in- formation about Noriega's leading American critics to the general himself." "One can only wonder who the CIA is working for," Kennedy added. The CIA said in a statement that it "categorically denies Blandon's assertions that it furnished any such information regarding U.S. senators Cortir fled The Washington TLnp The Wall Stmt Joumal The Chnstian Scianee Meta New York Dairy Now$ - - USA Today _ The Chicago Tnpune and their staffers to the govern- ment of Panama." A CIA spokesman said the agen- cy is prohibited by law "from col- lecting or retaining information on the personal lives of U.S. officials and U.S. citizens. The CIA does not engage in this practice." Blandon, 44, fired by Noriega last month as Panama's consul general in New York, also testified on No- riega's alleged links to international drug traffickers and said Noriega has received millions of dollars in payoffs. Noriega, Panata's military com- mander and de facto ruler, was in- dicted last week by two U.S. grand juries on charges that he provided government protection and other services to drug smugglers. Noriega has denied the drug al- legations and has publicly labeled Blandon a "Benedict Arnold." or traitor. Blandon said the Reagan admin. istration's push to force Noriega to resign is undermined by the support Noriega still has within the U.S. government, which results in "mixed signals" being sent to No- riega. Blandon testified that a cop No- riega supporter is Nestor D. San- chez, a former career CIA official who until last year was deputy is- sistant secretary of defense for Latin America. Blandon said San- chez has a "very close friendship" with Noriega and that Sancnrz r e- Iieves that any criticism of the amanian military is counter to U.z~. interests. Sanchez, now a Defense Depar-- ment consultant, could not be reached for comment yesterday. An informed source said Blandon has said the CIA and NSC reports were provided through the Pana- manian Embassy in Washington. J. Declassified in Part - Sanitized Copy Approved for Release 2013/02/01 : CIA-RDP90M00005R000700110051-2 Declassified in Part - Sanitized Copy Approved for Release 2013/02/01 : CIA-RDP90M00005R000700110051-2 .% Among the reports Blandon cited were ones on two Senate aides, Deb- orah DeMoss, a Helms assistant, and Gregory Craig, a Kennedy staffer. DeMoss and Craig have traveled to Panama and assisted their bosses in winning a congressional ban on vir- tually all U.S. aid to Panama. DeMoss and Craig said yesterday that the government-controlled Panamanian press has written ar- ticles about them as well as articles critical of Helms and Kennedy. They speculated that the detailed information may have come from the U.S. reports Blandon alleges were provided to Panama. Blandon also testified that polit- ical extremist Lyndon H. LaRouche Jr.'s organization supplied Noriega with reports on U.S. senators. "Mr. LaRouche works for Noriega," Blandon said. LaRouche and his group have publicly praised Noriega and denounced his critics as drug dealers. A0 Z. Declassified in Part - Sanitized Copy Approved for Release 2013/02/01 : CIA-RDP90M00005R000700110051-2 Declassified in Part - Sanitized Copy Approved for Release 2013/02/01 : CIA-RDP90M00005R000700110051-2 CIA briefed Noriega on lawmakers, Senate told By James M Dorsey "E AASHINGTO, ?"MES The CIA regularly sent Panama- nian strongman Gen. Manuel Ant- onio Noriega reports on U.S. sen- ators and congressional staff members that included information on their personal lives and political leanings, a former aide to the gen- eral testified yesterday. Jose I. Blandon. who headed Gen. Noriega's "Political Intelligence Group" before becoming Panama's consul general in New York, said he saw the reports, which referred mostly to senators and their aides who had sponsored legislation aimed at cutting off aid to Panama. He said the reports came from the CIA but included information pro- vided by President Reagan's Na- tional Security Council. CIA spokeswoman Sharon Foster, in a statement, denied Mr. Blandon's claims last night. "The CIA categorically denies Blandon's assertion that the agency furnished any such information re- garding U.S. senators or their staffers to the government of Pa- nama," she said. Mr. Blandon said the reports were in English on stationery of the CIA and the NSC. Well-placed sources said the re- ports were given by the CIA to Lt. Col. Sandy Motta, defense attache at the Panamanian Embassy in Wash- ington, who passed them on to Gen. Noriega. Mr. Blandon, who was fired by Gen. Noriega last month, made his startling revelation during a day of testimony before the Senate Foreign Relations subcommittee on narcot- ics, terrorism and international communications that included tales of drug trafficking, murder. gunrun- ning, money laundering and a host of other illegal activities through which the commander-in-chief of the Panamanian Defense Forces al- legedly amassed a vast fortune. The information provided to Gen. Noriega involved, among others, Sen. Jesse Helms, North Carolina Republican, a longstanding critic of the general: his staff aide Deborah Massachusetts Democrat: his aide Greg Craig; and, Sen. John Kerry, also a Massachusetts Democrat, Mr. Blandon said. The reports detailed "Kennedy's positions, and his own personal problems - all types of information on him," Mr. Blandon said. A report on Miss DeMoss prior to a visit by her to Panama stated that she "hated General Noriega," Mr. Blandon said. He said intelligence on senators was also provided to Gen. Noriega by Political activist Lyndon LaRouche. "Mr. LaRouche works for Mr. Nonega," Mr. Blandon said. Obviously angered, Mr. Kerry called Mr Blandon's disclosure "as disturbing a revelation as I've heard in the course of a lot of disturbing revelations over the past year and a half " He said it was "reprehensible" that the reports included details about senators' personal lives and suggested that sharing such data was "part of the ingratiation pro- cess. part of the sweetheart relation- ship" between Gen. Noriega and the CIA. Mr Kerry said he intended to raise the issue with the chairman of the Senate Intelligence Committee, Sen. David Boren, Oklahoma Demo- crat. He said those responsible should be fired if the testimony proved correct. Sen. Alphonse D'Amato, New York Republican, said the CIA action raised "great legal and ethical doubts" and would constitute a "vio- lation of the law" Differences within the Reagan ad- ministration between the State and Defense departments resulted in Pa- nama receiving "mixed signals" from Washington. Mr. Blandon said , adding that some within the admin- istration still support Gen. Noriega. Mr Blandon singled out Nestor Sanchez, a former deputy assistant secretary of defense for inter- Amencan affairs who now serves as a consultant to the Pentagon, as one of Gen. Nonega's staunchest sup- porters Mr. Sanchez was Gen. Noriega s control officer when both men were on the CIA payroll, he said. The former Panamanian official said a Panamanian intelligence of- ficer had told him Mr. Sanchez and Gen. Noriega were business part- ners in real estate, but that he had no evidence of that. A Defense Department spokes- man declined comment on the alle- gation Listening to Mr. Blandon describe a "gigantic machine" that generated hundred of millions of dollars in profits. Mlr Kerry said key U.S. agencies including the Drug En- forcement Administration and the TWasMrgton TIM" _ he he Wail Street Journal - . The Chrtrdan Sdenq Monitor New York Daily Newt USA Today The Chicago Tribune Date / ' State Department, had either been duped by Gen. Noriega or blinded to the nature of his enterprises by their interest in Panama's strategic im- portance as the site of the Panama Canal. Mr. Blandon said Gen. Noriega misled the DEA by turning over to the agency those involved in drug dealings that had no importance to him. "When he had problems with (someone] who had not paid, he'd turn them over to the DEA. Usually he'd turn over American citizens;' Mr. Blandon said, He said Gen. Noriega arranged in the early 1980s for arms shipments to Marxist rebels in El Salvador while ostensibly working with the CIA to counter the insurgency. "'So while Gen. Noreiga was working for the CIA and being paid by us, he was selling arms to the groups we were opposing?" asked Mr. Kerry, "Yes;' Mr. Blandon replied. One cocaine shipment by an al- leged Noriega associate involved an apparent connection to the U.S.- backed rebels in Nicaragua, Mr. Blandon told the subcommittee. Gen. Noriega has adamantly de- nied Mr. Blandon's accusations, and the general's lawyers have de- manded the right to cross-examine Mr. Blandon to protect their client from "vicious untruths " Gen. Noriega was indicted by two federal grand juries in Florida last week on charges he accepted mil- lions of dollars in exchange for mak- ing Panama a safe haven for drug and money-laundering operations. Mr. Blandon said Cuban President Fidel Castro once personally intervened in a dispute between Gen. :Noriega and the Colombia's Medel- lin drug cartel to protect the Pana- manian strongman from an as. sassination plot hatched by the cartel, which felt he had betrayed it. Mr. Castro wished to maintain re- lations with Gen. Noriega because Panama acted as a conduit for Cuban high-technology imports from the United States and Cuban shrimp and tobacco exports to the United States. he explained. The Cuban leader also sought in- fluence in Latin America through powerful drug barons and was eager Page Declassified in Part - Sanitized Copy Approved for Release 2013/02/01 : CIA-RDP90M00005R000700110051-2 Declassified in Part - Sanitized Copy Approved for Release 2013/02/01 : CIA-RDP90M00005R000700110051-2 saying Dr. Hugo Spadafora, a former deputy health minister in Panama and prominant Latin American revolutionary, had compiled doc- umentary evidence against the gen- eral. Mr. Blandon said Dr. Spadafora - whose mutilated and beheaded corpse was found near the Costa Rican border in 1985 - made the mistake of announcing he was re- turning to Panama to make that in- formation public. "He was arrested, then assassi- nated," Mr. Blandon said. Mr. Blandon said he once asked Gen. Noriega who had killed Dr. Spadafora. "I didn't do it, but Maj. Cordoba did," he quoted Gen. Noriega as say- ing. Maj. Luis Cordoba, head of the national department of traffic and transportation, was charged with the murder of Mr. Spadafora, but the charges were later dropped. to oppose the United States, he said. Mr. Blandon showed the commit- -tee copies of photos of the meeting in Havana between Gen. Noriega and Mr. Castro during which the Cu- ban leader sought to resolve the dis- pute with the. drug cartel. He esti- mated the Panamanian leader's fortune to be at least $200 million but said there are other estimates peg- ging it closer to $1 billion. Mr. Blandon said Gen. Noriega lives lavishly, maintaining 13 homes in Panama, often furnished with im- ports from Asia; a fleet of luxury cars and aircraft; a residence in France; and no fewer than 200 mili- tary caps. "Caps are to Noriega what shoes were to Imelda Marcos:' said Mr. Kerry, referring to possessions left behind in Manila when Mrs. Marcos left the Philippines. Mr. Blandon said as consul gen- eral in New York, he knew of shop- ping sprees by members of the Noriega family in which more than $50,000 was spent in a single day. He said a son of the general bought a Porsche automobile last year for $87,000. He said the general's control of Panama is so complete that he re- ceives $3 million a year from the country's central bank as "petty cash" He quoted an American pilot as 4. Declassified in Part - Sanitized Copy Approved for Release 2013/02/01 : CIA-RDP90M00005R000700110051-2 The Washmgton post Declassified in Part - Sanitized Copy Approved for Release 2013/02/01 : CIA-RDP90M00005R000700110051-2 ?0? %Mt Noriega citizen reports Former aide says CIA, NSC gave data on senators, staff By Stephens &oening Washington &utau of The Sun WASHINGTON - The CIA and National Security Council reported secretly to Panama's military ruler on the politics and private lives of potentially hostile U.S. senators and their staffs, the former head of a Panamanian Intelligence bureau tes- tified yesterday. Jose 1. Blandon, the former Intel- ligence specialist, said he usually re- ceived classified reports -- in Eng- lish - by the CIA or NSC Just prior to a visit to Panama of a senator or his staff member believed to be criti- cal of Gen. Manuel Antonio Noriega, the Panamanian dictator. "Norlega got them (the reports( and passed them on to us." Mr. Blan- don said. A spokesman for the CIA said. 'The CIA categorically denies Blan- don's assertion that the agency fur- nished any such Information regard- Ing U.S. senators or their staffers to the government of Panama.- Asked about the NSC's involvement, the White House said. 'There is no evi- dence to substantiate the charge.- Meanwhile, the White House fiat- lY rejected Yesterday General Norie- ga's demand that the United States end Its military presence in the country. "Under the Panama Canal treaties. we have every right to be there and we don't anticipate any change in that status,- spokesman Martin Fitzwater said at his daily news briefing. Testifying under oath before a Senate committee. Mr. Blandon re- called. "We had information with re- s~ to (Sen. Edward M. Kennedy) n8 political Position and his own personal problems. We had types ,Wf Information on him.- he said. e also r. (Sen. Jesse] jHHe ms ~ h1 about M ities.' Both the liberal Massachusetts Democrat and the conservative North Republican Not1 have been critical Carolina On the eve of a trip to Puna by Deborah DeMosa, a Latin America specialist on Senator Helms' staff, Mr. Blandon said. -We received com- aid ~ng a break in the hearing h~ng sthat the information In the reports, which she said now has been given to her privately. 'went far beyond what's available in press clippings.- Sen. John Kerry, D-Mass., chair. man of the Foreign Relations sub- committee on narcotics and terror- ism, said CIA spying on U.S. citizens is illegal. He said he intended to take Mr. Blandon's allegations to Sen. David L. Boren, D -Okla.. chairman of the Senate Intelligence commit. tee. Sen. Alfonse M. D'Amato, R-N.Y? said. This violates the law. It is We- gad (for the CIA( to be gathering this Information, and to supply it to No- riega simply compounds the felony.- For years, Mr. Blandon was direc- tor of what he called 'a specialized political Intelligence office- that re- Ported directly to Panama's military commander. In addition, he was widely known as one of General No- riega's most trusted political advis- ers. He broke with the general a few weeks ago when Mr. Noriega repudi- ated Mr. Blandon's efforts to mediate Panama *s growing political crisis. Mr. Blandon said he was speak- ing out because "I want to save (Pan- ama( from the grasp of a criminal enterprise- run by General Noriega and his cronies. He provided new details about what he said was the general's in- volvement in large-scale narcotics trafficking, gun-running, money- laundering, kickbacks, murder and looting of the public treasury. He said the general had amassed a -pharaonic- fortune, which he said could be as much as $ 1 billion. Mr. Blandon also described Gen- eral Noriega as a man who regularly betrayed the men and countries he dealt with - not least of all the United States. The Chicago Tribune USA Today The Wall Street Journal - The Christian Science Monitor New York Daily News The Washington Times Although he was on the CIA pay- roll. General Noriega secretly sold arms to leftist guerrillas in Colombia and El Salvador. whose government the United States was committed to support. Mr. Blandon said. While getting payments of tens of millions of dollars from the Colombi- an drug cartels for letting them oper- ate in Panama. General Noriega duped the U.S. Drug Enforcement Administration into believing he was a valuable ally in Washington's war on dregs, Mr. Blandon said. In one of the strangest incidents in a bizarre Intrigue recounted by Mr. Blandon, the DEA commended General Norlega for what it thought was the destruction of a large co- caine-p laboratory in Pana- ma, when in fact the lab. all Its supplies and the.23 men operating It were returned to the cartel in an ar- rangement brokered by President Fi- del Castro of Cuba. Mr. Blandon said General Noriega had ordered the raid on the laborato- ry amid the public outcry following the murder in 1984 of the Colombi- an justice minister by the dreg car- tel Mr. Noriega acted after it was disclosed in public that 100 mem- bers of the cartel were having a strategy session in Panama. What was not publicly known. Mr. Blan- don said, was that the Panamanian army was providing security for the drug Loris' meeting. The cartel leaders were fur?lour about the and plotted to assasat- nate Gen Noriega. a conspiracy that the Israeli secret service discov- ered and relayed to the general dur- ing one of his trips to Israel. Mr. Blandon said Mr. Blandon said General Nortega ordered him to Cuba where they would discuss the problem with Mr. Castro. The Cuban leader - with a -Co- iombtan- in the wings - proposed a settlement involving General Norie- ga's return of the $5 million the car- tel had paid him to set up shop. the return of all the equipment seized. including planes and helicopters. and release of the 23 Colombians arrested. Page - Declassified in Part - Sanitized Copy Approved for Release 2013/02/01 : CIA-RDP90M00005R000700110051-2 tng for his hk, t aveW back to PaA- ama with a spedally selected team of Cuban --bodyguard -peovtded by _ President Castro. Mr. Blandon sold. There were no inddenta President Casten acted as media- tor. Mr. Blandon said. because he wanted General Norte in power. 'Fidel feared that Norlega would be replaced in Panama. In Fidel's head - and I think he was right in this - he believed that if Nor legs and the group of officers working with him were to be eliminated. the illegal dealings he had with Panama would come to an end. So he was Interested because his own Interests in Panama were threatened,' he said. Mr. Castro was also aware of General Noriega's arms transactions with guerrilla groups that Cuba sup. ported. he said. 'So his interests were political. they were economic. and they were interests linked to a war which was being waged with the United States.- Mr. Blandon said. In testimony Monday, the first of four scheduled days of hearings, the former commander of U.S. forces in Latin America. retired Gen. Paul Galvin. said General Nor lega report- ed to U.S. officials on his frequent meetings with President Castro. General Galvin said he didn't give the reports much credence. This close association of Mr. No- riega and some U.S. officials provid- ed a humorous note yesterday when Mr. Blandon was speaking about Nestor Sanchez. a former CIA official who recently worked at a senior Pentagon post. Senator Kerry said Mr. Norlega and Mr. Sanchez were 'close- friends. 'Correct.' said Mr. Blandon. 'While he was in the CIA.- Mr. Kerry went on. -While who worked for the CIA. They both worked for the CIA.- Mr. Blandon answered. Declassified in Part - Sanitized Copy Approved for Release 2013/02/01: CIA-RDP90M00005R000700110051-2 Declassified in Part - Sanitized Copy Approved for Release 2013/02/01 : CIA-RDP90M00005R000700110051-2 ?'mto The wnew._-?- Declassified in Part - Sanitized Copy Approved for Release 2013/02/01 : CIA-RDP90M00005R000700110051-2 -...,oval Journal The Christian Science Mom--- NOW York itor Gaily News -- USA Today The Chicago Tribune Date 10 FFR QQ CIA DENIES PROVIDING CLASSIFIED PERSONAL INFORMATION ON t-lEM4BERS OF CONGRESS TO PANAMA'S GEN. MANUEL ANTONIO NORIEGA By UkNM WALKBR h1AS (UPI) The CIA denies Providin information on members of Congress to Panama's C sl ed Personal Noriega, as alleged by one of the military Mamel Antonio Senators investigating Panamanian corrupts der s former colleagues. disturbed by the allegation from Jose Blandon~~ however, are month as Panama's general consul in New York , who left his post last his country's de facto ruler. and is testifying Blandon lodged Y~g against healn his accusation against the CIA hearings set to continue today with testimony Tuesday, at senate pilot who admits flying guns and drugs as r from a former senate network run part of an dnternationion a Pilot Floyd the general. al Carlton, identified as a leader in of the illegal network, was expected to back u the civilian arm rg p filed against Noriega last week the drug-sr~gFlori ahaes Blandon, appearing Tuesday for a s~ time before a subca ofcthet gn Relations O mittee, said the CIA and t*~ She Security Council staff supplied private the etafl al politics and 'personal ' fo ators investigating corruption in Panama. problems, of senators inving Blandon said he saw U.S. d informmation about Sens. Edward Kennnetdscorked 'classified " with and several capitol Hill aides. The CIy, D-Mass- , Jesse Heim, R-N.C., Senate sources who confirmed LA and NSC were bl published such formation at aides had been in Noriega-controlled newspapers. The CIA categorically denies Blandon's assertion that furnished any such information regarding U L the agency to ta government of Panama, CIA spoke Tuesday. .S. senators or their staffers n Sharon Foster said But Sen. John Kerry, the Massachusetts subcommittee hearings,, called it Democrat leading the I've heard " in his continuin at disturbing a revelation as Central America. g investigations of U.S, activities in In daylong testimony, Blandon said Nori a r' cocaine kingpins, expert ly.maniP wo-ind with Colombia's ministration so that its r; ut?~~ the Drug Enforcement Luis Quiel, was in truth one of toe contact with identified as drug producers. general s i1aisons to the colambia While working on behalf of the CIA in F1 entering into agreement with the Soviet Union, '-ado , Noriega Sandinistas in their success `{ing for'thelso was Salvadoran rebels with fug re olution in Nicaragua and setting up Panama s sg syst>zg mom laundering, Blandon said. banking system for (He was) double-deaiii^g, triple-dealing, q~;adriple-deaf g Contnued 7 Declassified in Part - Sanitized Copy Approved for Release 2013/02/01 : CIA-RDP90M00005R000700110051-2 Declassified in Part - Sanitized Copy Approved for Release 2013/02/01 : CIA-RDP90M00005R000700110051-2 Page 2 Kerry declared, and it is -inc mprehensible " U.S. intelligence agencies did not know about it. ~We were canplicitors as a country in narcotics traffic,' the senator angrily concluded. Sitting in on the hearings, Sen. Alfonse D'Amato, R-N.Y., added, I dare say the intelligence agencies of this country, by God, should be involved in this matter instead of working with the scan of the earth as they have been doing." Kerry, on the NBC Today, program, said today Blandon -has no other motives other than telling the truth,'' in chars g Noriega with multiple crimes, noting Blandon has little money, never been accused'' of a crime and has not sought federal iiminity for anything.'' Aura o, also appearing on "Today-,,, said, ..we do know that Noriega has been a paid CIA agent ... highly paid,'' and the law has been violated'' by delivery of dossiers on members of Congress to Noriega, as Blandon charges. Both Kerry and D'Amato scoffed at Noriega's demand for U.S. military forces to leave Parana, headquarters of the U.S. Southern CXnmand and the largest U.S. military outpost in Latin America. D'Amato cautioned "this little pineapple ... a tin general, a thug,'' against flexing his rr scle against U.S. forces protecting the Panama Canal. Kerry, echoing D'Amato, said, "we are not in jeopardy,' in Panama . Blandon, termed a Benedict Arnold" by Noriega and now under protection by federal marshals, said some officials within the U.S. government still are supporting Noriega. Specifically, Sanchez, who he described as an adviser to the Pentagon ~ named Nestor tn Canal Cxmnission.and d the Panama 1 If you need to learn the U.S. position; you have to talk to the different (U.S.) agencies,'' Blandon said. The su-nary is, there is no position.'' He noted a recent U.S. anti-drug effort in Central America, known as Operation Pisces, was ballyhooed by the Reagan ad-dnistration as a success and even won Noriega a letter of thanks for cooperation. In reality, Blandon said, the operation 'did not affect anyone in Panama. He suggested Attorney General Edwin Meese simply " needed to have one success in the war against drug traffickinc.'' Blandon said Noriega sRLTs $3 million a year offPanarnanian defense force funds for 'petty cash ' and is worth as such as $1 bill-ion despite a $60,000 annual salary. His children have soent as much as $50,000 a day, Blandon sa=d. Declassified in Part - Sanitized Copy Approved for Release 2013/02/01 : CIA-RDP90M00005R000700110051-2 Declassified in Part - Sanitized Copy Approved for Release 2013/02/01 : CIA-RDP90M00005R000700110051-2 The Christian Science Monnor "0 'VW York Times The Washington Ti -. The Wall Street Journal - - New York Daily News USA Today The Chicago Tribune NCRIDGA, U.S. CLASH AS SENATORS HEAR OF HIS TIES TO CIA By Willian Scatty REUTERS Date 10 FEg gg WNSHnCMN, Feb 10, Reuter - Panamanian leader Manuel Antonio Noriega's rift with the Reagan adminid sharpp~words between Washington and Panama Citynistrationandwidened irrxmy about his alleged deals. role in arms and drug As the White House dismissed cen. U.S. forces Noriega's demand that pull out of strategically important Panama, a the former CIA close while at aide testified that Noriega built close ties to and Salvadoran the rebelssame time assisting cocaine traffickers . Noriega, Panama's de facto ruler s charged since 1983, was formall in connection with cocaine and y Florida last eight mono marijuana smuggling in week, but hur anitarian aid to his c~tfyter the United States cut all Former aide Jose Blandon told a Senate hearing on Tuesday that Noriega and the CIA had been so close that the CIA had given Panamanian intelligence reports on senators hostile to his rule, including Edward Kennedy and Jesse Heim. Blandon also told a Senate Foreign Relations panel on Tuesday that Cuban President Fidel Cast., Noriega on how to placate a notorious Col 1984 advised whose cocaine processing narcotics ring 9 plant in Panama had been raided. Blandon said Israeli intelligence, which protected Noriega when he was abroad, had uncovered a plot to assassinate him. At the White Hasse, spokesman Marlin Fitzwater told reporters the United States had no intention of c , 1y Noriega's call in a dartestic television broadcast forangend to the U.S. military presence in Panamma. The United States maintains its 10,000-r;pan reg=o al military headquarters in Panama. The country is of added strategic importance to Was - ; ,melon pause of the U . S . -b~ ~t and administered Panama Canal. Under the Panama Canal treaties (signed in 1977 President Jimmy Carter and then Panamanian leader General C?nar Continued Declassified in Part - Sanitized Copy Approved for Release 2013/02/01 : CIA-RDP90M00005R000700110051-2 Declassified in Part - Sanitized Copy Approved for Release 2013/02/01 : CIA-RDP90M00005R000700110051-2 Page 2 Torrijos), we have every right to be there and we don't anticipate any change in that status,'' Fitzwater said. Blandon, Panama's consul general in New York in 1987-88, also testified that Noriega's close relations with the CIA flourished even though he had sent arms for cash to guerrillas fighting the U.S.-backed Salvadoran government. He said Panamanian intelligence had received secret documents from the CIA and the National Security Council, including reports on the political leanings and personal lives of senators visiting Panama -- among teen Helms, a North Carolina Republican, and Kennedy, a Massachusetts Democrat. The CIA denied furnishing such reports, saying it was prohibited by law from collecting information on the personal lives of U.S. officials or citizens. Blandon, a small man with iron-grey hair who seeped to have the ability of total recall of past events, is a key witness'in the criminal cases against Noriega in Florida. . His nearly six hours of testimony was illustrated by charts shaving the structure of what he called a vast Noriega-led criminal enterprise . " Through an interpreter, he described a 1984 meeting with Castro in Havana at which the Cuban leader proposed a plan to smooth relations with the notorious Medellin narcotics ring. He said the ring had paid up to $7 million for safe haven in Panama when its cocaine plant in the Darien jungle region of Panama was raided and shut down, an action that brought a warm letter of commendation from U.S. drug authorities. According to Blandon, Castro proposed that the ring be paid back $5 million, that its factory equipment, helicopters be returned and that 23 operaiveslarrested be allowed to leave the country. After, Castro talked to Noriega about the proposed deal, Noriega told me ... everything had been arranged and they would proceed according to the Castro proposal, " Blandon said. /Q. Declassified in Part - Sanitized Copy Approved for Release 2013/02/01 : CIA-RDP90M00005R000700110051-2 t,* Washumon pm, . Declassified in Part - Sanitized Copy Approved for Release 2013/02/01 : CIA-RDP90M00005R000700110051-2 1 e DiIsul - The Christian Now Tod ? ~ Daq in Pnama CoverUpI The Chiicpo Tribune Date By ELAINE SCIOLINO Oftnel m fllt NA York Tirii WASHINGTON, Feb. 9 - A Central Intelligence Agency official was in- volved in a cover-up of the 1995 murder of a political opponent of Panama's military leader, a former Panamanian official testifiwd today. The former official, Jost 1. Blandon, who was dismissed as Panama's con- sul general in New York last month, made the assertion in an appearance before a Sense Foreign Relations sub- committee. It was Mr. Blandon's fullest declara- tion to date of how the Panamanian leader, Gen. Manuel Antonio Noriega, transformed his country's banks, gov- ernment and military institutions, cor- porations, airstrips and harbors into a "gigantic machine" that- generated hundreds of millions of dollars. Mr. Blandon said that the activity began in the early 1970's when General Noriega took over as Panama's intelligence chief. The testimony follows General Noriega's indictment last week by two Federal grand juries in Florida on charges of drug trafficking and other crimes. Under Round-the-Clock Guard Mr. Blandon, who is under round-the- clock protection by Federal marshals, also said today that as chief of political intelligence until two years ago, he had read classified Panamanian military intelligence reports that described the political beliefs and the personal lives of senators and Congressional staff members. He said the documents iden- tified the source of the information as the Central Intelligence Agency and the National Security Council. Mr. Blandon said he had received re- ports on the activities of Senator Jesse Helms,, a North Carolina Republican and a longtime critic of General Norie- ga, and on Senator Edward M. Ken- nedy, Democrat of Massachusetts. In one instance in 1986, Mr. Blandon said, he read a report with information purportedly provided by the C.I.A. on Deborah DeMoss, a staff member of the Senate Foreign Relations Commit- tee who was visiting Panama. It stated that she "hated" General Noriega, Mr. Blandon said, and a profile of her ap- peared shortly afterward in a Panama- nian newspaper calling her an Amer- ican Mata Hari. Senator John Kerry, a Massachu- setts Democrat who heads the subcom- mittee, called it reprehensible that re- ports included details about the private lives of public officials, adding that the handing over of such information was apparently "part of the ingratiation process, part of the sweetheart rela- tionship" between General Noriega and the C.I.A. A Denial by the C.I.A. The C.I.A. said in a statement that it "categorically denies" furnishing such information to the Government of Panama. The White House said that an extensive search by the National Se- curity Council had produced no evi- dence to substantiate the charges. Mr. Blandon's allegations of C.I.A. in- volvement in a cover-up involved the decapitation death of Dr. Hugo Spada. fora, a Noriega opponent, in September 1985. Mr. Blandon said that after the killing the C.I.A. station chief in Costa Rica, Joe Fernandez, known by the pseudonym Tomas Castillo, sent a "witness" known only as Hoffman to Panama where he appeared on televi- sion and declared that Salavadoran rebels were behind the killing. Mr. Fernandez was later disciplined A station chief is linked to a `witness' in a political murder. y the C.I.A. for his involvement in sup- lying aid to the Nicaraguan rebels chile such aid was prohibited by Cor.- eress. Mr. Hoffman, whom Mr. Blandon de- scribed as a specialist in electronics who sometimes worked for the C.I.A was never questioned by Panamanian law enforcement officials and was whisked out of the country. A Summons by Noriega According to the testimony today. General Noriega summoned ylr Blandon, then his senior political advis- er, to his suite at the Helmsley Palace in New York and attributed the murder to Luis Cordoba, now a member of the staff of the joint chiefs of Panama s Defense Forces, which General Noriega commands. Mr. Blandon Quoted General Nonega as then saying, In any case, he deserved to be dead." 'General Noriega has been accused by another high-ranking officer who broke with him of having ordered the murder of Dr. Spadafora. What is motivating Mr. Blandon to speak out remains a bit murky and some Panamanian opposition leaders believe that if he outlasts General Noriega he may try to run for Presi- dent when elections are held in Panama next year. A lifelong politi- cian, he has not joined the Panamanian opposition and today called himself a principal leader of the Government. allied Democratic Revolutionary Party. On the charges that C.I.A. files on legislators and staff members were forwarded to Panama, a C.I.A. spokes- man said tonight that the agency was "prohibited by law from collecting or ,retaining information on the personal lives of U.S. officials and U.S. citizens "The C.I.A. does not engage in this practice," the spokesman added "Under the law, C.I.A. may only collect or retain information on U.S. persons if it has a legitimate foreign intelligence or counterintelligence value." An Administration official said that there were no restrictions on the agency providing information to for- eign governments provided it had been lawfully acquired. The White House today rejected out right a demand by General Noriega on Monday that the United States end its extensive military presence in Pana- ma. "Under the Panama canal irea ties, we have every right to be there and we don't anticipate any change in that status." said the chief White House spokesman, Marlin Fitzwater. The United States maintains the headquarters of its regional Southey, Command, which is responsible for American military operations in Lj::r. America, in Panama and 10,000 Amer ican troops are stationed there Page Declassified in Part - Sanitized Copy Approved for Release 2013/02/01 : CIA-RDP90M00005R000700110051-2 The Washington Post Declassified in Part - Sanitized Copy Approved for Release 2013/02/01 : CIA-RDP90M00005R000700110051-2 The Washington Times The Wall Street Journal The Christian Science Monitor New York Daily News USA Today The Chicago Tribune Date 4 Panama Denounces Indictments as `Lies' Reuter PANAMA CITY, Feb. 5-The Panamanian government denounced the U.S. indictments of military leader Manuel Antonio Noriega to- day and warned the United States that its patience and tolerance were wearing thin. "The government of Panama en- ergetically and indignantly rejects ... the obsessive campaign of lies and calumnies against" Noriega and "the attempts by the North Amer- ican administration ... to isolate Panama and destabilize its govern- ment," the Foreign Ministry said in a statement. Federal prosecutors in Miami and Tampa, Fla., today issued indict- ments against Noriega on federal drug and racketeering charges, al- leging that he used his vast govern- mental powers to convert Panama into a haven to help traffickers smuggle drugs into the United States. [Maj. Edgardo Lopez, spokesman for the Panamanian military, quoted Noriega as saying the charges were "totally false, no more than another step in the plan to menace and ter- rorize nationalist leaders and Latin American patriots who dare to con- front the United States," United Press International reported. [According to Lopez, Noriega said the allegations were "a joke and absurd political maneuver" and that the whole affair was "in strict ac- cord with political interests of the government of the United States.") The Foreign Ministry statement said the charges were false and based on statements by convicted drug dealers who exchanged their testimony for reduced sentences. "The government warns that it is extremely dangerous to tax the pa- tience, tolerance and good faith. of the Panamanian people with cam- paigns that could spark unforeseen reactions; it said. The ministry did not specify what action the government might take. [The streets of Panama City were quiet in the hours after news reached the country that Noriega had been indicted in Florida, UP[ reported. But antiriot troops moved into a downtown park near the headquarters of key opposition groups.] spokesman for the U.S. Em- bassy here said the indictments constituted a legal process aimed at named individuals, not the Panama- nian government. "I should stress that we do not seek to sully the government of Panama or to denigrate the insti- tution of the Panama Defenab Forces," he said. Declassified in Part - Sanitized Copy Approved for Release 2013/02/01 : CIA-RDP90M00005R000700110051-2 Declassified in Part - Sanitized Copy Approved for Release 2013/02/01 : CIA-RDP90M00005R000700110051-2 AORIEGA INDICTED BY U.S. FOR 11D LINKS. TO ILLEGAL DRUGS By PHILIP SHENON t scLI to The New York Timn MIAMI, Feb. 5 - Gen. Manuel Anto- nio Noriega, the military ruler of Pana- ma, sold his official position to drug traffickers for millions of dollars in bribes and turned Panama into a capi- tal of international cocaine smuggling, the Justice Department charged in two indictments made public today. In one of the indictments, Federal prosecutors tried to link Fidel Castro, the Cuban leader, with drug operations run by General Noriega and the so- called Medellin cartel, a Colombian co- caine ring that is said to be responsible for more than half of the cocaine smug- gled into the United States. - While prosecutors said the Justice Department lacked enough informa. tion to bring formal charges against Mr. Castro, they described the evi- dence against General Noriega, who has ruled Panama since 1983, as over- whelming. $4.6 Million In Payoffs Alleged "In plain' language, he' utilized his position to sell the country of Panama to drug traffickers," said Leon B. Kell- ner, the United States Attorney in Miami, whose grand jury brought one of the two long-awaited indictments. The indictments charge that General Noriega took more than $4.6 million in payoffs to provide secure airstrips and haven for some of the world's most vio- lent drug traffickers, including a group of fugitives linked to the assassination of Colombia's Justice Minister, Ro- drigo Lara Bonilla, in 1984. The indictments, which were re- turned on Thursday and unsealed to- day, raise seripus questions' about the Reagan Admir)istration's once vigor- ous support for General Noriega and his Government. A Further Si rain on Ties . The indictments also complicate ef- forts by the Administration to ease General Noriega from power, and some United States officials expressed fear that he might retaliate against American interests and the 50,000 Americans living in Panama. (News analysis, page 5.1 Mr. Kellner said he recognized the effect of the 12-count indictment on al- ready strained relations between the United States and Panama. "I recognized the implications of in- dicting a person who controls a coun. try, and General Nor iega controls Panama," Mr. Kellner said. But he said he had received 'no hindrance" from any official in the Reagan Admin. istratlon in pursuing the 14-month in. vestigation. Because of limited extradition trea- ties between the United States and Panama, it -is almost inconceivable that the general will be brought to the United States for trial while he holds power. The 49-year-old general has repeat- edly denied involvement in drug traf. ticking and has accused the United States of making false allegations against his government in an effort to retain control of the Panama Canal. In Panama City, the Foreign Minis- try said today that "Panama energeti- cally and indignantly rejects this new assault against its leaders and institu. tions and warns that neither these ac- tions nor any other will make us cede." The ministry also said it would be "extremely dangerous" for the United States to try "the patience, tolerance and good faith" of Panama "with cam- paigns which could lead to unforeseen reactions." Called a Badly Kept Secret According to Federal law enforce. ment officials, the general's involve. ment in international narcotics smug- gling has been a badly kept secret for years. The indictment released today. in Miami accused General Noriega and: 15 associates of a drug conspiracy that dates at least from 1981. The chairman of the House Select I' Committee on Narcotics Abuse and Control, Representative Charles B. Rangel. Democrat of Manhattan, today accused the Administration of a "full- blown cover-up of the facts about Noriega," who maintained a close rela- tionship with the Central Intelligence Agency and William J. Casey, its direc- tor from 1981 to 1987. Reagan Administration officials said the criminal investigation of General Noriega began with what one described as a "relatively small-scale drug inves- tigation" by Mr. Kellner's office that mushroomed as additional witnesses provided evidence against the general. A senior Federal law enforcement of- ficial said Justice Department repre-, sentatives asked for a meeting last fall with their counterparts at the State De- partment to determine "whether State would try to block this." "There wasn't a problem," the offi-. cial said. "State and Justice agreed that if there was evidence to indict: Noriega, indict him." 1 'Money Laundering Centers' At a news conference, Mr. Kellner' said General Noriega provided invalu- able assistance to drug dealers by his willingness to transform Panamanian, banks into little more than "money laundering centers." "Panama was extremely important to the success of the Medellin Cartel because this is where their money went," he said. "This gave traffickers a safe haven to put money where we couldn't find it." The New York Ti,*, Th W e ashington Times The Wail Street Journal The Christian Science Monitor New York Daily News USA Today The Chicago Tribune Date 1~E~ ~~- The indictment brought by Mr. Kell- ner names 16 defendants in the cocaine conspiracy, including Capt. Luis Del Cid of theesc Panama National Guard.. who was dribed as General None. i ga's liaison with drug traffickers, and' Amet Paredes, son of the Panama's former military commander of Pana- ma, Gen. Ruben Dario Paredes. Another of General Paredes son's, Ruben Jr., was killed in Colombia in (1986 as he made arrangements to ac- quire a load of cocaine, the indictment said. The general has accused General Noriega of ordering the murder. Also indicted were Gustavo Dejesus iGaviria-Rivero and Pablo Escobar. 1 Gaviria, identified as leaders of the Medellin Cartel. The indictment was brought under the Federal racketeer. ing laws and charged a variety of other crimes, including cocaine distribution. Prosecutors said that two of the de- .fendants - they would not say which ones - were believed to be in the United States, and that warrants had been issued for their arrest. The three-count Federal indictment brought in Tampa charged General Noriega with conspiring to smuggle more than a million pounds of mari- juana into the United States. Under the scheme, the indictment said, General Noriega also agreed to permit more than $100 million in pro- !ceeds from the marijuana sales to be laundered through Panamanian banks. A key prosecution witness in the Tampa case is Stephen M. Kalish, a convicted American drug dealer who testified at a Senate hearing last week that he gave millions of dollars in kick. backs to General Noriega for the Pana- manian's help in drug deals and money laundering. Movement of Drugs Described The broader Miami indictment de- scribed the movement through Panama of thousands of pounds of Co- lombian cocaine bound for the United States. In one shipment, more than a ton of cocaine was placed aboard a let in June 1984 and flown to Miami. According to the indictment, General Noriega performed a variety of ices fur the Colombian smugglers: He provided them with secure airstrips, 1 ordered Panamanian customs and im- migration officials to ignore their drug shipments, and allowed fugitives to re- main in Panama if they were sought by law enforcement officials elsewhere in the world. Page .3 Declassified in Part - Sanitized Copy Approved for Release 2013/02/01 : CIA-RDP90M00005R000700110051-2 Declassified in Part - Sanitized Copy Approved for Release 2013/02/01 : CIA-RDP90M00005R000700110051-2 The 30-page indictment says Mr. Castro was instrumental in 1984 in mediating a dispute between General Noriega and members of the Medellin Cartel over the Panamanian govern- ment's seizure of a cocaine laboratory run by the cartel. According to the Jus- 'tice Department, the disagreement was resolved during a Havana meeting between General Noriega and Mr. Cas- tro. The Justice Department said this was only the second time it had in- dicted the sitting leader of a foreign na- tion; the other was the chief minister of the Turks and Caicos islands, a tiny chain of islands in the Caribbean, who was convicted in 1985 on American drug charges. If convicted on all counts in the Miami indictment, General Noriega could face life in prison and a maxi mum fine of $1.4 million. The Tampa charges carry a maximum penalty of 20 years in prison and $140,000 in fines. Declassified in Part - Sanitized Copy Approved for Release 2013/02/01 : CIA-RDP90M00005R000700110051-2 /I The Washington Post Q- Declassified in Part - Sanitized Copy Approved for Release 2013/02/01 : CIA-RDP90M00005R000700110051-2 Indictments Depict Noriega As DrugTrafficking Kingpin U.S. Had Long Backed Panamanian Leader By Joe Pichirallo WeYrytoo Pest Stiff Writer The U.S. criminal indictments unsealed yesterday against Gen. Manuel Antonio Noriega portray the Panamanian leader as a key member of an international drug- trafficking conspiracy that began in 1981-a time when the Reagan ad- ministration embraced him and dis- missed reports of his drug ties. The unprecedented indictments, returned by federal grand juries in Miami and Tampa, Fla., Thursday and made public yesterday, pro- voked sharp reactions yesterday in Panama and in Congress. Noriega, wbo is accused of vio- lating U.S. racketeering and drug laws, was charged for Providing protection and other government services in Panama to international drug traffickers who shipped co- Caine and marijuana to the United States through Panama. He also al- lowed large sums of illicit profits from U.S. drug sales to be laun- dered through Panamanian banks, the indictments said. But some administration critics in Congress and elsewhere declared that the indictments suggest that until recently the administration ei- ther covered up or overlooked al- legations against Noriega. Administration officials strongV denied these claims. And the Pan- amanian Embassy in Washington, in a strongly worded statement re- leased yesterday, denounced the in- dictments and accused the Reagan administration of engaging in a "systematic campaign" to destabil- ize the Panamanian government. The embassy said "it is dangerous in the extreme to challenge" Pan- ama's patience and could "engender unforeseen reactions" in the coun- try, site of the strategic Panama Canal. The indictments come at a time when the Reagan administration is pushing for Noriega, Panama's mil- itary commander and de facto ruler, to resign and permit civilian democ- racy to take hold in Panama. Administration officials insist the indictments are not related to U.S. efforts to oust Noriega. Officials said the criminal investigations of No- riega hardened within recent months because for the first time ev- er, U.S. law enforcement officials obtained evidence they viewed as credible. A high-ranking administration of- ficial said yesterday that "what really happened here is that the legal pro- Less ran its course. We monitored the legal proceedings, but we didn't try to influence them." Until recently, Noriega, 51, has been viewed by the Reagan admin- istration as an important ally in Latin America and had strong backing from the Central Intelligence Agen- cy and the Pentagon, according to current and former U.S. officials. Administration officials said the abandonment of suppport for No- riega was largely prompted by vi- olent, anti-Noriega riots in Panama last summer, the growth of internal opposition to hint and the continued deterioration of Panama's economy. The Miami indictment, which al- leges that Noriega was the key fig- ure in a broad criminal conspiracy, charged that the specific scheme des' ribed in the indictment began in the fall of 1981 and continued through March 1986. In a statement yesterday, Rep. Charles B. Rangel (D-N.Y.), chair- man of the House Select Committee on Narcotics Abuse and Control, said that "the American people have been victimized by a full-blown cover-up of the facts on Noriega (The indictment) could have been done years ago. The Washington Times The Wall Street Journal The Christian science monitor New York Daily News USA Today The Chicago Tribune Date "Apparently before," Rangel said, "Noriega was a useful source of in- telligence on Latin America. Now the administration may believe he has outlived his usefulness." Sen. Jesse Helms (R-N.C.), a No- riega critic, said in a statement that he has warned of Noriega's drug ac- tivities for a decade but that some U.S. officials have "supported No- riega for too long." Deputy State Department press aide Phyllis Oakley said yesterday that the Noriega indictment is aimed at individuals and is not an attack on the Panamanian government. Miami U.S. Attorney Leon Kell- ner said yesterday that the indict- ments "make it clear that no one is above our laws. General Nonega controls Panama .... he utilized his position to sell the country of Panama to traffickers. He has con- trol of law enforcement, of customs [and) of immigration." Chances of Noriega coming to trial in the United States are slim because the Panamanian constitu- tion bars extradition of its citizens. In Tampa, Noriega was indicted on three felony counts and charged with assisting a U.S.-based marijua- na-smuggling operation in return for receiving about $1 million in payoffs. Noriega and an associate, Enrique Pretelt, a Panamanian busi- nessman who was also charged, were accused of assisting an oper- ation led in part by Steven Michael Kalish, a convicted drug smuggler cooperating with the probe. The Miami indictment is a more detailed and broader case. Noriega is named with 15 others in a 12. count, 30-page indictment that ac- cuses him and others of participating in a criminal enterprise in violation of U.S. racketeering and drug laws. The charges in the Miami case carry a maximum 145 years in pris- on and $1.1 million dollars in fines, if Noriega were ever tried and con- victed. Page 17 Declassified in Part - Sanitized Copy Approved for Release 2013/02/01 : CIA-RDP90M00005R000700110051-2 Declassified in Part - Sanitized Copy Approved for Release 2013/02/01 : CIA-RDP90M00005R000700110051-2 The Miami indictment alleges that beginning in October 1982. Noriega offered to provide govern- ment protection and other services to the leaders of the notorious "Me- dellin cartel," a Colombian drug ring investigators say is responsible for most of the cocaine smuggled into the United States. The cartel is alleged to have paid Noriega more than $5 million in bribes. In return, the indictment said, Noriega allowed the ring to use Panamanian airstrips to fly cocaine to the United States, sold the group chemicals used to manufacture co- caine that had been seized by the Panamanian military and provided information on U.S. attempts to in- vestigate the operation. For example, the indictment said, Noriega in 1983 passed word to the cartel to delay a cocaine shipment passing through Panama to the United States because U.S. military exercises were under way in Pan- ama at the time. In 1984, when the Colombian gov- ernment began a crackdown on the Medellin cartel, Noriega let leaders of the group take refuge in Panama and run their operation from there, the indictment alleged. That same year, the indictment said, Noriega also let the cartel briefly set up a co- caine manufacturing plant in Panama near the Colombian border. Noriega has repeatedly denied any role in drug trafficking and has said the indictments are part of a campaign by conservatives such as Helms to discredit him and subvert the Panama Canal treaties. The 1977 treaties transfer control over the canal from the United States to Panama in the year 2000. Officials have said that Noriega, who was chief of military intelligence before becoming the military com- mander in August 1983, for years has provided intelligence to both the CIA and Cuba. The CIA, particularly under the late director. William J. Casey, considered Noriega to be an important asset, officials said. One former top military official said Noriega also served as a key back-channel intermediary between several U.S. administrations and Cuban leader Fidel Castro. The Mi- ami indictment alleges that Castro mediated a dispute between No- riega and the Medellin cartel over drug operations in Panama. Norman Bailey, an economic spe- cialist who was employed at the Na- tional Security Council in 1981-83, said both the Defense Department and the CIA strongly resisted efforts to withdraw U.S. diplomatic support from Noriega. Bailey said that as a participant in an NSC review of drug- money laundering, he saw "incontro- vertible" intelligence reports linking Nonega to drug trafficking. Bailey said that the information may not have held up in a court case, but he and others tried to use it to encourage a change in the U.S. policy on Noriega. "We ran up against a stone wall" at the Defense Department and the CIA, which felt "what we get from rum um is too valu- able to jeopardize," Bailey said. Declassified in Part - Sanitized Copy Approved for Release 2013/02/01 : CIA-RDP90M00005R000700110051-2 ./ The New York Times Declassified in Part - Sanitized Copy Approved for Release 2013/02/01 : CIA-RDP90M00005R000700110051-2 -- U~e j , ,HIM ? The Wan Street Journal The Christian Science Monitor Indict Noriega, Risk Retaliation By RONALD J. OSTROW and DOYLE McMANUS, Times'Stafy Writers WASHINGTON-The Reagan Administration has decided to go ahead with drug indictments against Panamanian military lead- er Manuel A. Noriega despite con- cerns that he might retaliate against U.S. interests, officials said Thursday. Administration officials consid- ered the possibility that Gen. No- riega, whose indictment is expected to be announced in Florida today, might seek reprisals but have con- cluded it is unlikely he would make a major move against the Panama Canal or other sensitive U.S. facili- ties in that nation, they said. Federal law enforcement au- thorities said Noriega was indicted Thursday by federal grand juries in Miami and Tampa, Fla., on charges of racketeering, cocaine trafficking and money laundering. The long- expected indictments were sealed by a federal magistrate, but U.S. attorneys in the two cities sched- uled announcements for today. Castro Dealings Officials said one of the indict- ments focuses in part on Noriega's dealings with Cuban leader Fidel Castro, who reportedly mediated a 1984 business dispute between the Panamanian strongman and mem- bers of a Colombian drug cartel. Noriega was quoted by CBS News as dismissing the indictments as "strictly political." Nonega, commander of Pana- ma's Defense Forces, the nation's sole military and police organiza- tion, has turned himself into a virtual dictator in his strategic country. which includes the 48- mile-long canal linking the Atlan- tic and Pacific oceans. In secret studies prepared before the decision, the State Department and CIA laid out a range of poten - tial Panamanian reactions to the indictments. These projected possi- bilities ranged from an anti-None- ga coup by military dissidents to political reprisals by Noriega against U.S. military and diplomat- ic facilities in that nation. But in the end, a knowledgeable intelligence source said, the most Ifkely immediate reaction was fudged to be: `Nothing.,. The U.S. extradition treaty with Panama does not require that na- tion to arrest or extradite Noriega. and the general could simply ig- nore the indictments and attempt to hang on to power, officials said The announcement of indict- ments against Noriega are expected to intensify public sentiment against the military strongman, they said, but the main question- as before-is whether other Pana- manian military leaders will decide "to dump the guy," in the words of one State Department official. For months, the Administration has been urging Noriega to quit, to no avail. Secretary of State George P. Shultz publicly called on the general to "step back" from power, and a senior Defense Department official told Noriega privately not long ago that the Pentagon also wants a new government. But Noriega, who has been ac- cused of ordering the assassination of political opponents, of massive corruption and of providing intelli- gence data simultaneously to the CIA and Communist Cuba, has stubbornly refused to relinquish power. He has denounced U.S. pressure against him as a "rightist plot" to prepare the way for an American seizure of the canal, which was turned over to Panama in treaties negotiated by Pres:-,::. Jimmy Carter and ratified in 'I 0_75. Under the treaty. Panama re- ceived unchallenged sov'ere:cnty over the canal and the stretch of territory on either s:_e c i it that used to be kno'.vn Panama Canal Zone. but the States retained rights to and defend the w titer ay a Dec t::31,1999. C~ Lad New York Daily News USA Today The Chicago Tribune L i.1 Date JCAV_JR /OA+- The United States has about. 10,000 troops in Panama, prima-:.y for the defense of the canal. Officials said several agenc:cs. including the CIA and U.S. dip!_ - nAbc and other missions in Pa is ' - ma, were ordered to prepare worst-case scenario" of what w:. likely to occur in the wake of ftc indictments. The possible outco.n,. included. - A move by anti-Noriega off- cers to depose the strongman. - A move by the civilian gov- ernment of President Eric A. Dei- volle to place Noriega under some form of "near-house arrest." - Relatively mild anti-Amen- can moves by Noriega. possibly including the expulsion of L'.S. citizens or a demand for the accel- eration of Panama's manage? ,ent mrd defense role under the canal treaty-a demand the Administra- tion would reject. - More threatening actions. possibly including a move to a!,gn Panama with Cuba and Sand::::s- ta-ruled Nicaragua. But the agencies concluded that no overt move against U.S. forces at the canal is likely. Much of the evidence again: Noriega has came from three fc?r - n"r aides and associates of the general, former Panamanian con- Sul Blandon and tic coo' ctn + drug smugglers. t'icyc ( r.ton and Steven Michael Kaiisn. t _ r: nan an tan me'~ cpaG charged that Nc-;re with Castro Cci.,: s ."no>delhn cocaine c-- UTA anu they;-?' Rite I _. J'. North.. He tot: that \t ag' _ , th to rain fr_; r' Contras in Declassified in Part - Sanitized Copy Approved for Release 2013/02/01 : CIA-RDP90M00005R000700110051-2 Declassified in Part - Sanitized Copy Approved for Release 2013/02/01 : CIA-RDP90M00005R000700110051-2 06 ;ton. a pilu:. has said he f!e More than. S1 mi;lior.,, r ~' , tribes to orega ,ran: the r'c.1or::b,~,^ drug Ca-tel Kal;s%I tole a JC'nate O%nllLteE la t mur,th --hat he +:,:? S3)O Ur)e hrih 333 a o, Declassified in Part - Sanitized Copy Approved for Release 2013/02/01 : CIA-RDP90M00005R000700110051-2 Declassified in Part - Sanitized Copy Approved for Release 2013/02/01 : CIA-RDP90M00005R000700110051-2 Noriega: A Skilled Dealer With U.S. eons of illegal activities by the general. The Senate Foreign Relations Com- mittee will hold hearings next week on the general's activities. One witness is to be Jose 1. Blandon, Panama's for- mer consul general in New York, who maintained close ties to the Panama- nian military. The lead witness, Robert M Morgenthau, the Manhanttan Dis- trict Attorney, is expected to question the Federal government's success in pursuing overseas drug traffickers. ''The knowledge that Noriega was engaged in criminal activities in the United States has been known to the Central Intelligence Agency for a long, long time," said Senator John Kerry, a Massachusetts Democrat who pressed for the hearings, along with Senator Jesse Helms, Republican of North Carolina, General Noriega's relations with the American intelligence began in the i9-,O's when he was head of military in. ielligence. A Government official said the Central Intelligence Agency viewed the officer as rising star in the mili- tary. He became the military com- marider in 1983. Over the years, General Noriega has offered a variety of secret assistance to United States Government officials.I Present and former Administration of- By STEPHEN ENGELBERG Special to The New York Times WASHINGTON, Feb. 6 - For more than a decade, Gen. Manuel Antonio Noriega, the Panamanian military leader, played off United States Gov- ernment agencies against each other and against other countries in a dizzy- ing succession of alliances and betray- als. According to present and former Government officials, General Noriega was a master at developing relation- ships in the American military and in- telligence agencies that forestalled dip- lomatic and legal pressure against him. These officials said that several times in the early 1980's, the Pentagon and Central Intelligence Agency rolled back proposals for taking a harder line with General Noriega over his involve- ment in drug trafficking, trading of re- stricted American technology to Cuba and Nicaragua, and repression of polit- ical opponents. General Noriega's career. some in- telligence officers contend, is a case study of how national security interests demand that the United States work with forerga leaders with unseemly reputations. "There are 100 guys around the world like Noriega," said an intelligence official. 0 Hearings on Noriega's Activities But members of Congress argue that the Government's ties to General Noriega went well beyond appropriate bounds and that American officials were too willing to overlook sugges- ficials said the general has a knack for offering officials exactly what they want. According to a Congressional of- ficial. the general once told a close as- sociate: "The United States is like a monkey on a chain. All you do is play the music and the monkey performs." According to Government officials, General Noriega once offered to assist Lieut. Col. Oliver L. North, the dis missed National Security Council aide, in funneling covert assistance to the Nicaraguan rebels. When Colonel North heard in October of 1986 that the Drug Enforcement Ad- ministration had become increasingly concerned that General Noriega was involved in drug trafficking, he ap- proached the head of the agency, Jack Lawn, with an offer to intercede. Mr. Lawn has said he rejected the offer. The Congressional Iran-contra com- mittees also looked into evidence that Colonel North met in London with a close aide to General Noriega. The pur- pose of the meeting was never learned, committee investigators said. Even as he was dealing with Colonel North. General Noriega tried to main- tain his own relationship with the Drug Enforcement Administration. Noriega Tipped Off U.S. on Drugs Law enforcement officials said that the general was a valuable source of in- formation on drug trafficking in the re- gion for years and that his tips led to the seizure of major drug shipments. For the Central Intelligence Agency, General Noriega provided a base of operations in Central America and an opportunity to eavesdrop on the finan- cial transactions and communications of the region. He was also viewed as a valuable source of information on Cuba, even though intelligence officials suspected that he was providing infor- mation on the United States to the Cubans. Present and former officials said that General Noriega had a personal relationship with William J. Casey, the former director of central intelligence. A senior official who opposed any ex- tensive dealings with the Panamanian leader said that in presenting reports on Central America to President Rea- gan. Mr Casey would occassionally mention the general. "It was apparent from those comments that Bill thought personally that C.I.A. was benefiting from the information it could get from Noriega." the official said. General Noriega also had supporters at the Pentagon, including Nestor San- chez, former Deputy Assistant Secre- tary of Defense for' International Se- curity Affairs. Administration officials said. Mr. Sanchez, the officials said. was a C I.A. officer in Central America when he met General Noriega. Raid on Cocaine Dealers The indictment of General Nonega, made public Friday in Mi~r?i ~I'..,,i.- The New York Times `-' - The Washi t ng on Timss The Wall Street Journal The Christian Science Monito_r New York Daily News USA Today The Chicago Tribune Date - g new light on an incident that American officials believe typifies how the gen- eral operated. It describes how Gen- eral Noreiga accepted payments from! a Colombian drug cartel to.allow the construction of a cocaine laboratory in Darien Province and then came under American pressure to take action against the drug trade. A former official said the Drug En- forcement Administration learned about the laboratory and tried to ar- range for the arrest of the Colombians involved in operating it. But Panama- nian forces seized the laboratory, the official said, and no one was arrested. The seizure earned General Noriegai some favor with the Americans, ac- cording to the indictment, but it infuri- ated the cocaine dealers. The dispute, between General Noriega and the Co-i lombians was not settled until Fidelf Castro, the Cuban leader, agreed to mediate. Jon R. Thomas, the former Assistant Secretary for International Narcotics Matters, said that on a visit to Panama,- General Noriega gave him a plaque that showed Panamanian soldiers de- stroving the laboratory. The gift was intended to illustrate Panama's com- mitment to fight drugs. Mr. Thomas said General Noriega's involvement in drug trafficking had been suggested in intelligence reports for years, but that until now there had been no solid evidence. "Any sugges- tion of a cover-up to protect Noriega is nonsense," he said. "I never saw any- thing like it." Declassified in Part - Sanitized Copy Approved for Release 2013/02/01 : CIA-RDP90M00005R000700110051-2 The New York Times Declassified in Part - Sanitized Copy Approved for Release 2013/02/01 CIA-RDP90M00005R000700110051-2 The Wall Street Journal The Christian Science Monitor New York Daily News ? USA Today Hill hears conffictmg views The Chicago Tribune Date 9 . S . of Noriega role in drug trade By James M. Dorsey THE WASHINGTON TIMES Law enforcement officials have long wanted to prosecute Panama- nian strongman Gen. Manuel Ant- onio Noriega for drug trafficking. but did not do so because of his ties to senior U.S. officials who valued him as an intelligence asset. Man- hattan District Attorney Robert M. Morgenthau and others said yester- day. But in separate testimony on the first day of Senate Foreign Relations subcommittee hearings on the Latin American drug trade, retired Gen. Paul Gorman. former commander of the U.S. Southern Command. said he had never seen evidence proving Gen. Noriega's involvement. Gen. Noriega. commander-in- chief of the Panamanian Defense Forces and widely considered the real power behind his country's civil- ian government. was indicted by two Florida grand juries last week on charges of racketeering and drug- related crimes. He denied the accusations and charged on CBS-TV's "60 Minutes" Sunday that he was being pros- ecuted because he would not cooper- ate with a proposed U.S. invasion of Nicaragua. White House and State Department officials flatly denied that allegation yesterday. (White House spokesman Marlin Fitzwater said yesterday the United States had no intention of invading Central America. no matter what former National Security Adviser John Poindexter may have told Gen. Noriega. Washington Times writer Jeremiah O'Leary reported. Mr. Fitzwater said he did not know if the conversation with Adm. Poindexter that Gen. Noriega mentioned in the television interview even took place. i*'Noriega's willing to say any- thing at this point. He's trying to come up will all kinds of charges to deal with his drug indictment.... John Kerry of the Subcommittee on Narcotics. Terrorism and Interna- tional Communications to cross ex- amine witnesses. The Massachu- setts Democrat said Gen. Noriega was welcome to testify in person at any time. !Gen. Noriega called yesterday for the U.S. Southern Command and its 10.000 American military person- nel to withdraw from Panama. Reu- ters reported. I In his televised speech, the Pana- manian commander-in-chief said: "The L.S. military presence here . . is Reared to gain power. The military presence should be strictly Panama- nian: I Panamanian opposition leaders urged President Eric Arturo Del- valle to fire Gen. Noriega "because the nation is on the verge of collapse and on the verge of a confrontation among Panamanians. so that we must do everything possible to pre- vent it." Reagan administration officials said Mr. Delvalle's prestige was on the line. "This is Delvalle's last chance to do something presidential. If he does not do something at this dra- matic moment, whatever vestiges of respect he has left will be stripped away." one L.S. official said. Neil R. Sonnett, one of Gen. Noriega's lawyers. said the attorneys wouiJ consult the general about whether to present documentary evidence to the subcommittee aimed at discrediting the witnesses and proving Gen. Noriega's innocence. Mr. Sonnett distributed a series of letters to Gen Noriega written by Drug Enforcement Administration chief John C Lawn praising the gen- eral for his cooperation Cornelius Dougherty. a DEA spokesman. said there had been le- gitimate letters of praise for Gen. Noriega over the years. "The bottom involved in a lot of very shady under- takings," Gen. Gorman said. refer- ring to Gen. Noriega. But he added: "I never saw a representation that pinned him specifically to criminal acts or undertakings of a sort one could adduce in a court" Gen. Gorman. who served as head of the Southern Command from 1983 to 1985, said he only learned of Gen. Noriega's alleged involvement in money laundering when he acted in 1986 as a consultant to the President's Commission on Organ- ized Crime. He said a study of Gen. Noriega's activity that he initiated after as- suming his command had revealed no evidence of criminal wrongdoing. Leigh Bruce Rich. a 34-year-old convicted drug smuggler. told the subcommittee that Gen. Noriega de- manded and got a S300.000 payment to arrange security for the launder- ing of drug profits through Panama- nian banks. He said the general made his airplane available for flights to Colombia to set up mari- juana deals and used the drug ring's Lear het. "People in law enforcement have known Gen. Noriega was corrupt for a long period of time." testified Mr. Morgenthau, the New York district attorney and the subcommittee's first witness. ..Mv view was he should have beer prosecuted a long time ago." Mr. Mtorgenthau said. adding that Gen Noriega had been protected by people in the L.S. government" who aileeedl\ used Gen. Noriega as an ir.tellieence source. Mr. Morgan- thau declined to name the officials. Noriega was said to he useful to our military and intellience com- munt\. added Sen. Alphonse D'AArnato. Republican of New York Gen. Gorman said L.S. Embassy nf; ic:als in Panama had presented Gen Noriega as a maior supporter of efforts to combat drugs "The representations that were These are just the idle charges of a man indicted for drug-running;' Mr. Fitzwater told reporters on Air Force one as President Reagan flew to North Carolina to make a speech.] lawyers for Gen. Noriega were denied permission by Chairman line is that he was helpful and coop- erat '.e in certain drug cases. Mr. Dougherty said. "What you got was the impression of a man of certain venality, he was Page Declassified in Part - Sanitized Copy Approved for Release 2013/02/01: CIA-RDP90M00005R000700110051-2 = Declassified in Part - Sanitized Copy Approved for Release 2013/02/01 CIA-RDP90M00005R000700110051-2 Al.xnow?Ieugeaoie orrlcials of the % American Embassy was that Gen. Noriega was a major contributor to our efforts to do something against the narco-trafficantes." Gen. Gor- man said. refusing to identify the officials publicly. Gen. Gorman' said Gen. Noriega reported to U.S. officials on his fre- quent travels to France. North Af- rica, and Cuba. where he held talks with President Fidel Castro. "I don't think any of us put much credence in what he said;' Gen. Gorman said. The retired officer noted that Cuba had one of its largest Western Hemisphere missions in Panama and charged that it actively aided the international drug trade. "In- deed. there is a lot of evidence that they active got cooperation in terms of ports made available to them, is- lands made available to them, ma- chines made available to transfer substances from oceangoing vessels to smaller ships." h he said. en. Gorman indicated that Gen. Nor-ieRra had close ties to an unidenti- f ied U.S. government agency be- lieved to be the Central Intelligence .Agenncyam. The former commander said Gen. Noriega's official sponsors on visits to the United States were "not mill- tary, not State, not White House. not Defense:" Intelligence sources said Nestor .Sanchez. former deputy assistant secretary of defense for inter- -American affairs while at the CIA acted as Gen. None a s contro offi- cer and was one of the enera s staunchest supporters within t e Reagan administration. The CIA lacks intelligence on the current situation in t e anamanIan military because of an aw17h reement 77th Gen. Nonega un er t the agency used the country as a re- gi%rnal listening post in exchan a or all;n~ ine the general to appoint 1is ov, n military liaison ", t t e ' IA. 2. Declassified in Part - Sanitized Copy Approved for Release 2013/02/01 : CIA-RDP90M00005R000700110051-2 The Washington Post J ' j A Declassified in Part - Sanitized Copy Approved for Release 2013/02/01 : CIA-RDP90M00005R000700110051-2 -c tx iae in ranama ? ins Washington Times e~J? ? The Wall Street Journal The Christian Science Monitor New York Daily News H No Nora a? Tie Seen USA Today The Chicago Tribune By Joe Pichiral o WWI M Pat SuS Nrlew Retired Army general Paul Gor- man told a Senate panel yesterday that when he was U.S. military commander for Latin America, based in Panama, he never received any credible information linking the Panamanian leader, Gen. Manuel Antonio Noriega, to drug traffick- ing. Gorman, who headed the U.S. Southern Command in 1983-85, said U.S. Embassy officials in Pan- ama repeatedly assured him No- riega was a "major contributor" to U.S. efforts to combat the drug trade. But according to allegations in two U.S. federal indictments re- turned against Noriega last week, Noriega at the time had converted Panama into a safe haven for inter- national drug traffickers smuggling narcotics into the United States. Gorman said an investigation he initiated determined that Noriega was making a fortune from a wide array of "very, very shady" com-: mercial ventures, including ship- ping, airlines and import-export businesses. Gorman said he had access to information from several U.S. military intelligence units based in Panama, but said his inqui- ry did not link Noriega to the drug trade. After his Senate testimony, Gor- man said that he had heard "ru- mors" but that "I had no solid rea- son to believe [Noriegal was en- gaged in any direct sense" in drug trafficking. Gorman'9 testimony before the Senate Foreign Relations subcom- mittee on terrorism, narcotics and international communications is likely to fuel the controversy that has erupted over whether the U.S. government covered up or ignored allegations tying Noriega to drugs. Reagan administration officials have strongly denied these claims. Congressional officials note that the reports of Noriega's coopera. tion received by Gorman are con. sistent with letters of praise written to Noriega by John C. Lawn, head of the U.S. Drug Enforcement Admin- istration, and his two predecessors, Francis (Bud) Mullen Jr. and Peter B. Bensinger. Administration officials in the last six months have been pressing No- riega, Panama's military command- er and de facto ruler, to resign and permit restoration of democratic rule, a move that has prompted No- riega to charge that the indictments are part of a "systematic campaign" to destabilize Panama. In a television interview broad- cast Sunday on CBS's "60 Minutes" program, Noriega added a new el- ement, charging that his troubles stemmed from his refusal to partic- ipate in an alleged secret U.S. plan to invade Nicaragua. Noriega said he learned of the plan in a Decem- ber 1985 meeting with then-Vice Adm. John M. Poindexter, the pres- ident's national security adviser. White House spokesman Marlin Fitzwater yesterday denied that the administration ever considered such a plan, calling Noriega's claims the "idle charges of a man indicted for drug-running." Current and former U.S. officials have said Norrle a, whoye-ajRjqi~ ama's military in ee li ence ore becoming military chief in ugust 1983, had a close relationship with the ntral tel igence Agency and was viewed as an important link with Cuban leader Fidel Castro. Gorman, who said he did not have a close relationship with Noriega said "another agency of the govern- ment" sponsored trips by Noriega to the United States. One informed source said the unidentified agency cited by Gorman was the CIA. Gorman said Noriega regularly reported to U.S. officials on his meetings with Castro, but added: "1 Date 4 r rs e $ B don't trunk any of us paid much cre- dence on what he said." When he arrived in Panama in 1983, Gorman said, he unsuccess- fully recommended that the South- ern Command headquarters be re- moved from Panama because -we were, in effect, in the hands of this man [Noriega]." "I would not do anything to irri- tate him, lest he indulge in one of his picayune acts of retribution." Gorman The indictments allege that No- riega laundered large sums of mon- ey derived from U.S. drug sales between 1981 and 1986. Gorman said he did not learn of Noriega's alleged ties to drug-money launder- ing until after he retired from the military and worked as a consultant in 1986 to the President's Commis- sion on Organized Crime. Staff writer Bill McAUister contributed to this report. Page 3. Declassified in Part - Sanitized Copy Approved for Release 2013/02/01 : CIA-RDP90M00005R000700110051-2