"NORIEGA GOT CIA DATA, PANEL TOLD"

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90M00005R000700110051-2
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 23
• Document Creation Date: December 23, 2016
• Document Release Date: February 1, 2013
• Sequence Number: 51
• Publication Date: February 1, 1988
• Content Type: LETTER

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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
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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.
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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
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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
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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
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 The Washmgton post
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?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.
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 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.
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 ?'mto
The wnew._-?-
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-...,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
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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.
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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
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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.
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 t,* Washumon pm,
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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
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 The Washington Post
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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.
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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
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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.
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 /I The Washington Post Q-
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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
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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.
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 ./ The New York Times
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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
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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,
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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."
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 The New York Times
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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
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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.
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 The Washington Post J ' j A
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-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