From Hubris to Humiliation

By STANLEY W. CLOUD

Does anyone deliver bad news with a more mournful mien than Secretary of State George Shultz? Last week, as President Reagan headed off to Moscow, his dispirited Secretary of State announced the collapse of U.S. efforts to force the resignation of General Manuel Antonio Noriega, Panama's pugnacious strongman. Shultz had delayed his own departure for the summit, believing that Noriega was about to yield. Instead, at the eleventh hour the general rejected the U.S. terms, which included a controversial offer to drop federal drug- running charges against him. With that, Shultz broke off talks and denounced Noriega as a "burden on the people of Panama." The Reagan Administration, he added for a little positive effect, would continue working with Panamanians and "democratic forces throughout the hemisphere" to get rid of the machete- waving dictator.

Shultz did not say how this could be done. Nor is it likely, on the evidence of the past year, that he knows. Since the U.S. drive to oust Noriega began last summer, Washington has once again demonstrated how the Law of Unintended Consequences can lead to a foreign-policy disaster. Through bureaucratic backbiting, uninformed bluster and gross miscalculation, the Administration did not merely fail to depose Noriega. It also managed to cripple Panama's economy, weaken the local democratic opposition, undermine pro-American attitudes, damage U.S. prestige in Latin America and exacerbate concerns about the stability of the Panama Canal. Moreover, the fiasco could easily become a major liability to George Bush's presidential quest. Says New York's Republican Senator Alfonse D'Amato: "What you have here is an Administration that has set its hair on fire and is trying to put it out with a hammer."

Reagan was asked after his arrival in Helsinki if he thought the Panama debacle made the U.S. appear foolish. "I don't feel that way," he said. But almost everyone else does, including many inside the Administration.

Finger pointing and recriminations abound. Were the consequences of bringing an unenforceable indictment against a foreign leader seriously considered? Or the political embarrassment of plea bargaining with a thug? Why did Washington act before properly assessing Noriega's strength with the Panama Defense Forces (PDF) he commands? And why conduct a policy that was at once too public and too timid?

Criticism is aimed primarily at Elliott Abrams, the State Department's Assistant Secretary for Inter-American Affairs. Despite getting into trouble for misleading Congress about U.S. aid to the contras, Abrams still enjoys Shultz's support. Stubborn and often intolerant of dissent, he fought for what he saw as a worthwhile goal: ousting Noriega. But Pentagon brass, who balked at threatening Noriega with force, say Abrams gave little thought to the other possible effects of his actions. "Nobody disagrees that Noriega must go," says a senior Defense Department official. "We just think State ((meaning Abrams)) is bungling it."

Slamming Abrams or any other appointed official misses a larger point illustrated by a joke making the rounds at the State Department: "We wouldn't be in this fix," the bemused diplomats say, "if Ronald Reagan were President." As in the Iran-contra disaster, the President seems to have been only dimly aware of decisions made in his name. Once again, he looked like a bystander in his own Administration, as his top officials wrangled about what should be done and who would be blamed if it didn't work.

To some degree, Noriega has been the target of mixed messages from Washington. The general was long regarded by the U.S. as an intelligence "asset," despite recurring allegations that he was hip deep in corruption and drug trafficking. Noriega, after all, aided the Nicaraguan contras, monitored Cuban activities in Central America on behalf of the CIA, and occasionally handed up drug smugglers in Panama.

Concern about Noriega began to deepen in 1985, after the torture and assassination of a prominent Panamanian dissident, Dr. Hugo Spadafora. At an interagency meeting that fall, the late CIA director William Casey was ordered to upbraid Noriega. The general was summoned to CIA headquarters in Langley, Va., but Casey did little more than engage him in an amiable, even reassuring, chat. In 1987 Noriega received a tougher lecture from Reagan's then National Security Adviser John Poindexter aboard a yacht off Panama City.

With that as prologue, U.S.-Panama relations plummeted in June 1987, when Colonel Roberto Diaz Herrera, the PDF's recently retired second-in-command, publicly accused Noriega of drug and arms trafficking and of ordering Spadafora's murder. The charge led to widespread street demonstrations that were firmly put down by the PDF. Alarmed, the Reagan Administration in December dispatched Assistant Secretary of Defense Richard Armitage to Panama, where he spent four hours sipping Scotch and talking turkey with Noriega to no apparent effect. The situation reached crisis proportions a month later when Jose Blandon, then Panama's consul general in New York City, gave evidence that helped a U.S. investigation of charges that Noriega was involved with Colombian drug smugglers. Two Florida grand juries indicted Noriega on Feb. 4.

Top Administration officials, including Bush and Abrams, now insist there was no hard evidence of Noriega's drug dealing before he was indicted. Abrams was astonished that the Justice Department was suddenly ready to proceed primarily on the basis of unproved testimony by Blandon. "All of a sudden," says a senior Administration source, "that which was inadequate became adequate." But Justice Department sources say that John Lawn, chief of the Drug Enforcement Administration, discussed the growing case against Noriega at no fewer than six meetings attended by high-ranking State Department and National Security Council representatives. "State and the NSC were well aware of the investigations as they proceeded," says one Justice official. "They knew the implications."

The grand jury actions presented Noriega with a serious dilemma: if he stepped down now, he might face arrest and possible imprisonment. Nor did the CIA or Defense Department predict the extent of Noriega's support among the military. "It's really shocking," says an insider, "how bad our intelligence has been." Soon after the indictments, Panama's mostly powerless President Eric Delvalle went to Washington for a meeting of the Organization of American States. Delvalle told Abrams he planned to announce to the OAS his intention of firing Noriega. Abrams, who continued to harbor hopes of a popular uprising in Panama, liked the idea but not the venue. "You're a Panamanian," he said. "You should do this in Panama." Delvalle took the advice, returned home and made his dramatic announcement on Panamanian television -- only to have Noriega turn the tables and fire him. When the U.S. offered only moral support, Delvalle was forced into hiding. A top U.S. official offers this startling explanation of why Washington wasn't better prepared: "We didn't think he ((Delvalle)) would do it."

More half measures followed. Some 2,000 additional troops were dispatched to U.S. bases in Panama. Abrams had hoped Noriega would fear an invasion, but the Pentagon promptly and publicly ruled out the likelihood of combat. A reassured Noriega then easily put down a coup attempt by some PDF officers, and his troops once again employed tear gas, clubs and bird shot to end a relatively subdued round of street demonstrations. The harsh tactics, as well as Noriega's appeals to Panamanian nationalism, led to the rapid demoralization of a recently formed opposition group, the Civic Crusade.

In March, Delvalle, working through private U.S. lawyers, managed to tie up $70 million in Panamanian funds in U.S. banks, paralyzing the local banking system. The U.S. then imposed limited economic sanctions, including the payment of Panama Canal fees into an escrow account inaccessible to Noriega and cancellation of trade preferences. This still did not faze Noriega, although it led to severe damage to Panama's economy. Noriega portrayed himself as a victim of yanqui imperialism, and 22 other Latin American nations, including Mexico and Venezuela, issued a statement of support.

In early May, Abrams dispatched his deputy Michael Kozak to Panama for what amounted to a series of plea-bargaining negotiations. The U.S.'s final offer, approved by Reagan the Sunday before he left for the Moscow summit: if Noriega would leave Panama shortly after Aug. 12, the fifth anniversary of his taking office, he could return for the Christmas holidays and permanently after his country's 1989 presidential elections. Another sweetener was an offer of $90 million in American aid. Although Noriega was to ditch new President Manuel Solis Palma after the formation of a "national reconciliation" government, another henchman, Colonel Marcos Justines, would continue to head the PDF. Most important, the drug charges would be dropped -- a proposition that drove even the relentlessly loyal Bush to his first public break with a Reagan policy. In the end, Noriega rejected the entire deal, and the U.S. was left to issue vague threats of future action. The general, says anti-Noriega Juan Sosa, Panama's Ambassador to Washington, "was never serious about negotiating."

It was hardly the first time that American good intentions had led to chaos. In The Quiet American, Graham Greene's 1955 fictionalized but accurate portrayal of early U.S. adventurism in Viet Nam, an American bomb- assassination plot aimed at corrupt South Vietnamese officers goes awry, killing innocent shoppers and children in a Saigon square. Amid the carnage, a confrontation ensues between Alden Pyle, the well-meaning but naive protagonist, and the novel's narrator, a British journalist:

"Pyle said, 'It's awful.' He looked at the wet on his shoes and said in a sick voice, 'What's that?'

" 'Blood,' I said. 'Haven't you ever seen it before?' "

In Panama, as in Viet Nam, the Law of Unintended Consequences hangs over U.S. policy this week like a pall of smoke after the explosion of a misplaced bomb.

With reporting by Ricardo Chavira and Bruce van Voorst/Washington