Panama has bedeviled every American president since Lyndon Johnson, who was forced to open negotiations over the Panama Canal after anti-American riots broke out there in 1964. It is not too surprising that Panama became President Bush's first foreign policy crisis.

In its last year in office the Reagan Administration decided to force the removal of longtime U.S. ally General Manuel Antonio Noriega, the de facto leader of Panama. It left office without accomplishing that goal, suffering embarrassment and criticism. The Bush Administration has pursued the same objective but no more successfully. General Noriega has continued to resist American pressures and escaped a coup in early October, when the United States chose to stand by as the rebellion collapsed.

The Bush Administration was deluged with criticism for being unwilling to back its rhetorical opposition to Noriega with more concrete action. Believing that an ideal opportunity to unseat Noriega had been lost, critics charged that the Bush Administration was indecisive. At a minimum, the episode suggested that the United States was unprepared to aid the very event that it had been encouraging. The Panama problem now seems likely to continue to fester, with no clear U.S. strategy in place to deal with it.

Panama is an unusual case. It is one of the few Third World countries whose problems arouse domestic opinion, mainly because Americans still care about the canal, the basic reason for the long and intimate relationship between the United States and Panama. Furthermore, the United States has identified Noriega as a major actor in the drug trade, thus making him a public enemy in an area that some polls identify as Americans' most pressing concern. Finally, the close U.S. relationship with the Panamanian military since its creation confers a responsibility that makes the Panama issue difficult for the United States to walk away from. Yet, even though the United States has escalated Noriega's rule to a major foreign policy issue, the range of measures employed to deal with it has been limited.

II

The United States had expected a transition to civilian democracy that would provide the basis for stability in Panama when President Jimmy Carter won the arduous battle for congressional approval of the 1977 Panama Canal Treaties, negotiated with Panamanian strongman Omar Torrijos. The treaties provided for the gradual transfer of the canal to Panamanian sovereignty, to be completed by the end of 1999. This was deemed sufficient time to implant a stable, representative government.

Carter and Torrijos reached a tacit understanding-not a formal part of the treaties-that Torrijos would oversee a transition to a democratic civilian government in Panama. Congress made this assumption explicit in conditioning its ratification on the understanding that the promised democratic transition would occur.

The sudden death of Torrijos in a plane crash in July 1981 put the transition to democracy in jeopardy. Even had he lived, the advent of democracy was uncertain. Torrijos had stepped down in 1978, turning over nominal power to the Democratic Revolutionary Party (PRD) he had founded, but the military retained enormous power. The close U.S.-Panamanian military relationship operated to bolster the Panamanian military's power vis-á-vis the civilians.

The PRD is an alliance of business interests and the military. The merchant class that dominates Panama's service economy had no interest in setting itself against the military, which controls the ports and transit routes that are its lifeblood. Symbiosis and collaboration have been more characteristic of Panamanian politics than confrontation. In 1982 the four top officers of the National Guard agreed on a plan for rotating command of the guard among themselves, with each outgoing commander taking up a position of power within the PRD.

The scheme broke down when intelligence chief Noriega became commander of the guard in 1983. He reneged on the agreement for his predecessor, General Rubén Darío Paredes, to be the PRD presidential candidate. He combined all security and immigration forces under his control in the Panamanian Defense Forces and began a steady consolidation of power over the country's businesses and the government, including the key agency DEPAT, responsible for the Panamanian side of canal affairs.

Panama's undemocratic government was only the most visible flaw in the political system. Not yet part of the public discussion was the fact that among Panama's main businesses are drug trafficking, arms smuggling and illicit trade of all sorts. The 1970 secret banking laws made Panama an attractive haven for illicit profits, and some Panamanian officials (including Torrijos' brother) were paid to accommodate this business. As intelligence chief of the PDF under Torrijos, Noriega had come to know all the subterranean dealings in Panama, knowledge that helped him amass power and wealth. How much U.S. authorities knew of the corruption in the Panamanian military is unclear, although worrisome reports had surfaced in the late 1970s.

Questions about why the United States had not pursued the reports of illegal activities by the Panamanian military caused George Bush some difficulty in the 1988 presidential campaign. A former U.S. ambassador to Panama, Everett Ellis Briggs, said that he was convinced of Noriega's involvement in illegal activities, and reported this to Washington. When asked why the reports of the ambassador had not been acted upon, Bush's response, with which the ambassador subsequently concurred, was that the United States did not have hard proof of Noriega's complicity.

The problem became indisputably clear in February 1988, when two U.S. grand juries handed up indictments of General Noriega. The charges included his assistance in the transshipment of drugs from Colombia to the United States, laundering drug profits in Panama-based banks in return for a payoff, security for the fund transfers, permission to set up cocaine-processing plants including one in Darien province in 1984, and the sale of ether and acetone to the drug cartel. In the course of 1988 detailed information became public, through hearings held by the Senate Foreign Relations Subcommittee on Narcotics and Terrorism. The star witness was former Panamanian official José Blandón, who testified about various illicit activities of Noriega and the PDF. In September 1989 the Bush Administration corroborated some of the charges and said that Noriega had accumulated some $200-300 million from his role in drug trafficking and had given safe haven to drug barons after the 1984 assassination of Colombian Justice Minister Rodrigo Lara Bonilla.

One explanation for the U.S. failure to take concerted action against Noriega before the indictments was his cooperation with such U.S. projects as aiding and training the Nicaraguan rebels fighting the Sandinistas. Responsible American officials well knew that Noriega traded intelligence with Cuba as well as the United States, but this also made him a useful source and channel of communication. The same was true of the drug traffickers; Noriega cooperated with the U.S. Drug Enforcement Agency, aiding in the occasional capture or arrest of traffickers, even as he was in league with them. Finally, because Noriega gained an intimate knowledge of U.S. military and intelligence operations, he would be a formidable adversary. The United States was understandably reluctant to confront him until it had no other option.

The United States was also leery of the dominant opposition politician, Arnulfo Arias, whose antimilitary stand could jeopardize U.S. interests in Panama. Arias had been ousted from the presidency shortly after winning elections in 1941, 1951 and 1968. He was the presumed winner again in 1984, but the PDF-backed candidate, Nicolás Ardito Barletta, a former World Bank vice president, was installed instead. Secretary of State George Shultz attended Barletta's inauguration, thus lending a stamp of legitimacy to the new government.

In late 1985 Barletta sought an investigation into the death of Hugo Spadafora, a former Torrijos supporter who had accused Noriega of drug trafficking. The hapless president was locked in a room by Noriega's henchmen until he submitted his resignation. Rumors that it was Noriega's Defense Forces who had killed Spadafora caused a scandal in the historically peaceful country. The United States condemned the pressure on Barletta, its first public move against Noriega, but took no further action when he was replaced by his first vice president, Eric Arturo Delvalle. Thus, the United States seemed to condone Noriega's increasingly arbitrary actions, and declined to wage an all-out campaign against him.

III

The United States was forced to confront the problem that Noriega had become after Panamanians expressed massive rejection of him and, more definitively, once U.S. courts indicted him on drug trafficking charges.

Panamanians' rising discontent with PDF corruption and dominance burst into the open in mid-1987. In June the PDF's former second-in-command, Colonel Roberto Díaz Herrera, accused Noriega of corruption, rigging the 1984 elections, the murder of Spadafora and even planning the crash that killed Torrijos. Díaz Herrera, cousin to Torrijos, was seeking revenge because Noriega had denied him his scheduled tour in the top PDF position, as agreed in the power-sharing arrangement worked out after Torrijos' death. The colonel's charges catalyzed an outpouring of protest, strikes and demonstrations that lasted for several months.

The opposition coalesced in the National Civic Crusade, a broad spectrum of business, labor and community groups, with significant support from the church and political parties. The crusade's aim was a democratic government, and to attain this it insisted that Noriega step down. A public opinion survey showed that 75 percent of Panamanians wanted Noriega to relinquish power. The opposition assured the PDF that it did not deny its legitimacy as an institution, though it did wish to negotiate changes in its role; only Noriega's resignation was nonnegotiable.

But the civilian opposition simply did not have the muscle to force Noriega out. Several politicians acknowledged that their campaign would require help from the PDF and/or the United States to succeed. Some Panamanian bankers had drawn up a plan with Noriega representatives that included a retirement date for the PDF chief, but Noriega stood fast.

One reason for Noriega's steadfastness was his confidence that certain sectors of the U.S. government would support him. The Defense Department, the Central Intelligence Agency and the Drug Enforcement Agency all had an interest in continuing cooperation with Noriega. He had helped the DEA apprehend suspected drug traffickers operating in Panama, and as late as March 1987 had cooperated with "Operation Pisces," a major U.S.-Panamanian money-laundering investigation in which 18 accounts in Panamanian banks were frozen.

Thus, when the June 1987 protests began, the U.S. government reacted slowly, as it tried to gauge the magnitude of the crisis in Panama. Was Noriega becoming more a liability than an asset? Washington halted U.S. aid in July after its embassy in Panama City was stoned and vandalized by Noriega supporters who charged that U.S. diplomats were behind the unrest. The State Department called on the Panamanian government to uphold the rule of law and respect for democracy, but "correct and formal" military and other bilateral U.S. relations continued. Some in Congress threatened more punitive action, but the issue then receded.

In December 1987 the Reagan Administration sent Assistant Defense Secretary Richard Armitage to Panama to explore quietly the conditions under which Noriega would step down from his post. The mission failed, despite an offer to drop the ongoing investigations of Noriega by U.S. Customs and other agencies charged with combating illegal drug traffic into the United States. When the Panamanian leader rejected this offer, the administration had no next step planned. Even though the executive branch is not informed in advance of indictments, they could not have been surprising to those officials who had dealt intimately with Panama and Noriega. Nonetheless, the Reagan Administration was caught without a prepared policy when the indictments were announced by two courts in Florida in February 1988.

The United States had no choice but to escalate, given that public concern about drugs was at an all-time high. The government could not afford to be seen as coddling a dictator-druglord after its own courts called for his prosecution. Nevertheless, the anti-Noriega campaign ran into problems almost as soon as it was launched. Some branches of the U.S. government still harbored misgivings about turning against a longtime ally, even though the indictments made the former intimate alliance publicly unpalatable or even untenable. This disunity within the administration complicated efforts to frame a coherent policy, particularly once the policy goal was defined as the removal of Noriega.

The difficulty of dislodging him was grossly underestimated by the officials in charge of formulating the anti-Noriega policy. As each denunciation of Noriega failed to have the desired effect, the United States was drawn further in. Washington had to take another step to avoid losing face in the battle against its former ally, and thus the pattern was set.

After the indictments, Assistant Secretary of State for Inter-American Affairs Elliott Abrams encouraged Panamanian President Delvalle's plan to dismiss Noriega as chief of the PDF. Delvalle did so on February 25, 1988, but the National Assembly was convened in emergency session hours later and dismissed Delvalle, on the grounds that he had acted unconstitutionally in firing Noriega without the legislature's consent. The education minister was named acting president. Opposition politicians were annoyed at the United States for courting Delvalle as the front man for the anti-Noriega campaign because they saw him as a Noriega puppet. In any case, Delvalle did not have the power to compel the strongman to step down. The deposed president went into hiding and later ended up in Miami. The U.S. government continued to recognize him as president of Panama.

Delvalle took the next step in the anti-Noriega campaign. U.S. recognition of Delvalle permitted his lawyers to argue successfully in U.S. courts that Panamanian government assets in the United States should be placed under the control of Delvalle and his representatives. In early March court orders froze some $40 million in Panamanian government assets in U.S. banks and the U.S. operations of the government-owned airline, Air Panama. Delvalle also asked the United States to withhold canal revenues due to Panama. The administration eventually agreed to withhold the March payment of $6.5 million, but continued to ponder the costs of an all-out economic war against Noriega.

The United States was looking for other possibilities as well. In congressional hearings on March 10, State Department officials expressed the hope that PDF members would rebel against their leader. Such a coup was attempted on March 16 by Panamanian police chief Colonel Leonidas Macias, but was easily quashed by loyalist troops. Noriega arrested Macias and removed 12 of 54 majors in the PDF, shoring up the loyalty of the 15,000-member PDF. But the attempt spurred the worst anti-Noriega riots Panama had seen yet, prompting Noriega to call out combat troops and break a general strike. The opposition made a major effort, believing the end was in sight. But it was disappointed again, as it had been in the summer of 1987 when its protests had failed to dislodge the dictator.

In a shrewd move, Noriega welcomed two State Department officials to Panama in mid-March for negotiations. Deputy Assistant Secretary of State William Walker and State's legal adviser Michael Kozak said that the administration would not seek his extradition if he went into exile, but refused to drop the indictments. Spain had offered asylum to the Panamanian leader. Efforts to negotiate a deal along these lines continued in April, but Noriega again stood firm in rejecting any plan that would require him to leave the country.

IV

To escalate pressure on Noriega, the Reagan Administration decided to impose selective economic sanctions on his regime. But implementation was slow and uneven, and the sanctions themselves were far from comprehensive. On March 31, 1988, the administration announced that it would put all monies it owed Panama into an escrow account in the United States, to be controlled by President Delvalle, and urged U.S. companies and individuals to follow suit. On April 8 President Reagan invoked the International Emergency Economic Powers Act, making the earlier measures mandatory.

Money withheld from the regime included canal toll revenues and payments for services of canal operations (about $80 million annually), as well as housing costs, taxes and social security payments (the last later reversed) of canal employees. The administration also suspended Panama's preferential trade status, covering about 30 percent of its exports to the United States. Congress had eliminated Panama's sugar quota in December 1987. But the sanctions were weakened after the 300 U.S. firms doing business in Panama protested them. By the end of April the U.S. Treasury Department began making exceptions enabling the firms to continue operations and avoid punitive action by the government in Panama.

The administration had limited the sanctions in order to minimize the harm to Panamanian citizens and the economy; only transactions with the Panamanian government were prohibited. But the denial of some $100-200 million to the Noriega regime was not fatal; the United States was an important but not the only source of revenue. After the sanctions were imposed Libya reportedly gave $24 million in cash to the regime. The Panamanian government closed banks in the country to halt capital flight. It managed to continue meeting the government payroll, albeit with delays, by issuing scrip that could be used at supermarkets and other stores in exchange for goods. (The government employs 25 percent of the working population, a source of political support but a drag on the slowing economy.)

Thus, the sanctions hurt but did not halt Panama's economy. Had the United States taken more drastic economic measures, such as a total trade embargo, the impact would have been enormous, given the large U.S. stake in the Panamanian economy-including the use of the U.S. dollar as the Panamanian currency. But such economic warfare probably would have ruined one of the region's healthier economies. Panama's per capita GNP, $2,100 in 1987, is one of the highest in Latin America. In any case, Noriega seems willing to engage in a contest with the United States, gambling that the Panamanians will eventually blame the United States for their economic pain.

Furthermore, the United States was on shaky ground in withholding canal revenues and other fees owed to Panama; it was violating the canal treaties. Although the foreign media and the international community did not focus on this fact, Noriega made full use of it inside Panama, charging that the only reason for the U.S. campaign against him was its desire to stop the transfer of the canal to Panamanian control. He sought to make a nationalist cause out of the crisis by wrapping himself in the canal issue, but this tactic had little success, at least initially.

American rhetoric only fed expectations that the economic sanctions imposed in 1988 would have immediate political effect-Noriega's collapse. A U.S. official said publicly in March that Noriega would be gone "in a matter of days." Yet in May Noriega was still firmly in the saddle, so the United States shifted course yet again and opened another round of negotiations. Kozak, now deputy assistant secretary of state, went to Panama and offered a new incentive-the administration would drop the indictments of Noriega in return for his departure from Panama. But Noriega rejected the offer on May 25, whereupon Secretary of State George Shultz said: "all offers are withdrawn from the table."

The United States had played its trump card, and still Noriega refused to leave. Noriega had withstood the repeated and various efforts of his opponents-opposition strikes, the coup attempt, the U.S. sanctions-and they had just about exhausted their options.

When the negotiations fell apart, the United States turned to its only feasible option remaining, covert military action. In July 1988 President Reagan signed an intelligence finding authorizing the CIA to work with a dissident former PDF colonel, Eduardo Herrera Hassan, to foment a coup in the ranks of the PDF.1 But the Senate Intelligence Committee objected because it feared Noriega would be assassinated, in violation of the U.S. executive order prohibiting the president from ordering the death of foreign leaders. Leaks to the press also made known the Defense Department's aversion to U.S. military involvement. The former chairman of the joint chiefs of staff recently explained that he had opposed actions that would "put American lives at risk, unless the stakes clearly justified it."2

The Panama issue receded during the U.S. presidential campaign. The Panamanian opposition, irritated at having been excluded from the State Department's negotiations with Noriega, lapsed into another period of quiescence. The 82-year-old Arnulfo Arias died in August without anointing an heir, leaving the opposition without a clear leader for the upcoming May 1989 elections.

V

When the Bush Administration came into office, it too tried various tactics designed to force Noriega out, but they proved as inadequate as its predecessor's. The Bush Administration did not seem particularly eager to take on the problem, but the Panamanian elections of May 7 brought the issue to the fore once again as the Noriega regime, unsurprisingly, prepared to ensure its victory. In the weeks before the vote, opposition voters were removed from the registration lists, their polling places were moved to distant locations, fictional names were added to the rolls, and the regime controlled all the media.

On the eve of the election U.S. News and World Report revealed that President Bush had signed an intelligence finding in February authorizing $10 million in covert aid to the opposition for printing, transportation and communications. Noriega pointed to the aid as U.S. intervention in Panama's internal affairs, and later seized on it as a reason to annul the elections.

The fraud that had been prepared for May 7 was not enough to ensure victory for the Noriega candidate. According to the "quick count" organized by the Catholic Church and conducted by lay workers, the opposition was winning by a three-to-one margin. No official vote count was released, although the pro-Noriega coalition of eight parties, Colina or National Liberation Coalition, claimed that it was winning. Colina's presidential candidate was Carlos Duque, a businessman and Noriega associate, and his running mates were Ramón Sieiro, brother-in-law to Noriega, and Aquilino Boyd. The opposition coalition, ADOC (Alliance of Democratic Civilian Opposition), ran Guillermo Endara, a little-known lawyer from Arnulfo Arias's party, Christian Democrat Ricardo Arias Calderón and the Molirena party's Guillermo Ford.

The Noriega regime made no move to recognize the opposition victory, even though international observers including former President Carter reported the apparent victory as well as the government's attempts to defraud the opposition. Announcements of the vote results were suspended, and the opposition took to the streets, calling on the government to concede defeat. On May 10 the opposition leaders and their supporters were brutally attacked by "Dignity Batallions," paramilitary groups that included members of the police. Hundreds of opposition supporters were arrested. Later that day the Panamanian electoral tribunal nullified the elections, saying they were invalidated by foreign interference.

The next day, President Bush announced measures to show U.S. displeasure at the annulment of the elections, the strongest of which was sending 1,900 more U.S. soldiers to Panama to reinforce the 10,000 troops stationed there. He also ordered the evacuation of U.S. citizens to the U.S. bases or the United States, and said the United States would rigorously enforce its rights under the canal treaties to move troops freely from one base to another. The U.S. ambassador was recalled and economic sanctions were continued, though not expanded. That all these steps were more symbolic than effective was underscored when it was reported that Libya promised Panama $50 million more in cash and oil credits of $100 million.

The announced rationale for sending more troops was to protect American lives. But a subsequent U.S. statement that the administration was not ruling out any options suggested that the United States might be willing to consider the use of force. The credibility of this threat was weakened, however, as U.S. officials also continued to send out signals that they were opposed to direct military action. The administration had apparently decided to look to the PDF for a solution, with President Bush calling on the Panamanian military to "defend democracy."

At the same time, President Bush indicated his desire to exhaust diplomatic remedies and marshal regional support for a policy of pressuring Noriega. In his May 11 announcement the president emphasized that "the United States strongly supports, and will cooperate with, initiatives taken by governments in this hemisphere to address this crisis through regional diplomacy and action in the Organization of American States."

A regional diplomatic effort was tried during the summer of 1989. On May 17 the Organization of American States approved a resolution condemning the election abuses in Panama. It named a mediating commission to promote "formulas toward a national agreement that would ensure a transfer of power by democratic means and within the shortest amount of time, fully respecting the Panamanian people's sovereign will." The Bush Administration had sought a stronger resolution calling for Noriega's ouster, but it nevertheless backed the OAS mediation.

Yet the OAS brought no more inducements to the table than the United States had in its 1988 negotiations with Noriega. Even though Noriega now faced united regional opposition to his rule, he seemed unfazed by such pressure. Being ostracized was far less onerous than other possible fates awaiting him should he leave Panama.

The OAS mission focused on exploring the possibility of new elections rather than persuading Noriega to recognize the opposition's May 7 victory. On July 20 the OAS proposed a specific formula for a provisional government to take over on September 1 when the current presidential term ended, and for that government to hold new elections as soon as possible.

The Panamanian opposition criticized the resolution as allowing Noriega to stall longer. "The Panamanian people have already decided on their destiny," said Endara. The Noriega camp put forward a proposal similar to the OAS position for a provisional junta government with opposition representation. The opposition refused the offer because it doubted that allowing Noriega to stay in power with a provisional junta would lead to elections any freer than the May fiasco.

This latest round of talks illustrated once again the dilemma of negotiations: Noriega would not voluntarily accept any arrangement that ended his power, much less forced him out of the country. The stakes for him were so high that only the most dire threats stood a chance of changing his mind. Yet the OAS was not even prepared to vote for comprehensive economic sanctions, let alone approve the use of force against him.

VI

After the OAS effort collapsed the U.S. administration turned up the pressure another notch, explicitly drawing the canal into the crisis for the first time. Francisco Rodríguez was sworn in as Panama's new president on September 1, 1989. Selected by the Noriega-controlled Council of State, he had been comptroller general for the past seven years. Refusing to recognize him, the Bush Administration expanded the economic sanctions somewhat.

More significant, the United States said it would not accept any candidate proposed by the Noriega government to serve as administrator of the canal.3 In June the Senate had passed a nonbinding resolution (63-31) that it would not vote for a Noriega nominee even if the administration approved one. Thus, the first major step in turning over the canal operations to the Panamanians is unlikely to take place on schedule. One possibility being considered by the Bush Administration is to appoint a deputy administrator, who is to be an American according to the treaty, and leave the administrator's post vacant.

Other actions earlier in 1989 had suggested that the canal might become a means of pressuring Noriega. In April the American chairman of the Canal Commission Board of Directors resigned from the board, saying the canal was in danger of being closed down as a result of arbitrary and illegal actions by the Panamanian government. In May the Canal Commission's secretary, also a U.S. member of the board, testified to the House of Representatives that he was beginning to worry about the state of the canal after the year 2000 if Noriega "continues to harass employees" and thus diminish the safety and efficiency of the canal's operation. A Panamanian member of the commission had also resigned in May, protesting what he called the Panamanian government's violations of civil rights.

Introducing the canal into the confrontation is a tactic that could backfire. Although the United States has good reason to fear the eventuality of a Noriega-controlled canal, its immediate interest is that the canal continue to function normally. In recognition of this fact, the U.S. canal administrator assured the Canal Commission in June that although employees were facing difficulties due to the country's political instability, they were performing their jobs well.

The United States has insisted that it has no intention of abrogating the treaties, although some congressmen have threatened to introduce legislation doing so. But U.S. insistence that it will abide by the treaties could be increasingly undermined by its actions, such as refusing to appoint a Panamanian as canal administrator. Such actions could force a difficult choice for the Panamanians: whether they dislike Noriega more than they yearn for sovereignty over the canal.

The canal is certainly vulnerable, and the Noriega government is capable of threatening it, although its own interests would be hurt as well. Furthermore, many Panamanians believe that a Noriega-run canal would be another source of corruption and illicit activities. Therefore, dangers to the canal exist. The question is: Just how important is the canal to the United States?

The waterway has diminished in importance since World War II, and even since the Vietnam War, when most of the forces bound for Southeast Asia transited the canal. Although U.S. aircraft carriers are too wide, smaller naval vessels still use it. Commercial trade is perhaps more significant. In 1987, 70 percent of the commerce via the canal was with the United States, most of it from Asia, amounting to ten percent of U.S. seaborne trade. About 40 percent of the seaborne trade of Latin countries on the Pacific coast goes through the canal.

The canal is more important to Panama, by any measure, than it is to the United States. In 1987, 140 million tons of cargo passed through. Total revenues from the canal amount to about ten percent of Panama's GDP, and it employs some 7,000 Panamanians. Yet the possibility remains that Noriega can contrive some threat to the canal that will work to his benefit. In any case, economic cost/benefit calculations have mattered less to him, as the sanctions have shown, than political survival. While the U.S. stake in the canal is important but not vital, the region would be seriously affected by its malfunctioning. As provided in the treaties, the United States is the ultimate guarantor of the canal's safety, and this is a responsibility that Americans want to shoulder. For political and regional security reasons, therefore, rather than economic factors, the U.S. interest in the canal will grow rather than diminish as 1999 approaches.

Another U.S. tactic that carried significant risks but low odds of effectiveness was increased maneuvers, exercises and movements by the U.S. troops stationed in Panama. The justification was that the United States has the right to do so under the canal treaties, and the immediate reason was to counter harassment by the PDF that had been going on for some time.4 In September the administration announced that these rights would be vigorously asserted, signaling the likely escalation of this game of chicken with Noriega. But such low-level confrontations only provide ammunition for Noriega's charge of U.S. aggression, even though he knows they pose little or no threat to him.

VII

After the debacle of the May election, the United States encouraged direct action against Noriega. President Bush said: "We share [the Panamanian people's] hope that the Panamanian Defense Forces will stand with them and fulfill their constitutional obligation to defend democracy." In another statement, the president sought to reassure the military that the U.S. objection was to Noriega, not the institution, saying: "A professional Panamanian Defense Force can have an important role to play in Panama's democratic future."

Yet the likelihood that the PDF alone could remove Noriega was not great. He had easily snuffed the March 1988 attempt against him, and has a "mafia" of some two dozen PDF officers to do his bidding in return for a share in the perks and power. They form an extensive intelligence and security network for the general. Even if some abandon him, the loyalty of the remaining group would have to be neutralized for a coup to succeed. Furthermore, there is no guarantee that those who take his place would not continue the ways he taught them. Many Panamanians fear that this scenario of "another Noriega" is likely, given the institutionalized corruption of the PDF, and indeed its pervasiveness in Panamanian society.

Nevertheless, on the morning of October 3, 1989, Major Moisés Giroldi, chief of security at the PDF headquarters in Panama City, led an uprising there aimed at forcing Noriega into retirement. Even though Noriega was reportedly a captive within his headquarters, he organized a successful counterattack to put down the rebellion later the same day. At first the U.S. government said it was not involved, but later acknowledged a limited role.

Two days before the coup Giroldi had met with CIA officials to ask U.S. forces to block two roads by which Noriega could bring in reinforcements. This was done, but no further U.S. action was taken to support the coup once it began to fail. The administration has insisted that no request for further U.S. aid came from the Giroldi rebels, denying a report that rebel officers had asked the second-ranking U.S. military official in Panama to send a helicopter to take Noriega into custody.5 It was reported that the rebels had earlier told the United States that they did not want U.S. involvement to "taint" their "self-cleansing" action, but they may have changed their minds once Noriega's well-trained Batallion 2000 turned up at the scene.

Brent Scowcroft, the U.S. national security adviser, later confirmed a report that President Bush had authorized the U.S. Southern Command to draw up a plan to use covert forces to apprehend the general, but by that time the coup had already failed. Many in Congress argued that the administration had lost a good opportunity to oust Noriega, but Bush officials said its information had been too sketchy to act upon safely. U.S. officials also expressed wariness of the coup leader, since Major Giroldi had been responsible for quashing the March 1988 coup attempt.

The failure of the October coup, the latest setback in the two-year campaign against Noriega, was the last straw to many in the United States. Frustration was vented that U.S. policy seemed to be banking on a very unlikely contingency-a successful, autonomous coup with little or no U.S. backing. In response to criticism that the United States had not offered more help, officials' statements implied that if coup plotters had requested U.S. help they might have received it. But they also pointed out that Congress previously had frowned on a proposed covert operation against Noriega, leading the administration to steer clear of any that might result in his death. Nonetheless, even if these prohibitions are loosened in the future, will Panamanians trust the United States to come to their aid after their experience in October?

VIII

The Panama crisis has reached this stage because the United States has continued to demand Noriega's ouster, while seriously underestimating his staying power. A number of options have been tried, but they either were pursued half-heartedly or were inherently inadequate to accomplish the objective. Negotiations, sanctions, elections, international mediation, veiled military threats and spontaneous coups have all been tried, and failed. What options remain?

Some in the Bush Administration still hope that a coup may succeed without U.S. backing. This is possible, but the record is not encouraging. After the October coup attempt Noriega began a systematic purge of the military, as well as of civilian officials whose loyalty was suspect. The harsh crackdown suggested that the PDF would be unlikely to try another revolt in the near future. While the October 1989 and March 1988 attempts indicated growing discontent in the PDF, Noriega still retained enough power to put down the challenges. Furthermore, even though a PDF coup without U.S. help might avoid political complications, the United States would have little influence over Noriega's fate and the shape of the new government.

The problem with returning to negotiations is that it is not clear what incentive the United States-or Latin American leaders, for that matter-could offer to persuade Noriega to leave Panama. Indeed, the repeated U.S. public demands that he leave seem to have made it impossible for him to do so without appearing to be caving in to U.S. interventionist pressure. Elections or any other scenario that leaves Noriega in the country, on the other hand, runs the risk that he will continue to wield de facto power. It might only serve to give the United States, and possibly a worn-out opposition, the means for a face-saving retreat.

Continuing to pursue these same options, especially if U.S. rhetoric encourages high expectations of a near-term solution, could result in further demonstrations of U.S. impotence. This perception of U.S. weakness may well become as great a problem as the original problem of Noriega's rule. Full-scale sanctions or threats to abrogate the treaties are far more likely to turn Panamanians against the United States than to induce Noriega's departure. Thus, U.S. options appear to have narrowed to a difficult choice: to take more drastic steps to force the general's removal or, if these steps are politically unfeasible, to coexist with him.

Coexistence would certainly cause severe embarrassment for the United States, but it might be less debilitating than repeated failures in Panama. Coexistence with Noriega will not work over the long term, however, if it means turning over the canal to him. Indeed, the canal is likely to become an immediate issue as the January 1990 deadline for installing a Panamanian administrator arrives.

If the United States continues to seek Noriega's ouster, pressure will grow for U.S. military action, whether covert or overt, unilateral or in conjunction with the PDF or other Latin Americans.

Overt military action would have a high political cost. The increased support in Congress for direct action against Noriega after the October coup attempt was surprising, but is unlikely to translate into support for direct, drastic action by U.S. troops unless Noriega attacks Americans or the canal. The U.S. military also continues to be leery of this option. The former chairman of the U.S. Joint Chiefs of Staff, Admiral William J. Crowe, Jr., told the Senate Armed Services Committee in the spring that using force can be "a messy, messy business," in contrast to the U.S. public's inclination to support only military operations that succeed with a minimum of casualties. In October Defense Secretary Richard Cheney warned that if the United States used military force in Panama, it would make U.S. cooperation with other Latin American countries more difficult.

The political obstacles to military action may well be insurmountable, but it is probably the only method certain to work. U.S. forces would have little difficulty prevailing over the Panamanian military, even if it would be "messy." Noriega has been fortifying the PDF and the Dignity Battalions with arms from abroad, but the PDF remains more a police force than an army. Only two battalions are battle-ready and few others are even equipped for combat; there is also a crack special operations unit, the Israeli-trained "Machos del Monte." The political costs of military action would be negligible if Latin Americans were directly or even solely involved, but no Latin government is likely to risk being caught breaking the regional taboo against intervention.

This leaves the option of a U.S.-supported coup. There are also serious political obstacles to this policy, although Congress may be persuaded to give wider latitude for covert action in Panama after the failure in October. To maximize the chances for a successful coup, the U.S. role would have to be substantial and, in the end, might involve direct military action. Given Noriega's capacity for discovering and foiling plots, the United States would need to plan for that contingency. To take this path, the administration needs the support of Congress.

These are stark choices indeed. Although President Bush may gain more support from Congress to act, his options have narrowed. The basic problem is that there is a substantial gap between the ends the United States has defined in Panama and the means it has so far been willing to employ. A successful policy requires adjusting one or the other.

1 William Scott Malone, "How Not to Depose a Dictator," The Washington Post Weekly, May 1-7, 1989, p. 23.

2 Admiral William J. Crowe, Jr., letter to The New York Times, Oct. 16, 1989, responding to a New York Times article by Elliott Abrams, Oct. 5, 1989, criticizing Crowe's opposition to proposals for "more vigorous" action.

3 According to the canal treaties, Panama is to propose a Panamanian in 1989 to take over as administrator on January 1, 1990. The U.S. administration is required to approve the nominee, and the Senate to confirm him.

4 In May, Deputy Assistant Secretary for Defense Richard Brown reported to Congress that there had been 1,200 violations of the canal treaties by Panama in the previous 15 months, including harassment of U.S. military personnel and dependents. The most serious confrontation occurred in August, when two U.S. soldiers were detained by Panamanian police. The United States retaliated in kind and denied Panamanians access to Fort Amador.

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  • Linda S. Robinson, Senior Editor of Foreign Affairs, is writing a book on Central America and Panama to be published by the Council on Foreign Relations in 1990.
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