Noriega Directly Involved in Drug Trade, Probers Told

Graphic details of Panama strongman Manuel A. Noriega’s alleged participation in drug deals and money laundering have been obtained by congressional investigators from a major American marijuana trafficker, who described delivering $300,000 in a briefcase to Noriega.

The permanent investigations subcommittee of the Senate Government Operations Committee will hear testimony today from Steven Michael Kalish, a principal witness in an investigation by the U.S. Customs Service in Tampa, Fla., into Noriega’s alleged role in illicit drug trafficking and schemes to disguise the proceeds.

In another Noriega case, it was learned that the Justice Department plans to seek an indictment of the strongman and others on drug-trafficking and money-laundering charges in Miami next month. A grand jury there is scheduled to hear testimony this week from Jose I. Blandon, the former Panamanian consul general in New York who was fired by Noriega two weeks ago. Blandon has vowed to make public details of Noriega’s alleged corruption if he does not step down.

Justice Department officials have voiced doubts about the legal strength of the Miami case, which depends heavily on testimony by Floyd Carlton Caceres, a Panamanian pilot now in the federal witness protection program. Caceres claims to have made drug-related payments to Noriega, and Blandon’s testimony is expected to buttress that case significantly, one source familiar with the investigation said.

The Miami and Tampa investigations are taking place as the United States is intensifying pressure on Noriega to step down. Two weeks ago, in a sharp escalation of U.S. pressure on Noriega, Secretary of State George P. Shultz called on him to “step back” from power to enable his countrymen to live under democratic rule.

The Capitol Hill appearance by Kalish, a convicted marijuana smuggler who has been in jail for nearly four years, will mark the first public testimony by a witness who claims first-hand knowledge of Noriega’s alleged role in trafficking drugs to the United States.

Sen. William V. Roth Jr. (R-Del.), the ranking minority panel member whose staff conducted the investigation, said that Noriega and other Panamanian officials “have apparently been making lots of money by helping drug smugglers and money launderers ply their trade.” If the allegations prove true, he said, “we must take immediate action to stop those officials from continuing to prime the pipeline of illegal drug profits.”

Briefcase Full of Cash

Kalish has told investigators that he carried the briefcase of cash to Noriega’s office in September, 1983, to help pave the way for drug deals, some of which would pass through Panama and were expected to yield $300 million that Kalish wanted to hide in the Central American nation.

As he was leaving the office, Kalish told investigators, Noriega noted that he had forgotten his briefcase. He responded that the case was for the Panamanian general--a comment that drew a smile from Noriega, Kalish said. The next day, the two men met at the Panama Canal offices, Kalish said, and an “extremely friendly” Noriega thanked him for the cash tribute.

Noriega then became a full-scale partner in proposed drug-smuggling operations, the profits from which were to be deposited in Panama, with Noriega guaranteed part of the money, Kalish told investigators.

Raul St. Malo, charge d’affaires for the Panamanian Embassy in Washington, belittled the allegations, contending that they are being made primarily by individuals trying to gain favorable treatment from authorities on their own drug convictions.

“There have been accusations for a year now, and no proof has ever been produced,” St. Malo said. “We feel that most of the people giving testimony are not reliable.”

Kalish, while questioned by subcommittee investigators, said he decided to turn to Panama as a possible haven for his burgeoning sums of drug money because currency had filled entire rooms in Tampa, where it was kept until 1983.

The cash stockpile increased as Kalish was planning marijuana smuggling that would generate up to $300 million, and he carried more than $2 million with him to Panama on “a test run” in September, 1983, he has told investigators.

Kalish said he was met at the Omar Torrijos Airport by Cesar Rodriguez, a reputed close associate of Noriega who was murdered in Colombia in 1986 in what U.S. authorities contend was a drug-related slaying.

Kalish told investigators that Rodriguez offered him a package deal to handle the illicit funds, including corporate, banking and investment services--and even armored car service to ensure safe passage of the money from the airport.

During his meeting with Rodriguez, Kalish said, a Panamanian official informed Rodriguez that the U.S. Drug Enforcement Administration had notified the intelligence arm of the Panamanian military that the private plane in which Kalish had flown was under surveillance. As a result, Kalish sent the plane back to the United States, congressional sources said.

The meeting between Kalish and Noriega then took place. In his purported dealings with the Panamanian leader, Kalish said that he helped arrange and finance the purchase of a helicopter and a Boeing 727 for Noriega.

Letter of Credit

In connection with those transactions, he obtained a $1.9-million, irrevocable letter of credit from the Banco Nacional, Panama’s national bank. The subcommittee has obtained the document and plans to display it today.

The marijuana shipments that Kalish planned included smuggling 400,000 pounds of the drug in a cargo vessel from Colombia to Panama, where the containers would receive Panamanian customs seals and then be sent on to New York as a shipment originating in Panama. As such, they would receive less scrutiny from U.S. authorities than a Colombian shipment, a congressional investigator explained.

Noriega agreed to the plan, which Kalish said included $4 million in payments to Noriega. Although Kalish made payments for the deal, he was arrested by FBI agents in Florida on July 26, 1984, and the shipment was aborted.