U.S. Drug Report Backs Aid to Panama, Mexico

A preliminary State Department report has found narcotics control programs by Panama and Mexico to be deficient but, because of overriding U.S. national interests in both cases, recommends that aid and trade privileges not be withheld from those countries.

Disclosure of the recommendation brought protests Saturday from congressional leaders in the fight against drugs. They deplored the treatment of Panama, whose military strongman, Gen. Manuel A. Noriega, was indicted by federal grand juries this month on drug trafficking and related charges.

Under law, findings of the yearly State Department report on national drug control, still in preparation by the department’s Bureau of International Narcotics Matters, are to be used by the President to certify the adequacy of a country’s drug-control program. Denial of certification normally requires cutoffs of U.S. aid, trade privileges and U.S. support in applications for international bank loans.

No Penalties Recommended

A State Department official, speaking on condition that he not be identified, said the bureau’s current draft report calls for denial of certification this year but recommends that no penalties be imposed on Mexico or Panama because of the significant national interests the United States has in both countries.

The official said the report, which was disclosed Saturday by the New York Times, did not specify the interests affected, but he observed that the presence of U.S. troops in Panamanian territory and Washington’s continuing participation in management of the Panama Canal were obviously factors. For Mexico, he cited only the wide variety of economic and other ties that exist with that neighbor. Both Mexico and Panama won unqualified certification last year.

In Panama’s case now, U.S. military and economic aid have already been suspended, a step taken by President Reagan last July during a wave of protest against Noriega. At that time, Panama lost U.S. loan support by action of Congress. Mexico does not receive U.S. aid but could be harmed by withdrawal of trade privileges and suspension of American support for its loan applications to the World Bank and similar multilateral institutions.

“There was never any question of restoring aid to Panama,” the official said in connection with the internal discussions now under way over the 1988 drug report.

He emphasized that the report is in the drafting stage and noted that other executive agencies concerned with narcotics--the Justice and Treasury departments, Bureau of Customs, Coast Guard, Drug Enforcement Administration, CIA and Defense Information Agency--must consider the report before it goes to the White House.

One of the most outspoken critics within the government is expected to be William von Raab, commissioner of customs. Von Raab, in Senate testimony last year, declared that corruption in the Mexican government related to narcotics reached from the presidential palace to the lowest ranks. An aide to Von Raab said he will oppose any leniency toward Mexico or Panama.

Congressional input was not solicited by the State Department, the official said. Members of Congress who learned of the report in preparation were irate, however.

Strong Repercussions Seen

Rep. Dante B. Fascell (D-Fla.), chairman of the House Foreign Affairs Committee and a member of the House International Narcotics Task Force, warned that if the report emerges unchanged there will be strong repercussions on Capitol Hill. He was particularly critical of leniency for Mexico.

“Production of heroin in Mexico is up, enforcement is down and the trials (of corrupt officials) haven’t got anywhere,” Fascell said.

Sen. John Kerry (D-Mass.), a Foreign Relations committee member who conducted hearings on Noriega recently, termed the action with respect to Panama “totally outrageous.”

Rep. Lawrence J. Smith (D-Fla.), chairman of the House Task Force on International Narcotics, was particularly bitter. Smith, whose hometown of Miami is a major entry point for drugs, said the Administration is “doing business as usual. . . . They say ‘just say no’ to drugs in the United States and overseas they close their eyes.”