In Attempts to Dislodge Noriega, Washington Runs Low on Options

The Reagan Administration, having failed to dislodge Manuel A. Noriega from power in Panama, must now consider what to do next.

The options hardly appear attractive, partly because the firing fiasco two weeks ago only demonstrated the limits of U.S. political influence in Central America and the disarray in Washington decision-making. The timing is also unfortunate since the Administration is still enmeshed in the Nicaragua Contras controversy and the State Department has virtually admitted that the United States lacks leverage in persuading foreign governments to help halt international drug trafficking. Both the Nicaraguan civil war and the narcotics plague are important elements in the overall Panama crisis.

The February anti-Noriega operation confirmed again that in the bluster about Panama nobody seems to forecast likely failure--or how to proceed after failure happens. Apparently acting out of sheer frustration over an inability to force Noriega’s ouster, the Administration--or some of its senior officials--produced a political-intelligence misadventure reminiscent of recent U.S. actions in Lebanon, Iran and Nicaragua.

A week after President Eric A. Delvalle made his abortive attempt to fire Brig. Gen. Noriega in a taped television broadcast, the strongman appeared to be firmly in control--even more firmly than he was last December when U.S. federal grand juries in Florida indicted him for drug trafficking and racketeering.

Now the United States continues to recognize Delvalle as Panama’s legitimate president, although he has been in hiding since Noriega replaced him with Manuel Solis Palma. The Noriega-dominated legislature appointed Solis after Noriega refused to leave his post as commander of the Panama Defense Forces. Noriega instead arranged for the firer to become the firee, in a procedure that, according to Panamanian jurists, was wholly illegal.

Delvalle remains in Panama, issuing anti-Noriega proclamations from his hide-out and trying to be the symbol of democracy to justify continued U.S. recognition and to encourage new U.S. assistance. Meanwhile, in Washington, when all aspects of the Panama puzzle were finally--and belatedly--analyzed by the Administration, these harsh realities emerged at the end of last week:

The United States cannot successfully apply new punitive sanctions even though Reagan certified last Tuesday that Panama is not fully cooperating in the fight against drug traffic. Military and economic aid were already suspended last summer. Reagan did not order additional punishments because they might have violated the 1977 Panama Canal Treaty, thereby perhaps inviting Noriega to retaliate by attacks on the strategic waterway.

When several members of Congress proposed legislation to apply a trade embargo against Panama, the Administration decided that an embargo would be a treaty violation. Specifically, the treaty, under which sovereignty over the canal will be ceded to Panama in the year 2000, specifies that logistical support for the 10,000 U.S. troops and their 20,000 dependents stationed there must be procured on Panamanian territory--if the goods are available. This means, for example, that the U.S. Southern Command must purchase food in Panama, which would render a trade embargo inoperative.

Acting in his name, Delvalle’s Washington delegates announced last week that they were freezing all Panamanian assets abroad. Private U.S. banks therefore agreed to halt remittances to Panama, in what the State Department said was legitimate action. On Friday, the government of Panama ordered all banks closed indefinitely because of a cash shortage, in what appeared to be an initial victory for Delvalle’s supporters. But it remained questionable whether the United States would withhold the $7-million monthly payments to the Panama Canal Commission for the use of the waterway. While such payments are vital to Panama’s collapsing economy, withholding them could put the United States in treaty violation because the pact was signed in the name of the nations, not the governments in power at any given time. A temporary solution would be to place these monies in escrow.

The practical question facing the United States was how long Delvalle could enjoy U.S. recognition if Noriega and company stay on as a de facto government with which Washington must sooner or later do business.

Having once predicted, incorrectly, that key military commanders would support Delvalle in firing Noriega--and having convinced the president that he could succeed in defying the general--U.S. officials now refrain from predictions. They realize that the opposition has no leader capable of mobilizing the masses against Noriega, including Delvalle, who gladly served for 2 1/2 years as puppet president under the general’s dominion.

The best chance to hasten Noriega’s downfall, some U.S. analysts believe, is through sustained economic and financial pressures. Because international institutions and private foreign banks have stopped loans to Panama, the treasury is nearly empty; Noriega may soon have to fire up to 30,000 public employees. Such layoffs could convince the poor and lower middle class--Noriega’s main populist constituency--to join the organized political opposition against him.

Nobody is prepared to guess, however, how long such a process might take. To Washington’s dismay, no major international pressure has developed against Noriega; the Organization of American States has not condemned him, although the Latin American presidential “Group of Eight” has suspended Panama, leaving the problem entirely in U.S. hands.

Worse, officials here are beginning to realize that a vindictive Noriega could pose serious problems. Under the current canal treaty, U.S. forces are in Panama for the specific purpose of defending the waterway. Because the treaty says nothing about other U.S. bases in Panama, Noriega could act against Howard Air Force Base, the principal logistic facility for supply and intelligence operations over Nicaragua. Howard is vital for such operations; meanwhile, Nicaragua’s President Daniel Ortega and Cuba’s Fidel Castro are publicly backing Noriega.

Many outside experts think the eventual solution is for the United States to advance enticing aid packages--for Panamanian economic recovery in general and for the Defense Forces in particular--to make the general’s overthrow palatable to the military and to the civilian politicians who back him today. The carrot may finally work better than the stick, they believe, and remove any opprobrium about U.S. “intervention.”

Yet there is no guarantee that any post-Noriega regime will instantly remove Panama as a major link in the U.S. drug traffic from South America. Though Noriega is held personally responsible for much of that traffic, he did not invent corruption in Panama. Still, the immediate goal for Washington must be to see Noriega go as rapidly as possible. This can happen only when the Administration coordinates and rationalizes Panama policies more responsibly--and more realistically--than it did in February.