Panama Cuts Electricity for U.S. Embassy Workers

The Panamanian government turned off the electricity at homes of U.S. Embassy employees Sunday, leaving the diplomats in the dark and wondering whether to pay their light bills and break President Reagan’s dollar embargo against Panama.

The move to cut the lights had been expected, embassy spokesman Terrence Kneebone said, because the United States is about two months behind in paying the electrical bills of its employees to the government of Gen. Manuel A. Noriega.

The Reagan Administration considers Noriega’s government illegitimate and refuses to make any payments for services to government agencies.

That measure, along with others that keep dollars from flowing to Panama, is designed to force Noriega to step down by making it impossible for Panama’s government to pay its own bills. Noriega has been unable to meet most salary payments of government employees for more than a month.

“We were told that if we didn’t pay our bills, the lights would go off,” Kneebone said. “We didn’t pay and out they went.”

The blackout affected about 45 out of 110 families of American diplomats who live in Panama City. Others are expected to be without electricity as soon as workers from the Panamanian utility company get to their homes to disconnect power.

Some families were already moving into hotels. Others were trying to explain to their small children why they could not watch their cartoons on television.

The power outage presents the Reagan Administration with a delicate problem. The dollar squeeze has yet to bring down Noriega but it has created significant hardships for most Panamanians. There is concern here that a decision to let Americans pay their light bills would be perceived harshly by Panamanians who are withstanding severe sacrifices in hopes of bringing Noriega down.

“If we make exceptions for ourselves, we could send the wrong message--that we are not willing to share the burden,” Kneebone said.

However, he noted that U.S. Embassy employees are already paying their own telephone bills, an action that is technically in violation of rules set by the Reagan Administration two weeks ago against Americans making payments to the Noriega government.

Kneebone said the telephones are vital for work. “We cannot just go out of business,” he remarked.

Kneebone added that talks are under way in Washington to arrive at a solution and that an announcement might be forthcoming as early as today.