U.S. Still Pressing for Deal With Noriega : Process Continues, White House Says, Despite Bush’s Objections

The Reagan Administration, despite objections from Vice President George Bush, continued working Friday toward a deal with Panamanian strongman Manuel A. Noriega under which the United States would drop drug charges against the general in exchange for his retirement.

White House officials said the proposed deal with Noriega was still unsigned, and one aide quoted Chief of Staff Howard H. Baker Jr. as saying details of the bargain were “changing minute by minute.” But White House and State Department officials said the negotiations with the Panamanian leader continued in spite of Bush’s demand that they stop.

“The talks have not broken down, nor has there been any agreement,” White House spokesman Roman Popadiuk said. “The process continues.”

At one point, officials told reporters that they expected Noriega to announce his retirement as commander of the ruling military Friday afternoon, but their hope dissipated by the end of the day.

The Administration has been pressing Noriega to step down since Feb. 5, when two federal grand juries in Florida returned drug-trafficking indictments against the Panamanian strongman.

However, despite U.S. financial sanctions that have crippled Panama’s economy, Noriega has doggedly remained in power--leading the Administration to negotiate for a compromise.

Under the most recent reported version of the proposed deal, Noriega has agreed in principle to resign Aug. 12 in exchange for the dismissal of the U.S. indictments. The deal would require the general to leave Panama in September but would allow him to come back for the Christmas holidays and then return permanently after the Panamanian presidential elections in May, 1989, officials said.

“He would be in exile for something like six months,” one aide said.

Bush’s chief of staff confirmed Friday that the vice president had objected to the negotiations with Noriega and asked for the recall of a State Department envoy who was sent to Panama to bargain with the strongman.

The statement by chief of staff Craig Fuller was made in response to a Washington Post report that Bush had recommended halting the negotiations during a top-level meeting of Administration officials Thursday.

A Bush spokesman said he would not disclose whether the vice president had made his objections known directly to President Reagan, or whether he received any response.

Bush, who is expected to win the Republican nomination for president, has increasingly distanced himself from the White House on the issue of Panama in the wake of charges that he knew about Noriega’s drug ties but did nothing about them. Bush has denied those charges.

‘Process Is Continuing’

State Department spokesman Charles Redman said Friday evening that the special envoy, Michael G. Kozak, was returning to Washington for consultations, but he repeated the White House statement that “the process is continuing.”

“The presumption is he will go back (to Panama),” Redman said. “This should not be taken as an indication that the negotiations are over. When it is solved, it will be solved.”

The negotiations with Noriega have created unusually bitter divisions within the Administration. In addition to Bush, Justice Department officials have openly criticized the idea of dropping indictments against Noriega. And a National Security Council aide, Jose Sorzano, resigned partly because of his objections to the way the negotiations were handled.

Both Sorzano and members of Panama’s political opposition were reported upset that the U.S. deal would allow Noriega to return home after only a short exile.

As the disputes within the Administration have become more apparent, “Noriega has been gaining in confidence and cockiness,” a State Department official noted unhappily.

The statement from Bush’s office was an unusual exception to the vice president’s frequent refusal to divulge his advice to the President. It also revealed the depth of the Bush camp’s concern that the controversial effort to bargain with Noriega would threaten Bush’s political aspirations.

It was the second time in three days that Bush or his lieutenants have sought to distance the vice president from fallout over the Noriega deal. In Los Angeles on Wednesday, Bush made a rare break from President Reagan by declaring: “I won’t bargain with drug dealers, either, whether they’re on U.S. or foreign soil.”

Meanwhile, the State Department said it was concerned about veiled threats against American diplomats in a pro-government newspaper in Panama.

The newspaper Critica published photographs of U.S. Embassy employees and their families Thursday and identified them as “the gringos who are starving us to death.”

State Department spokesman Redman said additional security precautions were taken as a result of the publication of the photographs.

Staff writers Cathleen Decker, Norman Kempster and Jack Nelson contributed to this story.