Rivalry, Snitches, Murder Helped Shape Noriega Case

This story was reported and written by Times staff writers Douglas Frantz, Ronald J. Ostrow and Robert L. Jackson

As early as 1972, the U.S. government was so concerned about what it saw as Manuel Noriega’s role in drug trafficking in Panama that it formulated an option to assassinate him. It was no idle contingency plan: A CIA operative was actually dispatched to Mexico to await final orders before the plot was finally scotched, according to a former U.S. intelligence official.

It was not until 16 years later that the United States found more acceptable means of dealing with Noriega--highly unusual criminal indictments of the foreign leader on charges that he protected drug traffickers and helped launder their illegal profits.

In February, 1988, when Noriega was indicted simultaneously by federal grand juries in Miami and Tampa, Fla., he had risen from the rank of colonel in his country’s national guard to maximum leader of Panama, and few thought he would be brought to trial. Little public attention was focused on the merits of the cases.

Now, however, after Noriega’s surrender to U.S. authorities in the wake of an invasion that cost the lives of 23 American soldiers and hundreds of Panamanians, the case behind the indictments is coming under mounting scrutiny.


Defense attorneys in the Miami case and other legal experts have criticized the government’s reliance on testimony by admitted drug dealers whose stories have won them reduced sentences. Elements within the U.S. government opposed the investigations from the outset, and some senior officials still raise doubts privately about the strength of the cases.

But sources familiar with the evidence say prosecutors have strong corroboration for much of the testimony, including key surveillance reports by the Drug Enforcement Administration confirming critical aspects of the smugglers’ stories.

Gen. Manuel A. Noriega is months from trial and, the specifics of the evidence aside, legitimate questions can be raised about U.S. actions in the case: If Noriega was as corrupt as the government claims, why did it take so long to charge him and why did U.S. agencies rely on him? Did rivalry between two politically savvy U.S. attorneys result in two indictments when one would have been stronger? Were prosecutors pushed into hasty indictments by looming Senate probes?

Definitive answers to those questions may remain a mystery even after Noriega’s trials. But thousands of pages of documents and dozens of interviews with figures close to the investigations have yielded some insights--as well as the story behind the indictments that brought down a dictator.


Early Drug Record

On Nov. 5, 1971, John Ingersoll, the director of the Bureau of Narcotics and Dangerous Drugs, the predecessor to the DEA, prepared a report that found Panama “one of the most significant countries for the transshipment of narcotics into the United States.”

An earlier secret report by a BNDD staffer had identified Noriega, then a lieutenant colonel in the national guard, as being in control of the drug trafficking in Panama.

Early in 1972, the BNDD created a list of options for dealing with Noriega, the most extreme of which called for his assassination. Ingersoll has said he rejected the idea out of hand, but apparently it found some adherents in the Richard M. Nixon Administration.


John Bacon, a CIA analyst who was on loan to BNDD in 1972, said in an interview that a member of the White House “plumbers unit” was sent to Mexico to await further orders on the assassination. The plan was eventually aborted and the operative was recalled.

Even at the time killing him was under consideration, Noriega was providing information to the CIA and military-intelligence agencies and receiving money in return. The information was apparently deemed so valuable that U.S. officials were willing to overlook other aspects of Noriega’s activities.

For instance, U.S. intelligence agencies were aware that Noriega was also passing along information to Cuban leader Fidel Castro. And in 1976, he was believed to have arranged a series of car bombings of U.S. targets in Panama in an attempt to soften the U.S. position on ownership of the Panama Canal.

At the time, George Bush was director of Central Intelligence in the Gerald R. Ford Administration. The CIA was concerned enough about the bombings to summon Noriega to Washington.


According to an account in a new book, “Our Man In Panama” by John Dinges, Bush met with Noriega at lunch in December, 1976, at the Panamanian Embassy here and listened with little comment to Noriega’s denial that Panama was connected with the bombings.

During the Jimmy Carter Administration, Noriega strengthened his ties with military-intelligence units, and two inquiries into allegations of corruption were stalled.

The first roadblock came soon after Carter negotiated the treaty to turn over the Panama Canal to Panama. The treaty encountered opposition from conservatives in the Senate, and Republican foes of the agreement sought the DEA’s files on drug dealings in Panama.

Bacon, who had by this time signed on full time at DEA, said he boxed up the files and turned them over to DEA lawyers. The files never reached the Senate, and Bacon said they disappeared.


Federal prosecutors in Miami also found themselves blocked when they tried to charge Noriega with buying and transporting weapons illegally in 1980.

R. Jerome Sanford, an assistant U.S. attorney at the time, said in an interview that the Customs Service had developed evidence that Noriega was involved in smuggling guns out of Miami to the Sandinista rebels in Nicaragua, who were fighting to overthrow Gen. Anastasio Somoza.

Sanford said he was told later that Noriega was providing security for the Shah of Iran, who had been given haven in Panama at the request of the United States, and that his indictment would embarrass the Administration. The charges were never filed.

Along with his ties to intelligence agencies, Noriega also developed a close relationship with the DEA during the late 1970s and early 1980s. Over the years, he was showered with letters of praise from DEA directors for his cooperation in cracking down on drug dealers.


But Noriega was cautioned by U.S. officials on various occasions as allegations about his corruption continued to filter back to Washington.

On Nov. 1, 1985, he was summoned to Washington for a meeting with CIA Director William J. Casey. U.S. officials were deeply concerned about reports that Noriega had engineered the brutal torture and murder two months earlier of Hugo Spadafora, a former Panamanian official who had publicly denounced Noriega’s drug dealings.

“Noriega was brought up here to be read the riot act, and Casey failed,” said Elliott Abrams, then an assistant secretary of state. “The fact that Casey did not read him the riot act meant that Noriega would certainly interpret it as a real honor.”

A month later, John M. Poindexter, President Ronald Reagan’s national security adviser, went to Panama for another session.


Noriega arrived for the meeting with Poindexter at Howard Air Base in Panama in a new Lincoln Continental and listened morosely as the U.S. official warned him about corruption, drug dealing and the expanding power of the military in Panama.

Abrams, who accompanied Poindexter, recalled that Noriega said he was innocent and that the Americans were listening to the wrong people in Panama.

Pilot Turns Informant

Richard D. Gregorie had not been chief of narcotics prosecutions for long in the Miami office of the U.S. attorney before he began to hear Noriega’s name.


In 1983, DEA agents in Miami nabbed Adler Barrimore (Barry) Seal, a former Special Forces pilot in the Vietnam War who had amassed a fortune flying drug shipments for the Colombians. To avoid a long jail term, Seal became the nation’s top drug informant.

In 1984, the DEA sent Seal to Panama for a meeting with Pablo Escobar and Jorge Ochoa, two leaders of the Medellin drug cartel who were hiding there after ordering the assassination of Colombian Justice Minister Rodrigo Lara Bonilla.

When Seal returned, he reported that Ochoa and Escobar were living in a Panama City hotel under Noriega’s protection, according to government sources. Seal reported that Noriega had also allowed the cartel to set up a cocaine lab in Panama.

In 1986, Seal was killed by Colombian gunmen on a street in Baton Rouge, La., after his information had led to the indictment of Ochoa, Escobar and others. By then, the Miami investigators were pursuing other leads toward Noriega.


A year earlier, DEA agent Danny Moritz had gone undercover as a money launderer and grown friendly with a Panamanian pilot, Floyd Carlton Caceres. An informant had told Moritz that Carlton was linked to Noriega.

In September, 1985, acting on a tip, DEA agents intercepted a load of Colombian cocaine. The plane made a crash landing on Interstate 75 north of Miami, and the pilot escaped. The DEA found 400 kilograms of cocaine on board. The seizure formed the basis for indicting the plane’s pilot, Antonio Aizprua, and the man behind the shipment, Floyd Carlton.

Moritz came to Gregorie, who was then chief assistant U.S. attorney, and told him: “I think I can make a case on Noriega.”

There were two problems, however. The first was nabbing Carlton, who had fled the United States after the seizure.


At the time Moritz was looking for him, Carlton was talking with DEA agents in Panama City. He was frightened because Colombian drug dealers thought he had stolen a cocaine shipment, and they had beaten one of his relatives while searching for him.

In Senate testimony in 1988, Carlton said he contacted two DEA agents in Panama City in January, 1986, to seek protection for himself and his family in exchange for information about Noriega. He described being driven around in a car by the agents and telling them about money laundering and drug dealing in Panama.

“When I mentioned the name of Gen. Noriega, they immediately became upset,” Carlton said, adding that the agents never contacted him again.

Later that year, Moritz arranged to lure Carlton to Costa Rica on the pretense of a drug deal, and he was arrested. In jail, he described his role as the middleman between Noriega and the Medellin cartel. Among other things, he said that he had arranged their $4-million payment to Noriega for protection after the Lara Bonilla assassination.


In January, 1987, Carlton was extradited to the United States. By June, he had reached an agreement to cooperate with the Miami investigation in return for leniency.

Moritz had been transferred to Cleveland, despite Gregorie’s protests. So for four weeks that summer, DEA agents Steven Grilli and Alberto Fernandez questioned Carlton in a windowless room in the basement of the Miami federal courthouse known as “the submarine.”

Fernandez said Carlton felt betrayed because Noriega had failed to help him when the Colombians were after him the previous year. In telling his story, he provided extensive details of what he said was Noriega’s involvement with the Colombian drug lords. But all those allegations would have to be corroborated.

That was the second problem.


Claims of Corruption

Prosecutors on Noriega’s trail in Tampa, Fla., were hearing other claims of corruption.

In 1984, Steven Kalish had been arrested on charges from a Texas marijuana-smuggling operation. He also was under investigation in North Carolina, Louisiana and Florida. Faced with the new indictments and a lifetime in jail, Kalish began trying to cut a deal in 1986.

On Aug. 21, 1986, Kalish’s Washington lawyer, Samuel Buffone, met with prosecutors from North Carolina and Tampa in the U.S. attorney’s office in Tampa. Buffone said his client could provide direct evidence of Noriega’s involvement in laundering millions of dollars for Kalish’s smuggling operation. He said that his client had given Noriega $300,000 in cash in a briefcase and that Noriega had used Kalish’s jet for several trips, including one to Washington.


“It was the first time we’d heard of Noriega’s involvement,” said J. Douglas McCullough, the federal prosecutor from Raleigh heading the North Carolina investigation.

The problem again was finding a way to substantiate the Kalish story. Kalish had something to offer on that score: flight logs from the times Noriega had used his Lear jet and records of the trip to Panama when he made the alleged $300,000 payoff.

A second meeting was held on Sept. 19, 1986, at a closed, secluded campground at Camp Lejeune, a Marine base in North Carolina. McCullough and several FBI and DEA agents obtained a more detailed briefing from Kalish.

Four days later, McCullough and the two Tampa prosecutors on the case, Mark Jackowski and Robert Kennedy, met with Justice Department officials in Washington. Robert Merkle, the U.S. attorney in Tampa, also flew up to discuss the potential Kalish deal with Stephen S. Trott, then associate attorney general in charge of the criminal division.


Near the end of the Merkle-Trott meeting, the three assistant prosecutors were brought into the room, and McCullough recalled Trott telling them: “It’s in your hands. You make the decision.”

The corroboration that sealed the deal for Kalish, according to McCullough and others, was DEA surveillance reports that placed him in Panama at the time he claimed to have given Noriega the $300,000. Coupled with the records that Kalish had provided, prosecutors felt confident that they had a strong case.

Still, it would be months before the indictment was handed down.

Probe Hits Resistance


The Miami prosecutors were having a tougher time of it.

In October, 1987, Gregorie went to Washington to discuss the investigation with officials at DEA headquarters and the Justice Department. He got a cool reception at the DEA. A few months earlier, John C. Lawn, DEA administrator, had written an effusive letter to Noriega praising his assistance in a major seizure of drugs and cash.

In the meeting with Gregorie, Lawn was cooperative and helpful, but Thomas G. Byrne, the agency’s intelligence chief, opposed the investigation openly.

“I’m used to agents being gung-ho to make a case and all of the sudden here was this guy Byrne saying: ‘The case stinks, you are not going to be able to make it,’ ” Gregorie recalled in an interview.


A senior DEA official explained in a recent interview that the DEA intelligence division was particularly protective of Noriega because he provided them with so much information about drug dealers.

“They felt this guy was the only game around,” the official said. “And they would ask: ‘Who else is helping us?’ ”

Gregorie was aware that some people in the Justice Department also opposed the investigation, but he said he was never overtly blocked at the Justice Department or the DEA. Merkle’s recollections were similar.

“There were people that clearly were not happy, mostly at DEA headquarters in Washington,” he said. “It was a more of a sense than anything. It’s like sitting at the table with a guy who has indigestion.”


A few days after Gregorie returned to Miami, he got a big break. Grilli, the DEA agent on the Miami case, received a call from an analyst in DEA intelligence who had spotted a debriefing report on a Colombian trafficker jailed in Oklahoma. The suspect was cooperating in another case and had mentioned Noriega.

The prisoner, Boris Olarte, said that he had paid $4 million to Noriega on behalf of the drug cartels in 1984, the same period Carlton claimed Noriega was receiving protection money. Olarte provided other details that corroborated Carlton’s story.

Before the end of the year, investigators had another big break when they interviewed Jose I. Blandon, a former political adviser to Noriega who had turned on the general.

Blandon’s most intriguing tale was his story that Castro had negotiated a truce between the Medellin cartel and Noriega after Noriega provided the DEA with information that led to the seizure of a cocaine lab the Colombians were building in Panama. The lab was supposed to have been protected as part of the $4-million payoff in 1984, Blandon said. He even provided pictures of Castro and Noriega together.


Pressure From Senate

As the Tampa and Miami investigations were nearing their conclusions, pressure came from another quarter.

Two Senate subcommittees--the permanent subcommittee on investigations and the subcommittee on terrorism and narcotics--had opened investigations into whether foreign-policy considerations were handcuffing the drug war.

Daniel Rinzel, chief counsel to the Republicans on the investigations subcommittee, was eager to put Kalish before the senators to tell his story. The hearing had been stalled by the Justice Department’s unwillingness to allow access to its witnesses.


“It was important to the Justice Department attorneys that they return an indictment prior to congressional hearings because they did not wish to appear to be merely responding to congressional revelations,” Rinzel said.

Jack Blum, the chief counsel to the terrorism and narcotics panel, had delayed his inquiry for several months at the request of the Justice Department. But by January, 1988, he had interviewed Blandon and was eager to hold his hearings on the U.S. relationship with Noriega.

“How could it have gone on for so many years?” asked Blum in an interview.

Critics contend that the Senate inquiries rushed the indictments. One of the prosecutors conceded that Miami officials wanted their indictment before the Senate hearings added another layer of politics to the case. And Merkle acknowledged that he was concerned about the Senate hearings, but he said: “That concern was not a predicate for an untimely indictment.”


The cases were sharply different. Tampa relied primarily on Kalish’s allegations of Noriega’s role in money laundering to bring charges against Noriega and an associate, Enrique A. Pretelt.

The Miami case was much broader, alleging that Noriega had extensive dealings with the Medellin cartel, protecting traffickers and their drugs and laboratories and allowing them to use Panamanian banks. Along with Noriega, charges were contemplated against members of the cartel and others.

Questions had been simmering within the Justice Department over whether there would be one indictment or two. While Leon Kellner, the U.S. attorney in Miami, and Merkle cooperated in the parallel investigations, a hot rivalry existed between the men and their offices. Neither was willing to give up a high-profile case.

Merkle, who is now in private practice, said there were sound reasons for two cases, including avoiding putting all of the government’s eggs in one basket. He also said the cases were drawn differently.


“Tampa is a very tight indictment, very clean and direct,” he said. “Miami is almost a policy statement.”

On Feb. 1, 1988, the two teams of prosecutors arrived in Washington to go over the proposed indictments with Trott and get final approval from Atty. Gen. Edwin Meese III.

The primary weakness was that Noriega could argue that his activities were part of his work as an agent of various U.S. agencies. The prosecutors had not been allowed to examine the intelligence files of the various agencies.

Opposition still remained in the Reagan Administration. At a meeting with National Security Council officials, one said to Kellner: “I never understood that the U.S. attorney for the Southern District of Florida was going to make foreign policy,” according to a participant in the meeting who recalled Kellner responding: “I don’t make foreign policy. I indict dope dealers.”


Despite the opposition and the inability of the prosecutors to determine the extent of Noriega’s relationship with U.S. intelligence operations, the decision was made to indict Noriega.

On Feb. 4, 1988, Kellner and Merkle announced the two indictments at a crowded, joint press conference in Miami. Representatives of the FBI and customs, which had played major roles in the Tampa investigation, were there. Two chairs left for the DEA agents involved in the Miami case were empty.