Panama Planning to Sue Noriega : Litigation: $5.3 billion will be sought in a civil action in U.S. court. Charges will include 3 murders and theft of millions of dollars.

A lawyer for the Panamanian government told a federal judge Wednesday that Panama soon will file a $5.3-billion racketeering lawsuit against Manuel A. Noriega.

The lawyer said that the civil suit will accuse the deposed dictator of being responsible for the murders of three of his opponents, including a priest and a leader of an ill-fated coup last October. He said Panama will also accuse Noriega of extortion, fraud and theft schemes that deprived the country of millions of dollars.

The surprise announcement was made after federal prosecutors met with Noriega’s lawyers and agreed to try to unfreeze $4.5 million to $6 million being held in the general’s accounts in European banks. The money is to be placed in an escrow account and dispensed by a federal judge to pay for Noriega’s defense.

The former Panamanian leader has pleaded not guilty to drug-trafficking and money-laundering charges in U.S. District Court here. His trial is expected to begin early next year.

At the request of the U.S. government, banks in several European countries froze accounts holding an estimated $20 million linked to Noriega. U.S. authorities said the money was tainted because it was earned through drug-dealing and money-laundering activities.

The accounts were frozen after Noriega surrendered to U.S. authorities following last December’s invasion of Panama. Noriega’s four defense attorneys have said that they have spent $1 million already. They threatened to withdraw from the case unless they were paid.

The agreement to unfreeze the bank accounts was worked out after Judge William M. Hoeveler rejected a prosecution proposal that the United States pay for Noriega’s defense and then be reimbursed from the frozen funds after the trial.

Assistant U.S. Atty. Patrick Sullivan said in court that the deal had been approved “at the highest levels of the Justice Department.” He said it requires the U.S. government to ask the foreign banks to release the money but does not guarantee that they will do so.

After Hoeveler approved the agreement, attorney Gregory Craig told the judge that he represented the Panamanian government and that it objected to the arrangement.

“Any assets that lawfully belong to the people of Panama should not be used to fund Noriega’s defense,” Craig said. His Washington law firm, Williams & Connolly, recently represented Oliver L. North, the former White House national security adviser who once used Noriega to help mount operations against the Sandinista government in Nicaragua.

Craig told the court that Panama intends to file a lawsuit accusing Noriega of racketeering through a series of illegal schemes and acts. He said that the lawsuit will seek $300 million in compensatory damages and $5 billion in punitive damages.

Outside the courtroom, Craig told reporters that Panama’s suit will accuse Noriega of being responsible for the deaths of a Colombian priest, a political opponent and a leader of the unsuccessful October, 1989, coup. He said that the lawsuit will be filed in a U.S. court within two weeks.

The priest, Father Hector Gallegos, was thrown out of a helicopter over the ocean in 1972. He had been organizing opposition to the regime of Gen. Omar Torrijos, Noriega’s predecessor and mentor.

The second slaying was that of Hugo Spadafora, a one-time Noriega ally who had become his most vocal political opponent. He was killed in 1985 near the Panama-Costa Rica border and his body was found in a U.S. mail bag on the Costa Rican side. His head was never found and the case was never investigated.

Craig said the suit also will accuse Noriega of ordering the execution of Capt. Moises Giroldi, who was in charge of security troops at Noriega’s headquarters until he led the failed coup last year and was later shot to death.

Hoeveler said he would deal with the Panama’s objections to the use of Noriega’s money after the lawsuit is filed.