COLUMN ONE : Cautionary Tales From Panama : Five years after the U.S. invasion, the nation's bumpy recovery offers lessons for Americans moving into Haiti. The failure to mete out justice is seen as a major obstacle to reform.

By TRACY WILKINSON

Sept. 26, 1994 12 AM PT

TIMES STAFF WRITER

PANAMA CITY —

In his last year in power, Gen. Manuel Antonio Noriega repeatedly appeared to accept a hard-fought deal, brokered with U.S. officials and Panamanian politicians. He would step down, civilians would be allowed to return to government, this nation’s long military regime would end.

But each time his adversaries thought a deal had been struck, Noriega found a way to renege. Three months after the last talks broke down, as Noriega continued to cling to power, U.S. armed forces invaded this tiny country to depose Noriega and restore democratic rule.

Five years later, the record in Panama is decidedly mixed and replete with lessons for U.S. military commanders and policy-makers as they move into Haiti. Although an outright invasion has been avoided, the stated goals are much the same as they were in Panama--and far more elusive.

In today’s Panama, substantial growth has revived an economy that was left a shambles after the invasion and by earlier U.S.-imposed sanctions. Panamanians enjoy personal and democratic liberties, such as freedom of expression, unthinkable during the Noriega years.

But many of the scourges that then-President George Bush said he was invading Panama to fight--drug trafficking, money laundering and rampant corruption--continue to flourish.

The government that U.S. occupation troops installed left office in disarray this month, with a single-digit approval rating in public polls. It was replaced--via Panama’s most democratic elections ever--by the same political party the invasion had ousted, the party that had backed Noriega.

Panamanian and U.S. analysts say the shortcomings in Panama can be traced, in part, to a failure to adequately change laws, political and judicial systems, and institutions, such as national security forces. Many Panamanians also lament the failure to mete out justice to the most abusive of Noriega’s cronies.

Haiti faces similar, if not greater, tasks. Thus far, the United States appears to be backtracking on its earlier resolve to disarm Haiti’s brutal army and to punish human rights violators. Where Panama ultimately was rid of dictator Noriega, the fate of Haiti’s military strongman, Lt. Gen. Raoul Cedras, is unclear, although he appears to be planning to step down from power but stay in the country.

In another cautionary note for Haiti, Panama’s lack of democratic tradition meant its post-invasion rulers had scant political training and were largely ineffective. President Guillermo Endara, whose term ended Sept. 1, never overcame the stigma of having been installed on a U.S. military base by occupation forces.

But unlike Endara, Haiti’s exiled President Jean-Bertrand Aristide--whom the Clinton Administration has pledged to restore to office--has a large base of popular support, which will help him build credibility.

Still, Haiti’s road to a functional government is a much longer one than Panama’s, its army and human rights history much more chilling.

“Removing Noriega did not change the type of society you had in Panama. You can’t expect that, and you can’t expect it in Haiti either,” said a senior U.S. military officer who participated in the Panama invasion.

“Panamanians,” the officer added, “expected a lot more than could have been delivered. They expected Panama would become like the (U.S.-managed) Canal Zone--a city of gold. Trash would be picked up, there would be jobs, enough to eat. Invasions don’t solve things like that. What will the Haitians expect? Who will they blame when it doesn’t happen? How do you define improvement there?”

Haiti is the poorest country in the hemisphere; Panama has traditionally been one of the most prosperous in Central America.

In contrast to the Haiti intervention, the U.S. invasion of Panama in December, 1989, ushered into power the Panamanian elite, and foreign investors immediately felt comfortable. It was private commerce, manufacturing and banking--more than foreign aid--that bolstered Panama’s economic recovery, an impressive 9.3% growth in 1991 and about 6% last year.

The goal of improving the administration of justice was a key element to restoring faith and trust in Panama, and it will be in Haiti.

Many Panamanians complain that, despite U.S. funding targeted for the judiciary, the post-invasion government did not change laws written under military dictatorship and allowed an unwieldy court system to remain in place. Failure to prosecute human rights abusers and the possibility of government amnesties--both real prospects in Haiti too--thwarted justice for many Panamanians.

About 100 Noriega supporters were jailed after the invasion. Many languished in prison for three years or more without trials, and the major atrocities of the previous two decades of military rule went unpunished. A trial was finally held last year in the 1985 beheading of Noriega critic Hugo Spadafora, for example, and the nine soldiers accused of the crime were acquitted.

“The people of Panama were thirsty for justice,” said Marco Gandasegui, who heads Panama’s Latin American Studies Center. “There were many (arbitrary conditions) that characterized the military regime. But (the Endara government) did not give the pursuit of justice much importance. In the romantic sense, maybe, but not in the institutional sense.”

Members of Noriega’s former party, the Democratic Revolutionary Party, or PRD, proposed a general amnesty in 1993. The proposal caused such uproar that the matter was dropped. But back in power, the party has revived the proposal, and new President Ernesto Perez Balladares last week announced pardons for more than 200 former Noriega officials, including the head of Noriega’s secret police.

In Haiti, one of the most arduous tasks that will face the occupation forces--or the Aristide government, presuming it takes office--is the building of a police force. Some cues can be taken from the Panama experience.

Almost immediately after the invasion, Noriega’s army, the 16,000-member Panama Defense Forces, or PDF, was dismantled; the more notorious military units, such as Noriega’s elite, U.S.-trained, combat-ready Battalion 2000, were abolished, and a new civilian police force was formed.

But rather than have to contend with thousands of out-of-work soldiers, the Endara government recruited many of the same PDF rank-and-file, as well as some officers, to staff and run the police force. They had to swear allegiance to Endara and undergo months-long scrutiny that eventually purged nearly 150 captains and majors.

Many Panamanians at the time were mortified that the same soldiers who once obeyed Noriega were going to be street cops. But Endara and his U.S. military advisers argued that there was no other source for the new police.

The recruits were given U.S. training, new uniforms and side-arms to replace their heavy weaponry. Still, the new force has been criticized for incompetence and what some critics call an authoritarian swagger. There have been morale problems because of low pay, and many former PDF officers resented their loss of power.

The police force went through six chiefs in the first 2 1/2 years after the invasion. The first was dismissed after revelations that he had a multimillion-dollar bank account that could not be explained. The second, Col. Eduardo Herrera Hassan, tried to overthrow the Endara government in a 1990 coup that had to be put down by American troops. Awaiting formal charges, Herrera was among those pardoned last week by Perez Balladares.

The current police chief, Oswaldo Fernandez, is a civilian who has held the job for more than a year. But U.S. and Panamanian officials say the police are still plagued by corrupt elements, and in a sign of the public’s continued mistrust, 125 private security firms have sprung up in the last couple of years, their total manpower greater than the police force’s. And they are well-armed.

Experts caution that recruiting police from an existing army has different implications in Haiti than in Panama.

“The PDF had protected itself, had defended Noriega and had engaged in criminal activity, but it hadn’t lived off the suffering of the general population and didn’t have the history of slaughtering and terrorizing the people the way the Haitian military does,” said Richard Millett, a senior adviser at the University of Miami North-South Center who has written extensively on Panama. “The PDF lived off international corruption; the Haitian military thugs live off domestic corruption.”

Millett and others also noted that the PDF was a defeated army, which made it easier to rein in.

The police here have also seemed ill-equipped to fight a raging crime wave, and Perez Balladares in his inaugural speech Sept. 1 declared a public security “state of emergency” and vowed to beef up the force. Government opponents hope such tough talk will not be used as a pretext for police brutality.

To oust Noriega, the United States launched what then was its largest combat operation since the Vietnam War, deploying 26,000 troops before dawn on Dec. 20, 1989.

Noriega, a onetime CIA operative, escaped and hid for days until his surrender on Jan. 3, 1990. In the invasion, 23 Americans and hundreds of Panamanians were killed. After a long federal trial in Miami, Noriega is in prison, serving 40 years for drug trafficking.

Endara, whose apparent electoral victory the previous May had been canceled by Noriega, was sworn in to office in a ceremony at a U.S. military base. Perez Balladares, like many PRD militants, was arrested by U.S. troops and interrogated.

When Perez Balladares took over from Endara this month, Endara actually seemed relieved his presidency was ending. His administration had been dogged by reports of widespread corruption and scandals involving drug trafficking, illegal arms smuggling and other sins that supposedly characterized the Noriega era.

Panama’s secretive banking system and its booming free-trade zone--one of the largest in the world--continue to make the isthmus country a thriving center for the laundering of cocaine profits.

Although the government took nominal steps to guard against money laundering, U.S. officials say there is no evidence the business has declined since Noriega’s departure.

Despite economic growth, 40% of Panama lives in poverty, and as many as one in four Panamanians is out of work, according to church and private-sector estimates. Drug abuse has soared, along with street crime, murder and suicide.

In a lesson to policy-makers dealing with Haiti, analysts and diplomats assessing post-invasion Panama say that widespread dissatisfaction poses a danger to democratic stability by creating a nostalgia for the “old days” of military rule.

In Panama, it has created a yearning for the paternalistic patronage system that benefited many in the working class and the poor.

“In the time of dictatorships, there were more jobs for the poor than under democracy,” complained an elderly man playing cards recently in the slum of El Chorrillo, which was burned to the ground during the invasion. He sat on the corner of a concrete slab where Noriega’s headquarters stood before it was bombed by the invading Americans.

That nostalgia may have been the motive for some voters in May 8 presidential elections that gave a narrow but decisive victory to Perez Balladares and the PRD.

“The matrix of the Noriega regime has returned to power, only this time they must govern without force,” said Miguel Antonio Bernal, a political scientist who opposes the government. “The question is, can they govern without force, especially as social and economic conditions deteriorate?”

Bernal, who has fought military strongmen for most of his adult life, is among the harshest critics of the PRD, and many people do not share his alarm. Perez Balladares and other PRD leaders join in denouncing Noriega and insist the party has reformed.

The new president especially has taken great pains to cooperate with Washington, offering to take Cuban refugees and give political asylum to Haitian leader Cedras.

Perez Balladares, a banker and millionaire businessman, has also placed prominent independents in his government, such as Gabriel Lewis Galindo, who helped negotiate the 1977 Panama Canal treaties.

“The (PRD’s) policy of the ‘70s is not the same as the ‘90s,” Lewis said. “The time of confrontation is over.”

Still, several members of Perez Balladares’ Cabinet, notably Labor Minister Mitchell Doens and Housing Minister Francisco Sanchez Cardenas, had prominent roles in the Noriega regime.

Doens’ record is so questionable that he might have trouble obtaining a U.S. visa if he were not a government official, sources say.

While it may not prove true in Haiti, Panamanian and American analysts caution that, at least in Panama, one legacy of military intervention is that it promotes a dependence on the United States for the resolution of problems.

Panamanians have always had a love-hate relationship with the United States, linked to the Panama Canal and the presence here of the U.S. Southern Command, which oversees all U.S. military operations south of Mexico.

A Close Comparison

HAITI

Capital: Port-au-Prince (pop. 752,000)

Location: Caribbean, about 590 miles from Miami

Total area: 10,711.5 sq. miles, roughly the size of Maryland

Official languages: French and Creole

Population: 6.5 million

Ethnicity African: 95% Other: 5% Religion Roman Catholic: 80% Protestant: 15% Other: 5% ***

PANAMA

Capital: Panama City (pop. 411,000)

Location: Central America; shares border with Costa Rica in the west and Colombia in the east

Total area: 29,762 sq. miles, roughly the size of Maine