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Jimmy
Carter forced
BY EDWARD RASEN Article
from Penthouse Magazine, November 1979 I
hope
we never hear the word Panama again," said Jody Powell,
Jimmy Carter's trusted aide. Supposedly this sentiment was shared by the
"Deacon" the president himself. While sitting in his little
study next to the Oval Office, listening to a Wagnerian opera, pondering
communiqués from Tehran and Panama City Carter must have spent a lot of
time wondering why one man he frequently called his "great
friend," the shah of lran, had lied to him, and why his
"friend Omar Torrijos" was trying to blackmail him politically Of
course, no one is yet quite sure what, in fact, the Senate vote really
meant: whether an international agreement, of doubtful legality
distorted by propaganda, political sloganeering, special-interest
lobbying, presidential arm twisting, corruption, deception, and cover-up
signaled the salvation of the Carter presidency or a continuation of
dirty politics and executive deception. Over
the past year the House of Representatives has blocked all legislation
and funds needed to implement the treaties. Members of the president's
own political party are turning against him. In January of this year
Carter had told John Murphy a Democrat from New York and chairman of the
House Merchant Marine Committee, to take care of the problem. At the
time Murphy's committee was about to debate proposals for funding the
canal deal approved by the Senate because the House of Representatives
has final approval on appropriations. The mood in the House was strongly
anti-Carter on the issue, and Murphy was worried. Mail to members of
Congress was still running 70 percent against the Panama treaties.
Debate was still raging over the president's disposing of federal
property without congressional approval. So Murphy went to the White
House for lunch with Carter carrying proposals and drafts of legislation
reflecting opposition views as well as compromise agreements. After a
short prayer and
some political gossiping, Murphy began explaining the mood of the
Congress on the Panama issue. He started to hand some of the revised
legislation to the president. Carter waved it away "I don't care
about these proposals," he told Murphy "Just get the
legislation passed." But
shortly after the lunch, Rep. John Dingell, expressing the mood of his
fellow Democrats, told Deputy Secretary of State Warren Christopher:
"We in the House are tired of you people in the State Department.
If you expect me to vote for this travesty you're sorely in error."
Two months later, in April of this year the Congress dealt the
president another setback by solidly rejecting $14 million in aid to
Panama. To
be sure, there have been, and will be, winners and losers in the canal
debate, as assuredly as Teddy Roosevelt and his big-stick diplomacy
wrested the Panamanian isthmus from Colombian control in 1903. But they
will not be the winners and losers that the orators and pundits
suggested. Despite
the fact that the stage managers of the morality play pitted the proud
American citizen against the oppressed Yanqui-go-home Latino, neither
the American taxpayer nor the Panamanian citizen is much of a winner.
And the real story of the Panama Canal agreement of 1978 suggests that
the treaties were not a negotiated revolution in United States policy
toward Latin America so much as they were the refinement of that policy
- a policy created by and for the traditionally narrow interests that
have always benefited by the exploitation and manipulation, whether at
home or abroad, of the average citizen, the "outsiders," as
Jimmy Carter used to call them. What
perhaps is most curious about the story is that, for all its rhetoric,
the Carter administration from the beginning allied itself with the
"insiders"- the bankers and entrepreneurs and Wall Street
power brokers. And the story of the canal treaties becomes an
enlightening glimpse at the machinations of insider politics
orchestrated by the man who claimed to "owe special interests nothing,"
to "owe the people everything," and who promised "to keep
it that way." Panama - the word that the Carter administration
would just as soon forget - reveals the hollowness of Carter's
declaration about who his creditors are and the emptiness of his promise
not to kowtow to special interests. JIMMY
CARTER NEEDS A VICTORY... As
the nation geared up for what the press was calling the
"historic" Senate vote on the Panama Canal treaty in early
1978, Carter's year-old presidency was on the rocks and floundering
badly The Bert Lance affair had only recently traumatized his
administration and extinguished his luminous candle of executive
integrity, and good old Bert was still hanging over the White House like
a radioactive cloud of Iodine 131. In January Carter had been caught -
on national television - lying about his part in the dismissal of
Philadelphia DA. David Marston. A month before that, he had infuriated
liberals - many of them his supporters - by letting "big shot"
former CIA Director Richard Helms plea-bargain his way out of perjury
charges, again trying to shade his own participation in the deal. Then
conservatives were maddened by his signing a $200 billion Social
Security tax increase - in the face of his promise not to raise taxes
for middle-income wage earners. His "moral equivalent of war"
energy program still languished in Congress, threatening to become
nothing more than a ridiculed acronym - MEOW Unemployment had not
slackened. And despite his promised assault on inflation, the consumer
index had jumped another 2 percent since he took office. Members of
Carter's own party were already looking for another standard-bearer
for 1980 After
13 months of Carter in the White House, polls confirmed the worst: Carter's
approval rating dipped below that of Eisenhower, Kennedy Johnson, and
Nixon at the same stage of their presidencies. After 13 months of
symbolism and plummeting popularity the fledgling president from Georgia
seemed to be losing his hold on the reins of national power. He
desperately needed some kind of victory and he chose Panama as the
battlefield and set every big gun in his administration to the frantic
task of bagging a treaty So
important did the treaty finally become to his credibility and his
authority as a competent chief executive that the issues of Panama
became secondary to the political problems of the president. Newsweek
magazine reported that "for many undecided Senators, the most
telling argument [for the treaty] had less to do with the virtues of the
treaty itself than with the disastrous emasculation of the President's
ability to conduct foreign policy if we were repudiated on
Panama." And New York Times political analyst Hedrick Smith concluded
that a defeat on Panama would have been “almost as severe
a blow to Mr. Carter as was the Senate's defiance of Woodrow Wilson in
1919, when it refused to ratify the Covenant of the League of
Nations." THE
POLITICS OF EXECUTIVE OFFICE HARD SELL ... In
February of 1978 word got out of the existence of what the Washington
Post called "one of the most closely held, limited
circulation documents in the State Department." That document was a
weekly report known to its select group of readers as the PITS - Panama
Information Track Score. The reason why it was kept so secret is that
PITS gave a blow-by-blow account of the Carter administration's efforts
to sell the Panama treaties to the public, using the public's money to
do so. It documented one of the most intensive tax-supported lobbying
campaigns in memory And to many treaty opponents the PITS was solid
evidence that the Carter administration was violating the law - a 1926
criminal statute forbidding the use of public money to pay for efforts
to influence members of Congress. From
a small office in the State Department's Latin America Bureau, decorated
with strategy maps of individual states and colored pins and charts,
looking much like a "war room" in the Pentagon, two full-time
staffers and a number of part-timers called in from other agencies
monitored the progress of a Panama Canal treaty battle plan that had
been drawn up by Carter's trusted strategist Hamilton Jordan in the
spring of 1977-months before most senators had even begun considering
the question. According
to the Post, the plan called for an attack in the best traditions
of Madison Avenue. There were studies of senators' past voting patterns
on similar issues; sophisticated market analyses to determine whom to
hit the hardest and how best to hit them; formulation of six standard
treaty speeches outlining the party line; and special two-day seminars
for administration salesmen, which included strategy advice from
professional psychologists on how to relate to different kinds of
audiences and videotape practice sessions. By
February of 1978, just four months after President Carter and Gen. Omar
Torrijos of Panama signed the treaties in Washington, the
administration’s tax-supported sales force had chalked up 476 live
speeches to groups as scattered as senior citizens in Miami and boy
scouts in Doylestown, Pa., and had conducted 388 media interviews (all
of which were duly noted by the PITS). Carter himself had presented the
case to a live, national television audience, and he gave 25 different
citizens' groups the privilege of meeting him in return for their
attention to his treaty pleas. Although
the administration's army of speakers claimed never to have advised
their listeners to write to their senators - obviously aware of the 1926
criminal statute barring such lobbying - that defense sounded a bit
like, as candidate Carter once said of the Watergate culprits,
"tiptoeing through a minefield on the technicalities of the law and
then bragging about being clean afterwards." Most observers were
well aware of the fact that neither boy scouts nor senior citizens would
vote on the treaties and that their support was enlisted for no other
reason than to influence the votes of senators, a point well understood
by Jordan: "Some of those bastards [senators] don't have the spine
not to vote their mail. If you change their mail, you change their
mind." With Jimmy Carter's own political future at stake, the
ethics - not to mention the legality-of using public money to lobby
Congress was lost to the desire of saving political grace. Less
legal hairsplitting was required, however to detect the ethical problems
of another kind of White House hard-sell tactic. In its effort to
finance a $600,000 protreaty media campaign - in addition to the
lobbying effort being financed with tax revenues - the White House in
late 1977 directed the well-connected former chairman of the finance
committee of the Democratic National Committee, Not
surprisingly - except to those who believed that the treaty represented
an ideological struggle between establishment conservatives and
democratic liberals-the list of COACT members included David
Rockefeller (chairman of Chase Manhattan Bank), John H. McCloy (former
chairman of Chase who was affectionately referred to by many as
"chairman of the establishment"), G. William Miller (named by
President Carter to head the Federal Reserve Board and, later, the
Treasury Department), Irving Schapiro of DuPont, Arthur Taylor of CBS,
J.
Wayne Fredericks of Ford
Motor Company Armand Hammer of Occidental Petroleum, and soon. It was a
good chance for anyone wishing to gain favor with the White House to
chalk up brownie points for future reference. At a COACT fund-raising
event in December, which funneled $80,000 into the canal coffers, Occidental
Petroleum and Braniff Airways had no problem finding $22,500 to contribute
to the cause. But
the ease with which Kung managed to trade future political favors for
hard cash must have gone to his head. Because he then devised a plan for
some real arm twisting. Enlisting
the aid of Robert Strauss, national chairman of the DNC while Kling was
its finance chief and now Carter's special trade representative, Kling
suggested holding private fund-raising receptions for the biggest of
corporate big shots at the Watergate apartment of Strauss. Strauss, the
man who was then making crucial decisions about what kind
of foreign competition
American businesses would have to face, agreed. And the president
himself even offered to invite those businessmen who would Kling's
assistant, Conrad Trahern, sent out 30 letters of invitation in December
in which he outlined the scheme. In all, 40 invitations were slated for
delivery but someone blew the whistle on the plan and complained to New
York Times columnist William Safire of the "shakedown"
operation. At that point no
amount of “tiptoeing through a minefield on the technicalities suffice
to explain away the conflicts of interest and heavy-handed persuasion
techniques being employed by the White House, and Satire's subsequent
revelations immediately killed the project. MEANWHILE
... BACK ON WALL STREET ... Together
the massive, publicly funded White House lobbying effort, the apparent
influence - peddling schemes, and, as the voting day approached, the
deals made with key senators (Herman Talmadge reportedly changed from
opponent to proponent when the White House offered to support the
Georgia senator's farm legislation and give him a dam or two) were a
good indication of how badly Carter wanted a personal political victory
and to what lengths he would go to achieve it. Nevertheless,
there was much more involved than the questionable political motives
on the president's part. Not every prominent American was strong-armed
by Carter; and there were more subtle - and more revealing - reasons why
so many standard-bearers of establishmentdom, Carter included, were
lining up on the side of a supposedly antiestablishment,
liberal-leaning agreement. Part
of that story begins long before Jimmy Carter entered the national
political arena, as influential East Coast "movers and
shakers" were beginning to wrestle with the growing problem of
keeping Latin America safe and secure for United States investments. In
early 1971 the Rockefeller dominated Council on Foreign Relations began
turning its attention to the Panama Canal, the most symbolic target of Latino
nationalism and anti-Americanism. After a series of lengthy meetings led
by Rodman Rockefeller (Nelson's son), Douglas Dillon (a member of the
Rockefeller Foundation and Secretary of the Treasury from 1961 to 1965),
and William P. Rogers (one of Nixon's secretaries of state and later a
foreign-policy adviser to the Carter presidential campaign), the CFR
came to the conclusion that turning the canal over to Panama was
essential if the United States was to maintain a climate conducive to
continued American investments in Latin America. Not
so surprisingly CFR's policy decision came just months after a deal
was struck between leading New York banks and General Torrijos in which
Torrijos agreed to reorganize Panama's banking laws. With that
reorganization the general made his country a tax and regulation free
haven for foreign financial institutions, and tiny Panama-smaller than
the state of Maine, with a population of 1.7 million joined the Bahamas
and Cayman Islands as an international refuge for the megabucks of the
world's largest banks. Then,
in the modern version of Teddy Roosevelt’s Rough Riders and his
swinging stick, into Panama marched a Bank of America, Bankers Trust,
Chase Manhattan, the First National Bank of Chicago, Marine Midland,
First National City Bank, and at least 60 other banks, which brought
with them over $8 billion of assets and sugar-coated promises of money
to a general needing to consolidate his power. At least three of the
banks-First National City the Rockefellers' Chase, and Marine Midland-at
various times helped Panama secure loans by acting as the government's
fiscal agents. Torrijos's
biggest payoff came, appropriately in massive increases of foreign bank
loans. In 1968, when the general seized power; Panama's foreign debt was
less than $200 million; but by 1977 its debt to American banks alone
stood at $1.8 billion. And by the time treaty negotiations between the
Carter administration and the Torrijos regime began, the general and
his friendly American bankers were inextricably locked in a tight embrace
of mutual interest. Torrijos, his country on the verge of bankruptcy and
by that time in debt to the Americans by almost $2 billion, was in no
position to reject any
United States
proposal. At the same time, however; should he refuse to negotiate and
repudiate his loans, American banks would immediately lose $323.6
million in loans coming due and several
billion dollars more farther down the road. These
scenarios were perhaps anticipated by the Council on Foreign Relations
in the early 1970s as it began gearing up for a formalization of its
economic stranglehold on the small but strategic Central American
country But the best place to legitimize financial interests was in the
political arena of international diplomacy The best stamp of approval
would be a treaty; and for groups like the Council on Foreign Relations,
from whose roster of bankers, lawyers, and corporate executives have
come hundreds of high-ranking government policymakers, the Panama Canal
treaties of 1978 would provide the stamp. MR.
ROCKEFELLER GOES TO WASHINGTON .. Within
a few years of the CFR's initial deliberations on Panama, the corporate
and financial elite was moving its lobbying effort to Washington. In
1974 it established the Commission on United States - Latin American
Relations, a group that was to become one of the most significant
influences on the protreaty crusade. The commission was largely funded
by the Ford Foundation and the Rockefellers; its chairman was Sol
Linowitz, a former ambassador to the Organization of American States
and a dynamic corporate fellow traveler. Other members of Linowitz's
commission were W. Michael Blumenthal, who was Jimmy Carter's first
secretary of the treasury; Samuel Huntington, now an aide to the
National Security Council; Peter Peterson, chairman of Lehman Brothers,
atop Wall Street brokerage firm; and Elliot Richardson, former attorney
general and later an ambassador at large for Jimmy Carter. At
about the same time, then - Sen. Gale McGee of Wyoming was opening even
more doors for Wall Street entrepreneurs and Big Business by enlisting
their counsel and financing in another protreaty drive. He called a
planning meeting in October 1975, held at the State Department, with
lobbyists from Chase Manhattan, the Bank of America, Gulf Oil, and
Rockwell International attending. With little arm twisting, McGee
reportedly received as much as $500,000 in contributions. In
subsequent meetings other large corporations, including Pan American
World Airways (on whose board sat Sol Linowitz and the future secretary
of state, Cyrus Vance), and banks were asked to help plan and fund an
effort to pressure politicians and business groups into supporting a
treaty with Panama. Considering the time and effort that the businessmen
and bankers had already devoted to a treaty on their own, the McGee
parleys were less a case of corporations lobbying Congress than a
politician's recognition of the power and influence of private capital. Sol
Linowitz's commission, meanwhile, continued its progress toward even
more direct influence on policy Just after Carter's election, in
December 1976 the commission's staff director; Dr. Robert A. Pastor;
wrote a report urging a new canal treaty and an increase of funds for
Panama. The CFR immediately called a special colloquium to give its
endorsement to the Linowitz Report. And the following month Zbigniew
Brzezinski, a former adviser to David Rockefeller and then Jimmy
Carter's national security adviser; appointed a special assistant on
Panama to the National Security Council. The assistant was none other
than Dr. Robert A. Pastor. In
his new government position, Pastor quickly drafted an NSC memorandum
recommending a new Panama Canal treaty His plan received Brzezinski's approval,
was shown to another longtime (Nelson) Rockefeller adviser; Henry Kissinger;
and was then endorsed by Jimmy Carter. If
Pastor's quick rise out of the waters of an influential financial think
tank to the halls of political power is crucial to the story of the
Panama treaty's evolution, the role of Pastor's boss at the commission
proves even more intriguing. At the same time that Pastor was moving to
the NSC, Linowitz was visiting the White House. He accompanied
Panamanian Ambassador Aquilino Boyd to a meeting with President-elect
Carter in December; and there the two men asked Carter to initiate plans
for a U.S. withdrawal from the canal. No one is quite sure what Carter
said at that meeting, but the question soon became academic when just
two months later Carter named Linowitz a special ambassador of the
United States to join the aging Ellsworth Bunker as leader of the Panama
Canal negotiating team. The
importance of the Linowitz appointment to the interests of the banking
and corporate establishment is difficult to underestimate. Linowitz was
a much more integral part of the establishment orbit than his
chairmanship of the Rockefeller-financed Commission on U.S.- Latin
American Relations suggested. He was also a member of the Council on
Foreign Relations as well as of the Rockefeller-founded Trilateral
Commission. (For Jimmy Carter; the presidential candidate who said he
owed the special interests nothing, this exclusive club of powerful
business and financial leaders, which he joined two years before announcing
his intentions toward the White House, was a godsend. According to his
media consultant, Gerald Rafshoon, The Trilateral Commission was
"one of the most fortunate accidents of the early campaign and
critical to his building support where it counted." As it turned
out, the favor was returned. The Trilateral, instituted with the express
intention of influencing U.S. foreign policy, counted among its alumni
so many Carter administration appointees - besides Carter himself the
list included Vice-President Walter Mondale, Secretary of State Vance,
National Security Affairs Adviser Brzezinski, former Treasury Secretary
Blumenthal, Defense Secretary Harold Brown, and others - that even
die-hard skeptics of conspiracy theories were whispering rumors of a
secret Trilateralist cabal.) Linowitz could also be found on the boards
of Time, Inc. (whose leading magazine, Time, was saying to its
millions of readers, "The Panama Canal treaty... is an idea whose
time has come"), Pan Am, and Marine Midland Bank at the time Carter
named him to represent the United States at the treaty talks. Though any
one of these many special-interest connections would have been enough to
undermine Linowitz's credibility as a nonpartisan representative of
American public interest, his ties to Marine Midland alone were evidence
of out-and-out conflict of interest: not only was Marine a correspondent
bank for the Banco Nacional de Panama, a Torrijos government appendage
and a fiscal agent for the Panamanian government, but the government of
Panama also owed Marine almost $8 million. It was no coincidence that
Linowitz went arm in arm to the White House in December
1976 with the Panamanian ambassador. It was no coincidence that Carter
greeted him warmly. So
blatant were Linowitz's ties to the Torrijos regime and the
American corporate and banking establishment that had taken up
residence under the general's benevolent hand, and so insistent was
Carter on keeping him on as treaty negotiator that Congressman George
Hansen and Sen. James McLure had to file a suit in April1977, asking for
a temporary restraining order against Linowitz as canal mediator. But
the only compromise Carter and Linowitz made was agreeing to have
Linowitz give up his Marine Midland ties, and even then only until
after the treaty was finalized. He refused to relinquish his Pan Am
board membership, the airline that had already contributed to Senator
McGee's protreaty campaign, provided Carter with a secretary of state,
and could ill afford to lose Panama as its Latin American headquarters. What
did all this mean to the document being negotiated with Panama? Put
simply it meant that after the new treaties were signed - final
agreement appropriately being reached just four hours and 40 minutes
before Linowitz's term as negotiator expired-it was clear that whatever
else the treaties might do, they committed the American taxpayer to
supporting the Torrijos regime and the special interests of
multinational banks and corporations, and to indirectly subsidizing
their efforts to retain control of Panama. PAYING
FOR THE ESTABLISHMENT'S TREATY ... According
to United States Comptroller Elmer B. Staats, a Government Accounting
Office study showed that initial U.S. government expenditures
required by the new treaties would be at least $400 million. It would
cost the United States $46 million to reequip three military bases, more
than $32 million to pay Panama for the "transfers" of army
personnel, $3 million for the "transfer of graves," $10
million annually to reimburse Panama for the costs incurred in providing
police and security services (over the course of the 22-year life of the
first treaty that alone represents U.S. expenditures of $220 million).
Staats believed that the costs could reach $1 billion if lawmakers
accepted all the Carter administration plans for implementing the
treaties. (Some of the costs, such as the annual payment to Panama for
security services, are written into the treaties themselves, and, though
subject to interpretation, are not altogether open to further debate;
many of the costs, however; are only implied by the treaties and
therefore still need the approval of both houses of Congress before
the money can be spent. Thus the crucial importance of the implementing
legislation being debated by Congress: the treaties could still be
"sabotaged" if Congress refuses to appropriate any money for
seeing them through.) The
Carter administration continually held out against revealing the
expenses it had committed the American taxpayers to covering. In a
letter to Sen. Richard Stone a month after the Senate approved the first
treaty Staats came about as close as any government bureaucrat could
come to calling a high-ranking Carter appointee a liar. "We
should point out," said Staats in his long analysis of treaty
costs, "that the Secretary's [Cyrus Vance's] statement to you that
... 'the [Panama Canal] Company will have no outstanding long-term
obligations' is not completely accurate." And Staats then went on
to include another $114 million of taxpayers expense for the treaties,
which was conveniently omitted from administration projections. When
Warren M. Christopher; deputy secretary of state, testified before the
House Merchant Marine and Fisheries Subcommittee, he finally admitted
that the treaties would cost American taxpayers "only" $350
million, explaining that Carter's promise the year before was
misunderstood: when the president said that taxpayers would not have to
pay he meant that the costs would be incurred by the Panama Canal
Commission. Of course, Carter hadn't mentioned the fact that, as Elmer
Staats pointed out, "because the Panama Canal Commission is a
United States Government agency it is clear that the financial
obligations of the Commission are also obligations of the United
States." By
February of 1978, with the Senate vote less than a month away the
administration had been forced to concede that the treaties would cost
an additional $633 million in appropriated funds and lost revenues to
the treasury But even this estimate was scoffed at by
now-figure-punchy skeptics and those, like Staats, who had submitted the
treaty to close scrutiny. A frustrated Congressman George Hansen angrily
charged that the treaties' cost, not including the $10 billion
replacement value of U.S. canal property Carter had promised. In
all of this, the government of Panama emerges smelling rather good. It
will pay nothing for the management, operation, maintenance, protection,
or defense of the canal and will still receive an additional 30 cents
per net ton shipped through the locks. This toll payment means even more
cost for Americans. Because of the fact that many of the payments to
Panama will be contingent on revenue raised by tolls - Linowitz was at
least half right in asserting that payments to Panama would come from
toll revenues - and because the canal even now operates at a deficit,
there will be considerable pressure to increase the toll charges in an
effort to meet payment obligations. Although a toll increase will have
no effect on the billion dollars (or $4 billion, using Congressman
Hansen's estimates) that the Carter administration is committing the
U.S. to pay from direct tax revenues, it will act as an indirect tax as
increased freight charges
are passed on to the consumer. Thus, in the end, the American taxpayer
will lose on three counts: he gives up $10 billion of property; he
absorbs the enormous cost of transferring the canal to Panama; and he
pays for the increased price of goods that results from increased toll
charges. The only beneficiaries of this Linowitz negotiated scheme are
the Panamanian government and the American banks and corporations that
have a huge financial stake in Torrijos's continued solvency AND
THE PROBLEM OF RENDERING UNTO PANAMA WHAT IS PANAMANIAN ... Again,
it seems, the exigencies of a real politik have been clouded by the
rhetoric of ideologues. If one accepted sovereignty then liberals and
leftists at least could solace themselves with the thought that the
Panamanians would receive the sovereignty Unfortunately for that line of
reasoning, however; the gift was diverted in transit. First
of all, and more academic than real, some doubts can be raised about
both American and Panamanian rights to the canal. After all, it
was Colombian rebels who, in 1903 with the inspiration, insistence,
and aid of Teddy Roosevelt, "liberated" the isthmus from the
Bogota government and then turned the rights to the canal over to the
United States. The aggrieved party in this whole debate is really
Colombia, but it is doubtful at this late stage that anyone would listen
to yet another plaintiff in the case. More
to the point is whether the U.S. has any intention of abandoning its control
over the canal. Symbolically the Reaganites and John Birchers are right:
America has deeded title to the canal to Panama and has thus given up
American property. But this
is a far cry from relinquishing either American interests in Panama or
American sovereignty. Ellsworth Bunker said it best when he pointed out
that "it is not ownership but use that is important." The real
question is whether the U.S. can control the canal without owning it. The
banks, as we have seen, have been amazingly adept - even before
receiving the imprimatur of the Carter treaty-negotiating team - at
increasing their power over Panama with subtle financial deals. And they
seemed not the least concerned with losing anything with the signing of
a treaty-in fact, they lobbied strenuously for it. Politically
and strategically the U.S. has given no indication that it intends to
let Panama push it out of the isthmus. On the contrary as Henry
Kissinger has stated, "the new treaty marks an improvement over the
present situation in that it assures continuing, efficient, nondiscriminatory
and secure access to the Panama Canal with the support of the countries
of the Western Hemisphere instead of against their opposition and
eventually their harassment." In other words, the U.S. has given up
none of its domination over Panama. It has simply exchanged the big
stick for the velvet fist. President
Carter was even more specific about what the treaty would mean for
continued American presence in the Canal Zone. "We will have,"
he assured the nation after announcing the agreement, "operating
control and the right to protect and defend the Panama Canal with our
military forces until the end of the century" And after that?
"We will have the right," he continued, "to assure the
maintenance of the permanent neutrality of the canal as we may determine
necessary. Our warships are guaranteed the permanent right to
expeditious passage without regard to propulsion or cargo.” In other words, should the velvet fist prove ineffective, we
won’t hesitate to swing the big stick. However;
chief Panamanian negotiator Romulo Bethancourt completely rejected
Carter's claims. During a news conference in Panama, which was
published by the CIA's Foreign Broadcast Information Service, Dr.
Bethancourt stated. "The treaty does not establish that the United
States has the right to intervene in Panama." Neither; in his view,
do United States vessels have the right of expeditious passage during
times of national emergency As Bethancourt put it, "If the gringos
with their warships say, 'I want to go through first,' then that is
their problem with the other ships there." Faced with Panama's
refusal to allow "privileged passage, the Americans finally accepted
the term "expeditious transit." There
are in fact two Panama Canal treaties-the treaty itself and an
additional treaty that purports to provide for the neutrality of the
Panama Canal. Unfortunately these treaties are in no way to be
construed as the whole agreement. Both are accompanied by very lengthy
executive agreements that actually contain the substance of the deal
struck with Panama. For example, the major defense provisions for the
Panama Canal are not in Article IV of the Canal Treaty entitled
"Protection and Defense," but in the Executive Agreement in
Implementation of Article IV - an agreement several times as large as
the entire canal treaty Article IV does not cover a complete printed
page; the Agreement in Implementation of Article IV is 53 pages long,
excluding annexes and excluding an additional 22 pages of minutes,
which have their own annexes. And
they are subject to renegotiation every two years. That means the
treaties could be completely nullified in two years without the
consent pf Congress. What has transpired is that President Carter
has entered into a legal agreement with Panama based not, in reality on
treaty law but on executive agreements authorized by treaty law but
subject to change at the whim of the Panamanians or the president. And,
of course, the American people were never informed of this. Furthermore,
at the Department of Defense Gen. George C. Brown, chairman of the Joint
Chiefs of Staff, guided by President Carter and Secretary of Defense
Harold Brown, coerced fellow officers to mount a campaign to convince
the public that the canal was not vital to the security of the United
States. However; secret testimony by Adm. James Holloway chief of naval
operations, was completely contradictory. During secret hearings he
told a handful of senators that the U.S. was giving up an irreplaceable
communications facility used in tracking enemy submarines. The
intelligence installation is on Galeta Island, at the Atlantic end of
the U.S. Canal Zone. It is manned by 50 naval personnel
and is the southern anchor in the U.S.’s sophisticated detection and
tracking system for Soviet submarines. According
to Admiral Holloway its mission is of the highest priority. The
station's unique position also makes it important for Pacific
operations, especially in cases where Soviet submarines are operating in
U.S. waters off the West Coast. Careful
steps were taken to prevent the leaking out of knowledge of the
station's existence and overriding strategic importance. Any mention of
Galeta Island was kept out of public debate. Testimony in closed secret
sessions was "sanitized" to prevent leakage to the press. In
fact, the campaign to keep the installation's existence secret was so
successful that only two or three senators were aware of the
installation. This
attitude on the part of American policymakers raises interesting
questions about internal Panamanian politics. Why would Panama accept
continued domination - both strategically and economically - by the
United States? The answer rests in part with the person of Gen. Omar
Torrijos, the heavy-handed military man who assumed control of the
country after a1968 coup and has since been variously labeled
"Maximum Leader of the Panamanian Revolurion" (his own
choice), Communist, dictator; and drug peddler. Even
the U.S. State Department, normally cautious in its criticisms of
countries in which the U.S. has a stake, in early 1978 accused the
Torrijos regime of suppressing freedom in Panama. In its "Country
Reports on Human Rights Practices," which wasn't released until
after the treaty had been signed in Washington, the State Department
said that Torrijos's National Guard (his police) physically abused
prisoners, kept them in "primitive" jails, and "in
certain public order and state security cases... interrogated, judged,
and sentenced [the accused] without internationally recognized standards
of due process." If
Panamanians disagreed with the terms of the treaty - which they did -
their opposition was effectively muted by an intensive Torrijos
propaganda campaign in which the government let it be known that dissent
was "treason against our fatherland." Opposition parties had
long been banned, newspapers and television and radio stations were
either owned by the government or closely watched by it, and many of
Torrijos' harshest critics had been exiled. The window dressing of
freedom was allowed for only 40 short days prior to the Panamanian plebiscite on the treaty
but even in that short time the criticism came from both the Left and
the Right. The conservative Movement of Independent Lawyers of Panama
denounced the treaty for allowing the "first American intervention
in our country of the twenty-first century" and asserted that
"the ordinary Panamanian will easily understand that …. There
will be a new version – perhaps slightly less grotesque than before
– of the hated American perpetuity on the
canal issue." The
Christian Democratic and Social Democratic movements; as well as the
Trotskyist Revolutionary Socialist League, all voiced strong objections
to the treaty. But Torrijos
refused to grant any more time for debate, and, with the most outspoken
opponents already having been deported to Miami, Mexico, and Venezuela,
he maneuvered the treaty narrowly but safely through the plebiscite. Torrijos
was not without his American enemies as well. But with the ignominious
fall of Richard Nixon, the Maximum Leader had lost his strongest
adversary: As much as Nixon wanted a new treaty to safeguard American
interests in the canal, he wanted even more to be able to negotiate it
with someone he could trust. Nixon thought Torrijos was a dangerous
Communist and knew he was a drug peddler and Nixon was always at his
Draconian best when Commie hunting or fighting his "war on
drugs." His plumbers had even hatched a plot to assassinate
Torrijos, the Nixonian version of big-stick diplomacy revealed by White
House operative E. Howard Hunt in 1977: "I believe the feeling was
that if Torrijos didn't shape up and cooperate, he was going to be
wasted." The
Panamanian general's corrupt ties to drug trafficking continued to
threaten plans for a canal treaty even after Nixon became absorbed with
Watergate and Torrijos made friends with Wall Street and big business.
As early as 1972 Congressman John Murphy's Panama Sub-committee of the
Merchant Marine and Fisheries committee claimed that "the United States
is negotiating a treaty
that involves a 70-year; $5 billion U.S. commitment, not to mention the
security of the United States and this hemisphere, with a government
that condones or is actually involved in a drug-running operation into
the United States." The subcommittee said three Panamanians were
arrested in New York City
in 1971, while trying to smuggle 70 kilos of heroin into the U.S. One of
the three waved a diplomatic passport in the face of U.S. authorities
that had been issued by Panamanian Foreign. Minister Juan Tack. Another
was a Iong time friend and bodyguard of Moises Torrijos, one of the
general's brothers and holder of various governmental positions. In a
later confidential report Murphy's committee documented the involvement
of other Panamanian officials in the drug trade: the director of
Panama's Tocumen Airport was arrested by
U.S'. drug agents, and it
was later revealed that
Omar Torrijos himself orchestrated a protest campaign against the
arrest; the Torrijos-controlled Banco Nacional de Panama and various
international banks were cited as depositories for large sums of drug
trafficking money; a secret Warrant for the arrest of Torrijos's
information in Panama,
Moises didn't attend the treaty-signing ceremony in Washington); and
Omar Torrijos himself, even aside from offering protection and positions
of power to known drug dealers, was reported to have hidden interests in
drug-peddling businesses. By
the time Jimmy Carter assumed responsibility for the canal treaty
deliberations, however; Torrijos had consolidated his grip on the reins
of power in Panama, had earned the confidence of U.S. big business, and
had enjoyed the position of negotiating with an American president who
wanted a canal treaty at all costs. Carter
himself was well aware of the Panamanian government's corruption. In
Senate confirmation hearings on his appointment of Robert Sayre as new
ambassador to Brazil, Sayre was asked about his knowledge of
officially condoned Panamanian drug dealing while he was ambassador to
Panama during the Nixon administration. At one point Sayre
related this amazing story: "I
learned on or about 12/6/72 from the CIA that Moises Torrijos planned to
return to Panama from Spain by ship on or about December ninth.
Reportedly, Moises planned to disembark at the port of Cristobal in
the Canal Zone [in U.S. jurisdiction]. I asked the CIA station chief
in Panama [Joseph Yoshio Kiyonaga, who was under State Department cover
as an International Relations Officer] to be sure that State Department
officials saw the intelligence reports [on Moises Torrijos's movements].
Subsequently, I was instructed by the department to contact General
Torrijos and let him know that we were aware of Moises's plans, which I
did. I [later] learned that Moises Torrijos left the vessel in Venezuela
and did not enter the Canal Zone." Despite
the objections that came from Sen. Jesse Helms, who charged Robert Sayre
with obstructing justice, Sayre was confirmed as ambassador to Brazil.
The State Department, in a letter to Helms, reasoned that Sayre's
"conduct was entirely proper” because Moises Torrijos’s arrest
would have undoubtedly “have provoked a most severe incident between
the two governments." Thereafter,
the Carter administration tried to classify all government material on
Panama as confidential and decided on only limited disclosure of
"national security material" to key senators. On October
7,1977, Drug Enforcement Administration chief Peter Bensinger warned his
employees that any "leaks" on Panama would be grounds for
immediate dismissal and criminal prosecution. That same day all Panama
files were reportedly moved under tight security from their normal
storage area to the tenth-floor offices of Gordon Fink, assistant DEA
administrator for intelligence. And when Sen. Robert Dole, frustrated in
his attempts to obtain information from the Carter administration, filed
a Freedom of Information request with the DEA on October 14, he was
stalled until the following February Even then, the senator complained
that the 75-page report he received contained none of the information he
had requested. He charged the DEA with giving him nothing but “heavily
censored" and "almost totally sanitized" material. What
Dole was not given was a suppressed study called the DeFeo Report,
initiated by the Justice Department in 1975. According to the report,
two DEA agents actually suggested killing Torrijos and Manuel Noriega,
chief of military intelligence. Nothing came of the DeFeo Report,
however. Although it was commissioned by Attorney General Edward H.
Levi to report on instances of corruption within the DEA, Levi
ultimately decided not to publish it. (The suppression of the DeFeo
report, which also enumerated instances of the Torrijos regime's involvement
in international drug trafficking, may be illegal under Senate
Resolution 21; under this resolution Congress is empowered to
investigate "illegal, improper; and unethical activities"
engaged in by intelligence agencies.) That
seems to have been the canal treaty story from the beginning: heavily
censored and sanitized. The agreement with Panama has become, finally
something of a catch-22 symphony orchestrated by special interests for
the benefit of banks and multinational corporations and unpopular
presidents and corrupt generals. For
those sympathizers believing that the agreement represented a
long-awaited recognition of Panamanian autonomy and an abandonment of
gunboat diplomacy, the treaty has become a dense cloud camouflaging the
more subtle imperialism of dollar diplomacy The United States has not
relinquished control. In
the end, both the American and Panamanian populace were made silent and
exploited parties to the agreement, pushed unwittingly into a no-win
situation by the once-populist Democrat and “outsider,” Jimmy
Carter, born-again representative of the ruling class. |
