Panama Kiss, Kiss, Bang, Bang

By John Greenwald

For General Manuel Antonio Noriega, the crisis seemed to grow more desperate by the day. As Panama suffered through a worsening cash crunch and continuing street protests, the strongman faced a revolt by some officers of the once unswervingly loyal Panamanian Defense Forces. The rebellion erupted shortly after dawn last Wednesday: residents living near Noriega's Panama City headquarters heard the crack of gunfire from inside the iron-gated compound. Reports of a coup quickly swept the capital. The rumors grew until 9:30 a.m., when Noriega appeared at a window and waved. Wearing a white guayabera sport shirt, the general later ventured out of the building to talk with reporters. Asked what the gunfire had been about, he pressed his fingers to his lips and replied, "Just kisses. Kisses for journalists."

But as Noriega's frozen smile suggested, the shots could not be dismissed so easily. Led by five officers, including Colonel Leonidas Macias, chief of the national police, the mutiny marked a milestone in an opposition drive, supported if not engineered by the U.S., to force Noriega from power. "This explodes the myth that the armed forces are united behind Noriega," said a knowledgeable Panamanian in Washington. "Now he can't be sure of anyone's loyalty. The thugs have started to fight among themselves."

Even as he publicly shrugged off the coup attempt, Noriega was negotiating with the U.S. State Department and domestic opposition leaders for a deal that would allow him to step down with some assurances of safety. William Walker, Deputy Assistant Secretary of State for Central America, flew to Panama City with Deputy Legal Adviser Michael Kozak. After a promising start, the talks stalled when the emissaries refused to guarantee that President Reagan would sign an Executive Order quashing drug-trafficking indictments that two grand juries brought against Noriega last month. In Washington officials denied reports that White House Chief of Staff Howard Baker was prepared to enter the talks as Reagan's personal envoy.

Noriega also sought a deal with the National Civic Crusade, a coalition of business and professional groups that has demanded the general's departure. In return for stepping down as military chief, Noriega apparently wants to remain in Panama and to have a voice in reshaping the armed forces and the government. Crusade members insist that the general leave the country permanently.

Heightening the pressure on Noriega's opponents, Panama declared a national "state of urgency" to boost the government's power, but Panamanians were pointedly assured that their constitutional rights would not be suspended. The decree said the country was locked in an "undeclared war" with the U.S. and with political foes at home.

On one point all sides agreed: Noriega's five-year reign as Panama's strongman seems to be near an end. Support for the general has withered rapidly since President Eric Arturo Delvalle tried to dismiss him as chief of | the Defense Forces last month. When Noriega flexed his muscle by engineering Delvalle's ouster instead, Washington responded by heeding Delvalle's plea for a freeze on some $50 million in Panamanian funds in U.S. banks and imposed other sanctions as well. The moves forced Panama to shut its banks, slowing down a once fast-paced economy and driving thousands, from doctors to dockworkers, into the streets to demand Noriega's departure.

The protests flared ominously early last week after the government failed to meet a $34 million payroll for 130,000 public employees. Each received a check that was initially uncashable, along with the right to pay a discount price for a bag containing rice, beans, salt and other basic foods meant to feed a family of five for a week. Outraged workers poured the salt on office steps and chanted anti-Noriega slogans. Firing tear gas and bird shot, riot police broke up demonstrations at the Education Ministry in Panama City and in the ports of Balboa and Cristobal. A day later doctors and nurses at two state-run hospitals hurled rocks at police and then fled inside. Showers of Molotov cocktails, stones and chairs rained on the troops from windows when they gave chase. Soldiers fired tear gas at the retreating demonstrators.

The confrontations scarcely matched the anger that exploded after the coup attempt. Emboldened by rumors that Noriega had been toppled, some Panamanians went on a protest spree that degenerated into sporadic rioting. While some neighborhoods stayed calm in Panama City, streets and alleys in others were thick with smoke from burning mounds of garbage, tires and trees. Looters set fire to shops and a department store near Noriega's headquarters. Striking utility workers deepened the gloom. Power-company employees cut electric service; telephone lines went dead.

To restore order, Noriega sent soldiers armed with M-16 rifles into the streets. The troops cleared roads and kept crowds from collecting. The military took over all public utilities, restored most electricity service and reopened telephone lines.

As a measure of calm returned to the capital, observers tried to piece together how the coup attempt had developed. Informed sources said the plotters contacted at least one high-ranking U.S. military officer before the attempt and originally intended to move against Noriega on Wednesday night. Perhaps fearful that their plans might leak, they struck in the morning instead. But the hastily planned attempt was a study in failure.

| Led by Major Fernando Quesada, the conspirators arrived at Noriega's headquarters on Panama City's Avenue A while their quarry was at another military compound. Troops loyal to Noriega had little difficulty in capturing the muddled plotters. At one point Quesada was taken before a company of crack troops to be introduced as their new leader. Instead, a loyal officer barked out, "This man wants to overthrow Comandante Noriega. Arrest him!" When Noriega arrived in his bulletproof Mercedes at 8:15 a.m., the brief rebellion was over. In the aftermath, at least 30 people were taken into custody. Noriega used the attempt to force five ranking military officers into retirement. Included was Colonel Bernardo Barrera, who stepped down as head of military intelligence.

In Washington the Administration remained determined to keep the pressure on Noriega. Questioned during a White House photo session, President Reagan told reporters, "We do want Noriega out of there and a return to a civilian democratic government." As the crisis deepened, Spain confirmed that it would offer political asylum to the general, provided that the U.S. agreed not to demand his extradition. Spanish Prime Minister Felipe Gonzalez was expected to discuss the Panamanian situation this week during a visit to Costa Rica. If Noriega does go abroad, he might settle first in Spain and eventually in France, where he is believed to own a Paris apartment and a home in the south. Noriega reportedly wants full access to his Swiss bank accounts, which are believed to hold millions in drug-trafficking profits.

With the strongman's departure possibly looming, some experts are worried about the shape a post-Noriega Panama will take. "Nobody is looking at who will be left in the general's absence," says a Panamanian in the U.S. who wants Noriega to quit. "People say Noriega is a thug, but there is a group in the army that is far worse."

The State Department prefers to play down such concerns. "At some point, this has to become an entirely Panamanian matter," one diplomat says. "We keep stressing that Panama should return to democracy, but it really is their responsibility to decide on details." Yet Washington cannot simply walk away from Panama once Noriega goes. Having brought the general to his knees, the U.S. will have to help the country return to normal.

With reporting by Ricardo Chavira/Washington and John Moody/Panama City