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Panamanian President Averts Colombia-Style Crisis With Acknowledgement

June 27, 1996

PANAMA CITY, Panama (AP) _ President Ernesto Perez Balladares has averted a Colombia-style crisis by acknowledging his 1994 campaign unwittingly received $51,000 from a company linked to a reputed drug trafficker.

With his public mea culpa, Perez Balladares stripped his political enemies of ammunition to accuse him of a coverup. And he pleased American officials who say he has been cooperating in the fight against drugs.

``The attitude of President Ernesto Perez Balladares in announcing publicly that his campaign received contributions (from a reputed drug trafficker) ... has been justly recognized as brave,″ the leading Panamanian daily La Prensa said in a front-page editorial this week.

When similar charges emerged in Colombia about drug-tainted contributions to his 1994 campaign, President Ernesto Samper became defensive and was plagued by calls to resign. Although he recently was absolved of the charges by Colombia’s congress, U.S. officials and many Colombians remain skeptical.

American officials indicate they will keep supporting Perez Balladares even if investigations show additional drug-tainted money in his campaign _ as long as he keeps cooperating with them and there is no evidence he knowingly accepted dirty money.

Panamanian prosecutors announced this week that they planned to question Second Vice President Felipe Virzi and Felix Estripeaut, the country’s ambassador to Costa Rica, about the contributions.

Virzi and Estripeaut said this week they did not know that the two checks totalling $51,000 were questionable when they accepted them during the 1994 campaign.

A recent audit by Perez Balladares’ Democratic Revolutionary Party showed the money came from a company owned by reputed Cali drug lord Jose Castrillon Henao, jailed this year on drug charges.

Accusations about government ties to narcotics smugglers are nothing new in Panama. The United States dispatched thousands of troops six years ago to arrest former strongman Gen. Manuel Antonio Noriega for trial on drug charges.

The hundreds of towering foreign bank buildings that crowd this capital’s financial center have long been infamous as havens for drug traffickers seeking to hide the source of their illegal profits.

In Washington, U.S. State Department spokesman Nicholas Burns acknowledged recently that money laundering remains ``a significant problem,″ but said Panama ``has performed very well in eradicating illegal drugs.″

For that reason, early this year U.S. officials recertified Panama as a cooperative partner in the fight against drugs. They refused to certify Colombia.

While insisting that Panama needs stricter banking laws, U.S. officials describe Perez Balladares’ administration as the most cooperative Panamanian government in memory. The president called this week for stricter laws to combat money laundering.

Panama is also important to U.S. efforts to monitor cocaine shipments from neighboring Colombia.

The two countries currently are discussing letting the United States keep thousands of troops stationed along the Panama Canal after the current treaty deadline to pull out by the end of 1999.

Perez Balladares, who took office in 1994, has been notably friendly toward the United States. He was one of the only regional leaders to help the house thousands of Cuban refugees in 1994.

Despite blatant drug corruption, Noriega was on the CIA payroll and a supporter of U.S. policy in Central America. It was not until after Noriega adopted an anti-American stance that the United States moved against him.

``We as a nation have a long history of making drug policy play second fiddle to issues more directly related to strategic interests and foreign relations,″ said Jon Caulkins, co-director of the Drug Policy Research Center run by the Rand Corp.

Perez Balladares’ detractors have enjoyed the recent flap, emphasizing his party’s former support of Noriega and drawing parallels between Panama and Colombia.

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