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Panamanian President Averts Colombia-Style Drug Crisis

June 28, 1996

PANAMA CITY, Panama (AP) _ Panama’s president appears to have averted a Colombia-style drug scandal by acknowledging he accepted a campaign contribution from a company owned by a reputed drug trafficker.

With his public apology last weekend, President Ernesto Perez Balladares stripped his political enemies of ammunition to accuse him of a cover-up. And he won the support of American officials who say he has been cooperating in the fight against illicit 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, President Ernesto Samper denied any knowledge of drug money in his campaign. The allegations haunted his administration for months and there were calls for his resignation.

Samper, who was accused of taking $6 million in contributions from the Cali cocaine cartel in his 1994 election bid, was recently absolved by Colombia’s congress. But U.S. officials and many Colombians remain skeptical.

Early this year U.S. officials recertified Panama as a cooperative partner in the fight against drugs. They refused to certify Colombia.

One U.S. diplomat, who spoke on condition of anonymity, said the reason for the difference in American policy toward the two countries is simple: one tried to stonewall, and the other was open.

The Panamanian president’s detractors, however, have enjoyed the flap, emphasizing his party’s former support of former dictator Gen. Manuel Noriega and drawing parallels between Panama and Colombia.

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

Virzi and Estripeaut said that they did not know that the two checks totaling $51,000 were questionable when they accepted them during Perez Balladares’ 1994 campaign.

A recent audit by the ruling Democratic Revolutionary Party showed that the money came from a company owned by reputed Cali cartel figure Jose Castrillon Henao, jailed this year on drug charges.

Accusations about government ties to narcotics smugglers are nothing new in Panama. Noriega was toppled by an American invasion in December 1989 and later convicted of drug-trafficking.

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

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