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Smuggler Says He Gave $300,000 Gift to Noriega

December 7, 1989

LAFAYETTE, La. (AP) _ A government witness in a drug smuggling trial claimed he once gave Panamanian Gen. Manuel Noriega a $300,000 present, and implicated the manager of rock star Bon Jovi.

Steven Michael Kalish, 37, faced cross-examination today at the U.S. District Court trial of 23 men accused of an enormous smuggling conspiracy.

In testimony Tuesday, Kalish said the Panamanian government helped him get in and out of Panama, once warning him that the U.S. Drug Enforcement Agency was watching his jet so he could arrange for another.

Kalish said he met Noriega in the fall 1983 through Cesar Rodriguez and Enrique Pretel, the Panamanian strongman’s partners in the firm of Servicios Touristicos.

Kalish, the 70th witness to testify in a trial which began in late October, said he told Rodriguez and Pretel that he expected to have $100 million and needed adequate banking protection for the money.

Soon afterward, he met Noriega. The day after that, he said, he was taken to Noriega’s home and gave the general a $300,000 gift.

″I am rather impressed that I am in this man’s house,″ said Kalish, who often spoke of the past in the present tense.

He said Noriega agreed to help with banking channels in Panama, and Noriega, Rodriguez and Pretel divided a 5 percent commission on $2.5 million sent to deposit in Panama’s Bank of Commerce Credit International.

Kalish also testified Tuesday that Harold ″Doc″ McGhee, manager of the rock groups Bon Jovi, Skid Row and the Scorpions, was the link between the smugglers and a Colombian drug supplier.

At a meeting in Miami, Kalish testified, McGhee was told to ask one of his associates - Paul Vargas of Baranquilla, Colombia - to supply a boat loaded with 40,000 to 50,000 pounds of marijuana for shipment to North Carolina in November 1982.

The Colombian Navy seized the boat and towed it to Cartegena, Colombia, he said. But, Kalish testified, a $100,000 bribe from Vargas - paid with the assurance that McGhee would repay Vargas in Miami - persuaded the Colombian crew to let the drug boat free and help load it.

McGhee, who got a suspended sentence after pleading guilty to marijuana importation charges in U.S. District Court in North Carolina, faces more charges in Lafayette, where he is among about two dozen defendants to be tried later.

Kalish described their marijuana enterprise as a multimillion-dollar business with so much cash that banks couldn’t handle it. At one point, he said, the organization had ″$40 million and no place to put it.″

Organization members are accused of smuggling about 48,000 pounds of marijuana into North Carolina in 1982, nearly 300,000 pounds into Louisiana in 1983 and plotting to bring one million pounds into Missouri in 1984.

The 1984 operation never materialized, however, because Kalish was arrested for racketeering. He subsequently pleaded guilty to continual criminal enterprise and was sentenced to 14 years in prison.

The prison term later was reduced to 10 years after Kalish began cooperating with federal authorities.

In testimony about another defendant, Michael Lyons, Kalish testified that he visited an Ohio farm soon after the delivery of 280,000 pounds of marijuana to a shipyard near Abbeville, La. He said some of the marijuana had been taken to the farm for distribution.

A problem developed, he said, when it was discovered the people who owned the farm were selling their own marijuana crop.

″One of the kids at the farm is selling bags of marijuana to the kids in town,″ Kalish said. ″We have 45,000 pounds of marijuana in this barn and here’s this kid selling little Baggies of marijuana and causing a security problem.″

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