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Money Laundering, Drug Smuggling Still Flourish in Panama


February 1993

Manuel Antonio Noriega sits in a Florida prison with a 40-year sentence, but more than three years after the December 1989 U.S. invasion designed to end Panama's role in drug trafficking, drug-linked corruption appears as firmly entrenched as ever (Tod Robberson, "U.S. Sounds Alarm on Drug-Linked Corruption in Panama -- Again," Washington Post, 1/31/93, A20).

Drug smuggling and money laundering appeared to drop sharply for a brief period after the 1989 invasion, but evidence that it soon returned to or surpassed pre-invasion levels has been plentiful. The Panamanian economy grew 8 percent in 1992, despite 50 percent of the nation living in poverty, and observers suggest that much of that growth was linked to drug smuggling and money laundering, which brought a huge inflow of currency into the nation.

Most recently, the law firm of Panamanian President Guillermo Endara has been tied to two Cuban-Americans charged with importing 75 tons of cocaine to the United States. The two men, Augusto Falcon and Salvador Magluta, hired Endara's firm in 1980 to set up what U.S. officials say were six shell corporations designed to launder drug money.

In another sign of possible drug-related corruption, former Attorney General Rogelio Cruz was charged by Panamanian authorities with illegally releasing $39 million in funds frozen by the government on suspicion of being linked to Colombian drug traffickers. He was arrested and was to stand trial in February. Another incident that occurred in early 1992 involved Panamanian Customs Director Rodrigo Arosemena. He was suspended after $1.8 million of $7 million in cash shipped from Miami and seized by Customs agents allegedly disappeared under his direction.