On a June day in 1985, Marine Lt. Col. Oliver L. North, then managing director of the U.S. drive to aid the Nicaraguan Contra rebels, boarded a yacht anchored off the Pacific coast of Panama for a secret meeting with the country's military strongman, Manuel Antonio Noriega.
North needed Noriega's permission to use Panamanian military bases and personnel to train Contra soldiers in their fight against Nicaragua's Sandinista government.Noriega enthusiastically joined in the effort to help the Contras, apparently betting that his cooperation would encourage U.S. officials to turn a blind eye to evidence that he was involved in narcotics trafficking, money laundering and gun running.
The ousted Panamanian leader now claims that the United States began its campaign to remove him only after he refused to allow Panama to be used as a launching pad for Contra attacks against Nicaragua.
North, who at that time was a White House aide, held at least two further meetings with Noriega, a strand in a web of high-level U.S. government contacts with the Panamanian ruler that included sessions with Vice President George Bush, CIA Director William Casey and Vice Adm. John Poindexter, the Reagan administration's national security adviser.
Analyzing these meetings, investigators for a Senate Foreign Affairs subcommittee on narcotics concluded last year that Noriega was following a divide-and-conquer strategy in his relations with the United States.
Noriega eventually offered to provide military training and weapons for the Contras and also to infiltrate Panamanian troops inside Nicaragua to sabotage key facilities and assassinate Sandinista leaders.
"Noriega recognized that so long as he helped the United States with its highest diplomatic priorities . . . the United States would have to overlook activities of his that affected lesser U.S. priorities," the Democratic-led panel said.
"In the mid-1980s, this meant that our government did nothing regarding Noriega's drug business and substantial criminal involvement because the first priority was the Contra war," it said.
Noriega, now awaiting trial in Miami on narcotics charges after his ouster from power in a U.S. invasion last month, long has said he holds information highly embarrassing to key U.S. officials, information stemming in part from his face-to-face conversations with them.
Noriega's lawyers say they will ask the government to turn over many sensitive documents bearing on Noriega's relationship with U.S. officials, documents which he contends will show the United States was aware of his narcotics activities for many years and chose to ignore them.
The Senate subcommittee, headed by Sen. John Kerry, D-Mass., sought many of the same documents but never succeeded in obtaining them from government agencies. Earlier, the congressional Iran-Contra committees also sought to trace Noriega's relationships, especially with North and the Contras.
Jose Blandon, a former Panamanian intelligence officer who was fired by Noriega as Panama's counsel-general in New York City, told the Senate investigators that when Noriega and North held their first shipboard meeting, North was looking for ways to circumvent the congressional ban on U.S. aid to the Contras.
Blandon testified that the meeting led to an agreement with Noriega in which up to 250 Contra soldiers received training at two Panamanian military bases, with Contra leaders being given permission to enter and leave Panama freely.
At a second meeting in October 1985 in Noriega's office in Panama City, the general asked for a favor in return, saying Panama needed economic help to deal with more than $3 billion in foreign debt.
Blandon told reporters Panama received some $200 million in U.S. and international bank loans during the next year.
In August 1986, Noriega, through an intermediary, upped the ante with an explosive offer.
Panamanian troops would infiltrate Nicaragua and assassinate top Sandinista leaders "in exchange for a promise to help clean up Noriega's image and a commitment to lift the ban on military sales to the Panamanian defense forces," according to documents made public at North's Iran-Contra trial.