518. Memorandum From the Executive Secretary of the Department of State (Read) to the President’s Assistant for National Security Affairs (Kissinger)1 2

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  • Situation in Panama

Panama is currently experiencing a period of political stress as an inexperienced military government wrestles with the problems of establishing an effective administration, carrying out certain reforms, and devising a way to reestablish constitutional government. There is no immediate threat to United States security interests. However, serious political instability could develop if the military regime fails to establish a satisfactory relationship with the civilian political leaders or if internal rivalries cause a split in the Guard command.

The October 1968 military coup that overthrew President Arnulfo Arias ten days after his inauguration brought to power a group of young, nationalistic, and reform-minded military officers, who do not belong to the narrow circle of politicians and business leaders that have traditionally controlled Panama. The key figures in the new regime are Colonel Omar Torrijos, Commandant of the National Guard, and Colonel Boris N. Martinez, the Chief of Staff. They have promised elections of an unspecified kind in 1970 but first desire to undertake reforms in public administration to revamp Panama’s fraud-prone electoral machinery.

The Guard’s determination to use authoritarian measures if necessary to achieve its aims has severely strained relations between the military leaders and Panama’s traditional civilian political establishment. Tensions have eased somewhat following a recent cabinet reshuffle, and government spokesmen, in a [Page 2] series of statements, have assured the Panamanian public of their good intentions. However, if the Guard again resumes the heavy-handed approach that led to the cabinet changes, it runs the risk of further alienating important segments of the civilian leadership. The result could be growing political unrest.

Recently there have been reports of increasing rivalry between Torrijos and Martinez, possibly encouraged by civilian political leaders who hope to increase their own influence. An internal power struggle between the two is potentially dangerous because it could diminish the effectiveness of the Guard, which is the only Panamanian force capable of maintaining public order in Panama.

The present government has also encountered a very limited amount of open resistance from supporters of deposed President Arias. This has taken the form of bombings in Panama City and sporadic guerrilla fighting near the Costa Rican border. The Guard has had no difficulty in containing these insurgents, who at present constitute only a marginal irritant.

Although not hostile to the United States, the new government has shown little concern or understanding for the impact which its arbitrary actions can have on United States public opinion, and consequently, on United States policy toward Panama. In our dealings with the military regime, we have sought to encourage a restoration of constitutional government. We have also endeavored to maintain a satisfactory working relationship with the new regime in order to assure continued National Guard cooperation in protecting the Panama Canal. We have continued on-going AID projects and resumed delivery of spare parts and training under the Military Assistance Program (MAP). Resumption of other aspects of the MAP program and the initiation of new AID projects will depend on our assessment of the developing political situation in Panama and the progress which the military regime makes toward restoring constitutional government.

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To provide an up-to-date evaluation of recent developments in Panama, we have requested a Special National Intelligence Estimate, which is to be completed by January 31.

The above report is submitted at the request of your office.

Benjamin H. Read
  1. Source: National Archives, RG 59, Central Files 1967–69, POL 2 PAN. Confidential. Drafted by Guthrie on January 24; cleared by Sanders and Vaky. Robert Brown signed above Benjamin Read’s typed signature. SNIE 84–69, January 30, provided additional information on Panama and concluded that “relations with the U.S. are likely to be somewhat strained throughout the period of military rule. We think the officer corps of the Guardia has become more nationalistic over the last couple of years, yet we doubt that the new regime will encourage blatant anti-Americanism, for fear it could not control an aroused populace.” (Central Intelligence Agency, NIC Files, Job 79–R01012A, Box 373, Folder 2, Situation in Panama)
  2. The Department of State reported that the new Panamanian Government showed little concern that the actions it took could damage its relations with the United States. The Department stated it was encouraging the return to constitutional government, maintaining a satisfactory working relationship, and assuring continued National Guard cooperation in protecting the Panama Canal.