227. Telegram From the Department of State to the Embassy in Panama1

132507. Subject: Panamanian Involvement With Nicaragua.

1. (Confidential—Entire text)

2. Ambassador requested to seek appointment with President Royo to review with him in general terms problems posed by congressional and press attention to Panama’s alleged involvement with Nicaragua. Following talking points should be drawn on.

3. (A) Royo is fully aware from his visit to Washington2 of high degree of attention being given by certain sectors in Senate and the House to various aspects of Panama’s alleged involvement with Nicaraguan situation. He will recall the specific questions posed to him both by congressional figures and by press.

(B) Since his return to Panama, there continues to be heavy press coverage of Miami arms case in which indictment handed down3 and [Page 560] further questions and charges were raised in House debate on implementing legislation on May 21. We expect this to continue and perhaps even intensify during coming weeks, particularly when House resumes consideration of legislation.

(C) There have been a number of discussions in the past with him and with General Torrijos on the general question of Nicaragua and Panama’s role therein. From those conversations, we drew the conclusion that Panama shared our view with respect to the necessity to find a peaceful solution in Nicaragua both because it was desirable for the sake of that country and because of the danger that some action might lead to an extension of the conflict. We hope Royo continues to share that general view.

(D) Because of the press and other allegations of Panamanian involvement in arms deliveries to the Sandinistas which grew out of the Miami case in which five persons were indicted, we greatly appreciate having received word of Royo’s decision to authorize an investigation to determine whether there was any violation of Panamanian law. We assume that such investigation will encompass all aspects of the Miami case including those arms which were exported legally to Panama but which were intercepted by the Nicaraguan National Guard. We hope that Royo will broaden that investigation should other cases emerge or come to his attention.

(E) We hope that these matters will not have a serious effect on the implementing legislation in either the Senate or the House. We also hope that Panamanian cooperation will enable us to continue to resist congressional pressures to limit assistance to Panama.

4. FYI. Our intention in above is to focus Royo’s attention again on what does represent not only a problem in the public domain, but one which holds out potential for difficulties in conduct of our bilateral relations.4

  1. Source: National Archives, RG 59, Central Foreign Policy File, D790236–0489. Confidential; Immediate. Drafted by Haahr and approved by Vaky.
  2. See Document 224.
  3. In telegram 126464 to Panama City, May 18, the Department informed the Embassy that the U.S. District Court for the Southern District Court of Florida had indicted five individuals for their role in deals that provided weapons to guerrilla forces in Nicaragua. An affidavit in the case alleged that the former Panamanian Consul in Miami, at the direction of the Panamanian G–2, had participated in at least seven arms transactions involving over 200 firearms. Treaty opponents were seizing the issue as “proof of Panamanian complicity with Sandinistas” and as revealing the “true nature and character of GOP.” (Department of State, American Embassy Panama, Classified and Unclassified Political Subject Files, 1979–1980, Lot 83F67, Box 33, DEF 19)
  4. In telegram 3952 from Panama City, May 30, the Embassy reported that Moss delivered the points contained in telegram 132507 to Royo, who agreed that a peaceful resolution and not an armed intervention from the outside was best for Nicaragua, but remained vague regarding Panama’s role and measures he could take. (National Archives, RG 59, Central Foreign Policy File, D790245–0297)