261. Memorandum From the Special Assistant to the Secretary of State (Raphel) to Secretary of State Vance and the Deputy Secretary of State (Christopher)1

SUBJECT

  • The Shah and Panama

This afternoon from 3:00 to 4:45, Hamilton Jordan, Lloyd Cutler and I met with Armao and Bill Jackson to discuss the Shah and Panama. Armao had requested the meeting and began with the usual list of complaints about the Panamanian treatment of Armao, his associates and the Shah’s party. Armao offered considerable detail about what he purported to be pay-offs made to Panamanians, and various exam[Page 617]ples of how the Shah’s stay was made exceedingly uncomfortable.2 He and Jackson also highlighted what they saw as the Shah’s real fears of extradition to Iran. His presentation ended with the statement that the Shah, his family and he have decided the Shah has to leave Panama immediately and what would we do to assist.

In response to the question whether the Shah had other possible havens, Jackson replied that none seemed available. During the past three weeks, Jackson has tried Austria and Switzerland, both of which replied not now, and South Africa which said no. Armao asked what would happen if, hypothetically, some country offered the Shah asylum and he left Panama on his own before the hostages were released. We noted that the decision would obviously be his, but that any travel by the Shah before the hostages are released could considerably complicate our attempts to achieve their freedom.

After further discussion, it was agreed that we faced two immediate problems—discomfort at the hands of the Panamanians and the Shah’s concerns about extradition. On extradition, we noted that we fully believed the Panamanian statements that he would not be extradited and we had no reason to think otherwise. On Panamanian actions inimical to the Shah’s party, we offered to raise this issue in an appropriate way with the GOP, if the Shah so wished.

Hamilton then made the following offer: He would be ready to travel to Panama secretly next week to meet Torrijos.3 He is prepared to discuss two issues. 1—He will ask Torrijos again for reassurances the Shah will not be extradited. Hamilton noted this is likely to disturb Torrijos, but he would do it if it would make the Shah more comfortable. 2—If the Shah wants, Bill Jackson should send Hamilton a letter giving specific examples of cases of extortion, bribery and other kinds of mistreatment of the Shah’s party. Hamilton will, without giving the letter to Torrijos, discuss the Shah’s specific concerns with the General.

At the conclusion of the meeting, it was understood that Jackson or Armao will be in touch with Hamilton on whether a trip to Panama was desirable. If so, Hamilton will go and raise the extradition issue [Page 618] and, if the Shah wishes, also the question of alleged Panamanian mistreatment of the party.

At the beginning of the conversation, Armao repeated his threat to go public and criticize Panama and Torrijos. By the conclusion of the meeting, he had backed off and seemed willing to let the hostage scenario play itself out for several more weeks before saying anything publicly. Hamilton’s offer to meet with Torrijos also helped mollify Armao.

  1. Source: Department of State, Personal Files of Secretary of State Cyrus R. Vance, 1977–1980, Lot 80D135, February Chron. 1980. Secret; Sensitive; Eyes Only.
  2. In telegram 185 from Panama City, January 7, Moss reported on the Shah’s difficulties in Panama, including expenses being charged the Shah, tension and hostility between the Panamanian security guards and the Shah’s staff, mail being opened by the Panamanians and phone lines being monitored. (Carter Library, National Security Affairs, Brzezinski Material, Country File, Box 60, Panama: 6/79–1/80) In telegram 1068 from Panama City, February 3, the Embassy reported on a meeting during which the Shah expressed numerous concerns with his stay in Panama, including his fear that he could not trust Royo and Torrijos’s assurances they would not extradite him. (Carter Library, National Security Affairs, Brzezinski Material, Country File, Box 60, Panama: 2–4/80)
  3. Jordan met with Torrijos in Panama on March 22. See Document 265.