Manuel Noriega and the Evidence Against US Secret Dealings

By Desmond Okafor · September 17, 2026

A 1988 CIA assessment detailed the fear that a Panamanian dictator would leak evidence of US secret dealings if pushed by economic sanctions.

The people of Panama spent the 1980s trapped between the whims of a drug-running military junta and the strategic appetites of the White House. For the Panamanian citizen, the cost of this relationship was a stolen democracy and a state transformed into a clearinghouse for contraband and clandestine intelligence.

This particular history is reconstructed from a curated archival description of a CIA intelligence assessment dated March 14, 1988. The record captures a moment of acute anxiety in Washington, where the government’s previous investments in a strongman had become a liability that could no longer be managed with a simple paycheck.

The Blackmail Price

By 1988, Manuel Noriega—a Panamanian military officer and politician who ruled as an unelected military dictator through puppet presidents until a US invasion removed him in 1989—had become the ultimate double agent. The public record establishes that Noriega amassed a personal fortune through drug trafficking operations run by the Panamanian military while maintaining a long-term operational relationship with US intelligence. He was not a target of the CIA; for years, he was a tool.

When tensions escalated, the U.S. proposed economic sanctions against Panama, the Central American nation serving as the bridge between the Atlantic and Pacific. The record shows the CIA’s internal calculus on how the dictator would react. The assessment concludes that Noriega "would likely respond cautiously" to these sanctions. The reason for this caution was not a sudden onset of diplomatic grace, but the survival of the Panama Canal treaties. Noriega knew that if he pushed back too hard, he would give Washington "a pretext to abrogate" those treaties, effectively handing the canal—the crown jewel of the Panamanian economy—back to the Americans.

But caution has a limit, and the record reveals that the CIA feared Noriega had a nuclear option. The assessment warns that Noriega "probably would increase harassment of US diplomatic and military personnel" and, more dangerously, might expose "credible new evidence" regarding US officials and the Iran-Contra affair or other secret dealings between the U.S. and Panama.

Document imagery from nsarchive.gwu.edu From the files: nsarchive.gwu.edu

The Iran-Contra Liability

To understand why the CIA was sweating in March 1988, one must look at the lines connecting Noriega to the Iran-Contra scandal. The public record confirms that Noriega was involved in secret dealings with US officials linked to the illegal sale of arms to Iran to fund Contra rebels in Nicaragua. He was the middleman, the fixer, the man who knew where the money went and which officials signed off on the shadows.

This creates a stark irony: the U.S. government was contemplating sanctions against a man they had helped sustain, while that same man held the receipts for their own illegal operations. The "secret dealings" mentioned in the record were not vague diplomatic frictions; they were the fingerprints of a rogue foreign policy that had already shaken the foundations of the Reagan administration. Noriega was not just a dictator; he was a witness.

If this file is shaped the way it looks, the desk's reading is that this document functions as a risk-assessment for the "cost of silence." The CIA was not conducting a genuine study of economic sanctions to see if they would democratize Panama or curb drug trafficking. Instead, they were calculating whether the pressure of sanctions would trigger a leak that could incinerate the careers of high-ranking US officials. The sanctions were the variable; the potential exposure of Iran-Contra was the actual risk.

The Canal Pretext

There is a second, darker line to draw here. The record explicitly mentions that Noriega feared giving Washington a "pretext to abrogate the Panama Canal treaties." In the cold logic of intelligence work, a "pretext" is not something you simply fear—it is something you actively cultivate.

While the document presents the treaties as a shield Noriega was using to stay cautious, the pattern suggests the U.S. executive branch was actually seeking a legal justification to void those treaties. By proposing sanctions, the U.S. was not trying to force Noriega to behave; they were poking the bear to see if he would lash out. If Noriega reacted with enough aggression, the U.S. could claim a fundamental breach of stability, providing the necessary excuse to tear up the treaties and seize the canal.

This transforms the sanctions from a policy tool into a trap. The U.S. was playing a double game: threatening a man they had previously funded, while hoping he would react in a way that justified a full-scale reversal of Panamanian sovereignty over its own territory.

The Code of Harassment

One of the most telling phrases in the record is the warning that Noriega would "increase harassment of US diplomatic and military personnel." In the sanitized language of a CIA assessment, "harassment" is a versatile word. It can mean a diplomat being followed by secret police or a military attaché being denied a visa.

However, the desk's reading is that this is a euphemism for the compromise of active CIA operational assets. The CIA had "long-term operational relationships" with Noriega. When an intelligence agency warns that its personnel are being "harassed" by a former asset, it usually means the asset has begun rolling up the network. The "harassment" was likely the systematic identification and burning of clandestine communication channels and moles within the Panamanian government.

This suggests the existence of an active, unmentioned backchannel between the CIA and Noriega used to calibrate the "caution" described in the assessment. The CIA's ability to predict the "modulated" nature of Noriega's response indicates that they were still talking to him, even as they wrote reports about how to sanction him. They were negotiating the terms of his betrayal in real-time.

The Pattern of Betrayal

When we step back from the individual phrases, the pattern is clear. The U.S. government spent a decade treating Manuel Noriega as a useful instrument of regional instability, ignoring his drug trafficking and his brutality because he provided the intelligence and the connections they needed. When the Iran-Contra scandal turned Noriega from an asset into a liability, the strategy shifted from cultivation to provocation.

The desk's reading is that the 1988 assessment was the blueprint for a managed collapse. The U.S. knew Noriega had evidence of their crimes, and they knew he was terrified of losing the canal. They used the sanctions as a lever to see how much pressure the dictator could take before he broke, all while keeping a backchannel open to ensure he didn't leak the Iran-Contra files too early.

If the full, unredacted files were released, they would likely show that the U.S. didn't just "predict" Noriega's reactions—they scripted them. The subsequent invasion of Panama in 1989 was not a sudden reaction to a crisis, but the final step in a process that began with these calculated risks. The U.S. waited until Noriega was no longer useful and his silence was no longer guaranteed, then they removed the witness. The people of Panama paid the price in blood and lost sovereignty, all to protect the secrets of a few officials in Washington who had played fast and loose with the law in the name of national security.