American 'giveaway' in Panama probed
Theft of military's property alleged
BY GLENN GARVIN
PANAMA -- U.S. and Panamanian investigators have launched an inquiry
giveaway of $40 million worth of military property during the rush to end the U.S.
military presence here before the turnover of the Panama Canal.
As part of the wide-ranging probe, the U.S. Army's criminal investigation
command has accused a defense contractor and a Georgia-based charity of
stealing more than $3 million of military property as U.S. bases shut down in
Panama last year.
The U.S. Justice Department, the U.S. Agency for International
General Accounting Office and the Panamanian attorney general's office are
probing the giveaway of hundreds of thousands of items ranging from pillows to
The equipment was handed over to charities in a panicky nine-month
generosity after U.S. military officials realized they had neither the time nor the
money to haul it all away before American armed forces left the country in
``It was the damndest thing I saw during my entire career,'' one
military officer said. ``It was scary at times.''
Southern Command spokesman Raul Duany said about $40 million worth
military equipment was given away between February 1999 and the end of the
year in an initiative known as the Foreign Excess Property Program. About 75
percent of it was furniture, he said.
But when some of the equipment began to leak into Panama's black
Army criminal investigators swooped onto the scene, followed closely by other
Neither Army officials nor federal prosecutors leading an investigation
Atlanta grand jury would comment on their findings. But in an official request for
assistance from Panamanian Attorney General José Antonio Sossa, the Army
and the Justice Department accused managers of a U.S. defense contractor and
a U.S. charity, as well as officials at two Panamanian companies, of ``fraud and
thefts'' in the transfer of $3 million in equipment.
The transfer may have violated federal statutes on conspiracy,
theft of public
property and money laundering, the document said, and could result in prison
sentences of up to 35 years and fines of $500,000.
The document named as conspirators William Anderson, a former
manager for Reston, Va.-based Dyncorp Aerospace Technology Inc.; Steven
Foster, director of the Dalton, Ga.-based charity Corazón A Corazón; two of their
employees; and Luís Nieves, president of Marine and Industrial Services, a
Panama City boat repair company. It accused them of plotting to sell or lease
property donated by the U.S. military for charitable purposes.
Anderson, Foster and Nieves denied any wrongdoing and said they
made scapegoats for military policy mistakes.
``I think our little organization has gotten caught in a much
bigger dispute involving
jealousies and problems within the military,'' said Foster, a physician who began
doing charitable work on Honduras' Atlantic Coast after it was ravaged by
Nieves said his company simply transported donated goods to locations
by American officials. ``I was hired to do a job, and I did it,'' he said. ``And I am
still owed in the neighborhood of $300,000. . . . But the U.S. Embassy is
attempting to work it out, and I'm confident it will be.''
Anderson declined to comment when contacted by The Herald on Wednesday.
But in a legal response to the allegations filed with the Panamanian attorney
general's office, he lambasted the Army's case. ``Every item of donated
equipment has a need or some purpose in support of humanitarian requirements
in Central America. . . . None of this makes any sense whatsoever,'' Anderson
As project manager for Dyncorp, Anderson was the point man in
harried U.S. military effort to empty out 95,000 acres of American-occupied
territory in Panama, bases that once housed 35,000 U.S. troops.
Though the treaty calling for U.S. military withdrawal was signed
in 1977, efforts
to renegotiate some kind of continued presence of American troops continued
until late 1998. In February 1999, military officials overseeing the withdrawal
realized they were were not only hopelessly behind schedule, but hadn't budgeted
enough money to airlift out all the military property.
``The bottom line was that the military, especially the army,
had a lot of stuff it
just wanted to get rid of as expeditiously as possible, and the easiest and
cheapest way to do that was to give it away,'' said a U.S. military officer who
helped oversee the withdrawal.
Originally, the military brass planned to let the U.S. Agency
Development, the U.S. government's foreign-aid arm, supervise the giveaway. But
when that process moved slowly, the Southern Command began handing over
equipment directly to charities -- the faster the better, some officers say. Dyncorp
was hired ``essentially to kick stuff out the door,'' to funnel it to approved relief
organizations, one U.S. official said.
Items valued at more than $1,000 had to be individually approved
echelons, military officials say, but anything of lesser value could simply be
handed over to any of a dozen or so charitable agencies on an approved list. That
led to widespread anomalies on property valuations.
``You just had supply sergeants slapping prices on things, and
there was no
coordination or system to it,'' one now-retired military officer said. ``Some of them
figured in depreciation, some didn't. And sometimes the values were placed
ridiculously low because that made it easier to get rid of.''