Theft of military's property alleged

 BY GLENN GARVIN

 PANAMA -- U.S. and Panamanian investigators have launched an inquiry into the
 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 Development, the
 General Accounting Office and the Panamanian attorney general's office are
 probing the giveaway of hundreds of thousands of items ranging from pillows to
 bulldozers.

 The equipment was handed over to charities in a panicky nine-month burst of
 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
 December.

 ``It was the damndest thing I saw during my entire career,'' one former U.S.
 military officer said. ``It was scary at times.''

 Southern Command spokesman Raul Duany said about $40 million worth of
 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 market, U.S.
 Army criminal investigators swooped onto the scene, followed closely by other
 federal agencies.

 Neither Army officials nor federal prosecutors leading an investigation by an
 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.

 CONSPIRACY ALLEGED

 The document named as conspirators William Anderson, a former program
 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 were being
 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
 Hurricane Mitch.

 Nieves said his company simply transported donated goods to locations specified
 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.''

 `HUMANITARIAN' NEED

 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
 said.

 As project manager for Dyncorp, Anderson was the point man in last year's
 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 for International
 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.

 VALUATIONS VARIED

 Items valued at more than $1,000 had to be individually approved at upper
 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.''