March 22, 2001

Panama canal workers sue U.S. for $1.2 billion

                  MIAMI, Florida (Reuters) -- A union representing 30,000 former Panama Canal
                  workers sued the United States government for $1.2 billion on Thursday, saying
                  its workers are owed Social Security and severance pay.

                  The Association de Empleados del Area Canalera, which represents the
                  Panamanian workers, has filed suit against the Panama Canal Commission, the
                  Secretary of the Army, and the Secretary of the Treasury in United States
                  District Court for the Southern District of Florida.

                  The union alleged that the U.S. government owes at least $300 million in Social
                  Security payments that should have been made between 1979 and 1999, when
                  the Panama Canal Commission operated the canal. The government also
                  neglected to pay severance pay when it ceased operation of the canal, according
                  to the lawsuit. The union is also asking for $900 million in punitive damages.

                  The problems date back to 1979, when the United States first began operating
                  under the Panama Canal Treaty, Steven Marks, the attorney for the group, said
                  at a news conference.

                  While operating abroad, the United States was required to abide by a Panamanian
                  law providing workers with a "13th month" of pay each year, Marks said.
                  Two-thirds of that amount -- equivalent to one month's salary -- was to go to the
                  Panamanian government for employer Social Security contributions, Marks said.
                  The final third was a bonus.

                  Marks said the United States neglected to make the payments for any of the
                  years it operated the canal.

                  Workers did not raise the issue at the time because they feared for their jobs,
                  Marks said. Also stifling the workers was that unions at the time were
                  fragmented groups -- not a united organization, he said. Even so, Marks said it
                  was "curious" that they did not take action.

                  As U.S. government employees, the Panamanian canal workers were entitled to
                  severance pay when the United States gave the canal back to Panama in 2000,
                  said Marks, who said that U.S. workers did get severance.

                  "The workers were treated differently," Marks said. "And did not receive the
                  same rights as their co-workers who were U.S. citizens."

                  Marks said the "Panama government as high as the president has stated support
                  for this claim," however the government has opted not to be a plaintiff.

                     Copyright 2001 Reuters.